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Smart Summary

Factual and Procedural Background

The complainants are allottees of residential flats in the project "Emerald Floors Premier" at Emerald Hills, Gurgaon, which the opposite party, M/s. Emaar MGF Land Ltd., was to construct. The complainants entered into Builder Buyer Agreements (BBA) with the opposite party, agreeing on sale consideration and payment schedules. Despite having paid major parts of the sale consideration, the complainants alleged that possession of their flats was not offered within the stipulated time. The complainants approached the Commission seeking possession of their flats along with compensation for the delay. The opposite party resisted the complaints, relying on grounds previously rejected in a related case (Jivitesh Nayal & Anr. Vs. M/s. Emaar MGF Land Ltd.). The Commission had earlier partially stayed the order on appeal before the Hon'ble Supreme Court.

Legal Issues Presented

  1. Whether the Commission possesses pecuniary jurisdiction to entertain complaints where the sale consideration and compensation claimed exceed Rupees One Crore.
  2. Whether the delay in delivery of possession by the builder amounts to negligence under the Consumer Protection Act.
  3. Whether the compensation clause in the Builder Buyer Agreement (Clause 15(a)) is binding on the complainants or constitutes an unfair and unconscionable term.
  4. Whether the complainants are entitled to just and fair compensation beyond the stipulated contractual compensation for delay in possession.
  5. Whether the Commission can direct the builder to complete construction and deliver possession under Section 14 of the Consumer Protection Act.

Arguments of the Parties

Opposite Party's Arguments

  • Compensation under Clause 15(a) of the BBA (Rs.10 per sq. ft. per month) is a penalty and the upper limit of compensation payable for delay.
  • No evidence of actual damages caused to complainants was led; hence, no entitlement to compensation or damages.
  • No loss or injury to complainants has been established.
  • No negligence on the part of the opposite party is proved or alleged.
  • Complainants are seeking specific performance of the contract and are bound by its terms.
  • Compensation for pecuniary jurisdiction purposes should be limited to contractual compensation only.
  • Service tax and VAT should not be added to the sale price for determining pecuniary jurisdiction.

Complainants' Arguments

  • Possession of flats was not delivered despite payment of major part of sale consideration.
  • Compensation clause in BBA is unilateral, unfair, and imposed under coercion, thus not binding.
  • Entitled to just and fair compensation for delay beyond the contractual amount.
  • Delay and failure to deliver possession amounts to negligence causing loss and injury.
  • Compensation claimed includes interest at rates up to 18% per annum, which is not an exaggerated claim for pecuniary jurisdiction.
  • Compensation should include interest on amounts paid, as the builder has used the money for other purposes.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jivitesh Nayal & Anr. Vs. M/s. Emaar MGF Land Ltd. Rejection of grounds raised by builder; pecuniary jurisdiction and compensation principles. Grounds already considered and rejected; applicable to current complaints.
Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. Definition of value of services for pecuniary jurisdiction under Consumer Protection Act. Sale consideration forms value of service; relevant for jurisdictional threshold.
Dushyant Kumar Gupta Vs. Today Homes & Infrastructure Pvt. Ltd. Assessment of pecuniary jurisdiction and admissibility of compensation claims. Supports inclusion of compensation with sale consideration to satisfy jurisdiction.
Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan Unfair contractual terms and consumer protection principles. Builder's one-sided clauses held unfair; supports consumer protection against coercive terms.
Central Inland Water Transport Corporation Limited and Ors. v. Brojo Nath Ganguly and Ors. Enforcement against unfair and unreasonable contracts violating Article 14 of the Constitution. Supports striking down unfair and unconscionable contractual terms imposed by stronger party.

Court's Reasoning and Analysis

The court first examined its pecuniary jurisdiction under Section 21 of the Consumer Protection Act, holding that the agreed sale consideration plus compensation in the form of interest (up to 18% per annum) exceeds Rs. 1 crore, thus conferring jurisdiction. The court rejected the opposite party’s contention that only contractual compensation should be considered. It held that claims for interest-based compensation are not exaggerated, referencing prior decisions including Dushyant Kumar Gupta.

