Rakesh Mehta v. Emaar Mgf Land Limited

practice adopted by the opposite party, opposite party may further be directed to pay rent @ Rs.27,000/- per month from the promise date of delivery till the delivery of the flat along with all the legal formalities for the same.

2. The complaint has been resisted by the opposite party which has taken preliminary objections that the terms and conditions of the agreement are final and binding upon the parties and time was not the essence of the agreement. Reliance is placed by the opposite party on the decision of the Hon'ble Supreme Court in Chand Rani Vs. Kamal Rani (1993) 1 SCC

519. It is also alleged that since the total consideration was less than Rs.one crore, this Commission lacks pecuniary jurisdiction to entertain the complaint. On merits, it is stated in the written version filed by the opposite party that the structure work of Tower K was complete and final finishing was going on. The booking made by the complainant as well as the allotment made to him, however has been admitted in the written version.

3. In terms of Section 21 of the Consumer Protection Act, This Commission possesses the pecuniary jurisdiction to entertain the complaint where the aggregate of the value of the goods or services, as the case may be, and the compensation, if any, claimed exceeds Rs.1.00 crore. As held by a Three-Members Bench of this Commission in Ambrish Kumar Shukla & Ors. Vs. Ferrous infrastructure Pvt. Ltd., dated 7.10.2016 in CC No.97 of 2016, the value of the services in such contracts means the sale price agreed to be paid by the buyer to the builder. The complainant has also claimed compensation along with the main relief claimed by him. If the amount of compensation is added to the agreed sale consideration, the aggregate come to much more than Rs.1.00 crore. This Commission does therefore possess the pecuniary jurisdiction.

4. It was contended by the learned counsel for the opposite party that since the primary relief claimed by the complainant is possession of the flat allotted to him and refund has been claimed only as an alternative relief if possession is not delivered and they are ready to deliver possession of the flat allotted to the complainant, he is not entitled to refund of the amount paid by him. This issue was also raised by the learned counsel for the opposite party at an intermediate stage on 11.9.2017 and the following order was passed:

"It transpired during the course of hearing that the opposite party has obtained the occupancy certificate dated 2.8.2017 in respect of the flat which was allotted to the complainant. Though in the complaint, the complainant has prayed for immediate possession of the said flat, as per the specification and master plan, or in the alternative, refund of the amount paid by him along with interest, he is no more willing to accept possession of the said flat. The contention of the learned counsel for the opposite party is that having sought possession of the flat, the complainant should accept the same than insisting upon the refund of amount paid by him. The prayer for immediate possession was made by the complainant more than two years ago. The opposite party did not have the occupancy certification with respect to the said flat even by the time the written version came to be filed. The occupancy certificate, according to the learned counsel for the opposite party, was applied for on 09.2.2017, which was almost 1 ½ years after this complaint was instituted. Therefore, the complainant cannot be compelled to accept possession of the flat at this belated stage".

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5. This complaint was instituted way back on 10.8.2015, about two years before the occupancy certificate was obtained by the opposite party. Therefore, the opposite party was not in a position to offer possession of the flat to the complainant even after the complaint was instituted or within a reasonable period thereafter. The first prayer made by the complainant being for delivery of immediate possession of the flat and the opposite party not being in a position to offer the said immediate possession, he became entitled to the alternative relief of refund of the amount paid by him. Even otherwise, Section 55 of the Indian Contract Act expressly provides that 'when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promise, if the intention of the parties was that time should be of the essence of the contract'. I therefore, find no merit in the submission that the complainant is not entitled to refund of the amount paid by him.

6. Relying upon the Chand Rani (supra) it was contended by the learned counsel for the opposite party that the time for delivery of the possession was not the essence of the Buyers Agreement executed between the parties. My attention has been drawn o the following view taken in Chand Rani (supra):

"19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England".

The aforesaid decision of the Hon'ble Supreme Court, in my opinion, does not apply to a case where the builder enters into a service contract with the flat buyer where-under the builder is to either construct a house / flat or develop a plot of land and then deliver its possession to the allottee. If the contract between such parties is a simple contract for the sale of a ready built up/developed property, such a transaction would be out of the purview of the Consumer Protection Act since it cannot be said in such a case that the seller is to render any services to the buyer. Similarly, if the plot of a land is agreed to be sold on "as is where is basis", without the seller having to carry out any development work such as providing services like development of land, electrification, water supply, sewerage etc., the transaction would be out of the purview of the Consumer Protection Act since it will not be possible to say that the seller has entered into a contract with the buyer for rendering services within the meaning of Section 2(1)(o) of the Consumer Protection Act to the buyer. A reference in this regard can be made to the decision of the Hon'ble Supreme Court in UT Chandigarh Administration & Another Vs. Amarjeet Singh & Ors. Civil No.1994 of 2006.

