JUSTICE SUDIP AHLUWALIA, MEMBER

2. The factual background, in brief, is that the Complainants purchased a residential unit in the project “Araya” located in Sector 62, Gurgaon, Haryana. The Opposite Party advertised the project as an ultra-luxurious housing development in a prime Gurgaon location. The project promised state-of-the-art amenities, including 3, 4, and 5 BHK apartments and penthouses, home automation systems, and high-end recreational facilities such as a clubhouse, swimming pool, gymnasium, landscaped gardens, and more.  The Complainants initially acquired the Unit bearing No. A-3101 in Tower A, having a super area of 4690 sq. ft. from the original allottees, Mr. Ashwani Handa and Ms. Kriti Handa, through an Agreement to Sale dated 08.06.2013. The transfer was acknowledged and formalized by the Opposite Party via a letter dated 04.07.2013. The unit was originally allotted to the Handas under an Apartment Buyer Agreement dated 06.03.2012, which stipulated that possession would be delivered by July 2017. However, the possession was delayed by over a year and was finally offered in December 2018.

 

3. Upon seeking possession, the Opposite Party required the Complainants to make full and final payment and sign an indemnity bond before inspecting the unit or the project. Reluctantly, the Complainants complied, fearing penalties and potential cancellation of the allotment. Despite the assurances made by the Opposite Party, the promised amenities were incomplete, and no compensation for the delayed possession has been provided to date. The Complainants contend that they had purchased the unit intending to provide quality housing for their family in the NCR region. The prolonged delays and lack of promised amenities have deprived them of their right to enjoy the property, causing immense hardship and frustration. Aggrieved with the deficiency in service due to delay in possession, the Complainants filed the present Complaint seeking the following reliefs -

“a) Direct the Opposite Party to pay interest @ 12% per annum as delayed compensation from the promised date of possession as per the Agreement i.e. from June, 2017 till the date the actual possession is handed over by the Opposite Party(s) along with all necessary documents and common areas and facilities as promised during the initial booking made by the Complainants;

 

b) Direct the Opposite Party to finish the construction of the project in a time bound manner and provide all the amenities and facilities as were promised in the agreement and brochure within 6 months;

 

c) Direct the Opposite Party to remove all the Holding Charges and other unnecessary charges levied by it immediately;

 

d) Direct the Opposite Party to reimburse the wrongly charged axes/charges/amounts from the complainants;

 

e) Direct the Opposite Party to pay compensation of INR. 5,00,000/- (Rupees Five Lakh only) to the Complainant(s) for mental agony, harassment, discomfort and undue hardships caused to the Complainant(s) as a result of the above acts and omissions on the part of the Opposite Party;

 

f) Direct the Opposite Party to pay a sum of INR. 1,00,000/- (Rupees One Lakh only) to the Complainant(s) in the Project "Araya" towards litigation costs…”

 

4. The Opposite Party has filed its Written Statement in which it has denied all the material averments made by the Complainants;  The Opposite Party claims to have successfully completed notable projects such as “Pioneer Park” and “Presidia” both of which have received widespread acclaim. Regarding the “Araya” project, it is contended that three of the four towers have been completed and granted Occupation Certificates, including Tower 'A,' which is the subject of the current dispute. The Occupation Certificate for Tower 'A' was issued on July 23, 2018, and the possession was promptly offered to the Complainants on the same date. In acknowledgment of the delay in possession, a penalty amounting to Rs. 14,26,990/- was credited to the Complainants’ account in accordance with Clause 11.5 of the Apartment Buyer’s Agreement. The Complainants accepted possession on 20.12.2018, after making all necessary payments and signing a conveyance deed. The property was subsequently leased by the Complainants, which demonstrates that they have enjoyed the benefits of ownership since taking possession. The filing of the present complaint in July 2020 is a baseless afterthought and amounts to malicious litigation.

5. The Opposite Party further contended in its Written Statement that the Complaint’s foundation rests on the alleged incompleteness of the project and lack of promised amenities. However, it is emphasized that the common amenities and facilities for the completed towers are fully operational and are being utilized by the residents. Photographic evidence of these amenities has been provided. The remaining tower is under construction, and its status does not affect the usability of the facilities for the completed towers. The timeline for possession stipulated in the Apartment Buyer’s Agreement, which provided for delivery within 45 months from the date of excavation, was always intended as tentative. Delays in construction were caused by factors beyond the Opposite Party’s control. Among these were non-payment of dues by customers, disputes with contractors, water shortages, and delays in obtaining infrastructural support and regulatory approvals. The Opposite Party has highlighted significant challenges, including contractor disputes, labour shortages exacerbated by social schemes, water scarcity in Haryana, and restrictions on the availability of raw materials such as sand due to mining bans in the Aravali region. Additional delays were caused by events such as the Jat Reservation Agitation in 2016, compliance with National Green Tribunal orders to halt construction, and the economic disruptions caused by demonetization. It is further averred by the Opposite Party in its Written Statement that the Apartment Buyer’s Agreement is binding on both parties, and the compensation already credited to the Complainants' account for the delay is in full compliance with the agreement. The Opposite Party also contends that any additional claims by the Complainants are unjustified and not supported by law. It is emphasized that claims for delay must be based on actual and proven losses, which the Complainants have failed to demonstrate.  

