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Subhash Chander Mahajan v. Parsvnath Developers Ltd.
Factual and Procedural Background
This opinion addresses two consumer complaints involving delayed possession of residential flats booked from Parsvnath Developers Ltd. In Complaint No. 144 of 2011, complainants Subhash Chander Mahajan and Ritu Mahajan booked a three-bedroom flat in Greater Noida with an agreed construction completion period of 36 months from commencement. The complainants made full payment in 2007 and took a loan from HDFC Bank, paying substantial interest. Construction was stopped in January 2008, causing delay. The agreement stipulated compensation of Rs.5 per sq.ft. per month for delay, but complainants argued this was inadequate and sought higher interest and damages for mental agony.
In Complaint No. 200 of 2011, complainant Abhishek Kumar Dwivedi booked a similar flat with the same completion timeline and compensation clause. He also paid in full and took a loan from ICICI Bank, paying interest. Delay in possession led to his complaint seeking principal, interest, compensation, damages, and costs.
Both complaints were heard together due to similarity of facts and issues.
Legal Issues Presented
- Whether the complainants are entitled to interest at 24% per annum compounded on the delayed payment of the booked flats, beyond the agreed compensation clause in the agreement.
- Whether the compensation of Rs.5 per sq.ft. per month stipulated in the agreement is adequate or if higher damages for mental agony and harassment are warranted.
- Whether the National Consumer Disputes Redressal Commission has jurisdiction over these complaints given the amounts claimed.
- The appropriate quantum of interest, compensation, and costs payable by the Opposite Party (Parsvnath Developers Ltd.) to the complainants.
Arguments of the Parties
Opposite Party's Arguments
- The Commission lacks jurisdiction as the amounts claimed exceed its limits and the cases fall within the State Commission’s jurisdiction.
- The amounts claimed by complainants, especially the interest at 24% p.a., are inflated and contradictory to the compensation clause.
- The complainants are bound by the terms of the agreement and cannot claim interest beyond the agreed compensation of Rs.5 per sq.ft. per month.
- Relied on precedents including Kumari Fenny & Ors. Vs. Kavitha V.K. (Dr.) & Ors. and V.K. Agarwal (Dr.) Vs. Infosys Technologies Ltd. & Ors. to support their contentions.
Complainants' Arguments
- Claimed principal amounts paid along with interest at 24% p.a. compounded till realization, far exceeding the compensation under the agreement.
- Argued the compensation of Rs.5 per sq.ft. per month is inadequate and exploitative given the extensive delay and mental agony suffered.
- Sought exemplary damages of Rs.20 lakhs for harassment and mental agony.
- Placed reliance on multiple precedents supporting claims for interest, compensation, and damages in delayed possession cases.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kumari Fenny & Ors. Vs. Kavitha V.K. (Dr.) & Ors. (I (2013) CPJ 34 (NC)) | Dismissal of exaggerated claims not supported by material; jurisdictional limits of consumer forum. | Used by OP to argue inflated claims and lack of jurisdiction; court found some force in OP's argument but did not dismiss claims outright. |
| V.K. Agarwal (Dr.) Vs. Infosys Technologies Ltd. & Ors. (2013) CPJ 373 (NC) | Relevant to share transactions; cited to argue inapplicability to current real estate delay case. | Court acknowledged no application to present case but noted OP’s reliance on it. |
| M/s. Sunil Mantri Reality Ltd. Vs. K. Sreelatha (RP No.2432 of 2012) | Support for claims related to real estate delays and compensation. | Relied upon by complainants to strengthen claims of compensation and interest. |
| Sanjay Goayl Vs. Unitech Ltd. & 3 Ors. (CC No. 344 of 2012) | Compensation and interest claims in delayed possession cases. | Complainants cited to support entitlement to compensation and interest. |
