AVM J. RAJENDRA, AVSM, VSM (RETD.), MEMBER

1.      The present Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 02.02.2016 passed by the State Consumer Disputes Redressal Commission UT, Chandigarh (hereinafter to be referred to as “State Commission) in Complaint No. 167 of 2015, wherein the Complaint filed by the Complainants (Respondents herein) was allowed.

2.      Brief relevant facts of the case are that the Respondents/ Complainants booked a residential plot in the upcoming Township project of OP called “Omaxe Chandigarh Extn”. (In short “Residential Project”) situated at Mullanpur, LPA (GMADA) Distt. SAS Nagar, Punjab. The Complainants initially paid Rs.22,50,000/- as booking amount along with application form dated 06.12.2010 and vide cheque dated 11.12.2010. The Basic Sale Price (“BSP”) of the plot, in question, was Rs.79,36,729.92/-. Further, an amount of Rs.80,000/- was also paid on account of additional cost and maintenance Security to the OP. The Complainants opted for “Discount Payment Plan, which is extracted hereunder:-

3.      The complainants paid further sum of Rs.12,85,200/- on 27.6.2011, as per demand raised by the Opposite Party vide letter dated 25.5.2011. The OP made the provisional allotment vide letter dated 24.10.2011. Subsequently, the Complainants made payment of Rs.40,44,693.43/- Thereafter, upon signing and submitting the allotment letter-cum-agreement to the OP on 03.12.2011, the official allotment letter-cum-agreement was issued by the OP on 09.04.2012, after a delay of four months.

4.      As per clause 24(a) of the Allotment Letter-Cum- Agreement, the possession of the plot was to be given within 18 months (by 09.10.2013), or within an extendable period of 6 months (by 09.04.2014). The relevant portion of the clause 24(a) of the Agreement is as under:

“The Company shall put its best efforts to complete the development of the plot/project within 18 (Eighteen) months or within an extended period of Six months from the date of signing of this Allotment Letter by the Allottee(s), subject to force-majeure conditions……”

5.      The Opposite Party subsequently offered the possession of the plot vide letter dated 09.04.2015 accompanied by a demand for residual sale price, External Development Charges, club costs, Infrastructure Maintenance & Security and Power Backup, which was to be paid within 15 days. However, upon visiting the plot in May 2015, the complainants were dismayed to discover that the plot was situated approximately eight feet below the actual road level. This posed risks of structural instability and flooding for future construction. Moreover, there was absence of water, electricity, sewerage facilities and proper road connection. Thus, the complainants issued a legal notice dated 03.06.2015 to the OP, requesting a mutual site visit to address issues related to leveling and infrastructure. However, no response was received from the OP. Instead, the OP sent demanding letters/reminders to the complainants, threatening penal charges of 18%-24%. The complainants made substantial payments (95% of the consideration) from December 2010 to November 2011, but the progress at the site had significantly slowed down. Consequently, they alleged that the OP's actions amounted to deficiency in service and unfair trade practices.

6.      Being Aggrieved the Respondent / Complainant filed a Consumer Complaint no. 167 of 2015, before the State Commission, U.T. Chandigarh Punjab, with prayer as under: -

A) Direct the Opposite Parties to deliver to the Complainants possession of the said residential plot complete in all respects and provide them with a possession-able residential plot free from all defects as alleged in the present Complaint,

(B) Direct the Opposite Parties to tender penal. interest @12% on an amount of Rs. 35,35,200/- from 11.12.2010 to 09.04.2012 for delayed execution of Allotment Letter,

(C) Direct the Opposite Parties to tender penal interest @12% on an amount of Rs.75,79,893/- from 09.10.2013 till possession complete in all respects is delivered to the Complainants,

(D) Direct the Opposite Parties to issue valid Completion Certificate as required under Punjab Apartment and Property Regulation Act, 1995,

(E) Direct the Opposite Parties to complete all developmental and infrastructural requirements as detailed in para: (t) above,

(F) Direct the Opposite Parties to correct, the Settlement of Final Dues and clear all payments due to the Complainants up till actual and complete possession.

