1. The present Consumer Complaint has been filed under Section 21 read with Section 12(1)(a) of the Consumer Protection Act, 1986 (for short “the Act”) by Reshu Kansal and Nitin Gupta (hereinafter referred to as the Complainants) against Opposite Party, M/s. Raheja Developers Ltd. (hereinafter referred to as the Developer), seeking refund of the amount paid towards purchase of Apartment alongwith interest, compensation and costs as the Opposite Party Developer failed to hand-over the possession of the Apartment booked by them in the Project launched by the Developer in the name and style of “Raheja Revanta” located at Sector-78, Gurgaon, Haryana.  

 

2. Brief facts of the case as narrated in the Complaint are that the Opposite Party Developer launched a Residential Project in the name and style of “Raheja Revanta” located at Sector-78, Gurgaon, Haryana (hereinafter referred to as the Project).  The Complainants booked an Apartment for residential purpose in the said Project for a total sale consideration of ₹1,33,07,623/- by paying a booking amount of ₹31,29,433/- on 31.03.2014.  Unit bearing No. B-063 in Surya Tower having super area of approx. 1621.39 sq. ft. was allotted to the Complainants vide allotment letter dated 31.03.2014.  Agreement to Sell (hereinafter referred to as the Agreement) was also executed between the Parties on 31.03.2014.  It was averred that although various clauses of the Agreement were arbitrary, unjust, one-sided and only in favour of the Opposite Party Developer yet they have to sign the Agreement under the threat of forfeiture of the earnest money. As per possession Clause 4.2 of the Agreement, the delivery of the possession was to be offered within 54 months (48 months + a grace period of 6 months) from the date of execution of the Agreement, i.e., by 30.09.2018.  The Complainants after obtaining a housing loan of ₹99,00,000/- from Bank of Baroda, had deposited a total sum of ₹1,17,09,564/- (Rupees One Crore Seventeen Lacs Nine Thousand Five Hundred Sixty Four only) on different dates upto March 2015 as per demand of the Opposite Party Developer.  Despite that the Opposite Party Developer miserably failed to deliver the possession of the Apartment within stipulated period.  It is averred by the Complainants that they continued to follow up with the Opposite Party Developer through various correspondence, meeting and telephonic conversation with their representative but whenever the Complainant raised query for actual date of possession, the Opposite Party Developer without assigning any reason for the delay, kept postponing the delivery date of the said Project on one pretext or the other.  Seeing the conduct of the OP Developer, they have no trust on the Opposite Party Developer and are no longer interested in having possession of the Apartment.  Alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party Developer, the Complainants have filed the present Consumer Complaint with the following prayer:

 

“i. Direct the Opposite Party for an immediate 100% refund of the total amount of ₹1,17,09,564/-(Rupees One Crore Seventeen Lakh Nine Thousand Five Hundred and Sixty Four Only) paid by the Complainants, along with a penal interest of 18% per annum from the date of the receipt of the payments made to the Opposite party;

 

ii. Direct the Opposite Party to pay compensation of ₹5,00,000/- (Rupees Five Lakhs Only) to the Complainants for mental agony, harassment, discomfort and undue hardships caused to the Complainant as a result of the above acts and omissions on the on the part of the Opposite Party;

 

iii Direct the Opposite Party to pay a sum of ₹2,00,000/- (Rupees One Lakh Only) to the Complainants as a whole, towards litigation costs;

 

That any other and further relief in favour of the Complainant as the Hon’ble Commission may deem fit and proper in the fact and circumstances of the case.”

 

