Delhi

StateCommission

A/1078/2014

MOHD. RAFAT KHAN - Complainant(s)

Versus

SRS REAL ESTATE LTD. - Opp.Party(s)

01 May 2018

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments :01.05.2018

Date of Decision : 07.05.2018

FIRST APPEAL NO.1078/2014

 

In the matter of:

 

Mohd. Rafat Khan,

S/o. Shri Mohd Zaheer Khan,

R/O. A-64 Ashoka Enclave-II,

Sector-37, Faridbad-121003.                                                    ……...Appellant

 

Versus

 

M/s. Real Estate Ltd.,

202 New Delhi House,

Barakhamba Road,

Connaught Place,

New Delhi-110001.

 

Also at :-

          SRS Multiplex, Sector-12,

FIRST APPEAL NO.1118/2014

 

In the matter of:

 

Mohd. Rafat Khan,

S/o. Shri Mohd Zaheer Khan,

R/O. A-64 Ashoka Enclave-II,

Sector-37, Faridbad-121003.                                                    ……...Appellant

 

Versus

 

M/s. Real Estate Ltd.,

202 New Delhi House,

Barakhamba Road,

Connaught Place,

New Delhi-110001.

 

Also at :-

          SRS Multiplex, Sector-12,

          City Centre Faridabad-121007.                                       …….Respondent

 

­­­­­­­­­­­­­­­CORAM

 

Hon’ble Sh. O. P. Gupta, Member (Judicial)

Hon’ble Sh. Anil Srivastava, Member

1.     Whether reporters of local newspaper be allowed to see the judgment?                                       Yes/No

2.      To be referred to the reporter or not?                                                                                                     Yes/No

Shri O.P. Gupta, Member (Judicial)

 

JUDGEMENT

 

          By this common order we shall be deciding two appeals bearing no.FA-1078/2014 and FA-1118/2014 as they arise out of same order dated 21.10.2014 passed by District Forum in CC No.550/2011. The former appeal is by complainant for deleting  directions  to the complainant to pay interest on delayed payment, for directions to the OP to pay delay penalty @ Rs.5 per sq. ft. as mentioned in the agreement, to direct the OP to pay interest at the rate of 18% per annum w.e.f. date of payment and directions to the OP to pay compensation of Rs.3,00,000/- on account of harassment, inconvenience. The later appeal has been filed by OP for setting aside the order passed by the District Forum.

          The impugned order passed by the District Forum recites complainant booked a flat measuring 1200 sq ft, @ Rs.1300/-  sq ft. in `SRS Residency’ in Sector-88, Faridabad, total basic price was Rs.18,00,000/-, letter dated 28.05.2007 was issued demanding second installment/ allotment amount of Rs.2,00,000/- and EDC charges of Rs.1,69,200/-. Payment plan was construction linked. So for OP has received Rs.16,14,825/- till construction of 7^th Floor and Rs.1,80,000/- being 10% remained to be paid till 30.11.2008. On receiving last demand at 7^th Floor the complainant visited the site and found that there was no construction of timely completion. OP accepted delay and gave assurance to complete the project by June, 2010 instead of June 2009. Since the project did not complete by stipulated time on 30.06.2009 complainant demanded penalty @ Rs.5/- per sq. ft for delay. The OP sent a demand notice for service tax.

          OP filed WS stating that promise to deliver possession by 30.06.2009 with extended period  of six months was subject to the condition that allottee  make payment of installments in time. Delay was caused by various reasons like non payment of installments by allottee, economic slow recession and other internal reasons. The com-plainant did not pay installments after 15.08.2008. OP gave details of other defaulters who did not pay the installment till 30.09.2011 and the out standing amount was running to Rs.24,00,00,000/- or so. Rs.9,03,174/- were due from the complainant as on 20.05.2011. Thus OP cancelled the allotment and asked the complainant to collect his refund vide letter dated 20.05.2011. After cancellation there was enhancement of EDC by government but said demand was not sent  to the complainant because has allotment had already been cancelled.

          After going through the material on record the District Forum found that project was admittedly delayed, completion in time was not possible unless allottee made timely payment, in construction linked payment the timely construction is not ascense of contract, delay is compensated by penalty in stipulated agreement. Action of the complainant in demanding penalty for delay by stopping payment of due installments could not be appreciated. Question of penalty would come only after the construction is completed and not before that. The complainant had no right to commit default in making  payment of installments as per decision of Punjab  State Commission in Somnath Verma vs. Municipal Council Kureli II (2008) CPJ 440.

          The District Forum further found that in view of decision of Hon’ble Supreme Court in Bangalore Development Authority vs. Syndicate Bank (2007) 6 SCC 711 mere delay in delivery of possession can not be equated with deficiency in service. The Hon’ble Supreme Court also held that any delay which developers has to explain can only be computed from the date when final installment  has been paid.

