HONBLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL) CC No. 487/2014 (1) The complainants, who are husband and wife, booked an apartment measuring 1560 sq. feet of super area in a project namely Vistas which the opposite party is developing in Sector-70 of Gurgaon. The parties entered into a Buyers Agreement dated 15.03.2010 in this regard. As per clause 4 (a) of the said agreement, the opposite party was required to deliver possession of the flat to the complainants within 36 months from the date of the agreement i.e. by 15.03.2013. The complainants made payment of Rs. 47,62,416/- to the opposite party as against the agreed total consideration of Rs. 52,09,200/-, constituting 91% of the total sale consideration. The grievance of the complainants is that despite they having made 91% of the payment, the opposite party has not even offered possession of the flat to them. The complainants therefore, are before this Commission seeking possession of the flat booked by them or a flat of identical size in a similar locality or a sum of Rs. 1,71,60,000, that being the current market value of such flats. They have also claimed a sum of Rs. 24,157/- per month towards rental expenses, Rs. 15,87,274/- as interest calculated @ 18% per annum from the committed date of possession till October 2014 and Rs. 1,32,600/- being the compensation as stated in the Buyers Agreement. CC No. 13/2015 (2) The complainant in C.C. No.13 of 2015 is a subsequent purchaser, who purchased Flat No.1001 measuring about 1629 sq. ft. of super area in the project FRESCO which the opposite party is developing in Sector 50 of Gurgaon, from the original allottee Ms.Kaushal and Mr.Mukesh Kumar by way of an agreement dated 24.01.2013. The booking by the original allottee was made on 01.11.2006 and they entered into an agreement dated 12.12.2006 with the opposite party. Under the Buyers Agreement, the opposite party was required to deliver the possession of the apartment to the purchasers by March 2009. The transfer in favour of the complainants was allowed by the opposite party vide its letter dated 24.01.2013. The grievance of the complainant is that the possession of the flat has not been offered to him despite more than 9 years have expired from the date of execution of the Buyers Agreement and about 3 years have expired from the date he purchased the apartment from the original allottee. The aforesaid complainant is therefore, before this Commission seeking possession of the flat booked by him alongwith compensation etc. CC No. 14/2015 (3) The complainants in CC/14/2015 booked an apartment measuring 1815 sq. ft. of super area in the project FRESCO which the opposite party is developing in Sector 50 of Gurgaon and parties entered into a buyers agreement dated 16.06.2008 whereby the opposite party was required to deliver possession of the apartment to the complainants within 27 months i.e. by 15.09.2010. The grievance of the complainants is that the possession has not been offered to them though more than 5 years have already expired from the date stipulated for delivering possession of the apartment to them. Being fed up with such abnormal delay in offering possession of the apartment to them, the complainants are seeking refund of the amount which they have paid to the opposite party along with compensation in the form of interest @ 18% p.a. Though they have also sought damages for the loss of rental income and payment of contractual compensation besides a lump sum compensation for physical and mental torture, the prayer is now confined to a consolidated compensation in the form of simple interest from the computed date of possession till the date the amount to the complainants is refunded. CC No. 15/2015 (4) The complainants in CC/15/2015 are the subsequent purchasers who purchased the apartment no.0103 having super area of 1662 sq. ft. in the project FRESCO in Sector 50 of Gurgaon from the original allottee of the said apartment on 15.12.2011. The allotment to the original allottee was made vide Buyers Agreement dated 2.8.2011 and as per clause 4 (a) of the said agreement, the possession was to be delivered within 9 months from the date of the agreement i.e. by 2.5.2012. However, the possession is yet to be offered to the complainants. The aforesaid complainant is therefore, before this Commission seeking possession of the flat booked by him alongwith compensation etc. CC No. 16/2015 (5) The complainant in CC No. 16/2015 alongwith his wife booked a residential apartment bearing no. 0302 measuring 1560 sq. feet of super area in the same complex i.e. Vistas in Sector-70 of Gurgaon for a total consideration of Rs. 5349504/-. Later, the name of the wife of the complainant was deleted from the said agreement. The complainant made payment of Rs. 4938886/- to the opposite party. As per the Buyers Agreement executed between the parties on 12.03.2010, the possession was to be delivered within 36 months from the date of the agreement
