1.      This First Appeal No. FA/876/2022 is filed against the State Consumer Disputes Redressal Commission, Delhi Order dated 15.09.2022 in CC No. 1372/2018. The Respondents/ Complainants had sought relief for deficiencies in services concerning a real estate transaction. During the pendency of the Appeal, one complainant, Mohammad Jagar (Respondent No.1) passed away, leaving Suriya Naheed (Respondent/Complainant) as the sole surviving respondent. Vide the said Order, the State Commission directed the appellant (Proview Construction Ltd.) to refund the amount deposited by the complainants, pay interest on the deposited amount and pay compensation for mental agony and litigation costs to complainants.

2.      As per report of the Registry, there is a 33 days delay in filing the present First Appeal.  For the reasons stated in I.A. No.10909 of 2022, the delay is condoned. 

3.      Brief facts of the case, as per the Complainant, are that on 22.08.2008, he booked Flat No. T9/702 in Proview Technocity project Apartment, located at GH-09A, Chi-V, Yamuna Expressway, Gautam Budh Nagar, UP. An allotment deed was executed on 23.08.2011, with a possession timeline of 24 months from the date of booking (i.e., by August 2010). Despite the agreed timeline, possession was offered on 29.06.2013, but the necessary Occupation Certificate (OC) was not obtained at that time. Upon site inspection, the complainants found the project to be incomplete and sent multiple emails seeking updates on construction status, OC and execution of sale deed. No satisfactory responses were provided. The builder demanded additional amounts, including a "Pratikar" fee, which the complainants contested. Being aggrieved, the complainants filed a consumer complaint before the State Commission.

4.      In Reply filed before State Commission, the OP asserted that the possession of the Flat was offered on 29.06.2013, subject to clearing outstanding dues, including additional Pratikar amount. The Occupation Certificate was obtained on 06.03.2017 and the delay is partly attributable to non-payment of dues by the complainants. They lack cause of action as they failed to fulfil their payment obligations. They sought to dismiss the complaint with costs.

5.      The learned State Commission vide order dated 15.09.2022 allowed the Complaint and passed the following orders:-

“18. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party  no .1 to refund the entire amount paid by the Complainants i.e., Rs. 30,08,236/- along with interest as per the following arrangement:

A. An interest @6% p.a. calculated from the date on which each instalment/payment was received by the Opposite Party no.1 till 15.09.2022 (being the date of the present judgment);

B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party no. 1 pays the entire amount on or before 15.11.2022;

C. Being guided by the principles as discussed above, in case the Opposite Party no. 1 fails to refund the amount as per the aforesaid clause (A) on or before 15.11.2022, the entire amount is to be refunded along with an interest @ 9% p.a. calculated from the date on which each instalment/payment was received by the Opposite Party no.1 till the actual realization of the amount.

19. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party no.1 is directed to pay a sum of

A. Rs. 2,00,000/- as compensation for mental agony and harassment caused to the Complainants; and

B. The litigation cost to the extent of Rs. 50,000/-.

20. The Opposite Party no. 1 is also directed not to deduct any TDS on the amount being paid/refunded. Our view is fortified by the dicta of Bombay High Court in the case of Sainath Rajkumar Sarode & Ors. Vs. State of Maharashtra & Ors. reported in {2021] 283 TAXMAN 494 (Bom).”

6.      Aggrieved by the Order of the State Commission, the Appellant/OP filed the present Appeal seeking:

“a) Allow the present Appeal and Set-aside the Order dated 15/09/2022, passed by the State Commission, New Delhi in CC No. 1372 of 2018 titled as "Mr.Mohammad Jafar & Anr. Vs. M/s Proview Construction Ltd. & Ors.";

b) Direct the State Commission to not take any further action on the basis of the Order dated 15.09.2022 passed by the State Commission in CC No. 1372 of 2018 titled "Mr. Mohammad Jafar & Anr. Vs. M/s Proview Construction Ltd. & Ors." thereby staying the operation of the impugned Order and execution till the final disposal of the present Appeal;

c) Pass any other or further Order(s) as deem fit and proper.

