PER SUBHASH CHANDRA

This First Appeal under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) assails the order dated 05.05.2021 of the State Consumer Disputes Redressal Commission, UT Chandigarh (for short “the State Commission”) in Consumer Complaint No.208 of 2019 allowing the complaint and directing the Opposite Parties No.1 to 4 jointly and severally:

1. To refund the entire amount, actually paid by the complainants from their own sources/pocket, at the time of booking and thereafter also, towards part price of the unit in question, alongwith interest @12% p.a. without deducting any TDS as this interest is granted as compensation, from the respective  dates of deposits onwards.
2. To refund the amount to the complainants, if any, paid by them to opposite party no.5, towards equated monthly installments, on the loan amount, as it was the liability of opposite parties no.1 to 4, under subvention scheme. 
3. To repay the entire loan amount to opposite party no.5, released by it in favour of the Company, in respect of the unit in question alongwith pre-EMI installments, if any due, till date. It is also made clear that till the time, the entire loan amount is not repaid to opposite party no.5, opposite parties no.1 to 4 shall be bound to pay the equated monthly installments/Pre-EMI interest to opposite party no.5, alongwith up-to-date interest on the loan account, till realization.
4. To pay compensation for causing mental agony and physical harassment and also litigation expenses, in lumpsum, to the tune of Rs.50,000/- to the complainants.
5. The payment of amounts mentioned at sr.nos.(i), (ii) (if any) and (iv) shall be made to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which the amount mentioned at sr.nos.(i) and (ii) (if any), thereafter shall carry interest @15% p.a., from the date of  default and interest @9% p.a., on the amount mentioned at sr.no. (iv) from the date of filing of this complaint, till realization, besides compliance of other directions given.
6. Complaint against opposite party no.5 is dismissed with                  no order as to costs, subject to directions aforesaid.

2.     This order is impugned before us with the prayers:

“(a) allow the present Appeal; and

(b) set aside the final judgment and order dated 05.05.2021 passed by the Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh in Consumer Complainant No.208 of 2019; and

(c) Pass such other and further order or orders as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.”

3.     Briefly stated, the facts of the case are that the Respondents applied for a residential flat in the Group Housing Project “The Lake” being developed and constructed as part of the “Omaxe New Chandigarh” project, District SAS Nagar, Punjab in May 2005.  Unit bearing                        No. Caspean A 503 was allotted and subsequently changed to Caspean B-903 as per the request of the Respondents.  Thereafter, the unit was changed to Victoria A-GF at the request of the Respondents.  As per the Allotment Letter dated 28.02.2015 signed between the parties, the total cost of the project including the basic sale price, preferential location charges, additional costs towards club membership, covered car parking, electrical equipment costs and fire-fighting equipment costs, power backup, interest free maintenance security and external development charges was ₹84,73,327/-.  Possession was promised within                     42 months of the signing of this Allotment Letter inclusive of six months of grace period as per Clause 40(a) subject to force majeure conditions in Clause 40(b) and timely payments by allottees.  The Respondents paid a sum of ₹72,22,281.46/- and obtained a loan of ₹84 Lakhs from Punjab National Bank Housing Finance Limited for which purpose a Tripartite Agreement was signed between the Respondents, the Appellants and the Punjab National Bank Housing Finance Limited on 20.08.2015.  Under this Agreement, the Appellants undertook to pay the loan amount in 36 Equal Monthly Instalments under interest subvention scheme.  As the possession was not offered by the Appellants as per the promised date, Consumer Complaint No.208 of 2019 was filed before the State Commission which came to be allowed vide order dated 05.05.2021

4.     The Appellants have contended that the order of the State Commission be set aside since finding of deficiency in service is based on an erroneous appreciation of the evidence on record since the Complaint was premature having been filed in September 2019 against the promised date of possession, i.e., February 2019 as some delays in real estate projects are inevitable.  It is contended that the Respondents were not entitled to refund since the delay was reasonable and the project had been granted further time till 31.07.2021 by RERA under which it was registered.  It was also stated that the construction of the flat was at an advanced stage of construction and that the force mejuere circumstances due to the impact of COVID-19 pandemic and restrictions since February 2020 had not been considered.  It was submitted that the direction of the State Commission to pay to the Complainants/Respondents EMI if paid by them to the Financial Institution was vague and not based on any specific averment.  The Complainants/Respondents had not averred in their complaint that they had paid any EMI to the Bank.  It was also averred that the quantum of interest awarded in the impugned order was not as per settled law and was excessive.  The contract between the parties could not be rewritten according to the Appellants and the interest awarded was contrary to settled law as laid down in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, II (2019) CPJ 117 and IREO Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna, (2021) 3 SCC 241.   

5.       We have heard the learned Counsel for both the parties and perused the material on record carefully.  Both the parties have filed written synopsis of their arguments which have also been considered.

6.     Learned Counsel for the Appellants argued that the delay in this project was reasonable in view of the force majeure circumstances on account of restrictions consequent to COVID-19 Pandemic since February 2020.  Multiple compensations had been awarded and the quantum of interest was not in consonance with the settled law as per the judgment of the Hon’ble Supreme Court.  It was also submitted that the compensation had not been adjudicated since the loss claimed had not been substantiated with any evidence by the Respondents.  Reliance was placed on Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 SCC Online SC 438, Nexgem Infracon Pvt. Ltgd. Vs. Manish Kumar Sinha & Anr. Civil Appeal No.62 of 2021 and Raghbir Singh vs. M/s BPTP Limited, CC/835/2020, NC.

