JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

          The complainant booked a residential apartment with the opposite party in a project namely ‘Palm Gardens’ which the opposite party was to develop in Sector 83 of Gurgaon.  The booking was made on 11.4.2012 paying a booking amount of Rs.7,50,000/-.  After allotment of a residential apartment bearing No.PGN02-0204 to the complainant the parties executed an agreement on 29^th May, 2012, incorporating their respective obligations in respect of the said transaction.  As per Clause 10(a) of the agreement, the possession was proposed to be handed over to the complainant within thirty six months from the start of construction.  A grace period of three months was also available to the opposite party for the limited purpose of applying and obtaining the occupancy certificate in respect of the unit and / or the project. The construction as per the brochure, which the opposite party had issued in respect of the said project started in June, 2012.  It was also stated in the brochure that the construction was progressing as per schedule and the expected delivery was September, 2015.  The grievance of the complainant is that the possession has not been offered to her and the construction is not complete, despite she having paid Rs.1,13,23,298/- out of the agreed sale consideration of Rs.1,19,57,632/-.  The complainant is therefore before this Commission, seeking refund of the amount paid by her to the opposite party with compensation.

2.      The complaint has been resisted by the OP which has admitted the allotment made to the complainant as well as the payment received from her.  It is stated in the written version that in the event of delay, liquidated damage @ Rs.7.5 per sq. ft. per month are payable to the complainant in terms of Clause 12(a) of the agreement.  It is further stated in the written version that the construction started in August, 2012 and the basic construction was completed in March, 2015 but several allottees defaulted in making payment which resulted in slow development.  Reliance is also placed by the OP on Clause 8 (i) of the Agreement.  It is also stated in the written version that the complainant is a permanent resident of Alwar in Rajasthan and is not a consumer within the meaning of the Consumer Protection Act.

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 hat 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.