PER MR SUBHASH CHANDRA, PRESIDING MEMBER

1.     This complaint has been filed under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in service and unfair trade practice on account of deficiency in service and unfair trade practices seeking refund of the amount deposited along with interest and other compensation in respect of the flat booked by them with the opposite party viz., Emaar MGF Land Ltd., in a project promoted and developed by it.

 2.    Briefly, the facts of the case are that the complainants had purchased a flat in a residential group housing project “Palm Gardens” (in short, the ‘project’) promoted and developed by the Opposite party located at Sector 83, Gurgaon, Haryana from one Mr Ashish Dahya and Mr Sri Krishna Dahiya, who were the original allottees for their residential purpose on 05.04.2013. At the time of purchase by the complainants, the terms of the agreement were endorsed to the complainants by the opposite party. The flat was originally booked on 15.12.2010 through a payment of Rs.7,50,000/-. An allotment letter dated 24.03.2011 was issued by the opposite party allotting apartment no. PGN-04-0203, 2^nd Floor, Tower 4, admeasuring approx. 1900 sq ft for a total sale consideration of Rs.1,06,47,853/-. A Builder Buyer Agreement (in short, ‘Agreement’) was executed between the original allottees and the opposite party on 24.03.2011 by which date Rs 26,54,689/- had been deposited with the opposite party. As per clause 10 (a) of the Agreement, delivery of possession was promised to be offered within 36 from the start of construction, with a grace period of 3 months. As construction on site commenced in June 2012, possession was to be offered by September 2015.

3.      The complainants have averred through this complaint filed on 25.09.2017 that the opposite party had mala fide intentions as they did not have requisite approvals from the District Town & Country Planning Department, Gurgaon which fact was confirmed vide their memo no. LC-1087/JE(BR)/2016/27149 dated 14.12.2016. It is also alleged that even though the agreement was executed on 24.03.2011, the layout plan was approved only on 23.03.2012. It is stated by the complainants that Rs.1,02,25,980/- was paid by them in instalments as per the schedule of payments. However, possession was not offered in September 2015.  It is further averred that the green areas across the boundary that were projected as green areas and a part of the project and for which PLC had been collected was now being shown as a public road and therefore the purpose of paying additional charges of PLC stands frustrated. Another 24 meter wide road projected as providing connectivity to Dwarka Expressway is also stated to be now not part of the layout plan. It is averred that these developments have come to notice upon enquiry and not through disclosure by the opposite party and constitute alterations to the layout without notice. Rs.3 lakhs have also been charged towards one car park which, as per orders of this Commission, are required to be included in the basic sale price and that the opposite party is charging various taxes and imposing a 24% rate of interest on delayed payments which is exorbitant. Other charges for EDC/IDC, Club Membership, etc. are also being levied whereas these were not part of the agreement.

4.     The project has been inordinately delayed with no possibility of possession in the near future. Deficiency in service and unfair trade practice on part of the opposite party is alleged since payment of 95% of the sale consideration has been made. Complainants have relied on this Commission’s orders dated 07.06.2016 in Satish Kumar Malhotra & 49 Ors Vs. DLF Ltd. & Anr. in CC 1375 of 2015 wherein it was held that an agreement that is unilateral and one-sided and to which allottees are forced to give consent is an unfair trade practice. They have also relied upon this Commission’s orders in Satish Kumar Pandey Vs. Unitech Ltd. dated 08.06.2015 in CC 427 of 2014 which held that arguments of force majeure circumstances without evidence of the opposite party’s efforts in this direction do not have merit. The complainants are before us with the following prayer:

(i)     Direct the opposite party for an immediate 100% refund of the total principal amount of Rs.1,02,25,980/- paid by the complainants along with a penal interest of 18% per annum from the date of the receipt of the payments made to the opposite party;

(ii)      Direct the opposite party to pay compensation of Rs.10,00,000/- to the complainants for mental agony, harassment, discomfort and undue hardships caused to the complainants as a result of the above acts and omissions on the part of the opposite party;

(iii)     Direct the opposite party to pay a sum of Rs.1,00,000/- to the complainants as a whole, towards litigation costs;

(iv)     That any other and further relief in favour of the complainants as the Hon’ble Commission may deem fit and proper in the fact and circumstances of the case.

