AJIT BHARIHOKE, PRESIDING MEMBER

            Complainant No.1 is husband of the complainant No.2 and son of complainant No.3. In the year 2007, the complainants with the intention to shift to a bigger accommodation were scouting for some suitable development project. In late 2007 representative of the opposite party developer intimated the complainants about availability of flats in the upcoming development project “Lodha Bellesimo” undertaken by the opposite party.  Looking into the need of the complainants, representative of the opposite party suggested them to purchase two flats being C-2001 and C-2002, carpet area of approximately 2502 sq. ft. and 1935 sq. ft. respectively in the C-Wing of the above noted project. As bigger flats with more bedrooms were not available, the complainant Nos. 1 to 3 booked aforesaid two flats for residential purpose. The complainants accordingly submitted two application forms for the allotment of said flats alongwith 10% value of the respective flats through cheques. Opposite party on 21.1.2008 issued two allotment letters in respect of the aforesaid flats Nos. C-2001 and C-2002 alongwith the terms and conditions. As per clause 8 of the terms and conditions of the allotment letter, the opposite party had promised to complete the construction of the flats and deliver possession by 31^st March, 2011. It was provided that in case of the delay caused due to reasons beyond the control of the opposite party including force majeure condition the opposite party shall be entitled to reasonable extension of six months beyond the schedule date of possession.

2.         It is further the case of the complainants that in furtherance of the allotment letter, agreements for sale of the aforesaid flats were executed in favour of the complainants. The said agreements superceded the agreement made at the time of application for allotment. As per clause 22 of the agreement of sale the opposite parties promised that it shall endeavour to give possession of the subject flats to the complainants on or before March, 2011. It was also agreed that opposite party builder shall be entitled to a grace period of six months if he failed or neglected to give possession of the flats to the complainants on or before the stipulated date on account of reasons beyond its control.

3.         According to the complainants, they have paid 95% of the agreed consideration amount of the said two flats amounting to Rs.8,75,09,076/- and Rs.6,74,39,876/- respectively but the opposite party failed to deliver possession of the subject flats to the complainants within the stipulated time. The opposite party, however, vide letter dated 31^st March, 2011 tried to justify the delay in delivery of the flats on the basis of a non-existent force majeure clause i.e. the delay in delivery of possession was due to alleged non-delivery of elevators by the suppliers in Japan as a consequence of occurrence of tsumani which caused widespread damage in and around Japan. The opposite party in its letter dated 31^st March, 2011 stated that the date of delivery of possession was August, 2011 and not March, 2011. It is further alleged that the opposite party even failed to meet the deadline of August, 2011 and gave fit out possession of the subject flats to the complainants with a two years delay in July, 2013. Although the opposite party gave fit out possession to the complainants on 2^nd July, 2013, the complainants and their family could not reside in the said flats because of non-availability of valid occupancy certificate. The occupancy certificate for the building was issued only on 6^th August, 2013. Complainants have also submitted that the flats suffered from various defects which were communicated to the opposite party but the opposite party failed to rectify the defects. Feeling aggrieved the complainants have filed the consumer complaint seeking following prayer: -

“a)       That the respondents will not create any objection, hindrance, obstacles, and restraint to the complainants in any manner whatsoever to use and/or enjoy the said premises in a peaceful manner.

b)        Pass an order awarding the relief under Section 22 r/w 14 of the Consumer Protection Act, 1986 for a total sum of Rs.5,41,87,198.26 (rupees five crore forty one lakh eighty seven thousand one hundred ninety eight and paise twenty six only) alongwith interest @ 18% per annum from the date of filing of the complaint till passing of this order date, which is to be paid within 15 days from the date of order. All payments by the respondents to the Hon’ble Commission and/or complainants should be made by demand draft issued by schedule bank/nationalized bank only.

c)         Direct the respondents to rectify the deficiencies, defects as enumerated in paragraph 21 and as conveyed through the complainants’ letter dated 18/01/2014 to the satisfaction of complainants No.1 to 3 within 30 days of order by the Hon’ble Commission.

d)        Pass such other and further order or orders as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.”

