BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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1.      Dr. Romesh Pandey r/o 3054, Sector 19-D, Chandigarh.

2.      Mrs. Sanjoli Chimni Pande r/o 3054, Sector 19-D, Chandigarh.

….…Complainants

                           V E R S U S

Uppal’s Marble Arch, Pocket No.2 & 3, Manimajra, Chandigarh.

                                  ..…Opposite Party

CORAM:  SH.JAGROOP SINGH MAHAL PRESIDENT

              DR.(MRS) MADHU BEHL       MEMBER

Argued by: Sh. Gunjan Rishi, Adv. for complainants.

Sh. Vikas Bector, Adv. for OP

PER SHRI JAGROOP SINGH MAHAL, PRESIDENT

             Succinctly put, the complainants entered into an Apartment Buyer’s Agreement with OP in respect of a 4-Bed Room apartment No.14, First Floor, Tower B,  and paid Rs.1,45,70,250/- which was 95% of the basic sale price.  As per the newsletter of the OP the possession was to be delivered by the end of 2008.  However, they committed breach of the same by incorporating clause 16 in the terms and conditions as per which the possession was to be offered in March, 2009.   As per clause 8.1 of the agreement to sell, the possession was to be delivered to the complainants on or before 30 months from the date of start of construction of the residential complex.  However, vide letter dated 31.3.2009 the OP informed that the apartment would be ready for occupation in August 2009 only.  When the complainants sought information under the RTI Act they were astounded and flabbergasted to find that the completion certificate applied for by the OP had been rejected on technical grounds.  Appalled at the attitude of the OP, the complainants sent a legal notice dated 19.5.2009 which was replied by the OP vide letter dated 4.5.2009 in which they referred to clause 8.1 of the Agreement.  It has been alleged by the complainants that the OP are not going to complete the construction of the aforesaid apartment before the end of 2010 and thus putting them to great financial loss as on the one hand they are paying exorbitant rents and on the other paying huge EMI against the housing loan availed by them. Hence this complaint alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice.

2.             In their written reply the OP admitted the factual matrix of the case.  It has been stated that the answering OP had submitted the building plans for sanction with the Chandigarh Administration well within time but the Administration delayed the matter at various levels by raising baseless objections and the till the same are not sanctioned the completion certificate is not issued.  It has been pleaded that the possession of the flat could not be offered on account of global recession coupled with technical and legal hurdles and there was no deliberate or conscious attempt on the part of the answering OP to delay the handing over of the possession.  It has been submitted that under force majeure situations as contemplated in clause 8.1 of the agreement the answering OP was entitled for reasonable extension of time.  It has been pleaded that the building plans have now been sanctioned and the completion certificate would be issued in due course and the answering OP would be in a position to hand over the possession of the flat in question some time in March, 2010.  Pleading that there has been no deficiency in service or unfair trade practice on their part prayer for dismissal of the complaint has been made. 

3.             Parties led evidence in support of their contentions.

4.             We have heard the Learned Counsel for the parties and have also perused the record. 

5.             Annexure C-1 is the Newsletter issued by the OPs in September 2006 intimating to the general public and prospective clients that the possession of the premises would be delivered by them by the end of 2008.  It was also intimated that plans for Marble Arch have been sanctioned vide letter number 1078/T3, dated 7th September, 2006 and Bhoomi Poojan took place on 23rd September, 2006.  When the agreement Annexure C-2 was entered into between the parties, the OPs in clause number 8.1 mentioned that they would offer possession on or before 30 months from the date of start of construction of the residential complex except in case of certain unforeseen circumstances or force majeure.  On 12th May, 2008, the OPs issued a letter Annexure C-3 to the complainants in which again it was mentioned that the construction started in October, 2006 and the completion date of the project would be around 31st March, 2009.  Needless to mention that the OPs did not stick to the said date and when the complainants wrote vide Annexure C-4, they were told through Annexure C-5 that the apartments would be ready for occupation in the month of August, 2009.  It is an admitted case that even in August, 2009, the OPs did not complete the project and did not hand over the possession.  These facts therefore certainly show that the OPs are deficient in rendering proper service.

6.             It is of common knowledge that the builders first give fanciful advertisements to attract the gullible investors/purchasers and receive enormous amount from them but thereafter do not stick to the schedule of construction.  It is being done by them intentionally because if they, in the very beginning, mention that the construction would be completed in 4 to 5 years, the number of customers may be less or their project may not get as many buyers as are needed.  It is an unfair trade practice on the part of the OPs. When they give misleading advertisements about the completion of the project by the end of 2008 and thereafter extended it through Annexure C-1 to 30 months from the date of start of construction and further to 31st March, 2009 vide Annexure C-3 and thereafter vide Annexure C-5 to August, 2009.  The OPs like other builders trapped the prospective buyers to believe that the construction would be completed and possession would be delivered very soon but they themselves in their heart of  hearts know that they would not be going to complete the project.  The OPs are therefore liable to pay compensation for adopting this unfair trade practice to mislead its customers.

