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Gautam Saha And Another Complainant(S) v. Anant Raj Industries Limited Opp. Party(S).
Summary of Opinion — National Consumer Disputes Redressal Commission
Factual and Procedural Background
This order arises from Consumer Case No. 747 of 2020 filed by Mr. Gautam Saha & Anr. (Complainants) against M/s Anant Raj Industries Limited (Opposite Party) under Sections 12(a) and 21 of the Consumer Protection Act, 1986 seeking a refund of amounts paid for an apartment and penal interest.
The Complainants booked an apartment in the Opposite Party's project "MACEO" at Sector‑91, Gurugram. A booking payment of Rs. 7,00,000 was made on 05.08.2011 and an Apartment Buyer's Agreement was executed on 19.09.2012. The Agreement recorded a total consideration of Rs. 80,09,735 and provided for possession within 36 months from execution (i.e., by 19.09.2015) plus a 180‑day grace period (i.e., by 19.03.2016). The Complainants assert they paid Rs. 64,37,276 (over 80% of the total consideration) but possession was not delivered and remained outstanding at the time of this order.
The Complainants prayed for: (a) 100% refund of amounts paid with penal interest @18% p.a.; (b) compensation of Rs.5,00,000 for mental agony; (c) Rs.1,00,000 towards litigation costs; and (d) other appropriate relief. The Opposite Party filed a written version resisting the Complaint, raising objections including jurisdiction/arbitration, reliance on contractual clauses (including a refund clause at 9% interest), force majeure, and asserting near completion of construction with an Occupation Certificate applied for on 23.12.2019.
Legal Issues Presented
- Whether the Consumer Forum has jurisdiction to adjudicate the dispute despite an arbitration clause in the Apartment Buyer's Agreement.
- Whether the delay in delivering possession (beyond the contractual period and grace period) amounts to deficiency of service/unfair trade practice entitling the Complainants to refund and compensation.
- Whether the Opposite Party can rely on force majeure or pending approvals (e.g., Occupation Certificate) to justify the delay and retain the amounts paid by the Complainants.
- If refund is warranted, the appropriate rate of delay compensation/interest and the time frame for refund.
Arguments of the Parties
Complainants' Arguments
- They booked Unit No. R‑1003 and paid substantial amounts (Rs.64,37,276) expecting timely possession pursuant to the Agreement which stipulated delivery by September 2015 (or including grace period, by March 2016).
- The Opposite Party has failed to deliver possession for an inordinate period (over four years at the time of the hearing) and has not provided any force majeure justification or valid reason for the delay.
- They seek 100% refund of amounts paid with penal interest @18% p.a., compensation for mental agony (Rs.5,00,000) and litigation costs (Rs.1,00,000).
Opposite Party's Arguments
- Construction of the project "MACEO" is nearly complete; Occupation Certificate for Tower‑R was applied for on 23.12.2019 and is pending approval with DTCP, Haryana.
- Interest @18% p.a. sought by the Complainants is excessive and unsustainable; Clause 9.2 of the Agreement provides that if the Company abandons the project it shall refund the actual amount paid with interest at 9% only.
- Clause 35 contains an arbitration clause and any dispute should be referred to arbitration under the Agreement.
- The Opposite Party asserted it has been diligently performing obligations and kept the Complainants informed of construction progress during 2016‑2017; it also relied on force majeure (Clause 19) for delays.
- Prayers included dismissal of the Complaint on preliminary objections, on account of pending OC and availability of alternate units, and that the Complainants are bound by terms of the Agreement.
Complainants' Rejoinder
- Reaffirmed the Complaint contents and contended the Opposite Party failed to supply any specific force majeure event to justify over four years of delay.