(G) Direct the Opposite Parties to refrain from taking any coercive measures qua the allotment of the Complainants and/also to refrain from illegally charging any penal interest on the full and final amount demanded & maintenance charges during the pendency of the present lis,

(H) Grant compensation to the tune of Rs. 3,00,000/- for inconveniences and mental harassment and damages suffered due to deficiency of services on part of the Opposite Parties,

(I) Grant compensation to the tune of Rs.50,000/- towards the costs of litigation, documentation charges, representation(s) and numerous visits,

(J) Any other relief to which the Complainants may be entitled to under the facts and circumstance of the matter be passed in favour of the Complainants and against the Opposite Parties,

(K) Cost of the Complainant be awarded in favour of the Complainants and against the Opposite Parties.

7.      The Opposite Party, in its written version before the State Commission, raised several preliminary objections. Firstly, the OP pointed to Clause 24(a) in the allotment letter, stating their commitment to completing the construction within 18 months or an extended six-month period, was subject to force majeure conditions. They highlighted that the complaint was filed on 12.08.2015, even though they had informed the complainants on 09.04.2015 itself about their readiness to hand over the plot. The OP contended that, it was the complainants who didn't complete the necessary formalities and, instead they resorted to filing the complaint. They forwarded a reminder on 25.05.2015 for possession, final payments and registration. The allotment letter specified that no claims for damages/ compensation would be accepted for delay in possession. The OP asserted that the residential plot was offered adhering to the agreed terms and conditions. They acknowledged the receipt of Rs.22,50,000/- on 11.12.2010. The demand for Rs. 80,000/- was for club cost and interest-free maintenance expenses. While a mail dated 13.5.2013 was received for a meeting to discuss the concerns, the complainants could not be reached. The OP denied any deficiency in service or unfair trade practices. The OP refuted the remaining claims.

8.      After due consideration of the case, the learned State Commission partly allowed the Complaint vide order dated 02.02.2016 & directed as follows:-

“i. The Opposite Parties shall hand over the legal physical possession of the plot, in question, complete in all respects, after obtaining completion certificate, within a period of three months, to the complainants, from the date of receipt of a certified copy of this order.

ii. The complainants shall deposit the balance amount of Rs.7,29,662.04Ps, with the Opposite Parties within a period of two months from the date of receipt of a certified copy of the order.

iii. The Opposite Parties shall execute the sale/ conveyance deed and get it registered in the name of the complainants after handing over the actual physical possession of plot, in question, as per direction in Clause (i), above, within a period of three months thereafter. The stamp duty, registration charges and all other incidental and legal \expenses for execution and registration of s ale deed shall be borne by the Complainants.

iv. The Opposite Parties are further directed to pay interest @12% per annum on Rs.75,79,893.43 to the complainants from 03.12.2013 till 31.01.2016, within a period of one month from the date of receipt of a certified copy of the order, failing which, it shall carry penal interest @15% per annum from the date of default till actual payment.

v. Interest @12% per annum, as directed in Clause (iv) above, accruing w.e.f. 01.02.2016 onwards till handing over of actual physical possession of the plot, in question, shall be payable by the Opposite Parties at the time of handing over of possession, to the complainants, failing which the same shall carry penal interest @15% per annum for the entire defaulted period.

vi. The Opposite Parties are further directed to pay Rs.2,50,000/- (Rupees Two Lac Fifty Thousand the complainants as compensation for mental agony and physical harassment within a period of one month from the date of receipt of a certified copy of the order, failing which, the same shall carry interest @12% per annum from the date of default till actual payment.

vii. The Opposite Parties are further directed to pay Rs.50,000/- to the complainants as cost of litigation, within a period of one month from the date of receipt of a certified copy of the order, failing which, the same shall carry interest @12% per annum from the date of default till actual payment.”

9.       Aggrieved by the Order of the State Commission, the Appellant / OP filed the present Appeal seeking the following:-

(a) allow the present Appeal; and

(b) set aside the final judgment and order dated 02-02-2016 passed by the Hon'ble State Consumer Disputes Redressal Commission, U.T. Chandigarh in Consumer Complaint No. 167 of 2015; and

(c) pass such other and further order or orders as this Hon'ble Commission may deem fit and proper in the facts and circumstances of this case.