i.e. by 12.03.2013. The possession however, has not been delivered. The complainant therefore, is before this Commission seeking possession of the flat, with compensation etc. (6) The complaints have been resisted by the opposite party on several grounds which were also taken in a number of consumer complaints filed against the said party before this Commission and were rejected. It is however, not in dispute that the opposite party is not in a position to hand over possession of the flats to the complainants and though construction of the super structure is stated to be complete, even occupancy certificate has not been applied. (7) The learned counsel for the complainants has pointed out that a number of complaints filed by the allottees of the project Vistas in Sector-70 of Gurgaon were allowed by this Commission vide order dated 08.06.2015. In CC No. 427/2014, Satish Kumar Pandey & Anr. Vs. M/s. Unitech Ltd. and connected matters. The order passed in the Satish Kumar Pandey & Anr. (supra) to the extent it is relevant, reads as under: Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression slow down would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word slow down having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project. As regards, alleged shortage of labour, I find that no material has been placed on record by the OP that despite trying, it could not be get labourers to complete the construction of the project within the time stipulated in the Buyers Agreement. It was submitted by the learned counsel for the complainants that ordinarily big builders such as the OP in these cases, are contracting/sub-contracting the construction work to the contractors engaged by them, instead of employing their own labourers on a regular basis, the purpose being to ensure that they are not saddled with the wage bill of those regular labourers, in case the opposite party does not have adequate work for them. There is no evidence of the OP having been invited tenders for appointment of contractors / sub-contractors for executing the work at the site of those projects and no contractor/ sub-contractor having come forward to execute the project on the ground that adequate labour was not available in the market. Therefore, it cannot be accepted that the opposite party could not have arranged adequate labour, either directly or through contractors/sub-contractors, for timely completion of the project. As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity. This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in
36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders. In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party. As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such tenders. Therefore, I find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity. It is an undisputed proposition of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms. However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyers Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyers Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyers Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyers Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment. It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyers Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word including before the words any of the following practices. (8) In Suman Nandi & Anr. Vs. Unitech Limited & Anr., CC No.277/2013 decided on , a Co-ordinate Bench of this Commission rejected the identical pleas taken by the17.12.2015 opposite parties-Unitech and Pioneer Urban Land & Infrastructure Ltd. The aforesaid judgment to the extent it is relevant reads as under:-
8. On careful perusal of the evidence, we find that opposite parties have not led any evidence to show any new legislation, regulation or order suspending, stopping or delaying the construction of complex in which the subject apartments were agreed to be sold to the complainants. Neither there is an allegation of strike, slow-down, civil commotion, war, enemy action, terrorist action etc. or any other act of god which might have caused delay in completion of project within time stipulated in the Buyers Agreement nor evidence in this regard has been adduced. Learned counsel for the opposite parties have tried to get out of the situation by arguing that expression slow-down in clause 9.b. of the Buyers Agreement would also include economic slowdown or recession in real estate sector. We do not find merit in this contention. The economic constraints ordinarily cannot be taken as a defence for non- compliance of the contract. The term slow down in clause 9.b. has been used alongwith word strike and it has to be read ejusdem generis with the aforesaid words and can only mean a slow down resorted by the labourers engaged in the construction of the project in support of their demands.
