JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          The complainant applied to the OP No.1 namely Emaar MGF Land Ltd.  through Asley Estate Pvt. Ltd. for allotment of a residential unit in a project namely ‘Palm Terraces’ which was to be developed in Sector-66 of Gurgaon.  The application for registration and booking was submitted on 29.05.2010 in respect of Unit No.PTF-1C-0302 to be located on the third floor in Block No.1C with use of two car parkings.  The sale consideration for the said unit was agreed at Rs.1,32,41,993/-.

2.      The parties then executed an Apartment Buyers Agreement dated 26.07.2010. OP No.2 Conscient Infrastructure Pvt. Ltd. was the confirming party to the said agreement.  Clause 3 & 4 of the preamble to the said agreement read as under:

III. The Director, Town & Country Planning Department, Haryana (“DTCP”), vide Memo No.DS-2007/24799 dated 27.09.2007 and 93/2008 dated 12.05.2008 (hereinafter collectively referred to as “the Licenses”) has granted license for development of the Building on the Project Land.

IV. Pursuant to the grant of the aforesaid Licenses, the Developer has conceived, planned and is in the process of constructing and developing various residential buildings including buildings known as “The Palm Terraces” (hereinafter referred to as the “Building”) situated on a piece and parcel of land more particularly detailed in Schedule-II of Annexure-I annexed hereto.  For the sake of clarity, the group housing colony being developed by the Developer on the Project Land has been approved as one single project by the Director, Town & Country Planning Department, Haryana under a single layout plan.  (Emphasis supplied)

3.      Clause 14(a) of the agreement related to possession of the apartment reads as under:

          14(a) Time of handing over the Possession

          Subject to terms of this clause and the Allottee(s) having complied with all the terms and conditions of this Agreement and not being in default under any of the provisions of this Agreement and upon complying with all provisions, formalities, documentation etc., as prescribed by the Developer, the Developer shall make all efforts to handover possession of the Unit (which falls within ground plus four floors tower/building) within a period of thirty (30) months from the date of commencement of construction, and for the Unit (which falls within ground plus thirteen floors tower/building) within a period of thirty six (36) months from the date of commencement of construction, subject to certain limitations as may be provided in this Agreement and timely compliance of the provisions of this Agreement by the Allottee(s).  The Allottee(s) agrees and understands that the Developer shall be entitled to a grace period of three (3) months, for applying and obtaining the occupation certificate in respect of the Unit and/or the Project.

4.      Since the flat allotted to the complainant was to be located on the third floor of the building, the possession, as per the agreement, ought to have been delivered within 33 months from the commencement of the construction, inclusive of the grace period of three months.  The possession however, was offered to the complainants only on 28.03.2017 and was actually taken by him on the spot on 02.06.2017.  The possession was taken in satisfaction of the liabilities and obligations of OP No.1 except in the matter of compensation. 

5.      The complainants had made payment of Rs.8,74,692/- alonwith Service Tax on that amount to OP No.1 before the execution of the Buyers Agreement.  The balance payment was made thereafter in installments pursuant to the demand raised by OP No.1.  This is also the case of the complainants that they were offered a Golf Driving Range as one of the facilities/attractions and that was a factor which persuaded them to book the residential flat in the above referred project.  Though the possession of the allotted flat has been delivered to the complainants, the Golf Driving Range/Golf Course has not been developed as yet.  The complainant no.2 claims to be a keen golfer and his case is that on account of the Golf Course having not been developed by OP No.1, he has to avail the said facility elsewhere and it would cost him as much as 25.37 lacs to avail the membership of DLF Golf Club which is the Golf Club nearest to this project.  

6.      This is also the case of the complainants that the construction was actually started by the developer in June 2012, after about two years from the booking of the apartment, thereby delaying its construction. 

The complainants are therefore, before this Commission with the following prayers:

1. Direct the OP to pay compensation in the form of interest @ 12% P.A. for the period of delay, which is from May 2010 till June 2012 amounting to Rs.8,74,692/- and from March 2015 till October 2017 amounting to Rs.42,42,816/-.

2. Direct the OP to provide the golf range completed in all respects immediately or agree to install Golf Simulator, or agree to get the membership nearby golf range/course or reimburse Rs.25.37 lakhs towards expenditure of initial five years membership fees of nearby golf range and pay the same amount every five years recurring till such time the golf range comes up.

3. Direct the OP 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.

    

7.      The complaint has been resisted by the OPs.  The booking made by the complainants as well as the execution of the agreement with them has been admitted.  The payment received from them has also not been disputed.  It is claimed that in view of clause 16 of the Builder Buyers Agreement, the complainants are entitled only to the compensation calculated at Rs.5/- per sq. ft. of the super area per month.

8.      Recently, in Civil Appeal No.12238 of 2018 – Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Other connected matter decided on 02.04.2019, the Hon’ble Supreme Court, referring to the clause such as clause 16(a) of the Builder Buyers Agreement executed in this case, inter-alia observed and held as under:

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.” 

6.4. A perusal of the Apartment Buyer’s Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties.  

For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser.  

Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days.  

On the other hand, as per Clause 11.5 of the Agreement, if the Appellant – Builder fails to deliver possession of the apartment within the stipulated period, the Respondent – Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant – Builder, and even thereafter, the Appellant – Builder gets 90 days to refund only the actual installment paid by the Respondent – Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant – Builder is liable to pay Interest @ 9% p.a. only.   

6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant – Builder to serve a Termination Notice upon the Respondent – Flat Purchaser for breach of any contractual obligation. If the Respondent – Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant – Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages.  

