For the Appellant                 Mr Gandharv Garg, Counsel with Authority

                                        Letter from Mr Nikhil Thakur, Advocate          

For the Respondent              Appearance Not Marked

ORDER

PER SUBHASH CHANDRA

1.        This appeal under section 51 of the Consumer Protection Act, 2019 (in short, ‘the Act’) challenges the order dated 20.05.2020 of the State Consumer Disputes Redressal Commission, U T., Chandigarh in CC no. 66 of 2019 directing the appellants herein to refund the amount of Rs.34,58,000/- with 12% interest from the date of deposit till realisation along with litigation cost of Rs.50,000/- to the respondent.

2.     The delay of 95 days in filing of this appeal is condoned in view of the extension of limitation period ordered by the Hon’ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 dated 10.01.2022.

3.     The relevant facts of the matter are that the respondent had booked a plot in appellant’s housing project ‘TDI City’, Sector 110-111, Mohali, Punjab by way of advance registration form dated 31.05.2012. An allotment letter in respect of plot no. 1743, ad measuring 192 sq yds was issued by the appellants on 05.07.2012. The appellants submitted that since the plot allotted was fully developed, an offer of possession was made to the respondent on 07.08.2012 to take possession within ten days, failing which they would be liable to pay maintenance charges. A Plot Buyers Agreement (in short, ‘the Agreement’) was entered into on 08.08.2012. The respondents opted for Payment Plan ‘A’, requiring payment of 20% of the amount to be paid at the time of booking (which stood paid with advance registration on 31.05.2012), 70% within 30 days of booking and the final 10% at the time of handing over the possession. The respondents paid Rs.24,92,200/- on 08.08.2012 and entered into a Maintenance Agreement dated 22.08.2012. The respondents/ complainants contend that the appellants were required to commence the construction of the house with due sanction of the Competent Authority within three years from the date of offer of possession which was not done. The appellants obtained a Partial Completion Certificate from the Competent Authority on 25.06.2015. It is contended that even after the expiry of the period of three years for the commencement of construction of the house on 07.08.2015, the appellants failed to commence the construction. By letter dated 18.12.2017, the appellants extended the time limit for construction to 31.03.2018 which was also not complied with. According to the appellants, the respondents filed a complaint before the State Commission to avoid the contractual obligations of the Agreement dated 08.08.2012 and the Maintenance Agreement dated 22.08.2012, despite taking over possession. It is contended that the complaint was barred by limitation since the last payment was made in August 2012 and there was no cause of action. The respondents were not ‘consumers’ under Section 2 (1) (d) of the Act, 1986 (Section 2 (7) of the Consumer Protection Act, 2019). It was contended that there was no deficiency in service which the State Commission failed to appreciate since possession had been offered with basic amenities. The conclusions of the State Commission that the plot was not developed was contested and denied. It was argued that the State Commission had erred in not appreciating that the appellants were exempted under PAPRA, 1995. The order of the State Commission was stated to also be erroneous in overlooking the fact that although the possession was offered, it had been held that no development had been done on the site even though partial Completion Certificate dated 25.06.2015 was available. It was contended that the respondents had willingly entered into a Maintenance Agreement on 22.08.2012 which indicated that they were satisfied with the amenities provided. It was submitted that even though it had been brought to the State Commission’s knowledge that the possession has been offered on 07.08.2012, it rejected this averment on the ground that this letter had been brought on record only during the pendency of the complaint. It was also submitted that the State Commission failed to appreciate that vide letter dated 18.12.2017 it had been mentioned that the offer of possession had been made on 07.08.2012 and that this letter was part of the written statement filed by the appellants. It was contended that the State Commission erred in not considering that respondents’ claim that the plot in question was required by the respondents as ‘consumers’  was a mere averment and submission which had not been established through evidence. It was contended that the plot had been booked for a commercial purpose. It was also contended that the impugned order had incorrectly recorded that there was no certainty regarding place, location and sanctions for the plot and it was based on conjectures and surmises in arbitrarily holding that there was no development in the project. It was also contended that the order was bad in law in directing refund of the entire amount with interest @ 12% per annum and compensation of Rs.50,000/- which amounted to premium to the respondent for their own fault. It was therefore, prayed to set aside the impugned order and pass any other order (s) deemed fit in the interest of justice.