On merits, the court analyzed the terms of the Builder Buyer Agreement, particularly Clauses 13(a) and 15(a). It found the compensation clause of Rs.10/- per sq. ft. per month to be a unilateral, unfair, and coercive term imposed by the builder, not binding on the complainants. The court emphasized that the complainants had no meaningful choice but to accept such terms and that such clauses are contrary to consumer protection principles and the Real Estate (Regulation & Development) Act, 2016.

The court defined negligence as failure to exercise reasonable care, applying this to the builder's failure to deliver possession within the committed period. It found the opposite party negligent, causing loss and injury to the complainants by depriving them of the use of their flats. The deprivation of use was held to be a serious injury warranting compensation.

Rejecting the argument that complainants sought specific performance, the court clarified that the relief sought was compensation under Section 14(1)(d) and directions for removal of service deficiencies under Section 14(1)(e) of the Consumer Protection Act. It held that the Commission has the power to direct the builder to complete construction and deliver possession.

The court also recognized the practical consequences of awarding only nominal compensation, cautioning that it may encourage builders to default and misuse funds. It endorsed the principle that amounts paid by buyers should be treated as deposits earning adequate interest.

Finally, the court relied on constitutional principles of equality and fairness under Article 14 and consumer protection provisions against unfair trade practices, holding that the one-sided clauses in the agreement constitute unfair trade practices and are unenforceable.

Holding and Implications

The complaints are allowed with directions against the opposite party.

The court directed the opposite party to complete construction, obtain occupancy certificates, and deliver possession of the flats by 30.09.2019. Compensation is to be paid at a simple interest rate of 8% per annum from the committed possession date to actual delivery, except for one complaint where a different interest calculation applies. The opposite party is entitled to a three-month grace period for occupancy certificate procurement. Compensation payable shall be adjusted against any additional amount payable by complainants, with balance paid at possession. The opposite party must also pay Rs. 25,000 as litigation cost in each complaint.

The court held that if the pending Supreme Court appeal modifies the earlier order, such modification will apply to these complaints. If the appeal is not decided by the stipulated date, the order will be binding unless stayed or modified.

No new precedent was created beyond the application and reaffirmation of existing consumer protection principles and case law.

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    Amitava Shankar Guha Complainant(S) v. Emaar Mgf Land Ltd. Opp. Party(S).

    JUSTICE V.K. JAIN, (ORAL) The complainants in these matters are allottees of residential flats in a project namely "Emerald Floors Premier" at Emerald Hills, which the opposite party was to construct on the land comprised in Village Maidawas, Sector 65 of Gurgaon. The following are the particulars provided by the complainants giving the details of the flats allotted to them, the date on which Builder Buyer Agreements were executed, the sale consideration agreed between the parties and the payment made so far to the opposite party:- S.No. CC No. Name ofComplainants Date of Allotment Date of execution of Cost of Floor Amount Paid

    1 1712/2017 AmitavaShankar Guha 21.12.2009 09.02.2010 71,31,350.00 62,56,044.00

    2 1713/2017 Amit Thusu 31.10.2009 06.01.2010 71,65,657.00 68,24,172.00

    3 1715/2017 Rajit Kohy Mammen & Smt. Jinsy Koshy 29.10.2009 02.01.2010 74,47,372.00 64,10,920.00 1716/2017 Smt. Purnima Bhatnagar & Anubhav Dayal Bhatnagar 26.12.2011 20.02.2010 26.12.2011 (endorsed) 99,54,709.00 91,53,575.00

    5 1720/2017 Vishal Mittal 31.10.2009 14.01.2010 72,65,643.00 71,64,570.00

    6 1721/2017 Amrita Randhawa & Vishal Madan 09.11.2009 20.01.2010 88,07,738.75 77,90,275.00

