1.       A fair number of first appeals (f.a.s) filed by the appellant – builder co. are pending before various benches of this Commission, including this bench.

The instant case relates to 16 f. a. s filed by the appellant – builder co. under section 19 of the Consumer Protection Act, 1986 against the State Commission’s Orders (6 nos.) dated 02.06.2016, 02.08.2016, 17.08.2016, 29.08.2016, 01.09.2016 and 12.09.2016 whereby the State Commission directed the builder – co. to hand over physical possession of the units as per the terms and conditions of the agreements; execute and get registered the sale-deeds; pay compensation; and pay cost of litigation to the respondents – complainants.

2.       We heard the learned counsels for the builder co. and the complainants, and perused the material on record.

3.       During arguments on 24.10.2018 the learned counsels for the builder co. raised an objection that this bench was constituted of non-judicial members and as such was not competent in law to adjudicate the issues.

4.       We feel it appropriate to briefly put the question of competence in perspective.

5.       Notwithstanding that one of us has a doctorate in law and one of us has a graduate degree in law in the first division, and notwithstanding that one of us has had over five years’ experience in this Commission itself and one of us has had fair experience of court-work including revenue court–work (in which the
CPC  and the Evidence Act were applicable, civil court jurisdiction was barred, parties were represented through advocates, reasoned judgements were delivered and were subject to scrutiny), the fact is that we are not from the judicial service.

6.       But, briefly, we would like to refer to the following:

Statement of Objects and Reasons

The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer councils and other authorities for the settlement of consumer disputes and for matter connected therewith.

To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the district, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.   

Aims and Object

An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consum­ers’ disputes and for matters connected therewith.

Section 20 (1) (b)

The National Commission shall consist of—

(b)  not less than four, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:—

(i)         be not less than thirty-five years of age;

(ii)        possess a bachelor's degree from a recognised university; and

(iii)       be persons of ability, integrity and standing and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

Proviso to Section 20 (1)(b)

Provided that not more than fifty per cent. of the members shall be from amongst the persons having a judicial background.

Explanation. -- For the purposes of this clause, the expression “persons having judicial background” shall mean persons having knowledge and experience for at least a period of ten years as a presiding officer at the district level court or any tribunal at equivalent level:

Section 20 (1A) (ii)

A Bench may be constituted by the President with one or more members as the President may deem fit.

7.       A reading of the above in conjunction makes clear to a sufficient extent the intention of the legislature and the intent of the legislation.

8.       We would also like to refer to the judgment delivered by Hon’ble Supreme Court in the case of L. Chandra Kumar vs. Union of India and Ors. 18^th March 1997 in Appeal (Civil) 481 of 1980 in which inter alia the following question was framed and answered by the Hon’ble Court:

(2)  Whether the Tribunals, constituted either under Article 323A or under Article 323B of the Constitution, possess the competence to test the constitutional validity of a statutory provision/rule?

The Hon’ble Court had answered the question inter alia as below:

“However, it is important to emphasise that though the subordinate judiciary or Tribunals created under ordinary legislations cannot exercise the power of judicial review of legislative action to the exclusion of the High Courts and the Supreme Court, there is no constitutional prohibition against their performing a supplemental--as opposed to a substitution - role in this respect. That such a situation is contemplated within the constitutional scheme becomes evident when one analyses Clause (3) of Article 32 of the Constitution……”

(para 80 of the Judgment)

“…..So long as the jurisdiction of the High Courts under Articles 226/227 and that of this Court under Article 32 is retained, there is no reason why the power to test the validity of legislations against the provisions of the Constitution cannot be conferred upon Administrative Tribunals created under the Act or upon Tribunals created under Article 323B of the Constitution. …….”

(para 81 of the Judgment)

“There are pressing reasons why we are anxious to preserve the conferment of such a power on these Tribunals……”

(para 82 of the Judgment)

“………It has been contended before us that the Tribunals should not be allowed to adjudicate upon matters where the vires of legislations is questioned, and that they should restrict themselves to handling matters where constitutional issues are not raised. We cannot bring ourselves to agree to this proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Courts and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases involve an interpretation of Articles 14, 15 and 16 of the Constitution. To hold that the Tribunals have no power to handle matters involving constitutional issues would not serve the purpose for which they were constituted……. While saving the power of judicial review of legislative action vested in the High Courts under Article 226/227 of the Constitution, it will ensure that frivolous claims are filtered out through the process of adjudication in the Tribunal. The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter.”

(para 91 of the Judgment)

“Before moving on to other aspects, we may summarise our conclusions on the jurisdictional powers of these Tribunals. The Tribunals are competent to hear matters where the vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for the High Courts and the Supreme Court which have, under our constitutional setup, been specifically entrusted with such an obligation. Their function in this respect is only supplementary and all such decisions of the Tribunals will be subject to scrutiny before a Division Bench of the respective High Courts. The Tribunals will consequently also have the power to test the vires of subordinate legislations and rules. However, this power of the Tribunals will be subject to one important exception. The Tribunals shall not entertain any question regarding the vires of their parent statutes following the settled principle that a Tribunal which is a creature of an Act cannot declare that very Act to be unconstitutional. In such cases alone, the concerned High Court may be approached directly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before a Division Bench of their respective High Courts. We may add that the Tribunals will, however, continue to act as the only courts of first instance in respect of the areas of law for which they have been constituted. By this, we mean that it will not be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except, as mentioned, where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction of the concerned Tribunal.”

(para 94 of the Judgment)

“..…..For these reasons, it has been urged that the appointment of Administrative Members to Administrative Tribunals be stopped. We find it difficult to accept such a contention. It must be remembered that the setting-up of these Tribunals is founded on the premise that specialist bodies comprising both trained administrators and those with judicial experience would, by virtue of their specialised knowledge, be better equipped to dispense speedy and efficient justice. It was expected that a judicious mix of judicial members and those with grass- roots experience would best serve this purpose. To hold that the Tribunal should consist only of judicial members would attack the primary basis of the theory pursuant to which they have been constituted. Since the Selection Committee is now headed by a Judge of the Supreme Court, nominated by the Chief Justice of India, we have reason to believe that the Committee would take care to ensure that administrative members are chosen from amongst those who have some background to deal with such cases.”

(para 96 of the Judgment)

9.       Statutory appeal under the Act 1986 lies in Hon’ble Supreme Court. Hon’ble High Court exercises superintendence (Article 227) over this bench. This bench’s Orders, functioning are subject to scrutiny, superintendence.       

10.     This bench has been constituted by Hon’ble President of the Commission, who is a retired judge of Hon’ble Supreme Court. Other single and division benches comprising of non-judicial members are functioning in the Commission. This bench has been taking up builder co. – complainant cases of this builder co. and of other builder cos. in the routine.

11.     The above (paras 5 to 10) put the question of competence in perspective.

12.     We do not feel any need to examine our competence, when the case before us is the first appeals of the appellant – builder co.

13.     In any case, this bench cannot determine its own competence.

14.     On the bench expressing its intention to proceed with adjudication of the 16 f.a.s that were taken up on 24.10.2018 for final hearing, the learned counsels for the appellant – builder co. (then) handed over a copy of an I.A. filed in some other f.a. (that was not taken up on 24.10.2018), but in which inter alia f. a. no. 853 of 2016 (that was taken up on 24.10.2018) is also mentioned. The said I.A. is an application filed under “Regulation 12 of the Consumer Protection Regulations, 2005 and ‘other enabling provisions of the Consumer Protection Act, 1986’ ”.

In para 8 of the said I.A. the following is stated:

8.  That the following are some of the substantial questions of law which arise in the captioned matters, as also in the pending SLP before the Hon’ble Supreme Court:

                                                                                    (underlining supplied by us)

I.  Whether the Hon’ble National Consumer Disputes Redressal Commission has the jurisdiction under the Consumer Protection Act, 1986 to pass order and directions which are clearly beyond the scope of the terms of a validly executed agreement between the parties?

II.  Whether the Commission has the jurisdiction to partially rely upon the clauses of the Agreement entered into by the Parties, while ignoring the others of an agreement duly executed between the parties, and then voluntarily increase the said compensation to a level which would afford an undue advantage to the Consumer?

III.  Whether the Ld. State Commission could have ignored that the Appellant was not charging any escalation on the construction cost of the flat for the delay in terms of Clause 1.2 of the Agreement and in any case the said delay in completion of the flats was beyond the control of the Appellant herein?      