4.     We have heard the learned counsel for the parties and have carefully considered the material on record.

5.     On behalf of the respondents, it was contended that the impugned order was just and proper since the plot was booked in 2012 and the appellant had not offered possession along with civic amenities required within a reasonable time period. Therefore, in terms of judgments of the Hon’ble Supreme Court in:

1. Fortune Infrastructure vs Trevor D’ Lima (2018) 5 SCC 442;
2. Pioneer Urban Land Infrastructure Ltd., vs Govindan Raghavan (2019) 5 SCC 725;
3. Kolkata West International City Pvt. Ltd., vs Devasis Rudra 2019 (6) Scale 462; and
4. Wg Cdr Arifur Rahman Khan and Anr. vs DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512

The respondent contended that as buyers they could not be made to wait for an unlimited period for possession of the plot booked. The respondents were entitled to seek cancellation of the Agreement and refund of the money deposited by them with interest as compensation and other reliefs.

6.     The respondents contend that the appellants are seeking reduction of award since they were liable to pay interest @ 18% which was being charged by the respondents from defaulting home buyers under their own Agreement. It was stated that the appellant builder had knowingly misled the home buyers and made false promises which led to the respondents suffering financial loss and being deprived of the use of their money for a significant period of time.

7.     It is apposite to note that in the impugned order the State Commission has held as under:

17.    The plot in question was booked by the complainants, as far back as in June 2012. Substantial amount of Rs.34,58,800/- had been paid by the complainants between 31.05.2012 to 21.08.2012; yet, possession of the plot in question was not delivered within a reasonable period, say, two to three years, from the date of allotment. On the other hand, it is proved on record that the opposite parties no.1 to 3 were not competent to sell plots or flats and to collect money from the complainants and other prospective buyers, in 2012, as far as the present project is concerned. Since not even a single document has been placed on record by opposite parties no.1 to 3, to counter the allegations leveled by the complainants, it can very well be said that the project in question was launched and units/plots therein were sold to the innocent buyers, in complete violation of the mandatory requirements as per Law, just with a view to grab money from them. The aforesaid act of opposite parties no.1 to 3 amounted to grave deficiency in providing service, negligence and adoption of unfair trade practice on their part.

Under these circumstances, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if no period is mentioned in the agreement, within a reasonable period say two to three years from the date of booking, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. Our this view is supported by the observations made by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. This view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. In the present case also, since there has been an inordinate delay in the matter, as such, we are of the considered opinion that if we order refund of the amount paid along with suitable interest, that will meet the ends of justice.

18.     The complainants are therefore held entitled to get refund of the amount actually paid by them alongwith interest @12% p.a. from the respective dates of deposits in view of principle of law laid down by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Recently also, under similar circumstances, the Hon’ble National Commission in Anil Kumar Jain & Anr. Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23rd Dec 2019, ordered refund of the amount paid, alongwith interest @12% p.a.

At the same time, opposite parties no.1 to 3 are also held liable to compensate the complainants for deficiency in providing service, negligence and adoption of unfair trade practice and also causing them mental agony and harassment.

21.     For the reasons recorded above, this complaint is partly accepted, with costs and the opposite parties no.1 to 3, jointly and severally, are directed as under:-

(i). To refund the amount of Rs.34,58,800/- to the complainants, along with interest @12% p.a., from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.34,58,800/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.

(ii). To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/- to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.

22.     Complaint against opposite parties no.4 and 5 is dismissed with no order as to costs.

23.     However, it is made clear that in case the complainants have availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of the said plot, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants.