          On facts the District Forum found that OP could not cancel the allotment without issuing any prior notice of intended cancellation.  The various reminders sent by OP showed that the OP mentioned about liability to pay interest @18% per annum for delay in paying installments. Complainant having deposited more than half of the dues, could not be divested of his right to flat. The OP did not return the amount, so OP acted unfairly by cancelling the booking. Thus complainant was entitled to interest @18% per annum. Accordingly OP was held guilty of  deficiency in service, unfair trade practice and was directed to restore the allotment and raise fresh demand with interest for the delayed payment, after adjusting interest @18% per annum from May, 2011 till date, OP should offer possession of flat to the complainant. If OP was unable to offer the same flat, it was directed to offer another  flat at same cost in other Tower acceptable to the complainant. In case it was not possible to deliver any flat, OP was to return the entire sum deposited by complainant with interest  @20% per annum from the date of deposit till the date of payment. 

          We have gone through the material on record and heard the arguments. Both the parties agreed that since the District Forum stayed transfer of the  flat to a third person, the flat is still available with the OP and OP was ready to deliver  the same to the complainant. At the same time the complainant expressed his willingness to accept the flat  but with penalty for delay in handing over possession.

          Thus the question which remains is whether the complainant is entitled to penalty for delay in offering possession and whether OP is entitled to interest for delay in depositing installments.

          The complainant submitted that having recorded a finding of deficiency in service on the part of OP, the District Forum could not have  directed payment of  interest  by complainant on delayed payment of installments.

          Per contra the counsel for OP submitted that  as per decision of  Hon’ble Supreme Court in Bangalore Development Authority (Supra), mere delay in delivery can not be automatically equated with deficiency in service and interest / compensation be awarded. In the said case there was no specific date of delivery nor was time validly made essence of the contract at any stage, nor did the allottee terminate the contract. The appellant development authority explained the delay being on account of its contract or stopping working and raising a dispute. The houses were being constructed on “no profit no loss” basis and the allottee had accepted possession at the originally agreed price  during pendency of the complaint, when the price of the house had grown up in value many times, allottee having had the said benefit, could not be held entitled to any compensation by way of  interest or otherwise.

          The complainant tried to distinguish the said decision on the ground that  in the cited case there was no specified date of delivery nor the time was validly made essence of the contract. In the case in hand there was  a specific date of delivery. Moreover in that case the developer was  a government body which was working at “no profit no loss”. To that extent the complainant seems to be right but nevertheless since the complainant is willing to accept the possession of the flat at already agreed price, he would be getting benefit of rise in price, he can not be entitled to interest/ compensation for delay in delivery of possession.

          Counsel for the OP relied upon decision of National Commission in CC No.505/2014 titled as Bijay Madan vs. Unitech Ltd. decided on 01.10.2015. In the said case the last payment by complainant was made on 06.03.2006 whereas the possession was to be delivered by March 2008 considering that two years were still left when the complainant stopped making payment to the OP, he could not assume that the OP would not be able to deliver possession by the stipulated date and could not have withheld further payment to OP. It was held that having defaulted since May, 2006 in payment of installments as per the schedule agreed by him, he failed to perform his part of the obligation under the agreement between the parties. Since the complainant himself defaulted his part of obligation, he could not insist upon OP continuing to perform the clause under the agreement. Thus the OP was justified in cancelling the allotment, forfeit the earnest money / the amount deposited by the complainant and refunding balance amount to him.

          Above said decision squarely applies to the case in hand. The complainant had stopped making payment after paying till construction of 7^th Floor, that was in October, 2008 whereas the date of completion was 30.06.2009. At that time the complainant could not presume that OP would not be able to complete the flat  on 30.06.2009 and he could not stop making the further payments. Consequently the OP was justified in cancelling the allotment.

          Over and above that we may add that in Hudda vs. Raje Ram AIR (2009) SC 2030 and in FA No.06/2014 titled as  Randhir Singh vs. Omax decided on 27.11.2014 by National Commission, it was held that when complainant is defaulter, he is not entitled to interest from the OP builder.

          In view of the above discussion both the appeals are partly accepted, impugned order is modified to the effect that OP would hand over the possession of the flat to the complainant after the complainant makes payment of balance amount without any interest. However the complainant would pay for extra space and EDC/ enhanced EDC. The claim of the complainant for interest from the date of payment till possession and / or compensation by way of penalty for delayed possession is declined.

Registrar of this Commission is directed to place a copy of this order in the case file bearing number FA-1118/2014 for records. Copies of the order be sent to both the parties free of cost.

One copy of the order be sent to District Forum for information.

          File be consigned to record room.

 

 

(ANIL SRIVASTAVA)                            (O.P. GUPTA)

MEMBER                                               MEMBER (JUDICIAL)