Project 'Mohali Hills' of the Opposite Parties situated in Augusta Park, Sector 109, SAS Nagar, Mohali. The total consideration of the Plot was fixed at Rs.36,19,104/-(Thirty Six Lakh Nineteen Thousand One Hundred and Four Only). The Respondents paid Rs.10,35,000/- (Ten Lakh Thirty Five Thousand Only) as booking amount on 29.09.2006. The Respondents stated that between the 29.06.2007 to 16.03.2009 they had cleared the total consideration amount but last amount of Rs.1,72,500/- was waived off by the Appellants.

The Respondents/Complainants stated that the Plot Buyer's Agreement (Hereinafter referred to as the Agreement) was executed on 20.06.2007. As per clause 8 of the Agreement the possession of the Plot was to be given within 2 years from the date of execution of the Agreement. The Relevant portion of the clause 8 of the Agreement reads as under:

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" Subject to Force Majeure conditions and reasons beyond the control of the Company, the Company shall endeavor to deliver possession of the Plot to the Allottee within a period of 2(Two) years from the date execution of this Agreement, but not later than 3(Three) years. In the event that the possession of the Plot is likely to be delayed for reason of any force majeure event or any other reason beyond the control of the Company including government strike or due to civil commotion or by reason of War or enemy action or earthquake or any act of God or if non-delivery is a result of any act, notice, order, rule or notification of the Government…. …then in any of the aforesaid events, the Company shall upon notice claiming force majeure to the Allottee be entitled to such extension of time. the force majeure event persists or the reason beyond the control of the Company exists. In the event the Company fails to deliver the possession of the Plot without existence of any force majeure event or reason beyond the control of the Company within a maximum period of 3(Three) years from the date of execution of this Agreement, the Company shall be liable to pay to the Allottee , a penalty of the sum of Rs. 50/- per sq.yds per month for such period of delay beyond 3(Three) years from the date of this Agreement"

the promoter shall complete the construction of the building within 36 months from the date of signing of this agreement subject to Force Majeure conditions and the timely payment from the Buyer. Force Majeure causes, availability of essential items for construction, delay in grant of permission by any competent authorities and other causes beyond the control of the Promoter…

However in case of delay in completion of the unit attributable to delay of promoter, after 180 days of above said period of 36 months the promoter would pay penalty to the Buyers @5/- per sq ft. Per month for the period of delay…" The Respondents/Complainants stated that as per the terms and conditions of the Agreement the possession of the Plot was to be given within 2 years from the date of the Agreement but inspite of lapse of nearly 7 years the possession has not been given.

4.

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Aggrieved by the delay the Respondents served a legal notice dated 05.11.2015 through their Advocate demanding their money back with 18% annual interest. They further averred that the Appellants did not reply to the legal notice. The Respondents again sent a reminder notice on 12.01.2016 to refund all the money but the Appellants did not revert to the reminder.

As per the Respondents/Complainants averments, the aforesaid acts, on the part of the Appellants/Opposite Parties, amounted to deficiency in service. When the grievance was not redressed, the Respondents filed a Complaint before the State Commission, U.T., Chandigarh with the following prayer :-

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"It is therefore respectfully prayed that this Complaint may kindly be allowed with cost and the Opposite Parties be directed to refund the amount deposited of Rs. 34,46,406/-(Thirty Four Lakhs Forty Six Thousand Four Hundred and Six Only) paid between September 2006 and March 2009 plus penalty as per clause 9 of the Buyer Agreement which is approx. 12 Lakh since June 2009 along with the compounded interest @ rate of 24% per annum, compensation of Rs. 11,00,000/- for mental agony and harassment from last 10 years along with litigation expenses and counsel Fees of Rs. 1,10,000/- and any other direction may kindly be passed which this Hon'ble Court deems fit in the interest of justice."

The Appellants/Opposite Parties resisted the Complaint in its written statement by stating that the State Commission is not vested with the territorial and pecuniary jurisdiction. It was further stated that under clause 39 of the Agreement all the disputes shall be referred to an Arbitrator. The Opposite Parties have not assured the Respondents/Appellants that the possession of the Plot will be handed over within 2 years.

6.

The State Commission partly allowed the Complaint by issuing following directions to the Opposite Parties/Appellants:

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" This Complaint is partly accepted and the Opposite Parties, jointly and severally, are directed to refund the amount of Rs.34,46,406/- to the Complainants, alongwith interest @12% p.a., from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this Order, failing which, thereafter, the said amount of Rs.34,46,406/- shall carry 3% penal interest i.e. 15% p.a.(12%p.a. plus(+) 3% p.a.) from the date of passing of this Order, till realization.