 IV.  Whether the Ld. State Commission had a jurisdiction to grant compensatory relief when the party claiming so, had not suffered any loss or damage and the present case does not match that yardstick?

V.  Whether the Ld. State Consumer Disputes Redressal Commission has overlooked the specific clauses pertaining to Force Majeure Conditions set out in Clause 11(a), (b) and (c) and Clause 43 of the Independent floor Buyers Agreement?

VI.  Whether the Ld. State Consumer Disputes Redressal Forum has properly appreciated the non-availment of exit option by the allotees in terms of the Independent Floor Buyers Agreement as well as the separate exit option given to all allottees?

VII.  Whether the allottees who have chosen to continue with the agreement, and not avail the two exit options, have a right to claim compensation beyond what is agreed to under the Independent Floor Buyers Agreement?

VIII.  Whether the Ld. State Consumer Disputes Redressal Commission has overlooked the specific clause pertaining to compensation for delay set out in Clause 15 of the Independent Floor Buyers Agreement?  

IX.  Whether the Ld. State Consumer Disputes Redressal Commission could have ignored the well settled principle as held in catena of judicial decisions that appreciation in a the value of real estate is adequate compensation for any alleged delay?

X.  Whether the Ld. State Consumer Disputes Redressal Commission while passing the impugned order ought to have adjudicated the fact that the individuals before it are not ‘consumer’ as per section 2(1)(d) of the Consumer Protection Act, 1986 or not?

XI.  Whether the Ld. State Consumer Disputes Redressal Commission had the jurisdiction to treat the payment made by an Independent floor buyer as an investment and then allow for a return on such investment in favour of the flat purchaser ranging between 12 – 18% on such payment already made?

In paras 11, 12, 13 and 14 of the said I.A. the following is stated:

11.  That the present application is being moved for listing of caption first appeals listed on 08.08.2018 before Bench comprising of a Judicial Member under Regulation 12 of the Consumer Protection Regulations, 2005. The said Regulation is set out hereunder:

            ‘12.      Hearing by Benches:- Where a Bench, constituted by the President of the State Commission or the National Commission as provided under section 16 or section 20, as the case may be, does not have a member with judicial background and any complex question of law arises and there is no precedent to decide the law point, the Bench so constituted may refer the matter to the President of the State Commission or the National Commission as the case may be to constitute another Bench of which the President shall be a member’.

                                                                                                (underlining supplied by us)

12.  That it is humbly submitted that various complex questions of law are involved in the present matter, as would be evident from some of the questions of law which have been set out hereinabove. Further, the orders passed by the Ld. State Commission have been passed by a Bench comprising of the Presiding Judicial Member, who is retired Judge of the Hon’ble High Court of Punjab & Haryana at Chandigarh.

13.  That in the aforesaid circumstances, it is humbly submitted that it would be appropriate to have all the captioned first appeals listed before a Bench of this Hon’ble Commission which comprises of a Judicial Member. As stated the Hon’ble Bench 6 wherein these appeals are presently listed is a Bench of Hon’ble Technical Members only.

14.  That it is accordingly prayed that appropriate orders for listing of the captioned appeals before a Bench comprising of Hon’ble Judicial Member may be passed.                 

15.     The issues mentioned in para 8 of the said I.A. are issues that arise in the normal wont in builder co. – consumer agreements / disputes. They are decided in the routine while adjudicating such cases. A bare perusal shows that they are not “substantial questions of law”. We feel it unnecessary to dwell on what constitutes a substantial question of law; it would be misplaced in the present context.

16.     We find no “complex” question of law in this case as may require us to refer this case to Hon’ble President of the National Commission under Regulation 12 of the Consumer Protection Regulations, 2005.

17.     On the bench declining to refer these 16 f.a.s to Hon’ble President under Regulation 12, learned counsels for the builder co. (then) handed over a copy of Hon’ble High Court’s Order dated 25.09.2018 in CM (M) 1141 / 2018 & CM APPL. 38729 / 2018, in which it is inter alia directed as below:

…….Without any observations on the merits or demerits of the submissions, taking into account the proceedings in CM(M)953/17 and the verdict of the Hon’ble Supreme Court in “Madras Bar Association Vs. Union of India and Another” (supra), further proceedings before the learned Bench No. 6 of the National Consumer Disputes Redressal Commission in relation to appeal no. First Appeal No. 446/2017 connected with First Appeals no. 447/2017 to 452/2017; First Appeal No. 634/2017 to 637/2017 and First Appeal no. 1236/2017 connected with First Appeals no. 1237/2017, 1241/2017; 1243/2017; 1248/2017; 1252/2017; 1310/2017 to 1316/2017 are stayed till further orders and furthermore the operation of the order dated 08.08.2018 and 18.09.2018 in the said cases of the Bench no. 6 of the National Consumer Disputes Redressal Commission is also stayed till further orders…..

Learned counsels for the builder co. informed that Orders dated 08.08.2018 and 18.09.2018 referred to in Hon’ble High Court’s above-quoted Order dated 25.09.2018 were the following:

First Appeal No. 446 of 2017

connected with

First Appeals No. 447/2017 to 452/2017; 634 /2017 to 637/2017

First Appeal No. 1236 of 2017

connected with

First Appeals No. 1237/2017 1241/2017; 1243/2017; 1248/2017; 1252/2017; 1310/2017 to 1316/2017

Dated: 08.08.2018

Heard learned senior counsel for the appellants and learned counsels for the respondents.

Application dated 08.08.2018 filed with reference to Regulation 12 of Consumer Protection Regulations, 2005 was heard.

The issues in the whole matter were also heard. 

On the suggestion of the learned senior counsel for the appellants, it is directed that the main matter will be finally heard on 25.09.2018 at 2.00 pm.  The issues raised in the application dated 08.08.2018 as well as all other issues and contentions the appellant and/or the respondents may like to raise will be heard together with the main matter on 25.09.2018.

It is also clarified to all parties that no adjournment will be granted on the date of final hearing i.e. 25.09.2018.

FIRST APPEAL NO. 446 OF 2017

connected with:

First Appeals No. 447/2017 to 452/2017; 634/2017 to 637/2017

FIRST APPEAL NO. 1236 OF 2017

connected with:

First Appeals No. 1237/2017; 1241/2017; 1243/2017; 1248/2017; 1252/2017; 1310/2017 to 1316/2017

Dated: 18.09.2018

List these matters on 25.09.2018, the date already fixed.

Learned counsel for the builder co. further informed that the above-referred Order dated 25.09.2018 of Hon’ble High Court has been complied with by this bench:

FIRST APPEAL NO. 446 OF 2017

Connected with:

First Appeals No. 447/2017 to 452/2017; 634/2017 to 637/2017

FIRST APPEAL NO. 1236 OF 2017

connected with:

First Appeals No. 1237/2017; 1241/2017; 1243/2017; 1248/2017; 1252/2017; 1310/2017 to 1316/2017

Dated: 25.09.2018

Learned counsels for the appellant – builder co. have handed over Order dated 25-09-2018 of Hon’ble High Court, Delhi in which the operative portion is as below:

“…….Without any observations on the merits or demerits of the submissions, taking into account the proceedings in CM (M) 953/17 and the verdict of the Hon’ble Supreme Court in “Madras Bar Association Vs. Union of India and Another” (supra), further proceedings before the learned Bench No. 6 of the National Consumer Disputes Redressal Commission in relation to appeal no. First Appeal No.446/2017 connected with First Appeals no. 447/2017 to 452/2017; First Appeal No. 634/2017 to 637/2017 and First Appeal no. 1236/2017 connected with First Appeals no. 1237/2017, 1241/2017; 1243/2017; 1248/2017; 1252/2017; 1310/2017 to 1316/2017 are stayed till further orders and furthermore the operation of the order dated 08.08.2018 and 18.09.2018 in the said cases of the Bench no. 6 of the National Consumer Disputes Redressal Commission is also stayed till further orders…….”

          In compliance:

(i)  Proceedings before this bench no. 6 in relation to the said appeals shall remain stayed till further orders of Hon’ble High Court.

(ii)  Operation of the Order dated 08.08.2018 shall remain stayed till further orders of Hon’ble High Court.

(iii)  Operation of the Order dated 18.09.2018 shall remain stayed till further orders of Hon’ble High Court.

18.       Learned counsels for the builder co. submitted that, having regard to Hon’ble High Court’s above-referred Order dated 25.09.2018 in CM (M) 1141 / 2018 & CM APPL. 38729 / 2018, this bench may consider not to take up these 16 f.a.s.

