Deepanshu Saini And Another Complainant(S) v. S.S. Group Private Limited And Others Opp. Party(S).

aforesaid flat within 36 months from the date of execution of the said agreement which expired on 30.05.2015. The complainants had obtained home loan from India Bulls Housing Finance Limited for making payments for purchase of the aforesaid flat and in that regard had to execute a tripartite agreement dated 19.06.2012. In between 2012 -2016, the complainants made payments of Rs.96,28,511/- (ninety six lakhs twenty eight thousand five hundred eleven only) to the opposite parties towards the cost of the aforesaid flat. As per Flat Buyers Agreement, the opposite parties were under an obligation to deliver the possession of the completed flat to the complainants on or before 30.05.2015. However, the opposite parties failed to deliver the possession of the flat in terms of their undertaking. As the complainants had planned to leave the rented accommodation upon getting possession of the aforesaid flat, the complainants had to bear the additional burden of paying rent even after 30.05.2015 as the opposite parties failed to deliver the possession of the aforesaid flat by that time. This totally disturbed the financial planning of the complainants and their other commitments failed solely due to this reason. The complainants had to face proceedings U/s 25 of the Payment & Settlement Systems Act, 2007 for committing default in making payment of EMIs to the Indiabulls Housing Finance Limited. The complainants suffered untold mental agony, humiliation and pains to defend the proceedings exclusively due to the failure of the opposite parties to fulfill their undertaking of timely delivery of possession of completed flat to the complainants. On 03.08.2016, the complainants realized that the opposite parties had no intention to fulfil their commitments related to the project particularly in view of the existing condition of the unit in question. Therefore, the complainants requested the opposite parties to refund the entire deposited amount with interest vide their e-mail dated 03.08.2016. On 03.11.2016, in the circumstances, the complainants were constrained to terminate the agreement with the opposite parties. This was done by the complainants through legal notice dated 03.11.2016. On 10.12.2016, instead of complying with the legal notice or even replying it, the opposite parties made a further demand of Rs.11,64,915/- from the complainants. This amounted to act of gross deficiency in services on the part of the opposite parties.

3. The complaint was resisted by the opposite parties by filing the reply to the complaint. It has been stated that the building is ready and the opposite parties are ready to handover the possession and therefore, the complainants cannot demand the refund of the total amount as the same has been invested in the building. The opposite parties are ready to give the compensation for the delayed possession as per the agreement. Based on these assertions, it was prayed that the complaint be dismissed.

4. Both the parties led their evidence by way of their affidavits, which have been taken on record.

5. Heard the learned counsel for the parties and perused the record. Learned counsel for the complainants stated that as per builder-buyer agreement the flat was to be handed over within 36 months and accordingly 30.5.2015 was the date by which the possession would have been given. It was emphasized that the complainants have paid as per the payment plan and paid a total amount of Rs.96,28,511/- as against the total consideration of Rs.1,09,70,000/-. Learned counsel drew my attention to condition No.8.3(b), which reads as below:-

"8.3. Compensation

(b) Subject to the provisions of Clause 8.1 (b) and Clause 28, in case the Developer

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fails to deliver possession of the Flat within fifty one (51) months (or such extended period for want of sanction plan), from the date of signing of this Agreement, or as may be extended in a situation covered in clause 8.1(b), then in such case the Flat Buyer(s) shall have the option to give notice to the Developer within ninety (90) days from the expiry of the said period of fifty one (51) months conveying the Flat Buyer(s)'s intention to terminate the Agreement. On receipt of such notice from the Flat Buyer(s), the Developer shall be at liberty to sell and/or dispose off the said FLAT and the allotted parking space to any other party at such price and upon such terms and conditions as the Developer may deem fit without accounting for the sale proceeds thereof to the flat Buyer(s). Thereafter, the Developer shall within ninety

(90) days from the date of sale of said FLAT the parking space and after full realization of the Sale Price, refund to the Flat Buyer(s), all the monies received from the Flat Buyer(s) during the term of this Agreement. In case the Developer fails to refund the Sale Price, the Developer shall pay interest to the Flat Buyer(s) @15% for any period beyond the said period of 90 days. The Flat Buyer(s) shall have no other claim against the Developer in respect of the said FLAT and the parking space under this Agreement. If the Flat Buyer(s) fails to exercise his/her/their right of termination within the time limit as aforesaid, by delivery to the Developer of a written notice acknowledged by the Developer in this regard, then he she/it shall not be entitled to terminate this Agreement thereafter and he/she/it shall continue to be bound by the provisions of the Agreement, provided that in such case, the Developer shall continue to pay the compensation provided herein."