On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent – Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement.  

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.”

          Thus, the Hon’ble Supreme Court has clearly held that such a term in Apartment Buyers Agreement, being wholly one sided and unfair to the purchaser, will not bind him.  Therefore, irrespective of the aforesaid term contained in the agreement, the complainants are entitled to a fair and reasonable compensation for the period the possession has been delayed. 

9.      The next question which arises for consideration is as to for which period and on that amount the complainants are entitled as compensation for the delay in the offer of possession.  In clause IV^th of the preamble to the agreement, the developer clearly stated inter-alia that it was “in the process of constructing and developing various buildings including buildings known as ‘The Palm Terraces’ situated in a piece and parcel of land more particularly detailed in Schedule-II of Annexure-I annexed hereto.”  The case of the complainants is that actual construction in the project commenced only in June 2012.  This has not been disputed by the developer.  If this is so, a false statement with respect to the status of the project was made by OP No.1 to the complainants in clause IV^th of the preamble to the Builder Buyers Agreement.  Such a false statement would clearly be an unfair trade practice as defined in Section 2(1)(r) of the Consumer Protection Act. 

It is not disclosed in the written version filed by OP No.1 as to whether it was required to obtain any approval other than the license referred in clause (3) of the preamble and if so, when did it apply for such an approval, when it was granted to it, whether there was any delay in the grant of the requisite approval and to whom the delay, if any, was attributable.  If the developer required further approvals before starting actual construction of the building, it ought not to have stated in clause IV^th of the preamble that it was in the process of constructing and developing residential buildings including ‘The Palm Terraces’.  Had such a representation not been made, it is quite possible that the complainants would not have booked an apartment in this project or would not have made substantial payment before start of the construction. 

10.    In the present case, the complainants have sought compensation on the amount of Rs.36,44,550/- from the date of booking until the start of construction, the said amount being about 27.5% of the total cost of the flat.  Considering all the facts and circumstances of the case, including the false statement contained in clause IV^th of the preamble to the Flat Buyers Agreement, I am of the view that the complainants should be paid compensation in the form of simple interest @ 8% per annum on the amount which they had paid to OP No.1 upto 31.05.2012, from the date of each payment till 31.05.2012, the construction having commenced in June 2012.  The complainants are also entitled to compensation in the form of interest, on the entire amount paid by them to OP No.1, w.e.f. 01.04.2015, till the date on which possession was offered to them.

11.    As far as the failure of OP No.1 to develop the Golf Course is concerned, it has been stated in its reply that the land on which it had planned to develop the Golf Course, was sought to be acquired by Government of Haryana and therefore, the developer had to challenge the said acquisition before the Hon’ble High Court of Punjab & Haryana by way of a Writ Petition.  Though a stay against dis-possession has been granted to the developer, the matter is still pending before the Hon’ble High Court.  The acquisition/proposed acquisition by the Government of Haryana in my opinion, constituted a force majeure circumstances since Golf Course cannot be developed on a land which is subject matter of acquisition proceedings clause and until the said acquisition proceedings are quashed.  In the event of the acquisition proceedings being upheld, the land would not be available to the developer and therefore, it would not be possible to develop the Golf Course on the land.  The OP has not abandoned the proposed Golf Course.  In the event the acquisition is quashed, the developer would be under an obligation to develop a Golf Course on it and in that case, the complainants would be entitled to the use of the Golf Course.  If the use of the Golf Course is eventually denied to them or they are aggrieved from the terms and conditions on which the use of the Golf Course is denied to them, the complainants can avail such remedy as may be open to them in law in this regard, including seeking compensation for deprivation of the golf course facility. 

12.    For the reasons stated hereinabove, the complaint is disposed of with the following directions:

          (i) The OP No.1 shall pay compensation in the form of simple interest @ 8% per annum to the complainants on the amount which they had paid by 31.05.2010 with effect from the date of each payment till 31.05.2012. 

          (ii) OP No.1 shall also pay compensation in the form of simple interest @ 8% per annum to the complainants on the entire amount which they had paid to it, with effect from 01.04.2015 till 29.04.2017 when the intimation of possession as per the statement of account was given to the complainants. 

          (iii) OP No.1 shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants.

     As far as OP No.2 is concerned, since the construction was to be raised by OP No.1 alone, without any role to be played by OP No.2 and since admittedly the entire amount was paid only to OP No.1, no ground for grant of compensation against OP No.2 is made out, the Sale Deed in favour of the complainants having already been executed. 

(iv) The compensation already credited by OP No.1 in the account of the complainants on account of delay in delivery of possession, shall be deducted from the compensation payable to them in terms of this order. 

(v) If the order passed by this Commission in CC/664/2015 Kumar Rishabh & Anr. Vs. Emaar MGF Land Ltd. and CC/668/2015 Kumar Vaibhav & Anr. Vs. Emaar MGF Land Ltd. is set aside or modified by the Hon’ble Supreme Court in Civil Appeal Dy. No. 7840 of 2018 Emaar MGF Land Ltd. Vs. Kumar Vaibhav & Anr., the order passed by the Hon’ble Supreme Court will apply to this consumer complaint and this complaint, to the extent that order is found applicable, shall deemed to have been disposed of in terms of the said order of the Hon’ble Supreme Court.  If any amount becomes refundable by the complainants to the OP in terms of the order of the Hon’ble Supreme Court in Civil Diary No.7840 of 2018, the complainants will be liable to refund that amount to the OP along with simple interest @ 8% per annum from the date of receipt of that amount by him till the date of its refund.