JUSTICE V.K. JAIN (ORAL)

The complainants booked a residential flat with the opposite party Unitech Ltd. in a project, namely, Unitech Habitat Alistonia Estate which the opposite party was to develop on Plot No.09 in Sector Pi-II of Greater Noida in District Gautam Budh Nagar of Uttar Pradesh. The booking was made on 16.6.2006 and the sale consideration for the flat was agreed at Rs.67,31,426/-. The parties then entered into a Buyers Agreement dated 30.8.2008. As per clause 4a of the Buyers Agreement, the possession was to be delivered to the complainant within 36 months of signing of the said agreement, subject to force majeure circumstances beyond the control of the developer. The grievance of the complainant is that despite his having paid as much as Rs.64,31,479/-, the possession of the flat was not even offered to him. The complainant, therefore, has approached this Commission by way of this consumer complaint seeking the following reliefs:-

“Direct the OP to hand over the possession of the aforesaid flat complete in all respects to the complainant immediately on agreed terms without any additional charges / levies etc. and execute all the necessary and required documents and pay incidental costs including enhancement in registration costs over and above registration cost payable in June 2009 etc. in respect of the said flat in favour of the complainants.

b.     Direct the OP to pay interest of Rs.1,70,52,504/- (Rupees One Crore Seventy Lakhs Fifty Two Thousand Five Hundred and four only) calculated at the rate of 18% compounded annually as per table forming part of Annexure C1 (colly), being the amount calculated by the complainant towards interest on amounts paid by them and being used by O.P. from the respective date of payments till 1^st July, 2014.

c.     Direct the OP to pay interest @ 18% per annum compounded quarterly on Rs.1,70,52,504/- (Rupees One Crore Seventy lakhs fifty two thousand five hundred and four only) at the same rate as is being charged by OP (in parity with Clause 2.c of allotment letter), as aforesaid, till the actual date of handover of possession of the flat complete in all respects by the O.P. to the complainant.

d.     Direct to the O.P. to pay a sum of Rs.30,00,000/- (Rupees Thirty Lakhs only) towards damages for the deficient services, unethical trade practices and restrictive trade practices along with physical and mental torture, agony, discomfort and undue hardships caused to the complainants and the complainants families as a result of the above acts / omissions on the part of the O.P.

e.     Direct the O.P. to pay a sum of Rs.2,00,000/- (Rupees Two Lakhs only) to the complainant towards the cost of litigation; and

f.      Any other order (s) as may be deemed fit and appropriate may also kindly be passed.”

2.      The complaint has been resisted by the opposite party on several grounds. The opposite party has admitted the booking made by the complainant as well as the execution of the Buyers Agreement with him. The delay in offering possession of the flat to the complainant is sought to be justified on the very same grounds which this Commission has repeatedly rejected in a number of consumer complaints. The following broadly are the reasons given by the opposite party to justify the delay in offering possession of the apartment to the complainants:-

(i)  There was blockage of construction work in Greater Noida by the farmers agitating for enhancement of compensation, from February 2008 to February 2009.

(ii)  There was shortage of labour as well as building material from April 2010 to March 2011 on account of Commonwealth Games.

(iii)  There was shortage of labour  due to implementation of social schemes such as NREGA and JNNURM.

(iv)  The farmers had filed several writ petitions in Allahabad High Court challenging acquisition of land allotted to developers for the housing complexes.

(v)  The acquisition of land in some villages of Greater Noida was quashed by the court and thereafter there was unrest amongst the farmers who  dharnas in front of  various projects of the builders.

(vi)  There was default on the part of several buyers in making payment resulting in acute resource crunch.

(vii)  There was recession in real estate agency during 2008-2009.

3.      Rejecting identical grounds taken by the opposite party, this Commission interalia held as under in Anil Kumar Gupta Vs Unitech Ltd. - CC No.472 of 2015 decided on 30.9.2016 and Aakash Chopra Vs. Unitech Acacia Projects - CC No.930 of 2015 decided on 20.6.2016:-

“(i) 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 complainant.

(ii)      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  complainant 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.

(iii)     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. 

(iv)    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 labour nor the building material in sufficient quantity was available in the open market.

(v) As far as the alleged agitation by farmers is concerned, there is no evidence of any agitation by the farmers on the site of this particular project.  Therefore, the plea taken in this regard appears to be only afterthought with a view to justify the delay on the part of the opposite party.