- Maintained entitlement to refund and compensation because construction remained incomplete and possession had not been delivered as per the Agreement.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| M/s Imperia Structures Ltd. v. Anil Patni and Another, (2020) 10 SCC 783 (02.11.2020) | Held that remedies under the Consumer Protection Act are in addition to remedies available under special statutes; section 3 of the Act makes Consumer Act provisions additional and not in derogation of other law. | Used to reject the Opposite Party's objection that the Commission lacked jurisdiction due to an arbitration clause; supported competence of Consumer Forum to entertain the Complaint. |
| Aftab Singh v. Emaar MGF Land Limited & Anr., Consumer Case No.701 of 2015 (Order dated 13.07.2017) | Stated that an arbitration clause in a buyer's agreement does not bar jurisdiction of the Consumer Fora. | Relied upon to support the proposition that arbitration clause does not oust the Commission's jurisdiction over the consumer dispute. |
| Sivarama Sarma Jonnalagadda & Anr. v. M/s Maruthi Corporation Limited & Anr., CC 379 of 2013 (decided 21.09.2021) | Holding that reliance on a force majeure clause while retaining amounts deposited by the complainant amounts to not only deficiency of service but also an unfair trade practice. | Invoked to reject the Opposite Party's force majeure defence where the Opposite Party retained amounts despite delay; supported finding of deficiency/unfair practice. |
| Emmar MGF Land Ltd. & Ors. v. Amit Puri, II 2015 CPJ 568 (NC) (30.03.2015) | After the promised date of delivery, the complainant may either accept any offer of possession or seek refund of amounts paid with reasonable compensation; complainant has right to principal refund with interest and compensation. | Applied to confirm the Complainants' right to elect refund with interest and compensation given the delay beyond the contractual delivery date. |
| Kolkata West International City Pvt. Ltd. v. Devasis Rudra, II (2019) CPJ 29 SC (25.03.2019) | It is manifestly unreasonable to construe a contract as requiring a buyer to wait indefinitely; long delays (e.g., seven years) are beyond what is reasonable and justify refund orders. | Relied upon to underline that prolonged delay is unreasonable and supports ordering refund of moneys to buyers in such circumstances. |
| Samruddhi Co‑Operative Housing Society Ltd. v. Mumbai Mahalaxmi Construction Pvt. Ltd., Civil Appeal No.4000 of 2019 (11.01.2022) | Failure to obtain the Occupation Certificate is a deficiency in service, attracting liability and entitlement to compensation for consequences arising from lack of an occupancy certificate. | Used to stress the importance of obtaining an OC and to characterise the Opposite Party's failure to obtain OC as a deficiency in service. |
| Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna & Anr., Civil Appeal No.5785 of 2019 (11.01.2021) | Alternate offers of allotment do not bind allottees in case of inordinate delay; absence of Occupation Certificate amounts to deficiency of service; allottees entitled to refund of entire amounts deposited. | Applied to support the conclusion that complainants are entitled to refund where OC is not available and there has been inordinate delay; reinforced entitlement to full refund. |
Court's Reasoning and Analysis
The Commission proceeded in logical steps:
- Jurisdiction/Arbitration objection: The Commission rejected the Opposite Party's contention that the matter must be referred to arbitration. It relied on the Supreme Court's declaration that remedies under the Consumer Protection Act are in addition to other remedies and on earlier Commission precedent (Aftab Singh) that an arbitration clause in a buyer's agreement does not bar Consumer Fora. Thus, jurisdiction to hear the complaint was upheld.
- Force majeure and pending approvals: The Commission addressed the Opposite Party's defence of delay due to force majeure and pending statutory approvals (Occupation Certificate). It relied on precedent (Sivarama Sarma) to the effect that invoking force majeure while retaining buyers' funds amounts to deficiency of service and unfair trade practice. The fact that the Opposite Party had applied for an Occupation Certificate (on 23.12.2019) but had not obtained it demonstrated ongoing incompleteness; the absence of OC was treated as relevant to deficiency (supported by Samruddhi).
- Unreasonable delay and entitlement to relief: The Commission found that there was an unreasonable delay in construction and handing over possession beyond the contractual period (36 months plus 180 days). The Complainants had made substantial payments and were not provided with possession; no valid reason was offered by the Opposite Party to justify the prolonged delay. The court observed established authorities (Emmar, Kolkata West, Ireo) recognising that buyers should not be made to wait indefinitely and that inordinate delay and absence of OC constitute deficiency of service entitling buyers to refund and compensation.