However, it is made clear that if the Complainants have availed loan facility from any Bank/ Financial Institution, for making payment towards part price of the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the Complainants."

Aggrieved by this Order passed by the State Commission, Appellants/Opposite Parties have filed First Appeal No. 517 of 2020 before this Commission with the following prayer :

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Set aside the impugned Order dated 18.12.2019 passed by the Hon'ble State Commission in C.C. No. 822 of 2016, in the First Appeal; and

a.

To pass such other and further Orders as may be deemed just and necessary in the facts and circumstances of the present case.

b. The Opposite Parties/Appellants raised following issues in their Appeal which reads as under:

The Complaint filed before the State Commission is grossly barred by time;a. The State Commission overlooked that the Respondents/Complainants are willfull defaulter in making payment as per agreed timelines.

b.

The rate of interest of 12% p.a. is in clear violation of the Judgments of the State Commission in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318 which is of a project in the close vicinity of the Project in question and should have been applied, if at all. Moreover, the Judgement of GDA Vs Balbir Singh 2004-5-SCC-65 and 2009-175CC-199 clearly states that 12% p.a. cannot be a blanket rate to be awarded in each case and the same has to be determined from facts of each case after hearing the parties.

c.

The State Commission failed to consider the e-mail dated 22.05.2013, wherein the Appellants relocated the Plot of the Respondents. It overlooked the fact that upon the offer of relocation, the obligations of the Appellants under the Agreement stood fulfilled and the Respondents are duty bound to accept possession after making payments as per the terms of the Agreement.

d.

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We have heard the learned Counsel for both the Parties and perused the material available on record.

10.

The learned Counsel of the Respondents/Complainants stated that the Respondents have made the balance payment between 29.06.2007 to 16.03.2009. However, till date, the Appellants have neither given the possession of the Plot nor returned the money despite lapse of more than 14 years from the date of the execution of the Agreement. The learned Counsel further argued that though the relocation was offered in 2018, it cannot be imposed.

11.

The Objection of the Appellants/Opposite Parties that the Complaint filed in the State Commission is barred by limitation is devoid of merit. In this regard, attention is drawn to the Order of the Hon'ble Supreme Court in Meerut Development Authority Vs. Mukesh Kumar Gupta [IV (2012) CPJ 12] decided on 09.05.2012 wherein it was held that :

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"the failure to deliver possession of the Plot constitutes a recurrent/continuing cause of action."

The ground of the Appellants/Opposite Parties in their Appeal that they offered relocation of Plot vide e-mail dated 22.05.2013 and therefore the Respondents/Complainants are bound to accept the possession is rejected. Firstly, the relocation of the Plot was offered after more than 2 years of unexplained delay from the proposed date of possession. Secondly, it is the Respondents/Buyer discretion whether to accept/reject the relocated

13.

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Plot. In this regard attention is drawn to the Order of this Commission in the case of

Emaar MGF Land Ltd. & Ors. Vs. Amit Puri- {(II 2015 CPJ 568 (NC)}, decided on 30.03.2015, Wherein this Commission has held as under:

"After the promised date of delivery, it is the discretion of the Complainant whether to accept the offer of possession, if any, or to seek refund of the amounts paid by him with some reasonable compensation and it is well within his right to seek for refund of the principal amount with interest and compensation."

We find that there is no doubt to the fact that there has been an unreasonable delay in handing over the possession of the Plot to the Respondents/Complainants as per 'the Agreement'. The Respondents cannot wait for an indefinite time as they have invested heavy amount with the intention to get the possession of the Plot on time. There are a number of Case Laws wherein the Hon'ble Supreme Court has decided favourably on the right of the buyers for getting refund of their money in case of undue and unreasonable delay by the Developer in giving possession in terms of the Agreement.

14.

Reliance is placed on the Judgment of the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, decided on 25.03.2019 in which the Hon'ble Apex Court has observed as hereunder :

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".....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified."

