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

          The complainant before this Commission claims to be a Recognized Consumer Association, within the meaning of Section 12 of the Consumer Protection Act.  This complaint has been instituted on behalf of allottees of ten residential units in a project namely “Parsvnath Elite Villas/Elite Floors, Parsvnath City” which the OP was to develop in Dharuhera, Haryana.  The OP allotted residential villas/floors to the above referred ten allottees and executed Buyers Agreement with them on different dates between 17.06.2008 to 04.05.2012.  The following are the dates on which the agreements were executed by the OP with the above referred allottees:

2.      Clause 8(a) of the agreements is related to delivery of possession and reads as under:

8 (a)  The Developer shall endeavour to complete the construction of the Villa within a period of twenty four (24) months from the date of commencement of construction, after receipt of sanction of building plans / revised building plans and other approvals of concerned authorities as may be required, subject to force majeure, restraints or restrictions from any courts / authorities, non-availability of building materials, disputes with contractors / work force etc. and circumstances beyond the control of the Developer and subject to timely payments by the Buyers.  For the purposes of this clause / agreement the date of submission of application with competent authority for obtaining completion certificate in respect of internal development of the Colony shall be reckoned as the date of completion of development of the colony.  No claim by way of damages / compensation shall be against the developer in case of delay in handing over possession on account of any of the said reasons and the developer shall be entitled to reasonable extension of time for completion of the Villa.

3.      The grievance of the allottees on whose behalf this complaint is instituted, is that despite they having made substantial payment to the developer, the possession of the allotted villas/floors has not been offered to them and even the construction is not complete till today.  Since the construction was not complete and possession was not offered to them, the said allottees approached this Commission through the complainant association with the following prayers:

1. Direct the opposite party to:

2. Hand over the possession of the respective 10 villas / floors, subject matter of the present complaint, completed as per the specifications mentioned in the buyer agreement including execution of necessary title transfer documents, without any encumbrance, within such reasonable period as this Hon’ble Court deem fit and

3. To pay a delay penalty on the amount paid calculated @ 24% per annum from the expiration of 24 months from the date of respective agreement

4. OR IN THE ALTERNATIVE –

5. To refund the full amount received in respect of the 10 units, as mentioned in the complaint above, along with pro rata interest @ 24% per annum thereupon from the respective date of agreement;

6. Direct the opposite party to pay a compensation to the tune of Rs.6,00,00,000/- (Rupees six crores) as stated hereinabove to the complainant association;

7. Cost of the present proceedings may also be directed to be recovered from the opposite party.

4.      The learned counsel for the complainant states on instructions from the allottees on whose behalf this complaint is instituted that none of the allottees wants to wait for possession of the allotted villa/floor and all of them want refund of the amount which they have paid to the OP alongwith appropriate compensation etc.

5.      The complaint has been resisted by the developer which has disputed the competence of the complainant to institute this complaint.  On merits, it is alleged that the developer had encountered various problems which, as a result, affected the construction.  The aforesaid problems, according to the developer, were as under:

1. Various challenges being faced by the opposite party:

   The following various problems which are beyond the control of the Opposite Party seriously affected the construction;

2. Lack of adequate sources of finance;

3. Shortage of labour;

4. Rising manpower and material costs;

5. Approvals and procedural difficulties

In addition to the aforesaid challenges the following factors are also played major role in delaying the offer of possession;

1. There was extreme shortage of water in the region which affected the construction works

2. Unexpected sudden declaration of demonetization policy by the Central Government, affected the construction works of the opposite party in a serious way for many months.Non-availability of cash-in-hand affected the availability of labours.

3. Recession in economy also resulted in availability of labour and raw-materials becoming scarce.

4. There was shortage of labour due to implementation of social schemes like National Rural Employment Guarantee Act (NREGA) and Jawaharlal Nehru Urban Renewal Mission (JNNURM).

All the above problems are beyond the control of the opposite party.