| Shivalik Vihar Sites Pvt. Ltd. & Ors. Vs. Gurcharan Singh (RP No.1413 & 1414 of 2012) | Principles regarding delay in possession and compensation. | Used by complainants to argue for enhanced compensation beyond agreement terms. |
| M/s. Omaxe Limited Vs. Amit Mishra (RP No. 2280 of 2012) | Claims related to real estate possession delays and interest. | Complainants relied on it to justify claims for interest and compensation. |
| Mrs. Veena Khanna Vs. M/s. Ansal Properties & Industries Ltd. (First Appeal No.155 of 2006) | Entitlement to damages for mental agony and harassment in real estate delays. | Supported complainants’ claim for damages beyond monetary compensation. |
| South Western Railway Vs. K. Velayudhan (RP No.454 of 2011) | General principles of compensation and interest in contractual delays. | Referenced by complainants to support their claims. |
| Sh. J.L. Sethi Vs. Senior Citizen Home Complex (RP No. 3129 of 2005) | Special consideration for senior citizens in compensation claims. | Complainants used to highlight senior citizen status and entitlement. |
| Ghaziabad Development Authority Vs. Balbir Singh (Civil Appeal No.7173 of 2002, (2004) 5 SCC 65) | Legal principles on compensation and interest in delayed possession cases. | Complainants relied on this apex court authority to support interest claims. |
| K.A. Nagamani Vs. Karnataka Housing Board (Civil Appeal Nos. 6730-31 of 2012) | Granting interest @ 18% p.a. in refund of flat value in delayed possession cases. | Court applied this precedent to fix interest rate at 18% p.a. instead of 24% claimed. |
Court's Reasoning and Analysis
The court recognized the substantial delay of approximately four years in handing over possession of the flats, acknowledging the resultant mental agony and harassment suffered by the complainants, particularly noting the senior citizen status of complainant No.1 in the first case.
While the Opposite Party argued lack of jurisdiction and inflated claims, the court found merit in the argument that the complainants could not claim interest at 24% per annum as demanded, since they were bound by the agreement terms. However, the court also noted that the agreed compensation of Rs.5 per sq.ft. per month was inadequate considering the extent of delay and hardship.
The court referred to the Apex Court decision in K.A. Nagamani Vs. Karnataka Housing Board, which granted interest at 18% per annum in similar circumstances, and adopted this rate for calculating interest on the principal amounts.
The court balanced the interests of both parties by granting principal repayment with interest at 18% p.a., along with enhanced compensation of Rs.7 lakhs for mental agony and harassment, which it found justified given the long delay and the Opposite Party’s conduct.
The court also imposed costs of Rs.2 lakhs on the Opposite Party in each case, reflecting the litigation expenses incurred by the complainants.
Holding and Implications
The complaints are partly allowed. The Opposite Party is directed to pay to the complainants the principal amounts paid for the flats along with interest at 18% per annum from the date of deposit until realization.
Additionally, the Opposite Party must pay compensation of Rs.7,00,000 (Rs.1,00,000 per year from 2007 onwards) within 90 days for mental agony and harassment; failure to do so will attract interest at 24% per annum until realization.
The Opposite Party is further ordered to pay Rs.2,00,000 towards costs in each case.
The decision directly affects the parties by providing monetary relief and compensation but does not establish a new legal precedent beyond applying existing principles and prior case law.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 144 OF 2011
1. SUBHASH CHANDER MAHAJAN & ANR. S/o. Late Gian Chand Mahajan R/o. 2921-A, Block-C-1, Sushant Lok-1,
Gurgaon - 122 001.
