KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C. No. 29/2019

JUDGMENT DATED: 17.11.2022

PRESENT:

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN              : PRESIDENT

SRI.T.S.P. MOOSATH                                                                   : JUDICIAL MEMBER

SRI.RANJIT. R                                                                               : MEMBER

SMT. BEENA KUMARY. A                                                          : MEMBER

SRI. RADHAKRISHNAN K.R.                                                    : MEMBER

COMPLAINANTS:

1. Radhakrishnan P.J., S/o P.K. Janardhanan Pillai, Vysakham, Thattarambalam P.O., Kandiyoor, Mavelikkara, Alleppey District.

2. Bindhu Radhakrishnan, Vysakham, Thattarambalam P.O., Kandiyoor, Mavelikkara, Alleppey District. 

       (By Advs. M.M. Hussain & S. Reghukumar)

                                                Vs.

OPPOSITE PARTIES:

1. M/s MIR Realtors Pvt. Ltd., M.M. Building, Kalabhavan Road, Ernakulam North, Kochi-682 018 represented by its Managing Director.

2. Managing Director, M/s MIR Realtors Pvt. Ltd., M.M. Building, Kalabhavan Road, Ernakulam North, Kochi-682 018.

(By Adv. Sandeep T. George for OPs 1 & 2)

3. Chief Operating Officer, M/s MIR Realtors Pvt. Ltd., M.M. Building, Kalabhavan Road, Ernakulam North, Kochi-682 018.

JUDGMENT

SRI. RANJIT. R : MEMBER

This is a complaint filed by the complainants, husband and wife, under Sec. 17 of the Consumer Protection Act, 1986, claiming refund of the amount paid by them to the opposite parties towards sale consideration of the apartment booked by them with interest and costs.

2.  The case of the complainants as detailed in the complaint in brief is that complainants are non-resident Indians.  They have entered into two agreements with the opposite parties on 16.04.2014.  The first agreement is for sale of undivided interest in land and the second agreement is the agreement for construction in the opposite party’s Apartment Project ‘Haritham Apartment’ in the township project named ‘The Greens’ at Karakulam, Thiruvananthapuram.  The sale agreement made on 16.04.2014 stipulated that 1^st opposite party is the owner of 11.15 acres of property in Survey No. 233/1 of Karakulam Village, Thiruvananthapuram.  The said agreement further stipulates that the 1^st opposite party intended to convey undivided share equivalent to 1692/210090 in the 87 cents of land (portion of aforesaid 11.5 acres) set apart for the Haritham Constructing apartment on the 11^th floor of the north eastern side of the proposed building having a super built-up area of 1692 sq. ft. with a car parking area.  The sale consideration for the undivided interest was fixed at Rs. 85,805/-.  As per the agreement for construction entered on 16.04.2014, the total price fixed for the apartment was RS. 61,54,000/- for the proposed building having a super built up area of 1692 sq. ft. with a car parking area.  Further in pursuance to the agreement for sale and construction agreement a tripartite agreement was executed among the complainants, the 1^st opposite party and M/s Axis Bank for availing loans.  As per the tripartite agreement dated 23.05.2014 the bank has agreed to provide financial assistance for purchasing the flat and sanctioned a sum of Rs. 40,00,000/- to the complainants.  The entire loan amount of Rs. 40,00,000/- was appropriated by the opposite parties from the bank. 

3.  The opposite parties undertook that the construction of the apartment would be completed on 31.03.2015 as per the construction agreement.  The complainant had availed loan on the assurance that the opposite parties will hand over the apartment by March 2015.  However, the opposite parties have abandoned the project even without completing the structure of the apartment.  Complainants had made a total payment of Rs. 59,42,460/- through bank transfer and as per cheque.  The total payment constituted 97% of the total price.  The opposite parties had pressurized the complainants to pay the money in advance even though the respective stages of construction were not completed. The complainants even though could not occupy the apartment had to repay the loan to the bank in installments.  The balance amount remains to be paid to the opposite parties is only Rs. 2,11,540/- out of which Rs. 1,00,000/- to be paid at the time of handing over of the apartment.  The complainants who were stationed abroad were not in a position to instruct and ascertain the stages of construction.  Therefore believing the words of the opposite parties the payments were made.  The non-completion of the apartment within the time stipulated in the agreement and the continued postponement of the project have caused severe mental agony and stress to the complainants who have invested their life savings in the apartment project.  Therefore alleging deficiency in service and unfair trade practice the complainants filed the complaint claiming refund of Rs. 59,42,460/- paid by them with interest @ 15% per annum from March 2015 till realization. They have also claimed costs of the proceedings.