10.    In the instant Appeal, the Appellant mainly stated the following:-

1. The State Commission failed to appreciate that the relief of compensation for delay is consequent to the main relief of possession. Without seeking the main relief, only consequential relief cannot be sought.
2.  The State Commission failed to appreciate that the possession of the plot has already been offered to the Respondents in April 2015 and it is they who is not taking possession by raising one or the other objection.
3. The State Commission failed to appreciate that the Complainant invested in the project for commercial gain. Thus, he cannot be termed as Consumer within the scope of Section 2(d) of the Consumer Protection Act, 1986.
4. The State Commission failed to appreciate that the award of interest @ 12% per annum is not justified in view of the broad principles laid down by the Hon’ble Supreme Court in Ghaziabad Development Authority Vs Balbir Singh reported as 2004(3) Scale, that award of compensation necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury...."

11.    Upon notice, the Respondents/ Complainants have not filed any Reply/objections to the present Appeal. However, they reiterated the factual details of the case, emphasizing that the OP has not provided any specific date for possession of the residential unit in question. Further, the Respondents/ Complainants highlighted that the OP lacks a Completion Certificate as mandated by the Punjab Apartment and Property Regulation Act (PAPRA) at the time of the offer for possession was made. The main prayer in the Complaint was for possession of the plot, in question, complete in all respects and free from all defects; pay penal interest @12% per annum on Rs.35,35,200/- from 11.12.2010 to 09.4.2012 for delayed execution of allotment letter; Interest @12% per annum on Rs.75,79,893/- from 09.10.2013 till possession is delivered; issue a valid completion certificate as required under Punjab Apartment and Property Regulation Act, 1995; complete all development and infrastructural requirements; correct the statement of final dues and clear all payments due to the complainants up-till actual and complete possession; refrain from taking any coercive measures qua the allotment of the complainant’s and charge any penal interest on the full and final amount demanded; pay Rs.3,00,000/- as compensation on account of inconvenience, mental harassment and damages suffered due to deficiency of service on the part of the Opposite Parties; and pay Rs.50,000/- as litigation expenses.

12.    The learned Counsel for the Appellants painstakingly argued that the compensation for delay in delivery of the property can only be granted from the committed date of possession up to the date of offer of possession, after obtaining the partial completion certified i.e., on 10.07.2015. Further, awarding @12% interest and Rs.2,50,000/- as compensation for the delay in handing over a residential plot is excessive and not aligned with the directives of the Hon’ble Supreme Court and this Commission. The compensation cannot be granted on multiple heads. He placed reliance on the following judgments: -

a)   I (2019) SLT, Supertech Ltd. Vs. Rajni Goyal.

b)   DLF Home Developers Ltd. & Anr. Vs. Capital Greens Flat Buyers Association etc. CA Nos. 3864-3889 of 2020.

c)   IV(2019)SLT 675- DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda.

13.    The Learned Counsel for the Respondents/ Complainants reiterated the facts of the complaint and relied on certain judgments of the Hon'ble Supreme Court in favour of the Respondents/ Complainants. He argued that the Complainants prayed for possession of the plot at the earliest, complete in all respects. Additionally, the Complainants sought Compensation for delay in possession from 03.12.2013 (expected date of possession) till the date of actual possession.

14.    We have examined the pleadings and associated material brought on record. We have carefully heard the learned counsels for both the parties.

15.    It is an established fact that there has been an unreasonable delay in the development of the project in dispute. The Allotment-Cum-Agreement was executed on 09.04.2014. Possession was to be given within a period of a total of 18 months.  The argument of the Appellants that it had partial Completion Certificate is of limited consequence. The non-availability of the Occupancy/Completion Certificate points to the deficiency on the part of the Appellant.

16.    In this regard the Hon’ble Supreme Court, in Samruddhi Co-Operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd. in Civil Appeal 4000 of 2019, decided on 11^th of January 2022, has held that:

“In the present case, the respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as ‘consumers’ to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate”.

17.    As regards interest @ 12% awarded by the learned State Commission, the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, decided on 25.03.2021 has held that:

“.....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 the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified.

…In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified. Having regard to all the facts and circumstances of the case, we modify the order of the NCDRC by directing that the appellant shall pay interest at the rate of 9% per annum to the respondent instead and in place of 12% as directed by the NCDRC. Save and except for the above modification, we affirm the directions of the NCDRC.”