19.     It was noted that the appellant – builder co. in the case before Hon’ble High Court (CM (M) 1141 / 2018 & CM APPL. 38729 / 2018) is the same. The respondents – complainants before Hon’ble High Court are different i.e. different from the respondents – complainants in these instant 16 f.a.s before this bench. They are not parties before Hon’ble High Court. The respondents – complainants in these 16 f.a.s are not being afforded opportunity before Hon’ble High Court. Hon’ble High Court has not stayed further proceedings in these instant 16 f.a.s.

Learned counsels for the appellant – builder co. could not show and did not affirm that any mention of these 16 f.a.s was made explicitly (or implicitly) in the applications filed before Hon’ble High Court. Nor could they show or affirm that any prayer was made to seek Hon’ble High Court’s order that further proceedings in these instant 16 f.a.s be stayed. It was but admitted and accepted that no specific order of Hon’ble High Court (or Hon’ble Supreme Court) to stay further proceedings in these instant 16 f.a.s exists.

Learned counsels for the respondents – complainants submitted, explicitly and categorically, that there is no Order of Hon’ble High Court (or Hon’ble Supreme Court), whatsoever, in relation to these instant 16 f.a.s. Specifically, there is no Order of Hon’ble High Court (or Hon’ble Supreme Court) to stay further proceedings in these instant 16 f.a.s. They also drew attention to section 19A of the Act 1986 wherein the ideal normative period for deciding first appeal is 90 days. And they requested that final arguments be heard, and the instant 16 f.a.s be decided. 

20.     This bench requested learned counsels for the builder co. to argue on merit on the 16 f.a.s taken up for arguments on 24.10.2018, to which they (finally) agreed.

21.     The short delay of 1 day in filing f.a. no. 1144 of 2016 was overlooked.

22.     We note that these 16 f.a.s have similar facts and same questions of law involved.

We are taking f.a. no. 853 of 2016, arising from the Order dated 02.06.2016 of the State Commission in c.c. no. 94 of 2016, DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, as the lead-case. 

23.     The facts, as taken from the lead-case, first appeal no. 853 of 2016, and as recorded in paras 4, 5 and 6 of the said Order dated 02.06.2016 of the State Commission, are as below:

4.  Under above circumstances, to dictate order, facts are being taken from consumer complaint bearing No. 94 of 2016, titled as D.S. Dhanda Vs. DLF Homes Panchkula Private Limited and anr. The complainant, who is a retired employee, has filed this consumer complaint seeking possession of the unit, allotted to him, by the opposite parties. It is case of the complainant that copy of the brochure Annexure C-1, showing rosy pictures of the upcoming project, has been given to the prospective buyers, by the opposite parties. Allured by the facts given in the said brochure and appearing through media, the complainant booked a built-up flat, in the said project, on 30.03.2010 and paid an amount of Rs.4 lacs, towards booking amount. Vide letter dated 03.04.2010, he was allotted flat, bearing no.DVF-E-7/25-FF#217, measuring 1450 square feet saleable area, in a project known as “DLF Valley”, in Sector 3, Kalka-Pinjore Urban Complex, Panchkula, Haryana. Total price of the said unit, including External Development Changes, Infrastructure Development  Charges etc. was fixed at Rs.35,08,999.69Ps. plus taxes payable as per law. Buyer’s Agreement was executed between the parties, on 11.02.2011. By that time, the opposite parties had already received an amount of about Rs.10 lacs. As per Clause 11 (a) of the Agreement, possession of the unit was contemplated to be delivered within 24 months, from the date of execution of the same i.e. upto 10.02.2013, failing which, as per Clause 15, the opposite parties were liable to pay Rs.10/- per square feet, per month, for the period of delay. When this complaint was filed in the year 2016, the complainant had already paid an amount of Rs.32,18,158/-. It is grievance of the complainant that within the given time i.e. 10.02.2013, delivery of possession of the unit was not in sight. The opposite parties issued an advertisement in a newspaper namely “Hindustan Times” on 13.01.2014, much after the cutoff date, promising that possession of the units, will be handed over in the year 2014. Even thereafter, possession of the unit was not offered to the complainant. Many queries raised by the complainant, through various letters/emails were not even replied by the opposite parties. It is also grievance of the complainant that whatever construction has been raised at the site, is of poor quality and many facilities as per promise made, has not yet been provided. It was averred that on account of non-delivery of possession of the unit, by the stipulated date, the complainant is being forced to live in a rented accommodation, for which he is paying hefty amount of rent to the tune of Rs.15,000/- per month, meaning thereby that additional financial loss has been caused to him. By stating as above, prayer has been made, seeking directions to the opposite parties to deliver possession of the unit, in question, alongwith compensation and litigation expenses.

5.  Upon notice, reply was filed by the opposite parties, wherein assertions made by the complainant were controverted. It was stated that on account of delay in handing over possession of the unit, no loss is going to be caused to the complainant because allotment made to him is cost escalation free. Possession of the constructed unit will be handed over to the complainant at a price, which was fixed in the year 2011. Execution of the Agreement and promise to hand over possession within 24 months, from the date of execution of that Agreement were not controverted. However, it is stated that construction at the site could not be completed, on account of stay granted on construction activities, by the Hon'ble Supreme Court of India, between 19.04.2012 upto 12.12.2012, which caused delay in handing over possession of the constructed unit to the complainant. It was further stated that to get extension of time of one year, to handover possession of the unit, consent was sought from the complainant vide letter dated 05.06.2013 Annexure R-9 and in the alternative, it was open to him to get back the money deposited by him, alongwith simple interest @9% p.a.. However, the said option was not exercised by the complainant. It is stated that as on date, when reply was filed, construction of 258 independent floors is complete and another 1517 built-up units are near completion. Even occupation certificates have been received for aforesaid 259 units and as on date 86 units have been offered for possession to the owners. Not only this, even completion certificate in respect of the project, has been obtained from the Competent Authorities. It is stated that when construction is not complete, on account of force majeure circumstances, the complainant is only entitled to get delayed compensation. It is asserted that the unit, in question, was purchased for future gain, as such, the  complainant would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act. It was also pleaded that time is not the essence of contract. It is pleaded that construction of the units, is in full swing and offer of possession, will be given to the complainant shortly. Even, facilities/amenities to be provided, are on the verge of completion and the same will be provided to the buyers, in coming days.     

6.  On merits, it was admitted that the unit was sold to the complainant. Amount so received and further that possession could not be delivered in time, for want of complete construction, was also admitted. It was averred that the complainant defaulted in making payment of installments, towards the said unit. It is further stated that not only as above, other reasons for delay in starting construction work, at the site are, delay in sanction/ revision of layout plans by the Competent Authorities; delay in approval of service plans and various other approvals/sanctions etc. by the Competent Authorities. It is further said that the complainant will be compensated, by making payment of compensation for the period of delay in handing over the possession, by the opposite parties, as per Clause 15 of the Agreement. It is a contractual obligation between the parties to be discharged, as such, this Commission has no jurisdiction to entertain the complaint and only the Civil Court has jurisdiction. It is stated that terms and conditions of the Agreement are binding upon the parties. Prayer was made, to dismiss the complaint, filed by the complainant.  

24.     The salient material dates and the specific awards made in the 16 f.a.s are depicted in tabular form below:

25.       The State Commission vide its Order dated 02.06.2016 had allowed the complaint with directions as recorded in para 28 of its Order (lead-case):

28.  For the reasons recorded above, all the complaints are partly accepted, with costs, in the following manner:-

Consumer Complaint bearing No. 94 of 2016, titled as D.S. Dhanda Vs DLF Homes Panchkula Private Limited and anr. The opposite parties are jointly and severally directed as under:-

1. To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, as per the terms and conditions of the Agreement, to the complainant, within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against him.

    

2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty, by the complainant, directly to the Registering Authorities concerned.

    

3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 10.02.2014  to 31.05.2016, within 2 months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.

    

4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant  w.e.f. 01.06.2016, onwards (per month), by the 10^th of the following month, failing which, the same shall also carry penal interest @15 % p.a., instead of 12% p.a.,  from the date of default, till the delivery of possession.

    

5. To pay compensation, in the sum of Rs.3 lacs, on account of mental agony and physical harassment, caused to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.