3. The Complaint was resisted by the Opposite Party Developer by filing its Written Statement in which the Opposite Party Developer submitted that the Complainants are mere real estate speculators and investors and have booked the Apartment in question, for investment as such they do not fall under the definition of ‘Consumer’ as defined under section 2(1)(d)(ii) of the Act, therefore, the Complaint is not maintainable. It was further stated that the terms of the Agreement are binding on both the Complainant and the Opposite Party.  As per term 4.2 of the Agreement they are ready to pay delay compensation @7/- per sq. ft. but the Complainant did not accept the offer and filed the present Complaint in order to earn more profit.  It was also stated that the relief claimed by the Complainant is beyond the scope of the terms of the Agreement.  In support of his contentions, he relied upon judgments passed by the Hon’ble Supreme Court in ‘Bhunaneshwar Development Authority vs. Susanta Kumar Mishra (2009) 4 SCC 684, United India Insurance Co. Ltd. vs. Harchand Rai chandan Lal (2004) 8 SCC 644 and Bharathi Knitting Co. v. DHL Worldwide Express Courier (1996) 4 SCC 704.  It was also stated that the construction of the structure in the Tower in which the Complainant’s Apartment is located is completed and as per RERA, Haryana the completion date of the Project is June, 2022.  It was further stated that the delay in Project is due to force majeure conditions for which the OP Developer cannot be made to suffer as the Government Agencies miserably failed to provide essential basic infrastructure facilities such as Roads, Sewage line, Water and Electricity Supply in the sector where the Project is located, which resulted delay in Project.  It was also submitted that they have deposited the requisite External Development Charges to the Government Agencies despite that the concerned authorities did not develop necessary infrastructure facilities like 60 meter sector roads including 24 meter wide road connectivity.  It was also submitted that the delay in construction is due to the reasons which were beyond the control of the Developer, therefore, there is no Deficiency in Service or Unfair Trade Practice on their part.  It was prayed that the Consumer Complaint be dismissed.  

 

4. We have heard Mr. Aditya Parolia, learned Counsel for the Complainants, Mr. Gaurav Mitra, learned Counsel appearing on behalf of the Opposite Party Developer, perused the material available on record and have given our thoughtful consideration to the various pleas raised by the learned Counsel for the Parties.

 

5. The contention of the learned Counsel for the Opposite Party that the Complainants are not a ‘Consumer’ and that the subject Apartment was booked for investment purpose is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainant No.1 was dealing in real estate i.e. in the purchase and sale of plots/ flats in his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case the Opposite Party Developer had failed to discharge by filing any documentary evidence to establish their case. Therefore we are of the considered view that the Complainants do fall within the definition of ‘Consumer’ as defined under Section 2 (1)(d) of the Act and the Complaint does fall under the jurisdiction of this Commission.

 

6. The contention of the learned Counsel for the Opposite Party Developer that the Complainants are bound by the terms of the Agreement and it did not give any rise to any cause of action to Complainant to file the present Complaint, we have gone through the various clauses of the Agreement.  Clause 3.14 and 4.2 of the Agreement read as under:-

“3.14 ..........If there is any delay or default in making payment of the instalments on time by the purchaser, then the Purchaser shall pay the interest @18% per annum to the Seller from the due date of payment of instalment on monthly compound basis.....

 

4.2 ……. If the Seller fails to complete the construction of the said building/Unit within Thirty Six (36) / Forty Eight (48) months plus aforesaid grace period of Six (6) months for the date of execution of the Agreement to Sell and after providing of necessary infrastructure in the sector by the Government or for any reason other than the reasons stated above, then the seller shall be liable to pay to the Purchaser compensation @ Rs.7/- sp. Ft. of the super area per months for the entire period of such delay which is proportionate to the rental income for the similar property in the area or average rental of equivalent sized unit in the vicinity, whichever is higher.”

 

7. A bare perusal of above Clauses makes it clear that as per Clause 3.14 in case of delay, the Purchaser was liable to pay interest @18%, whereas as per Clause 4.2, in case of delay in possession, the OP Developer is liable to pay meager compensation in the form of ₹7/- per sq. ft.  This shows that the terms of the Agreement are wholly one-sided and unfair. Therefore, the Complainant cannot be made bound to the terms of the Agreement, which is one-sided and unfair in the light of the recent Judgment of the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34 (SC), wherein the Apex Court has observed as follows: 

“6.7. A terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

 

7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms.”

 

8. As far as the contention of the learned Counsel for the Opposite Party Developer that the Project is delayed due to failure on the part of the State Authorities in providing infrastructure facilities like road, water, electricity and sector roads is concerned, we observe that it is the duty and responsibility of the Opposite Party Developer to follow-up with the State Authorities for providing infrastructure facilities like road, water, electricity and sector roads.  The Complainant cannot be made victim for the same.  Therefore, we see no merit in the contention and the same is rejected.

