JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

          The complainants booked a residential flat with the opposite party in a project namely ‘Paras Dewas’ on 29.12.2012 with a booking amount of Rs.7,50,000/-.  Pursuant to the application submitted by the complainants, an allotment letter dated 10.01.2013 was issued to them by the opposite party.  Thereafter, an agreement was executed between the parties on 23.4.2013.  Clause 3.1 of the agreement related to delivery of the possession reads as under:

          “3.1   Subject to Clause 10 herein or any other circumstances not anticipated and beyond the reasonable control of the Seller and any restraints / restrictions form any courts / authorities and subject to the Purchaser(s) having complied with all the terms and conditions of this Agreement and not being in default under any of the provisions of this Agreement and having complied with all provisions, formalities, documentation, etc., as prescribed by the Seller, whether under this Agreement or otherwise, from time to time, the Seller proposes to hand over the possession of the Apartment to the Purchaser(s) within a period of 42 months with an additional grace period of six months from the date of execution of this Agreement or date of obtaining all licenses or approvals for commencement of construction, whichever is later, subject to Force Majeure.  The purchase (s) agrees and understands that the Seller shall be entitled to a grace period of 90 business days, after the expiry of grace period, for offer to hand over the possession of the Apartment to the Purchaser.  Any application for the occupation certificate in respect of the Project shall be filed in the due course.  The seller shall give Notice of Offer of possession in writing to the Purchaser with regard to the handing over of possession, where after, within thirty days the purchaser shall clear his outstanding dues and complete documentary formalities and take physical possession of the Apartment.  In case, the purchaser (s) raises any issue with respect to any demand, the same would not entitle the purchaser (s) for an extension of the time for taking over possession of the apartment.  In the event the purchaser fails to make all payments and accept and take the possession of the apartment the apartment within thirty days of the Notice of Officer of Possession  the purchaser shall be deemed to be custodian of the apartment from such due date indicated in the Notice of Officer of Possession and the apartment shall be held by the Seller solely at the risks and costs of the Purchaser, including but not limited to applicability of the appropriate Holding Charges as defined in Clause 3.3 below and interest.  The obligation of the seller to offer possession to the purchaser under this clause shall be subject to Force Majeure.”

2.      It would thus be seen that the possession was to be delivered within a period of 48 months, including the grace period of six months and the said period was to be computed from the date of execution of the agreement or the date on which all the licenses or approvals required for commencement of the construction were obtained, whichever was later.  The builder was also entitled to a further grace period of 90 business days for handing over possession of the apartment to the complainants.

3.      The grievance of the complainants is that even the construction of the apartment is not complete till date, though they have already made payment of more than Rs.70 lakhs to the developer.  The complainants are therefore, before this Commission seeking refund of the amount paid by them to the developer along with interest, compensation etc.

4.      The complaint has been resisted by the OP which has taken two preliminary objections.  The first preliminary objection taken by the OP is that the complaint is barred by limitation and the second preliminary objection as taken by the developer is that this Commission does not have pecuniary jurisdiction to entertain the complaint.  On merits, it is alleged that the complainants had defaulted in payment of the installments, which were linked with the stage of construction despite demand letters and show cause notice having been issued to them.  It is however, not disputed in the written version that the construction of the Tower in which the flat allotted to the complainants is located, is not completed though, the occupancy certificate in respect of Tower A to D of the project is annexed to the written version of the OP.

5.      As far as limitation is concerned, since the OP did not deliver or even offer the possession of the allotted flat to the complainants at any point of time and even today, the OP does not have the occupancy certificate in respect of Tower ‘E’ in which the allotted flat is located, the complainants had a recurrent cause of action to take a consumer complaint.  A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Meerut Development Authority Vs. Mukesh Kumar Gupta [IV(2012) CPJ 12 (SC)].

6.      As far as pecuniary jurisdiction is concerned, in terms of Section 21 of the Consumer Protection Act, 1986, this Commission had pecuniary jurisdiction to entertain a consumer complaint where the value of the goods or the services, as the case may be, and the compensation, if any, claimed in the complaint exceeded Rs.1.00 crores.  As held by a Three-Members Bench of this Commission in Ambrish Kumar Shukla Vs. Ferrous Infrastructure Pvt. Ltd. CC No. 97 of 2016, decided on 07.10.2016, the value of the services in such a case would mean the sale price agreed to be paid by the Flat Buyers to the Builder.  The sale price of this flat was more than Rs.95.00 lacs as is evident from a perusal of the payment plan filed by the OP itself.  If compensation in the form of simple interest is added to the aforesaid amount, the aggregate becomes more than Rs.1.00 crore.  Therefore, this Commission has the requisite pecuniary jurisdiction to entertain and decide this complaint.

