DR. SADHNA SHANKER, MEMBER

1.       The present appeal has been filed under Section 51 of the Consumer Protection Act, 2019 (for short “the Act”) by M/s Omaxe Chandigarh Extension Developers Pvt. Ltd. (hereinafter referred to as the “builder company”) assailing the Order dated 19.04.2021 passed by the State Consumer Disputes Redressal Commission, Chandigarh (hereinafter referred to as the “State Commission”) in Complaint No. 176 of 2019, whereby the complaint of the complainant was partly accepted.

2.       Heard the learned counsel for the builder company and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and perused the record including the State Commission’s impugned Order dated 07.11.2017 and the memorandum of appeal.

3.       There is a delay of 60 days in filing the present appeal.

In the interest of justice and considering the reasons mentioned in the application for condonation of delay, the delay in filing the appeal is condoned.

4.       The brief facts are that the complainant was allotted plot No. 921, admeasuring 321 sq. yds. located at Phase-2, Omaxe, New Chandigarh, SAS Nagar, Mohali for a total sale consideration of Rs.31,72,345.98/- as per the agreement dated 07.02.2012. Against the said total consideration, the complainant paid a total amount of Rs.29,77,724/- as per the demand raised by the builder company. It is alleged that as per the terms and conditions specified in the agreement, the physical possession of the plot was to be handed over to the complainant within 24 months (18 months plus 06 months extended period as per condition no. 24(a) of the allotment letter/agreement date 07.02.2012) from the date of the agreement i.e. on or before 06.02.2014 but the builder company had failed to handover the possession of the plot within the stipulated period. It is further averred that after a delay of more than 7 years the builder company informed the complainant through a letter dated 25.01.2018 that due to certain changes in the allotment plan, complainant is relocated to plot No. 562 P24, admeasuring 289.27 sq.yds. but being unhappy with relocation of the plot the complainant requested for the refund of the amount paid by her but the builder company refused to refund the amount and again offered another plot no. 423B admeasuring 302.52 sq.yds. and when finally the complainant accepted the same, it was informed that the same had been sold to somebody else and ultimately, the complainant was relocated to Plot No. OCE/II/1870, located in Phase-3, Omaxe Cassia, New Chandigarh, which was accepted. The possession of the said plot was handed over to the complainant on 29.03.2019.

5.       The complainant filed a complaint before the State Commission.

6.       The builder company contested the complaint by filing written statement and raised several preliminary objections to the complaint. Firstly, the builder company stated that the complaint was not maintainable due to an arbitration clause in the agreement, which stated that all disputes to be settled through arbitration. Another preliminary objection is that the complainant has purchased the plot for commercial purpose, hence, she does not fall within the definition of ‘consumer’. Other objections are that the State Commission does not have territorial and pecuniary jurisdiction to entertain the complaint. Furthermore, it is contended that complex legal and factual matters requires adjudication by a civil court, not the State Commission. The builder company emphasized that time was not the essence in the contract regarding immovable property and that the agreement only stipulated the builder's best efforts for possession within 24 months. It is further alleged that the builder company retained the right to relocate due to changes in the tentative allotment plan. The builder company highlighted that the complainant was relocated to another plot, possession of which was taken over, and a partial completion certificate for the project was obtained. Moreover, it is stated that the preferentially located plot allocated to the complainant required payment of Preferential Location Charges (PLC), and excess charges on account of decrease in area of reallotted plot had been refunded. Top of Form

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7.       The State Commission, vide its order dated 19.04.2021 partly accepted the complaint and directed the builder company as under :-

1. To pay compensation by way of interest @9% p.a. to the complainant, on the entire amount deposited by her starting from 06.02.2014 (due date of possession) till 29.03.2019 (the date when possession was delivered), within a period of 30 days from the date of receipt of a certified copy of this order failing which thereafter the entire accumulated amount, as ordered to be paid, shall entail penal interest @12% p.a. from the date of default till realization.
2. To refund the amount of PLC within a period of 30 days from the date of receipt of a certified copy of this order failing which the same shall carry interest @9% p.a. from the date of filing this complaint till realization.
3. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/- to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
4. To complete the construction of the club house in Phase-3, Omaxe Cassia/ other basic amenities and obtain completion certificate in respect of the project in question from the competent authorities. However, it is made clear that the opposite party shall not charge any maintenance charges etc. from the complainant till the time the said club house is constructed for use of the complainant and other similar located allottees and completion certificate in respect of the project in question is obtained from the competent authorities.

8.       Being aggrieved, the builder company has filed the present appeal before this Commission.

9.       Learned counsel for the builder company has argued that the State Commission failed to appreciate that a judicial forum cannot grant relief beyond what has been prayed for in the complaint. The State Commission also failed to acknowledge that the user of club facilities must enter a separate agreement with the third party i.e. maintenance agency, stipulating payment terms and entitlements. These facilities are not considered basic amenities in plotted developments. The direction to cease maintenance charges until club completion lacked justification as the same was not requested in the complaint. Moreover, the Commission disregarded the objection regarding its lack of pecuniary jurisdiction, as raised by the builder company. He further argues that clause 9(f) of the allotment letter/buyer’s agreement explicitly grants the builder company the right to levy Preferential Location Charges (PLC) even if there's a change in the layout plan resulting a shift from the initially allotted unit.