            4.  On receiving notice opposite parties 1 & 2 M/s MIR Realtors Pvt. Ltd. and its Managing director entered appearance and filed version.  The 3^rd opposite party the Chief Operating officer of the 1^st opposite party did not file any version.

5.  In the version opposite parties 1 & 2 contended that the complainants are not entitled to seek any personal relief against the Managing Director of the 1^st opposite party which is a private limited company.  The 1^st opposite party is not having any person holding the post of Chief Operating Officer under it and hence the 3^rd opposite party is wrongly impleaded in the complaint.  In view of the establishment of the Kerala Real Estate Regulatory Authority (RERA) to deal with and regulate and promote matters relating to the real estate sector this Forum is not having jurisdiction or authority to entertain the present complaint and the complainants are not entitled to raise any claim for compensation before this Commission as sought for in the present complaint.  The execution of agreement for sale, construction agreement and tripartite agreement are all admitted by the opposite parties.  The only contention for the delay is that due to demonetization and consequent recession most of the customers who had executed the construction agreement had defaulted in making regular payments and there occurred fund shortage making it difficult to proceed with the construction.  Further, the consequent flood which occurred in the year 2018 & 2019 and the Covid-19 pandemic that spread in the country also affected the construction.  Further they would contend that the allottees of the apartments had formed an Association and they had approached the RERA seeking direction for completion of the project and other reliefs.  The RERA has been seized of the matter and has passed a common order with regard to the completion of the project and has granted time up to 31.10.2021 for the completion of the project in all respects.  It was subsequently extended up to 22.05.2022.  The complainants are fully aware of such proceedings and this complaint is filed suppressing the above material facts.  In view of the fact that the RERA which is a competent authority and entrusted with matters relating to regulation of real estate sector including construction of villas and apartments, the complainants ought to have approached the said authority if at all they are having any complaint.  The present complaint filed before this Commission is totally unsustainable.  80% of the construction of the project has already been completed and the rest of the construction would be completed within the time fixed by the RERA.  Moreover, an amount of Rs. 2,11,540/- is yet to be paid by the complainants.  There is no deficiency in service on their part.  Hence they prayed for dismissal of the complaint. 

6.  The opposite parties have produced the order of the National Company Law Tribunal wherein it has passed a moratorium under Sec. 14 of the I & B Code 2016 in regard to the following:

(a) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any Court of Law, Tribunal, Arbitration Panel or other authority.

The order of moratorium passed by the NCLT is not binding to this Commission as per the law laid down by the Supreme Court in Pioneer Urban Land Infrastructure & another Vs. Union of India decided on 19.08.2019.  Hence this Commission proceeded with the complaint.

7.  Complainants filed proof affidavit and produced 7 documents which were marked as Exts. A1 to A7.  The opposite parties have also filed proof affidavit.  They have not produced any document.

8.  Heard both parties and perused the documents.

9.  The following points arise for consideration:

1. Whether the complaint is maintainable?
2. Whether there is unfair trade practice or deficiency in service on the part of opposite parties 1 & 2?
3. Whether the complainants are entitled to any compensation? If so, what is the quantum?

10.  Point (i):- The learned counsel for the opposite parties contended that the complaint before this Commission is not maintainable in view of the establishment of the Kerala Real Estate Regulatory Authority which deals with and regulate and promote matters relating to the real estate sector and only RERA can adjudicate the matter under dispute. The learned counsel for the complainant would contend that both RERA as well as Consumer Commission have jurisdiction to entertain the complaint since both remedies are running parallel to each other and it is up to the complainant to choose any one of the remedies available to him.

The Supreme Court in the land mark judgment in Pioneer Urban Land & Infrastructure Ltd. & anr. Vs. Union of India has held that the jurisdiction of the Consumer Commission under the Consumer Protection Act is not ousted with the promulgation of the RERA.  The allottees are at liberty to avail any of the remedies available to them.  Both remedies are running parallel to each other.  In view of the above we hold that the complaint is maintainable before this Commission. 

