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DEEPAK AGGARWAL v. EXPERION DEVELOPERS PVT. LTD.
Factual and Procedural Background
The consumer complaint was filed by Deepak Aggarwal against Experion Developers Pvt. Ltd., alleging deficiency in service. The complainant booked a flat on 2 July 2012 and signed the agreement on 20 December 2012. The flat was transferred to him on 6 February 2013. According to clause 10 of the agreement, possession was to be delivered within 42 months, i.e., by 19 June 2016, with a grace period extending possession due date to 19 December 2016. Possession was offered on 7 December 2017, but the complainant did not take possession citing incomplete facilities. Additionally, the opposite party communicated an increase in the flat’s area by 125 sq.ft. with an additional demand for payment. The complaint sought refund and compensation due to delay and alleged breach of contractual terms.
Legal Issues Presented
- Whether the delay in possession beyond the agreed date entitles the complainant to seek refund and compensation?
- Whether the offer of possession without completion of facilities and amenities justifies refusal to take possession and claim for refund?
- Whether the increase in area of the flat beyond the original agreement constitutes a breach entitling the complainant to refund?
- Whether the complainant, being an investment banker, qualifies as a consumer under the Consumer Protection Act?
- What is the appropriate rate of interest payable on the refund amount in case of delay?
Arguments of the Parties
Complainant's Arguments
- The possession was delayed beyond the contractual date, including the grace period, with possession offered only after more than a year.
- The facilities and amenities were incomplete at the time possession was offered, rendering the flat uninhabitable.
- An increase in the flat’s area was communicated just before possession, along with an additional demand for payment, which was not justified.
- Relying on precedents, the complainant argued entitlement to refund and compensation including interest at a rate higher than 12% per annum.
- The complainant asserted the right to refuse possession due to these breaches and sought refund accordingly.
Opposite Party's Arguments
- There was a delay of only one year in offering possession, which was due on 19 December 2016 and offered on 7 December 2017 after obtaining the occupation certificate on 6 December 2017.
- The agreement provides for compensation at Rs.7.5 per sq.ft. per month for delay, which should suffice instead of refund.
- The complainant had paid Rs.10,00,000/- in October 2017, after the due date of possession, indicating waiver of objection to delay.
- All facilities were completed as occupation certificate was obtained; some project-wide facilities may still be under completion but are not part of the agreement with the complainant.
- The increase in area by 125 sq.ft. is within the 10% permissible limit under clause 8.1 of the agreement and supported by an architect’s certificate.
- The complainant is an investment banker and thus not a consumer entitled to protection under the Consumer Protection Act.
- The earnest money clause should apply to deny refund since the complainant continued payments beyond the possession due date.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rahul Pande Rao Vs. M/s. Unitech Limited, CC No.1035 of 2015 | Possession cannot be offered without requisite Occupancy Certificate and completion of amenities; flat must be habitable. | Supported the complainant's argument that possession offered without completion of facilities is not valid. |
| Thangavel Palanivel & Anr. Vs. M/s. DLF Southern Homes Pvt. Ltd., CC No.304 of 2015 | Delay in possession entitles complainant to seek refund and compensation; complainant cannot be compelled to accept possession belatedly. | Reinforced complainant’s entitlement to refund due to delay beyond committed date. |
| Shri Satish Kumar Pandey & Anr. Vs. Unitech Ltd., CC No.427 of 2014 | Compensation in form of interest on deposited amount can be granted; 12% p.a. interest awarded. | Guided the court’s decision on interest rate payable on refund amount. |
| Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65 | Person seeking refund without possession is entitled to higher interest compared to one who has taken possession. | Supported complainant’s claim for higher interest rate on refund. |
| Tirumala Garden Flat Owners Vs. Tirumala Homes Pvt. Ltd. & Anr., RP No.3998 of 2012 | Only terms in agreement for sale are binding; brochure representations are not contractual obligations. | Supported opposite party’s argument that facilities mentioned in brochure but not in agreement cannot be enforced. |
Court's Reasoning and Analysis
The court noted that the possession was contractually due by 19 June 2016, with a grace period extending to 19 December 2016. The opposite party obtained the occupation certificate on 6 December 2017 and offered possession on 7 December 2017, resulting in a delay of approximately one year.
The complainant continued to make payments until October 2017, after the possession due date, indicating waiver of objection to the delay. The court acknowledged that delay in possession is not uncommon in large projects and that a bona fide purchaser generally takes possession despite delay.
Regarding the complainant’s claim that facilities and amenities were incomplete, the court held that issuance of the occupation certificate implies that the building was complete as per the approved plan and necessary facilities were in place. The complainant’s refusal to take possession on this ground was found to lack merit.
The increase in flat area by 125 sq.ft. was within the 10% permissible limit under the agreement and supported by an architect’s certificate. Hence, this did not amount to breach of contract.
While the opposite party breached the agreement by failing to deliver possession on time, the complainant’s waiver and continued payments limited his entitlement. The court reasoned that granting interest beyond the savings bank rate would be inappropriate under the circumstances.
