PER MR SUBHASH CHANDRA, MEMBER

1.     This complaint has been filed under section 12(1) (a) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in services and unfair trade practice in respect of the residential apartment booked by the complainants with the opposite party.

2.     In brief, the facts of the case are that the complainant had booked a residential flat in the project ‘Emerald Bay’, Sector 104, Gurgaon, Haryana on 28.01.2013 being developed and executed by the opposite party. On 11.02.2013 he was provisionally allotted unit number 1503 in Tower A-3 on the 15^th floor by the opposite party for a sale consideration of Rs 2,39,81,694/- inclusive of all charges. A Builder Buyer’s Agreement (in short, ‘Agreement’) was signed between the complainant and the opposite party on 10.12.2013 and as per the Agreement possession was promised after 48 months, with a grace period of 6 months i.e. by 10.03.2018 which they have failed to do despite payment of Rs 2,23,81,694/- between January 2013 and January 2017 by the complainant under the construction linked plan as on the date of filing of this complaint. It is averred that the Agreement was executed after 11 months of the booking of the apartment by which time the complainant had already paid Rs 27,57,376/- and he was therefore not in a position to contest the one sided agreement loaded in favour of the opposite party. It is also averred that though clause 11 (a) of the Agreement promised construction in 48 months, on 26.09.2017 the opposite party informed that the project was delayed, that there was a change in building plans of the project and sought a grace period of 6 months for completion. However, the construction of certain facilities and amenities of the project were deferred by the builder and a ‘Future Building Plan’ was proposed in Pocket III where various common recreational facilities had been originally proposed which was objected to by the complainant before the Director, Town and Country Planning. It is further averred that while certain construction was deferred to the future, the payments under the construction linked plan continued to be collected on the basis of super built area which is a deficiency in service. The complainant avers that the deferment of construction of common facilities has negated his payment of preferential location charges as he does not have any view of landscaped area, swimming pool or club house as originally promised. He is therefore before us with the following prayer:

1. Opposite party be directed to refund the amount with 18% interest for the period of delay;
2. Opposite party be directed to pay Rs.15 lakhs for mental agony and harassment and consequential litigation; and
3. Opposite party be directed to obey any other and such directions as may be deemed fit by the Hon’ble Commission keeping in view the facts and circumstances of the complaint.

3.     The opposite party has resisted the complaint by way of written statement. The averments of the complainant have been denied and it has been contended that the complainant is not entitled to claim compensation. The opposite party has taken preliminary objections to the complaint on the grounds that complainant is not a ‘consumer’ within the definition of section 2(1)(d)(ii) of the Act as he has invested in the subject flat for speculative purposes; that this Commission lacks jurisdiction in view of the Agreement providing for arbitration and that there has been no deficiency in service as the project was never intended to be completed in one phase. Unfair trade practice is denied as also the fact that there has been delay in view of force majeure conditions of demonetisation, orders of the Hon’ble National Green Tribunal (NGT) placing restraints on construction and non-payment of instalments by other allottees.

4.     Parties led their evidences and filed their written arguments. We have heard the learned counsels for the parties and perused the records carefully. Admittedly, there has been a delay in the handing over the subject flat although for reasons advanced by the opposite party who has not denied the receipt of Rs.2,23,81,694/- towards the sale consideration. Opposite party has not denied that the complainant made all payments as per plan in a timely manner. Opposite party has denied making false or misleading promises and averred that the apartment of the complainant will eventually be landscape facing as per the PLC levied. While no reasons for the delay in completing the project and obtaining an occupation certificate are advanced by the opposite party except to state that construction was at an advanced state and that force majeure conditions are responsible for the delay, it was admitted during arguments that a completion certificate was not available as on date and that no offer of possession had been made. No evidence has also been furnished by the opposite party in support of its claim that the project was never intended to be completed in a single phase.

5.     We have considered the arguments of both parties in the light of the arguments urged, the documents on record and the various judgements of the Hon’ble Supreme Court and this Commission.

