- The present batch of Consumer Complaints has been filed by the Complainants, against the Opposite Party, Sunstone Developers Joint Venture seeking compensation for delayed delivery of the Flats booked by them in the complex to be constructed by the Opposite Party Developer in the name and style of “Hubtown Sunstone”, within stipulated period.
- Since the facts and question of law involved in these Complaints are similar except for minor variations in the dates and events and flat numbers, these Complaints are being disposed of by this common Order. However, for the sake of convenience, Consumer Complaint No. 12 of 2017 is treated as the lead case and the facts enumerated hereinafter are taken from Consumer Complaint No. 12 of 2017.
- Brief facts as narrated in the Consumer Complaint are that Akruti Nirman Limited, i.e., erstwhile company of Hubtown Limited and Swapanrajan Infrastructure Pvt. Limited formed a Joint Venture, i.e., Sunstone Developers Joint Venture (hereinafter referred to as Opposite Party Developer) vide Joint Venture Agreement dated 23.12.2011 with object to develop and construct the sale component by constructing the saleable components by utilising the FSI generated till 23.12.2011 on Property bearing Survey No. 341(pt.), CTS No. 629/1251, Village Bandra, Bandra East, Mumbai, in the name and style of ‘Hubtown Stone’ (hereinafter referred to as the Project) consisting of 3 Basements + Ground + 19 Upper Floors.
- Allured by the various representations given by the representatives of the Opposite Party Developer that the Project has received Commencement Certificate and all other approvals and sanctions have been received, the Complainant approached the Opposite Party Developer for allotment of a Flat. Accordingly, Flat No. 601, 6th Floor admeasuring 690 sq. ft. carpet area was allotted for the aggregate consideration of ₹1,96,00,800/- payable as per progress of the Project. Agreement for Sale (hereinafter referred to as the Agreement) was executed between the Parties on 31st March 2012. As per Clause 2.5 of the Agreement, the Possession of the Flat was to be delivered by March 2014. It is stated that till the agreed date of possession, i.e., March, 2014, the Complainant has made about payment of ₹1,37,76,945/- out of total sale consideration of ₹1,96,80,000/- despite that the Opposite Party Developer failed to deliver the possession of the Flat till the agreed date of possession. It was also stated that till the date of filing of the Complaint, as per demand of the Opposite Party Developer from time to time, the Complainant has made a total payment of ₹1,57,44,945/- ,i.e., 80% of the total sale consideration to the Opposite Party Developer, despite that they failed to deliver the possession of the Flat within stipulated period. Alleging deficiency in service on the part of the Opposite Party Developer, the present Complaint was filed with the following prayer:-
“(a) That this Hon’ble commission be pleased to declare that the Opposite Party is guilty of deficiency in service and be further please to direct to Opposite party to rectify the defects in its service as builder and developer with further directions to the Opposite Party to handover possession of flat being flat No.601, 6th admeasuring 690 sq.ft carpet area together with ca parking no. 44 A/B in building known as Hubtown Substone situated at land bearing survey No.341 (pt), CTS no. 629/1251 Village Bandra, Bandra (East), Taluka Andheri as per the terms and conditions of agreement dated 31th March 2012 by obtaining the occupation certificate from the concerned authorities in accordance with law forthwith or in such reasonable time this Hon’ble Commission may deem fit and proper by accepting the balance consideration of ₹39,35,055/- as per terms and conditions of agreement dated 31.03.2012 by and between the parties. (b) That this Hon’ble Commission be pleased to declare that the Opposite Party is guilty of delay in delivery of possession of flat in question as per its obligation vide clause 2.5 of agreement dated 31st March 2012 with further directions to the Opposite party to pay interest @ 24% p.a. w.e.f. from date of possession mentioned in the agreement till realization of the complainant’s claim together with further interest from the date of the decree till actual payment of the complainant’s claim. (c) That this Hon’ble Commission be pleased to award compensation of ₹25,00,000/- for causing mental torture and mental hardships to the Complainants herein on account of failure of the Opposite Party to comply with its obligation under agreement dated 31st March 2012 within the stipulated period mentioned therein. (d) That pending the hearing and final disposal of the above complaint, this Hon’ble commission be pleased to invoke the provisions of Section 13(3B) of the Consumer protection Act and grant injunction restraining the Opposite party, its partners, Directors, servants and agents and/or any other person or persons claiming by under or through it from creating third party interest in respect of the said flat being Flat No. 601, 6th floor, admeasuring 690 sq.ft carpet area together with car parking in building known as Hubtown Substone situated at land bearing survey no. 341 (pt), CTS no. 629/1251 Village Bandra, Bandra (East), Taluka Andheri earmarked for the Complainant under Registered Agreement date 31st March 2012. (e) Pending the hearing and final disposal of the above complaint the Opposite party be restrain from acting upon the amended plans and permissions granted by SRA subsequent to the agreement dated. 31.03.2012 and construct any additional floors on the building in question over and above the permission granted prior to execution of agreement in favor of complainants herein and in any event construct additional floor over and above basement + ground+19 upper floors in any manner whatsoever. (f) For costs of ₹1,00,000/- towards prosecuting the above complaint be provided for; (g) For such other and further relies as the nature and circumstances of the case may require.”