    

6. To pay cost of litigation, to the tune of Rs. 50,000/-, to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

26.     After hearing arguments on 24.10.2018, and after perusing the material on record, and after thoughtful consideration, we recorded the gist of our considered view in the daily Order of 24.10.2018:

1.  Heard the learned counsels for the appellant – builder co. and the learned counsels for the respondents - complainants.

2. Perused the material on record.

3. We hold deficiency in service and unfair trade practice on the part of the appellant – builder co. 

4.  The operative paragraph of the impugned Order dated 02.06.2016 of the State Commission in F.A. No. 853 of 2016 is partially modified as below:

sub-paras  (i) & (ii):                as such, unequivocally re-articulated

sub-paras (iii), (iv) & (v):        compensation:

(a)  by way of interest on the deposited amount from the assured date of handing over possession to the actual date of handing over possession.  The rate of interest shall be the rate for house building loan in the corresponding period in a scheduled nationalized bank (take, State Bank of India).  If ‘floating’/varying/different rates of interest were prescribed, the higher rate shall be taken for this instant computation; and

(b)  a sum of Rs. 1 lakh per year from the assured date of possession to the actual date of possession (pro – rata to the nearest whole month, with part month to be taken as one month).  

sub-para (vi):  cost of litigation:  a sum of Rs. 1,00,000/-.

Mutatis mutandis apropos impugned Orders of the 15 connected cases.

5.  In addition, specifically for indulging in unfair trade practice, stern advice of caution to the appellant - builder co. with cost of Rs. 25,000/- in each case (i.e. in total 1 + 15 = 16 cases) to be deposited in the Consumer Legal Aid Account of the State Commission.

6.  Full compliance of sub-paras (i) & (ii) shall be made within four weeks of the date of the reasoned judgment. 

All payments (as modified) in respect of sub-paras (iii) to (vi) shall be made within four weeks of the date of the reasoned judgment.  

Failure in timely compliance shall attract higher/penal interest and other compensation/costs (which shall be determined by this Commission in the facts and specificities of that contingency if it so arises).

7.  Reasoned judgment to follow.

We are giving our reasons hereinafter.

27.     To succinctly bring the rival contentions into focus, it may be stated, in brief, that, in the lead-case, the contention of the complainant was that despite depositing more than 90% of the total cost of the subject unit (deposited: Rs.32,18,158/; total cost: Rs.35,08,999.69p), the builder co. failed to deliver physical possession of the unit till the date of filing of the compliant [as well as till the date of decision of the State Commission (02.06.2016), as also till the date of arguments (24.10.2018) in the first appeal before this Commission]. As per the terms and conditions of the buyer’s agreement dated 11.02.2011, the possession was to be delivered within two years from the date of execution of the agreement i.e. upto 10.02.2013. The construction raised at the site was of poor quality and many basic facilities / amenities, as promised, had not yet been provided. Due to non-delivery of possession of his dwelling unit, the complainant was being forced to live in a rented house despite paying almost the full cost.    

And the contention of the builder co. was that due to force majeure the possession of the unit in question could not be delivered to the complainant in time as Hon’ble Supreme Court vide its Order dated 19.04.2012 stayed construction activities at the site. Time was not the essence of the contract. The builder co. vide its letter dated 05.06.2013 explained the reasons for delay in handing over possession and gave an option to cancel the allotment and avail refund along with simple interest (@ 9% p.a.) but the complainant did not avail the said offer. The builder co. is willing to pay compensation @ rs.10/- per sq. ft. per month as per clause 15 of the agreement to the complainant if he is not found guilty of breach of any terms and conditions of the agreement. The State Commission has no jurisdiction to entertain this complaint because the allegations levelled against the builder co. require detailed interpretation of the clauses of the agreement which cannot be done in summary proceedings.     

28.     The State Commission in its Order dated 02.06.2016 has given reasoned findings that (lead-case):

(a) the complainant is a consumer within the definition of ‘consumer’ under section 2 (1) (d) of the Act 1986 (para 16 of the State Commission’s Order);

(b) the complaint is maintainable in consumer fora (State Commission) as per  section 3 of the Act 1986 (para 18);

(c) existence of an arbitration clause in the agreement does not bar the jurisdiction of the State Commission (para 19);

(d)  time was unequivocally made the essence of the contract (para 17);

(e) the shelter of force majeure conditions can not be taken by the builder co. as it did not take requisite approvals / sanctions from the competent authorities  before launching the project in question (para 15 ); and

(f)  (in addition to deficiency in service,) the builder co. is inter alia also guilty of adoption of unfair trade practice (para 20, para 21).

29.     During arguments on 24.10.2018 learned counsels for the builder co. handed over a fair number of judgements and citations to support its contentions:

1.     Madhya Pradesh Housing Board Vs. Progressive Writers and Publishers, (2009) 5 Supreme Court Cases 678;

2.     Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 Supreme Court Cases 711;

3.     Haryana Urban Development Authority Vs. Raje Ram, (2008) 17 Supreme Court Cases 407;

4.     Budhi Ram Vs. Haryana Urban Development Authority & Ors., II (2011) CPJ 165 (NC);

5.     Shri Satish Kumar Pandey & Anr. Vs. M/s. Unitech Ltd., Consumer Case No. 427 of 2014 (along with 23 connected Consumer Cases) decided on 08.06.2015 by the National Commission;

6.     Prashant Kumar Shahi Vs. Ghaziabad Development Authority, (2000) 4 Supreme Court Cases 120;

7.     Kailash Nath Associates Vs. Delhi Development Authority & Anr., (2015) 4 Supreme Court Cases 136;

8.     Delhi Development Authority Vs. P.R. Samanta, (2015) 14 Supreme Court Cases 501;

9.     Secretary, Bhubaneshwar Development Authority Vs. Susanta Kumar Mishra, (2009) 4 Supreme Court Cases 684;

10.   Ghaziabad Development Authority Vs. Balbir Singh, (2004) 5 Supreme Court Cases 65;

11.   HUDA Vs. Raj Singh Rana, (2009) 17 Supreme Court Cases 199;

12.   State of Rajasthan & Anr. Vs. Ferro Concrete Construction Pvt. Ltd., (2009) 12 Supreme Court Cases 1;

 13.  Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra Reddy & Anr., (2007) 2 Supreme Court Cases 720;

14.   M/s. Ackruti Jay Developers & Ors. Vs. Sashi Govind Gadakh, R.P. No. 2942 of 2015 decided on 06.01.2017 by the National Commission;

15.   Capt. Gurtaj Singh Sahni & Anr. Vs. Manager, Unitech Ltd. & Anr., Consumer Case No. 603 of 2014 (along with 17 connected Consumer Cases) decided on 02.05.2016 by the National Commission;

16.   Satish Kumar Malhotra & Ors. Vs. DLF Ltd. &  Anr., Consumer Case No. 1375 of 2015 decided on 07.06.2016 by the National Commission;

17.   DLF Ltd. & Anr. Vs. Satish Kumar Malhotra & Ors., Civil Appeal No. 7371 of 2016, decided on 26.08.2016 by Hon’ble Supreme Court;

18.   DLF Homes Panchkula Pvt. Ltd. & Anr. Vs. Himanshu Arora & Anr., First Appeal No. 123 of 2017(along with connected 41 First Appeals) decided on 11.12.2017 by the National Commission;

19.   DLF Homes Panchkula Pvt. Ltd. & Anr. Vs. Himanshu  Gupta & Anr., R.A. No. 114 of 2018 in First Appeal No. 123 of 2017, decided on 09.04.2018 by the National Commission;

20.   DLF Homes Panchkula Pvt. Ltd. & Anr. Vs. Himanshu Arora & Anr., Petition(s) for Special Leave to Appeal (C) No.(s) 12603 of 2018 dated 18.05.2018  of  Hon’ble Supreme Court ; and

21.   M/s Emaar MGF Land Ltd. & Anr. Vs. Aftab Singh, Civil Appeal Diary No.(s) 37997 of 2017 with Civil Appeal No. D. No. 38994 of 2017 dated 15.12.2017 of Hon’ble Supreme Court.

30.     The judgements and citations handed over by learned counsels for the builder co. have been perused by us. We find that they are not relevant or applicable on the facts and specificities of this case, they are not relevant or applicable here in the manner and for the purpose their relevance and applicability was sought to be argued by learned counsels for the builder co.

31.     The State Commission had heard both sides, appraised the evidence, and passed a reasoned Order.

We are broadly in agreement with the findings of the State Commission.

We are, but, also making our reasoned examination of the matter, as well as stating the reasons for finding it appropriate to slightly modify the award of the State Commission.  