- Relief awarded: Applying these legal principles to the undisputed facts (significant payments by complainants, contractual delivery date missed, OC not obtained), the Commission concluded the Complainants had the right to refund. Rather than granting the full penal rate sought by the Complainants (18% p.a.), the Commission directed refund with delay compensation at 9% p.a. from the respective dates of deposit until realization, to be paid within six weeks; a higher rate of 12% p.a. was stipulated to apply for any delay beyond six weeks.
Holding and Implications
Holding: COMPLAINT PARTLY ALLOWED — The Opposite Party is directed to refund the entire amount paid by the Complainants along with delay compensation at 9% per annum from the respective dates of deposit until realization, within six weeks; any delay beyond six weeks will attract interest at 12% per annum for the same period.
Direct consequences for the parties:
- The Opposite Party must refund the full amounts paid by the Complainants and pay delay compensation at the specified rates according to the timelines ordered by the Commission.
- All pending applications in the proceeding, if any, were disposed of.
Broader implications noted by the Commission (as applied in this case):
- The decision reiterates that Consumer Fora can entertain disputes notwithstanding arbitration clauses in standard builder‑buyer agreements (consistent with Supreme Court and Commission precedents cited).
- The Commission treated prolonged delay and failure to obtain an Occupation Certificate as deficiencies in service justifying refund and compensation; reliance on force majeure without adequate justification while retaining buyers' monies can amount to unfair trade practice.
The opinion did not purport to lay down a new legal principle; rather, it applied established precedent to the facts before the Commission to determine entitlement to refund and the rate and timing of delay compensation.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 747 OF 2020
1. GAUTAM SAHA & ANR. ...........Complainant(s) Versus
1. ANANT RAJ INDUSTRIES LIMITED ...........Opp.Party(s)
BEFORE:
HON'BLE DR. S.M. KANTIKAR,PRESIDING MEMBER HON'BLE MR. BINOY KUMAR,MEMBER
For the Complainant : Mr. Aditya Parolia, Advocate Ms. Parul Singh, Advocate
For the Opp.Party : Mr. Mitansh Charan, Advocate Dated : 22 Feb 2022
ORDER
Binoy Kumar, Member
1. The present Consumer Complaint has been filed under Section 21 read with Section 12(a) of the Consumer Protection Act, 1986 (for short "the Act") by Mr. Gautam Saha & Anr. (hereinafter referred to as the Complainants) against the Opposite Party M/s Anant Raj Industries Limited (hereinafter referred to as the Opposite Party) seeking refund of the entire amount collected by the Opposite Party along with penal Interest @18% per annum.
2. The brief facts leading upto the present Complaint are that the Complainants booked the Apartment (hereinafter referred to as the Unit) in the Project of the Opposite Party "MACEO"
situated at Sector-91, Gurugram Haryana. The Complainants paid Rs.7,00,000/- as the booking amount on 05.08.2011 as per 'Time Linked/Construction Linked Payment Plan' and thereafter they were allotted Unit No. R-1003, 10th Floor, Tower-R, area admeasuring 2491 Sq. Ft.
3. The Opposite Party i.e. M/s Anant Raj Industries Limited and the Complainants executed an Apartment Buyer's Agreement dated 19.09.2012 (hereinafter referred to as the Agreement) wherein the total consideration of the Unit was mentioned as Rs.80,09,735/- inclusive of various charges like BSP, PLC, EDC, IDC, IAC, Club Charges, Service Tax. As per clause 7 of the Agreement, the Unit was to be delivered within 36 (thirty-six) months from the date of signing of the Agreement, i.e. by 19.09.2015 and by 19.03.2016 when the grace period of 6(six) months is included. The relevant portion of Clause 7.1 reads as under:
" …The Developer based on its present plans and estimates and subject to all just exceptions, proposes to complete construction/ development of the Said Project and handover the possession of the Said Apartment to the Allottee(s) within a period of 36 (thirty six) months from date of execution of this agreement unless there shall be any delay or failure due to force majeure. The Allottee(s) understand and agrees that the Developer shall be entitled to a grace period of 180 (one hundred and eighty) days after the aforesaid 36 (thirty six) months…."