7.      The Appellant has raised the following grounds in the appeal to challenge the order passed by the State Commission:

A. The Flat construction was completed and Occupancy Certificate (OC) was obtained on 06.03.2017, proving compliance with all statutory mandates. Despite this, the State Commission directed for refund of the entire amount, which is unjust.

B. The Respondents were irregular and failed to adhere to payment schedule as per the agreed plan in the allotment deed. The delay in possession was due to the Respondents’ non-payment.

C. The Respondents falsely stated to have paid ₹30,08,236, while only ₹23,08,236 was paid. This misrepresentation was not adequately addressed by the State Commission. Respondents still owed ₹9,67,314, which they failed to pay despite reminders.

D.  The Appellant offered him possession of the flat after obtaining the OC. However, the Respondents neither cleared the balance amount nor showed interest in executing the sale deed. Buyers cannot demand possession without clearing dues.

E. Awarding of refund of ₹30,08,236 along with damages and litigation costs was arbitrary and excessive, especially since the flat was complete and habitable. The Respondents default in payments caused hardships to other buyers and the Appellant. The State Commission failed to consider established legal principles.

F.  There was no deficiency in service on their part as all statutory and contractual obligations were fulfilled, and the Respondents’ non-compliance was the root cause of dispute.

8.      In his arguments, learned counsel for Appellant/OP reiterated the grounds stated in the present First Appeal and asserted that there is no deficiency in service, unless the entire amount has been paid by the complainant against the booking of flat in question as per the agreement. The complainant being the defaulter of timely instalments cannot put burden of his own defaults on payments. The complainant deliberately and intentionally did not take the possession of the flat in question, which was complete in all respects and habitable and the OC has already been obtained. He relied on Prashant Kumar Shahi v. Ghaziabad Development Authority, MANU/SC/02333/2000; and S. Kartar Singh Kochhar v. Vatika Ltd., CC No.242/211 (NCDRC) decided on 11.01.2013.

9.      Per contra, the learned Counsel for the Respondent/ Complainant reiterated the facts of the complaint, Asserted the grounds advanced and argued in favour of the order passed by the learned State Commission. He sought to dismiss the present First Appeal. In support of his arguments he relied on Mehnga Singh Khera and Ors. Vs. Unitech Ltd., I (2020) CPJ 93 (NC); M/S. A.R. G Housing Pvt. Ltd. vs A mit Kumar & Anr. decided NCDRC on 02.03.2019; and M/S Treaty Construction vs M/S Ruby Tower  Co Op Hsg. Society, AIR 2019 SC 3676.

10.    I have examined the pleadings and associated documents placed on record and thoughtfully heard the arguments advanced by the learned Counsel for the parties.

11.    It is an admitted fact that on 22.08.2008, the complainants booked Flat No. T9/702 with the Appellant/OP in the project ‘Proview Technocity Apartment’ situated at Plot No. GH-09A Chi-V, Yamuna Expressway, Gautam Budh Nagar, UP. The Appellant/OP and the Respondents/Complainants entered into the allotment deed of the Flat on 23.08.2011. The Appellant was to hand over the possession of the said flat within 24 months from the date of booking.  However, the OP offered possession of the flat vide letter dated 29.06.2013 without obtaining Occupation Certificate. Without doubt, there was delay in completion of completion and handing over of possession of the Flat as per agreement between the parties. The Complainant invested significant amount with intent to get the possession of the flat in time. In catena of judgements Hon’ble Supreme Court and this Commission decided on favour of right of the buyers to get a refund of their money in case of delay by the Developer in giving possession in terms of the Buyer’s Agreement. In Emmar MGF Land Ltd. & Ors. Vs. Amit Puri- {(II 2015 CPJ 568 (NC)}, decided on 30.03.2015, NCDRC has held:

“After the promised date of delivery, it is the discretion of the Complainant whether to accept the offer of possession, if any, or to seek refund of the amounts paid by him with some reasonable compensation and it is well within his right to seek for refund of the principal amount with interest and compensation.” 