32.     We may first note that the Act 1986 is for better protection of the interests of consumers, to provide speedy and simple redressal to consumer disputes, in recognizedly a fight amongst unequals. 

33.     We may also note that the consumer – complainant is not seeking specific performance of a contract in a civil court; he is seeking consumer justice from a quasi-judicial machinery for redressal of consumer disputes under the provisions of the Consumer Protection Act, 1986.

34.     Section 3 of the Act 1986 specifically provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.  That is, the remedy provided under the Act is in addition to the provisions of any other law for the time being in force; the provisions of this Act give the consumers an additional remedy besides those that may be available under other existing laws.

35.     It flows straightaway from section 3 of the Act that existence of an arbitration clause in the agreement does not bar the jurisdiction of the State Commission.

36.     The subject unit is a residential dwelling units, the subject project is a residential housing project.

The complainant who entered into the buyer’s agreement with the builder co. was ‘consumer’ within the meaning of section 2(1)(d) of the Act 1986. On the face of it, he was not barred on count of “commercial purpose” (exception and ‘explanation’ to section 2(1) (d) refer) etc.

It may be added here that the buyer’s agreement and the amount deposited by the complainant with the builder co. are admitted by both sides.

37.     The State Commission had the jurisdiction to entertain these complaints, and to adjudicate apropos deficiency in service [section 2(1) (g) & (o)] and unfair trade practice [section 2(1) (r)] under the additional (alternative) remedy provided for consumers (section 3). We find no issue involved, as may require such (voluminous) oral and documentary evidence and such (complex) examination as to make it apt or necessary to be adjudicated only and only by a civil court. We find the case within the professional competence and lawful jurisdiction of the State Commission. The builder co.’s contentions to the contrary are misconceived and erroneous.  

38.     Here, first, we may refer to clause 11 (a) to (c), clause 14 and cause 15 of the buyer’s agreement:

Clause 11 (a) to (c):

(a)   Schedule for possession of the Said Independent Floor

The Company based on its present plans and estimates and subject to all just exceptions, endeavors to complete construction of the Said Independent Floor within a period of twenty four (24) months from the date of execution of the Agreement unless there shall be delay or failure due to Force Majeure conditions and due to reasons mentioned in Clause 11(b) and 11(c) or due to failure of Allottees to pay in time the Total Price and other charges, taxes, deposits, securities etc. and dues/ payments or any failure on the part of the Allottee abide by all or any of the terms and conditions of this Agreement.

(b) Delay due to reasons beyond the control of the Company

If the possession of the Said Independent Floor is delayed due to Force Majeure conditions, then the Company shall be entitled to extension of time for delivery of possession of the Said Independent Floor. The Company during the continuance of the Force Majeure reserves the right to alter or vary the terms and conditions of this Agreement or if the circumstances so warrant, the Company may also suspend the development for such period as is considered expedient and the Allottee shall have no right to raise any claim compensation of any nature whatsoever for or with regard to such suspension.

The Allottee agrees and understands that if the Force Majeure condition continues for a long period, then the Company alone in its own judgment and discretion may terminate this Agreement and in such case only the liability of the Company shall be to refund the amount without any interest or compensation whatsoever. The Allottee agrees that the Allottee shall have no right or claim of any nature whatsoever and the Company shall be released and discharged of all its obligations and liabilities under this Agreement.

(c) Failure to deliver possession due to Government rules, orders, notifications etc.

If the Company is unable to complete the construction/development of the Said Independent Floor/ Said Building/ Said Project due to any government/ regulatory authority’s action, inaction or omission then the Company may in its sole discretion challenge the same by moving the appropriate Courts, Tribunal(s) and / or Authority. In such a situation, the amount(s) paid by the Allottee shall continue to remain with the Company and the Allottee shall not have a right to terminate this Agreement and ask for refund of his money and this Agreement shall remain in abeyance till final determination by the Court(s) / Tribunal(s) / Authority (ies). However the Allottee may, if so desires become a party along with the Company in such litigation to protect Allottee’s rights arising under this Agreement. In the event the Company succeeding in its challenge to the impugned legislation or rule, regulation, order or notification as the case may be, it is hereby agreed that this Agreement shall stand revived and the Allottee shall be liable to fulfil all obligations as provided in this Agreement. It is further agreed that in event of the aforesaid challenge becomes final, absolute and binding, the Company will subject to provisions of law/court order, refund within reasonable period in such manner as may be decided by the Company to the Allottee all the amounts received from the Allottee after deducting Non Refundable Amounts without any interest or compensation and the decision of the Company in this regard shall be final and binding on the Allottee save as otherwise provided herein, the Allottee shall be left with no other right, claim of whatsoever nature against the Company under or in relation to this Agreement.                    

Clause 14:

Failure to deliver Possession by the Company

If for any reasons other than those stated above, the Company is unable to or fails to deliver possession of the Said Independent Floor to the Allottee within twenty four months (24) from the date of execution of the Agreement or within any extended period or periods as envisaged under this Agreement, then in such case, the Allottee shall be entitled to give notice to the Company, within ninety (90) days from the expiry of said period or such extended periods, as the case may be, for terminating this Agreement. In that event the Company shall be at liberty to sell and / or dispose of the said Independent Floor and Parking Space(s) to any other party at such price and upon such terms and conditions as the Company may deem fit without accounting for the sale proceeds thereof to the Allottee.  Thereafter the Company shall within ninety (90) days from the date of full realization of the sale price after sale of said Independent Floor and the Parking Space(s) refund to the Allottee, without any interest, the balance from the amounts paid by the Allottee in respect of the said Independent Floor and the Parking Space(s) without deduction of Earnest Money but after deduction of other Non Refundable Amounts. The Allottee agrees that the Allottee shall have no other claim against the Company in respect of the said Independent Floor and Parking Space(s) under this Agreement. If  the Allottee fails to exercise the right of termination within the time limit as aforestated, by delivery to the Company of a written notice acknowledged by the Company in this regard then the Allottee shall not be entitled to terminate this Agreement thereafter and shall continue to be bound by the provisions of this Agreement.

Clause 15:

Abandonment

The Allottee agrees and understands that the Company may abandon the said Project due to any reasons whatsoever, without giving any reasons and if the Company abandons the said Project then this Agreement shall stand terminated and the Allottee shall be entitled to refund of the amount alongwith 9% interest per annum for the period the amount has been laying with the Company and the Company shall not be liable to pay any other compensation whatsoever.

However, the Company may, at its sole option and discretion, decide not to terminate this Agreement in which event the Company agrees to pay only to the Allottee(s) and not to any one else subject to the Allottee not being in default under any term of this Agreement, compensation @ Rs.10/- per sq. ft. of the Saleable Area of the said Independent Floor per month for the period of such delay beyond twenty four months or such extended periods as permitted under this Agreement. The adjustment of such compensation shall be done only at the time of conveyancing the said Independent Floor to the Allottee first named in this Agreement, and not earlier.

39.     Without in any manner negating the fact that the consumer – complainant entered into the buyer’s agreement voluntarily, with eyes open, we may, but, also place in perspective that the appellant is a builder co., its activities spread across different districts and states of the country. It has its own pre-determined and pre-set articulation of (its) buyer’s agreement. The buyer – consumer has to necessarily agree to the letter of the agreement, inclusive of all its terms and conditions, as determined and set by the builder co., else, he cannot enter into the agreement at all. The language (pre-determined, pre-set) of the agreement is vetted, administratively, financially, technically and legally, by functionaries
(/ experts) of the builder co., and the buyer – consumer has to but agree to it in toto (there is an element of ‘take it, or leave it’, notwithstanding that the buyer-consumer enters into the buyer’s agreement voluntarily and with eyes open and is aware of its articulation and language). We, however, made it explicit that we are, but, only putting the perspective in place, and are not (repeat not) treating this to be unfair or deceptive within the meaning of section 2 (1) (r) of the Act.

We also want to place in perspective that the nature of the agreement between the builder co. and the consumer – complainant was in essence of a self-financing scheme, in which the consumer – complainant was paying the builder co. the agreed total cost prior to / simultaneous to the construction, and it went without saying that the total cost included the builder co.’s effort and profit.  

40.     For an ordinary common buyer – consumer, the two fundamentals which are significant and material are, one, ‘Cost’ and, two, ‘Time’, that is, the total cost, read with the schedule of making payment, and the total time period in which possession would be delivered.

