JUSTICE SUDIP AHLUWALIA, MEMBER

 

2. The factual background, in brief, is that the Appellant/Improvement Trust on 15.10.2010 issued a brochure for the sale of HIG multi-storeyed Apartments and Penthouses in Manmohan Kalia Enclave Bathinda, inviting applications from the public under a self-financing and partially self-financing scheme. The Complainant applied for a Flat, paid an application fee, and eventually secured a Flat (No. C-02, 1st Floor) in the Complex through a draw held on 13.12.2010. The total price of the Flat was Rs. 27 lakhs, which the Complainant paid in instalments, completing the payments by 27.04.2016.

3. The Improvement Trust was obligated to complete the construction and hand over possession of the Flat within two years and six months of the date of allotment i.e., by 27.10.2013. However, the Complainant asserts that the Opposite Party failed to hand over the possession and complete the promised developments in the Colony, such as roads, water supply, sewerage, streetlights, parks, car parking, and other amenities. The Complainant repeatedly contacted the Improvement Trust about these delays and was ultimately informed that the Flat remained incomplete.

4. In 2016, the Improvement Trust issued a notice demanding an additional payment of Rs. 6,20,000/-, which according to the Complainant was a further instance of unfair trade practices. The Complainant also learnt through an RTI response provided to another buyer that the Improvement Trust had admitted deficiencies in construction quality and had suspended its officials for poor construction practices. Aggrieved with the deficiency of service and unfair trade practice on the part of the Improvement Trust, she filed her Complaint before the Ld. State Commission, Punjab with the following prayer –

“To return the whole amount paid by the complainant to the opposite party i.e. Rs. 26,33,125/- only (Rupees Twenty Six lacs thirty three thousands one Hundred Twenty five only) with interest of 24% p.m. from the date of payment of different installments along with compensation @ Rs.20,000/- p.m. from 27.10.2013 till the date of decision of present complaint and with compensation to the tune of Rs. 5,00,000/- on account of mental tension, agony, harassment, botheration etc; and along with Rs. 1,00,000 on account of litigation expenses.

OR

To pay any other additional, consequential or alternative relief for which the complainant may be found entitled to.”

 

5. The Ld. State Commission vide the impugned Order dated 01.06.2018 issued multiple directions to the Appellant. The relevant extracts from the impugned Order are set out as below –

 

8. One Tarun Goel, had sought information under RTI from the Op and they have given information to him vide letter No. 1130 dated 14.6.2017 (Ex. C-13) alongwith that order dated 4.5.2017 was attached vide which the responsibility of various Officers with regard to deficiency in the construction and completion certificate has been fixed. Therefore, this letter itself indicates with regard to obtaining the completion certificate. Further another letter No. 1116 dated 13.6.2017 was written by the Executive Officer, Improvement Trust, Bathinda Ex. Op-12 to the Additional Chief Secretary, Local Government, with regard to the progress report of these flats. Since the scheme is under Improvement Trust, Bathinda, therefore, the completion certificate is required from Municipal Corporation, Bathinda in whose area this project was constructed. In this regard, a reference can be made to Section 272 of The Punjab Municipal Corporation Act, 1976, which reads as under:-

“272. Completion certificate. (1) Every person who employs a licensed architect or engineer or a person approved by the Commissioner to design or erect a building or execute any work shall, within one month after the completion of the erection of the building or execution of the work, deliver or send or cause to be delivered or sent to the Commissioner a notice in writing of such such completion accompanied by a certificate in the form prescribed by bye- laws, made in this behalf and shall give to the Commissioner all necessary facilities for the inspection of such building or work.

 (2) No person shall occupy or permit to be occupied any such building or use or permit to be used any building or a part thereof effected by any such work until permission has been granted by the Commissioner in this behalf in accordance with bye-laws made under this Act:

Provided that if the Commissioner fails within a period of thirty days after the receipt of the notice of completion to communicate his refusal in grant such permission, shall be deemed to have been granted.”

However, the Op has not obtained this certificate. It is now settled preposition of law that without completion certificate offer of possession cannot be given. In this regard, we are fortified by the judgment of the Hon’ble National Commission 2017(1) CPR 292 “Harinder Singh versus Unitech”, in which it was held that in the absence of completion certificate, complainant cannot be compelled to take possession of the plot. It has further been argued by the counsel for the complainant that in case the flat is not offered within the promised period despite the fact that the payment as demanded by the Op has been paid, it amounts to deficiency in services on the part of Op and that the complainant has a right to withdraw from the scheme. In this regard we are fortified by the judgment reported in 2017(1) CPR 168 (NC) “Sanjay Kumar versus Sahara Prime City Limited & others” wherein it was held that allottee is entitled to withdraw from the scheme in the event of delay in completion of the project. However, at the same time counsel for the Op stated that now the flats are complete and she has placed on the record some photographs Ex. Op-14(colly) onwards. From the photographs, it appears that the flats have been completed but without completion/occupation certificate nobody can take occupation of the flat and the counsel for the Op stated that within a reasonable time they will get the completion certificate and then the complainant can take the possession because the flats have been construction with the money deposited by the allottees and in case the allottee does not take the possession then it will cause irreparable loss to the Government/Improvement Trust. Coming to the principle of equity and justice for the delayed period, compensation can be awarded to the complainant in the form of interest and sometime can be given to the Op to get a completion certificate on the basis of that the complainant will take the possession of the flat, otherwise, the complainant will be entitled to take the refund alongwith interest. In this case the complainant will be entitled to interest.