2. Ritu Mahajan D/o. Subhash Chander Mahajan, R/o. 2921-A, Block-C-1, Sushant Lok-1,
Gurgaon - 122 001 ...........Complainant(s) Versus
1. PARSVNATH DEVELOPERS LTD.
(Through its Managing Director) Regd. Office-6th Floor, Arunachal Building 19, Barakhamba Road , New Delhi - 110 001 ...........Opp.Party(s)
BEFORE:
HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR, MEMBER
For the Complainant : Mr. Saurabh Jain, Advocate For the Opp.Party : Ms. Rosetta, Advocate Dated : 05 May 2014
ORDER
JUSTICE J.M. MALIK 1. This order shall decide two cases detailed above. The facts of both the cases and law points involved herein are similar. Therefore, both these cases are being decided through a common judgment. 2. The case of the complainants, Sh. Subhash Chander Mahajan and Sh. Aditya Mahajan, in complaint No. 144 of 2014 is this. They booked a Three- Bed Room residential Flat No. 1402, measuring 1855 sq.ft in the Parsvnath Privilege Complex situated in Plot No.11, Sector P-1, Chauraisin Estate, Greater Noida. Both the complainants were issued a provisional allotment letter dated 23.02.2007. It was agreed that the flat would be completed within a period of 36 (thirty-six) months from the date of commencement of construction. The Agreement has been attached as Ex.P-2, in this case. It was also agreed that if there was delay in construction of the flat, beyond the period, as stipulated, the Parsvnath Developers/OP would pay to the complainants Rs.5/- per sq.ft, per month, for the period of delay of the agreement. The complainants made full payment towards the flat in question in May, 2007, under the Down Payment Plan, Plan-A. provision for 10% rebate was also provided at the very start. It is alleged that the construction of the said premises was stopped in January, 2008 for the reasons best known to the OP. The complainants took loan of Rs.20.00 lakhs in May, 2007 from HDFC Bank for the purpose of making payment towards the above said booked flat. They have already paid the interest from 01.04.2007 to 31.03.2012 in the sum of Rs.6,97,230/- vide receipts, annexed as Annexure P-3 (colly). 3. OP vide letter dated 10.06.2010 admitted that there had been a delay in the construction of the project. The OP
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itself, vide its letter dated 22.05.2007, informed HDFC Bank that the loan was required by the complainants. The factum of loan was in the knowledge of the OP. The complainant wrote a number of letters vide Annexure P-5 (colly) (about 15 letters approximately), requesting it to explain the status report of the project. 4. It was stipulated in the agreement that an interest @ 24% p.a. would be charged in case of default in payment by the complainants. It is contended that the OP is also liable to pay the same interest @ 24% p.a. as calculated from July, 2011, in the sum of Rs.80,74,423/- besides the principal amount of Rs.50,708,998/-. The OP has caused mental agony, harassment in not handing over possession of the flat to the complainants. Consequently, it is also liable to pay Rs.20.00 lakhs towards damages, harassment and mental agony caused to the complainants due to the acts of OP. The complainants are sharing their residence with their daughter in Gurgaon after retirement of complainant No. 1. The complainants had made up their mind to stay in their own house after retirement of complainant No. 1. 5. As per Clause 10(c) of the Flat Buyer Agreement, it was agreed by the OP that in case of any delay, the OP shall pay to the complainants a compensation @ Rs.5/- per sq.ft., per month, for the period of delay and therefore, a sum of Rs.1,02,025/- accrued towards compensation from September, 2010, till July, 2011. It is contended that the amount of Rs.5/- per sq.ft. is unjust and OP has exploited the complainants by delaying the construction work. The complainants visited the premises in dispute, a number of times till 29th June, 2011, but did not find any progress at the premises. They demanded the refund but the same was not given. Consequently, the complainants have filed the complaint with the following prayers :- . Grant a sum of Rs.1,31,53,421/- (towards principal amount of Rs. 50,78,998/- along with interest of Rs.80,74,423/-) at the rate of 24% per annum compounded along with pendent lite and future interest at the rate of 24% per annum