5.     The opposite party has contested the complaint by way of reply. It is contended by way of preliminary objections  that the complainants were not ‘consumers’ under the purview of section 2(1)(d)(ii) of the Act being residents of Bangalore and the USA and had invested in the flat for commercial purposes; that there was no cause of action as the construction had been completed and Occupation Certificate issued; that the issues involved require adjudication by a civil court and hence this Commission lacks jurisdiction under the Indian Contract Act as per the agreement which provides for liquidated damages; that the agreement was signed by the complainant willingly and with full knowledge of the different clauses. It is also stated that the construction commenced in August 2012 and not June 2012 but many allottees defaulted on payments and the work slowed down as the opposite party undertook its organizational re-structuring.

6.      It is contended that the complainant has misinterpreted clause 10(a) of the agreement with regard to completion of the project in 39 months, including grace period since this clause has to be read conjunctively with clauses 7, 8, 13, 16 and 26 with regard to force majeure circumstances. Reliance has been placed on clause 12 which lays down terms of the relief in case of delay and it is contended that the complainant cannot claim relief beyond the agreement or seek to vary the agreement as per Hon’ble Supreme Court’s judgment in Bharathi Knitting Co. Vs. DHL World-Wide Courier (1996) 4 SCC 704. Reliance is also placed on the Hon’ble Apex Court’s judgment in GDA Vs. Balbir Singh 2004 (5) SCC 65 that compensation has to be determined after appreciating evidence. It is contended that the fora under the Act can award compensation only after determining negligence of the opposite party under section 14(1)(d) of the Act as per the judgment of the Hon’ble Supreme Court in Chief Administrator, HUDA & Anr. Vs. Shakuntala Devi in CA No. 7335 of 2008. It is further contended that this Commission has held in Lakshmi Cotton Traders Ltd. Vs. CWC 3 (1996) CPJ 222 that compensation has to be quantified rationally and needs to be based upon a finding of loss or injury and cannot be a bonanza. It is also contended that the complaint is not maintainable since parties are bound by the unchallenged terms of the contract as held in Secretary, Bhubaneswar development Authority Vs. Susanta Kumar Mishra, V (2009) SLT 242 by the Hon’ble Supreme Court. On merits, deficiency in service and unfair trade practice are denied. It is stated that opposite party has applied for compounding of the offence to the DTCP, Gurgaon and has already had the regularization done under section 13 of Haryana-RERA. The complaint is stated to be misconceived and vexatious in respect of other averments related to PLC and other charges.  It is therefore contended that the delay was on account of reasons beyond the control of the opposite party and therefore it was not liable for the delay.

7.     Parties led their evidence and also filed their short synopsis along with case laws relied upon. I have heard the learned counsel for the parties and have perused the records carefully.

8.      The preliminary objection of the opposite party that the complainant is not a ‘consumer’ but an investor needs consideration in light of the Hon’ble Supreme Court’s judgment in Laxmi Engineering Works Vs. PS G Industrial Institute Civil Appeal No of 4193 of 1995 (1995) 3 SCC 583 which defines ‘commercial purpose’ and this Commission’s orders in  in Kavita Ahuja vs Shipra Estates – I (2016) CPJ 31, wherein it was held that the onus of establishing that the complainant was dealing in real estate, i.e., in the purchase and sale of plots/ flats for commercial purposes to earn profits lies upon the opposite party. This has not been done by the opposite party in the present case. Only a bald assertion is made. Further, in Rajnish Bhardwaj and Ors vs M/s CHD Developers Ltd., and Ors in CC no. 3775 of 2017 decided on 26.11.2019, this Commission had observed as under:

“13.      The first contention of the Learned Counsel for the Opposite Party that the Complainants are not “Consumers” and only “investors” is not supported by any documentary evidence. In a catena of judgments, this Commission has laid down that the onus of proof shifts to the Opposite Party to prove that the Complainant is “investor” and it is observed that the Opposite Party did not discharge their onus of proof regarding this aspect. Hence, we are of the considered view that the Complainants are “Consumers” as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986”.

The contention of the opposite party therefore does not sustain.

9.      The contention that this Commission lacks jurisdiction since the issue needs consideration by a civil court has also been considered. This issue was put to rest by the Hon’ble Supreme Court in M/s Emaar MGF Land Limited Vs. Aftab Singh I (2019) CPJ 5 (SC) wherein it was held that even an arbitration clause in the Agreement does not bar the jurisdiction of the consumer fora to entertain the complaint. This contention is therefore not justified and is not accepted.