4. The Complainants submitted that, they have paid substantial amount of Rs.64,37,276/-
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(more than 80% of Total Consideration) to the Opposite Party and as per Clause 7.1 of the original Builder Buyer Agreement the possession was to be delivered before September, 2015, but the Opposite Party has failed to deliver the flat to the Complainants.
5. The Complainants averred that this 'case is not just of a simple/ordinary delay but one of a kind where there is no possibility of getting possession in near future which as caused immense financial burden on the Complainants.
6. Thus, aggrieved by the delay in possession of their Flat, the Complainants have filed this Complaint with the following prayer to:
a) Direct the opposite Party for an immediate 100% refund of the total amount paid by the Complainant(s) along with a penal interest of 18% per annum from the date of receipt of payments made to the Opposite party for the Unit in the Project "MACEO" at Sector 91, Gurgaon, Haryana.
b) Direct the Opposite Party to pay compensation of INR. 5,00,000/- (Rupees Five Lakh Only) to the Complainant(s) for mental agony, harassment, discomfort and undue hardships caused to the Complainant(s) as a result of the above acts and omission on the part of the Opposite Party;
c) Direct the Opposite Party to pay a sum of INR. 1,00,000/- (Rupees One Lakh Only) to the Complainant(s) towards litigation costs;
d) That any other further relief in favour of the Complainant(s) as the Hon'ble Commission may deem fir and proper in the facts and circumstances of the case.
7. The Opposite Party ( M/s. Anant Raj Industries Limited) has filed its written version and resisted the Complaint by taking objections as under:
a) The Construction of the Project "MACEO" is nearly complete and Occupation Certificate for the 'Tower-R' has already been applied on 23.12.2019 and the same is pending approval from DTCP, Haryana.
b) The interest @ 18% p.a. sought by the Complainant is excessive, unfounded and unsustainable. As per Clause 9.2 of the Agreement stated that "..the Company, in its sole discretion may at any time abandon the Said Project… the Company shall refund the actual amount paid by the Allotee(s) with an interest 9(nine) % thereon for the period such money has been lying with the Company".
c) As per Clause 35 of the Agreement, if any dispute, claims and/or differences arises it shall be referred to a sole arbitrator appointed by Opposite Party under Arbitration Clause.
d) The Opposite Party is diligently fulfilling its part of the obligation and has regularly intimated the Complainant herein about the construction progress of the projects on various dates in 2016-2017.
e) The delay in handing over the possession was caused due to unforeseen circumstances beyond the control of the Opposite Party and the same is covered under Clause 19 i.e. Force Majeure.
In view of the aforesaid facts and circumstances the Opposite Party has prayed this Commission to:
a) Dismiss the complaint filed by the Complainants in terms of preliminary objections and submissions to the present complaint.
b) Dismiss the complaint filed by the Complainants as Occupancy Certificate for Tower R has already been applied and the same is pending approval with DTCP, Haryana and possession in the same will be offered in near future.
c) Dismiss the complaint on the ground that the Complainants have the option to switch to
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another flat/unit in another tower in which possession has been offered;
d) Dismiss the complaint filed by the Complainants as they are bound by the terms and conditions of the Apartment Buyer's Agreement that they have signed and the remedy shall be sought within the said agreement.
e) Pass any such other Order in favour of the Opposite Party as this Hon'ble Commission deems fit and in the facts and circumstances of the present case.
8. A Rejoinder was filed by the Complainants against the written version of the Opposite Party in which the Complainants reaffirm the contents of the Complaint filed by them. Further, the Complainants stated that, the Opposite Party has failed to provide any reason or force majeure conditions responsible for the inordinate delay of over 4 years. The Opposite Party, as per Clause 7.1 of the Agreement was obliged to deliver the possession of the Unit by September, 2015 and till now, the Opposite Party has failed to complete the construction of the project "MACEO".