12.    The Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, ll (2019) CPJ 34 (SC), decided on 02.04.2019 as under:

“We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfil his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent – Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent – Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the 22 Respondent – Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest”.

Further, para 6.7 of the Order reads as :

“A term of a contract will not be final and binding if it is shown that the flat purchasers had no option to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement of 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 flats by the Builder.

Further, para 7 of the Order reads as under :

“In view of 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 cannot seek to bind the Respondent with such one-sided contractual terms.”

13.    It is undisputed that there was long delay in completion and handing over the possession of the Flat. The non-availability of Occupancy/Completion Certificate points to the deficiency on the part of the OP. The Hon’ble Supreme Court, in Samruddhi Co-Operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd. in Civil Appeal 4000 of 2019, decided on 11.01.2022, has held:

“In the present case, the respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as ‘consumers’ to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate”.

14.    In Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, decided on 25.03.2021 Hon’ble Supreme Court has held that:

“.....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 circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified…..”

15.    Also, the Hon’ble Supreme Court in the case of Debashis Sinha & Ors. Vs. M/s. R.N.R. Enterprise Rep. by its Proprietor/ Chairman, Kolkata, 2023 LiveLaw (SC) 92 wherein it was held:

19. Curiously enough, the NCDRC referred to sub-section (2) of section 403 of the KMC Act only to permit the respondents to wriggle out of such obligation and arrived at a completely erroneous finding that no deficiency in service could be attributed to the respondents since both the respondents and the appellants had acted in violation of law. True it is, the appellants ought not to have taken possession without the completion certificate; however, that was not a valid ground not to direct the respondents to apply for and obtain the completion certificate as required by law. The mere fact that the flat owners were being assessed by the KMC affords no reason to the respondents for breaching section 403(1) read with rule 26 of the 1990 Rules. Of course, once a completion certificate is issued by the KMC upon conducting appropriate inspection and tests of the building that has since been erected, it would stand to reason that the same amounts to a certification that the building does not suffer from any violation of the building plan sanctioned for the purpose under section 390 of the KMC Act or that its constructional quality is not of the desired level for which it is unsafe for human habitation. We are constrained to observe that the respondents have been let off by the NCDRC in a manner contrary to law.

16.    The above view is consistent with the ratio of the decision of the Hon’ble Supreme Court in Civil Appeal NOs.2809-2810 of 2024 titled Dharmendra Sharma Vs. Agra Development Authority decided on 06.09.2024, it has been held as under:

“21. The appellant has rightly cited relevant precedents to bolster this argument. In Debashis Sinha v. R.N.R. Enterprise (2023) 13, this Court held that possession offered without the requisite completion certificate is illegal, and a purchaser cannot be compelled to take possession in such circumstances. The Court in that case held:

“20. Finally, we cannot resist but comment on the perfunctory approach of NCDRC while dealing with the appellants' contention that it was the duty of the respondents to apply for and obtain the completion certificate from KMC and that the respondents ought to have been directed to act in accordance with law. The observation made by Ncdrc of the respondents having successfully argued that it was not their fault, that no completion certificate of the project could be obtained, is clearly contrary to the statutory provisions.

21. Sub-section (2) of Section 403 of the KMC Act was referred to by Ncdrc in the impugned order [Debashis Sinha v. R.N.R. Enterprise, 2020 SCC OnLine NCDRC 429] . Sub-section (1) thereof, which finds no reference therein, requires every person giving notice under Section 393 or Section 394 or every owner of a building or a work to which the notice relates to send or cause to be delivered or sent to the Municipal Commissioner a notice in writing of completion of erection of building or execution of work within one month of such completion/erection, accompanied by a certificate in the form specified in the rules made in this behalf as well as to give to the Municipal Commissioner all necessary facilities for inspection of such building or work.