    7 1723/2017 Ashish Kumar Khullar & Aarti Sharma 31.10.2009 08.01.2010 97,46,031.00 85,05,428.00 1726/2017 Sharad Sinha & Basant Kumar Sinha & Ms. Seema Sinha 18.12.2009 14.01.2010 71,68,124.00 54,40,679.00

    9 1729/2017 Narsh Chander & Smt. Anita Chander 16.11.2009 04.02.2010 72,47,514.00 62,05,582.00 1730/2017 Smt. Enakshi Ganguly Thukral & Kishore Thukral 19.11.2009 20.02.2010 79,21,447.00 75,15,088.00 1732/2017 Smt Premlata Dang & Shyam Sunder Dang 28.10.2009 27.01.2010 69,56,350.00 62,10,656.00 1733/2017 Sandeep Mathur & Smt. Vandana Mathur 29.10.2009 20.01.2010 84,49,416.00 63,81,735.00 -10-

    13 1734/2017 Vineet Dewan & Smt. Amriti Dewan 05.12.2009 20.02.2010 85,04,897.00 71,98,373.00

    14 1736/2017 Ravi Jethani &Durga Jethani 31.10.2009 20.02.2010 73,10,863.00 65,01,859.00 1737/2017 Smt. Bela kapoor & Sameer Kapoor & Tanay Manohar Kapoor 25.11.2009 20.02.2010 78,24,250.00 71,77,845.00

    16 1739/2017 Gaurav Bajaj & Smt. Manju Bajaj 22.06.2012 18.07.2012 1,57,24,337.00 1,40,29,263.00

    17 1740/2017 Rakesh Kumar & Smt. Rashmi Sharma 13.09.2011 15.03.2012 1,50,16,348.00 1,10,87,665.00

    18 1741/2017 Vijay Plaha & Smt. Nirja Plaha 23.12.2009 20.01.2010 98,87,968.00 86,22,775.00 1742/2017 Sunil Mittal & Smt. Alka Mittal 31.10.2009 18.01.2010 75,06,254.00 64,10,915.00

    2. As per Clause 13(a) of the BBA, the opposite party proposed to hand over possession within

    24 months in C.C. No. 1740/2017 and 36 months in C.C. Nos. 1712/2017, 1713/2017, 1715/2017, 1716/2017, 1720/2017, 1721/2017, 1723/2017, 1726/2017, 1729/2017, 1730/2017, 1732/2017, 1733/2017, 1734/2017, 1736/2017, 1737/2017, 1739/2017, 1741/2017 and 1742/2017, from the execution of the said agreement though it was entitled to a grace period of three months for the limited purpose of applying and obtaining the occupancy certificate. The case of the complainants -11- is that the possession of the flat has not been offered to them despite they having paid major part of the sale consideration to the opposite party as and when demanded from them. The complainants are therefore before this Commission by way of these complaints, seeking possession of their respective flats complete in all respects alongwith compensation

    3. The complaints have been resisted by the opposite party on several grounds but, those grounds are stated to have already been considered and rejected in CC No. 34 of 2015 Jivitesh decided on 02.11.2017.Nayal & Anr. Vs. M/s. Emaar MGF Land Ltd. & connected matters Hence, the said grounds need not be examined again in these consumer complaints.

    4. The decision of this Commission in the case of Jivitesh Nayal & Anr. Vs. M/s. Emaar to the extent it is relevant reads as under:-MGF Land Ltd. (supra) "3. The complaint has been resisted by the opposite party which has taken a preliminary objection that since the agreed consideration was less than Rupees One crore, this Commission lacks pecuniary jurisdiction to entertain the complaint. On merits, the allotment made to the complainant as well as the execution of the Builder Buyer Agreements with them, has been admitted. The payments made by the complainants have also not been disputed. It is claimed that in view of Clause 15 of the Builder Buyer Agreement, in the event of delay, the complainants are entitled only to compensation calculated at Rs.10/- per sq. ft. per month. The construction, according to the opposite party, is in full swing. It is alleged that all possible efforts are being made to complete the construction and deliver possession to the complainants.