41.     The clear sum and substance and import of “- - - endeavors to complete construction of the Said Independent Floor within a period of twenty four (24) months from the date of execution of the Agreement - - -” in clause 11(a) read in conjunction with “- - - compensation @ Rs.10/- per sq. ft. of the Saleable Area of the said Independent Floor per month for the period of such delay beyond twenty four months - - -” in clause 15 as evident to a reasonable man of normal intelligence is that the builder co. would complete construction and hand over possession of the unit within a period of 24 months from the date of execution of the agreement, and, in case there is some short reasonable delay in offering possession, the builder co. would pay compensation for such short reasonable delay @ rs.10/- per sq. ft. of the saleable area of the independent floor per month.

That in clause 11(a) the words “subject to all just exceptions” or “endeavours to complete” etc. etc. have been used or that other terms and conditions (albeit ‘ifs and buts’) have been built into clause 11(a) to (c), and / or clause 14, and / or clause 15, and / or other clauses, does not in any manner take away the import of the proposition intended to be conveyed and understood.

And the compensation for delay provided for in clause 15 (rs.10 per sq. ft. p.m.) cannot be for an unreasonably protracted period or indefinite; at best it can be for a short period that would appear to be reasonable per se and would be acceptable as such to a reasonable man.

The contention forwarded by the builder co. that the various terms and conditions of clause 11(a) to (c), clause 14 and clause 15, read together, imply that delay could for any period beyond 24 months, short or protracted, reasonable or otherwise, and the (self-evidently meagre) compensation for delay provided for in clause 15 could be paid indefinitely for any period above 24 months is misconceived and erroneous.  As already stated, the clear import and intent of “- - - endeavors to complete construction of the Said Independent Floor within a period of twenty four (24) months from the date of execution of the Agreement - - -” in clause 11(a) read with the compensation of “- - - @ Rs.10/- per sq. ft. of the Saleable Area of the said Independent Floor per month for the period of such delay beyond twenty four months - - -” provided for in clause 15 is that the construction would be completed and the possession handed over not later than 24 months of the execution of the agreement and that for a short reasonable delay beyond 24 months a (somewhat token) compensation would be paid.

To say that the possession can be delayed indefinitely or unreasonably and a token compensation for delay can be paid indefinitely or for an unreasonably protracted period is misconceived and erroneous. Indefinite or unreasonable delay with token compensation for delay cannot continue ad nauseam, ad infinitum (such situation would be absurd).

The builder co.’s contention that ‘time is not the essence of the contract’ is misconceived and erroneous.

42.     From the afore discussion, an axiom flows that the builder co. had to hand over possession of the unit within a period of 24 months from the date of agreement as provided for in clause 11(a) and a short reasonable delay would have attracted token compensation as provided for in clause 15 (this token compensation for a short period, would, by its very nature, has to be only and only for a short period which a reasonable man would not agitate). 

And two natural corollaries flow therefrom; one, the consumer-complainant has the fundamental option to obtain the possession of the unit as and when it is offered  by the builder co. and in addition seek just and equitable compensation under the Act 1986 for delay in offering possession beyond the conveyed and understood period of 24 months if the delay was unreasonable; two, the consumer-complainant has the other option to claim refund of the principal amount; interest thereon; and compensation, if the offer of possession of the unit is unreasonably delayed beyond 24 months.

43.     Summing up, the consumer- complainant has both options available, one, to obtain possession of the unit as and when offered by the builder co. and to in addition seek just and equitable compensation under the Act 1986 for unreasonable delay in possession, and, two, to opt for a fair amount from the builder co. if the possession of the unit is unreasonably delayed.

44.     Here, in the lead-case, c.c. no. 94 of 2016, f.a. no. 853 of 2016, the agreement was executed on 11.02.2011, the conveyed and understood period of 24 months expired on 10.02.2013, the consumer-complainant went to the State Commission on 14.03.2016 i.e. almost 37 months after expiry of the 24 months from the date of execution of the agreement. Significantly, the possession of the unit in question was not offered even in the subsequent period of litigation in the State Commission (upto 02.06.2016; about 2 ½  more months) and also in the still subsequent period of litigation in the National Commission (upto 24.10.2018, the date of arguments; about 28 yet more months). Such delay in offering possession cannot be said to be reasonable or normal. The complainant’s right to seek either of the two remedies summed-up in para 43 above is well and truly evident.

The position in respect of the other 15 c.c.s / f.a.s is similar (the table in para 24 refers).

45.     It is seen that of the two options available to the consumer – complainant (as determined in para 43 above), he opted for obtaining possession and in addition seeking compensation under the Act 1986 for unreasonable delay in possession.

46.     For the consumer, when he entered into the buyer’s agreement and made his first deposit towards the total cost, and subsequently continued to ( / will continue to) make his deposits (with the stipulated penal interest if there was / is any delay in depositing any instalment/s) as per the stipulated schedule of deposit, the proposition conveyed and understood was that the construction would be completed, possession would be delivered, registration would be executed, completion certificate and other documentary requisites from concerned authorities would be provided, requisite structural drawings & plans from the builder co. would be provided, by the builder co., within the conveyed and understood time period of 24 months.

47.     Prior to (or, at the least, simultaneous to) getting a consumer to enter into its buyer’s agreement and accepting the first payment towards the total cost of the unit, the builder co. is required and expected to have the due pragmatic and realistic assessment and preparation of the project planning, execution and completion. Planning, execution and completion are its responsibility, and not of the consumer.

(Normal) impediments or problems that arise in planning, execution and completion are its responsibility, and not of the consumer.

Specifically, availability of land ( / acquisition of land), as well as approvals from competent authorities, as and when due, being fundamental basic requirements of a housing project, are decidedly the builder co.’s primary responsibilities, and not of the consumer.

Cost and Time overruns are its responsibility, not of the consumer.

48.     Non-fulfilment of its overall responsibilities of project planning, execution and completion can not be and are not grounds for condoning or overlooking delay in completion and handing over possession.

Force majeure, unforeseeable circumstances, irrespective of its various ‘liberal’ or ‘strict’ interpretations, and irrespective of its various interpretations in different sets of facts, can, but, not be nebulously and irrationally argued for anything and everything related to the builder co.’s responsibilities for completion of the project without cost or time overruns.

49.     It is significant that the material facts and consequences relating to availability of land (/ acquisition of land) and approvals from concerned authorities at the due time were not brought to the notice of the consumer at the time of entering into the buyer’s agreement. In the absence of  the facts and the consequences thereof being specifically and explicitly brought to his notice, the buyer – consumer would reasonably (and correctly) understand that all aspects of project planning, execution and completion, inclusive of availability of land (/ acquisition of land) and approvals from concerned authorities at the due time, are the responsibility of the builder co. and have been / are being / would be duly taken care of by the builder co., without cost or time overruns. Not bringing the material facts and consequences relating to availability of land (/ acquisition of land) and approvals from the concerned authorities at the due time to the notice of the buyer – consumer while entering into its buyer’s agreement was unfair and deceptive of the builder co. [within the meaning of section 2(1) (r) of the Act 1986].       

50.     We note that due to litigation relating to acquisition of land, construction activity in the project was stopped from 19.04.2012 to 12.12.2012 in compliance of Order dated 19.04.2012 of Hon’ble Supreme Court:

Order dated 19.04.2012 of Hon’ble Supreme Court in SLP No. 21786-88 / 2010:

We are prima facie of the view that the entire acquisition proceeding deserve to be quashed. However, before passing any order in that regard, we deem it proper to order impleadment of all the persons, in whose favour land was released at different stages as parties to the special leave petitions. Learned counsel for the petitioner is directed to furnish the list of all such persons by tomorrow and also file amended cause title.

The Registry is directed to issue notice to the impleaded parties returnable in the first week of July, 2012.

With a view to avoid further complications in the matter, we direct the State of Haryana and   its functionaries and also the impleaded respondents not to undertake further constructions on the land which was acquired vide Notification dated 26.9.2007 read with the declaration dated 25.9.2008. This would mean that all the ongoing construction activities shall be stopped forthwith.

Order dated 12.12.2012 of Hon’ble Supreme Court in SLP No. 21786-88 / 2010:

Before concluding, we consider it proper to observe  that  even though while issuing notice in the special leave petitions, the Court had felt that the legality of the acquisition merits consideration  in the light of the alleged violation of Section 5A of the  Act  and  the  official respondents were directed  to  file  affidavits  and  produce records in the context of the alleged discrimination practiced in  the matter of release of  land  after  the  issue  of  notification  under Sections 4 (1) and 6 (1) and passing of award, we  do  not  consider  it      necessary and proper to decide the same because the only argument made  before the High Court related to the competence of Shri K.K. Amrohi to perform the functions of the  Collector  and  no  other  issue  was considered and decided by the High Court.

