AVM J. RAJENDRA, AVSM, VSM (RETD.), MEMBER

1.      The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 20.02.2018 passed by the learned State Consumer Disputes Redressal Commission, U.T. Chandigarh (hereinafter referred as “the State Commission”), in Consumer Complaint No.527 of 2017 whereby the State Commission partly allowed the complaint.

2.      There was 291 days delay in filing the present Appeal. For the reasons stated in IA/345/2019, vide Order dated 21.01.2019, the delay was condoned.

3.      For the Convenience the parties are being referred to as mentioned in the Complaint before the State Commission. Mr. Varinder Kumar and Ms. Khushi Mittal are referred to as the Complainants. While Ansal Properties & Infrastructure. Ltd.  is referred to as the Opposite Party (OP) in the present matter.

4.      Brief facts of the case, as per the Complainants, are that the Complainants being husband and wife, based on advertisement published by OP, booked a flat bearing No. 637, First Floor, admeasuring 1120 Sq Ft. consisting of 3 BHK + 2 Bathrooms @ Rs.2142.86 per Sq. ft. in the project of OP namely 'Happy Homez", Golf Links, Sector 114, Kharar Landran Road, Mohali. Subsequently the Allotment Letter was issued on 15.09.2010. The Complainants have paid the following booking amounts: -

5.      The OP assured the Complainants that the flat was under a subvention scheme where they were to pay Rs.4,70,000/- as a booking amount, and the rest would be paid upon possession. However, the OP later reneged on this agreement, forcing the Complainants to start paying towards the unit’s price to avoid cancellation of the allotment. The OP also compelled them to take a home loan of Rs.17 lakhs from HDFC Bank, with disbursement amounted to Rs. 14,40,000/- made to the OP on 08.02.2012. The total paid by the Complainants amounted to Rs.19,10,000/- as of 08.02.2012, out of the total flat cost of Rs.24 lakhs.

6.      As per Clause 12 of the Allotment Letter, the OP promised to hand over possession of the said unit within 24 to 30 months. The said clause reads as under: -

'The Construction of the said Independent Floor is likely to be completed within 24 to 30 months of commencement of work, which shall be tentatively the date of receipt of all requisite sanctions/ approvals/ permissions/ clearances subject however to force majeure circumstances, regular and timely payments by Allottee(s), availability of building material etc. change of policy by Government/Local Authorities etc. No claim by way of damages/compensation shall be raised against the Company in case of delay in handing over possession on account of the said reasons or any other reason beyond the control of the Company.”

7.      The OP was obliged to hand over possession within 24 to 30 months and the deadline lapsed on 14.03.2013. However, the OP failed to deliver possession. Faced with the delay the Complainants purchased another house in Green Enclave, Mohali, necessitating an additional loan from Andhra Bank. Despite the payments, the flat was not ready as promised, and the facilities and amenities were absent at the project site. The Complainants received a letter from OP on 10.08.2015 demanding Rs.19,10,000/- as payment. The Complainants protested, asserting that they had already paid this sum and requested the OP to withdraw the notice, which went unanswered. The Complainants demanded refund of the amount paid along with interest and compensation, alleging the OP had utilized the funds for its own purposes.

8.      In the absence of response, aggrieved, the complainants filed a Consumer Complaint No. 527 of 2016 before the learned State Commission with the following prayer:

“To direct the OPs to refund the amount i.e. Rs.19,10,000/- alongwith interest @ 15% p.a. from the date of deposits till realisation. The complainant is also entitled for cost of litigation to the tune of Rs.50,000/- besides Rs.5,00,000/- on account of mental agony, harassment.”

9.      The Appellant/Opposite Party was proceeded ex-parte vide order dated 04.12.2017 passed by the State Commission. The Appellant has not challenged the said order and resultantly, it has not filed any reply to the complaint before the State Commission. The State Commission vide impugned Order dated 20.02.2018, partly allowed the Complaint being C.C. No.527/2017 filed by the Complainants with costs and directed the Appellant/ Opposite Party as under:-

(i) To refund the amount of Rs.19,10,000/- to the complainants, alongwith interest 12% p.a., from the respective dates of deposits onwards.

(ii) To pay compensation, in the sum of Rs.80,000/- for causing mental agony and physical harassment, to the complainants, as also escalation in prices.

(iii) To pay cost of litigation, to the tune of Rs.30,000/- to the complainants.”