    4. In terms of section 21 of the Consumer Protection Act, this Commission possesses the requisite pecuniary jurisdiction to entertain a consumer complaint, where the value of the goods or services as the case may be, and the compensation, if any, claimed in the complaint, exceeds Rupees One Crore. As held by a Three-Members Bench of this Commission in CC No.97 of 2016 Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., decided on 07.10.2016, the value of services in such cases, means the sale consideration agreed to be paid by the flat buyer to the builder. The following view was taken by this Commission in CC/198/2015 Dushyant Kumar Gupta Vs. Today Homes & Infrastructure Pvt. Ltd. & connected matters, decided on 31.1.2017, and containing almost identical prayers, is relevant, as far as the issue of pecuniary jurisdiction is concerned:- "4. The main question which arises for consideration in these complaints is as to whether this Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. As provided in section 21 of the Consumer Protection Act this Commission has jurisdiction to entertain the complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1 crore. Though most of the complainants have claimed refund @ Rs.10,000/- per sq.ft. of the area of the flat, no credible evidence has been led by them to prove that the market value of a flat similar to the flat allotted to them and in the same or a comparable locality was Rs.10,000/- or more on the date these complaints were instituted. No price list of any developer in respect of residential flats in the same or a comparable locality with identical or comparable specifications has been produced by them, in the absence of a credible evidence, it would be difficult to accept the bald statements of the complainants as regards the market value of a similar flat in the same or a comparable locality, on the dates these complaints were instituted. Therefore, invocation of the pecuniary jurisdiction of this Commission on the basis of the aforesaid alleged market value of the similar flats is highly misplaced and cannot be entertained. -12-

    5. This Commission has in the past granted compensation in the form of interest paid Rs.18% per annum in the cases where refund has been allowed and compensation in the form of interest @ 12% per annum in the cases where possession of the house/plot has been directed. Therefore, a claim for refund by adding the agreed sale consideration to compensation in the form of simple interest @ 18% per annum from the date of each payment till the date of filing of the complaint cannot be said to be highly exaggerated or fanciful and made only with a view to invoke the jurisdiction of this Commission, even if this Commission eventually grants a lesser compensation to the complainant. Similarly, where the complainant seeking only the possession of the house but there is no prayer for refund of the payment made by him to the builder, the value arrived it by adding the agreed sale consideration to the compensation in the form of interest @ 12% p.a. from the committed date of possession till the date of filing of the complaint would be maintainable before this Commission if the said claim comes to more than Rs.1 crore.

    6. In a complaint where the complainant makes alternative prayers, one for possession of the house allotted / plot to him and the other for refund of the amount paid by him to the developer along with compensation, this Commission would have pecuniary jurisdiction to entertain the complaint where either the relief of possession or the relief of refund, alongwith the compensation as calculated in terms of para-5 hereinabove falls within the pecuniary jurisdiction of this Commission. Since in such a case, the State Commission will not have the requisite pecuniary jurisdiction to grant one of the alternative reliefs claimed in the complaint, the complainant cannot be asked to approach the said Commission.

    8. The contention of the learned senior counsel for the opposite party was that the service tax and VAT cannot be added to the sale price in order to determine the value of the service in terms of section 21 of the Consumer Protection Act. I however, find no merit in this contention since, as per the agreement between the parties, the flat buyers were required to pay the aforesaid taxes to the opposite party, and not pay them directly to the concerned Government. It would be immaterial that the opposite party, in turn would have to deposit the said taxes with the concerned Government, the material fact being that without payment of the agreed purchase price and these taxes, the opposite party would be under no obligation to deliver possession of the flat to the buyers. Therefore, the aforesaid taxes, in my opinion, cannot be excluded while determining the value of the service, in terms of section 21 of the Consumer Protection Act."

