PRAVIN KUMAR GOEL & ANR. v. PARSVNATH DEVELOPERS LTD. & ANR.

PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed appellant against order dated 25.2.2015 in Complainant Nos.

18 of 2013- Nalin Bhargava & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 34 of 2013- Jasleen Viswanathan & Anr. Vs. Parsvnath Developers Ltd. & Anr; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. & Anr; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. & Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. & Anr.; 86 of 2010- Priyanka Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 101 of 2011- Mohd. Aslam Khan & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 130 of 2012- Dr. Sunil Kr. Singh & Anr. Vs. Parsvnath Developers Ltd. & Anr; 49 of 2012- Neera Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr;

74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. & Anr. ; 87 of 2010- Syed Gufran Ali Alvi & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. & Anr.; 175 of 20130- Umesh Chandra Dixit & Anr. Vs. Parsvnath Developers ; byLtd. & Anr.; 97 of 2011- Pravin Kumar Goel & Anr. Vs. Parsvnath Developers Ltd. & Anr which complaints were partly allowed. Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses. The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have -10- not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/respondents, complainants filed separate complaints before State Commission. Opposite parties resisted complaints and submitted that the complainants for the purchase of flats in question have entered into the Flat Buyer Agreement with the opposite parties after going through its various terms and conditions which were understood and agreed upon and thereafter signed by both parties and thus a binding contract was entered into between the parties. Clause 10(a) of the said agreement stipulates that Construction of the flat is likely to be completed within a period of 36 months from the date of commencement of construction of the particular block in which the flat is located, on receipt of sanction of building plan/revised building plans and approvals of all concerned authorities, as may be required for commencing and carrying construction subject to force majeure, restraints or restrictions etc. and circumstances beyond the control of the developer and subject to timely payment by the buyers in the scheme. Since on account of global economic meltdown and severe global recession, there is some delay in completing the project due to circumstances beyond control of the developer which not only affected the opposite parties, but in particular affecting the real estate sector all over, therefore, in view of these circumstances and as per the said agreement wherein it is provided that for circumstances beyond control of the developer no claim/ damages shall lie against the developer, as agreed to abide by the parties to the agreement, the said reliefs are not worth allowed to the complainants. The construction completion period is to be reckoned from the sanctions by authorities concerned for commencement of construction of project. Vide clause 10 (c ) of the said agreement, which stipulates that in case of delay beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under sub clause (a) of clause 10, the developer has assured to compensate for delay as per said clause which will be settled at the time of possession. The opposite parties have already intimated their allottees that it is not in the interest of either of the parties that project is delayed and all efforts for the completion of the project is being made and interest of parties is to remain protected in terms of the flat buyer agreement for the period of delay, if any, in completion of the project. In these circumstances, there is no cause of action accrued for filing of the alleged complaint cases, as interest of the parties is already protected by virtue of the flat buyer agreement as aforesaid. Thus, relief sought for inter-alia of direction for delivery of physical possession of finished flats is premature, particularly since complainants admittedly have been informed about the efforts being made by developer to complete the project. It was, further, pleaded that the complainants are defaulters and the interest is still due and payable by the complainants as per their respective accounts. Until such payments are made in totality, including but not limited to payments with regard to maintenance, registration fees etc., the possession of the said flat cannot be handed over to the complainants. Further, there has been no agreement or understanding towards payment of 24% interest by the opposite parties to the complainants and even otherwise the same does not arise. As per Clause 10 (c ) of the Flat Buyer Agreement entered into by both parties, in case of delay by the opposite parties, the liability of the opposite parties is limited to Rs. 5/- per square feet, per month after 42 months elapsed. The complainants were required to pay instalments in accordance with the terms and conditions of the Flat Buyer Agreement, in order to avoid penal interest and cancellation of allotment. The complainants never paid their instalments in time. The opposite parties never informed the complainants that the apartments were likely to be completed by 2015 as alleged in the complaints. The