1.       The present appeal has been filed ­under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) by Eldeco Infrastructure & Properties Limited (hereinafter referred to as the ‘appellant’) assailing the Order dated 05.03.2020 passed by the State Consumer Disputes Redressal Commission, Punjab, Chandigarh (hereinafter to be referred to as ‘State Commission’) in complaint No. 585 of 2018, whereby the complaint of the complainant was partly allowed.

2.       There is a delay of 91 days in filing the present appeal.

In the interest of justice and considering the reasons mentioned in the application for condonation of delay, the delay in filing the appeal is condoned.

3.       According to the complaint, the facts are that the complainant / respondent vide application dated 08.06.2010 applied for allotment of a flat in the project, namely, “Eldeco Estate One” situated at village Hussianpura, Ludhiana-Jallandher Road belonging to appellants / builder for a total cost of Rs.38,74,000/-. The complainant had made an initial payment of Rs.1,50,000/- vide receipt no. 491 dated 08.06.2010.

4.       The agreement dated 18.08.2010 was executed between the parties at Ludhiana bearing serial no. D 299193. The agreement outlined an Installment Payment Plan, under "Plan-A," wherein the complainant was requested to remit a sum of Rs.37,24,000 out of a total of Rs.38,74,000. The complainant, after securing a loan of Rs. 18 lakhs from ICICI Bank, had made the payments totaling Rs.27,92,350 by 14.01.2012. In November 2013, the complainant visited the construction site and noted that the construction work was incomplete and this state of incomplete construction persisted until July 2017.

5.       The appellant vide letter dated 18.05.2018 informed the complainant that the allotment had been canceled due to non-payment of the installments citing a previous pre-cancellation letter dated 04.05.2016. Subsequently, again on 24.06.2018 the complainant visited the site and found that construction was still in progress. Seeing that the construction was in progress, the complainant requested the appellants to provide an Occupation and Completion Certificate. In response, the appellants issued a revised Final Demand Notice (FDN) dated 18.06.2018 demanding outstanding balance of Rs. 19,33,994/-. The complainant, however, refused to comply, asserting that this demand was unlawful and arbitrary.

6.       The appellant averred that they had received a sum of only Rs.27,26,796/- exclusive of service tax despite the complainant having made payments totaling Rs.27,92,350/-. Furthermore, the complainant contested that the appellants had not fulfilled their obligation to provide physical possession of the specified flat upon the completion of work, as stipulated in the terms and conditions of the agreement under "Plan A."

7.       By stating the above facts, the complainants filed a complaint before the State Commission with the following prayer :-

1. To Direct the opposite parties 1-3 to give physical possession qua independent Flat number GF 31 measuring 291.55 sq yards in Eldeco Estate One situated in Ludhiana after obtaining completion/occupation certificate without any further delay and without any addl. cost/extra charges/penalty/Interest.
2. and in case of taking defence of cancellation of flat number 31 GF against the letter dt. 18.05.2018 and 04.06.2016, same be held illegal, null & void etc.
3. To direct opposite parties 1-3 to execute sale deed of the GF flat No. 31 measuring 291.55 sq yards as per content of letter dt. 18.06.2018 or as per actually measurement in Eldeco Estate One, Ludhiana without any extra/illegal charges.
4. To direct opposite parties 1-3 to provide basic amenities at the site within three months.
5. To provide all necessary documents to show that their project is cleared from all concerned Departments and opposite party 1-2 has got necessary and approved sanction for construction and they are in a position to give physical possession of flats to allottees.
6. To pay interest @ 18% p.a on Rs.27,92,350/- (on account of deposit by complainant for flat) from the date of deposit till date of actual delivery of actual possession of above mentioned GF Flat no. 31.
7. To direct opposite parties 1-3 for not claiming the sum of Rs.1,02,046/-- as EDC plus GST thereon, PLC charges Rs.1,00,000/- plus GST thereon & other charges such as maintenance charges of Rs.1,14,245-, miscellaneous charges (intt. on delayed payment of basic price) Rs2,36,000/-, Reimbursements Rs55,072/- etc against the flat no. 31 GF as per their latest letters 18.06.2018 etc as well as to quash thhe said demand.
8. To direct opposite parties 1-3 to refund the sum of Rs65,554/-- as per contents of para 22 above or adjust the same in remaining payable basic amount.
9. To pay Rs3,00,000/- on account of compensation for causing mental tension, harassment and mental agony to the Complainant.
10. To pay Rs33,000/- as cost of litigation.
11. Any other Relief that this Hon’ble Commission may deem proper in the facts and circumstances of the case, may kindly be passed against the Opposite Parties, in the interest of justice.

