PER JUSTICE R.K. AGRAWAL

This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short “the Act”) against M/s Emaar MGF Land Limited (hereinafter referred to as “the Opposite Party”), seeking the following reliefs:

1. Direct the Opposite Party for an immediate 100% refund of the total principal amount of Rs.1,05,13,907/- (Rupees One Crore Five Lacs Thirteen Thousand Nine Hundred and Seven Only) paid by the Complainant, along with a penal interest of 18% per annum from the date of the receipt of the payments made to the Opposite Party;
2. Direct the Opposite Party to pay compensation of Rs.10,00,000/- (Rupees Ten Lakh Only) to the Complainant for mental agony, harassment, discomfort and undue hardships caused to the Complainant as a result of the above acts and omissions on the part of the Opposite Party;
3. Direct the Opposite Party to pay a sum of Rs.1,00,000/- (Rupees One Lakh Only) to the Complainant as a whole, towards litigation;
4. That any other and further relief in favour of the Complainant as the Hon’ble Commission may deem fit and proper in the fact and circumstances of the case.

2.       The brief facts as stated in the Complaint are that the Complainant lured by the advertisements, representations and assurance of timely delivery of possession made by the Opposite Party, the Complainant on 14.01.2012, for residential purpose, booked an Apartment in the project, namely, ‘Palm Gardens’ being developed by the Opposite Party at Sector-83, Gurgaon, Haryana by paying a booking amount of ₹7,50,000/- for a total sale consideration of ₹1,09,15,907/-. The Opposite Party issued an Allotment Letter dated 25.01.2012 for unit bearing No. PGN-01-12A06 for super area of approximate 1900 sq. ft.  The Builder Buyer Agreement was executed between the Parties on 16.02.2012. As per Clause 10 (a) of the Agreement, the possession of the Apartment was to be delivered within 36 months from the date of start of construction with a grace period of three months. It is averred that the possession of the Apartment was to be handed over in September, 2015 including the grace period of 3 months, as the construction was started in June, 2012. The Complainant has opted for a construction linked payment plant. It is stated that the Complainant have diligently followed the payment plan and paid all the installments as and when demanded by the Opposite Party totaling to ₹1,05,13,907/-.

3.       It is averred that the Opposite Party made demands for the installments without reaching the concerned milestone. It is further averred that the Opposite Party has changed the layout plan of the project without informing the Complainant/ Buyers in the year, 2015, when the possession of the Apartment was to be handed over. It is submitted that the Opposite Party failed to complete the construction of the project within the stipulated period and in the year 2016, unilaterally, extended the date of completion of the project to 2018-2019. It is further submitted that the Opposite Party has illegally charged the Complainant under various heads like parking charges, PLC, IFMS, EDC, IDC etc.  It is alleged the Opposite Party without having building plans approved by concerned authorities started booking of the Apartments and has collected substantial amounts from the buyers, which is contrary to the law. 

4.       It is pleaded that the Opposite Party, despite having collected a substantial amount of ₹1,05,13,907/-, which is almost 96% of the total sale consideration has failed to deliver the possession of the Apartment, till the date of filing of the present Complaint. It is alleged that the Opposite Party miserably failed to comply with its contractual obligations of handing over possession of the subject Apartment in “Palm Gardens”, and even after several years, has not completed the construction work, which clearly is an act of “deficiency in service” on the part of the Opposite Party. The Opposite Party  has also unilaterally extending the date for completion of the project, which is an unfair trade practice on its part.  The Complainant has therefore approached this Commission seeking the aforenoted reliefs.  

5.       The Complaint was contested by the Opposite Party by filing the Written Statement, admitting to the booking and allotment of the Apartment, receipt of amount, execution of Agreement and its clauses. The Preliminary objection raised by the Opposite Party is that the Complainant is not a Consumer and just an investor in the project as the Complainant already has a permanent residence in Rohini, Delhi and it is only for investment purpose that he had booked the unit for financial gain by re-selling the same.  It is stated that for any delay in handing over of possession, beyond the period mentioned in the Agreement, the Opposite Party is only liable to pay @ ₹7.5 per sq. ft. per month towards penalty in the form of liquidated damages in terms of Clause 12(a) of the agreement.  It is further stated in the Written Statement that the construction of the project started in August, 2012  and not in June, 2012 as claimed by the Complainant and the basic construction is complete and the Opposite Party shall be applying for Occupancy Certificate tentatively in May, 2018 and shortly start the delivery of the possession. It is averred that several allottees/ purchasers have defaulted in making payment which resulted in some delay in completion of the Project.  All the other averments made in the Complaint have been denied and the dismissal of the Complaint is sought.