10.    Dissatisfied with the Impugned Order, the Appellant filed the present Appeal with the following prayers:

i. Allow this Appeal and set aside the impugned order dated 20.02.2018 passed by the Hon'ble State Consumer Disputes Redressal Commission, U.T., Chandigarh in C. C. No. 527 of 2017 titled as “Ansal Properties & Infrastructure Ltd. Vs. Varinder Kumar & Anr.; and

ii. Pass such other and further order as this Commission may deem fit & proper in the interest of Justice.”

11.    The Appellant mainly raised the following objections in the instant Appeal that the learned State Commission:

(a) Erroneously rendered judgment without considering the terms and conditions outlined in the allotment letter, while the claims of deficiencies are baseless and unproven.

(b)  Not appreciated that the possession was offered on 11.12.2013, after obtaining the Occupancy Certificate on 27.09.2013. However, they failed to take possession by clearing dues. Thus, there was no deficiency in service.

(c)  Failed to appreciate that the respondents breached the terms of allotment, and huge amount is still pending. Thus, the appellant is entitled to deduct the earnest money.

(d)  There is nothing on the record showing delay in handing over possession. There is no deficiency of service.

(e)  Is silent on increase in the area of the whether respondents are liable to pay outstanding dues.

(g) Failed to recognize the arbitration clause consented in the allotment letter.

12.    In response to the Appeal, the Respondents have not filed a reply. However, they have submitted written arguments reiterating the issues raised in the original complaint. They emphasized that, as per the terms specified in the allotment letter, the flat was to be delivered by 14.03.2013. However, the same was not done. Further, the amount paid was not refunded even after serving a notice dated 12.11.2015.

13.    The learned counsel for the Appellant strongly reiterated the grounds stated in the Appeal. It was vehemently argued that the Respondents failed to pay timely installment despite reminders, including a specific notice dated 31.03.2011, that the subvention scheme would cease to exist by 10.04.2011. Further, they neglected to clear the charges related to the increased area of the flat, as indicated in the demand letter dated 10.09.2012. This breach of terms in the allotment letter has resulted in a substantial pending amount against the complainant. Hence, the Appellant is justified in deducting the earnest money due to this breach. There was no deficiency in the service. The Occupancy Certificate (OC) for the flat was granted on 27.09.2013, and possession was offered vide letter dated 11.12.2013 with a deadline of 27.01.2014 to clear outstanding dues. Despite numerous requests payment was not done. The Appellant forwarded cancellation notice dated 21.03.2014. Clause 31 of the Allotment Letter dated 15.09.2010 clearly states that the parties agreed to resolve disputes arising from the allotment through arbitration. The State Commission failed to consider this crucial aspect. Further, it did not determine whether the Respondent qualified to be a consumer and whether the flat in question was booked for commercial purpose.

14.    The learned Counsel for Respondents reiterated the issues raised in the Complainant and asserted that the impugned order passed by the State Commission. He argued that, at the time of booking the Appellant assured the Respondents that the flat was under the 'Subvention Scheme,' wherein Rs.4,70,000/- was to be paid as the booking amount, and the rest was payable upon possession. Contrary to this, the Appellant demanded the full amount before delivering possession requiring the Respondents to avail a loan of Rs.14,40,000/- from HDFC on 08.02.2012, paying a total of Rs. 19,10,000/- against the total cost of the flat, which was Rs. 24 Lakhs. The Appellant never offered possession within the stipulated time mentioned in the Allotment Letter. Additionally, the documents submitted to support the grounds in the Appeal were not part of the State Commission's records. No permission was sought to include these documents, rendering them unreliable and inadmissible as evidence.

15.    We have examined the pleadings placed on record and the associated documents and thoughtfully considered the detailed arguments advanced by the learned Counsels for both the parties.

16.    The central question is whether the Appellant, M/s Ansal Properties & Infrastructure Ltd fulfilled its obligations as per terms of the Allotment Letter, particularly with regard to delivery of possession within 24 to 30 months, ending on 14.03.2013. Additionally, there's a dispute concerning the payment schedule and whether the Appellant's demand for payment before possession aligns with the 'Subvention Scheme agreed-upon.

17.    The objection raised by the learned Counsel for the Appellant/ Opposite Party “whether the Respondents qualifies as a consumer under the Consumer Protection Act and whether the booking of the flat was intended for commercial purposes”.  In this regard, it would be proper to draw attention to this Commission’s Order in the case of Sanjay Rastogi v. BPTP Limited & Anr (CC No. 3580 of 2017 decided on 18.06.2020) which was upheld by Hon’ble Supreme Court. It has observed as under:

18.    In the case of Sai Everest Developers v. Harbans Singh Kohli, 2015 SCC OnLine NCDRC 1895 decided on 21.07.2015, in which it was held that

“the Opposite Party should establish by way of documentary evidence that the Complainants were dealing in real estate or in the purchase and sale of the subject property for the purpose of making profits.”