    5. If considered in terms of the decision in Dushyant Kumar Gupta (supra), this Commission does possess the requisite pecuniary jurisdiction to entertain the complaints since the agreed sale consideration and the compensation in the form of interest comes to more than Rupees one crore in all these matters.

    6. It was contended by the learned senior counsel for the opposite party that compensation for the purpose of pecuniary jurisdiction would mean only the contractual compensation agreed between the parties. However, I find no merit in the contention. A bare perusal of Section 21(a) of the Consumer Protection Act would show that for the purpose of pecuniary jurisdiction, compensation, if any, claimed by the complainant is to be added to the value of the goods or services, as the case may be. Of course, a highly exaggerated, fanciful or inflated claim cannot be considered to be a genuine claim and therefore, cannot be determinative of the pecuniary jurisdiction. However, considering that not only this Commission, but the Honble Supreme Court has awarded compensation in the form of interest at the rate upto 18% per annum, compensation in the form of interest calculated @ 18% per annum would not be taken as a highly -13- inflated or exaggerated claim so as to warrant outright rejection of the complaint, even though the Court / Forum may award a lesser compensation. Therefore, I find no merit in the contention that this Commission lacks pecuniary jurisdiction to entertain these complaints.

    7. On merits, the following contentions were advanced by Shri A.S. Chadhiok, learned senior counsel for the opposite party: (a) In view of the Clause 13(a) read with Clause 15 of the BBA, compensation @ Rs.10/- per sq. ft. per month is in the nature of a stipulation by way of penalty and therefore, the upper limit of the compensation which can be awarded to the complainants, in the event of breach of contract by the opposite party. (b) No evidence of actual damages, if any, caused to the complainants has been led and therefore, they are not entitled to any compensation or damages. (c) No loss or injury to the complainants has been established, and therefore, they are not entitled to any compensation. (d) No negligence on the part of the opposite party is proved or even alleged. (e) The complainants are seeking specific performance of the contract between the parties, and therefore are bound by its terms.

    8. Clause 13(a) and 15 of the BBA read as under: "13. POSSESSION (a) Time of handing over the possession Subject to terms of this clause and subject to the allottee(s) having complied with all the terms and conditions of the agreement, and not being in default under any of the provisions of this Agreement and compliance with all provisions, formalities, documentation etc., as prescribed by the company, the company proposes to hand over the possession of the Independent Floor within

    27 months from the date of execution of this Agreement. The allottee(s) agres and understands that the company shall be entitled to a grace period of three months for applying and obtaining the occupation certificate in respect of the Independent Floor and / or the project.

    15. COMPENSATION (a) In case within a grace period of six months as stated in clause 13(a), the company is not able to hand over the possession to the Allottee(s), the Allottee(s) shall be entitled to payment of compensation for delay at the rate of Rs.10/-(Rupees ten only) per sq. ft. per month of the super Area till the date of notice of possession under the provisions of Clause 14(a), provided the allottee(s) has complied with all the terms and conditions of this Agreement. The Allottee(s) shall have no other claim against the company in respect of the said independent floor and parking space under this Agreement during such extended period. -14- (b) The Allottee(s) agrees that the compensation as payable under clause 15 (a) hereinabove shall be payable only after making payment of all charges and clearing off all dues as reserved in this Agreement and after allottee(s) fulfils all the condition as set out in clause 14(b). (c) The allottee(s) agrees and understands that the compensation as mentioned hereinabove, that may become payable to the allottee(s) will be paid only if the allottee(s) has not defaulted and or breached the terms of the Buyers Agreement or defaulted in payments as per the Schedule of Payment annexed hereto this Agreement or in other words has complied with all the terms and conditions of the Agreement. (d) Notwithstanding anything contained hereinabove or elsewhere in this Agreement, in the event if there is delay in handing over possession due to the delay or non-receipt of the occupation certificate, completion certificate and / or any other permission / sanction from the competent authorities, then in such an event no such compensation or any other compensation shall be payable to the allottee(s)."

