R.K. AGRAWAL, J., PRESIDENT

The present Consumer Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (for short “the Act”) by the Complainants, against the Opposite Party, namely, Emaar MGF Land Ltd. seeking the following reliefs:

i.      Direct the Opposite Party to handover the possession of the apartment bearing number EHF-350-C-GF-024, complete in all respects to the Complainants immediately as per the Buyer’s Agreement and execute all the necessary and required documents in respect of the said flat in favour of the complainant or in alternative provide a ready to move in flat to the complainant which is of identical size and in similar locality or in alternative pay a sum of Rs.1,75,00,000/- being the available market rate of the similar house @ Rs.10,000/- per sq. ft., the apartment being the size of 1750 sq. ft. to enable the Complainant to purchase another house on their own.

ii. Direct the Opposite Party to pay interest @12% p.a. on the sum collected by the OP towards the house from the date of possession as per the buyer’s agreement till the actual possession.

iii. Grant immunity to the complainants from the payment of any charges incurred due to any escalation in cost including enhanced Service Tax.

iv. Direct the O.P. to pay a sum of Rs.5,00,000/- (Rupees Five Lakhs Only) to the complainants towards the mental agony and harassment and the cost of litigation.”

2.  Facts giving rise to the present Complaint are that the Opposite Party, was developing a residential gated Colony known as “Emerald Hills” at Sector, 65, Gurgaon, Haryana.  On the basis of lucrative advertisements and representations made by the representatives of the Opposite Party, the Complainants, who were looking for a residential home for their personal use applied for booking of an Independent Floor on 05.06.2009. The Builder-Buyer’s Agreement was executed on 03.12.2009 and the Complainants were allotted the Independent Floor bearing no. EHF-350-C-GF-024, located at Ground Floor, in Sector Coral having Super Area of 162.58 sq. mtrs., for a total sale consideration of Rs.76,47,030/-. According to Clause 13(a) of the Agreement, the possession of the Independent Floor was to be handed over within 27 months from the date of execution of the Agreement, along with a grace period of 3 months.

3. It is averred that the Complainants were assured by the Opposite Party that the construction would be completed within the stipulated time and that the possession would be offered as committed in the Builder-Buyer’s Agreement. It is stated that the Complainants have made the payments towards the sale consideration in a time bound manner.  

4. It is alleged that some of the Clauses of the Agreement were unreasonable and one-sided in favour of the Opposite Party and that the Complainants were forced to sign on the dotted lines as it is and in case it was not acceptable to the Complainants, they were threatened that their allotment would be cancelled and earnest money would be forfeited.  Therefore, the Complainants were left with no other option but to sign the Agreement, which contain many unreasonable Clauses.  

5.       It is averred that the Complainants have made all payments on time as demanded by the Opposite Party and in total the Complainants paid a sum of Rs.52,38,630/-. Despite collecting substantial amount of money the Opposite Party failed to adhere the time schedule and deliver the possession of the Unit as Agreed in the Agreement.  Despite repeated communications from the Complainants and personal visits neither they were given satisfactory response nor the possession of the unit was handed over to them on time. It is pleaded in the Complaint that the Opposite Party failed  to deliver the possession of the Apartment within the stipulated time and therefore, the Complainants are entitled for interest on the amount paid @24% p.a. from the  promised date of delivery of possession till the actual date of possession, keeping in view the parity, as the Opposite Party is charging interest @ 24%  p.a. on any delayed payment from the buyers.

6.       The Complainants alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party, have approached this Commission seeking the aforenoted reliefs.

7. The Complaint has been resisted by the Opposite Party by filing its Written Statement/Reply. The maintainability of the Complaint has been challenged on the grounds that the Complainants are not ‘Consumers’ within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 as they have booked the property for the purpose of investments to reap financial benefit; that as per Clause 37 of the Agreement, the Parties have agreed for exclusive jurisdiction of the Courts at Gurgaon, Haryana; that this Commission lacks pecuniary jurisdiction to entertain the present Complaint; and the Complaint has been filed beyond the time prescribed under Section 24A of the Consumer Protection Act, 1986 vis-à-vis the cause of action.

8.   Further, it is contended by the Opposite Party that at the time of booking, the Opposite Party had duly explained the terms and conditions to the Complainants and they had signed the Agreement with their own consent and freewill. It is averred that as certain other Allottees of the Project defaulted/delayed the payments, which resulted in slow development and extraordinary delay in the Project, but the Opposite Party has been making all possible efforts to complete the construction of the Project, inasmuch as it has deployed about 15000 labourers on the Project sites across the country. The Opposite Party has already provided the Allottees with the target Completion schedule for the Project and shall also keep them updated of the progress regularly. It is further averred that the Project is near completion and now the Opposite Party is in the process of applying for Occupation Certificate and as soon as the same is received, the Opposite Party shall offer the possession to the Allottees.