 

9. The learned Counsel for the Opposite Party Developer submitted that the construction of the structure in which the Complainant’s Apartment is located is completed.  Mere completion of structure cannot be said that the Apartment is ready for valid possession.  The Opposite Party Developer is duty bound to hand over a physical possession of the Apartment after obtaining Occupancy Certificate to the Complainant.  The Hon’ble Supreme Court in its Judgment dated 11.01.2022 in Civil Appeal No. 4000 of 2019 entitled ‘Samruddhi Co-operative Housing Society Ltd. vs. Mumbai Mahalaxmi Construction Pvt. Ltd.’ has held that ‘…The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable.’

 

10. We find it a fit case to place reliance on the decision of the Hon’ble Supreme Court in Civil Appeal No. 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter decided on 02.04.2019 and the decision of the Hon’ble Supreme Court in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra decided on 25.03.2019, wherein it has been held that in a case of an unreasonable delay in offering possession of the allotted flat, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid by him to the builder with compensation.

 

11. In Devasis Rudra (supra), the possession was offered to the Complainant/Appellant during the pendency of the Complaint before the State Commission and it was contended that the said builder having made substantial investment in terms of the agreement, a direction for refund was not warranted.  In the Consumer Complaint filed in Devasis Rudra (supra), the complainant/appellant had prayed for possession of the house and in the alternative, for refund of the amount paid by him to the developer.  In view of the said prayer made in the Consumer Complaint, it was argued on behalf of the builder that he should be made to accept possession of the allotted house and refund and not be allowed to him.  The complainant, on the other hand, contended that at the time the Consumer Complaint was filed, he was ready and willing to accept the possession, but seven years having elapsed, he was not more willing to accept possession.  Allowing the appeal, the Hon’ble Supreme Court inter-alia held as under:

“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession.  By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016.  This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement.  A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC.  There was in any event a prayer for refund.”

 

12. In Pioneer Urban Land & Infrastructure Ltd. (supra), the builder submitted before this Commission itself that since the construction of the apartment was complete and Occupancy Certificate had been obtained, the flat purchaser must be directed to accept the possession instead of directing refund of the amount deposited.  In that case, there was a delay of about three years in offering possession and the flat purchaser had submitted that he was not interested in taking possession after delay of about three years.  He also stated that he had taken an alternative property in Gurgaon.  This Commission having allowed refund to the complainant/respondent, the appellant before the Hon’ble Supreme Court inter-alia contended that as per the terms of the agreement executed between the parties, the flat purchaser could claim refund only after expiry of twelve months from the grace period by terminating the agreement but the Consumer Complaint had been filed even before the said twelve months period after the grace period had come to an end.  It was also submitted on behalf of the builder that this Commission had erred in granting interest at the rate of 10.7% per annum to the complainant when the agreement between the parties provided for payment of interest @ 6% per annum in case of delay in handing over possession.  Rejecting the contentions advanced by the builder, the Hon’ble Supreme Court inter-alia held as under:     

6.1. In the present case, admittedly the Appellant – Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent – Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.

 

In Lucknow Development Authority v. M.K. Gupta, this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.  

 

In Fortune Infrastructure &Anr. v. Trevor D’Lima& Ors., this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

 

6.2. The Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant – Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent – Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.

 

6.3. The National Commission in the Impugned Order dated 23.10.2018 held that the Clauses relied upon by the Builder were wholly one-sided, unfair and unreasonable, and could not be relied upon.

 

          The Law Commission of India in its 199th Report, addressed the issue of ‘Unfair (Procedural & Substantive) Terms in Contract’. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :

 

“A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”

 

6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :

 

“‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.

 

6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.

 

The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

 

7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent – Flat Purchaser. The Appellant – Builder could not seek to bind the Respondent with such one-sided contractual terms.

 

8. We also reject the submission made by the Appellant – Builder that the National Commission was not justified in awarding Interest @10.7% S.I. p.a. for the period commencing from the date of payment of each installment, till the date on which the amount was paid, excluding only the period during which the stay of cancellation of the allotment was in operation.

 

In Bangalore Development Authority v. Syndicate Bank, a Coordinate Bench of this Court held that when possession of the allotted plot/flat/house is not delivered within the specified time, the allottee is entitled to a refund of the amount paid, with reasonable Interest thereon from the date of payment till the date of refund.