8.   Upon notice, the appellants filed their reply raising preliminary objections such as allotment of the flat is governed by the terms and conditions mutually agreed between the parties on 18.08.2010 and the complainant failed to make the payment of installments timely and delayed the same. Therefore, the complaint is infructuous and not maintainable. It is further averred that the opposite parties performed their part of agreement by offering possession of the flat to the complainant vide Final Demand Notice dated 22.10.2013 but the complainant did not pay the outstanding amount. Therefore, the complainant is not entitled to the relief as claimed for.

9.       The Opposite Parties further averred in their reply they had sent revised Final Demand Notices to the Complainant, firstly on 24.07.2017 and then again on 18.06.2018 but despite these notices, the complainant did not respond or settle the outstanding dues, resulting in a sum of Rs.19,33,994/- remaining unpaid by the complainant. The Opposite Parties emphasized that they had consistently been prepared and willing to fulfill their obligations under the agreement.

10.     It is also argued that the unit in question had been fully completed and developed in all respects. They supported their claim by producing evidence, including the Occupation Certificate dated 01.08.2018, Partial Completion Certificate dated 05.09.2014, recent photographs, and a list of allottees who had already taken possession of their respective flats. Furthermore, they pointed out that the sale deed had been registered in their favor. It is further contended that they had not caused any delay in the construction of the flat and had complied with their construction obligations in a timely manner.

11.     After appreciation of the facts of the case, the State Commission partly accepted the complaint and held as under:

Following directions are issued to the opposite parties:-

1. To deliver the possession of the Unit/Flat in question, complete in all respects along with all agreed basic amenities to the complainant, subject to payment of balance sale consideration by complainant without interest and penalty, within two months from the date of receipt of copy of this order after obtaining the Completion / Occupation Certificate obtained from the competent authorities;
2. To pay interest at the rate of 12% per annum on the deposited amount i.e. Rs.27,92,350/- from 18.12.2013 till the date of handing over the possession as per relief (i)
3. To execute the sale deed of the flat, in question, after receiving the total sale consideration as per actual measurement.
4. To pay Rs.40,000/- as compensation on account of mental agony and harassment as well as litigation expenses.

12.     The appellant/builder has filed the present Appeal before this Commission with the following prayer:

1. Set-aside the Impugned Order dated 05.03.2020, to the extent of orders/directions of (i) handing over possession of the Said Unit by the Respondent to the complainant without interest and penalty as per FDN/ revised FDN, (ii) payment of interest @ 12% per annum on the amount of Rs.27,92,350/- from 08.12.2013 till the delivery of actual possession, (iii) payment of compensation of Rs.40,000/- on account of mental agony and harassment, passed by Hon’ble State Consumer Dispute Redressal Commission, Chandigarh, in Consumer Complaint No. 585 of 2018, titled as Rajneesh Kumar vs. Eldeco Infrastructure & Properties Limited;
2. Stay the operation of Impugned Order dated 03.05.2020, during pendency of the present appeal;
3. Pass any other and/ or further order(s) as this Hon’ble Commission may deem just and proper in the facts and circumstances of the present case and to meet the ends of justice.

13.     The appellants’ main contention against the impugned order of the State Commission is that the State Commission failed to appreciate that the Complainant had breached the agreement by not making timely payments to the appellants in accordance with the agreed terms and payment plan. Therefore, the complainant should not be allowed take to benefit of their own actions, shortcomings, and breaches of the agreement.

14.     We have heard the learned counsel for both the parties and have gone through the record including the Order dated 05.03.2020 of the State Commission and the memorandum of appeal.