opposite parties have not caused the complainants any mental agony and stress by its attitude as alleged. It was denied that the opposite parties failed to abode -11- by their promise of providing possession of the flat by January, 2009, as no such promise was given by the opposite parties. The opposite parties have never refused to hand over the physical possession of the respective flats to the complainants as and when the same is ready. It is submitted that the opposite parties have already applied to the authorities for completion/ occupancy certificate with respect to Towers bearing Nos. 1,2,8,9 and 10 in the month of December, 2012. Denying deficiency on their part, prayed for dismissal of complaints. Learned State Commission after hearing both the parties allowed complaints and directed opposite parties to hand over the possession of flats to complainants in the year 2015. Opposite parties were further directed to issue statement of accounts to each complainant on their demand and to pay 9% p.a. interest on amount received in excess as per clause 10 . Complainant inNalin Bhargava complaint and in were furtherNo. 18 of 2013 Ravindra Kumar Singh complaint No. 32 of 2012 allowed to get difference of amount of rent to the tune of Rs. 14,000/- p.m. paid by them and the amount credited by opposite parties as per clause 10 (c). Aggrieved by aforesaid order, complainants filed separate appeals. Heard Learned Counsel for the parties finally at admission stage and perused record. Learned Counsel for appellants submitted that Learned State Commission committed error in not allowing interest @ 24% p.a. after 36 months of the agreement and committed error in allowing payment as per clause 10 (c ) of the agreement and further committed error in not allowing compensation, hence, appeals be allowed and impugned order be modified. Learned Counsel for appellant in FA No. 317 of 2015, further, submitted that Learned State Commission committed error in not granting penalty on increased area. On the other hand, Learned Counsel for respondents submitted that order passed by Learned State Commission is in accordance with law, hence, appeals be dismissed. Perusal of impugned order reveals that Learned State Commission refused to grant interest and allowed penalty as per clause 10 (c ) of the agreement. The core question to be decided is whether complainants are entitled to interest or penalty amount beyond the terms and conditions of agreement. Learned Counsel for appellants submitted that when there are unfair and unreasonable terms & conditions in the agreement and parties are not equal in bargaining power, Courts will strike down unfair and unreasonable contract. He placed reliance on the judgment of Honble Apex Court in in which it(1986) 3 SCC 156- Central Inland Water Transport Corpn. Vs. Brojo Nath Ganguly; was observed that courts will not enforce and will strike due unfair and unreasonable clauses in the contract entered into between the parties who are not in equal bargaining power. In para 89 of the judgment, an example was given that such condition will apply to situation in which the weaker party is in a position to obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. This judgment is not applicable to the facts and circumstances of these cases because in the cases in hand, it cannot be inferred that opposite party was in a dominating position or stronger party and without agreeing to the terms & conditions of the opposite party, complainants would not get flats. Opposite party is not the only builder and there are many many builders to provide flats to the buyers. Admittedly, complainants have signed agreement with their open eyes and never raised any objection for deleting or modifying terms & conditions of the agreement and have not pleaded that duress/coercion or undue influence was exercised by opposite party on complainants for executing agreements. Learned Counsel for respondent has placed reliance on judgment of -12- Honble Delhi High Court decided on 7 February, 1994 in th M/s. Unikol Bottlers Ltd. Vs. M/s. ; in which it was held that agreement to be valid should be the result of feeDhillon Kool Drinks consent and unequal bargaining power is really concerned with the question of free will. It was further observed that other circumstances to be seen are whether complainant protest before or soon after the agreement or took steps to avoid the contract or complainant had any alternative course of action or remedy? In the case in hand, there is nothing on record to suggest that agreements were not executed by complainants with free will and in such circumstances, it cannot be held that opposite party was stronger or in bargaining capacity to compel complainants to enter into purchase agreements. Learned Counsel for appellant submitted that as respondent was in bargaining position, terms & conditions of agreement to sale be held to be unreasonable and inappropriate. In support of this contention, he has placed reliance on judgment of Honble Apex Court in (1996) 4 SCC 704- butBharathi Knitting Co. Vs. DHL Worldwide Express Courier, Division of AirFreight Ltd.; perusal of aforesaid judgment reveals that this judgment does not help to the appellant, rather helps to respondent because it was held in the aforesaid case that when there is specific terms in