9. As regards shortage of labour, but for the bald plea of the opposite parties in their written statement and the affidavits which are more or less reproduction of the written statement, there is no material or convincing evidence on record that despite of making efforts, the opposite parties could not get labours to complete the construction of project within the stipulated time. Therefore, it cannot be accepted that opposite party because of market conditions could not manage to arrange adequate labour for timely completion of project. As regards the alleged shortage of water, bricks and sand in the market, no cogent evidence has been produced by the opposite party to establish that it was unable to procure water, sand and bricks in adequate quantity. No evidence has been adduced to establish that from the date of signing of Buyers Agreement from 2006-2010, there was shortage of those materials in the market. The opposite parties have also taken a plea that there was a notification of government imposing restriction on the production of bricks by brick klins. The aforesaid argument is without any force because the notification relied upon by the opposite party was in force even at the time the opposite party promised possession of the apartments within 30 -36 months. The opposite parties having entered into an agreement knowing the aforesaid constraints because of government notification now cannot get rid of its obligation to justify the delay in construction. As regards the scarcity of water, plea of the opposite party is without any basis because the order of High Court stopping use of ground water for construction activity came much later. If the opposite parties actually intended to complete the construction within the stipulated time, they would have completed the super structure which does not take much time within initial 24 months of the date of Buyers Agreement.
10. As regards the plea of shortage of labour etc. due to common wealth game is concerned, that plea is also not acceptable for the reason that Buyers Agreement are of the year 2006 to 2010 and if the opposite parties intended to comply with the terms of agreement, they would have raised substantial construction before common wealth games. Had there been truth in the defence taken by the opposite party, the opposite party after the completion of construction activities pertaining to commonwealth games would have completed the project within the period of five years since the common wealth games were held. Till date, the possession of the apartments have not been handed over to the complainants which clearly indicate the deliberate delay and negligence on the part of the opposite party and opposite party cannot be permitted to hide behind a bogus plea of force majeure or exceptions provided in clause 9.b of the Buyers Agreement.
18. On reading of clause 2 (r) (i) (ii) & (vi), it is clear that if a service provider in order to increase his business makes a false representation regarding the standard and quality of the proposed service or its usefulness, it would amount to the unfair trade practice. On careful reading of the Buyers Agreement it is clear that in the said agreement, the opposite party service provider has extended a clear promise/representation to the complainants that in the event of their paying consideration amount, they would be given possession of the booked apartments complete in all respect within 30-36 months or reasonable period thereof. However, in the above-noted case, the stipulated period has expired way back and even almost five years have gone by but the possession of the
iii. apartments have not been delivered. There is no evidence from the side of the opposite party as to how and where the money paid by the complainants and the other buyers of apartments in the project has been utilised. From this can be safely inferred that the opposite party has diverted the funds and instead of utilising the funds paid by the complainants/buyers for completing the project within the promised period. Therefore, in our considered view, this is a case of soliciting business by the opposite party service provider by making false representation. Therefore, in our view, this is a clear case of unfair trade practice. The opposite party, thus, cannot take shelter of clause 4.a of the contract to avoid its liability to pay reasonable compensation for the delay caused due to its intentional act in not making sincere efforts to complete the construction within a reasonable period.
19. In view of the above, since the opposite party has utilised the money paid by the complainants against consideration amount, the complainants are entitled to interest on the payment made by them for the period of delay as compensation instead of meagre compensation computed on the basis of clause 4.c. of the Buyers Agreement, which is highly unfair. Looking into overall facts and circumstances of the case, we are of the opinion that 12% interest p.a. from the date of default in delivery of the subject apartments would meet the interest of justice. (9) In a recent decision in CC No. 368/2014, Shweta Kapoor & Anr. Vs. M/s. Unitech Ltd. , decided on 14.01.2016, the complainants had agreed to purchase a residential flat from& Anr. the opposite party Unitech Ltd. in a project which it was developing in Sector-50 of Gurgaon and had made payment of Rs. 95.5% of the total sale consideration. The Buyers Agreement executed between the parties in that case stipulated delivery of possession by September 30, 2009. Since the possession was not delivered by the stipulated date, the complainants approached this Commission by way of a complaint. The grounds on which the aforesaid complaint was resisted were summarized as under: A preliminary objection has been taken that as per the terms and conditions of the agreement between the parties, in case of delay on the part of the opposite party in delivering possession, the complainants are entitled only to compensation @ 5 per square feet per month of the super area, for the period the possession is delayed and in case the developers are not in a position to offer the property, they may offer an alternative property or refund the amount received from the flat buyers with interest @ 10% per annum. On merits, the opposite parties have admitted the agreement with the complainants as well as the receipt of the amount alleged by them. The delay in offering possession is sought to be justified on the following grounds:- Common Wealth Games during April, 2010 to March, 2011 the Common Wealth Games were organized in the NCR region which resulted into an extreme shortage of labours in the region as most of the labour force was employed and / or was engaged by the Government to expedite the completion of the pending projects required for the Common Wealth Games. Active implementation of social schemes like NREGA and JNNURM In addition to the above due to active implementation of alluring and promising schemes floated by the Central and State Government, there was a sudden shortage of labour / workforce especially in the real estate market. The workforce / labour forces were tempted to return to their respective states due to the guaranteed employment. Order dated 16.7.2012 passed by the Honble High Court of Punjab & Haryana (hereinafter referred to as the The above mentioned Order strictly restrained theOrder
iii.