7.             The complainants had sent a notice Annexure C-7 , which was replied by the OPs through Annexure C-8.  The learned Counsel argued that as per clause 8.1 of the apartment buyers agreement Annexure C-2, they are entitled to reasonable extension of time for completion of possession of the residential apartment.  No mention was made in Annexure C-8 about the reasons or the force majeure due to which the construction could not be completed or the possession could not be delivered.  Annexure C-8 therefore shows that infact there were no reasons with the OPs which could help them in extension of time for completion of the project.  The same were subsequently coined by the OPs to justify this delay.

8.             In their written statement (and the affidavit), the OPs mentioned in preliminary objection number 2 that the delay was on account of “some external factors”.  Those “some external factors” were not mentioned in this para but have been mentioned in para number 3 of the reply on merits. Their contention is that they had submitted building plan for sanction with the Chandigarh Administration well within time but the Administration kept delaying the matter at various levels by raising baseless objections.  It appears the building plan had not been sanctioned and this fact was falsely mentioned by the OP in Annexure C-1 that the plans have been sanctioned vide letter number 1078/T3, dated 7th September, 2006. The OPs were therefore telling lies to the public when they issued the newsletter to trap the customers believing that the building plans had been sanctioned and therefore the completion would not take more than 30 months, though the building plans had not been sanctioned even a longtime later.  The contention of the OPs that the Chandigarh Administration kept on delaying the matter at various levels by raising “baseless objections” is also not true.  The alleged “baseless allegations” were not placed on file nor was any such fact mentioned as to when the building plans were submitted by the OPs with the Chandigarh Administration and when the objections were leveled.  This information was withheld by the OPs intentionally. An adverse inference is therefore to be drawn against the OPs that they had not submitted the building plans in time nor any “baseless objection” had been raised by the Chandigarh Administration.

9.             It is further mentioned by the OP in this para that now that building plans have been sanctioned and the completion certificate would be issued soon.  It appears the OPs started the work even without getting the building plans sanctioned and therefore the question of issuing of completion certificate did not arise. Ordinarily the proper procedure is to first get the plan sanctioned and thereafter to raise construction in accordance with the plan.  The fault therefore lies with the OP in not following proper procedure and if there was any delay that cannot be attributed to neither the Chandigarh Administration nor the objections raised by it can be said to be “baseless”.  Here again the OPs were wanting of due care and caution. We are prompted to cite one judgment of the Hon`ble National Consumer Disputes Redressal Commission, New Delhi in the case of Kamal Sood Vs. DLF Universal Ltd.,III(2007)  CPJ  7(NC), where in Para No.1 it has been held that it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan.  It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction etc., in the first instance, and thereafter, recover the consideration money from the purchaser of the flat/buildings.  Same is the position in the instant case.  It is proved from the pleadings of the OPs that when they received the money as booking amount from the complainants they were not having approved zoning plans for raising construction, rather they had applied late and the approval was yet to come.  From all this it is proved that the OPs have indulged into unfair trade practices.

10.           The next ground given by the OPs is that due to global recession, the property market went into a depression, wherein the building contractors and the labourers also created hurdles in the timely completion of the project.  According to the OPs these are the force majeure situations as contemplated under clause 8.1 of the agreement Annexure C-2. If the property market went into recession, it was not of any harm to the OPs who had already obtained the money from the applicants and were to raise construction with it.  They were infact using the money of the public/purchasers.  If they did not start construction and started using that money for their personal use, it would be their fault and not of the global recession or the property market.  The recession could have come into play only if they were to sell the constructed property in the market.  However here the buyers had already paid them huge amounts, as in the present case the complainants paid Rs.1,45,70,250/- but even then the OPs did not complete the project within the said time and obviously appears to have misused the same somewhere else.  Further, the OPs have not produced any evidence to suggest as to what “hurdles” were created by building contractors and the labourers.  It is therefore a vague allegation devoid of merit. Moreover if any such force majeure existed, the OPs would have mentioned the same in Annexure C-8 while sending a reply to the legal notice issued by the complainants. We are therefore of the opinion that there is no force majeure in the present case and there is no justification with the OPs for extension of time or to justify the delay in completion of the construction.

11.           Annexure C-6, which is the letter issued by U.T. Chandigarh Administration to the OPs regarding the completion certificate.  The objections raised by the Administration have been specifically mentioned, one of which is to complete the work in all respect i.e. flooring work, joinery work etc., and then apply for occupation certificate.  The next objection is that the form K.I.F.E submitted by the OP was not complete.  They did not even give their attested specimen signatures or the authority letter.  These drawbacks were all on the part of the OPs while submitting the applications for completion certificate and cannot be said to be baseless objections.  Annexure C-6 therefore demonstrates that the OPs had not completed the construction whey they applied for occupation certificate and therefore were not handling the project with due care and were wanting of even for compliance of necessary requirements while applying for the completion certificate.

