JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

Consumer Complaint No.535 of 2015

          The complainants in Consumer Complaint No. 535 of 2015 namely Ravi Marwah and Mrs. Aarty Marwah booked a residential flat in a project namely ‘Unitech Verve’, which the opposite party was to develop in Greater Noida.  Initially the booking was made in another project namely ‘Capella’ but, later on it was transferred to Unitech Verve, since the opposite party had shelved the ‘Capella’.  The opposite party allotted Apartment No.1203, admeasuring 1577 sq. ft. in the aforesaid project to the complainants for a total consideration of Rs.59,63,666/- out of which Rs.49,71,662/- was paid by the complainants in the year 2008.  As per the Buyers’ Agreement executed between the parties, the possession of the flat was to be delivered within 12 months of the signing of the said agreement, which came to be executed on 10.5.2011.  The possession therefore, ought to have been delivered to the aforesaid complainants by 10.5.2012.  The grievance of the complainants is that the opposite party has failed to offer possession of the flat booked by them though, more than three years from the committed date of possession have already expired.  The complainants are therefore, before this Commission, seeking refund of the principal amount paid by them, along with interest @ 18% per annum, which comes to Rs.62,64,294/-, thereby making an aggregate of Rs.1,12,35,956/- as on the date of filing of this complaint.

Consumer Complaint No.536 of 2015

2.      The complainants in Consumer Complaint No. 536 of 2015 namely Amit Bhatia and Mr. Bhawna Bhatia booked a residential flat in the project ‘Unitech Verve’ in May, 2008. The sale consideration agreed for the sale of the said flat was Rs.57,51,210/- out of which Rs.51,35,040/- already stands paid to the opposite party in the year 2008 itself.  In their case, the possession was to be delivered within 21 months from the date of the agreement which was executed on 24.7.2008, meaning thereby that the possession ought to have been delivered by 24.4.2010.  Since the possession was not offered to them, they are also seeking refund of the amount paid by them, along with interest @ 18% per annum and the aggregate of the principal sum paid by them and simple interest calculated @ 18% per annum comes to more than Rupees one crore.

3.      The complaints have been resisted on several grounds but all those grounds have repeatedly rejected by this Commission in a number of consumer complaints. One of the objections taken by the opposite party is that since the original cost of the flat was less than Rs. One crore each in both the complaints, the complainants ought to have approached the State Commission instead of approaching this Commission.  Reference in this regard is made to the provisions contained in Section 21(a) (i) of the Consumer Protection Act.

4.      The learned counsel for the complainants has drawn our attention of the decisions of this Commission in Dewan Ashwani & Ors. Vs. Unitech Reliable Projects Pvt. Ltd. Consumer Complaint No.282 of 2012, wherein in a complaint relating to the booking made by the complainants in this very project i.e. Unitech Verve in Sector Pi-II of Greater Noida, this Commission, after rejecting all the contentions advanced by the opposite party, directed the opposite party to refund the amount paid by the complainant, along with interest @ 18% per annum from the date of receipt of the amount till realization. The complainants therein were also paid Rs. 1,00,000/- as compensation for the harassment and mental agony suffered by them at the hands of the opposite party.  Being aggrieved form the aforesaid order passed by this Commission, the opposite party approached the Hon’ble Supreme Court by way of an appeal.  Vide order dated 09.10.2015, the Hon’ble Supreme Court, on the reference of the learned Senior counsel appearing for the opposite party granted them leave to withdraw the said appeal with liberty to approach this Commission with some kind of proposal in terms of Clause 4(e).

5.      Since a decision rendered by a Coordinate Bench of this Commission, directing refund of the principal amount paid by the buyer, along with interest @ 18% per annum on that amount, has been accepted by the opposite party by withdrawing the appeal which it had preferred before the Hon’ble Supreme Court, the complainants, on the principle of parity, are entitled to an identical relief.  Therefore, we need not independently examine the ground taken by the opposite party for resisting these complaints.