4.         The opposite party in its written statement has taken preliminary objections that the dispute raised by the complainants relates to compliance of the contractual obligation under agreement for sale. Therefore, the Consumer Fora has no jurisdiction and the remedy of the complainants lies in the civil suit. It is also pleaded that the complaint is not maintainable because the complainants are investors and they have booked two flats with a view to make monetary gains by selling the flats at profit. It is further pleaded that the complaint is liable to be dismissed because there is no cause of action in favour of the complainants as they have already taken possession of the flat in July, 2013.

5.         So far as merits of the case are concerned, the opposite party has admitted allotment of subject flats to the complainants and also the execution of the agreement of sale. It is also admitted that the complainants have paid almost 95% of the consideration amount in respect of the said flats amounting to Rs.15,49,48,952/-. The opposite party has denied deficiency in service on the premise that the opposite party was prevented from completing the construction and delivering the possession to the complainant within the stipulated time because of the circumstances beyond its control. It is alleged that opposite party could not complete the construction and obtain occupancy certificate of the subject building because of non-supply and non-installation of elevator by the Japanese dealer as a consequence of the devastation caused in Japan because of tsunami. The opposite party has also denied the liability to pay compensation @ 18% p.a. on the deposited amount for the delayed period.

6.         The complainants in support of their case have filed evidence by way of affidavit of the complainant No.1, the opposite party in rebuttal has filed affidavit of Shri Surendran Nair, authorized signatory of the opposite party.

7.         We have heard learned counsel for the parties and perused the record.

8.         Learned counsel for the opposite party at the outset has raised the issue of maintainability of the consumer complaint. It is contended that perusal of the complaint would show that the dispute raised by the complainants relates to execution of the agreements of sale of the apartments between the p arties for which only remedy for the complainants is to file a suit for specific performance in a civil Court and the Consumer Fora has no jurisdiction in such matter.

9.         The contention of the opposite party is misconceived. On going through the pleadings it is clear that the parties had entered into a builder-buyer agreement qua the subject apartments under which, the opposite party had agreed to render service to the complainants for consideration i.e. to construct the apartment as per the agreed specifications and deliver possession of the same within the stipulated period. Therefore, in our view, there being allegation of deficiency in service on the part of the opposite party, the instant consumer complaint is maintainable. It is pertinent to note that Section 3 of the Consumer  Protection Act, 1986 provides that provisions of the Consumer Protection Act shall  be in addition and not in derogation of the provisions of any other law for the time being in force. Thus, it is clear that the remedy provided under the Consumer Protection Act is in addition to the provisions of any other law and the consumer has a choice to approach the Consumer Fora or the alternative Fora. In our aforesaid view, we find support from the judgment in the matter of Consumer & Citizens’ Forum vs. Karnataka Power Corporation 1994 (1) CPR 130.

10.       The next challenge as to the maintainability of the consumer complaint is that the complainants are investors and had booked the above-noted flats with a view to make monetary gains by selling the flats on subsequent date at a profit. Therefore, the complainants in view of exception carved out in the definition of consumer cannot be termed as consumer as envisaged under Section 2 (1) (d) of the Consumer Protection Act.

11.       We do not find merit in the above contention. Merely because the complainants have booked two apartments in the same project, it cannot be presumed that their intention was to make profit by selling flats on subsequent date at a higher price. The opposite party has not led any cogent evidence to show that at the time of booking of the flats the complainants were guided by the intention to make profit by selling the flats at the appreciated price. On the contrary, complainant No.1 in his affidavit by way of evidence has categorically stated that they booked the above-noted flats in tower-C of the subject project for using the same as a residence for their family and currently they are utilizing the said flat as a single dwelling unit. Therefore, it cannot be said that the complainants had booked the said flats for commercial purpose, as such, the exception carved out in the definition of term consumer in Section 2 (1) (d) of the Act does not come into play and in our view the complainants are consumers and they are well within their rights to maintain the consumer complaint.