Holding and Implications
The Consumer Complaint No. 463 of 2018 is partly allowed. The opposite party is directed to pay Rs. 2,20,09,804/- along with interest at 4% per annum from the date of respective deposits until actual payment. The order is to be complied with within ten weeks from the date of receipt or service.
This decision resolves the dispute between the parties by recognizing the delay in possession but balancing it against the complainant’s conduct and waiver. No broader precedent beyond the facts of this case is established.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 463 OF 2018
1. DEEPAK AGGARWAL ...........Complainant(s) Versus
1. EXPERION DEVELOPERS PVT. LTD. ...........Opp.Party(s)
BEFORE:
HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Complainant : Mr.Chandrachur Bhattacharyya, Advocate For the Opp.Party : Mr. Gagan Gupta, Advocate Dated : 14 Feb 2020
ORDER
This consumer complaint has been filed by the complainant Deepak Aggarwal alleging deficiency in service on the part of the opposite party Experion Developers Pvt. Ltd.
2. Heard the learned counsel for the parties and perused the record. Learned counsel for the complainant stated that the booking for a flat was made on 02.07.2012 and the agreement was signed on 20.12.2012. The said flat was transferred to the present complainant Deepak Aggarwal on 6.2.2013. As per clause 10 of the agreement, the possession was to be delivered within 42 months and the possession was due on 19.06.2016. Even, if the grace period of six months is considered, the time for possession expired on 19.12.2016. The possession was offered on 07.12.2017. As the facilities were not completed, the possession was not taken by the complainant. About two months before the date of possession, the opposite party sent a letter giving intimation for increase of area in the said flat. An increase in area was communicated and additional demand of 125 sq.ft. was also made by the opposite party. In support of his argument, learned counsel for the complainant referred to the following judgments:-
1. Rahul Pande Rao Vs. M/s. Unitech Limited, CC No.1035 of 2015, decided on 19.8.2016 (NC). It has been held that:-
"10. …… In my view, the opposite party cannot in law offer possession of the flats to the allottees, without obtaining the requisite Occupancy Certificate / part Occupancy Certificate which permits occupation of the allotted flats. The opposite party should also provide all the amenities and facilities as per its contractual obligations, since it will not be possible for the allottees to enjoy the possession of the flats without such facilities and amenities being in place. It goes without saying that the flats should otherwise be complete in all respects and should be in a habitable position at the time the possession is offered."
3. Learned counsel for the complainant further argued that if there is delay in handing over the possession beyond the committed date of possession, complainant will be entitled to seek
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refund along with compensation as has been held in Thangavel Palanivel & anr. Vs. M/s. DLF Southern Homes Private Ltd., CC No.304 of 2015, decided on 29.8.2016 as under:-
11. ……. In my view, since the opposite party committed default in performing its contractual obligation, by failing to offer possession of the flat to the complainants on or before the date committed in the Buyers Agreement, the complainants cannot be compelled to accept the possession of the said flat at this belated stage."
4. The compensation can be granted in terms of interest on the deposited amount and this Compensation in Shri Satish Kumar Pandey & Anr. Vs. Unitech Ltd., CC No.427 of 2014, decided on 08.6.2015, (NC) has allowed 12% p.a. interest to the complainant. Learned counsel also referred to the judgment of Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, wherein it has been emphasised that a person seeking refund who is not getting the accommodation is entitled to more interest as compared to the person who is getting the possession. From this angle, interest should be awarded more than 12% p.a.
5. It was vehemently argued by the learned counsel for the complainant that when the possession was delayed and offer of possession was given without completing the facilities and amenities under the project and moreover the area of the flat has been increased without any reason, the complainant has every right to seek refund. The complainant cannot be compelled to take possession when the place is not in a habitable condition.
6. On the other hand, learned counsel for the opposite party stated that there was only one year delay in offering the possession. The possession was due on 19.12.2016. However, the occupation certificate was obtained on 06.12.2017 and accordingly the offer of possession was sent on 07.12.2017. There is already a provision in the agreement that for delay in possession a compensation of Rs.7.5 per sq. ft. per month will be offered to the allottee. Thus, if there is a delay of only one year and the same is to be compensated by compensation as provided in the agreement, there should be no ground for seeking refund in the matter. Complainant has paid about Rs.10,00,000/- in October, 2017, which was the date beyond committed date of possession. In a way, the complainant had waived his objection for the delay. By that time the building was already completed as occupation certificate had been obtained on 06.12,2017. Thus, the complainant was committed to take possession of the property till October 2017, just two months before the offer of the possession was sent. The complainant is only seeking refund as the real estate market is down these days.
7. Learned counsel for the opposite party further argued that all the facilities were completed and occupancy certificate can only be obtained when the building has been constructed as per the approved plan and all basic facilities are there. It is quite possible that certain facilities are in completion stage. The agreement is basically for the flat and the facilities are for the whole project. Thus, the complainant is not justified in refusing the possession and asking refund on this ground.