4.      For the reasons stated hereinabove, I have no hesitation in holding that the delay in offering possession of the flat to the complainant was not at all justified and cannot be said to be on account of reasons beyond the control of the opposite party.

5.      The possession of the flat in question has since been delivered to the complainant during pendency of this complaint on 15.10.2016 and, therefore, the only question which survives for consideration is the compensation to which the complainant is entitled to from the opposite party for the delay in delivering possession of the flat which it had allotted to him.

6,      As noted earlier, in terms of clause 4a of the Buyers Agreement, the possession was to be delivered to the buyer within 36 months from the date of the said agreement, meaning thereby that the possession ought to have been delivered on or before 30.11.2011. The case of the opposite party is that it had already obtained the Occupancy Certificate in respect of the tower in which the flat allotted to the complainant is situated, way back on 29.12.2010 but since the construction of the said flat was not complete, it could not be offered to the complainant prior to 26.8.2014. The letter dated 26.8.2014 to the extent it is relevant reads as under:-

“We are pleased to inform you that captioned residential unit booked by you in UNITECH HABITAT at Greater Noida, is ready for possession and you are just one step away from having your apartment

You are requested to clear your dues as per enclosed Statement of Account and Maintenance invoice within 60 days hereof.  This may be treated as final notice issued as per Terms and Condition of Allotment.  You are required to submit 4 (four) passport size photographs of each allottee, for the purpose of possession letter.

        Kindly contact Mr. Rajesh Sinha / Mr. Lalit Saxena on 0120-3985156 / 3985100 or e-mail @ rajesh.sinha@unitechgroup.com / lalit.saxena@unitechgroup.com for any Account related Query, making Final Payments and collection of Possession Letter, thereafter.  For inspection of your apartment for physical possession, you may kindly contact Mr. Sumit Gaur on 9654888875 or 0120-3985142.

        We are keen to ensure that when you move into your new apartment, it should greet you in its ultimate glory.  In this context, we intend to do final coat of paint on internal walls & polishing, fixing of CP fittings, fixing of laminated wooden floor in bedrooms after you have collected the possession letter from our Commercial Department.  The actual physical possession of the apartment shall be handed over after submission of possession letter at project site.”

On receipt of the aforesaid letter during pendency of this complaint, the complainant sent a communication dated 22.10.2014 to the opposite party. The said communication to the extent it appears to be relevant reads as under:-

“For me, to even consider taking Possession, while the matter is sub-judice, I need to ascertain from you, the following:

1.     Is Unitech, in Possession of a Completion Certificate & an Occupancy Certificate for the entire Habitat complex and more specifically Tower 18, Apt. 1008 and the common areas such as the Club facilities & Pool etc.  If yes, please provide a copy of the same.

2.     To what extent are the promised project facilities as per the brochures / Agreements, ready Please provide facilities-wise readiness report.

3.     Is there some kind of moratorium on Unitech to register the Habitat flats, by the Noida / Greater Noida Authorities or any other Regulatory / Judicial body, as a consequence of which, Unitech is not in a position to register the properties in the Registrar of Properties, office.  If so, please provide the relevant details.

4.     Your possession letter clearly states that the Apartment will be delivered to me in its ultimate glory.  Unfortunately for me, a site visit entailing, a photo session, as well, illustrates, otherwise.  The external façade is in a dilapidated condition, the lobby and the corridors, far from being finished are in a complete mess.  My concern is that the building is not habitable / presentable. Just a barely functioning building, is not what I, as a buyer, bargained for and it certainly does not speak well for Unitech’s reputation.

5.     Mr. Sumit Gaur, in charge of site inspection etc. was quite explicit in stating, that once the final demand notice is complied with, it may take up to 4 months, just to finish the interiors of my Apartment.  He further stated that the façade of the Tower and the corridors / lobby will not be completed until 50% of occupancy, takes place.  This in spite of the fact that a security deposit @ Rs.25 p.s.f. amounting to  R.52,175 is being charged upfront.

6.     As levy of the service Tax, in this category has become effective, as of last year, the resulting liability of Rs.35,155 should be borne by Unitech. Had Unitech not delayed the Project by over five years, I, the buyer would not have been subject to payment of this, relatively recent levy of Service Tax.