6. Rejoinder on behalf of the Complainant to the Written Statement by the Opposite Party has been filed; It is averred in the rejoinder that the Opposite Party's reply is misconstrued, evasive, and baseless, attempting to deviate from the substantive issues raised in the Complaint. The Opposite Party is accused of raising frivolous and arbitrary contentions to obscure the inordinate delay in completing the project, failing to deliver timely possession of the unit, and not providing compensation for the delay. The Complainants assert that any extension of time can only be justified by factors beyond the Opposite Party's control, which is not the case here. The Complainants averred that their grievances are identical to previous disputes adjudicated by this Commission against the same Opposite Party concerning the same project “Araya”. These cases include “Geetu Gidwani Verma and Anr. vs. Pioneer Urban Land and Infrastructure Ltd, CC No. 238 of 2017” which was upheld by the Hon’ble Supreme Court in “Pioneer Urban Land and Infrastructure Ltd. v. Geetu Gidwani Verma & Anr., CA No. 1677 of 2019”. Other relevant cases include “Rajvir Singh Rana & Anr. v. Pioneer Urban Land & Infrastructure Ltd, CC No. 1805 of 2018” and “Arun Gupta & Anr. v. Pioneer Urban Land & Infrastructure Ltd., CC No. 1159 of 2017”.

7. The Complainants have further emphasized vide the rejoinder that the unit was purchased exclusively for residential purposes, and not for any commercial use, thus qualifying them as “consumers” under Section 2(d) of the Consumer Protection Act, 1986. Despite collecting the entire amount for the unit, the Opposite Party failed to complete construction and hand over possession by the promised date of July 2017. When possession was eventually offered on 20.12.2018, it was done haphazardly, with the project incomplete and lacking various promised amenities. The Opposite Party was unable to provide any valid reasons for the delay and assured the Complainants of due compensation, which has not been adequately provided to date. 

8. Furthermore, even after the delayed possession was offered, the unit and the project lacked several facilities and amenities promised at the time of booking and outlined in the Agreement. Notably, the Opposite Party merged the exclusive clubhouse promised for “Araya” with another project, “Presidia” contrary to the initial assurances; Arbitrary charges were levied, including demands for an incomplete clubhouse and excessive electricity charges that contradict government-approved rates. The Complainants also incurred additional costs due to increased service tax, GST, VAT, and other charges resulting from the construction delays. Despite multiple requests, the Opposite Party failed to share its approved sanction plans showing the common and green areas. They also demanded advance maintenance charges for a year, even though various amenities and facilities remain incomplete. On-going construction poses health risks due to dust and other substances, causing serious concern for the Complainants and other residents.

9. Evidence by way of Affidavit has been filed by Complainant No. 1 Mr. Naveen Lal Chopra and Complainant No. 2 Mrs. Ashu Chopra; Evidence by way of Affidavit has been filed on behalf of Opposite Party by Mr. Rohit Sharma, Authorized Representative of the M/s Pioneer Urban Land & Infrastructure Ltd.

10. Ld. Counsel for Opposite Party has argued that the Complainants’ prayer for additional compensation is not maintainable. The Complainants accepted possession of the unit on 20.12.2018 after the possession was offered on 23.07.2018. A conveyance deed was subsequently registered, transferring the unit to the Complainants, who have since leased the premises to a third party. Therefore, the filing of the present complaint in July 2020 is merely an afterthought, amounting to frivolous litigation; The Opposite Party has placed reliance on the judgment of the Hon’ble Supreme Court in “HUDA vs. Raje Ram, (2008) 17 SCC 407”, in which it was held that subsequent allottees aware of delays and still accepting the allotment cannot be equated with the original allottees. Accordingly, the Complainants, as subsequent allottees, are not entitled to any additional compensation. Moreover, by accepting possession without protest and receiving the delay compensation in accordance with the Builder-Buyer Agreement, the Complainants are estopped from raising any further disputes regarding compensation.

11. Ld. Counsel for the Opposite Party has further argued that the Complaint focuses on an alleged incompletion of the project and non-providal of the promised amenities. However, it is noted that the “Araya” project consists of four towers, three of which, including the one relevant to the complaint, have been completed and granted Occupancy Certificates. Additionally, since the Complainants have leased the unit, the loss they suffered would at best be limited to rental income, which could be the only potential relief available, if any; That even in cases of refund where no possession has been offered, compensation is generally awarded at a rate of 6%, as observed by the Hon’ble Supreme Court and this Commission. For cases involving possession, as in the present case, compensation rates have been consistently lower. The Hon’ble Supreme Court in “Ghaziabad Development Authority vs. Balbir Singh, (2004) 5 SCC 65” emphasized that compensation in possession cases is necessarily less than that in refund cases. This Commission has previously awarded compensation at 4% in possession cases, such as in “RK Rahu v. Pioneer Urban Land and Infrastructure Ltd., CC No. 85 of 2016”.