In the result, the special leave petitions are dismissed. The interim orders stand automatically vacated.  

As  a  sequel  to  the  dismissal  of  the  special  leave petitions, all pending interlocutory applications are disposed  of  as infructuous.

51.     We also note that vide its letter dated 05.06.2013 the builder co. had communicated the following to the buyer – consumer:

This is further to our letter of 28^th December 2012. To recap the facts, we refer to our earlier letter dated 11.05.2012 by which we had informed that as per directions of the Hon’ble Supreme Court vide its order dated 19.04.2012 in SLP No. 21786-88 / 2010 and a communication dated 30.04.2012 from DTCP, Haryana, we had put the construction activities at the project site in abeyance and no further construction activities were carried out pursuant to the said directions.

The Hon’ble Supreme Court dismissed the SLP No. 21786-88 / 2010 vide its order dated 12.12.2012 and the earlier order dated 19.04.2012 passed by Supreme Court to not to undertake further construction activities at the project land stands vacated.

The company will endeavour to complete the Project subject to the delay of 12 months which has occurred due to stoppage of the work mentioned above.  We may also like to mention that for such delay the company is not liable for performance of its obligations as per the terms of  the allotment of apartment as set out in clause 17 of the Application for allotment of apartment.

We request you to confirm that you will agree to the above conditions for additional time to be taken for completion of the construction. In case you do not agree to  the above, the Company will cancel the allotment and refund the amount paid by you along with simple interest calculated @ 9% p.a.

We will request you to please provide your consent by sending a confirmation in the duplicate copy of this letter within 10 days from the date of receipt of this letter. In case the company fails to receive the confirmation from you within the stipulated time period of 10 days, it will be deemed to be considered that you are agreeable to continue with the allotment on the above terms and conditions, including the extended time line for completion of the project. 

52.     We may note the chronology of dates:

53.     The litigation apropos land acquisition had initiated prior to the entering into of the buyer’s agreement. The facts and consequences thereof were not brought to the notice of the complainant at the time of entering into the buyer’s agreement. The letter dated 05.06.2013 was issued after about four months of expiry of the 24 month period to complete construction and deliver possession. An offer of refund with 9% simple interest per annum on the deposited amount was made about four months after the construction should have been completed and the possession delivered.  An unreasonably short time of 10 days was granted to either agree to delay of 12 months in completing construction and delivering possession or to take the deposited amount back with 9% simple interest per annum, with a stipulation that if confirmation is not received within the 10 days it will be deemed that the complainant agrees to continue with the allotment with the changed terms and conditions.  Construction activities were stopped for about 8 months (19.04.2012 to 12.12.2012), (but) the builder co. assigned to itself an extended time period of 12 months. The construction was not completed even after expiry of the said 12 months’ extended time period (assigned, by the builder co., by itself, to itself). The 12 months’ extended time period expired on 09.02.2014. The complainant went to the State Commission on 14.03.2016 i.e. 25 months thereafter. The arbitrariness and highhandedness of the builder co. is well evident. The builder co.’s unfair and deceptive acts [within the meaning of section 2(1) (r)] are also well evident.  

54.     We may make it explicit that mere issuance of the letter dated 05.06.2013 did not in any manner dilute the builder co.’s responsibilities towards project planning, execution and completion, including availability of land (/ acquisition of land) and approvals at the due time, without cost or time overruns, and which responsibilities arose (qua the complainant) on the date of entering into the buyer’s agreement with the complainant and receiving the first payment towards the total cost of the subject unit from the complainant.

55.     The State Commission has granted compensation by way of interest from “10.02.2014 (promised date in view of the extension sought vide letter dated 05.06.2013 i.e. 12 months after the stipulated date as per Agreement i.e. from 10.02.2013)” (lead-case):

To pay compensation, by way of interest @ 12% p.a., on the deposited amount, to the complainant, from 10.02.2014 (promised date in view of the extension sought vide letter dated 05.06.2013 i.e. 12 months after the stipulated date as per Agreement i.e. from 10.02.2013) to 31.05.2016, within 2 months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.

To pay compensation by way of interest @ 12% p.a. on the deposited amount, due to the complainant w. e. f. 01.06.2016, onwards (per month), by the 10^th of  the following month, failing which, the same shall also carry penal interest @ 15% p.a., instead of 12% p.a., from the date of default, till the delivery of possession.

                     (para 28 (iii) & (iv) of the State Commission’s Order dated 02.06.2016)

We are not interfering with this date adopted by the State Commission to compute compensation from.

This however does not in any manner condone the unfair and deceptive facts and specificities of the said letter dated 05.06.2013, as brought out in para 53 above.

And, the (mere) issuance of such letter dated 05.06.2013, or adopting the milestone date for computing compensation from this letter, in no manner affects or dilutes the builder co.’s responsibilities as enunciated in paras 47, 48, 49 and 54 above.

We may specifically add that when the milestone date for computing interest has been kept as per the date indicated in the unfair and deceptive letter dated 05.06.2013, there remains no case for, one, not giving just and equitable compensation, and, two, not putting a just and appropriate time-frame for the due compliance of the award made.    

56.     In the lead-case there was delay in possession for a period of more than 37 months from the expiry of 24 months of the date of execution of the agreement, and also more than 25 months of the date of expiry of the 12 months’ extended time period assigned by the builder co. (by itself to itself), before the consumer – complainant sought relief under the Act 1986. The possession of the unit was not offered even in the subsequent period of litigation in the State Commission (about 2 ½ more months) and also in the still subsequent period of litigation in the National Commission (upto 24.10.2018, the date of arguments; about 28 yet more months).  

Deficiency in service within the meaning of section 2(1) (g) & (o) of the Act is well evident.

The position in respect of the other 15 c. c. s / f. a. s is similar (the table in para 24 refers).

The consumer – complainant was put to loss and injury, put to a continuous position of mental agony and physical harassment, hardship and difficulty, uncertainty and helplessness, even after making payment of 32,18,158 / 35,08,999 x 100 = about 92% of the total cost well before approaching the State Commission.

57.     We may note that the builder co. has raised two principal contentions:

          one:  that ‘time was not the essence of the contract’.

          two: that due to force majeure the possession of the subject unit could not be given to the complainant in time as Hon’ble Supreme Court had stayed construction activities at the site vide its Order dated 19.04.2012.

We have already determined in para 41 above that the builder co.’s contention that ‘time is not the essence of the contract’ is misconceived and erroneous. [Such finding has also been given by the State Commission (refer para 28 (d) above)].

We may also note that assigning (by itself to itself) an extended time period of 12 months by its letter dated 05.06.2013 is also per se on the face of it inconsistent with the builder co.’s contention that ‘time was not the essence of the contract’. Had that been so, there was no need to assign to itself an additional time period in the way it was assigned by it vide its letter dated 05.06.2013 (refer paras 53, 54 above). However, that being as it may be, we are, as already determined in para 41 above, of the clear opinion that the builder co.’s contention that ‘time is not the essence of the contract’ is misconceived and erroneous.

We may further note that, as already stated in paras 47 and 48 above, availability of land (/ acquisition of land), as well as approvals from competent authorities, as and when due, being fundamental basic requirements of a housing project, are decidedly the builder co.’s primary responsibilities, and not of the consumer, and, force majeure, unforeseeable circumstances, irrespective of its various ‘liberal’ or ‘strict’ interpretations, and irrespective of its various interpretations in different sets of facts, can, but, not be nebulously and irrationally argued for anything and everything related to the builder co.’s responsibilities for completion of the project without cost or time overruns. In the given facts and position of this case, we do not find merit in the builder co.’s contention that stoppage of construction activities for about 8 months (from 19.04.2012 to 12.12.2012) due to an interim Order of Hon’ble Supreme Court in litigation apropos acquisition of land can be construed to mean ‘force majeure’.

However, we may furthermore note that due to this interim Order of Hon’ble Supreme Court, the builder co. assigned to itself an extended time period of 12 months vide its letter dated 05.06.2013. The State Commission has computed compensation from the date the extended time period expired. We have also not interfered with this milestone date (refer para 55 above).

So, either way, this contention of the builder co. also fails. 

