Chandigarh

StateCommission

A/133/2024

A.P. DUGGAL - Complainant(s)

Versus

THE CHIEF EXECUTIVE OFFICER-CUM-SECRETARY H.P. HOUSING AND URBAN DEVELOPMENT AUTHORITY - Opp.Party(s)

DEVINDER KUMAR

10 Dec 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	133 of 2024
Date of Institution	:	27.03.2024
Date of Decision	:	10.12.2024

 

 

 

 

 

 

Sh. A.P. Duggal s/o Late Dharam Paul Duggal resident of Flat No.C-42, Sector 48-B, 2^nd Floor, Chandigarh.

 ….Appellant/Complainant.

Versus

The Chief Executive Officer-cum-Secretary H.P. Housing and Urban Development Authority (HIMUDA) Nigam Vihar, Shimla-171002 (H.P).

 ...Respondent/Opposite Party.

 

BEFORE:    JUSICE RAJ SHEKHAR ATTRI, PRESIDENT

                  MR. RAJESH K. ARYA, MEMBER

 

ARGUED BY :-    

Sh. Amit Mehta, Advocate for the appellant.

Sh. Nitin Rana, Advocate for the respondent – on VC.

PER  RAJESH  K. ARYA,  MEMBER

                    The instant appeal has been filed by the complainant – Sh. A. P. Duggal (appellant herein) seeking modification of order dated 01.02.2024 vide which his consumer complaint No.567 of 2020 has been partly allowed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (in short ‘District Commission) in the manner that the opposite party - The Chief Executive Officer-cum-Secretary H.P. Housing and Urban Development Authority (HIMUDA) (respondent herein) has been directed to immediately execute the conveyance deed and hand over possession of the subject plot to the appellant within forty five days from the date of completion of the formalities i.e. deposit of requisite non judicial stamp papers, outstanding amount, penal interest etc., if any, by the appellant. 

2]           The facts of the case, in brief, before the District Commission, were that in the year 2006, the opposite party published an advertisement offering freehold residential plots at Mandhala, Baddi, in response to which, the complainant applied for a type III plot of 200 sq. meter by paying ₹88,000/- as earnest money. The opposite party issued an allotment letter on 8.5.2007, confirming the complainant's successful draw of lots and requested the first installment of ₹1,32,000/- within 30 days, with a penalty for late payment. Subsequently, on 2.8.2007, the complainant was allotted plot No.C-72 at a tentative price of ₹8,80,000/-. Over time, the complainant made payments totaling ₹8,00,000/-. On 28.9.2011, the opposite party issued a letter adjusting the final cost to ₹10,55,000/- and asked for ₹1,75,000/- in lump sum within 45 days. The complainant complied, completing a total payment of ₹10,55,000/-. However, upon visiting the site, the complainant found that basic development works like electricity, roads and sewerage had not been completed, contrary to the opposite party’s claim that the plot was ready for possession. The opposite party misrepresented the status of the development and did not provide a date for completion or an occupation certificate, although the brochure specified that development work should be completed before possession. The complainant claimed that the opposite party’s failure to complete the development work and offer possession amounted to deficiency in service and unfair trade practices, particularly as the opposite party continued to demand balance payments and penal interest. Despite several requests for possession and interest on the amounts paid, the opposite party did not resolve the matter.

3]                The opposite party, in its defense, acknowledged the allotment and payments but denied the lack of amenities, citing that over 100 allottees had completed their constructions. The opposite party further pleaded that the complainant failed to complete formalities, including executing the conveyance deed within the stipulated 45 days after receiving the final allotment letter. It contended that the complainant’s allegations were false and sought to contest the complaint on the grounds of maintainability, jurisdiction, limitation, and estoppel.