7.     On their part, the Respondents argued that they were consumers under Section 2(1) (d) of the Act and that the State Commission had held, on the basis of this Commission’s order in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, that the Appellants had not discharged the onus of proving through documentary evidence that the Respondents were engaged in real estate business.  It was also argued that in view of Emaar MGF Land Ltd. Vs. Aftab Singh, (2019) 12 SCC 751, reliance of the Appellants on the provision for arbitration in the Agreement between the parties was not applicable and that this Commission had jurisdiction in the matter even though it was registered with RERA in terms of the order of Hon’ble Supreme Court in M/s Imperia Structures Ltd. Vs. Anil Patni & Anr.,(2020) 10 SCC 783.  On merits, it was argued that the Appellants had admitted that the project was not complete and that the construction was in progress.  It was argued on the basis of judgment of the Apex Court in Kolkata West International City (P) Ltd. Vs. Devasis Rudra, (2020) 18 SCC 613 and Fortune Infrastructure & Anr. Vs. Trevor D’Lima & Ors., (2018) 5 SCC 442 that an allottee could not be made to wait indefinitely for possession and was entitled to seek refund of the money paid.  It is argued that there was no basis to claim extension on the grounds of any force majeure circumstances and that there was no rewriting of the agreement between the parties, as alleged.  It was argued that the quantum of interest awarded was as per settled proposition of law and considering all the facts and circumstances of the case.  Reliance of the Appellants on the existing Clauses in the Allotment Letter providing for compensation was argued to be arbitrary and reliance was placed on Abhishek Khanna (supra) that such clauses which were one sided and entirely loaded in favour of the developer and against the allottee constituted unfair and/or restrictive trade practice.

8.     It is manifest from the foregoing that the Appellants who had received ₹72,22,281.46/- against the promised delivery of the flat by 20.02.2019 had failed to make an offer of possession even as on date.  The Appellants admitted before the State Commission that the project was still on.  Therefore, as on the date of order of the State Commission dated 05.05.2021, the project was still incomplete.  It is significant to note that the Appellants had promoted the flats on the promise that the apartments will be completed within 36 months from the date of signing of the agreement.  A period of six months had been provided for various contingencies as a grace period.  Its contention that the complaint filed by the Respondents in September 2019 before the State Commission was premature cannot be countenanced in view of its own undertaking in the Allotment Letter.  Its further contention that force majeure circumstances on account of COVID-19 Pandemic apply to the project also cannot be considered since these restrictions came into effect only with effect from 15.03.2020 by which time a period of six months being grace period provided in the Allotment Letter had been availed by the Appellants.  Therefore, the order of the State Commission in holding the Respondents entitled to claim refund of the amount deposited with interest as compensation cannot be faulted.  It has been laid down by the Hon’ble Supreme Court in Devasis Rudra (supra) and Trevor D’Lima (supra) that while an allottee can be expected to wait for a reasonable period of time, he cannot be expected to wait indefinitely and is entitled to seek refund in case of delay.  In the instant case, it is apparent that the Appellants have neither indicated a revised date of completion nor offered any compensation (as provided in the Allotment Letter which is its own document) nor is it in any position even on date to make a statement in this direction.  The claim of the Respondents to seek refund with compensation is, therefore, found to be justified and the order of the State Commission in this regard does not warrant any interference.

9.     As regards quantum of compensation awarded by way of interest the Hon’ble Supreme Court has held in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, Civil Appeal No. 6044 of 2019 decided on 07.04.2022 that compensation should be restitutionary and compensatory.  In a catena of judgments, the Hon’ble Supreme Court and this Commission have held that interest rate of 9% is fair and equitable.  Therefore, the rate of interest @ 12% awarded by the State Commission is found to be unjustifiable.  In D. S. Dhanda (supra), the Hon’ble Supreme Court has held that awarding of multiple compensation for a single act of deficiency is not justifiable.  This proposition of law has been reiterated in a catena of judgments of the Hon’ble Supreme Court and this Commission.

10.    The rate of interest @ 12% in the case of delay is set aside as the same is not found to be justifiable.  However, we see no reason to interfere with the litigation costs of ₹50,000/- awarded by the State Commission to the Respondents. 

11.    As regards the issue of payment under the Tripartite Agreement, as per which the Appellants had undertaken to pay EMI on monthly basis for 36 months under the subvention scheme, it cannot be disputed that the first charge on the refund being ordered would be Punjab National Bank Housing Finance Limited.  However, the details of the same have not been brought on record.  Therefore, the same will have to be filed by the Respondents and the Financial Institution jointly with the Appellants in order to determine the account position thereunder.  In light of the above discussion and in the facts and circumstances of the case, the Appeal is allowed partly and it is directed that:

1. The Appellants shall refund the entire amount received from the Respondents along with simple interest @ 9% p.a. from the respective dates of deposits till realization, within a period of eight weeks, failing which the applicable rate of interest shall be 12% p.a.
2. The Appellants and the Financial Institution shall jointly prepare a statement of account under the Tripartite Agreement dated 28.02.2015 for ₹84 Lakhs and furnish the same to the Appellants in order for it to discharge the loan as the first claim after accounting for the pre EMI instalments to be paid on behalf of the Respondents. 
3. The Appellants shall pay to the Respondents litigation costs of ₹50,000/- along with refund as ordered above.

12.    Pending IAs, if any, also stand disposed of with these directions.