 

13. In the instant case, it is not in dispute that the Complainants were allotted the Apartment on 31.03.2014.  As per terms of the Agreement executed between the Parties, the proposed date for delivery of the possession of the Apartment was 30.09.2018.  Despite having received a huge sum of ₹1,17,09,564/- (Rupees One Crore Seventeen Lacs Nine Thousand Five Hundred Sixty Four only) on different dates upto March 2015, till the date of filing of the Written Submissions, i.e., 05.03.2021, what to talk of offer of possession, even the Occupation Certificate was not obtained by the Opposite Party Developer. The Opposite Party Developer had failed to deliver the possession of the Apartment ever after more than 8 years of the booking of the Apartment.  The Complainants cannot be made to wait indefinitely.  The Complainants had not made a prayer for delivery of possession in the Consumer Complaint but sought refund of the amount paid by them to the Opposite Party Developer on account of the delay in offering possession of the allotted Unit to them.

 

14. Respectfully following the principles laid down by the Hon’ble Supreme Court in Devasis Rudra (supra) and Pioneer Urban Land & Infrastructure Ltd. (supra), we are of the considered view that the Complainants are entitled for refund of the entire deposited amount along with damages/compensation.

 

15. Learned Counsel appearing on behalf of the Complainants submitted that the present case is squarely covered by the Judgment passed by this Commission in ‘Mayur Saraf vs. Raheja Developers Ltd.’ (CC No. 988 of 2016 decided on 15.02.2019), wherein the Opposite Party Developer has been directed to refund the entire amount alongwith compensation in the form of simple interest @10% p.a. from the date of each payment till the date of refund alongwith cost of ₹25,000/-.

 

16. Per contra, learned counsel appearing on behalf of the Opposite Party Developer relied upon Judgments passed by the Hon’ble Supreme Court in the cases of “DLF Homes Panchkula Pvt. Ltd  vs. D.S. Dhanda, II (2019) CPJ 117 (SC); Prateek Infra Projects India Pvt. Ltd. vs. Nidhi Mittal and Anr. (Civil Appeal No. 2504/2020); “M/s. Nexgen Infracon Pvt. Ltd. vs. Manish Kumar Sinha & Anr. (Civil Appeal No. 62/2021),   wherein interest awarded by this Commission has been scaled down to 9% p.a.

 

17. Having considered the rival contentions of both the Parties, we observe that the Hon’ble Supreme Court vide Order dated 05.06.2020 passed in Civil Appeal No. 2504/2020 entitled “Prateek Infra Projects India Pvt. Ltd. vs. Nidhi Mittal and Anr.”, has scaled down the rate of interest awarded towards damages by this Commission to 9% per annum.  Similar view was also taken in Civil Appeal No. 62/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Manish Kumar Sinha & Anr.” and in Civil Appeal No. 5109/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Sanjay Dhall”.  In “Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors.” (2021) 3 SCC 241”, the Hon’ble Supreme Court has also awarded compensation in the form of simple interest @9% p.a. on the deposited amount, by observing as under:-

…….We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market. We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic.

 

We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry.

 

In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fair play that the amounts deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount…..” 

 

18. Keeping in view the peculiar facts and circumstances of the case as also the principles laid down by the Hon’ble Supreme Court in afore-noted Judgments, we are of the considered view the Complainants are entitled for refund of the entire deposited amount along with damages and compensation in the form of simple interest@9% p.a. from the respective date of deposit till the date of actual refund.  Since the damages in the form of interest @9% p.a. on the deposited amount has been awarded, the Complainants shall not be entitled for any other compensation in view of the Judgment passed by the Hon’ble Supreme Court in “DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda, II (2019) CPJ 117 (SC)”, wherein it has been held that when interest is awarded by way of damages awarding additional compensation is unjustified.

 

19. Consequently, the Opposite Party Developer is directed to refund to the Complainants a sum of ₹1,17,09,564/-(Rupees One Crore Seventeen Lakh Nine Thousand Five Hundred and Sixty Four Only) alongwith interest @9% p.a. from the respective dates of deposit till the date of actual refund within 6 weeks from the date of passing of this Order, failing which the rate of interest will increase to 12% p.a.  The Opposite Party Developer is also directed to pay a sum of ₹50,000/- towards cost to the Complainants within six weeks from today. 

 

20. The Consumer Complaint is partly allowed in above terms.  The pending applications, if any, also stand disposed off.