compounded till the date of actual realization of the payment. b. Grant a sum of Rs.1,02,025/- towards compensation at the rate of Rs.5 per sq.ft., per month on the flat having super area of 1855 sq.ft. along with pendent lite and future compensation at the same rate till the date of actual realization of the amount. c. Grant a sum of Rs.6,95,817/- towards interest on loan paid to HDFC along with pendent lite and future interest, till the date of actual realization. d. Grant a sum of Rs.20 lacs towards exemplary damages detailed above in the complaint. e. Grant cost of litigation to the complainants. f. Any other order, relief or direction which this Honle Commission may deem fit and proper under the circumstances of the case may kindly be passed in favour of the complainants and against the respondent The complainant No.1 is a senior citizen of 75 years old. 6. In complaint No.200/2011, Sh. Abhishek Kumar Dwivedi, is the complainant in this case. The facts of this case are almost similar to that of complaint No.144/2011, detailed above. However, the complainant is not a senior citizen. He also got booked residential flat from the same OP on 15.11.2007. He paid the entire money. As per the Agreement dated 24.12.2007, filed as Annexure P-2, wherein it was explained that construction was to be completed within a period of 36 months. It was also stipulated in para 10(a ) of the Agreement that if there is a delay, the OP would pay a compensation @ Rs.5/- per sq.ft., per month. He also took loan from the bank and paid interest in the sum of Rs.14,74,756/- on loan to ICICI Bank. Home Loan approval letter and statement of interest on loan are also annexed as Annexure P-3 to the complaint. There was delay in handing over the possession, like in the previous case, though, the complainant had paid total amount of consideration @ Rs.56,02,399/-. Ultimately, this complaint was filed with the following prayers :- . Grant a sum of rs.1,23,37,627/- (towards principal amount of Rs. 56,02,399/- along with interest of Rs.67,35,228/-) at the rate of 24% per annum compounded along with pendent lite and future interest at the rate of 24% per annum compounded till the date of actual realization of the payment. b. Grant a sum of
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Rs.74,200/- towards compensation at the rate of Rs.5 per sq.ft., per month on the flat having super area of 1855 sq.ft. along with pendent lite and future compensation at the same rate till the date of actual realization of the amount. c. Grant a sum of Rs.14,84,756/- towards interest on loan paid to ICICI along with pendent lite and future interest, till the date of actual realization. d. Grant a sum of Rs.20 lacs towards exemplary damages detailed above in the complaint. e. Grant cost of litigation to the complainants. f. Any other order, relief or direction which this Honle Commission may deem fit and proper under the circumstances of the case may kindly be passed in favour of the complainants and against the respondent 7. We have heard the counsel for the parties. The learned counsel for the OP made only one submission. She vehemently argued that this Commission had no jurisdiction. The amounts were inflated by both the complainants. This case comes within the jurisdiction of the State Commission. She pointed out that on one hand, both the complainants are claiming interest at more than Rs.80.00 lakhs and Rs.67.00 lakhs @ 24% p.a., respectively, and on the other hand, they are also claiming compensation @ Rs.5/- per sq.ft., per month. Both these facts are contradictory. The complainants are not entitled to interest @ 24% p.a. They must abide by the agreement and should not go beyond it. In support of her case, she has cited few authorities. This Commission, in case Kumari Fenny & Ors. Vs. Kavitha V.K. (Dr.) & Ors. , I (2013) CPJ 34 (NC) (a medical case), decided by a Bench consisting of (Justice J.M. Malik and Sh. Vinay Kumar, Member) and authored by Honle Sh.Vinay Kumar, Member, held that considering the material examined above, we have no hesitation in holding that the prayer made in the complaint petition is highly exaggerated and not borne out by the material placed on record. Therefore, the complaint petition is dismissed, reserving liberty to the complainant to seek remedy before an appropriate Fourm of competent jurisdiction. 