10.     The learned counsel for the complainant has vehemently argued that the builder company had issued a letter dated 29.03.2019 giving ‘No Dues Certificate’ to the complainant and thereafter issued another letter dated 11.04.2019 reflecting that some amount is payable by the complainant whereas the said letter had not been placed on record before the State Commission. Hence, the letter dated 11.04.2019 is false and was not produced before the State Commission. It is further argued that the maintenance agreement was neither produced before the State Commission nor was the same was given to the complainant, therefore, the same cannot be accepted at the appellate stage. He further argued that it is admitted fact by the builder company that there is delay in handing over physical possession of the plot and it is only on 29.03.2019, the possession was given i.e. with a delay of about 05 years and 01 months. It is further argued that the complainant had never opted for a plot with Preferential Location Charges (“PLC”) and the same was not the part of the agreed costs and the builder company had relocated the plot of the complainant. Therefore, the preferential Location Charges should not be levied upon the complainant and the same would be refunded with reasonable interest. Furthermore, he further argued that the builder company had failed to construct a functional shopping area, school, club house, gym, jogging track etc. as promised in the brochure of the Project. It is further stated that the State Commission has passed a well-reasoned Order and the appeal is liable to be dismissed.

11.     The question which falls for our consideration is whether there is deficiency in service on the part of the builder company.

12.     From a perusal of the record, it is clear that there was an allotment letter/ agreement dated 07-02-2012 which states that the possession would be handed over within 18 months or within extended period of six months from the date of allotment letter/agreement. It is undisputed that the possession of the plot was given on 29.03.2019 i.e. with a delay of 05 years and 01 months. The letter dated 25.01.2018 offered relocation to another plot on account of change in the allotment plan. The builder company failed to provide any reason for not delivering the possession of the originally allotted plot no. 921. The builder company on its own had made certain changes in the tentative allotment plan in the year 2018 while the possession was to be given in the year 2014 and the complainant had never opted for preferential location charges, therefore, the payment of Preferential location charges is not tenable and the same is liable to be refunded.

From a perusal of the prayer made in the complaint, it is manifest that there is no prayer for completion of the construction of the club house in Phase-3, Omaxe Cassia/other basic amenities, therefore, the direction of the State Commission to construct a club house in Phase -3 is beyond jurisdiction and the same is liable to be set aside.

13.     In the present case, the delay, on the face of it itself, is unreasonable. The builder has absolutely no argument to make on its patent deficiency in respect of long unreasonable delay.

14.     There are a number of landmark judgments of the Hon’ble Supreme Court holding builders responsible for compensation for delay in delivery of possession.

      The issue to be decided in this case is what would be the reasonable quantum of interest for delay in handing over possession.

15.     In this regard, we would like to quote the recent judgment of the Hon’ble Supreme Court in the case of Wing Commander Arifur Rahman Khan and Aleya Sultana and Ors. Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512 wherein it was held as:

“54. …. The general appreciation in land values results in an increase in the value of the investment made by the buyers. Difficulties in determining the measure of compensation cannot however dilute the liability to pay. A developer who has breached a clear representation which has been made to the buyers of the amenities which will be provided to them should be held accountable to the process of law.”

“69.1. ….the first and second respondents shall, as a measure of compensation, pay an amount calculated @ 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate.”

In another case of DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537 decided on December 14, 2021  the Hon’ble Supreme Court has held as under:

“It is true that in the present case, the contractual rate of Rs.10 per square foot per month is double the rate fixed in the agreements in the above case. On the other hand, the court must be conscious of the fact that the situation in the real estate market in Delhi is very distinct from that in Bengaluru both in terms of rentals and land values. This has not been disputed. The flat buyers had to suffer on account of a substantial delay on the part of the appellants. In such a situation, they cannot be constrained to the compensation of Rs.10 per square foot provided by the agreements for flat purchase. However, having regard to all the facts and circumstances, we are of the view that the compensation on account of delay should be brought down from 7% to 6%. Moreover, the amount, if any, which has been paid in terms of the contractual rate shall be adjusted while computing the balance”.

16.     In view of the judgments rendered by Hon’ble Supreme Court, we are of the view that the compensation has to be just and equitable, commensurate with the loss and injury suffered. We feel that in particular facts and circumstances of the case, the compensation in the form of simple interest at the rate of 6% per annum for delay in delivery of possession would be just and equitable and commensurate with the loss and injury suffered by the complainant. Also, it would be apt that the compensation should be calculated from the promised date of delivery of possession as mentioned in the agreement i.e. 06.02.2014 till the date of handing over the physical possession i.e. 29.03.2019.

17.    As such we modify the award made by the State Commission to the extent that the builder company shall pay compensation in the form of simple interest at the rate of 6% per annum deposited amount from 06.02.2014 to 29.03.2019. Direction no. (ii) shall remain undisturbed. Directions no. (iii) and (iv) are set aside. The order be complied with within four weeks from today, failing which, it shall carry interest at the rate of 9% per annum.

18.     The appeal stands disposed of in above terms. All pending applications, if any, stand disposed of.