iii. usage of ground water and directed to use only treated water from available Sewerage Treatment Plants (hereinafter referred to as ). As the availability of STP, basicSTP infrastructure and availability of water from STP, was very limited in comparison to the requirement of water in the ongoing constructions activities in NCR region. This scarcity of an essential commodity for construction purposes made it difficult for the Opposite Parties to cope up with the pre-decided schedules as the availability of treated water became very limited and against the total requirement of water. It is to be highlighted here that only approx. 10-15% of required quantity was available at construction sites to continue with the planned construction activities. In addition to the above, the Opposite Parties were later completely banned to use underground water for construction purposes and were vehemently directed to use recycled water only. Notification dated 14.9.1999 published by Ministry of Environment and Forest The Notification dated 14.09.1999 barred the excavation of top soil for the manufacture of bricks and further directed that no manufacturing of clay bricks or tiles or blocks be done within a radius of 50 (fifty) kilometres from coal and lignite based thermal power plants without mixing atleast 25% of ash with soil. As a consequence of this Notification dated 14.09.1999 various brick kiln were shut creating shortage of essential commodity bricks for construction purposes. Further, another raw material i.e. the sand which is used as mixture along with cement was also not available in the vicinity of the Complex due to restrictions from Mining Department imposed in the entire Aravali region and the same had to be procured from neighbouring State of Rajasthan. Later in a completely unforeseeable ruling by the Honble Supreme Court of India dated 08.05.2009 the Honble Court suspended all the mining operations in the Aravalli Hill range falling in State of Haryana within the area of approx.. 448 sq. kms. In the district of Faridabad and Gurgaon including Mewat which directly affected the construction schedules and activities of the Respondents herein. Notification dated 14.09.2006 published by the office of Director, Town and Country Planning, Haryana This Notification dated 14.09.2006 imposed certain restrictions and prohibitions on new projects or activities, or on the expansion or modernization of existing projects or activities based on their potential environmental impact being undertaken in any part of India unless prior environmental clearances are obtained. Therefore, due to the said Notification dated 14.09.2006, the procedure of obtaining approvals and sanctions by the opposite parties led to the delay in the present construction schedule. Recession in the economy That since the real estate industry is a cyclical industry that is affected by both local and national economic conditions. While macroeconomic conditions affect the overall state of the real estate industry, local supply and demand conditions are by far more important factors affecting the real estate markets as a result of which the availability of essential resources namely the labour and various raw materials became scarce. (10) Rejecting all the pleas taken by the opposite party and allowing the complaint, this Commission inter-alia observed and held as under:
4. We find that the pleas taken in the reply filed by the opposite party are same which this Commission has already rejected in a number of complaints filed against the said opposite party. In Swarn Talwar & Ors. vs. Unitech Ltd., C.C. No.347 of 2014 decided wherein the opposite party had failed to construct flats in a project knownon 14.08.2015 as Unitech Habitat in Greater Noida, this Commission while directing the opposite party to refund of the amount deposited by the flat buyers along with interest on that amount @ 18% per annum inter-alia held as under:-