- The Complaints were contested by the Opposite Party Developer by filing written statement in which it has been stated that the present Complaint is not maintainable in view of the Arbitration Clause in the Agreement; Complainants are not consumers of the Opposite Party as the sale of Flat does not fall within the ambit of Service as such the Complaint is not maintainable and since there is no negligence, no compensation can be awarded to the Complainant. Relying upon Government Resolution No. ZOPUDHO-1001/Case No.125/14/ZOPSU-1 dated 22nd July 2014, it was stated that due to change of DCR and Policy of SRA, the generation of FSI was affected; due to non-availability of Cement, Steel and other Construction materials, the Project got delayed. It was further stated that the Project is delayed due to above-reasons which were beyond the control of the Opposite Party Developer and said reasons fall under the Force majeure Clause of the Agreement. It was further stated that as per terms of the Agreement they had updated the expected date of possession to the Complainant vide letters dated 22.08.2014 and 10.06.2015 and Emails dated 16.01.2016, 17.05.2016 and 07.07.2016 and sought extension of date of possession from the Complainants. It was further stated that there is no deficiency in service on their part and prayed that the Consumer Complaints be dismissed.
- During the course of proceedings, after obtaining Occupation Certificate on 01.08.2017, the Opposite Party Developer offered the Possession of the subject Flat to the Complainant on 02.09.2017 and the Complainant without prejudice to their rights after clearing the dues, had accepted the possession only on 16.02.2018 in compliance of Order passed by this Commission on 25.01.2018.
- Mr. Mohit Bhansali, learned Counsel for the Complainants, submitted that the Opposite Party Developer had failed to deliver the possession of the Flat within stipulated period and as such the Opposite Party Developer is liable to pay delay compensation in the form of simple interest @24% which the Opposite Party Developer has demanded from the Complainant towards delay in payment. It was further submitted that as per Clause No. 3.4 the payment was to be made on commencement of 15th slab, commencement of Terrace slab, plastering of building and possession of building, whereas the demand raised by the Opposite Party Developer vide letter dated 5th August 2017 itself is contrary to the payment schedule mentioned in the Agreement. It was further submitted that despite having received the entire sale consideration, the Opposite Party Developer neither completed the Project nor did provide the amenities as agreed such as gymnasium together with equipment and instruments, paving around the Building compound lights, Generator, open space garden, Recreation Garden. It was prayed that the Consumer Complaint be allowed.
- Per contra, Mr. Sachin Datta, learned Senior Counsel appearing on behalf of the Opposite Party Developer submitted that although after obtaining after obtaining Occupation Certificate on 01.08.2017, the Opposite Party Developer offered the Possession of the subject Flat to the Complainant on 02.09.2017 yet the Complainant wilfully took the possession with a delay of 6 months. Accordingly, the Complainant is liable to pay delay interest @24% on the outstanding dues in terms of Clause 6.1 of the Agreement for the period of delay in making the payment. It was further submitted that the Complainant is currently enjoying the possession without any interference. It was further submitted that the delay occurred due to the reasons which were beyond the control of the Opposite Party Developer. It was further submitted that although the Complainant has option to exercise his right to terminate the contract under Clause 19.5, yet the Complainant without raising any objection, continued with the contract, which makes it amply clear that the Complainant was not aggrieved by the extension of time for possession of the Flat, therefore, the Complainant is not entitled for any compensation. It was further submitted that there is no deficiency in service on their part and it was prayed that the Consumer Complaint be dismissed.