    8. In terms of Section 14(1)(e) of the Consumer Protection Act, if this Commission is satisfied that any of the allegations contained in the complaint about the services of the opposite party are proved it is required to issue an order to the opposite party directing it to remove the deficiencies in the services in question. In terms of Section 14 (1)(d) of the Act this Commission is also required to pass an order directing the opposite party to pay compensation to the complainants for any loss or injury suffered by them due to the negligence of the opposite party. If the builder, whose services are engaged by a buyer for construction of a residential house for him fails to complete the construction and deliver its possession on or before the date committed by him for the purpose, such an act on the part of the builder would be an act of negligence, causing loss or injury to the flat buyer. The term negligence has not been defined in the Consumer Protection Act but as per its dictionary meaning, it is the failure to give enough care or attention especially when such an act has serious results for another person (Oxford Advanced Learners Dictionary, New 8th Edition). As per Blacks Law Dictionary IX Edition, negligence includes the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. In the absence of force-majeure circumstances, a prudent builder in place of the opposite party would have been in a position to construct the flats and offer their possession to the complainants on or before the date committed for this purpose or at best within the grace period available under the BBA. By not delivering on the commitment made by it with respect to the delivery of the possession of the flats booked by the complainants, the opposite party certainly committed an act of negligence and since the said act of negligence has resulted in loss or injury to the complainants who have been deprived f the user of the flats booked by them, compensation in terms of Seciton14 (1)(d) of the Consumer Protection Act can be awarded to the complainants, against the opposite party. Since the Act empowers this Commission to direct removal of the deficiencies in the service in question, the opposite party, in exercise of the aforesaid power of this Commission, can also be directed and in fact ought to be directed to complete the construction and deliver possession of the flats to the complainants at the earliest possible. Therefore, both the directions sought by the complainants viz. direction for completion of the construction and delivery of possession of the flats and the direction for payment f compensation for the period the possession is delayed are within the competence of this Commission under Section 14 of the Consumer Protection Act. Therefore, it is not correct to say that the complainants are seeking specific performance of the agreement they had executed with the opposite party. The specific performance of a contract can -15- be sought before a Civil Court in terms of the provisions contained in the Specific Relief Act 1963. Neither this Commission is a Civil Court nor have the complainants invoked the provisions of the Specific Relief Act, 1963.

    9. Also, I find no merit in the contention that the compensation stipulated in Clause 15(a) of the BBA is in the nature of a penalty attracting applicability of Section 74 of the India Contract Act. The aforesaid compensation is a unilateral and patently unfair term imposed by the builders upon the flat buyers. Having already paid the booking amount to the builder, they have no option but to sign on the dotted lines, since the failure to execute the agreement unilaterally drafted by the builder and imposed upon the flat builders is likely to result in the booking amount being forfeited by the builder. Therefore, executing an agreement containing such a term is nothing, but a consent given under coercion and cannot be said to be the result of the exercise of a free consent on the part of the flat buyer. Moreover, a term to pay such a paltry compensation to the flat buyer in the event of default on the part of the builder, while making him pay exorbitant interest in the event of default or delay on his part is an absolutely unfair term. In fact, the incorporation of a term for payment of a paltry compensation to the buyer in the event of the failure of the builder to deliver possession within the time period committed by him, had become so wide spread and rampant that the Legislature had to step in by enactment of the Real Estate (Regulation & Development) Act, 2016 to statutorily require the builder to pay compensation in the form of interest at prescribed rate in the event of the possession being delayed or the buyer deciding to quit on account of the delay on the part of the builder in delivering upon the promise made by him. Therefore, irrespective of Clause 15(a) of the BBA, the complainants in my view are entitled to a just and fair compensation for the period the possession of the flats is delayed by the opposite party.