8. So far as the increase in area is concerned, as there is already a provision in the agreement in Clause 8.1, which allows opposite party/builder to change the area of a flat in the final layout up to 10% of the area. In the present case, it is only about 125 sq.ft. excess area for which the demand has been made. This area is less than 10% of the original area. Sometimes these changes are necessary to get final approval for the project and these are only
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some adjustments which have to be made finally. Thus, increase in area is as per the provision of the agreement and the complainant cannot say that the agreement has been breached. The complainant was already aware that the project was already delayed. There have been also delays in payment of instalments and the complainant has paid an interest for delayed instalments to the tune of roughly Rs.2 lacs. Learned counsel for the opposite party further stated that the facilities mentioned by the complainant in his complaint are the facilities which figure only in the brochure, but they are not part of the agreement signed with the complainant. In this regard, learned counsel relied upon the judgment of this Commission in Tirumala Garden Flat Owners Vs. Tirumala Homes Pvt. Ltd. & anr., RP No.3998 of 2012, wherein the following has been observed:-
"11. We have gone through the agreement for sale. It is a contract between petitioner and the respondents. We are of the view that the petitioner cannot hold the respondents liable for what is not included in the agreement for sale. The brochure is not in the nature of a contract. Further, the petitioner entered into the individual agreements of sale with open eyes. We agree with the findings of the State Commission that "there is no agreement between the complainant and the OP to provide such facilities as agitated by the complainant, the said Commissioner report is not helpful for the complainant." As observed by the State Commission, the complainant has failed to file any agreement between the members of association and the builder to prove that the said works referred to in the complaint were agreed to be done by the respondents/opposite parties."
9. As the occupation certificate has not been challenged before the competent authority, it has to be construed as completion of building as per the approved plan.
10. On the above grounds, learned counsel for the opposite party stated that the complainant is not entitled for refund and if he wants to take possession of the flat, the opposite party is ready to give possession. In respect of increase in area, the architect has given certificate and based on the architect's certificate, increase in area for the flat has been calculated. Once there is an increase in super area, the allottee has to pay the price for this area. Accordingly, increase in super area is within the permissible limit as per the agreement and therefore, the complainant cannot seek refund on this ground. Learned counsel further stated that the complainant is an investment banker and he has booked this flat for investment purposes. Accordingly, he is not a consumer.
11. It was further argued by the learned counsel for the opposite party that in October, 2017, the complainant had paid part of the consideration amounting to Rs.10,98,900/-. It means that the complainant was ready to take possession atleast till that time. Occupation Certificate was obtained on 06.12.2017 and offer of possession was sent on 07.12.2017 itself. A builder invests money in construction on the basis of amounts received from the allottees and if a complainant suddenly asks for refund without any reason, then earnest clause should be attracted and refund should not be ordered.
12. I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on record.
13. From the facts of the case, it is clear that as per the agreement, the possession was due by
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19.06.2016 and if the grace period was also allowed then the possession was due by 19.12.2016. The complainant made payments till October, 2017 and the offer of possession was issued on 07.12.2017 after obtaining the occupation certificate by the opposite party. Thus, there is clearly a delay of one year in issuance of offer of possession, but it is also a fact that the complainant has paid amounts beyond the date of possession and the last payment of Rs.10,98,900/- was made in October, 2017. It is thus clear that the complainant had waived off the objection of delay and further consideration was paid to the opposite parties. For big projects having flats worth more than Rs.2 crores, the delay of about one year is not very uncommon and if the allottee is a real purchaser and does not want profit from the flat, he will definitely go for taking the possession. However, there may be circumstances when allottee may seek refund if there is inordinate delay in getting the possession. In the present case, though legally it can be said that the opposite party has breached the agreement as it could not deliver the possession by the due date of 19.12.2016 and allottee may seek refund on certain pressing grounds. In the present case, the only ground mentioned for seeking refund is that there is no development of facilities and amenities. Once the occupation certificate has been obtained on 06.12.2016, it is broadly implied that the facilities are in place. Moreover, if occupation certificate has been issued, the flat would be considered to be complete atleast from the point of view of facilities and amenities required for the flat as per the agreement. Therefore, there is no merit in the assertion of the complainant that the complainant did not take the possession as the amenities and facilities were not complete.
14. The issue of earnest money is not attracted in the present case as the period of due possession had already expired and then amount has been asked to be refunded. The breach of the agreement has first been committed by the opposite party as they did not complete the flat within the stipulated period as given in the agreement.
15. The complainant has made last payment of Rs.10,98,900/- in October, 2017 and therefore, it appears that the complainant had no intention of seeking refund and would have had full mind set to go for the possession of the flat. If allottees change their mind and seek refund without any reason, it will be difficult for any builder to complete the project. In fact, developers/builders develop project from the fund collected from the allottees and these funds are invested in the project. Keeping this consideration and the peculiar facts of the case in view, the complainant should not be eligible to get any interest on the amount of refund. However, keeping the interest of complainant in mind, an interest equal to savings bank rate of interest prevailing in nationalised banks @4% can be granted.
16. Based on the above discussion, the Consumer Complaint No.463 of 2018 is partly allowed and the opposite party is directed to pay Rs.2,20,09,804/- along with 4% p.a. interest from the date of respective deposits till actual payment. The order be complied within a period of ten weeks from the date of receipt/service of this order.
......................
PREM NARAIN
PRESIDING MEMBER
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