18.     In a recent Order, the Hon’ble Supreme Court, in the case of Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 07.4.2022 has held as under:-

“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts.  The Commission in the Order impugned has granted interest from the date of last deposit.  We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.

At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.”

19.    The other contention of the Appellant is that the offer of possession was already made to the Respondents in April 2015 and it is the complainant who failed to take possession by raising one or the other objection. In this regards, the Hon’ble Supreme Court in Supertech Ltd. Vs. Rajni Goyal (2019) 17 SCC 681 decided on 23.10.2018 has held that:-

“However, the Commission held that since there was a delay in handing over possession of the flat to the Respondent purchaser, the Appellant builder was liable to pay interest to the Respondent purchaser by way of compensation.  The scheduled date for handing over possession was 31.10.2013. The Appellant builder had issued the pre-possession letter on 31.10.2015. As per the Respondent purchaser, the Appellant builder did not have the occupancy certificate on that date. The Commission directed the Appellant builder to pay compensation in the form of simple interest @ 8% p.a. from 1.11.2013 till the date on which possession was actually offered to the Respondent purchaser.

The Appellant builder inter alia submitted that possession of the flat was offered to the Respondent purchaser in December, 2015 after obtaining the completion certificate for the building. Even though the agreement provided for delivery of possession by 31.10.2013, the delay occurred because of various legal impediments in timely completion of the project because of various orders passed by the National Green Tribunal. The delay ought to be computed from six months after 31.10.2013 i.e. from 1.5.2014 by taking into consideration, the 6 months grace period provided in the agreement. Furthermore, the period of interest should close on April, 2016 when the full occupancy certificate was obtained as per the admission of the Respondent purchaser herself in para 4(j) of the Consumer Complaint, wherein she has admitted that the Appellant builder had obtained the completion certificate as late as April, 2016 with respect to delay in handing over possession.  The Respondent purchaser ought not to be allowed to reap the benefits of her own delay in taking possession. In the light of the aforesaid discussion, the period of compensation of interest must be computed from 1.5.2014 till 30.4.2016 at the rate awarded by the Commission. The Order of the Commission is modified only to the extent mentioned hereinabove. The Appeals are disposed of accordingly.”

20.    As regards the contention of the learned Counsel for the Appellant that the Respondents purchased the Plot for commercial purpose, this Commission in the case of Sanjay Rastogi v. BPTP Limited & Anr (CC No. 3580 of 2017 decided on 18.06.2020), which was upheld by Hon’ble Supreme Court, held as under:

"13...Once, the Complainant has clarified in the very first para of his plaint that he is not buying the unit for any commercial purpose. It is for the OP to prove otherwise. Two, commercial purpose requires that the Complainant be shown to be in the business of buying and selling flats. No attempt has been made to prove this.” 

21.    Similar observation was made by this Commission in the case of Sai Everest Developers v. Harbans Singh Kohli, 2015 SCC OnLine NCDRC 1895 decided on 21.07.2015, in which it was held that

“the Opposite Party should establish by way of documentary evidence that the Complainants were dealing in real estate or in the purchase and sale of the subject property for the purpose of making profits.”

22.    In the instant Appeal while the Respondent denied that the property was purchased for commercial purpose, the Appellant had led no evidence to assert that the said Unit was purchased by the Respondent for the purpose of resale.

ORDER

23.    In view of the foregoing, a portion of the order of learned State Commission dated 02.02.2016 stands amended only with respect to the interest, compensation and costs as follows:-

(iv) & (v).  The Opposite Parties are directed to pay interest @ 9% per annum on Rs.75,79,893.43 to the complainants from 03.12.2013 till the date of offer of possession, after obtaining completion certificate, within a period of one month from the date of this order. Failing which, it shall carry penal interest @12% per annum from the date of default till actual payment.

(vi).  The order pertaining to payment of compensation of Rs. 2,50,000 is set aside.

(vii). The Opposite Parties are further directed to pay Rs.50,000/- to the complainants as cost of litigation.

24.    The remaining parts of the Order of the learned State Commission dated 02.02.2016 is affirmed. All the pending Applications, if any, are disposed of accordingly.  The statutory amount deposited by the Appellant, if any, be refunded after due compliance of the order.