JUSTICE V.K.JAIN (ORAL)

IA/21790/2018 (C/delay)

For the reasons stated in the application, the delay of 32 days in filing the appeal is condoned. The application stands disposed of.

FA/2086/2018

The complainants / respondents booked a residential unit with the appellant in the year 2008 in a project, namely, ‘Shourya Greens’, which the appellant was to develop in Jalandhar. A residential unit was allotted to the complainants for a consideration of Rs.2953425/-, out of which Rs.2575413/- already stand paid by the appellants. In terms of the agreement executed between the parties on 8.1.2009.  The possession of the unit was to be delivered by December, 2009. The possession having not been delivered, the complainants approached the concerned State Commission by way of a consumer complaint instituted on 22.11.2016, more than seven years after the date by which the possession was to be delivered had expired, seeking possession of the allotted unit or in the alternative refund of the amount which the complainants had paid to the appellants with compensation.

2.      The complaint was resisted by the appellants who admitted the allotment made to the complainants, the agreement executed with them as well as the payment received from them. It was also not disputed that the possession of the allotted unit had not been delivered to the complainants.

3.      The State Commission vide its impugned order dated 7.12.2017 directed as under:-

“(i) to refund the amount of  Rs.25,75,413/- to the complainants, along with interest at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA; and

(ii) to pay Rs.80,000/-, as compensation for mental harassment and agony suffered by the complainants including litigation expenses.

(iii)The opposite parties shall comply with the order within 30 days of the receipt of certified copy thereof, failing which the

compensation amount of Rs.80,000/- shall also carry interest at the rate of 12% from the date of this order till realization.”

4.      Being aggrieved from the order passed by the State Commission, the appellant is before this Commission by way of this appeal.

5.      When this appeal came up for hearing on 27.3.2019, notice limited to the quantum of compensation was issued to the complainants/respondents. I have accordingly heard the learned counsel for the parties.

6.      Though it is submitted by the learned counsel for the appellants that the possession was offered to the complainants, admittedly the appellant does not possess the requisite Occupancy Certificate even as on today. Therefore, the offer of possession was meaningless and not sanctified by law. A reference in this regard can be made to Section14 of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which to the extent it is relevant, reads as under:-

          “14.  It is the responsibility of the promoter –

(i)      In the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate form the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and (ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5.

(2)     The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate.”

7.      The Government of Punjab has issued a Notification dated 7.7.2015 applicable to the properties falling within Municipal units and Clause 3.12 (i) of the said Notification reads as under:

          “No person shall occupy or allow other person to occupy any new building or part of a new building for any purpose whatsoever until such building or part thereof has been certified by the local authority or of any person authorized by it in this behalf to be in every respect completed according to the sanctioned plan fit for the use for which it is erected.”

          In view of the aforesaid statutory provisions, the possession could neither have been offered nor taken without the developer obtaining the requisite Occupancy Certificate. In any case, limited notice having been issued to the complainants, I need not examine the said contention.

8.      Coming to the quantum of interest and compensation, which the State Commission has awarded, the learned counsel for the complainants states on instructions that the complainants are not pressing for the compensation of Rs.80,000/- awarded to them by the State Commission and are pressing only for payment of interest awarded by the said Commission.

9.      Rule 17 of the Punjab Apartment and Property Regulation Rules, 1995 deals with rate of interest on refund of the advance money received by a builder from the allottee and reads as under:

         “17.   Rate of interest on refund of advance money upon cancelation of agreement –

          The promoter shall refund full amount collected from the prospective buyers under subsection (1) of Section 6 together with interest thereon at the rate of twelve percent per annum payable from the date of receipt of amount so collected till the date of repayment.”

 10.   In view of the statutory prescribed rate of interest, the State Commission, once it came to the conclusion that no justification had been shown for the delay in delivery  of possession, was required to award compensation at the statutorily prescribed rate and, therefore, the order of the State Commission to the aforesaid extent cannot be said to be unjustified or unreasonable so as to call for interference by this Commission in exercise of its appellant jurisdiction.

11.    Relying upon the decision of the Hon’ble Supreme Court in M/s Fortune Infrastructure & Ors. Vs. Trevor D’Lima & Ors. [(2018) 5 SCC 442], the learned counsel for the appellants submits that the compensation by way of interest cannot exceed the actual loss suffered by the complainants and since the value of residential units in similarly located projects has not increased to the extent it would justify award of interest @ 12% p.a., the said interest needs to be reduced so that there is no unjust enrichment to the complainants. In my view, the Legislature having stepped in and having statutorily prescribed the rate at which the interest would be awarded to an allottee in the event of refund being directed against a builder/developer, this Commission need not go into the question as to what was the actual prevailing market value of such apartments  at the time the consumer complaint came to be instituted. In any case, admittedly no evidence was led before the State Commission to prove the market value prevailing on the date of institution of the complaint though an application seeking permission to lead additional evidence to prove such a market value has been filed before this Commission. However, considering the statutorily prescribed rate of interest, the application seeking permission to file additional evidence in order to prove the aforesaid market value cannot be allowed.

12.    For the reasons stated hereinabove, the appeal is disposed of with the directions that the appellants need not pay the compensation of Rs.80,000/- awarded by the State Commission but shall pay the interest awarded by the said Commission alongwith the principal amount to the complainants/respondents.