10.   The contention of the opposite party that the agreement was voluntary and does not include any unfair trade practices as it is not one-sided does not sustain in light of the judgement of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd (supra) wherein it has been categorically held that “… terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder” (para 6.7) and that “The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms” (para 7). It is evident that clauses such as  1.2 (b) that bind the complainant to penalties of 24% rates of interest for delays in payments while providing for compensation at Rs. 7.50 per sq ft per month are grossly iniquitous and cannot but be held to be one-sided. It is also not possible to consider the argument of the opposite party that the complainants being defaulters in making payments are not eligible for any relief. As held by this Commission in Ankur Goswami Vs. Supertech Ltd. & Anr. 2017 SCC OnLine NCDRC 1240 (CC no.930 of 2016 decided on 13.07.2017) not having taken action to cancel the allotment of the complainant on grounds of default in payments, it is now not open to the opposite party to contend thus.

11.    The argument relating to shortage of building materials as a force majeure argument have been considered and addressed at length in this Commission’s order in the case of Anil Kumar Jain & Anr. Vs. M/s Nexgen Infracon Private Limited CC No. 1605 of 2018 dated 23.12.2019 wherein it was held that in the absence of any proof to substantiate such claims adversely causing delay in completion of the project and impacting the date of handing over of flats, such reliance on force majeure conditions was not justifiable. In real estate projects where the opposite party/builder collects deposits against a time committed project, the management of risks is his liability. By his own admission, the opposite party has claimed that delay was also on account of its own internal organizational restructuring undertaken by it. This cannot qualify as a force majeure event. The argument therefore does not merit consideration.

12.    In a catena of judgements, the Hon’ble Supreme Court and this Commission have upheld the right of the consumer to be compensated for inordinate delay in the offer of possession of a residential apartment booked by them due to inordinate delays by builders when the complainants are bonafide consumers who have duly paid the instalments and waited for the promise of allotment to fructify. Admittedly, the opposite party had indicated a period of 36 months with a 3 month period of grace from the date of the commencement of construction (August 2012), i.e. September 2015. Possession was, however, not offered till the filing of the complaint or on date. The intervening period of 2 years is not a short period and the complainant is justified in seeking compensation for the same. It has been held by the Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. Vs Govindan Raghavan (supra) that when there is an inordinate delay in the handing over of possession, the consumer is entitled to compensation for the delay.

13.   There is an admitted delay in handing over possession. The opposite party during arguments submitted that an Occupation Certificate dated 29.10.2019 is now available. Apparently, even with this document being available, a formal offer of possession has not been made. The opposite party cannot expect the complainant to wait indefinitely for the possession to be offered in light of the judgement of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra – II (2019) CPJ 29 SC wherein it was laid down that

“…it would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession…A buyer can be expected to wait for a reasonable period. A period of seven years is beyond what is reasonable”.

In Fortune Infrastructure Vs Trevor D’Lima (2018) 5 SCC 442 the Hon’ble Supreme Court has also held that

‘a buyer cannot be expected to wait indefinitely for possession and in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation’.

We are also guided by the law laid down by the Hon’ble Supreme Court in Fortune Infrastructure Vs Trevor D’Lima (supra) that a buyer cannot be expected to wait indefinitely for possession and in a case of an unreasonable delay in offering possession, he cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation. As the project was admittedly not complete, the complainant’s exercising of his option to seek a refund cannot be construed to be unjustified. The prayer of the complainant for refund with compensation in the form of interest is therefore justified.  

14.   Compensation claimed by the complainant at the rate of 18%, however, would be excessive and not in line with prevailing market conditions. We would respectfully follow the Hon’ble Supreme Court in this regard in light of D.S. Dhanda (supra) and consider that interest rate at 9% would adequately compensate the complainant.

15.    I therefore find merit in the complaint and allow the same with the following directions:

(i)     opposite party shall refund the amount deposited by the complainants with interest @ 9% on the deposited amount as compensation for the delay in offering possession from the respective dates of deposit till the date of realization;

(ii)    this order shall be complied within two months failing which penal interest of 12% shall be paid.

16.    With these directions, the above consumer complaint stand disposed of.