The following observations made by this Commission in Shri Pradeep Narula & Anr. Vs. M/s. Granite Gate Properties Pvt. Ltd. & Anr. CC 315 of 2014 decided on 23.8.2016 are also relevant in this regard:

"10. ……….. The primary purpose of a consumer in booking a residential flat which the builder is to construct for him, is to start living in that house on or about the date committed to him by the builder for delivering possession of the flat booked by

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him. If the builder does not deliver upon his contractual obligation and at the same time, is unable to show that the delay in completion of the flat and offering its possession to the consumer was on account on circumstances beyond his control, this would constitute deficiency on the part of the builder / service provider in rendering services to the consumer. If I accept the contention that the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice and result in a situation where the flat buyer is left at the mercy of the builder, without recourse to an appropriate legal remedy. Such an interpretation, if taken, is bound to defeat the very objective behind the enactment of the Consumer Protection Act, as far as housing construction is concerned. Therefore, I am unable to accept the contention advanced by the learned counsel for the opposite party. In my view, wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, though a minor delay may not constitute deficiency in the service rendered by him to the buyer. Of course, if the builder is able to how that the delay in completion of the construction and offering possession to the buyer is attributable wholly to the circumstances beyond his control, that may not be a case of deficiency in the services rendered to the consumer". I therefore, hold that the complainant is entitled to refund of the amount paid by him to the opposite party along with compensation in the form of interest on that amount.

7. During the course of arguments the learned counsel for the opposite party also referred to

Ranbir Singh Vs. Executive Engineer (2011) 15 SCC 453, Shamsu Suhara Beevi Vs. G. Alex & Anr. (2004) 8 SCC 569 and General Motors (India) Pvt. Ltd. Vs. Ashok Ramnik Lal Tolat & Anr. (2015) I SCC 429. However, none of the aforesaid decisions appears to be directly relevant to the issues involved in this complaint.

8. The next question which arises for consideration is as to what amount the complainant is entitled as compensation from the opposite party. It is an admitted position that the complainant had raised a housing loan from ICICI bank and a tripartite agreement was executed between him, ICICI bank and the opposite party. The said loan is stated to have been repaid in instalments, the last instalment having been paid in August, 2015. To the extent the sale consideration was paid by loan taken from ICICI bank on interest, the complainant is entitled to be compensated by directing the opposite party to pay interest at the same rate at which it was paid by the complainant to the ICICI bank. For the rest of the amount, the learned counsel for the complainant, on instructions from the complainant, has restricted his claim to compensation in the form of simple interest @ 9% per annum. He has also pointed out that as per the Buyers Agreement, the opposite party itself agreed to pay interest @ 9% per annum in the event of not taking up the construction of the flat sold to the complainant. Even otherwise, considering the prevailing rates of interest the bank FDR at the relevant time, the claim for simple interest @ 9% per annum cannot be said to be unjustified or inflated. The learned counsel for the complainant on instruction also stated that for the period subsequent to August, 2015, the complainant was restricting his claim to compensation in the form of simple interest @ 9% per annum on the entire amount paid to the opposite party so as to avoid any

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further litigation in this regard. The complaint therefore is disposed of with the following directions:

(i) The opposite party shall refund the entire principal amount of Rs. 96,28,565/- to the complainant.

(ii) On the principal amount of the loan taken by the complainant from ICICI bank the opposite party shall pay compensation in the form of interest at the same rate at which it was paid by the complainant to the ICICI bank. The compensation in the form of interest on that amount shall be paid from the date of payment till 31.8.2015. With effect from 1.9.2015, compensation in the form of simple interest shall be paid @ 9% per annum on the aforesaid amount, till the date of refund.

(iii) On the amount paid by the complainant to the opposite party from his own funds, compensation in the form of simple interest @ 9% per annum shall be paid with effect from the date of each payment, till the date of refund.

(iv) The opposite party shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainant.

(v) The payment in terms of this order shall be made within three months from the date of this order.

......................J

V.K. JAIN

PRESIDING MEMBER

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