22. Section 393 mandates every person, who intends to erect a building, to apply for sanction by giving notice in writing of his intention to the Municipal Commissioner in such form and containing such information as may be prescribed together with such documents and plans. Similarly, Section 394 also mandates every person who intends to execute any of the works specified in clause (b) to clause (m) of sub-section (1) of Section 390 to apply for sanction by giving notice in writing of his intention to the Municipal Commissioner in such form and containing such information as may be prescribed.

23. It is, therefore, evident on a conjoint reading of Sections 403, 390 and 394 of the KMC Act that it is the obligation of the person intending to erect a building or to execute works to apply for completion certificate in terms of the Rules framed thereunder. It is no part of the flat owner's duty to apply for a completion certificate. When the respondents had applied for permission/ sanction to erect, the Calcutta Municipal Corporation Buildings Rules, 1990 (hereafter “the 1990 Rules” for short) were in force. Rule 26 of the 1990 Rules happens to be the relevant Rule. In terms of subrules (1) to (3) of Rule 26 thereof, the obligation as cast was required to be discharged by the respondents. Evidently, the respondents observed the statutory provisions in the breach.”

This position is supported by other decisions, including Pioneer Urban Land and Infrastructure Ltd. (supra) and Treaty Construction (supra), where the absence of these certificates was found to constitute a deficiency in service. In the present case, the ADA’s failure to C.A. No.2809-2810/2024 Page 17 of 19 provide the required certificates justifies the appellant’s refusal to take possession. This strengthens the appellant’s claim for additional compensation to compensate for the delay caused by ADA’s breach of its statutory obligations.

…

23.        In light of the aforementioned observations and taking into account the shortcomings on the part of both the appellant and the ADA, this Court deems it appropriate to provide a compensation of Rs. 15,00,000/- (Fifteen Lakhs only) apart from what was awarded by the NCDRC. Therefore, apart from the refund of the entire amount deposited by the appellant @ 9% interest per annum from 11.07.2020 till the date of refund, the ADA is directed to pay an additional amount of Rs. 15,00,000/- (Fifteen Lakhs only) to the appellant. The entire amount should be rendered to the appellant within three months of this order. We also order the ADA to return the non-judicial stamp worth Rs. 3,99,100/- back to the appellant.

17.    The Appellant’s contention that there is no deficiency in service and unless and until the entire amount is paid by the Complainant against the booking of flat in question as per payment plan, is untenable. The Complainant paid significant portion of consideration towards the Flat in question. It is undisputed that there was significant delay in handing over possession and obtaining of the Completion Certificate by the Appellants. Therefore, the Appellant is liable for deficiency in service. The contention of the Appellant that the Complainant had deliberately and intentionally did not take the possession of the flat in question, which was complete in all respects and habitable, does not hold credence without obtaining Completion Certificate. Therefore, the Complainant has the option either to accept possession along with delay compensation; or to seek refund along with compensation.

18.    In view of the foregoing deliberations, the Appellant is held to be deficient in handing over the possession of the Flat in question as per agreement executed between the Parties and the Complainant is entitled to refund the deposited amount from the Appellant.

19.    The next step is determining the quantum of compensation to be awarded to the Complainant for deficiency in service and delay in refund case. In this regard, vide Order dated 15.09.2022, the learned State Commission awarded certain compensation to the Complainant and the Complainant has not filed any Appeal against the same seeking enhancement of compensation. This Appeal has been filed by the OP against the order. With due regard to the fact that the delay in completion of the project is undisputed, the OP has liability to refund the consideration paid along with delay compensation. While the scale of compensation tenable in such refund cases is already established by Hon’ble Supreme Court, the same awarded by the learned State Commission dated 15.09.2022 in Complaint Case No. 1372 of 2018 in fact verges to sub-optimal. I, therefore, find no reason to interfere with the same. Consequently, First Appeal No. FA/876/2022 is dismissed.

20.    There shall be no order as to costs.

21.     All the pending Applications, if any, are disposed of accordingly.