6. Learned counsel for the complainants mentioned that as per this provision, the complainants gave a notice for cancellation of the agreement and for refund of the amount paid by the complainants. As per this condition, the opposite parties are bound to refund the amount along with interest @15% p.a. Instead of taking action on this notice dated 03.11.2016, the opposite parties sent another demand letter dated 10.12.2016 for Rs.11,64,915/- . Not only this, the opposite parties offered possession on 22.11.2018. As the complainants have already terminated the agreement, offer of possession dated 22.11.2018 had no meaning for the complainants. The main reason for asking refund was the delay in completion of the project and delay in handing over the possession. As delay was happening in the project and it was not sure when the project would be complete, the complainants did not want to block their money in the project and therefore the complainants applied for refund and filed the consumer complaint. The opposite parties have not given any reasons for delay in the project or delay in handing over the possession. Thus, there is deficiency in service on the part of the opposite parties and the complainants are entitled for refund alongwith compensation.

7. On the other hand, learned counsel for the opposite parties stated that the construction was completed in the year 2017. However, sometime has been taken in getting the occupancy certificate, which was obtained on 17.10.2018. Just after getting the occupancy certificate, the possession letter was issued to the complainants. Thus, there is no delay on the part of the opposite parties. It does not appeal to logic when a person has invested about Rs.1,crore, then why would he not like to take possession even if possession is likely to be delayed. This will only happen when the allottee does not want flat for residential purpose and had booked unit only for an investment to earn profit later on.

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8. Learned counsel stated that the company is still ready to handover the possession to the complainants and would also give compensation for the delayed possession as may be ordered by the Commission. It was also offered that the penalty of interest on delayed payment of the remaining amount shall also be waived. Learned counsel mentioned that these concessions are being offered to retain the allottee. If every allottee wants refund then the project shall collapse. It was further argued by the counsel for opposite parties that if the Clause 8.3(b) is strictly adhered to, then the amount can be refunded to the complainants only when the concerned unit is sold to a third party. Learned counsel stated that due to slump in the real estate market, the company has not been able to find buyer for the unit so far. Therefore, as per the agreement, the question of refunding the amount to the complainants does not arise.

9. Learned counsel for the opposite parties further stated that in the present case the complainants have taken loan from IHFL and tripartite agreement dated 19.06.2012 has been entered between the parties. Clause 9 of the tripartite agreement reads as under:-

"9. That if the Borrower fails to pay the balance amount representing the difference between the loan sanctioned by IHFL and the actual purchase price of the flat/residential apartment, or in the event of death of Borrower or in the event of cancellation of the residential apartment for any reason whatsoever the entire amount advanced by IHFL will be refunded by the Builder to IHFL forthwith. The Borrower hereby subrogates all its rights for refund with respect to the said residential apartment in favour of IHFL."

10. On the basis of the above clause, the learned counsel for the opposite parties argued that the complainants do not have any right to seek refund in the matter as this right has been subrogated to the IHFL. Learned counsel for the opposite parties also pointed out that the complainants have not made IHFL party in the present complaint and therefore, the complaint is liable to be dismissed on the ground of non-joinder of necessary party.

11. It was emphasized by the learned counsel for the opposite parties that it is wrong to say that no reasons have been given by the opposite parties for delay in the project. In fact, in para 12 of the written statement filed by the opposite parties, the reasons are given for such delay and the main reason has been the delay in obtaining the environmental clearance from the concerned authority. This was beyond the control of the opposite parties, therefore, this will come under force majeure. Hence, the complainants would not be entitled to any compensation for this delay. Learned counsel for the opposite parties further stated that the complaint has been filed mainly against the company i.e. opposite party No.1. However, the complainants have also made opposite parties Nos.2,3 & 4 as opposite parties who are only the Directors of the company and they would not have been impleaded at this stage.