12.           The contention of the OPs is that they had issued a letter Annexure C-5 giving provisional possession to the complainants, which should be enough to conclude that the construction is complete.  We do not find any merit in this contention. The OPs through Annexure C-5 gave the complainants permission for fitout purposes specifically mentioning that “it is designed to provide them a facility to carryout fitout works without any kind of possession of the concerned apartments”. Again in the concluding line of this para, it was mentioned that “this system/provision is only facilitating you to carry out fitout without actual possession” and that “actual possession can be done as per terms and conditions of agreement mutually agreed”. In this manner the permission through Annexure C-5 carried no legal sanctity because even provisionally, the possession was not being delivered through this letter, though it was worded in the manner to camouflage the real intentions of the OPs.  Annexure C-5 therefore does not protect the OPs from the allegations of deficient in service by adopting unfair trade practice.

13.           Clause 6.4 of the buyers agreement Annexure C-2 provides that in case there is delay in payment by the customers, the OPs were to charge interest @24% p.a. on all amounts due and payable by the buyer. The Learned Counsel for the complainant argued that if the OPs charge interest at this rate then they should also be liable to pay interest at the same rate for the delay in delivery of possession.  Clause 8.2 provides that if the complainants do not claim possession of the premises within 30 days of the receipt of intimation, the OPs would be entitled to compensation @ Rs.50/- per sq.ft per month of the super area of the said residential apartment.  It is also argued by the Learned Counsel for the complainant that if due to any reason the Forum does not approve paying interest@24% p.a. then the compensation should not be less than Rs.50/-per sq.ft. per month. Clause 2.1 of Annexure C-2 shows that super area of the flat purchased by the complainant was 2450 sq.ft. Clause 3.1 shows that its basic price was Rs.1,49,45,000/- out of which the complainants had already paid 95% of the said sum amounting to Rs.1,45,70,250/- as mentioned in the notice Annexure C-7 which has not been denied by the OPs while sending a reply Annexure C-8.  Otherwise also in their written reply the OPs have admitted having received the said amount from the complainants.  However, even after depositing such a huge amount with the OPs under a hope that they would get possession by the end of 2008 or even by 31st March, 2009 the OPs have not delivered the possession so far and has not been able to complete the construction.  If we calculate interest @24% then the compensation comes out to about Rs.2.90 lacs per month.  However, if the compensation is calculated @ Rs.50/- per sq.ft. per month the compensation comes out to Rs.1,22,500/-.

14.           It is a case in which from the very beginning the OPs tried to befool the customers first by mentioning that the building plans have been sanctioned though the same had not been sanctioned and a wrong declaration to attract customers was made in Annexure C-1.  It was also mentioned in Annexure C-1 that the possession would be delivered by the end of 2008 but they did not stick to that.  The OPs further befooled the complainants when they executed the agreement Annexure C-2 in which the delivery of possession was promised to be given within 30 months from the date of start of construction which as per Annexure C-1 had started in September 2006.  The OPs mentioned in Annexure C-3 that the project would be completed by 31st March, 2009 and that the possession would be delivered by 31st March, 2009 but again they did not stick to the same.  

15.           The OPs unilaterally tried to change this date through Annexure C-5 to August, 2009, the complainant however did not agree to this.  Needless to mention that when an agreement has been entered into between the parties, none of the parties can unilaterally change it by issuing such a letter as Annexure C-5 to change any of the terms of the said contract. The OPs therefore cannot claim that the complainants are not entitled to possession before August 2009 or to compensation therefor. The OPs then mentioned certain reasons in their written reply none of which existed and these reasons have been coined because the same were never mentioned in reply to the notice.  We are therefore of the opinion that the OPs should he liable to pay interest as damages atleast @10% p.a. with effect from 1st April 2009.  This amount would be not only lesser than the rate of interest of 24% mentioned by the OPs in clause 6.4 of the agreement but is also lesser than the compensation of Rs.50/- per sq.ft per month as mentioned by them in clause 8.2 of the agreement.

16.           In view of the above discussion, we are of the opinion that the present complaint must succeed. The same is accordingly allowed.  The OPs are directed to pay interest on the amount deposited by the complainants with effect from 01.04.2009 till the possession is delivered to the complainants.  The arrears of compensation alongwith litigation costs of Rs.5,000/- shall be paid within 30 days from the receipt of the copy of this order. The compensation in future shall be paid for each month by the 10th of next following month failing which, interest would be payable @12% p.a. on the arrears which are not paid in time in accordance with this order.  The OPs would pay interest for the whole month in which the possession is delivered.

              Certified copies of this order be sent to the parties free of charge.  The file be consigned.