[ Emphasis added ]

8.     Addressing at the outset, the preliminary issue that the respondents were not consumers under provisions of Section 2 (1) (d) of the Consumer Protection Act, 1986, it is evident that the averment of the appellant has not been supported by any evidence on record to establish they had purchased the plot for commercial purpose. In this regard, the judgment of this Commission in Kavita Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd., 1 (2016) CPJ 131 NC, wherein the onus to prove that the respondents were engaged in the business of real estate, i.e., purchase and sale of properties for commercial gain is required to be discharged by the appellant which has not been done as no documents to prove the same have been brought on record. Accordingly, this objection cannot be considered. The contention that the respondent lacked cause of action since it had made the payment in the year 2012 and the complaint was filed before the State Commission on 20.03.2019 and the fact that an offer of possession was made vide letter dated 07.08.2012 also cannot be sustained since this offer pre-dates the issue of the Partial Completion Certificate and therefore, does not constitute a valid offer of possession as laid down by the Hon’ble Supreme Court Samruddhi Co-operative Housing Society Ltd. vs. Mumbai Mahalaxmi Construction Pvt. Ltd., Appeal (Civil) no.4000 of 2019 decided on 11.01.2022.

9.     On merits, from the foregoing and the material on record, it is manifest that while an allotment letter was issued to the respondents on 05.07.2012, the Plot Buyer’s Agreement was signed between the parties only on 08.08.2012. It was in this Buyer’s Agreement that a Payment Plan was set out along with other conditions of handing over the possession, penalties etc. The Agreement stated that the appellant was engaged in the business of real estate development and was in the process of setting up an integrated township and that the appellant had agreed to sell a residential plot for a total sale consideration of Rs.33,88,800/- of which Rs.6,14,400/- was the earnest money being 20% of the sale price. The basic sale price covered, as per Clause 15, the ‘development costs’ of internal services, such as colony roads, water lines, sewer lines and storm water drains, development of horticulture within the limits of the colony. As per Clause 16, the operation and maintenance of various value added services and facilities were to be maintained by a Management Agency engaged by the appellant with whom the respondent was required to enter into an appropriate agreement. The Payment Plan prescribed a schedule commencing from the time of booking till the time of offer of possession spread over nine installments as per Annexure ‘A’ to the said agreement. The contention of the appellants is that possession was offered to the respondent on 07.08.2012 since the plot allotted was fully developed in all respects and thereafter a Maintenance Agreement was signed on 22.08.2012. However, this averment is not supported by any document such as a Completion Certificate on record. The appellant’s contention that the respondent failed to construct a house within three years of allotment as per Clause 21 of the Agreement needs to be considered in the light of the appellant’s own admission that it was issued a Partial Completion Certificate by the Competent Authority on 25.06.2015. The offer of possession dated 07.08.2012 therefore, needs to be viewed in light of this submission since the offer of possession which is not supported by a valid Completion or Occupation certificate has been held by the Hon’ble Supreme Court in Samruddhi Co-operative Housing Society Ltd., (supra) to not be a valid and legal offer of possession.

10.   It is also manifest from the records that the Partial Possession Certificate which the appellant relies upon had been applied for on 10.03.2015 and 08.06.2015. Furthermore, the Partial Completion Certificate granted on the basis of inspection under Notification dated 02.09.2014 was subject to several conditions/ compliances under, inter alia, Water (Prevention and Control of Pollution) Act, 1974; Municipal Solid Waste Management and Handling Rules, 2000; NOC from the Forest Department and maintenance of internal services to the satisfaction of the Competent Authority; completion of pre-mixed carpeting work of the roads before seeking final completion certificate etc. While the final completion certificate has not been brought on record, even on the basis of the Partial Completion Certificate the offer of possession claimed by the appellant on 07.08.2012 cannot be sustained. Consequently, the contention of the appellant that the respondents had defaulted with regard to non-commencement of the construction of the house on the said plot within three years from 07.08.2012 also cannot be sustained.