7.     The penalty for late delivery (Rs. 5 per month x 2,087 sq. ft) for sixty seven months (July, 2009 thru January, 2015) – amounts to Rs.6,99,145.  The credit for this amount is not reflected in your Statement of Accounts, accompanying the ‘Offer of Possession’.

Admittedly, there was no response from the opposite party to the aforesaid communication of the complainant dated 22.10.2014.

7.      When this matter came up for hearing on 28.4.2016, the following order was passed by this Commission :-

“The OP has offered flat No.1003 in Tower-18 to the complainant. According to the complainant, there are several deficiencies on account of which he is unable to take possession of the flat. He is directed to file an affidavit pointing out those deficiencies supported by the photographs. The opposite party is also directed to file affidavit stating therein that it has already obtained the Completion Certificate in respect of the above-referred flat and that the said flat is complete in all respects as per  Annexure-B and is in immediate habitable condition. The OP will also inform whether it is in a position to immediately execute and register the conveyance deed of the said flat in favour of the complainant.”

In compliance of the aforesaid order dated 28.4.2016, the opposite party filed an affidavit of Shri Anjesh Kumar Singh project in-charge of the project in which the flat was allotted to the complainant. The aforesaid affidavit to the extent it is relevant reads as under:-

“a.  That the opposite party has duly obtained the Completion Certificate / occupancy certificate dated 29.12.2010 with respect to the Project Habitat, Greater Noida, (True copy of the Completion Certificate/Occupancy Certificate is attached as Annexure-A). The civil structure of the flat is complete and possession can be offered within 45 days after completing furnishing and finishing work provided the complainant accepts the possession letter issued by the respondent.

b.  That the flat shall be delivered complete in its entirety complying with all aspects enlisted in Annexure-B of the petition. Some photographs of the flat, common area, Tower etc. are annexed herewith as Annexure-B.

c.   That the opposite party is ready in position, power and will to execute and register the conveyance deed of the aforementioned flat immediately without any further hindrances or unnecessary delay and the same shall be duly registered once the petitioner accepts the possession letter dated 26.8.2014 offered by the opposite party herein and deposits the stamp duty payable for the registration of sub-lease.”

8.      The complainant had filed photographs along with his affidavit dated 6.5.2016. The following as per those photographs were the deficiencies in the flat offered to the complainant:-

“Bathrooms are unfinished as per Annexure B of Allotment letter

1.      No bathroom fixtures have been installed.

2.       No shower stalls

3.       No doors

4.       Window panes broken

5.       No flooring

6.       Unfinished paint job

7.       Electricity fixtures are not installed

Balcony

1. Unfinished flooring as tiles are not installed

2. Unfinished paint job

3. electricity fittings not installed

4. No doors

Inside hallway of the apartment

1. Unfinished flooring as tiles are not installed.

2. Unfinished paint job

3. Electricity fittings not installed

4. Do doors

5. No woodwork

6. Broken walls need to be repaired

Drawing room/Dining room

1. Unfinished floorings as tiles are not installed

2. unfinished paint job

3. Electricity fittings not installed

4. No doors

5. No woodwork

6. Broken walls need to be repaired

7. Missing window panes

Main lobby (Ground Floor) Tower 18

1. Unfinished flooring as tiles/marble not installed

2. Unfinished paint job

3. Electricity fittings not installed

4. No doors

5. Broken walls need to be repaired

Underground parking lot entrance from within the building

1. Unfinished flooring as tiles/marble not installed

2. Unfinished paint job

3. Electricity fittings not installed

4. Broken walls need to be repaired

5. Piles of garbage/blockage of way/access”

          The complainant had also claimed several defects and deficiencies in the main lobby on the ground floor of Tower-18,  in the underground parking lot entrance and in the 10^th floor corridor besides the facade of Tower-18.

9.      When this matter came up for hearing on 11.8.2016, the Project Engineer Mr. Anjesh Kumar Singh  who was present in the court, after seeing the photographs filed by the complainant stated that the said photographs had been taken 7-8 months ago. Thus according to the Project In-charge, the photographs filed by the complainant reflected the condition of the flat as in about January 2016.

On that day, it was directed that the complainant as well as Mr. Anjesh Kumar Singh shall jointly visit the flat in question and in the presence of both of them, photographs of the flat will be taken from inside as well as from the outside. Liberty was given to both the parties to take such photographs as they might desire. However, no photograph has been filed by either party.