12. I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and examined the record. The admitted fact is that the possession was due on 30.5.2015 and the occupancy certificate has been obtained on 17.10.2018. Clearly, there is a huge delay in the project. Letter of offer of possession was issued on 22.11.2018. The complainants have not accepted offer of possession as the complainants have already given a notice for cancelling the agreement as per clause 8.3 (b) of the agreement. Now, the question

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arises as to when the opposite parties have agreed to have a clause like 8.3(b) in the agreement and if the complainants have acted in accordance with this clause, the opposite parties should also have acted in compliance of this clause. Even this Clause 8.3 (b) seems one sided because the complainants' money is already blocked and if the same is not returned till the unit in question is sold to a third party, this is clearly prejudicial to the interest of the consumer. The interest @ 15% is only payable when the flat is sold to a third party and the money is not refunded within 90 days from that sale. All these conditions are totally one sided and they are the result of the dominant position of the builder at the time of signing the builder-buyer agreement because by that time lot of money of the complainants is already blocked with the builder.

13. The main reason for delay in completion of the project has been told to be due to delay in obtaining environmental clearance for the project. Though, this may not be directly within the control of the opposite parties to get the clearance, however, the clear procedures are laid down and it depends on the management of the builder company how efficiently and meticulously they pursue the environmental clearance with the competent authority. Thus, this cannot be considered as force majeure, therefore, the delay on account of this factor cannot be excluded from the total delay in the project. Hon'ble Supreme Court in Civil Appeal No.12238 of 2018

titled as "Pioneer Urban Land & Infrastructure Ltd. versus Govindan Raghavan" has upheld the order of this Commission by observing the following:

"3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent - Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent - Flat Purchaser could not be compelled to take possession at such a belated stage. The grounds urged by the Appellant - Builder for delay in handing over possession were not justified, so as to deny awarding compensation to the Respondent - Flat Purchaser. The clauses in the Agreement were held to be wholly one - sided, unfair, and not binding on the Respondent - Flat Purchaser. 6 The Appellant - Builder was directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent - Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation.

9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.

10. The Civil Appeals are accordingly dismissed, and the Final Judgment and Order dated 23.10.2018 passed by the National Consumer Disputes Redressal Commission is

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affirmed."

14. On the basis of the above observations of the Hon'ble Supreme Court, it is clear that if the occupancy certificate is sufficiently delayed say beyond two years then the complainants cannot be compelled to take possession of the property and they are entitled to refund. In the present case also, the occupancy certificate has been delayed by roughly three years, therefore, complainants cannot be compelled to take the possession. As the learned counsel offered certain concessions at the time of argument, learned counsel for the complainants was asked whether the complainants would consider offer given by the learned counsel for the opposite parties. It was categorically denied by the learned counsel for the complainants. The learned counsel for the complainants stated that the complainants are now only interested in refund of the amount as they have lost faith in the opposite parties. Learned counsel for the complainants further stated that he has no objection if the amount due to IHFL is directly remitted to IHFL by the opposite parties/ builder and the remaining amount be given to the complainants.

15. Learned counsel for the complainants has demanded interest @15% p.a. on the amount of refund as per clause 8.3 (b) of the agreement. However, as explained above, interest @15% p.a. is not available under this Clause for total period of delay and it is only applicable once the property is sold to a third party and amount could not be refunded by the opposite parties within 90 days. Otherwise also keeping in view the present interest scenario, the interest @15% p.a. is not justified. Hon'ble Supreme Court in Kolkata West International Pvt. Ltd. Vs. Deva Asis Rudra, II (2019) CPJ 29 (SC) has reduced the interest of 12% p.a. granted by this Commission to 9% p.a. on the amount of refund. Consequently, the interest @ 9% p.a. seems reasonable and sufficient on the amount of refund in the facts and circumstances of the case.

16. On the basis of the above, the consumer complaint No.2135 of 2016 is allowed and following order is passed:-

O R D E R

The opposite parties are directed to pay Rs.96,28,511/- (ninety six lakhs twenty eight thousand five hundred eleven only) to the complainants along with 9% p.a. interest from the date of respective deposits till actual payment. The opposite parties will also pay Rs.50,000/- (rupees fifty thousand only) as cost of litigation to the complainants. The order be complied with by the opposite parties within 8 weeks from the date of receipt/service of this order.

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PREM NARAIN

PRESIDING MEMBER

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