9. We have heard the learned Counsel for both the Parties and have gone through the Complaint and material available on record.
10. We would like to deal with the objections of the Opposite Party. The objection that this Commission has no jurisdiction and any dispute between the parties shall be referred to Arbitration is devoid of merit. Attention is drawn to the Order of Hon'ble Supreme Court in M/s Imperia Structures Ltd. v. Anil Patni and Another (2020) 10 SCC 783 decided on 02.11.2020 which held that "remedies under the Consumer Protection Act were in addition to the remedies available under special statutes", hence this Commission is also competent authority, also, as per section 3 of the act "the provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force".
Regarding the objection that the dispute shall be referred to Arbitration or Civil court, attention is drawn to the Order of this Commission in Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017. which was also upheld by Hon'ble Supreme court, wherein it was held that:
"Arbitration Clause in the Buyer's Agreement does not bar the jurisdiction of the Consumer Fora."
11. The Objection that delay was caused due to delay in getting approvals from competent authority and due to Force Majeure circumstances is devoid of merit. CC 379 of 2013 Sivarama Sarma Jonnalagadda & Anr vs. M/s Maruthi Corporation Limited & Anr decided on 21.09.2021 wherein it was held that:
"the act of the Opposite Party in relying on force majeure clause while retaining the amounts deposited by the Complainant, is not on only an act of deficiency of service but also amounts to unfair trade practice."
12. Having considered the objections of the Opposite Party, we will now deal with the main issue at hand. We find that there is no doubt to the fact that, there has been unreasonable delay in construction and giving possession as per the Agreement. The Complainants made substantial payment to the Opposite Party with an expectation of getting timely possession of the Unit. In the written version of the Opposite Party, it is clearly admitted that the Construction of the Project is nearly completed and Occupation Certificate has been already applied on 23.12.2019. But the Occupation Certificate till date has not been obtained which
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clearly means that the construction is not complete in all respect. The Opposite Party failed to construct and deliver the Unit to the Complainants even after delay of about 4 years from the promised date of possession for which the Opposite Party has not given any valid reason to justify the delay. The Complainants cannot wait for an indefinite time as they have invested heavily their hard earned money with the intention to get delivery of the Unit on time. Since, the Agreement is a valid legal document, as per its terms and conditions, possession should have been given in 3 years (36 months) i.e. by September, 2015 or March, 2016 (after adding 6 months of grace period). The Complainants booked the Unit 9 years back and the Opposite Party has not obtained Occupancy Certificate till date. The Complainants have all his right to claim refund along with a reasonable compensation for the unreasonable delay. Even today in the year 2022, possession has not been given and the Project is not complete. 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.
13. In case of Emmar MGF Land Ltd. & Ors. Vs. Amit Puri- {(II 2015 CPJ 568 (NC)},decided on 30.03.2015, 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."
14. We also find it a fit case to place reliance 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 :
".....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."
15. On the issue of importance of obtaining Occupancy Certificate which the Opposite Party has not obtained till date. Attention is drawn to the recent Order of Hon'ble Supreme Court in Samruddhi Co-Operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd. in Civil Appeal 4000 of 2019, decided on 11th of January, 2022, wherein, it was held as under:-
"In the present case, the respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as 'consumers' to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate".
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16. 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:-
"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.
Consequently, we hold that the allottees in Chart B are entitled to refund of the entire amount deposited by them".
17. In view of the discussion above, the Consumer Complaint is partly allowed. The Opposite Party is directed to refund the entire amount paid by the Complainants along with delay compensation @ 9% per annum from the respective dates of deposits till realization within a period of six weeks of this Order. Any delay beyond six weeks, will attract an interest rate of 12% p.a. for the same period.
18. All pending applications, if any stand disposed of.
......................
DR. S.M. KANTIKAR
PRESIDING MEMBER
......................
BINOY KUMAR
MEMBER
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