10.    The first question which arises for consideration is as to whether the opposite party had performed its contractual obligation with respect to possession of the flat by 26.8.2014 or not. As noted earlier, even as per the letter dated 26.8.2014, final coat of paint on internal walls and polishing had not been done, CP fittings had not been fixed and laminated wooden flooring in the bedrooms had not been fixed by the time the aforesaid letter dated 26.8.2014 was written. Even as per the affidavit of Mr. Anjesh Kumar Singh dated 6.5.2016, possession could be offered to the complainant within 45 days after completing furnishing and finishing work, meaning thereby that the furnishing and finishing work had not been done even by 6.5.2016 when the aforesaid affidavit was filed. Mr. Anjesh Kumar Singh interalia stated that the flat shall be delivered complete in its entirety in all aspects and listed in Annexure B of the petition. The aforesaid statement in the affidavit also shows that the flat was not complete in its entirety when the aforesaid affidavit was filed. In my view, the flat should have been complete in all respects before possession was offered to the complainant. Offering possession of the flat which is not complete in all respects, including the  finishing, work cannot be said to be in conformity with the contractual obligation of the OP. The very fact that the site engineer had sought 45 days for completing the furnishing and finishing work is a clear indicator that the flat was not complete in all respects even on that date. In fact, if the photographs filed by the complainant which the project engineer claimed to have been taken in around January 2016 are seen, it is evident that there were several deficiencies in the flat even at that time. Therefore, it can be safely said that in January 2016, the construction of the flat was not in complete in all respects.

11.    As noted earlier, on 30.8.2016 the parties were given liberty to carry out a joint inspection of the flat and file photographs to be taken during the said joint inspection. No photograph has been filed by either party. In these circumstances, it would be difficult to say exactly on which date the construction of the flat was complete in all respects. It, however, cannot be disputed that it was not complete in all respects by 6.5.2016 when an affidavit came to be filed by Mr. Anjesh Kumar Singh and he sought 45 days’ time to complete the entire work which still remained to be carried out in the flat. Therefore, in my opinion the opposite party must pay compensation to the complainants till 20.6.2016 when 45 days computed from 6.5.2016 expired. Though fridge, geysers, jacuzzi and shower cubicles  had admittedly not been fixed even by 30.8.2016, the said fittings, in my opinion, could be provided at the time of delivery of possession.  The construction of the flat  cannot be said to be incomplete only on account aforesaid equipment having not been provided.

12.    The next question which arises for consideration as what should be quantum of compensation to be paid to the complainants.  Though the case of the opposite party is that the complainants are entitled only to the agreed compensation of Rs.5/- per sq.ft. of the super area for each month the possession has been delayed, this Commission has repeatedly held the aforesaid term to be an unfair trade practice. In fact, with effect from the committed date of possession, the amount paid by the complainant can be considered to be a deposit held by the opposite party, in trust for the complainant, to be spent only in the construction of the flat.  Considering all the facts and circumstances of the case, including the prevalent interest rates on bank deposits, the opposite party is directed to pay compensation in the form of interest @ 8% per annum w.e.f. 30.8.2011 till 20.6.2016 to the complainant. While making payment in terms of this order, the OP shall be entitled to set off the compensation already credited to the account of the complainant, as reflected in the letter dated 26.8.2014.  

13.    As far as holding charges are concerned, in view of my finding in the preceding paragraphs, the OP shall be entitled to the said charges  w.e.f. 20.6.2016 till 15.10.2016 when the possession was actually delivered to the complainants. The OP shall also be entitled to the balance principal amount in terms of the demand letter dated 26.8.2014 along with interest on that amount @ 8% p.a. Rs. 25,000/- on account of not providing the Jacuzzi shall be deducted by the OP while raising demand in terms of this order.

          As far as service tax is concerned, that would not be payable considering the decision rendered by a Division Bench of Hon’ble High Court of Delhi in Writ Petition No.2235 of 2011 – Suresh Kumar Bansal Vs. Union of India & Ors. and connected matter.

14.    The payment in terms of this order shall be made by the opposite party within three months from today. The OP shall also execute the requisite title deed within the aforesaid period subject to the complainant depositing the requisite stamp duty.