11.  Points (ii) & (iii):- These points are considered jointly.  The specific case of the complainants is that they have booked an apartment in the opposite parties’ apartment project named ‘The Greens’ at Karakulam, Thiruvananthapuram.  They had entered into a sale agreement as well as a construction agreement in 2014.  The total sale consideration for the apartment was Rs. 61,54,000/-.  The complainants have paid 97% of the total sale consideration which comes to Rs. 59,42,460/-.  The opposite parties as per Ext. A2 agreement had offered to hand over the apartment by March 2015.  The opposite parties have pressurized the complainants to pay the amount in advance even though the respective stages of construction were not completed.  Since the construction was not made as promised in the agreement the complainants, on 27.04.2018 sent an advocate notice demanding refund of the amount paid by them with 15% interest and compensation.  Opposite parties have not handed over the possession of the apartment till date.  Complainants’ documents Exts. A1 to A3 proves the agreement and Exts. A4, A5 & A6 prove that they have paid a total amount of Rs. 59,42,460/- to the opposite parties.  Thus the complainants have proved their case.  One of the contentions put forward by the opposite parties in not handing over the apartment in time is that due to demonetization and consequent economic recession most of the customers who had executed construction agreements, defaulted in making regular payments as per the payment schedule and hence there occurred fund shortage hampering the progress of the construction.  They further contended that consequent to the flood which occurred in the year 2018 and 2019 the situation worsened and further, the Covid-19 pandemic which affected the country, had blocked the entire construction activities.  It may be noted that the above mentioned demonetisation, flood and Covid-19 pandemic situation arose years after the date on which they had promised to hand over the apartment.  As per the agreement the only acceptable reason for any delay in construction is a force majeure event.  Demonetisation and the other events took place only after time for completing the construction had expired.  Complainants cannot be made to wait indefinitely for the delivery of possession of the apartment and the stand of the opposite parties in relying on the demonetization, flood and Covid Pandemic situations which happened years after, for their default, while retaining the amounts deposited by the complainants, is not only an act of deficiency in service but also amounts to unfair trade practice.   

12.  The learned counsel for the opposite parties further contended that the balance work would be completed as per the direction of the RERA.  The construction will be completed within a short span of time.  The learned counsel for the complainant on the other hand would contend that the complainants had waited patiently for more than 7 years to get possession of the flat, as agreed.  Now they have lost interest in the project of the opposite party since they were prolonging the date of handing over possession, without any valid reason.  Hence they have filed this complaint for refund of the amount already paid by them. 

13.  The contention of the learned counsel for the opposite parties that the construction of the structure in which the complainants’ apartment is located has almost been completed as per the directions of the RERA cannot be taken to mean that the apartment is ready for valid possession/occupation.  Therefore the said contention is not sustainable.  The complainants cannot be made to wait indefinitely for the delivery of the possession.  The Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasi S Rudra reported in 2(2019) CPJ 29 SC has held that the complainant cannot be made to wait indefinitely for the delivery of the possession by observing as under: 

It would manifestly unreasonable to construe the contract between the parties as required in the buyer’s agreement to wait indefinitely for possession.

 By 2022 nearly 8 years have elapsed from the agreed date of possession.  Even according to the opposite parties the developer is yet to complete the project and only 80% of the construction is completed.  This is the situation nearly 8 years after the period promised for handing over the possession.  The period of 8 years is beyond what is reasonable.  The complainants cannot wait indefinitely for possession of the apartment as the apartment is not yet ready for possession.  Keeping in view of the judgment passed by the National Commission in Emmar MGF Land Ltd. &ors. Vs. Amit Puri 2(2020) CPJ 568 (NC) wherein it has been laid down that after the promised date of delivery, it is the discretion of the complainant whether he wants to insist on handing over of possession or to seek refund of the amount paid with reasonable interest.   It is held that it is well within the complainant’s rights to seek refund of the principal amount with interest and compensation as the apartment is still not ready for possession. Therefore we are of the considered view that the complainants are entitled for refund of the full amount along with damages and compensation in the form of reasonable interest which we quantify at 9% per annum from the date of complaint till the date of actual refund.

In the result, the complaint is allowed as follows: 

1. Opposite parties are directed to refund to the complainants                       Rs. 59,42,460/-along with interest @ 9% per annum from the date of complaint till date of payment, within one month from the date of this order. 
2. Opposite parties shall pay litigation costs of Rs. 30,000/- to the complainants. 

If the opposite parties do not comply with this order within one month from the date of receipt of a copy of this order it will attract penal interest @ 12% per annum till the date of payment.

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

T.S.P. MOOSATH   : JUDICIAL MEMBER

RANJIT. R                : MEMBER

                                                                        BEENA KUMARY. A         : MEMBER

                                                                        K.R. RADHAKRISHNAN  : MEMBER

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APPENDIX

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

T.S.P. MOOSATH   : JUDICIAL MEMBER

RANJIT. R                : MEMBER

                                                                        BEENA KUMARY. A         : MEMBER

                                                                        K.R. RADHAKRISHNAN  : MEMBER

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