58.     In the light of the above discussion, we find, both, deficiency in service within the meaning of section 2(1) (g) & (o), and unfair trade practice within the meaning of section 2 (1) (r), to be well and truly evident on the part of the builder co.

In remedy, it is just, equitable, appropriate and necessary to direct the builder co. to hand over physical possession and to register the units as well as to pay compensation and cost of litigation to the complainants, and, in addition, specifically for indulging in unfair trade practice, to put the builder co. to stern advice of caution with just and appropriate cost.  

59.     The complainants are entitled to the following relief:

(A)     Possession:

Physical possession of the subject unit, complete in all respects as per the terms and conditions of the subject agreement, and, specifically, as per the agreed & assured specifications & amenities, on payment of the total cost in full by the complainant as per the agreed schedule of payment (inclusive of penal interest for delay in payment of any instalment/s).

(B)     Registration:

Execution and registration of the sale-deed, on payment of registration charges and stamp duty by the complainant to the registering authorities, along with completion certificate and other documentary requisites from the concerned authorities and requisite structural drawings & plans relating to civil work, electrical work, water / plumbing, sanitation, etc. as are necessary and required for the buyer – consumer for future maintenance and upkeep of his unit.

(C)     Compensation:

The compensation for loss and injury, for mental agony and physical harassment, hardship and difficulty, uncertainty and helplessness, can be neither meagre nor exorbitant, but has to be just and equitable, commensurate with the loss and injury (note: it could be less than or more than what the complainant asked for or what the State Commission determined, at the considered wisdom of the adjudicating authority / court in the facts and  specificities of the case).

And it is always desirable and preferable, to the extent feasible and appropriate in the facts and specificities of a case, that some objective logical criteria be identified and adopted to determine the compensation. The compensation cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimised.

We note that the State Commission has given compensation in two parts, one, by way of interest on the deposited amount from the ‘promised’ / assured date after taking in view the extension sought vide letter dated 05.06.2013 i.e. 12 months after the 24 months’ conveyed and understood time period for completing construction and handing over possession, and, two, a lumpsum amount.

If compensation comprises of two parts, (i)   by way of interest on the deposited amount from the assured date (milestone date) of completing construction and handing over possession to the actual date of handing over possession, and,
(ii) lumpsum amount, we find nothing wrong in it.

We do not agree with the builder co.’s contentions that interest on the deposited amount should not be provided since it is not a case of refund but a case of delay in possession. The interest on the deposited amount has to be viewed in the light of the purpose for which it is intended. It is but a way of computing compensation for delay in possession that is commensurate with the amount deposited by the complainant, and here it has been computed after adopting a milestone date as per the builder co.’s own (unfair and deceptive) letter of 05.06.2013. There can be and is no question of not agreeing to and endorsing the award of interest from the said milestone date.

Here we may however add that the rate of interest also cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimised, a logical correlation has to be established. Albeit detailed arithmetic or algebra is not required. Logical, (to the extent feasible) objective parameters should be adopted. Rounding off simplification etc. to make the computation doable could be adopted.

We feel it appropriate that, considering that the subject units in question are dwelling units, in a residential housing project, the rate of interest for house building loan for the corresponding period in a scheduled nationalized bank (take, State Bank of India) would be appropriate and logical, and, if ‘floating’ / varying / different rates of interest were / are prescribed, the higher rate of interest should be taken for this instant computation.

We also feel it appropriate and logical that the lumpsum amount awarded should be commensurate with the period for which there has been delay in possession beyond the milestone date, and be objectively and logically computed so.

In our considered view, a sum of Rs. 1 lakh per year from the assured date of handing over possession to the actual date of possession (pro-rata to the nearest whole month, with part month to be taken as one month) would be objective, logical, just and equitable in the facts and specificities of the case.  

(D)     Cost of litigation:  

In respect of cost of litigation, too, just and equitable cost is necessary (this, by its very nature, needs no elaboration).

In our considered view, cost of litigation of Rs.1 lakh is just and appropriate in the facts and specificities of the case.

60.     It is also to add that it would be inappropriate not to protect the lawful interests of the bank / financial institution that provided loan (if any) to the complainant, for the subject unit, when the actual dispute is between the complainant and the builder co. only and the bank / financial institution but provided loan to the complainant in the normal wont of its functioning.

We are thus of the considered view that the compensation and the cost of litigation should, first, go to the bank or financial institution from which the consumer – complainant has availed loan facility (if any) for making payments to the builder co. towards the total cost of the unit. The first charge on the amount payable, to the extent, should be of the bank or financial institution from which the consumer – complainant has taken loan for making the payment for the said dwelling unit.

61.     And consumer justice in the true sense has to be met.  Once the award is adjudicated and determined, the onus is on the builder co. to be prompt and dutiful in complying with the award within the stipulated time. Creating yet further agony, harassment, hardship, difficulty, uncertainty, helplessness, for the consumer by delaying or diluting the compliance of the award within the stipulated period (if the adjudication is not stayed or quashed or modified by a higher authority / court) will be an unacceptable situation, to be viewed seriously – the agony, harassment, hardship, difficulty, uncertainty, helplessness, of the consumer should end, promptly and fully, the chapter should close. Therefore, if the builder co. delays or dilutes the adjudicated award, it would and should attract higher / penal interest and other compensation / costs.

62.     We, finally, firm-up the award as below:

(A)     The builder co. shall hand over physical possession of the subject unit, complete in all respects as per the terms and conditions of the subject agreement and specifically as per the agreed & assured specifications & amenities, on payment of the total cost in full by the complainant as per the agreed schedule of payment (inclusive of penal interest for delay in payment of any instalment/s), within four weeks from the date of pronouncement of this Order.

(B)     The builder co. shall execute and get registered the sale-deed of the subject unit, on payment of registration charges and stamp duty by the complainant to the registering authorities, along with completion certificate and other documentary requisites from the concerned authorities and requisite structural drawings & plans relating to civil work, electrical work, water / plumbing, sanitation, etc. as are necessary and required for the buyer – complainant for future maintenance and upkeep of his unit, within four weeks of pronouncement of this Order.

(C)    The builder co. shall pay compensation to the complainant:

(i)      by way of interest on the deposited amount from the assured date of handing over possession (i.e. the “promised date” 10-02-2014 indicated in the para 28( iii) of the State Commission’s Order dated 02.06.2016) to the actual date of handing over possession (lead-case):

The rate of interest shall be the rate for house building loan in the corresponding period in a scheduled nationalized bank (take, State Bank of India). If ‘floating’ / varying / different rates of interest were / are prescribed, the higher rate shall be taken for this instant computation;

The interest upto 31^st October 2018 shall be paid within four weeks of the pronouncement of this Order. The onus of calculating the correct and full interest and paying the same to the complainant with clear and cogent calculation sheet shall be on the builder co.

For default in delivery of possession of the subject unit beyond 31^st October 2018, the interest for each month, November 2018 onwards, shall be paid by the builder co. to the complainant within the immediate next month.  

(ii)     a sum of Rs. 1 lakh per year from the assured date of handing over possession to the actual date of handing over possession (pro – rata to the nearest whole month, with part month to be taken as one month).

The amount due upto 31^st October 2018 shall be paid within four weeks of the pronouncement of this Order. The onus of calculating the correct and full amount and paying the same to the complainant with clear and cogent calculation sheet shall be on the builder co.

For default in delivery of possession of the subject unit beyond 31^st October 2018, the amount due for each month, starting November 2018 onwards, shall be paid by the builder co. to the complainant within the immediate next month.

(D)     The builder co. shall pay cost of litigation of Rs.1 lakh to the complainant, within four weeks of the pronouncement of this Order. 

(E)               The first charge on the amount payable for compensation and cost of litigation  by the builder co. to the complainant shall be, to the extent, of the bank or financial institution from which the complainant has taken loan (if any) for making payment to the builder co. for the subject dwelling unit.

(F)     The award for the complainants in the 15 connected c.c.s / f. a. s, which have similar facts and are similarly placed, shall be the same, mutatis mutandis.

(G)     In addition, specifically for indulging in unfair trade practice, the appellant –  the builder co. is put to stern advice of caution with cost of Rs. 25,000/- in each case (i.e. in total 1 + 15 = 16 cases) to be deposited in the Consumer Legal Aid Account of the State Commission, within four weeks of the pronouncement of this Order.

(H)     Failure in timely compliance shall attract higher / penal interest and other compensation / costs (which shall be determined by this Commission in the facts and specificities of that contingency if it so arises).

So disposed.