12.       Coming to the merits of the case.  Learned counsel for the complainant has contended that it is not in dispute that in furtherance of the applications for allotment of flats made by the complainants, the opposite party allotted subject flats no. C-2001 & C-2002 to the complainants and executed two agreements of sale, both dated 27.03.2008.  Learned counsel has argued that it is not in dispute that pursuant to the agreement, the complainants have made 95% payment of the consideration amount but the opposite party failed to give possession of the subject flats in time.  In support of his contention, learned counsel for the complainants has drawn our attention to clause 22 of the above noted agreements of sale which are exactly similar.  The relevant clause is reproduced as under:

22.            The Builder / Promoter shall endeavour to give possession of the said premises / flat to the purchaser/s on or before March 2011.  The Builder/Promoter shall be entitled to a grace period of 6 months if he fails or neglects to give possession of the said Premises / Flat to the Flat Purchaser/s on or before the date aforementioned on account of reasons beyond its control.  In the event, the Builder/Promoter fails to hand over the possession of the premises to the Purchaser beyond the said grace period of 6 months then and in that event, the Builder shall, on demand, be liable to pay to the Purchaser compensation calculated at the rate of 12% p.a. on the amounts paid by the purchaser from the date of expiry of such grace period of 6 months till the possession of the premises, is handed over to the Purchaser.  Alternatively, on such expiry of the said grace period of 6 months, the Purchaser may be giving notice in writing to Builders elect to terminate this Agreement and in such event, the Builder/Promoter shall on demand be liable to refund to the Purchaser the amounts already received by the Builder / Promoter in respect of the said Premises / Flat with simple interest of 12% per annum from the date the Builder/Promoter received such amount till the date of refund.  In the event of such termination, neither Party shall have any other claim, against the other, in respect of the said flat or arising out of this agreement and the Builder/Promoter shall be at liberty to sell and dispose of the flat to any person of such price and upon such terms and conditions as the Builder/Promoter may deem fit.  If as a result of any legislative order or regulation on direction of the Government or Public authorities, the Builder/Promoter are unable to complete the aforesaid building and / or give possession of the said flat to the Purchaser, the only responsibility and liability of the Builder/Promoter will be to pay over to the Purchaser such amount attributable to the said premises that may have been received by the Builder/Promoter without any interest within such time and in such manner as may be decided by the Builder/Promoter.  Save as aforesaid neither party shall have any right or claim against the other under or in relation to this Agreement or, otherwise however.  Provided that the Builder/Promoter shall be entitled to reasonable extension of time for giving delivery of Flat on the aforesaid date, if the completion of building in which the Flat is to be situated is delayed for reasons beyond the control of the Builder/Promoter including on account of:

(i)              non availability of steel, cement, other building materials, water or electric supply.

(ii)             Water, civil commotion or act of God

(iii)            Any notice, order, rule, notification of the Government and / or other public or competent authority or for any reason beyond the control of the Builders/Promoter”

13.       Learned counsel has argued that perusal of aforesaid clause would show that opposite party had promised to give possession of the subject flats to the complainants on or before March 2011 with a further grace period of six months. Therefore, the opposite party as per the agreement was under an obligation to deliver possession of the subject flats to the complainants latest by 30.09.2011. Admittedly, the possession of the flat was not given by the stipulated date and fit out possession was given to the complainants before the issue of occupancy certificate by the authorities on 02.07.2013 and the occupancy certificate was issued on 06.08.2013. Thus, for all practical purposes, the subject flats could not be used for residence, therefore, it is a clear case that the complainants were delivered possession of subject flats after a delay of almost two years on 06.08.2013.  Therefore, the opposite party is under obligation to compensate the complainants for delay by paying them 12% interest on the amount paid by the complainants as provided in the above noted clause 22 of the agreement for sale.