6.       Heard the learned Counsel for the Parties and perused the material on record.

7.       All the aforementioned grounds on which the Complaint is resisted by the Opposite Party has been specifically dealt with and rejected by this Commission in  Anila Jain Vs. Emaar MGF  Land Ltd., I (2020) CPJ 43 (NC), decided 11.11.2019, which relates to the same project of the Opposite Party namely, ‘Palm Gardens’. Therefore, the said grounds need not be examined again in the present matter. The observations made by this Commission in Anila Jain (Supra),  are reproduced below:

“3.      As noted earlier, in the brochure issued by it for the purpose of sale of the residential flat in its project, the OP inter-alia represented to the perspective buyers that the construction in this project had commenced in June, 2012, it was progressing as per schedule and was likely to be completed by September, 2015.  Though, it is stated in the written version that the construction actually commenced in August, 2012, this is contrary to the representation made to the perspective flat buyers in the brochure.  The learned counsel for the OP states that though the construction in this project had commenced in June, 2012, the construction of the particular tower in which the allotted flat was to be located commenced in August, 2012.  Irrespective of whether the construction commenced in June, 2012 or August, 2012, the fact remains that the OP was not able to complete the same within the stipulated period of 36 months from the start of construction.  Admittedly, the construction was not complete even in August, 2015, when 36 months computed from August 2012 expired.  The learned counsel for the OP submits that though he is not aware of the date on which the occupancy certificate was applied for the tower in which the allotted flat is located, the said occupancy certificate has been received after a written version was filed  by them.  The written version having been filed in May, 2018, the occupancy certificate must have been received thereafter.  It is therefore, evident that the construction was not complete even for almost three years from August, 2015 when it ought to have been completed even if it is assumed that it had started in August, 2012 and not in June, 2012.

4.      Admittedly, even during pendency of the complaint, the possession has not been offered to the complainant though she is no more interested in taking possession of the allotted flat and wants refund of the amount paid by her to the OP, along with compensation.

5.      In any case, the complainant cannot be compelled to accept possession when it is offered after such a long period of say atleast three years from the timeline stipulated for this purpose, in the agreement executed between the parties.  A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Civil Appeal No. 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter decided on 02.04.2019 and the decision of the Hon’ble Supreme Court in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra decided on 25.03.2019, in support of his contention that in a case of an unreasonable delay in offering possession of the allotted flat, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid by him to the builder with compensation.

In Devasis Rudra (supra), the possession was offered to the complainant/appellant during the pendency of the complaint before the State Commission and it was contended that the said builder having made substantial investment in terms of the agreement, a direction for refund was not warranted.  In the Consumer Complaint filed in Devasis Rudra (supra), the complainant/appellant had prayed for possession of the house and in the alternative, for refund of the amount paid by him to the developer.  In view of the said prayer made in the Consumer Complaint, it was argued on behalf of the builder that he should be made to accept possession of the allotted house and refund and not be allowed to him.  The complainant, on the other hand, contended that at the time the Consumer Complaint was filed, he was ready and willing to accept the possession, but seven years having elapsed, he was not more willing to accept possession.  Allowing the appeal, the Hon’ble Supreme Court inter-alia held as under:

          “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession.  By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016.  This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement.  A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC.  There was in any event a prayer for refund.”

In the present case, the complainant did not make a prayer for delivery of possession in the Consumer Complaint and sought refund of the amount paid by him to the builder on account of the delay in offering possession of the allotted unit to him.

6.      In Pioneer Urban Land & Infrastructure Ltd. (supra), the builder submitted before this Commission itself that since the construction of the apartment was complete and Occupancy Certificate had been obtained, the flat purchaser must be directed to accept the possession instead of directing refund of the amount deposited.  In that case, there was a delay of about three years in offering possession and the flat purchaser had submitted that he was not interested in taking possession after delay of about three years.  He also stated that he had taken an alternative property in Gurgaon.  This Commission having allowed refund to the complainant/respondent, the appellant before the Hon’ble Supreme Court inter-alia contended that as per the terms of the agreement executed between the parties, the flat purchaser could claim refund only after expiry of twelve months from the grace period by terminating the agreement but the Consumer Complaint had been filed even before the said twelve months period after the grace period had come to an end.  It was also submitted on behalf of the builder that this Commission had erred in granting interest at the rate of 10.7% per annum to the complainant when the agreement between the parties provided for payment of interest @ 6% per annum in case of delay in handing over possession.  Rejecting the contentions advanced by the builder, the Hon’ble Supreme Court inter-alia held as under:     

6.1. In the present case, admittedly the Appellant – Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent – Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.

In Lucknow Development Authority v. M.K. Gupta,2 this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.  

          In Fortune Infrastructure & Anr. v. Trevor D’Lima & Ors.,3 this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

6.2. The Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant – Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent – Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.

6.3. The National Commission in the Impugned Order dated 23.10.2018 held that the Clauses relied upon by the Builder were wholly one-sided, unfair and unreasonable, and could not be relied upon.

          The Law Commission of India in its 199th Report, addressed the issue of ‘Unfair (Procedural & Substantive) Terms in Contract’. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :

“A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”

6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :

“‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.