7.      Coming to the merits of the case, the payment plan agreed between the parties and incorporate in the agreement executed between them reads as under:

Payment Plan – Construction Linked Payment Plan

8.      Vide his email dated 17.11.2015, the complainants requested the OP to permit them to pay 25% of the outstanding demand at that time which came to Rs.2.14 lacs and promised to pay the balance amount at the time of possession, on the ground that the bank had not released further loan to them.  Vide email dated 07.12.2015, the OP agreed that the complainants need to pay only Rs.1,80,000/- at that time, followed by payment of Rs.8.00 lacs in June, 2016 and the rest of the payment could be made on possession.  Thus, the complainants were required to pay only Rs.1,80,000/- before June, 2016 when they were to make further payment of Rs.8.00 lacs.  The complainants paid the aforesaid amount of Rs.1,80,000/- immediately after receipt of the aforesaid email and the cheque was encashed on 10.12.2015.

9.      It is true that the complainants did not make payment of Rs.8.00 lacs to the developer in June, 2016 in terms of the email of the developer dated 07.12.2015.  The case of the complainants is that when they visited the site, they found that the construction work had come to a halt and that was the reason they did not make payment of Rs.8.00 lacs in June, 2016.  The demands upto the stage of completion of electric conduiting had already been raised by the OP by the time the above referred email dated 7.12.2015 was sent.  The next installment was payable on completion of the flooring.  There is no evidence of the said demand having been raised by the OP even by the time the written version to the consumer complaint was filed on 09.8.2019.  The statement of accounts annexed to the written version clearly indicates that the flooring had not been completed by the time the said statement of accounts was filed with the written version.  This would mean that the OP had not been able to complete the flooring in more than three years and eight months which had expired by the time the written version as filed.  This clearly indicates that the construction work had totally stopped at the site as is alleged by the complainants.  Had the construction work not come to standstill, the OP would have been able to complete the flooring within a view months of sending the email dated 07.12.2015.  Therefore, the complainants are absolutely right in saying that they did not make payment of Rs.8.00 lacs in June, 2016 on account of they having noticed, on a site visit, that the construction work had been halted and had come to a standstill.  A person who has already paid more than Rs.70.00 lacs to the builder cannot keep on making further payment and thereby sinking more and more money in a project which he does not see being completed in near future.  The OP had already received more than Rs.70.00 lacs from the complainants out of the total sale price of above Rs.95.00 lacs.  There was no reason for the OP not to even complete the flooring within a few months of the writing the email dated 07.12.2015.  The complainants, therefore, were justified in not making the payment, which the OP wanted them to make in June, 2016.  Had the complainants made that payment, the principal amount payable by the OP to them would have increased by Rs.8.00 lacs, without any benefit to the complainants.  Therefore, the failure of the complainants to make payment of Rs.8.00 lacs to the OP in June, 2016 was fully justified in the facts and circumstances of the case as noted hereinabove.

10.    As noted earlier, the possession was expected to be delivered by the complainants within a period of four years form the commencement date.  If the date of execution of the agreement i.e. 23.4.2013 is taken as the commencement date, the possession ought to have been offered by 23.4.2017.  There has already been a delay of almost 3 ½ years and even today the OP is not in a position to offer possession of the allotted flat to the complainants on having not obtained the requisite occupancy certificate in respect of Tower E in which the flat allotted to the complainants is located.  The complainants cannot be compelled to wait indefinitely for the possession of the allotted flat and are entitled to seek refund of the amount which they paid to the OP along with appropriate compensation in the form of interest etc. 

11.    A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter  (2019) 5 SCC 725 and the decision of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra II (2019) CPJ 29 (SC).

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.”

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,2 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.,3 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.

 12.   For the reasons stated hereinabove the complaint is disposed of with the following directions:

(i)      The OP shall refund the entire principal amount of Rs.70,33,103/- to the complainants.  

(ii)      On the amount taken as a housing loan by the complainants from ICICI Bank, the OP shall pay as compensation such interest as is paid by the complainant to the ICICI Bank.  On the rest of the amount, which the complainants contributed from their own resources, compensation in the form of simple interest shall be payable @ 9% per annum from the date of each payment till the date of refund. 

(iii)     The OP shall pay a sum of Rs.25,000/- as cost of litigation to the complainants. 

(iv)    The payment in terms of this order shall be made within six months form today, subject to the OP filing an undertaking of its Managing Director within three months form today, undertaking therein to comply with the order of this Commission in all respects within six months from today.  If such an undertaking is not filed, the order passed by this Commission shall be executable on expiry of three months from today.