4]                 In this appeal, the appellant/complainant is seeking modification of the impugned order with the prayer to direct the respondent/opposite party to deliver the physical possession of the plot to him; award interest @14% p.a. for delayed possession from the date of deposit of the amount with the respondent till the date of handing over the physical possession; refund ₹1,903/- alongwith interest paid as penal interest/watch and ward charges; pay ₹2,00,000/- as compensation for causing mental agony, harassment and humiliation to him and ₹30,000/- as litigation expenses. It may be stated here that at the time of admission hearing i.e. on 08.04.2024, it was vehemently argued by the Counsel for the appellant that although the complaint has been partly allowed by the District Commission but nothing has been paid towards delayed possession and further compensation awarded by the District Commission is highly meager. In the grounds of appeal, it has been stated that despite receipt of the entire consideration amount, the respondent has failed to complete the development works and provide basic amenities and also failed to deliver possession of the plot in question to the appellant with all amenities and the District Commission below has failed to appreciate this aspect of the matter. It has further been stated that the respondent neither disclosed the date of completion, occupation certificate and status of work regarding the project nor placed on record any documents to bring true facts before the District Commission. It has further been stated that as per the brochure, the respondent shall not have any responsibility or obligation for any damage occurring to the plot and/or the services like roads, paths, water supply, sewerage, electric supply and/other development works after plots are handed over, which clearly means that before the plots was handed over to the appellant/allottee, all the development works referred in the brochure were supposed to be complete. It has further been stated that the respondent has not mentioned any specific date to deliver the possession of the plot or has signed any agreement with the appellant, which itself amounted to unfair trade practice. It has further been stated that the respondent vide its letter dated 28.09.2011 had said that possession of the plot would be delivered after receiving full and final cost of the plot and registration of conveyance deed. It has further been stated that the condition/formality regarding registration of conveyance deed before possession imposed by the respondent shows its malafide intention just to escape from its contractual liability and to deliver the incomplete/sham possession of the plot to the appellant which lacked basic amenities. The appellant placed reliance on W. Cdr. Arifur Rahman Khan & Aleya Sultana and ors. Vs. DLF Southern Home Pvt. Ltd. (Decided on 24.08.2020), wherein the Hon’ble Supreme Court of India held that a term of contract will not be final and binding if it is shown that flat purchasers had no option but to sign on dotted line, framed by the builder. The incorporation of such one sided clauses in an agreement constitutes an unfair trade practice. 

5]                It has further been stated that the failure of the opposite party to offer and deliver physical possession of the plot in question after receiving full and final amount for such an inordinate delay, without there being basic amenities, amounted to deficiency in rendering service. It has further been stated that the District Commission has failed to award any interest for delayed possession alongwith compensation for mental agony and physical harassment and also did not put any penal clause, in case the respondent did not comply with the order within the stipulated period of 90 days.

6]                On the other hand, on behalf of the respondent, it has been submitted that the possession of the plot in question was to be offered/handed over only after depositing final cost of plot and execution of conveyance deed, on “As is where is basis” in terms of Clause 7 of allotment letter dated 02.08.2007. It has further been submitted that it was a big project and it will take considerable time for development and moreover, the construction of new patches are being also developed as per provisions contained in the terms and conditions for allotment. It has further been submitted that in order to take over the possession, the appellant was required to executive conveyance deed after making full and final payment to the respondent and after completing all the codel formalities as have been prescribed in the final allotment letter dated 28.09.2011 but the appellant himself has failed to do so. It has further been submitted that the plot in question has been allotted on self-financing scheme where every allottee in order to take over possession has to pay full and final cost and to take over possession within 45 days from the issue of final allotment letter, failing which, every allottee has to pay penal interest on delayed amount and watch and ward charges @0.1% of the cost up-to three months (excluding 45 days) and thereafter 0.2% of the cost till taking over possession as per terms and conditions of the scheme. It has further been submitted that final allotment letter dated 28.09.2011 had been issued after completion of basic amenities at site. Lastly prayer for dismissal of appeal has been made by the respondent.