6.      The opposite party has denied the averments of the complainant while admitting the delay in completion of the project. The complainant has sought refund with compensation in the form of interest on the amount deposited by him. The delay of nearly 5 years by the opposite party in handing over of the subject flat is certainly inordinate and needs to be viewed as such. The Hon’ble Supreme Court in Civil Appeal No 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter on 02.04.2019 and in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt., Ltd., Vs. Devasis Rudra decided on 25.03.2019 has also held that in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation. Accordingly, the prayer of the complainant has merit.

7.      As regards the opposite party’s preliminary objection that this Commission lacks jurisdiction in view of the provision for arbitration in the Agreement, it is relevant to note that this issue has been settled by the Hon’ble Supreme Court in M/s Emaar MGF Land Limited Vs. Aftab Singh I (2019) CPJ 5 (SC) wherein it was held that an arbitration clause in the Agreement does not bar the jurisdiction of the consumer fora to entertain the complaint. Hence, the objection of the opposite party that the clause of arbitration bars this Commission from entertaining the complaint is unsustainable.

8.      The opposite party’s contention that the complainant is not a consumer within the definition of section 2 (i) (d) of the Act needs to be considered in the light of the documentary evidence submitted. It is seen that the opposite party has not submitted any evidence in support of this assertion. In Kavita Ahuja Vs. Shipra Estates I (2016) CPJ 31 it has been categorically laid down by this Commission that the onus of proving that complainants are not consumers lies upon the opposite party which in the instant case it has failed to prove by way of any documentary evidence. This contention is therefore not valid.

9.      As regards the issue of force majeure as the reason for the delay, it is seen that no evidence in support of this assertion has been provided. No evidence has been produced by the opposite party to prove that delay is on account of reasons beyond their control. Reasons such as economic slow down or restrictions on construction are risks that the opposite party should have factored in as part of the project execution planned by it. This Commission in Ashish Gupta Vs. Unitech Ltd. in CC No. 594 of 2016 dated 28.11.2016 while considering such extraneous events as likely reasons for delay and qualifying as force majeure events has held that:  

“As regards the alleged economic slowdown and consequent recession in the real estate market, the same cannot be a valid ground for delaying the possession of the flats to the  complainant since some of the buyers made advance payment of almost 95% of the sale consideration whereas the other buyers were to make payment linked with the progress of construction and this is not the case of the opposite party that they had defaulted in performing their contractual obligations as regards the payment of the sale consideration. Therefore, it cannot be said, as far as this project is concerned, that the construction was delayed on account of funds not being available with the opposite party.”

The same argument would apply also to the issues of demonetisation and restrictions on account of orders of the NGT advanced by the opposite party as being factors responsible for the delay but not attributable to it. Such issues have also been extensively considered in this Commission’s orders in Anil Kumar Jain & Anr. Vs. M/s Nexgen Infracon Private Limited CC No. 1605 of 2018 dated 23.12.2019 which held that in the absence of any proof to substantiate the claims of demonetisation and NGT adversely causing delay in completion of the project and impacting the date of handing over of flats, such reliance on force majeure conditions was not justifiable.

10.   No evidence has been submitted to also support its claim that there had been a widespread default by the bulk of the allottees which impacted his cash flow. In any case, it was for him to have planned for such contingencies before commencing a project of such magnitude. It was also not disclosed in any manner to the allottees that the project was contingent upon timely payments by them.

11.   In view of the foregoing, we are of the considered view that the opposite party has been deficient in not making an offer of possession of the subject flat to the complainants within the stipulated period of 10.03.2018 which had been promised while signing the Agreement on 10.12.2013 despite having accepted deposits of Rs. 2,23,81,694/- from the complainants which amounts to approximately 93% of the total sale consideration. There is also unfair trade practice on part of the opposite party in that it has amended the construction plans and postponed certain amenities to a future, second phase while raising demands from the complainant by including the same in the super area for payments collected and not honouring its obligations undertaken as part of the PLC charges levied.

12.    We, therefore, find merit in the complaint and allow the same with the following directions:

(i) Opposite party is directed to refund the entire amount of Rs.2,23,81,694/- deposited by the complainants along with 9% simple interest on it from the dates of respective deposits;

(ii) Order be complied within 12 weeks failing which penal interest of 12% shall be paid to the complainant.

13.   The complaint is accordingly disposed of with these directions.