9.  It is stated in the Written Version that the Complainants have never raised any grievance regarding the Clauses of the Agreement being wholly one sided, unfair and unreasonable, as also delay in construction etc. before filing of the Complaint and Clause 13 (a) of the Agreement, which provides for handing over possession of the Unit in question within 27 months from the date of execution of the Agreement and 3 months’ grace period for applying and obtaining completion/occupation certificate, cannot be read in isolation and has to be read with other Sub-Clauses of Clause 13 and other Clauses of the same Agreement, which contemplates delay for Force Majeure event or any other reason beyond the control of the Opposite Party. It is further stated without admitting that, if there is any delay, in delivery of possession, the same has to be compensated in terms of Clause 15 of the Agreement, which provides for compensation of Rs.10/- per sq. ft. per month for the period of delay, and, therefore, the Complainants cannot claim the exorbitant interest rate, which is barred by Section 74 of the Indian Contract Act because the Complainants have agreed to accept the said compensation in the Agreement. It is pleaded that there is no deficiency in service or failure in service or unfair/restrictive trade practices on the part of the Opposite Party and, therefore, the Complaint deserves to be dismissed with exemplary costs.

10.  We have heard the learned Counsel for the Parties and perused the material available on record.

11. All the aforementioned grounds on which the present Complaint is resisted by the Opposite Party has been specifically dealt with and rejected by this Commission in the Consumer Complaint No. 3525 of 2017, namely, Sanjay Manidhar & Anr. vs. M/s Emaar MGF Land Ltd., decided on 15.02.2022, which relates to the same project of the Opposite Party namely, ‘Emrald Hills’. Therefore, the said pleas/ grounds need not be examined again in the present matter. The observations made by this Commission in Sanjay Manidhar & Anr. (Supra),  are reproduced below:

“13.     As far as challenge to the maintainability of the Complaint on the grounds mentioned in Para-8, referred to above, is concerned, in our considered view, none of the grounds are tenable.  In support of the plea that the Complainants are permanent residents of Gurgaon and have purchased the Unit in question for commercial purposes and, therefore, do not fall within the purview of Section 2(1)(d) of the Consumer Protection Act, 1986, the Opposite Party has not filed any documentary evidence.  The Opposite Party has not been able to establish that the Complainants are ordinarily indulged into purchasing and selling activities of flats/apartments in order to earn profit.  Merely stating that the Complainants have purchased the Unit in question for commercial purposes is not sufficient to hold so.  As the Unit in question has been purchased by both the Complainants in their joint name and the Agreement has also been executed between both the Complainants on First Part and the Opposite Party on the other, the Complaint can be filed either by any one of the Complainants, if the facts and circumstances so warrant, or by both the Complainants and, therefore, there is no requirement on the part of Complainant No.1 to authorize Complainant No.2, who is his wife and co-buyer/allotee, to file the Complaint.  In view of the Reliefs/Prayers claimed in the Complaint, quoted above, it cannot be accepted that the claim of the Complainants is not more than Rs.1.00 Crore and they are bound to approach the Courts at Gurgaon.  The Complaint is maintainable before this Commission.  Further, in view of admission by the Opposite Party in its Written Statement/Reply that the Project is near completion and as soon as the Occupation Certificate is received by the Opposite Party, the offer shall be made to the Complainants, as also the information dated 01.11.2017 uploaded by the Opposite Party on its Website relating to construction update, which shows that the construction is still incomplete and houses are lying in unfinished state (see page 87-88 of the Complaint), it cannot be said that the Complaint has been filed beyond the prescribed period under Section 24A of the Consumer Protection Act, 1986 vis-à-vis the cause of action.  The Complainants, who have not been handed over possession of the Unit in question, are entitled to file the Complaint at any time before the possession is handed over to them.

14.     The contention of the Opposite Party that the Complaint is devoid of a valid cause of action is also misconceived.  The Project, having the Unit in question, being incomplete has not been denied by the Opposite Party and, therefore, the Complainants, who have not been handed over possession of the Unit despite lapse of considerable period over and above the period prescribed therefor and payment of huge money, are within their rights to approach this Commission by filing the present Complaint.

15.     Even if at the time of booking the Complainants were explained all the terms and conditions of the Agreement and they had signed the same with their own freewill and consent, it is not in dispute that till date possession has not been given to the Complainants, which was required to be handed over by June, 2012, going by the period of 30 months from the date of execution of the Agreement (28.12.2009), including the 3 months’ grace period available to the Opposite Party for applying and obtaining the Occupation Certificate, and there is inordinate delay of over 9 years in doing so. 

16.     Further, it is contended by the Opposite Party that Clause 13(a) of the Agreement, which deals with the period of handing over possession, extracted above, cannot be read in isolation and has to be read with other Sub-Clauses/Clauses of the Agreement, which contemplates for Force Majeure events/conditions or any other reason beyond the control of the Opposite Party.  We find that no such events/conditions/reasons have been given by the Opposite Party in its Written Statement/Reply and, therefore, it cannot take shelter of the stated plea.