7]                After hearing the rival contentions of the parties and going through the material available on record, the impugned order and the written submissions, we are of the considered view that the appeal is liable to be accepted and the impugned order needs modification for the reasons to be recorded hereinafter. It is apposite to mention here that during the pendency of this appeal, on 05.07.2024, it came to notice of this Commission during preliminary arguments, that the possession of the plot is ready and the appellant is also ready to take the same. As such, we directed the respondent – opposite party to deliver possession of the plot in question to the appellant – complainant within a period of 15 days from the date of receipt of copy of the order. We also directed the respondent – opposite party to submit possession delivery report before this Commission alongwith copy of Completion/Occupation Certificate on the next date of hearing i.e. 31.07.2024. Accordingly, on 31.07.2024, Sh. Naresh Kumar, Clerk from the office of respondent – HIMUDA appeared before this Commission by filing his authority letter. He also placed on record copy of Allotment Letter dated 16.03.2024 w.r.t. the plot in question i.e. Plot No.C-72 in Housing Colony at Mandhala (Baddi), written to the appellant Sh. A. P. Duggal, wherein an outstanding dues of ₹7,05,162/- have been shown as payable by the appellant. Copy of the said letter was supplied to the Counsel for the appellant, who contended that in the absence of any offer/delivery of possession till date, the question of raising demand of ₹3,07,005/- + GST of ₹55,261/- thereon and non-construction chargers of ₹3,42,875/- for the period from 31.07.2017 to 31.01.2024, does not arise at all as it is the respondent itself who has delayed the possession under the garb of unfair Clause 7 ibid. In our considered opinion, Clause 7 of the initial allotment letter dated 02.08.2007, which stipulates that possession of the plot would be handed over only after the final cost of the plot is paid and the conveyance deed is executed, on an “as is where is basis,” is fundamentally unfair. It is evident from the record that by November 2011, when the complainant had already paid the total sale consideration for the plot, the development work had not been completed and essential amenities such as roads, electricity, and sewerage were still lacking. Despite this, the respondent, HIMUDA, insisted on the unfair condition of Clause 7, delaying the possession of the plot. The possession was only offered after specific directions were given by this Commission in its order dated 05.07.2024, despite the substantial payment made by the complainant. Moreover, while possession was eventually offered by way of allotment letter dated 16.03.2024, the respondent raised an illegal and arbitrary demand for watch and ward charges up to 26.02.2024 and also levied non-construction charges as stated above. This demand is entirely unjustifiable as the respondent is at fault for the delay in offering possession, which resulted from its own failure to fulfill its obligations under the terms of the agreement and the unfair provisions outlined in Clause 7. The imposition of additional charges for a period during which the respondent was responsible for the delay further exacerbates the unfairness of the situation, which in our considered view, the appellant is not liable to pay in any case. As such, the demand of  ₹3,07,005/- + GST of ₹55,261/- thereupon towards watch and ward charges  and ₹3,42,875/- towards non-construction chargers for the period from 31.07.2017 to 31.01.2024 raised by the respondent – opposite party vide allotment letter dated 16.03.2024 is quashed. It is made clear that the respondent – opposite party will not charge any such charges from the appellant – complainant henceforth. Not only above, the respondent shall also refund an amount of ₹1903/-, which the appellant paid towards penal interest/watch and ward charges.

8]                Further in the absence of any agreement signed between the parties and when Clause 7 ibid is declared as unfair by this Commission, we are of the considered view that in such circumstances, it is well settled law that non-delivery of possession of plots/units by the promised date or if there is no 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. It was also so said 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. The above 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. It may also be stated here that  it is well settled law that onus to prove the stage and status of infrastructure and development work at the project site and that all the permissions/certificates/approvals have been obtained in respect of the project in question, is on the builder/developer. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. It is also settled law that before offering possession of a unit/plot in a project, the project proponent is legally bound to complete the construction, development and basic amenities at the project site and also to obtain occupation and completion certificates from the competent authorities.

