1.            The present Consumer Complaint has been filed under Section 12(1)(a) read with Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) by Dr. Nidhi Patni and Dr. Sanjeev Kumar Patni (hereinafter referred to as the Complainants) against Opposite Party, M/s. Emaar MGF Land Limited (hereinafter referred to as the Developer), seeking refund of the amount paid towards purchase of Flat alongwith interest, compensation and costs as the Opposite Party Developer failed to hand-over the possession of the Apartment booked by them in the Project launched by the Developer in the name and style of “Palm Gardens” located at Sector-83, Gurgaon, Haryana. 

2.            Brief facts of the case as narrated in the Complaint are that the Opposite Party Developer launched a Residential Project in the name and style of “Palm Gardens” located at Sector-83, Gurgaon, Haryana (hereinafter referred to as the Project).  The Complainants booked an Apartment for residential purpose in the said Project for a total sale consideration of ₹1,00,45,319/- in late 2011.  Unit bearing No. PGN-09-12A03 at 12th Floor, Tower No. 09 having super area of approx. 1900 sq. ft. was provisionally allotted to the Complainants.  Builder Buyer Agreement (hereinafter referred to as the Agreement) was executed between the Parties on 24.11.2011.  The construction of the Project as per the Statement of Accounts, started on 09.08.2012.  As per Clause 10(a) of the Agreement, the delivery of the possession was to be offered within 36 months with a grace period of 3 months from the date of the start of the construction.  It is averred by the Complainants that as per terms of the Agreement, the expected date of delivery of possession of the Apartment was 09.11.2015. The Complainants had deposited ₹94,83,640/- (Rupees Ninety Four Lacs Eighty Three Thousand Six Hundred Forty only) on different dates as per demand of the Opposite Party Developer.  Despite that the Opposite Party Developer miserably failed to deliver the possession of the Flat within stipulated period.  The slow pace of the construction clearly suggests that the possession of the Apartment alongwith the promised layout, amenities and specifications including the greens etc, will not be probable in the near future. It is also averred in the Complaint that the Opposite Party Developer has charged several unwarranted taxes and charges.  It is further averred that whenever the Complainant raised query for actual date of possession, the Opposite Party Developer without assigning any reason for the delay, kept postponing the delivery date of the said Project on one pretext or the other.  Seeing the conduct of the Opposite Party Developer, they have no trust on the Opposite Party Developer and are no longer interested in having possession of the Apartment.  Alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party Developer, the Complainants have filed the present Consumer Complaint seeking following reliefs:-

“i.            Direct the Opposite Party for an immediate 100% refund of the total amount of ₹94,83,640/- (Rupees Ninety Four Lacs Eighty Three Thousand Six Hundred Forty only) paid by the Complainants, along with a penal interest of 18% per annum from the date of the receipt of the payment made to the Opposite party;

ii.             Direct the Opposite Party to pay compensation of ₹10,00,000/- (Rupees Ten Lakhs Only) to the Complainants for mental agony, harassment, discomfort and undue hardships caused to the Complainant as a result of the above acts and omissions on the on the part of the Opposite Party;

iii             Direct the Opposite Party to pay a sum of ₹1,00,000/- (Rupees One Lakh Only) to the Complainants as a whole, towards litigation costs; and

iv             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.”

3.            The Complaint was resisted by the Opposite Party Developer by filing its Written Statement in which the Opposite Party Developer submitted that the Complainants are permanent residents of Jaipur, Rajasthan and had apparently booked the Unit in question for commercial purpose to reap the financial benefit, thus does not fall within the ambit of a ‘consumer’; there is Arbitration clause in the Agreement, therefore, the case is liable to be referred to the arbitration.  It was also stated that the development work got slowed as the Opposite Party Developer Company has undergone re-structuring; several allottees defaulted/delayed in making payment which hampered availability of funds resulting in slowed down of development work; the Contractor was also liable for the delay as it did not complete the work in time-bound manner.  Therefore, the delay in construction is due to the reasons which were beyond the control of the Developer, however, they are ready to compensate the Complainant as per Clause 12(a) of the Agreement, which provides compensation @7.5/- per sq. ft. per month of the super area, and Opposite Party Developer is ready to compensate the Complainant in terms of the Agreement and in terms of Section 74 of the Contract Act, 1872, the Complainant is not entitled for more than the compensation as agreed between them.  It was also submitted that there is no Deficiency in Service or Unfair Trade Practice on their part and prayed that the Consumer Complaint be dismissed.

4.            We have heard Mr. Deepak Aggarwal, learned Counsel for the Complainant, Mr. Shashank Sharma, learned Counsel appearing on behalf of the Opposite Party Developer, perused the material available on record and have given our thoughtful consideration to the various pleas raised by the learned Counsel for the Parties.

5.            The contention of the learned Counsel for the Opposite Party that the Complainants are not ‘Consumer’ and that the subject Apartment was booked for investment purpose is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainants were dealing in real estate i.e. in the purchase and sale of plots/ flats in their normal course of business to earn profits, shifts to the Opposite Party, which in the instant case the Opposite Party Developer had failed to discharge by filing any documentary evidence to establish their case. Therefore we are of the considered view that the Complainants do fall within the definition of ‘Consumer’ as defined under Section 2 (1)(d) of the Act.