 

9. No other point was argued.

 

10. Sequel to the above we dispose of the complaint as under:-

(i) Op will get the completion certificate within a period of three months from the date of dispatch of the order passed by this Commission.

(ii) After getting completion certificate, intimation will be given to the complainant to deposit the balance amount and after that the possession of the flat will be taken by the complainant.

(iii) With regard to delay in delivery of possession, the Op will pay interest on the deposited amount to the complainant @ 8% p.a. from 27.10.2013 till the date of delivery of possession.

(iv) The amount to be paid by the complainant will be adjusted in the amount to be paid by the Op to the OF complainant and the balance, if any, will be paid by the complainant to the Op.

OR

In case completion certificate is not obtained and possession is not delivered then Ops will refund the entire amount deposited with it alongwith interest 12% p.a. from various dates of deposit till payment. 

(v) The Op will pay Rs. 50,000/- as compensation for mental agony and harassment for not delivering the possession within the specified time and the complainant had to wait for a long period.

(vi) pay Rs. 15,000/- as litigation expenses.

 

11. If the Op fail to comply with the above directions within the period mentioned above, the complainant shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops…” 

 

6. Aggrieved with the impugned Order, the present Appeal was filed by the Improvement Trust on the following grounds – 

A. That the State Commission had erroneously directed the Trust to obtain a Completion Certificate from the Municipal Corporation, Bathinda, when, as per law, no such Certification is required from the Municipal Corporation. Established under the Punjab Town Improvement Act, 1922, the Improvement Trust functions as an independent statutory body empowered to develop residential and commercial projects within municipal limits. The Trust operates autonomously, with powers under Sections 36 to 42 of the Act, 1922, to acquire land, design, and execute development schemes without the need for oversight or approval from the Municipal Corporation. The reliance of the State Commission on Section 272 of the Punjab Municipal Corporation Act, 1976, which mandates individual property owners to obtain Completion Certificates, does not apply to Trust-led projects. Therefore, the Municipal Corporation has no jurisdiction to issue a Completion Certificate for this project, as the Trust has the requisite authority to certify its own projects;

B. That the Project’s layout and design were duly approved by the State Government, and construction was completed according to these sanctioned plans. Once the government has sanctioned a scheme, it is presumed that all statutory requirements have been met. No further involvement from the Municipal Corporation is required, as the development falls solely within the Improvement Trust’s jurisdiction and regulatory framework under the Punjab Town Improvement Act;

C. That in response to the State Commission’s direction, the Trust proactively sought clarification from the Municipal Corporation, Bathinda. In a letter dated 25.06.2018, the Municipal Corporation stated that it was not responsible for issuing the Completion Certificate for the Trust’s project. Consequently, the Improvement Trust issued a Completion Certificate to the Complainant on 02.01.2019, fulfilling the requirement autonomously. Therefore, the directions issued by the State Commission should be modified to reflect the Municipal Corporation’s lack of jurisdiction in this matter, as the State Commission’s order holds that non-compliance would entitle the Complainant to a full refund with 12% interest per annum;

D. That the Complainant’s request for refund lacks merit, as the allotment agreement provides no Clause for refunds if possession is refused. Possession of semi-finished Flats was offered as early as 2013, as per the Self-Financing Scheme guidelines. The Complainant’s demand for refund and additional interest is unjustified, as it would set a precedent encouraging other allottees to seek refunds, potentially leading to a significant financial loss for the Trust. The Trust is a custodian of public funds, having invested approximately Rs. 25 crores into the project, and cannot afford to reverse payments on a completed Public Housing Scheme;

E. That the Trust also objects to the interest imposed by the State Commission from 27.10.2013, as the interest should only accrue until the date possession was first offered to the Complainant. The semi-finished possession was available from that date on an “as is and where is” basis, as stated in the brochure’s Clause 10, which outlines that possession in a semi-finished state would be available once all formalities and dues were settled.

7. This Commission has heard the Ld. Counsel for the Appellant and Respondent, and perused the material available on record. 