19.    In the instant Appeal, there is no such Evidence filed by the Appellant to establish its case that the said flat was purchased for the Commercial purpose.

20.    The objection as regards jurisdiction and that the dispute should have been referred to Arbitration is devoid of merit. The Hon’ble Supreme Court in M/s Imperia Structures Ltd. v. Anil Patni and Another (2020) 10 SCC 783 decided on 02.11.2020 has held that “remedies under the Consumer Protection Act were in addition to the remedies available under special statutes”, hence this Commission is also competent authority, also, as per section 3 of the act “the provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force”.  Further, the Order of this Commission in Aftab Singh Vs. Emaar MGF Land Limited & Anr., CC No. 701 of 2015, vide order dated 13.07.2017, upheld by Hon’ble Supreme court, wherein it was held that:

“Arbitration Clause in the Buyer’s Agreement does not bar the jurisdiction of the Consumer Fora.”

21.    Unquestionably, there has been delay in the construction as per “the Allotment Letter”. The Complainant had invested heavy amount to get possession of the flat on time. In catena of judgments the Hon’ble Supreme Court and this Commission have decided on the right of the buyers to get a refund in case of delay.

22.    In Emmar MGF Land Ltd. & Ors. Vs. Amit Puri- {(II 2015 CPJ 568 (NC)} decided on 30.03.2015, this Commission has held:

“After the promised date of delivery, it is the discretion of the Complainant whether to accept the offer of possession, if any, or to seek refund of the amounts paid by him with some reasonable compensation and it is well within his right to seek for refund of the principal amount with interest and compensation.” 

23.   The Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, ll (2019) CPJ 34 (SC), decided on 02.04.2019 has held:

“We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfil his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent – Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent – Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the 22 Respondent – Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest”.

         Further, para 6.7 of the Order reads as :

“A term of a contract will not be final and binding if it is shown that the flat purchasers had no option to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement of 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 flats by the Builder.

 Further, para 7 of the Order reads as under :

   “In view of above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms.”

24.    It is an admitted position that the contract dated 15.09.2010 vide Allotment Letter was entered into between the parties. As per Clause 12 of the said Allotment Letter, the unit was to be handed over within 24 to 30 months, i.e. by 14.03.2013. However, the project was not completed in time and admittedly the Appellant offered possession of the unit only on 11.12.2013 after obtaining OC on 27.09.2013. Therefore, there is delay of 9 months. Subsequently, the Appellant forwarded two payment demands dated 22.01.2014 and 13.02.2014. When these were not met, the Appellant terminated the agreement on 21.03.2014 and forfeited Rs.6 Lakhs as Earnest Money and brokerage. The termination letter indicated the balance refundable as Rs.12,00,000.

25.    Considering the above discussion, it is evident that there is 9 Months delay in offering possession and it has not given any reasonable justification for such a delay. This action contradicted the terms they agreed upon when signing the Allotment Letter. After the date of delivery of possession expired on 14.03.2013, the Complainants have right either to seek refund or take possession of the property in question in view of the judgments passed by the Hon’ble Supreme Court in Emmar MGF Land Ltd. and Pioneer Urban Land & Infrastructure Ltd.  (Supra).  Hence, the Complainant is entitled to refund the entire deposited amount.

26.    As regards the rate of interest and the scope for payment of compensation in such matters, the Hon’ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 7.4.2022 held that:-

“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts.  The Commission in the Order impugned has granted interest from the date of last deposit.  We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.

At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”

27.    The Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 held that multiple compensations for singular deficiency is not justifiable. Therefore, award of Rs.80,000/- as compensation for mental agony and physical harassment by the learned State Commission  is untenable.

28.    In view of the above discussions and judicial precedents, the impugned Order dated 20.02.2018 in C.C. No.527 of 2017 passed by the learned State Commission, Chandigarh is modified with the following directions: -

ORDER

1. The Appellant shall refund the entire deposited amount of Rs.19,10,000/- to the Complainants/Respondents along with simple interest @ 9% per annum from the respective dates of deposit till the date of realization, within one month from the date of this order. In the event of delay, the amount payable shall carry interest at the rate of 12% per annum from the date of expiry of one month until the realization of the entire amount.

2. The Appellant shall pay cost of litigation quantified as Rs.30,000/- to the Complainants/ Respondents, within one month from the date of this order.

29.    Consequently, the instant First Appeal No. FA/31/2019 stands disposed of. All the pending Applications, if any, also stand disposed of.  The statutory amount deposited by the Appellant, if any, be refunded after due compliance of the order.