8. Counsel for the OP also placed reliance on V.K. Agarwal (Dr.) Vs. Infosys Technologies Ltd. & Ors., (2013) CPJ 373 (NC), which pertains to shares and has no application to this case. 9. On the other hand, the counsel for the complainant has placed reliance on the following eight authorities :- 1. M/s. Sunil Mantri Reality Ltd. Vs. K. Sreelatha, RP No.2432 of 2012 (NCDRC) 2. Sanjay Goayl Vs. Unitech Ltd. & 3 Ors., CC No. 344 of 2012 3. Shivalik Vihar Sites Pvt. Ltd. & Ors. Vs. Gurcharan Singh, RP No.1413 of 2012 & RP No.1414 of 2012 (NCDRC) 4. M/s. Omaxe Limited Vs. Amit Mishra, RP No. 2280 of 2012 (NCDRC) 5. Mrs. Veena Khanna Vs. M/s. Ansal Properties & Industries Ltd., First Appeal No.155 of 2006 (NCDRC) 6. The Secretary, South Western Railway Vs. K. Velayudhan, RP No.454 of 2011 (NCDRC) 7. Sh. J.L. Sethi Vs. Senior Citizen Home Complex, RP No. 3129 of 2005 (NCDRC) 8. Ghaziabad Development Authority Vs. Balbir Singh, Civil Appeal No.7173 of 2002, (2004) 5 SCC 65 10. We find force in the arguments raised by the counsel for the OP, in a measure. The complainants cannot claim interest @ 24% p.a. They are bound by the agreement entered into between the complainants and the OP. It is to be assumed that the parties had signed the agreement with open eyes and after understanding its each and every covenant. However, we are aware of a case where the Apex Court had granted interest @ 18% p.a., wherein the money in respect of the flat was returned. This was so held by the Apex Court in the case of K.A. Nagamani Vs. Karnataka Housing Board, Civil Appeal Nos. 6730-31 of 2012, decided on 19.09.2012. Even if the value is calculated at the rate of 18% p.a., it will be more than Rupees One Crore. 11. It must be borne in mind that there is a huge delay in handing over the possession of the premises in dispute, i.e., about four years. The OP has made attempt to feather its own nest i.e., to make profits for itself at the expense of others. The grant of Rs.2.00 lakhs or Rs.3.00 lakhs for such a huge delay will be unjust and unfair. The complainants Subhash Chander Mahajan and his wife are compelled to live in the house of their daughter.
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They do not have any independent house to live in. Their harassment and mental agony cannot be equated by payment of a few pea nuts. The OP has played fast and loose with the consumers. 12. It is true that an amount of Rs.20.00 lakhs is wee bit on the higher side. However, the principal amount plus interest @ 18% p.a. plus few lakhs of compensation will squarely bring these cases within our jurisdiction. So we decide this point in favour of the complainants in both these cases and against the OP. 13. On our enquiry, the counsel for the OP submitted that they will allot the flat to the complainants in the month of June, 2015. This is a huge delay. The learned counsel of OP did not make any other submission. 14. Keeping in view the facts and circumstances of these cases, we accept both these complaints, partly, and direct the OP, in CC No.144/2011, to pay a sum of Rs.50,78,998/- with interest @ 18% p.a., from the date of deposit, till its realization. It is further directed to pay compensation in the sum of Rs. 7.00 lakhs, (@ Rs. 1,00,000/- per year, from 2007 onwards) within a period of 90 days from the date of this order, for harassment, mental agony, anguish, frustration, anger and sadness, otherwise, after the expiry of 90 days it will carry interest @ 24% p.a. till its realization. We also grant a sum of Rs.2,00,000/- towards costs of this case. 15. In the case of Complaint No.200/2011, we direct OP to pay the complainant, Sh. Abhishek Kumar Dwivedi, a sum of Rs.56,02,399/-, along with interest @ 18% p.a, from the date of deposit, till its realization. He is also granted compensation in the sum of Rs. 7.00 lakhs, (@ Rs. 1,00,000/- per year, from 2007 onwards) within a period of 90 days from the date of this order, for harassment, mental agony, anguish, frustration, anger and sadness, otherwise, after the expiry of 90 days it will carry interest @ 24% p.a., till its realization. We further grant him a sum of Rs.2,00,000/- towards costs of this case.
......................J
J.M. MALIK
PRESIDING MEMBER
......................
DR. S.M. KANTIKAR
MEMBER
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