6.7. A term 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.

The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

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

8. We also reject the submission made by the Appellant – Builder that the National Commission was not justified in awarding Interest @10.7% S.I. p.a. for the period commencing from the date of payment of each installment, till the date on which the amount was paid, excluding only the period during which the stay of cancellation of the allotment was in operation.

In Bangalore Development Authority v. Syndicate Bank, a Coordinate Bench of this Court held that when possession of the allotted plot/flat/house is not delivered within the specified time, the allottee is entitled to a refund of the amount paid, with reasonable Interest thereon from the date of payment till the date of refund.

 7.      The only justification given by the OP for the delay in completion of the construction is that the some of the flat buyers did not pay their respective dues and as a result the progress of the construction had slowed down.  In my view, the complainant cannot be made to suffer for the default, if any, committed by the other buyers of the project.  If the other buyers in the project had defaulted in making payment in terms of their agreement with the builder, it was for the builder to cancel their allotment, sell those flats in the open market, raise funds from alternative sources and complete the construction of the allotted flats within the timeframe committed in this regard or within a reasonable time, thereafter.  That however has not been done, since the construction was not complete and the occupancy certificate was not obtained atleast till May, 2018 when the written version was filed.  In fact, the submission of the learned counsel for the complainant is that the occupancy certificate has been obtained only last month, meaning thereby that there is a delay of more than four years.  On these facts the OP cannot be said to have given any valid explanation for the delay in completing the construction of the allotted flat.

8.      As regards the plea that the complainant being a resident of Alwar cannot be said to be a consumer, I find no merit in the contention.  Alwar is a part of National Capital Region rather a small town.   The desire of a person to shift to a town such as Gurgaon, which is in the close vicinity of the National Capital, is quite natural and understandable.  There is no evidence of the complainant having booked the residential flat for the purpose of making an investment and selling the house at a higher price after taking its possession from the builder.  Therefore, it cannot be said that the complainant is not a consumer within the meaning of Consumer Protection Act. The onus was upon the opposite party to prove that the flat in question was booked by the complainant for commercial purpose.  The opposite part has miserably failed to discharge the reliance placed by it.

9.      For the reasons stated hereinabove, I hold that the complainant is entitled to refund of the entire amount which he has paid to the opposite parties alongwith compensation in the form of appropriate interest notified under Rule 15 of Haryana Real Estate (Regulation And Development) Rules 2017.  The said rate of interest is now stated to 10.3% p.a.  The complaint is, therefore, disposed of with the following directions:-

(i)      The OPs shall refund the entire principal amount of Rs.1,13,23,298/- to the complainant alongwith compensation in the form of simple interest @ 10.3% per annum from the date of each payment till the date of refund.

(ii)      The OPs shall pay a sum of Rs.25,000/- as the cost of litigation to the complainant.

(iii)     The payment in terms of this order shall be made within three months from today.”

8.       Accordingly, following the decision of this Commission in Anila Jain (Supra)  and the Judgments of the Hon’ble Supreme Court in Fortune Infrastructure Vs. Trevor D’ Limba, (2018) 5 SCC 442, Pioneer Urban Land & Infrastructure Ltd. Vs. Govind Raghavan, (2019) 5 SCC 725, Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 (6) SCALE 462 and Wg.Cdr. Arifur Rahman Khan Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512, wherein it is held that the Buyer cannot be made to wait indefinitely for possession, in case of inordinate delay in offer of possession and the buyer is entitled for refund of money, we are of the considered opinion that the Complainant is entitle for refund of the amount deposited by him with adequate compensation in the form of interest as the Opposite Party has failed to deliver the possession even after lapse of more than 10 years from the date of booking and the Opposite Party has itself admitted in the Written Statement that it has yet to apply for the Occupancy Certificate and no specific date is given for delivery of possession of the Apartment.

9. Now, we address ourselves to the quantum of interest that has to be awarded to the Complainant to meet the ends of justice.

10.     Though, this Commission in Anila Jain (Supra), which is related to the same project, has awarded interest @ 10.3% per annum from the respective dates of deposit till realization, but keeping in view the recent decisions of the Hon’ble Supreme Court, wherein it has been awarding lower rate of interest, we are of the considered opinion that the simple interest @ 9% per annum together will meet the ends of justice. This interest rate @ 9% p.a. is being awarded by way of all damages and compensation and no other amount is being awarded under the head of compensation.

11.     In the result, this Complaint is allowed in part and the Opposite Party is directed to refund the amount deposited by the Complainant along with simple interest @ 9% per annum from the respective dates of deposit till realization together with litigation costs of ₹50,000/-.

12.     Time for compliance of this Order is two months from the date of receipt of copy of this Order, failing which the amount shall attract the interest @ 12% for the same period.

13.     Pending Applications, if any, stand disposed of.