9]                As stated above, in the present case, since nothing has been produced on record that the project is habitable and ready for possession and when it has been stated by the respondent itself in its written arguments filed in appeal that since it was a big project and it will take considerable time for development, as such, we are of the considered view that the appellant - complainant needs to be suitably compensated for the period, he remained without possession of the plot despite making substantial payment referred to above.

10]              Now the question arises, as to what compensation should be granted to the appellant - complainant, for delay in delivery of possession of the plot to him and for what period?. It may be stated here that Consumer Protection Act has been made to safeguard consumer rights. This Act is regarded as the 'Magna carta' (everyone is subject to the law, even the king, and guarantees the rights of individuals, the right to justice and the right to a fair trial) in the field of consumer protection for checking unfair trade practices, ‘defects in goods’ and ‘deficiencies in services’ and it works and protects consumers even in situations where they do not know their rights. Failure of the respondent - opposite party to provide complete/effective possession of the plot within a specific period (say three years where no agreement has been executed) amounts to deficiency in service. It is also matter of common parlance that for purchasing the plot(s)/unit(s), the purchasers take loans from their family members, relatives and friends or financial institutions or under self-fining schemes as the instant case is. In some cases, the purchasers live on rent in the absence of timely delivery of possession. On account of delay in actual delivery of possession within the stipulated period, the appellant - complainant suffered mental agony, hardships and financial loss. In case titled as Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon’ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022, the Hon’ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-

“……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…….”

 

In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon’ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered. In the present case, the complainant has purchased the plot in question, as far as back in 2006 and remained empty handed for more than 18 long years and had to approach the Consumer Fora for redressal of his grievance. The respondent - opposite party has played fast and loose with the appellant - complainant and has caused tremendous harassment and mental agony to him. In our considered opinion, if we grant interest @9% p.a. to the appellant - complainant on the entire amount deposited by him w.e.f. 08.05.2010 (reasonable period of 3 years from the date of allotment letter dated 08.05.2007, Annexure C-2) onwards till 16.03.2024 the date of offer of possession/allotment letter, that will meet the ends of justice. This interest will take care of any other financial loss caused to the complainant qua penal interest/watch and ward charges & non-construction charges, if any, already paid to the respondent-opposite party.

11]              For the reasons recorded above, this appeal is accepted and the impugned order dated 01.02.2024 passed by District Commission-I, U.T., Chandigarh stands modified in the manner that the respondent – opposite party is now directed as under:-

1.      to deliver actual physical possession of plot in question to the appellant-complainant, in the project in question, complete in all respects, after obtaining completion certificate from the competent Authority, on receipt of balance sale consideration, if any, strictly as per the terms and conditions of the allotment letter and get registered the conveyance deed on receipt of stamp duty charges and Govt. levies (without charging any delayed interest, watch and ward charges & non-construction charges), within a period of 45 days from the date of receipt of a certified copy of this order, failing which, the respondent-opposite party shall pay penalty @₹500/- per day till compliance of this direction. 
2.      to pay to the appellant-complainant, interest @9% p.a. on the entire amount deposited, starting from 08.05.2010 till 16.03.2024, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry interest @12% p.a. from the date of default till this entire accumulated amount is paid to the complainant.
3.      to refund an amount of ₹1,903/- to the appellant-complainant charged towards penal interest/watch and ward charges, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amount shall carry interest @9% p.a. from the date of default till realization.
4.      to pay to the appellant-complainant, compensation to the tune of ₹1,00,000/- for causing him mental agony and harassment and also for deficiency in providing service and adoption of unfair trade practice and cost of litigation to the tune of ₹25,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @9% p.a. from the date of default till realization.

12]              Certified copies of this order be sent to the parties, free of charge.

13]              File be consigned to Record Room after completion.

Pronounced

 10.12.2024.

(JUSTICE RAJ SHEKHAR ATTRI)

PRESIDENT

 

 

(RAJESH  K. ARYA)

MEMBER

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