JUSTICE V.K. JAIN (ORAL)

The complainant booked a residential floor with the OP in a project namely ‘Ivy Terraces’ which the OP was to develop in Sector-70 of Gurgaon.  Unit No.00B, on plot No.88 was allotted to them for a consideration of Rs.19838514/-. The parties executed a Sale  Agreement on 14.5.2014 incorporating their respective obligations.    As per Clause 4(a)(i) of the agreement, the possession was  to be delivered within 42 months of its execution meaning thereby that the possession ought to have been delivered by 14.9.2017. The grievance of the complainant is that the possession has not been offered to him and even the construction is not complete, despite he having already paid Rs.6300315/- to the OP.  The complainant is therefore, before this Commission seeking refund of the said amount alongwith interest and compensation. 

2.      The complaint was resisted by the opposite party which has filed a written version contesting the complaint. However, no affidavit of admission/denial of documents of the complainant or affidavit by way of evidence has been filed by the opposite party though the complainant has filed affidavit of admission/denial of documents as well as affidavit by way of evidence.

3.      In its written version, the opposite party has admitted the allotment made to the complainant, the agreement executed with him and the payments received from him.

4.      The complaint has been resisted primarily on the following grounds:-

(i)      There was shortage of labour in Delhi and NCR on account of Commonwealth Games organized in October, 2010.

(ii)      There was shortage of labour on account of implementation of Schemes such as NREGA and JNNURM

(iii)     There was shortage of water  and  Punjab & Haryana High Court had restrained  usage of ground water for construction purposes.

(iv)    There was reduction in the availability of bricks on account of some restriction placed by Ministry Environment &Forest and the Ministry of Mines on bricks kilns.

(v)     There was shortage of sand in the market.

(vi)    The real estate sector in India has been plagued with recession and financial problems.

5.      It is also stated in the written version that the complainant is entitled only to compensation at Rs.5 per sq.ft. per month of the saleable area in terms of Clause 4(b) of the Agreement executed between the parties.

6.      The grounds on which the complaint has been resisted have already been rejected by this Commission in several other consumer complaints allowed against the opposite party. A reference in this regard is made to the decision in Cap. Gurtaj Singh Sahni Vs. Unitech Limited, Consumer Complaint No.603 of 2014 and connected matters, decided on 2.5.2016, which to the extent it is relevant reads as under:-

“6. The next question which arises for consideration is the quantum of compensation which should be paid to the complainants for the delay in completion of the villas. As far as the prohibition on use of underground water in construction is concerned, the learned counsel for the complainant has drawn my attention to the order dated 21.08.2012 passed by a Divisional Bench of Punjab & Haryana High Court in Civil Writ Petition No. 20032 of 2008 wherein the High Court noted that the public notice issued under Section-5(3) of the Environment Protection Act, 1986 was published in the newspaper on 26.12.2000. It further shows that the said notice had imposed a complete ban upon the use of underground water in the construction without prior approval of the competent authority. It was noted by the High Court that despite publication of the aforesaid notice, the builders continued to use underground water for construction purposes. If there was a complete ban on use of underground water for construction and the said prohibition was notified on 26.12.2000, the opposite party must have taken into account, the impact of the said prohibition while entering into Buyers Agreements with the complainants. Therefore, it is not open to the opposite party to rely upon the said prohibition in order to justify the delay in construction of the villas sold to the complainants. The opposite party knew at the time of entering into agreements with the complainants that it will not be able to use underground water for construction of the villas and therefore, will have to make alternative arrangements from authorized sources for making the water available for the said construction. Therefore, the aforesaid prohibition on use of the underground water for construction purpose does not justify the delay in completion of the construction. In any case, no material has been placed by the opposite party on record to show that efforts were made by it during the relevant period to procure water from alternative sources but it was unable to obtain the water from the said sources. More importantly, in the Buyers Agreement executed between the parties, it was not disclosed to the buyers that since no underground water can be used for construction purpose, the developer will have to arrange water from alternative sources and in case it is not able to arrange water, the construction would be delayed and in that case, it will not be held responsible for the delay in completion of the construction.”