6.      It is also alleged in the written version that timely payment of the sale consideration by the allottees was the essence of the agreement and the allottees had defaulted in making payments.  Instance of one Samir Bhargava is given who, according to the OP, failed to make payment of the balance amount despite several reminders which are annexure R-3 (Colly.) to the written version, thereby violating clause 5(a) of the agreement. 

7.      Section 12(1)(b) of the Consumer Protection Act which enables a Recognized Consumer Association to file a Consumer Complaint, came up for consideration of a Three-Members Bench of this Commission in Moulivakkam Trust Heights Flats Affected Buyers Association Vs. M/s Prime Sristi Housing Pvt. Ltd. & Ors. CC No.560 of 2014 and connected matters decided on 05.05.2017 and the following view was taken:

17.     For the reasons stated hereinabove, the essential characteristics of a Voluntary Consumer Association, for the purpose of Section 12 of the Consumer Protection Act, can be summarized as under:

(a)     It should be a body formed by a group of persons, coming together of their own will and without being motivated by any financial consideration;

(b)     The sole or one of the main objectives of the body so formed should be to pursue, propagate, advance, safeguard or promote the interests of the consumers in general, or a class or sub-class of the consumers as defined in Section 2(1)(d) of the Consumer Protection Act;

(c)     The body qualifying the conditions (a) and (b) above should be registered under the Companies Act or under any other law for the time being in force;

(d)  A Residents Welfare Association, a cooperative society or an Association of Flat / Plot Buyers or a company, if it qualifies conditions (a) to (c) above also will be a Voluntary Consumer Association, within the meaning of Section 12 of the Consumer Protection Act;

(e)     If a body is formed with the objective of making financial gains, and not to serve the cause of the consumer or the society in general, it will not qualify as a Voluntary Consumer Association, within the meaning of Section 12 of the Consumer Protection Act;

8.      A perusal of the registration certificate of the complainant dated 12.08.2016 would show that the complainant is duly registered with the Registrar of Societies (South-East District), Delhi under the provisions of the Societies Registration At, 1860.  The following inter-alia are the aims and objectives of the complainant society:

2. To approach, petition courts of law, as a recognized consumer association for its members {either individual/co-allottees/attorney etc.}, including High Court/Supreme Court/Consumer Court {National Consumer Disputes Redressal Commission or State Consumer Disputes Redressal Commission or any other forum under the Consumer Protection Act for the redressal of all kinds of grievances against Parsvnath Developers Limited claiming compensation, damages, in respect of Villas and Floors of Parsvnath Developers Limited under the name and style of “Parsvnath Elite Villas/Elite Floors” situated at Parsvnath City, Dharuhera, National Highways-8, District Rewari, Haryana.

9.      The complainant thus, is a registered society.  The aims and objectives of the complainant leave no reasonable doubt that it is also a Recognized Consumer Association within the meaning of Section 12 of the Consumer Protection Act, one of its objectives being to take up the cause of the allottees of the project Parsvnath Elite Floors and Villas, Parsvnath City, Dharuhera in Courts and Forum including this Commission, seeking redressal of the grievances of the buyers against the said developer. 

10.    Recently, vide its decision dated 14.02.2020 in Civil Appeal Nos.9961- 9962 and Civil Appeal Nos. 9959-9960 of 2017 Subhechha Welfare Society Vs. M/s Earth Infrastructure Pvt. Ltd., the Hon’ble Supreme Court clearly held that a  Recognized Consumer Association can file a Consumer Complaint on behalf of more than one consumers.  The view taken by a Bench of this Commission that a Recognized Consumer Association can file a Consumer Complaint only on behalf of one consumer, was set aside by the Hon’ble Supreme Court.  Therefore, the complainant is competent to institute this complaint on behalf of all the allottees referred in the complaint. 