8. As regards the plea that in terms of Clause (c) of the allotment letter the opposite party is required to pay only the holding charges calculated at the rate of Rs.5/- per sq.ft. per month of the super area for the period the possession is delayed, such a contention was expressly rejected by us in Puneet Malhotra (supra) holding that such clause applies only in a case where construction of the flat is delayed but despite delay the buyer accepts the possession of the flat from the seller and consequently the accounts have to be settled between the parties. We observed in this regard that the buyer would have to pay the agreed holding charges to the seller and the seller to pay the agreed compensation on account of delaying the construction of the flat. The said clause, however, does not apply to a case where the buyer on account of delay on the part of the seller in constructing the flat is left with no option but to seek refund of the amount which he had paid to the seller. We further held that such a clause where the seller in case of default on the part of the buyer seeks to recover interest from him at the rate of 24% per annum will amount to an unfair trade practice since it gives an unfair advantage to the seller over the buyer. We also noted in this regard that enumeration of the unfair trade practices in Section 2(r) of the Act is inclusive and not exhaustive. This plea was also negatived by us in a batch of complaints CC No.427 of 2014, Satish Kumar Pandey & Anr. Vs. Unitech Ltd. and connected matter, decided on 08-06-2015. All those complaints were filed against none other than the opposite party in these matters, namely, Unitech Ltd.
9. Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant. It would also be pertinent to note here that as pointed out by the complainants the agitation of the farmers was on account of acquisition of land in Noida Extension and not on account of acquisition of land on which the project in which the flats were to be constructed for the complainants. As regards the alleged delay in obtaining environmental clearances there is no material on record to show when the opposite party applied for such clearances, where they submitted all the requisite documents etc. while applying for such clearances and how much was the time taken by the concerned authorities in granting the said clearances. In the absence of such particulars, it would be difficult for us to accept that development of the project was delayed on account of any notification imposing restrictions on new projects. In any case, the opposite party has failed to produce before us any notification imposing restriction or prohibition on development of the project in which the flats were to be constructed for the complainants. (11) This Commission further observed and held as under in : Shweta Kapoor & Anr. (Supra)
6. In the case before us, there is no evidence of the opposite parties having been prevented from completing the construction due to an Act of God or reasons beyond their -10- control. There is no evidence of any Tribunal or Authority having restrained them going ahead with construction of this particular project, which could not be completed even after more than 6 years after the date stipulated for this purpose in buyers agreement. The averments made in the reply are vague and general in nature, without even specifying when, by which order and for how much period a Tribunal or Authority had stopped the opposite parties from completing the construction. The opposite parties ought to have obtained all the requisite approvals and clearances before coming in the market for accepting booking of the flats. If some building material or water was not available in Gurgaon (though there is no evidence of the opposite parties having been unable to get building material and water in Gurgaon) it was for them to arrange building material and water from alternative sources, wherever it could be available. The shortage of labour, building material or the water required for construction cannot be said to be Acts of God or reasons beyond the control of the opposite parties. This is not the case of the opposite parties that no construction came up in Gurgaon in last 7-8 years. If others could construct buildings during this period, the opposite parties also could have done so, if they so intended. This is not the case of the opposite parties that the entire money collected by them from the flats buyers in this project was used only for this project. Hence, there seems to be truth in the contention of the complainants that the opposite parties have diverted the money collected from them to other projects or for other