14.       Learned counsel for the opposite party has contended that delay in completing the construction and failure to deliver possession in time was unintentional and it occurred because of Force Majeure circumstances, namely (i) delay due to non delivery of Mitsubishi elevators, (ii) delay in construction due to shortage of sand, (iii) delay in construction due to labour shortage, (iii) delay in construction from finishing stage because of delay by third party contractors & (iv) delay in supply of Bamer doors from third party contractors.  We do not find merit in the above plea of Force Majeure. 

15.       As regards non delivery of elevators by Mitsubishi of Japan, plea of the opposite party is that the delivery of elevators got delayed because of floods in Japan at the relevant time due to Tsunami.  We do not find merit in the plea, firstly because the allegations in the written statement and even the affidavit evidence of the opposite party is bereft of the dates on which the Tsunami came, the period  till which the effect of flood lasted and the period of closure of the plant of Mitsubishi elevators.  Otherwise also, if Mitsubishi because of floods was unable to deliver elevators, the opposite party was required to make some other arrangements from other vendors instead of delaying the project for two years.   It is pertinent to note that opposite party has not led any evidence to show that cause of delay was ever informed to the complainants.

16.       As regards the delay in construction due to shortage of sand as a result of interim stay order against sand mining passed by Mumbai High Court, it will suffice to say that this plea is of no avail to the opposite party because the opposite party has led no evidence to show that during the relevant period, sand was not available.  The opposite party has not led any evidence to show that a serious effort was made by the opposite party to procure sand from the areas where sand mining stay order was not operative.  Similarly, plea of construction due to labour shortage is not acceptable because no evidence has been led by the opposite party to establish that there was shortage of skilled and unskilled labour for more than a decade from year 2001 onwards. 

17.       Lastly, opposite party has tried to justify the delay in construction by shifting the blame on third party contractors appointed by the opposite party for certain works.  This plea also is of no avail to the opposite party because if the third party contractors have delayed the job, the opposite party can always have recourse to claim damages from the third party contractors.  If such pleas are entertained, then it will always give lever to unscrupulous builders to take shelter of delay in completing the project by shifting the blame on third party contractors.

18.       In view of the discussion above, we do not find force in the Force Majeure plea taken by the opposite party.  It is established on record that opposite party has delivered possession of the subject flats to the complainants after a delay of about two years.  Therefore, in our opinion, the opposite party is liable to compensate the complainants for the period delayed @ 12% p.a. as agreed between the parties as recorded in clause 22 of the contract.

19.       Counsel for the complainants has also pressed for direction to the opposite parties to rectify the defects in the subject flats.  In this regard it will suffice to say that complainants have not led cogent evidence to show that there were defects in the construction.   But for the statement of complainant no.1,  no independent expert has been examined to show that there was any defect in the flats. Thus, the complainants are not entitled to any relief in respect of allegation of defects in the subject flats.  From the above, it is clear that opposite party has been deficient in service for failing to deliver possession of the subject flats to the complainants within stipulated date plus grace period.  As per the agreement, the opposite party with the benefit of grace period was supposed to deliver possession of the subject flats by 30.09.2011.  However, undisputedly the fit out possession was given in July 2013 and occupancy certificate was given in August 2013.  Thus, in our view, the opposite party is liable to compensate the complainants for the delay in delivery of possession i.e. for the period w.e.f. 01.10.2011 to 06.08.2013. As per clause 22 of the respective agreement to sell, the opposite party had agreed to pay compensation @ 12% p.a. on the deposited amount in case of failure to deliver possession of the flats in time.  20.            Therefore, we allow the complaint and direct the opposite party to pay to the complainants 12% interest p.a. on the total amount of Rs.15,49,48,952/- paid against the consideration amount  before the delivery of possession.  Opposite party to comply with the order within six weeks failing which the complainants shall be at liberty to get the order executed.