6.      The learned counsel for the opposite party submits that the plea of jurisdiction which she has advanced before this Commission was not considered by this Commission in Dewan Ashwani & Ors. (supra).  However, this contention was considered and expressly rejected by this Commission in Swarn Talwar & Ors. Vs. Unitech Ltd. Consumer Complaint N. 347 of 2014 and connected matters decided on 14.08.2015.  The following view taken by this Commission in Swarn Talwar (supra) is relevant in this regard:

          “5.      The first question which arises for our consideration in these cases is as to whether this Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. Section 11(1) of the Consumer Protection Act read with Section 21 of the Consumer Protection Act to the extent it is relevant provides that this Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000/-. The contention of the learned counsel for the opposite party is that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/- except in one case. The learned counsel for the complainants on the other hand contended that the interest which they have claimed along with refund of the principal sum even if not so described specifically, is by way of compensation only, since the opposite party has been deficient in rendering services to the complainants by not delivering possession of the flats on or before the time agreed in this regard.

6.      In our view, the interest claimed by the flat buyers in such a case does not represent only the interest on the capital borrowed or contributed by them but also includes compensation on account of appreciation in the land value and increase in the cost of construction in the meanwhile. As noted by us in CC No.232 of 2014, Puneet Malhotra Vs. Parsvnath Developers Ltd. decided on 29-01-2015, there has been steep appreciation in the market value of the land and cost of construction of the residential flats in Greater Noida in last about 7-10 years and consequently the complainants cannot hope to get a comparable flat at the same price which the opposite party had agreed to charge from them. In fact it would be difficult to get a similar accommodation, even at the agreed price plus simple interest thereon at the rate of 18% per annum. Therefore, the payment of interest to the flat buyers in such a case is not only on account of loss of income by way of interest but also on account of loss of the opportunity which the complainants had to acquire a residential flat at a particular price.

7.      In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Hon’ble Supreme Court inter alia observed and held as under:

        “However, the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury. Thus the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is

received/paid but possession is not given within the period set out in the brochure...

…Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both

mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause.

That compensation cannot be uniform and can best of illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher.

          It would, thus, be seen that the Hon’ble Supreme Court recognized that the interest to the flat buyers in such cases is paid by way of compensation. Therefore, there is no reason why the interest claimed by the complainants or at least part of it should not be taken into consideration for the purpose of deciding the pecuniary jurisdiction of this Commission. If this is done, the aggregate amount claimed in each of the complaints exceeds Rs.1,00,00,000/- and, therefore, this Commission does possess the requisite pecuniary jurisdiction”.

          The opposite party preferred an appeal before the Hon’ble Supreme Court against the decision of this Commission in Swarn Talwar (supra).  The said appeal being Civil Appeal (Diary) No.35562 of 2015 was dismissed with the following observations:

          “We have heard learned counsel for the appellant and perused the record.  We do not see any cogent reason to entertain the appeal.  The judgment impugned does not warrant any interference.

          The Civil Appeal is dismissed”.

7.      The legal proposition which emerges from the decision of this Commission in Swarn Talwar (supra) which was later upheld by the Hon’ble Supreme Court is that since the interest in such matters is awarded by way of compensation, the amount of interest claimed by the flat buyers needs to be added to the principal amount paid by them for the purpose of deciding whether a particular complaint falls within the pecuniary jurisdiction of this Commission or not.  In both these cases, when compensation claimed in the form of interest by the complainants is added to the principal amount paid by them, the aggregates comes to more than Rupees one crore.  Therefore, it would difficult for us to accept the contention that this Commission lacks pecuniary jurisdiction to entertain these complaints and the complainants should be relegated to the concerned State Commission.

8.      For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(i)      The opposite party shall refund the principal amount of Rs.59,63,666/- in Consumer Complaint No.535 of 2015 and Rs.57,51,210/- in Consumer Complaint No.536 of 2015 to the respective complainants, along with compensation in the form of simple interest @ 18% per annum from the date of each payment till the date on which the principal amount, along with compensation in the form of interest is paid, in terms of this order;

(ii)      The opposite party shall also pay Rs.10,000/- each as the cost of litigation in both the complaints.

(iii)     The payment in terms of this order shall be made within three months from the date of this order.  No other relief is pressed.