purpose, thereby financing their other business activities at the cost of the flat buyers in this project. In these circumstances, the aforesaid pleas are accordingly rejected. (12) In Swarn Talwar & Ors. vs. Unitech Ltd., C.C. No.347 of 2014 and connected matters , the complainants had booked residential apartment in project known as decided on 14.08.2015 Unitech Habitat, which the opposite party was to develop on plot no.9, Sector PI-II (Alistonia Estate) in Greater Noida. The opposite party however failed to deliver possession of the flats to the complainants within the time agreed between the parties and consequently the complainant sought refund along with interest @ 18% p.a. besides damages and cost of litigation. The complaints were resisted on the grounds identical to those on which the present complaint has been opposed. Rejecting all the grounds taken by the opposite party and also inter alia relying upon the decision of the Honble Supreme Court in K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board, C.A. No.6730-6731, decided on 19.09.2012, this Commission directed the opposite party to refund the amount paid to it by the complainants, along with compensation in the form of simple interest on that amount @ 18% per annum from the date of deposit till the date the said amount was paid to the flat buyers. The payment was directed to make within six weeks. Being aggrieved from the order passed by this Commission, the opposite party preferred an appeal before the Honble Supreme Court being Civil Appeal (Diary No. 35562 of 2015). Vide signed order dated 11.12.2015, the Honble Supreme Court dismissed the said appeal. The order passed by the Honble Supreme Court reads as under:- We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference. The Civil Appeal is dismissed. -11- (13) The learned counsel for the opposite party submits that since the apartment in question was purchased for less than Rs.1 Crore, this Commission lacks pecuniary jurisdiction to entertain this complaint and the complainants should be relegated to the concerned State Commission for the redressal of their grievance. We however find no merit in this contention. This issue was raised by the opposite party in and was rejected. TheSwarn Talwar (Supra) aforesaid decision to the extent relevant to this plea reads as under:-
5. The first question which arises for our consideration in these cases is as to whether this Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. Section 11(1) of the Consumer Protection Act read with Section 21 of the Consumer Protection Act to the extent it is relevant provides that this Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000/-. The contention of the learned counsel for the opposite party is that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/- except in one case. The learned counsel for the complainants on the other hand contended that the interest which they have claimed along with refund of the principal sum even if not so described specifically, is by way of compensation only, since the opposite party has been deficient in rendering services to the complainants by not delivering possession of the flats on or before the time agreed in this regard.
6. In our view, the interest claimed by the flat buyers in such a case does not represent only the interest on the capital borrowed or contributed by them but also includes compensation on account of appreciation in the land value and increase in the cost of construction in the meanwhile. As noted by us in CC No.232 of 2014, Puneet Malhotra Vs. Parsvnath Developers Ltd. decided on 29-01-2015, there has been steep appreciation in the market value of the land and cost of construction of the residential flats in Greater Noida in last about 7-10 years and consequently the complainants cannot hope to get a comparable flat at the same price which the opposite party had agreed to charge from them. In fact it would be difficult to get a similar accommodation, even at the agreed price plus simple interest thereon at the rate of 18% per annum. Therefore, the payment of interest to the flat buyers in such a case is not only on account of loss of income by way of interest but also on account of loss of the opportunity which the complainants had to acquire a residential flat at a particular price.