 7.      As regards the alleged shortage of labour and building material on account of Commonwealth Games, the plea taken by the opposite party is wholly misplaced since the said games were over in October 2010 much before the allotment in this project was made to the complainants.

8.      As regards the alleged economic slowdown and consequent recession in the real estate market, the same cannot be a valid ground for delaying the possession of the flats to the  complainants since some of the buyers made advance payment of almost 95% of the sale consideration whereas the other buyers were to make payment linked with the progress of construction and this is not the case of the opposite party  that they had defaulted in performing their contractual obligations as regards the payment of the sale consideration. Therefore, it cannot be said, as far as this project is concerned, that the construction was delayed on account of funds not being available with the opposite party.

9.      As regards the alleged shortage of labour due to NREGS and Jawahar Lal Nehru National Urban Renewal Mission, there is no evidence of the opposite party having attempted to recruit labour and having not found the requisite labour available in the market. Ordinarily such big builders operate by giving contracts/sub-contracts to third parties. There is no evidence of the opposite party having not been able to get any contractor/sub-contractor on account of non-availability of labour and/or building material in the market. Moreover, this is not the case of the opposite party that no construction activity took place in Gurgaon in the last 5 years or so. Had the labour and/or building material not been available in the market, the problem would have been faced not only by the opposite party but by all other builders as well as the individuals who were seeking to construct houses in this area. Therefore, I find no merit in the aforesaid plea taken by the opposite party.

11.    As regards the alleged shortage of bricks and sand, there is no evidence of the opposite party having invited tenders for supply of bricks and sand and the said material having not been available in the market. Moreover, there is no evidence of any sub-contractor/contractor of the opposite party having stopped the work awarded to him on account of non-availability of labour and/or building material in the market. It is possible that the wages of the labour and the cost of the building material may have gone up with the passage of time but it would be difficult to accept that neither the required labor nor the building material in sufficient quantity was available in the open market.”

7.      Moreover, in the present case the booking itself was made on 27.3.2014 whereas Commonwealth Games were held in October, 2010. Therefore, any shortage whether of material or of labour on account of Commonwealth Games could not have affected the construction of the flat which the opposite party had allotted to the complainant.

8.      Even otherwise, no evidence has been led by the opposite party to prove the alleged shortage of construction material and labour in the market.

9.      As far as Clause 4(b) of the Agreement is concerned, such clauses have consistently been held to be unfair and unenforceable. A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725 which to the extent it is relevant, reads as under:

          “6.4. A perusal of the Apartment Buyer’s Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties.

For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser.

Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days.

On the other hand, as per Clause 11.5 of the Agreement, if the Appellant – Builder fails to deliver possession of the apartment within the stipulated period, the Respondent – Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant – Builder, and even thereafter, the Appellant – Builder gets 90 days to refund only the actual installment paid by the Respondent – Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant – Builder is liable to pay Interest @ 9% p.a. only.

 6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant – Builder to serve a Termination Notice upon the Respondent – Flat Purchaser for breach of any contractual obligation. If the Respondent – Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant – Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages.

 On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent – Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement.

 6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :

 “‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.

 6.7. A term 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.”

10.    The learned counsel for the complainant submits that the actual payment made by the complainant comes to Rs.6452761/- but  inadvertently the service tax paid by the complainant was not included when the amount paid to the opposite party was mentioned in the consumer complaint. The complainant, therefore, is entitled to refund of the aforesaid amount of Rs.6452761/-. 

11.    For the reasons stated hereinabove, the complaint is disposed of with the following directions:-

(i)      The opposite party shall refund the entire principal amount of Rs.6452761/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum with effect from the date of each payment till the date of full refund. 

(ii)      The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainant.

(iii)     The payment in terms of this order shall be made within three months from today.