8. The Appellant is aggrieved that the Ld. State Commission had directed it to obtain the Completion Certificate after which the Complaint was to be notified with the direction to deposit the balance amount, after which possession of the Flat was to be taken by her alongwith delay compensation.  It was stressed on behalf of the Appellant before us on 24.7.2004 that Section 272, or any other provision of the Punjab Municipal Act, 1986, which required obtaining the Completion Certificate before permitting the concerned Allottees to occupy their dwelling Units would not apply to the Appellant/Opposite Party which is a Town Improvement Trust constituted under provisions of the Punjab Town Improvement Act 1922, which is not required to obtain  Completion/Occupancy Certificate from the concerned Municipality. A detailed Affidavit in this regard has been filed on behalf of the Appellant on 28.10.2024.  Be that as it may, it is seen from Para 7 of the Impugned Order that Ld. Counsel appearing for the Appellant before the Ld. State Commission had admitted that when the offer of possession letter was issued on 21.2.2014, the Flat was not complete as promised by the Opposite Party because the work of lifts was still to be done and then they issued the letter No. 3583 dated 16.9.2016 vide which an additional amount of Rs. 6.20 Lacs had been resolved to be taken from the allottee as additional costs, after which, the complainant was directed to deposit such amount within a period of 30 days before taking the possession.

9. The Ld. State Commission, thereafter, went  on  to  observe in Para 8 of its impugned judgment that while the Allottee was entitled to withdraw from the Scheme in the event of delay in completion of the Project, in view of the decision of this Commission in “Sanjay Kumar Vs. Sahara Prime City Limited & Others, 2017(1) CPR 168 (NC)”.  Yet, at the stage of Final Hearing before the State Commission in the year 2018, it appeared from certain photographs placed on record that construction of the Flats had since been completed although Completion/Occupation Certificates for the same were not available.  It was in this backdrop that the Ld. State Commission had passed the aforesaid directions in its impugned Order.

10. As such, the Ld. State Commission clearly appears to have overlooked the specific prayer of the Complainant/Respondent in her Complaint, in which she had only wanted refund of the consideration amount paid by her alongwith interest and other ancillary compensatory reliefs, and had never suggested that she was agreeable to take possession of her Flat.  Admittedly, she has not filed any Appeal to challenge the aforesaid direction of the Ld. State Commission.  The clear and visible reason for the same is that the quantum of compensation awarded by the Ld. State Commission was sufficient enough for her in the given facts and circumstances, since in Clause (iv) of the directions passed by the Ld. State Commission in Para 10 of the impugned Order, it was mentioned “In case completion certificate is not obtained and possession is not delivered then Ops will refund the entire amount deposited with it alongwith interest @ 12% p.a. from various dates of deposit till payment”.  

11. The aforesaid direction would make it clear, that even while directing the Appellant to obtain the Completion/Occupancy Certificate, the Ld. State Commission was conscious that there might be a possibility of such Completion Certificate not being obtainable at least within the limited time of 3 months, on account of which the actual relief prayed for by the Respondent/Complainant in her Complaint had also been granted as an alternative.  

12. The matter relates to the same Project in which we have already disposed off no less than 18 Appeals and Counter Appeals being FA Nos. 632, 633, 634, 635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 652, 656, 1085, 1086 and 1087, all of 2018, on 31.5.2024 in which the Orders passed by the Ld. State Commission were challenged not only by the various Allottees/Complainants, but also by the present Appellant/Town Improvement Trust. Those Appeals were disposed off by us on 31.5.2024 to the extent that the compensation awarded alongwith refundable amounts of the concerned Appellants was reduced from 12% p.a. to 9% p.a. in the same situation in which the dwelling units had not been completed or delivered to the concerned Complainants for a substantial time after the stipulated date for offering possession i.e. 26.10.2023.

13. The controversy in the present case is therefore squarely covered by the facts and circumstances of the aforesaid 18 Appeals in which the Complaints for identical relief were filed and allowed with a direction on the Appellant/Town Improvement Trust to refund the consideration prices paid by the various Complainants alongwith interest which was reduced to 9% p.a. instead of 12% p.a. as awarded by the Ld. State Commission. 

14. The present Appeal is therefore also allowed in part by modifying the impugned Order passed by the Ld. State Commission to the extent that now the Appellant instead of offering possession of the Respondent’s allotted Apartment to her, shall refund the amount paid by her alongwith interest @ 9% p.a. from the date of each respective deposit within three months from the date of passing of this Order failing which any unpaid amounts shall attract an interest @ 12% p.a. for the same period till the date of final realisation. The other directions of the Ld. State Commission regarding award of compensation for mental agony and harassment and litigation expenses, as mentioned in Para 10 of the impugned Order shall remain unchanged.

15. Pending application(s), if any, also stand disposed off as having been rendered infructuous.