    10. I am also unable to accept the contention that the complainants have failed to prove any loss or injury to them on account of the failure of the opposite party to deliver the possession of the flats on or before the time period stipulated in the BBA. Had the opposite party delivered possession of the flats within the time stipulated for this purpose, the complainants would have been enjoying the use and possession of the flats booked by them. They have been deprived of the user of the flats on account of the default committed by the opposite party. It can hardly be disputed that the deprivation of the user of a self- owned house amounts to a serious injury to the flat buyer who has booked the flat for the purpose of having a shelter over his head and therefore, has either to live in a rented accommodation or an accommodation which is not suitable or convenient to him. Also, we need to appreciate the satisfaction and enjoyment one would have if he lives in a house of choice owned by him as against living in a rented accommodation or in an accommodation which is not owned by him or is not otherwise suitable or convenient to him.

    11. If a paltry compensation of say Rs.10/- per sq. ft. per month is awarded against a builder, it may lead to dangerous consequences since the builder may be tempted not to complete the construction and divert the money collected from the flat buyers for other purposes, in the hope that in the event of the buyer approaching a Court or a Consumer Forum, he can get away by paying a paltry compensation of Rs.10/- per sq. ft. per month to him. Paying such a meagre compensation would always be a win win situation for a builder who is likely to pay many times more if he goes to market for arranging finances which he gets by diverting the money collected from the flat buyers to other purposes. This Commission, therefore, ought to refrain from taking a view which would lead to such serious consequences, against the innocent flat buyers. I also find some merit in the contention of the complainants that in a situation where the builder despite taking money from the flat buyers does not utilize the whole of the said money only for th construction of the flat sold to him, the amount which the builder has collected from the flat -16- buyers should be treated as a cash deposit with the builder who should pay adequate interest to the flat buyer for utilizing his money.

    12. For the reasons stated hereinabove, I hold that:

    (i) The opposite party has been negligent in the matter of rendering services to the complainants

    (ii) The flat buyers have suffered loss and injury due to negligence of the opposite party

    (iii) The term for payment of compensation under Clause 15(a) of the BBA does not bind the complainants, who are entitled to just and fair compensation against the opposite party for the deficiency on the part of the opposite party in the services rendered to them.

    (iv) The complainants are not seeking specific performance of the BBA in terms of the Specific Relief Act, 1963 but are seeking compensation in terms of Section 14(1)(d) of the Consumer Protection Act and

    (v) This Commission in exercise of the powers conferred upon it by Section 14(1)(e) of the Consumer Protection Act can direct the opposite party remove the deficiencies in the services by completing the construction and delivering possession of the flats within a reasonable time."

    5. The opposite party has preferred a Civil Appeal Diary No(s). 7840/2018 M/s. Emaar MGF before the Honble Supreme Court against the aboveLand Ltd. Vs. Kumar Vaibhav & Anr. referred decision of this Commission and the order passed by this Commission has been partially stayed by the Honble Supreme Court vide its order dated 27.04.2018, which reads as under:- "There shall be stay of the impugned order to the extent of 50% of the interest amount directed to be paid to the respondents in terms of clause(b) of the said order. In so far as the remaining 50% amount is concerned, an amount of Rs.10/- per sq. ft. per month would be paid to the respondent(s) by the petitioner while the balance amount will be deposited in court. Such amount deposited in court would be kept in a fixed deposit initially for a period of six months to be kept renewed. The payment and deposit be made within two weeks."