6.            As far as the contention of the learned Counsel for the Opposite Party Developer regarding Arbitration Clause is concerned, we find it a fit case to place reliance on the Judgment passed by the Hon’ble Supreme Court in M/s Emaar MGF Land Limited vs. Aftab Singh – I (2019) CPJ 5 (SC),in which the Hon’ble supreme Court has laid down the law that an Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint. Hence, the objection raised by the Learned Counsel for the Opposite Party that the clause of Arbitration bars this Commission from entertaining the Complaint is unsustainable.

7.            Regarding the contention of the learned Counsel for the Opposite Party that the Complainants are bound by the terms of the Agreement and they are ready to compensate the Complainant for delay in terms of Clause 12(a) of the Agreement, we have gone through the various clauses of the Agreement.  Clause 12(a) and 13 of the Agreement reads as under:-

“12.        Compensation

(a)          In case within a grace period of three months as stated in clause 10(a), the Company is not able to hand over the possession to the Allotee(s), the Allottee(s) shall be entitled to pay of compensation for delay at the rate of Rs.7.50/- (Rupees Seven and Fifty paisa only) per sq. ft. per month of the Super Area till the date of notice of the possession under the provision of clause 11(a), provided the Allottee(s) has complied with all the terms and conditions of this Agreement. The Allottee(s) shall have no other claim against the Company in respect of the said Unit and car parking space under this Agreement during such extended period.

13.1        It is agreed by the Allottee(s) the in the event of the failure of the Allottee(s) to take the possession of the said Unit in the manner as aforesaid in clause 11, then the company shall have the option to cancel this Agreement and avail of the remedies as stipulated in clause 16 of this Agreement or the Company may, without prejudice to its rights under any of the clause of this Agreement and at its sole discretion, decide to condone the delay by the Allottee(s) in taking over the said Unit in the manner as stated in this clause on the condition that the Allottee(s) shall pay to the company the following amount:

(a)          …….

(b)          Simple interest @ 24% per annum on the amount due as mentioned in the notice for possession from the due date till date of the payment.

8.            A bare perusal of above Clauses makes it clear that as per Clause 12(a) of the Flat Buyer Agreement, in case of delay the Opposite Party Developer is liable to pay ₹7.5/- per sq. ft. of the super built up area of the flat per month for the period of delay in offering of possession, whereas in terms of Clause 13.1(b) in case of late payment, the Complainant/Buyer is liable to pay interest @24% p.a.  This shows that the terms of the Agreement are wholly one-sided and unfair. Therefore, the Complainant cannot be made bound to the terms of the Agreement, which is one-sided and unfair in the light of the recent Judgment of the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34 (SC),wherein the Apex Court has observed as follows:

“6.7.       A terms 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 cannot seek to bind the Respondent with such one-sided contractual terms.”

9.            As far as the plea regarding delay in Project due to re-structuring of Company and failure on the part of the Contractor to complete the work in time-bound manner is concerned, we observe that it is their internal matter and the Complainants/Allottees cannot be made victim for the same. 

10.          So far the plea of the Opposite Party Developer that due to default in payment by some of the Allottees, the construction slowed down is concerned, it is observed that if some of the Allottees defaulted in making payment, it was open for the Opposite Party Developer to cancel their allotment and sell their allotted flats in the open market; raise funds from alternative sources and complete the construction of the allotted Apartments within the timeframe, but this was not done.  Therefore, we do not find any force in this contention as well.

11.          We find it a fit case to place reliance on 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, wherein it has been held 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.

12.          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.”

13.          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.

14.          In the instant case, it is not in dispute that the Complainants were allotted the Flat in the year 2011 and the construction started at the site from August 2012.  As per terms of the Agreement, the proposed date for delivery of the possession was 09.11.2015 but till the date of filing of the Written Statement, i.e., 03.08.2018, what to talk of offer of possession, even the Occupation Certificate was not obtained by the Opposite Party Developer.  The Complainants had not made a prayer for delivery of possession in the Consumer Complaint and sought refund of the amount paid by them to the Opposite Party Developer on account of the delay in offering possession of the allotted Unit to them.

15.          Respectfully following the principles laid down by the Hon’ble Supreme Court in Devasis Rudra (supra) and Pioneer Urban Land & Infrastructure Ltd. (supra), we are of the considered view that the Complainants are entitled for refund of the entire deposited amount along with damages and compensation.

16.          Now, coming to the quantum of compensation, we find that the Hon’ble Supreme Court in ‘DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda, II (2019) CPJ 117 (SC)’, has observed that when interest is awarded by way of damages awarding additional compensation is unjustified. The Hon’ble Supreme Court in Civil Appeal No. 2504/2020 entitled “Prateek Infra Projects India Pvt. Ltd. vs. Nidhi Mittal and Anr.” vide Order dated 05.06.2020, has scaled down the rate of interest awarded by this Commission to 9% per annum.  Similar view was also taken in Civil Appeal No. 62/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Manish Kumar Sinha & Anr.” and in Civil Appeal No. 5109/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Sanjay Dhall”.

17.          Keeping in view the Principles laid down by the Hon’ble Supreme Court in aforementioned Judgments, we are of the considered view the Complainants are entitled for refund of the entire deposited amount along with damages and compensation in the form of interest@9% p.a. from the date of respective date of deposit till the date of actual refund.  Consequently, the Opposite Party Developer is directed to refund to the Complainants ₹94,83,640/- (Rupees Ninety Four Lacs Eighty Three Thousand Six Hundred Forty only) alongwith interest @9% p.a. from the respective dates of deposit till the date of actual refund within 6 weeks from the date of passing of this Order failing which the rate of interest will increase to 12% p.a.

18.          The Consumer Complaint is partly allowed in above terms.  The pending applications, if any, also stand disposed off.