11.    Coming to the merits of the case, it would be seen from clause 8(a) of the Buyers Agreement that the possession was to be delivered within 24 months of the commencement of the construction.  The date on which the construction commenced, has not been disclosed in the written version of the OP, though this was a fact especially in the knowledge of the OP and therefore, ought to have been disclosed in the written version filed by it.  Be that as it may, a perusal of the e-mails sent by the OP to an allottee on 06.02.2010 would show that the OP had informed him that the likely date of possession was possibly by end of 2011.  Therefore, the possession of the villas/floors ought to have been completed and the possession ought to have been offered latest by December 2011.  This Consumer Complaint came to be instituted on 30.08.2016, about 4 years and 8 months after December 2011.  The construction was not complete on the date the Consumer Complaint was instituted.  Admittedly, the construction is not complete even as on today.  The OP therefore, is not in a position to offer possession of the allotted villas/floors to the allottees even in February 2020 though it ought to have offered possession by December 2011.  Therefore, there is already a delay of more than 8 years. 

12.    Coming to the grounds taken in the written version, to justify the delay in construction, I find that no evidence has been led by the OP to prove that labour was not available in the region for carrying out construction, nor evidence has been led to prove that water from any source whatsoever was not available in this region for construction purpose.  There is no evidence of raw material required for the construction not being available in the market.  Therefore, the delay in completion of the construction cannot be justified on any of these grounds.  The increase in the manpower cost and the material cost cannot be a ground for delaying the construction since the possible rise in the labour cost and material cost ought to be and must have bene factored in by the developer while fixing the sale price of the houses.  As far as demonetization is concerned, I fail to appreciate how it could have affected the pace of construction.  The OP has claimed that non-availability of cash has affected the availability of the labours.  The OP was expected to pay by way of cheques/RTGS/NEFT if cash was not available with it for payment to the workers. Therefore, demonetization could not have affected the pace of the construction.  In any case, demonetization has now become a thing of the past, it having come in October-November, 2016 and more than three years having already expired since then. 

13.    As far as the alleged default on the part of the allottees in making payment to the OP is concerned, the developer has given instance of only one allottee namely Mr. Samir Bhargava.  A perusal of the payment plan which Mr. Samir Bhargava had agreed with the OP would show that he was to make payment for construction linked installments.  The third installment was payable within 60 days of commencement of construction and the fourth installment was payable on start of ground floor roof slab.  Admittedly, he has already paid more than 50% of the cost of the house allotted to him.  Thus, first four installments which constitute 50% of the cost of the house, already stand paid.  The fifth installment was payable on completion of the super structure.  There is no evidence of the OP having informed Mr. Samir Bhargava that the super structure was complete and having asked him to pay the installment which became payable on completion of the super structure.  In any case, if there was default on the part of an allottee in making timely payment of the installments, nothing prevented the OP from cancelling the allotment made to such an allottee and allot the flat to some other person.  That having not been done, the OP is precluded from taking the plea of delay in payment of the installments, to justify the delay in the completion of the construction.   

14.    For the reasons stated hereinabove, I hold that the OP has failed to justify the delay in completion of the construction.  The allottees who are already waiting for last 7-11 years, cannot be compelled to wait indefinitely when it is not known when the OP will be able to complete the construction and offer possession of the allotted house to them.  All the aforesaid allottees therefore, are entitled to refund of the amount which they paid to the OP alongwith appropriate compensation. 

15.    The learned counsel for the complainant states on instructions from the allottees that they are pressing for payment of compensation in the form of simple interest at a rate notified by RERA Authority in Haryana.  The said rate of interest is stated to be 10% per annum.  Hence, the Consumer Complaints are disposed of with the following directions:

          (i) The OP shall refund the entire principal amount received from all the ten allottees on whose behalf this Consumer Complaint is instituted alongwith compensation to them in the form of simple interest @ 10.2% per annum with effect from the date of each payment till the date of refund. 

          (ii) The OP shall also pay a sum of Rs.50,000/- as cost of litigation to the complainant.

          (iii) The payment in terms of this order shall be made within three months from today.