17.     As per Clause-15 of the Agreement, the Opposite Party is required to pay delay compensation for the period of delay in handing over possession @ Rs.10/- per sq. ft. per month.  In our considered opinion, this compensation is too meagre and cannot be accepted as adequate compensation.  It is well settled by a catena of decisions that such Clauses are not applicable and the Complainants are to be adequately compensated.  In the Case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors., I (2021) CPJ 60 (SC), wherein delay compensation of Rs.7.50 per sq. ft. per month had been offered to be paid as delay compensation, the Hon’ble Supreme Court has been pleased to hold the compensation offered as inadequate.  We are of the conscious of the fact that in present case, delay compensation of Rs.10/- per sq. ft. per month, which as stated by the Complainants comes out to 1.4% per annum, has been stipulated in the Agreement but too cannot be treated as adequate.  Accordingly, the submission of the Opposite Party that the Complainants are entitled to the delay compensation of Rs.10/- per sq. ft. per month and cannot claim beyond the agreed terms and conditions of the Agreement cannot be accepted.  While it is well settled that one sided terms and conditions incorporated in the Agreement to Sale favouring the Seller only are not applicable and binding on the Purchaser, we also feel that in the present real estate market conditions as a result of Covid-19 Pandemic the claim of the Complainants for penal interest @ 12% per annum is also on the higher side.

18.     Insofar as contention of the Opposite Party that there was slow development and extraordinary delay in the Project on account of some Allottees of the Project not making the payments is concerned, this Commission recently in the Case of Kshitij Jain & Anr. Vs. Emaar MGF Land Ltd. (Consumer Complaint No. 386 of 2020), decided on 04.02.2020, while negating the said contention, has held as under:

“19.    Further, for the slowdown in the real estate market and resultant non-making of payments by some allottees of the Project, the Complainants cannot be blamed.  It is true that the Project is dependent upon the availability of funds and for this reason the construction work of the Project may be hampered but for that reason the Complainants cannot be made to wait indefinitely for taking the possession of the Unit booked.  It is for the Developer, which has floated the Project, to look for alternative arrangements so that the Project is completed within the stipulated period.”

 19.     As regards the contention of the Opposite Party that it has already provided the Allottees with the target completion schedule for the Project and shall also keep them updated of the progress regularly, we may note that it is not in dispute that even till today the possession has not been offered to the Complainants, perhaps for want of Occupation Certificate, which as stated by the Opposite Party is yet to be applied for.  In this view of the matter, the Opposite Party has not been able to establish that the Project is complete and Occupation Certificate has also been obtained by it.       

20.     It is not the case of the Opposite Party that there was any default on the part of the Complainants in making the payments demanded by it, inasmuch as it is stated by the Opposite Party that there was default on the part of the Allottees in making the payments.  Though it was a Construction Linked Payment Plan and the Complainants have already paid the aforesaid huge amount, which has not been denied by the Opposite Party, in the Written Statement/Reply no instance relating to any amount not paid by the Complainants has been given by the Opposite Party.  In such a situation, even if there was any default on the part of the Complainants in making some payment demanded by the Opposite Party, they cannot be blamed as the Project was not complete and it was a Construction Linked Payment Plan.

21.     In view of the foregoing discussion, we have no hesitation in holding that there is deficiency in service on the part of the Opposite Party in not handing over possession to the Complainants by June, 2012, by which time the period prescribed under Clause 13(a) of the Agreement for handing over possession of the Unit in question had expired.  Still, possession has not been offered to the Complainants and there is inordinate delay of over 9 years in handing over possession to the Complainants.  They are entitled to a reasonable compensation therefor.  In our considered opinion, delay compensation @ 8% simple interest per annum on the amounts deposited by the Complainants from July, 2012 till the date of handing over possession would meet the ends of justice.   Needless to state that in the Case of Amitava Shankar Guha Vs. Emaar MGF Land Ltd., IV (2019) CPJ 522 (NC), which involves similar facts and circumstances as also the Project in question, namely, “Emerald Hills”, 8% simple interest has been awarded by a Coordinate Bench of this Commission and, accordingly, respectfully following the said decision, same interest is being awarded in this case.” 

12.     Accordingly, following the aforenoted decision of this Commission in Sanjay Manidhar & Anr. (Supra) which relates to the same project of the Opposite Party, namely, “Emrald Hills” the present Complaint is allowed in part with the direction to the Opposite Party to handover physical possession of the Unit in question to the Complainants, complete in all respects, and execute the required documents in their favour, subject to payment of outstanding dues, if any, after obtaining Occupation Certificate, if not obtained by now, within a period of two months from today and pay compensation in the form of simple interest @ 8% per annum on the amounts deposited by the Complainants from July, 2012 (that is the promised date of delivery) till the date of handing over of possession. The Opposite Party shall also pay a sum of Rs.50,000/- as litigation expenses to the Complainants.

13.     Time for compliance of this Order is two months from the date of receipt of copy of this Order, failing which the Opposite Party shall be liable to pay interest @ 10% per annum instead of 8% per annum for the same period.

14.      Pending Application, if any, stands disposed of.