the contract, the parties are bound by the terms in the contract and order of this Commission dismissing appeal of complainant was upheld. Learned Counsel for respondent also placed reliance on judgment of Honble Apex Court in Civil Appeal No. 4492- LIC of India & Anr. Vs. in which it was held that courts and tribunals cannot rewrite contract and directSmt. S. Sindhu; payment contrary to the terms & conditions of the contract. In the light of aforesaid judgment, it becomes clear that parties are bound by the terms & conditions of the contract and this Commission cannot rewrite contract and direct payment contrary to the terms of the contract. Learned Counsel for appellant also placed reliance on judgment of Honble Apex Court in (2004) ; which has also been considered5 SCC 65- Ghaziabad Development Authority Vs. Balbir Singh by Learned State Commission but it does not help to the appellant because in aforesaid case, it was observed that whenever 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 property he is getting. In it(2009) CPJ 56 (SC)- HUDA Vs. Raje RamI; was observed that where possession is given at old rate, party has got benefit of escalation in price of land, interest should not be awarded on amount paid by allottees due to delay in allotment. In such circumstances, appellants are not entitled to get interest on deposited amount as prayed due to delay in delivery of possession contrary to terms & conditions of agreement. He also placed reliance on judgment of this Commission in Consumer Case No. 293 of 2014- Sunil Joshan Vs. M/s. Parsvnath Developers Ltd.; First Appeal No. 61 of 20150 Unitech Ltd. & Ors. Vs. Syed Hussain Tahir Kazmi & Anr.; Consumer Case No. 144 of 2011- Subhash Chander Mahajan & and Anr. Vs. Parsvnath Developers Ltd. Consumer Case No. 347 of 2014- Swarn Talwar & 2 in which interest@ 18% p.a. was allowed on deposited amount till refund. Ors. Vs. Unitech Ltd.; These cases are not applicable to the cases in hand because in those cases, complainant prayed for refund of amount and while allowing refund, interest @ 18% was allowed whereas in the cases in hand, complainants are claiming possession of allotted flat and State Commission has directed opposite party to hand over possession. In such circumstances, in the light of aforesaid judgment of Apex Court, complainants are not entitled to get interest as prayed on the deposited amount from the date of deposit till handing over possession. Learned Counsel for appellant also placed reliance on judgment of this Commission in Complaint ; and Complaint No. No. 427 of 2014- Satish Kumar Pandey Vs. M/s. Unitech Ltd. CC/277/2013- .; in which while directing opposite partySuman Nandi & Anr. Vs. M/s. Unitech Limited & Anr -13- to deliver possession, interest @ 12% p.a. was allowed after 36 months of the agreement alongwith penalty provided in the agreement. With respect, I do not agree with the aforesaid judgments in the light of judgments referred above, I am of the view that parties are bound by terms & conditions of the agreement and complainants are not entitled to receive any interest on the deposited amount after due date for delivery of possession. Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under Section 2 (nnn) of Consumer Protection Act and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring aboutrestrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under Section 2(nnn) of Consumer Protection Act. Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10 ( c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause

10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have bene deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession. Complainants- Nalin Bhargava in and complainantsComplaint No. 18 of 2013 Ravindra Singh in , are entitled to get only difference of amount fromComplaint No. 32 of 2012 -14- the amount already awarded by State Commission which has not been challenged by opposite party. Perusal of record reveals that in Complaint No. 987 of 2011, Pravin Kumar Goel Vs. , flat area of complainant has been increased and additional Rs. 7,99,997/-Parsvnath Developers has been demanded by opposite party from complainant but Learned State Commission has not allowed penalty as per clause 10 (c ) for the increased area and complainants are entitled to get penalty as per aforesaid clause on the increased area also. Consequently, appeals filed by appellants are partly allowed and order dated 25.2.2015 passed by Learned State Commission in the aforesaid complaints is modified and opposite party is directed to pay @ Rs. 15,000/- p.m. and Rs. 20,000/- to the allottees of flats upto 175 sq. mt. and above 175 sq mtr respectively from beginning of 55 month from the date of execution of flatth buyer agreement till delivery of possession of flat to the complainants and complainants in and are entitled to receive only differenceComplaint No. 18 of 2013 Complainant No. 32 of 2012 of amount as stated above and opposite party is directed to pay penalty to complainant in on the increased area as per clause 10 (c ) of the agreement.Complaint No. 97 of 2011 Parties to bear their costs. -sd/- For the Appellants in : Ms. Ruchira Goel, Advocate. FA/317/2015 For the Appellants in : Ms. Ruchira Goel, Advocate. FA/317/2015 ......................J K.S. CHAUDHARI PRESIDING MEMBER -15-