11.   The Plot Buyer’s Agreement is a document which was prepared by the appellant and was admittedly signed on 08.08.2012. It has been held that Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan Civil Appeal No. 12238 of 2018 decided on 02.04.2019 that a document prepared by the builder which imposed onerous conditions on the purchaser who has no option but to sign the same having paid considerable amounts itself constitutes an unfair trade practice as per Section 2 (1) (g) of the Act.

12.   In the instant case, it is evident that the respondents had booked the flat in the year 2012 and had paid Rs.34,58,800/- as on 31.05.2012 to 21.08.2012. This is not disputed by the appellant. The respondents had approached the State Commission by way of complaint on 20.03.2019, i.e., after nearly 7 years since the date of booking of the flat and the Buyers Agreement. It has been held in a catena of judgments by the Hon’ble Supreme Court and this Commission that in cases where there is inordinate delay in handing over possession of a plot or flat by the builder to an allottee who is a bonafide consumer, the consumer is entitled to cancel the agreement and to seek refund of the money deposited by him with compensation by way of interest. It is relevant to recall the judgments of the Hon’ble Supreme Court in this regard in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal Nos. 3182 of 2019 and 6303 of 2019 [decided on 25.03.2019], Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan Civil Appeal No. 12238 of 2018 decided on 02.04.2019 and Fortune Infrastructure & Anr. Vs. Trevor D’Lima & Ors. (2018) 5 SCC 442. In Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, C.A. No. 6044 of 2019 decided on 07.04.2022, the Hon’ble Supreme Court has held that compensation by way of interest should be both compensatory and restitutionary. The order of the State Commission directing refund of Rs.34,58,800/- with interest therefore cannot be found fault with.

13.   In view of the discussion above, it is evident that the contention of the appellant that the State Commission had erroneously held that the possession of the plot in question has not been handed over cannot be accepted. The moot issue is whether the offer of possession was a valid, legal offer in the absence of an occupation/ completion certificate. Admittedly, a Partial Completion Certificate was obtained on 25.06.2015. Any offer of possession prior to this date, even if it is argued by the appellant that the Maintenance Agreement had been signed without demur, cannot be accepted as a legal offer of possession. As already discussed above, the Buyer’s Agreement contained onerous clauses and placed the respondent in a situation where he had no option but to sign such a document. As laid down by the Hon’ble Supreme Court in Wg Cdr Arifur Rahman Khan and Aleya Sultana and Ors., vs DLF Southern Homes Pvt. Ltd., (2020) SCC Online SC 667, such an agreement clearly constitutes an unfair trade practice. For these reasons, the offer of possession dated 07.08.2012 cannot be considered to be a valid offer. At best, the offer of possession could have been issued only on or after the receipt of the Partial Completion Certificate on 25.06.2015. Hence, the respondent is liable to relief.

14.   In view of the foregoing discussion we do not find any merit in the appeal which is liable to be dismissed. However, the rate of interest awarded by the State Commission (12%) needs to be considered in the light of the judgment of the Hon’ble Supreme Court in Sushma Ashok Shiroor (supra), wherein the Hon’ble Supreme Court has laid down that compensation in cases of refund with interest should be equitable and that 9% simple interest is just and equitable from the respective dates of deposit till the date of payment. We are inclined to respectfully follow the law laid down by the Hon’ble Supreme Court in this regard.

15.   For the aforesaid reasons, the appeal is partly allowed and the order of the State Commission is affirmed with the following modifications:

1. Appellants 1 to 3 are directed to jointly and severally refund the amount of Rs.34,58,800/- to the respondents along with compensation @ 9% simple interest per annum from the date of respective deposits within 45 days of this order, failing which the applicable rate of interest shall be 12% per annum till realization;
2. Pay Rs.50,000/- as litigation costs along with the amount directed to be paid at (i) above;
3. All other directions regarding compensation for mental agony and interest are set aside;
4. Order dismissing the complaint against the opposite parties 4 and 5 before State Commission and no order as to costs is upheld; and
5. The direction for the first charge on the amount payable to be with the Bank/ financial institutions from which the housing loan (if any) is upheld.

16.   All pending IAs stand disposed of by this order.