15.     The learned counsel for the appellants argued that the appellants have been offering possession since 22.10.2013 in accordance with the terms of the agreement but due to the complainant's failure to make timely payments, the appellants had to issue a pre-cancellation notice dated 04.06.2016. As the complainant had not taken the possession of the flat, the appellants had cancelled the allotment of the said flat vide its letter dated 18.05.2018. The learned counsel for appellants also argued that as complainant had not complied with the Final Demand Notices dated (i) 22.10.2013, (ii) 24.07.2017 and (iii) 18.06.2018 to make the payment due, the complainant is not entitled to any interest. The learned counsel also argued that the complainant should be directed to pay the outstanding balance amount as specified in the Final Demand Notice and also bear the stamp duty and registration fees as required for the registration of the sale deed.

16.     The question which falls for our consideration is the compensation to be awarded to the complainants for delay in handing over the possession of the flat.

17.     The fact is that there has been a delay on the part of the appellants in handing over the possession of the flat to the respondent/ complainant. The flat was not allocated to the complainant as scheduled and the physical possession of the unit was eventually transferred on 13.11.2020. As per Allotment letter/agreement executed between the buyer and the appellants / builder, the construction of the flat was to be completed within a period of 24 months of commencement of construction of the particular building in which the said flat is located after a grace period of six months. This agreement was signed on 18.08.2010 meaning thereby that the construction had to be completed on or before 18.02.2013 including the grace period of 06 months. The possession was only handed over on 13.11.2020 indicating a substantial delay on the part of the appellants and therefore, complainant has rightly claimed compensation for delay in delivery of possession. The delay in delivery of possession stretched for approximately 7 years and 9 months beyond the initially promised possession date till the handing over of physical possession and there has been consistent delay at every step, whether it be the issues of allotment letter, agreement, obtaining Occupancy Certificate or handing over of possession. Therefore, the complainant is justified in claiming compensation in delivery of possession.

18.     There are a number of landmark judgments of the Hon’ble Supreme Court holding builders responsible for compensation for delay in delivery of possession.

The issue to be decided in this case is what would be the reasonable quantum of interest.

In this regard, we would like to quote the recent judgment of the Hon’ble Supreme Court in the case of Wing Commander Arifur Rahman Khan and Aleya Sultana and Ors. Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512 wherein it was held as:

“54. …. The general appreciation in land values results in an increase in the value of the investment made by the buyers. Difficulties in determining the measure of compensation cannot however dilute the liability to pay. A developer who has breached a clear representation which has been made to the buyers of the amenities which will be provided to them should be held accountable to the process of law.”

“69.1. ….the first and second respondents shall, as a measure of compensation, pay an amount calculated @ 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate.”

In a similar case of the Hon’ble Supreme Court DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537 decided on December 14, 2021, wherein it was held as under:

“It is true that in the present case, the contractual rate of Rs.10 per square foot per month is double the rate fixed in the agreements in the above case. On the other hand, the court must be conscious of the fact that the situation in the real estate market in Delhi is very distinct from that in Bengaluru both in terms of rentals and land values. This has not been disputed. The flat buyers had to suffer on account of a substantial delay on the part of the appellants. In such a situation, they cannot be constrained to the compensation of Rs.10 per square foot provided by the agreements for flat purchase. However, having regard to all the facts and circumstances, we are of the view that the compensation on account of delay should be brought down from 7% to 6%. Moreover, the amount, if any, which has been paid in terms of the contractual rate shall be adjusted while computing the balance”

19.     The Buyer’s Agreement represents a legally binding contract that imposes obligations on both Buyers and Builders/Developers.

20.     In view of the judgments rendered by Hon’ble Supreme Court, we are of the view that the compensation has to be just and equitable, commensurate with the loss and injury suffered. We feel that in particular facts and circumstances of the case, the compensation in the form of simple interest at the rate of 6% per annum for delay in delivery of possession would be just and reasonable. Also, it would be apt that the compensation should be calculated from the promised date of delivery of possession as mentioned in the agreement i.e. 18.02.2013 till the date of handing over the physical possession i.e. 13.11.2020.

21.    As such we modify the award made by the State Commission to the extent that the appellants shall pay compensation in the form of simple interest at the rate of 6% per annum deposited amount i.e. 27,92,350/- from 18.02.2013 to 13.11.2020 and the other directions of the State Commission are sustained.

22.     The appeal stands disposed of in above terms. All pending applications, if any, stand disposed of.