The Hon'ble Supreme Court in the recent case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Anr. in Civil Appeal No. 5785 of 2019 decided on 11.1.2021, has held as under:-

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"The Developer made an alternate offer of allotment of apartments in Phase 1 of the Project. The allottees are however not bound to accept because of the inordinate delay in completing the construction of the Towers where units were allotted to them. The Occupation Certificate is not available even as on date, which clearly amounts to deficiency of service. The allottees cannot be made to wait indefinitely for possession of the apartments allotted to them nor can they be bound to take the apartments in Phase 1 of the Project. The allottees have submitted that they have taken loans, and are paying high rates of interest to the tune of 7.9% etc. to the Banks.

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Consequently, we hold that the allottees in Chart B are entitled to refund of the entire amount deposited by them".

We notice that there has been an unreasonable delay in development of the Plot. The Plot was booked by the Respondents/Complainants in the year 2006. Thereafter, an Agreement was signed on 20.06.2007. As per clause 8 of the Agreement, the possession of the Plot was to be given within 2 years and not later than 3 years from the date of signing of the Agreement. Thus, the possession of the Plot was to be given by 20.06.2009 or 20.06.2010 as per the Agreement. The Appellants/Builder has not given possession of the Plot to the Respondents even after lapse of 14 years from the date of execution of the Agreement and 11 years from the promised date of possession. Therefore, the Respondents are entitled for a fair and reasonable delay compensation apart from getting refund of the amount deposited.

17.

We notice that the delay compensation awarded by the State Commission is high, therefore, on the issue of what would constitute a reasonable rate of interest in the present time, attention is drawn to the Order of Hon'ble Supreme Court in the case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Anr. in Civil Appeal No. 5785 of 2019, decided on 11.01.2021 while dealing with the question of awarding compensation for delay in handing over the possession has held as under:-

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"(i) We are of the view that allottees at Serial Nos.1 and 2 in Chart A are obligated to take possession of the apartments, since the construction was completed, and possession offered on 28.6.2019, after the issuance of Occupation Certificate on 31.5.2019.The Developer is however obligated to pay delay compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees."

In its Order, it further held that -

"We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of Rs. 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market. We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic. We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry. 53 In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fair play that the amount deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount."

The Hon'ble Supreme Court has taken similar view in M/s BPTP Limited and Another V. Sanjay Rastogi in Civil Appeal No. 1001-1002 of 2021 decided on 04.12.2021, Wherein it was

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held as under:

" …..The appellant failed to deliver possession within the contractual period. There is no error in the finding on the basis of which a refund of consideration has been directed. However, in the alternative, it has been submitted Mr Siddharth Bhatnagar, learned senior counsel that the rate of interest may be suitably scaled down having regard to the earlier decisions of this Court including the decision in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna, (2021) 3 SCC

241. Having regard to the rate of interest of which has been fixed in other cases such as the present, we reduce the interest from 10% to 9% per annum. The Appellant is, however directed to ensure that full payment in compliance with the Order of the NCDRC with interest at the rate of 9% per annum is paid over to the respondent on or before 15 July 2021. The Hon'ble Supreme Court has taken similar view in M/s Nexgen Infracon Pvt. Ltd. Vs Manish Kumar Sinha in Civil Appeal No. 62 of 2021 decided on 11.01.2021, wherein it was held as under:

"…. This take us to the next question whether the rate of interest awarded by the Commission be maintained or whether such rate is required to be scaled down. In keeping with the directions issued by this Court in the case of Prateek Infra projects, we scale down the interest from 12% & 14% as ordered by the Commission to 9% per annum. We also modify the direction restraining the appellant from deduction the tax at source. It is, therefore, directed that the amounts deposited by the respondents in respect of the apartment in question shall be refunded to them along with interest@9% per annum from the dates of respective deposits. The other direction issued by the Commission as regards of cost of litigation is maintained.

19. There are a numbers of Orders and Judgments of this Commission and Hon'ble Supreme Court where an interest rate of 9% has been awarded as delay compensation on amount deposited by buyer/purchasers. Thus, the interest rate of 9% is just and fair.

20. In view of the discussion above, we are of the considered view that the Order of the State Commission does not suffer from any illegality. We find that there is no merit in the Appeal as no question of law is involved. We, therefore, dismiss the Appeal by partly upholding the Order of the State Commission by modifying it to the extent that the Appellants/Opposite Parties pay delay compensation on the deposited amount @9% per annum simple interest instead of 12% failing which, the said amount of Rs.34,46,406/- shall carry 3% penal interest i.e. 12% per annum simple interest.

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DR. S.M. KANTIKAR

PRESIDING MEMBER

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BINOY KUMAR

MEMBER

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