7. In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Honble Supreme Court inter alia observed and held as under: However, the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury. Thus the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is -12- received/paid but possession is not given within the period set out in the brochure... Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best of illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher. It would, thus, be seen that the Honble Supreme Court recognized that the interest to the flat buyers in such cases is paid by way of compensation. Therefore, there is no reason why the interest claimed by the complainants or at least part of it should not be taken into consideration for the purpose of deciding the pecuniary jurisdiction of this Commission. If this is done, the aggregate amount claimed in each of the complaints exceeds Rs.1,00,00,000/- and, therefore, this Commission does possess the requisite pecuniary jurisdiction. In the cases where the complainant does not want refund and is seeking possession, alongwith compensation for the delayed possession, this Commission would have jurisdiction to entertain the complaint, if the aggregate of the value of the flat, on the date of filing of the complaint and the compensation claimed for the delay in delivering possession, exceeds Rs. 1 Crore. In terms of Section 21(a) of the Consumer Protection Act, this Commission can entertain complaints where the value of the goods or services and compensation exceeds Rs. 1 Crore. Since the buyer is seeking possession of the flat booked by him, the value of the service, in such a case in our opinion, in terms of Section 21(a) of the Consumer Protection Act means the value of the flat as on the date of filing of the complaint and not the value on the date the flats were booked. (14) In some of the complainants before this Commission were Satish Kumar Pandey (Supra) subsequent purchasers who had purchased the apartment from the original allottee of the opposite party. The possession in those cases was offered to be delivered within three years. It was directed by this Commission that those who had purchased the apartment after more than one year from the initial allotment should be paid compensation in the form of simple interest @ 12% per annum w.e.f. three years from the date of repurchase till the date the possession is delivered to them, no compensation shall be payable to them from first three years from the initial allotment and for the period between three years from the date of initial agreement/allotment and three years from the date of repurchase by them compensation shall be paid to them @ Rs.5/- per sq. ft. of the super area in terms of the clause 4 (c) of the buyers agreement. Lesser compensation to the subsequent purchaser was awarded considering the decision of the Honble Supreme Court in Haryana Urban Development Authority vs. Raje Ram, AIR 2009 SC 2030. -13- (15) The persons who had purchased flats within one year from the date of the agreement with/allotment to the original allottee were treated by this Commission at par with the original allottee in Satish Kumar Pandey (Supra) and therefore such complainants would be entitled to same compensation for the period the possession is delayed, as has been awarded to the original allottees. (16) During the pendency of this complaint, the opposite party sent a letter to the allottees in FRESCO project conveying a revised completion schedule and offer of possession of apartment for various towers. A higher penalty clause was also proposed by the opposite party in the said letter dated 26.05.2015. As per the said letter dated 26.05.2015, possession in Tower-4 whereby the apartment purchased by the complainant in CC No. 13/2015 is situated, was to be offered by 31.10.2015 and in case of delay penalty @ Rs.17 per sq. ft. per month w.e.f. 1.11.2015 till the date of actual offer of possession. Admittedly, the possession has not been offered by 31.10.2015. (17) In view of the forgoing discussion, the complaints are disposed of with the following directions: (a) In CC No. 14/2015, the opposite parties are directed to refund the amount paid to them by the complainants alongwith compensation in form of simple interest @ 18% per annum, calculated from the date of each payment till the date on which the said amount is refunded to them. (b) The opposite parties shall pay a sum of Rs. 5,000/- as the cost of litigation in each complaint. (c) The opposite parties shall deliver possession of the flats booked in the project Vistas in Sector-70 of Gurgaon, by the complainants in CC No. 487/2014 & 16/2015 to them within one year from today. (d) The opposite parties shall pay to the complainants in CC No. 14/2015, CC No. 15/2015 and CC No. 487/2014, compensation in the form of simple interest @ 12% per annum with effect from the expiry of the period stipulated in the Buyers Agreement/Allotment Letter for offering possession to them till the possession of the flats is actually delivered to them. The compensation in the form of interest till 29.02.2016 shall be paid by 31.03.2016. Thereafter, compensation in the form of interest in terms of this order shall be paid on monthly basis by the
10 of each succeeding month.th (e) In CC No. 13/2015, where the agreement with the original allottee is dated 12.12.2006 and the committed date of possession was March 2009, the opposite parties shall pay compensation by way of simple interest @ 12% per annum with effect from 27 months from the date of purchase of the flat by them till the possession is delivered to them. They will also be paid contractual compensation @ Rs. 5 per sq. feet of the super area of their flat for the period between 01.04.2009 and 27 months from the date of re-purchase of the flats by them. (f) If the opposite parties fail to deliver possession of the flats to the complainants within the time stipulated in this order, they shall pay higher compensation to them in the form of interest @ 18% per annum for each day of delay beyond the time stipulated in this order for delivering possession of the flat to them. We however, hope that a situation attracting the aforesaid higher compensation will not arise. -14- ......................J
V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER -15-