12. This Commission has heard both the Ld. Counsel for Complainants and the Opposite Party, and perused the material available on record.

13. The delay in handing over possession of the residential unit constitutes a fundamental breach of the Apartment Buyer’s Agreement by the Opposite Party. As per the Agreement, possession was to be delivered by July 2017, but it was delayed by over a year, and possession was finally offered only in December 2018. Such a delay caused not only financial losses to the Complainants but also mental agony and a disruption of their legitimate expectations. The Opposite Party’s assertion that external factors contributed to the delay does not mitigate its liability, as these factors were foreseeable and should have been accounted for within the construction timeline or mitigated through effective planning.

14. The compensation for delay credited to the complainants’ account as per Clause 11.5 of the Apartment Buyer’s Agreement does not preclude their right to seek additional compensation under the Consumer Protection Act, 1986. It is well-established that the statutory rights of consumers cannot be limited by contractual clauses, particularly in cases where the service provider is demonstrably at fault. The delay compensation specified in the agreement is often a standard clause that fails to account for the actual financial losses, inconvenience, and mental agony suffered by the flat buyers due to the delay. Therefore, the Complainants are entitled to claim compensation that adequately reflects the severity of the delay and its associated consequences. Furthermore, the Opposite Party’s contention that the Complainants have waived their right to seek additional relief by leasing the property is legally untenable. Leasing the property was a pragmatic decision by the Complainants to mitigate their financial losses caused by the delay. It does not, in any way, negate or diminish their grievance regarding the delayed possession or the incompleteness of the promised amenities. The Complainants’ decision to lease the unit does not absolve the Opposite Party of its responsibility to compensate for the delay, particularly when the delay compensation under the Agreement is insufficient to address the full extent of the loss suffered.

15. The Complainants in the present case were deprived of the opportunity to use the property for their intended residential purposes for over a year, and even after possession was offered, the project remained incomplete with several promised amenities missing. Additionally, the Complainants have raised valid concerns regarding the Opposite Party’s arbitrary charges, merging of the clubhouse with another project, and incomplete documentation, which further underscores the deficiency in service. These factors justify the need for additional compensation beyond what has been provided under the Agreement. 

16. Therefore, this Commission is of the view that the complainants are entitled to seek compensation that reflects the totality of their losses, including the delay in possession, the incomplete delivery of promised amenities, and the mental agony caused by the Opposite Party’s actions. The compensation already credited to their account under the Agreement is insufficient to address these grievances.

17. As for the quantum of compensation that the Complainants are entitled to, the decision of the Hon'ble Supreme Court in “Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., 2020 SCC OnLine SC 667” is being relied upon. The relevant extracts of the judgment are as under - 

 “69. For the above reasons we have come to the conclusion that the dismissal of the complaint by Ncdrc was erroneous. The flat buyers are entitled to compensation for delayed handing over of possession and for the failure of the developer to fulfil the representations made to flat buyers in regard to the provision of amenities. The reasoning of Ncdrc on these facets suffers from a clear perversity and patent errors of law which have been noticed in the earlier part of this judgment. Allowing the appeals in part, we set aside the impugned judgment and order of Ncdrc dated 2-7-2019 [Rasheed Ahmad Usmani v. DLF Ltd., 2019 SCC OnLine NCDRC 84] dismissing the consumer complaint. While doing so, we issue the following directions:

 

69.1. Save and except for eleven appellants who entered into specific settlements with the developer and three appellants who have sold their right, title and interest under the ABA, the first and second respondents shall, as a measure of compensation, pay an amount calculated @ 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate.

 

69.2. The above amount shall be in addition to the amounts which have been paid over or credited by the developer @ Rs 5 per square feet per month at the time of the drawing of final accounts.

 

69.3. The amounts due and payable in terms of Directions 69.1 and 69.2 above shall be paid over within a period of one month from the date of this judgment failing which they shall carry interest @ 9% p.a. until payment.”

 

18. In view of the aforesaid discussion and in the light of the decision of the Hon’ble Supreme Court in “Arifur Rahman Khan” (supra), the Opposite Party is directed to pay to the Complainants delay compensation @ 6% p.a. on the total consideration price paid by the Complainants from the promised date of possession till the date the possession was offered within two months of the date of this Order. This delay compensation shall be over and above the compensation provided under the Agreement. In the event of non-compliance by the Opposite Party, the interest rate shall be enhanced to 9% p.a.

19. The Opposite Party shall also pay to the Complainants an amount of Rs. 50,000/- towards litigation costs.

20. Pending application(s), if any, stand disposed off having been rendered infructuous.