- We have heard Mr. Mohit Bhansali, learned Counsel for the Complainants, Mr. Sachin Datta, learned Senior Counsel appearing on behalf of the Opposite Party Developer, perused the material available on record and have given our thoughtful consideration to the various pleas raised by the learned Counsel for the Parties.
- The Hon’ble Supreme Court in M/s Emaar MGF Land Limited vs. Aftab Singh – I (2019) CPJ 5 (SC), has laid down the law that an Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint. Hence, the objection raised by the Opposite Party Developer that the clause of Arbitration bars this Commission from entertaining the Complaint is unsustainable.
- In view of the Judgment passed by the Hon’ble Supreme Court in “Lucknow Development Authority v. M.K. Gupta, [(1994) 1 SCC 243]” in which it has been held that 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.”, the contention of the Opposite Party Developer that the Complainants are not consumers of the Opposite Party and Complainants are not entitled for any compensation, is rejected.
- Relying upon Government Resolution No. ZOPUDHO-1001/Case No.125/14/ZOPSU-1 dated 22nd July 2014, it was stated that due to change of DCR and Policy of SRA, the generation of FSI was affected due to which Project could not be completed in time. The possession date as per Agreement was March 2014 whereas the said Government Resolution is issued on 22nd July 2014, i.e., much after the date of agreed date of Possession, which in our view does not help the Opposite Party Developer to establish their case. Second plea taken by the Opposite Party Developer that due to shortage of Cement, Steel and construction material, Project could not be completed in time. The Opposite Party Developer has failed to produce any cogent evidence to prove that there was shortage of cement, steel and other construction material. Even otherwise, it is the duty and responsibility of the Opposite Party Developer to manage the raw/construction material for construction and the Complainants cannot be made victim for the same. Therefore, we do not find any force in the plea of the Opposite Party Developer that the delay in the possession was due to the reasons which were beyond their control.
- We have gone through various Clauses of the Agreement and found that various clauses of the Agreement are unfair, one-sided, unjustifiable and only in favour of the Opposite Party Developer, for example, while as per Clause 6.1 in case of delay in payment, the Opposite Party Developer is entitled for interest @24% p.a. on the other hand, as per Clause 19.2(d) and Clause 19.5, in case of non-delivery of possession, the Opposite Party Developer is liable to refund the amount alongwith interest @9% p.a. After having received a huge amount of sale consideration, the Opposite Party Developer cannot take advantage of Clause 19.5 which in our view is also unreasonable, unfair and totally in favour of the Opposite Party.
- The Complainant cannot be made bound to the terms of the Agreement, which are unreasonable and unfair in the light of the Judgment passed by the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34 (SC), wherein the Apex Court has observed as follows:
“6.7. A terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. 7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms.” - It is not in dispute that the Complainant booked/hold the Flat in the Project to be developed by Opposite Party Developer on 07.03.2011. As per terms of the Agreement the expected date of delivery of the possession of the Flat was March 2014. Despite having received a huge sum, the Opposite Party Developer failed to deliver the possession within stipulated period. The possession was offered by Opposite Party Developer only on 02.09.2017. In compliance of Order dated 25.01.2018, the Complainant without prejudice to their rights after clearing all the dues, took the possession of the Flat only on 16.02.2018.
- We find it a fit case to place reliance on the Judgment dated 11.01.2021 passed by the Hon’ble Supreme Court in “Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors.” [Civil Appeal No. 5785 / 2019 & other connected Appeals], in which the Hon’ble Apex Court has observed as hereunder :
- The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees….”
- Respectfully following the principle laid down by the Hon’ble Supreme Court in “Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors.” (supra), we are of the considered view that the Complainants are entitled for Compensation for delay in delivery of the possession of the Flats. Keeping in view the peculiar facts and circumstances of the case and respectfully following catena Judgments of the Hon’ble Apex Court wherein delay compensation in the form of simple interest has been awarded not more than 9% p.a., we are of the view that the compensation in the form of simple interest @9% p.a. alongwith cost of ₹25,000/- would meet the ends of justice.
- Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today. The Opposite Party Developer shall also pay cost of ₹25,000/- to the Complainants in each case. Since we have awarded delay compensation till the date of offer of possession instead of actual physical possession of the Flat, the Opposite Party Developer shall not be entitled for any delay interest from the date of offer of possession till the date of payment made by the Complainant for taking physical possession of the Flat.
- All the Consumer Complaints stand partly allowed in above terms. The pending application, if any, also stands disposed off.
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