    6. The learned counsel for the complainants has also drawn my attention to the recent order of the Honble Supreme Court dated 2.4.2019 passed in Civil Appeal No.12238 of 2018 Pioneer Urban Land & Infrastrucure Ltd. Vs. Govindan Raghavan & other connected matter wherein the Honble Supreme Court interalia held as under:- 6.3. The National Commission in the Impugned Order dated 23.10.2018 held that the Clauses relied upon by the Builder were wholly one-sided, unfair and unreasonable, and could not be relied upon. -17- The Law Commission of India in its 199th Report, addressed the issue of Unfair (Procedural & Substantive) Terms in Contract. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :

    A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.
    6.4. A perusal of the Apartment Buyers Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days. On the other hand, as per Clause 11.5 of the Agreement, if the Appellant Builder fails to deliver possession of the apartment within the stipulated period, the Respondent Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant Builder, and even thereafter, the Appellant Builder gets 90 days to refund only the actual installment paid by the Respondent Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant Builder is liable to pay Interest @ 9% p.a. only. 6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant Builder to serve a Termination Notice upon the Respondent Flat Purchaser for breach of any contractual obligation. If the Respondent Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages. On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not -18- be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement. 6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines unfair trade practices in the following words : unfair trade practice means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice , and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive. In Central Inland Water Transport Corporation Limited and Ors. v. Brojo Nath Ganguly and Ors., 4 this Court held that :

    89. Our judges are bound by their oath to uphold the Constitution and the laws. The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and equal protection of the laws. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances. (emphasis supplied) -19- 6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

    7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyers Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent Flat Purchaser. The Appellant Builder could not seek to bind the Respondent with such one-sided contractual terms.

    7. For the reasons sated hereinabove, the complaints are disposed of with the following directions:- (a) The opposite party shall complete the construction of the flats allotted to the complainants in all respects, obtain the requisite occupancy certificate at its own cost and responsibility and offer possession of the said flats to the complainants on or before 30.09.2019. The learned counsel for the opposite party states that though they have applied for requisite occupancy certificate in respect of some of towers, however, they cannot say when the said occupancy certificate will be issued. (b) In the matters other than CC/1716/2017, the opposite party shall pay compensation in the form of simple interest @ 8% per annum to the complainants with effect from the committed date of possession till the date on which the possession is actually offered, in terms of this order.The aforesaid compensation is acceptable to the complainants. (c) In , the complainants they being re-purchasers, shall be entitled to CC/1716/2017 compensation in the form of simple interest @ 8% per annum w.e.f. 26.3.2015 till the date on which possession in terms of this order is actually delivered. They shall also be entitled to the contractual compensation for the period from 20.5.2013 to 25.3.2015. (d) Wherever applicable, the opposite party shall be entitled to a grace period of three months while computing the committed date of possession. (e) The compensation payable in terms of this order shall be adjusted out of the additional amount, if any, payable by the complainants to the opposite party. The balance amount, if any, shall be paid to them while offering possession of the flats in terms of this order. -20- (f) The opposite party shall pay Rs.25,000/- as the cost of litigation in each complaint, within three months from today. (g) If the order passed by this Commission in Jivitesh Nayal (supra) is modified by the Honble Supreme Court in Civil Appeal Diary No. 7840/2018, such modified order of the Honble Supreme Court in the said case shall , apply to these consumer complaints asipso-facto well, and these complaints shall be deemed to have been disposed of in terms of the said modified order of the Honble Supreme Court. (h) If the Civil Appeal Diary No(s). 7840/2018 M/s. Emaar MGF Land Ltd. Vs. preferred by the OP and pending before the Honble Supreme Court isKumar Vaibhav & Anr. not decided by 30.09.2019, the OP shall comply with this order in toto unless this order is stayed or modified by the Honble Supreme Court in the meanwhile. In that case, if the order passed by this Commission in Jivitesh Nayal (supra) is modified by the Honble Supreme Court after 30.09.2019, the necessary adjustment in terms of the said modification will be made within 30 days of the said modification by the Honble Supreme Court. If as a result of such adjustment any amount becomes payable by the complainants to the OP and is not paid, the OP shall be entitled to approach this Commission for the enforcement of this part of the order. ......................J

    V.K. JAIN PRESIDING MEMBER -21-

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    Amitava Shankar Guha Complainant(S) v. Emaar Mgf Land Ltd. Opp. Party(S).
    (Apr 23, 2019)