ORDER
R.K. AGRAWAL, J., PRESIDENT
The present Consumer Complaint has been filed under Section 21 (a) of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act") by the Complainants, against the Opposite Parties, namely, M/s. Ireo Pvt Ltd. and M/s. Nucleus Conbuild Pvt. Ltd., seeking refund of the money paid, as the Opposite Parties have failed to handover the possession of the Apartment booked within the stipulated period.
2. The facts as enumerated in the Complaint are that in November, 2011 the Complainants booked an Apartment with the Opposite Parties in the Project, "Ireo Gurgaon Hills" (hereinafter referred to as "the Project") located in the Village Gwal Pahari, Tehsil Sohna, District Gurgaon, Haryana for their personal use. Thereafter, the Apartment Buyer's Agreement (hereinafter referred to as "the Agreement") was executed between the Parties on 07.11.2012, i.e. after a year from the date of booking. It is alleged by the that some of the terms of the Agreement are arbitrary and one-sided in favour of the Opposite Parties and as the Complainants have already paid more than rupees One Crore, they have no option but to sign the same.
3. The Complainants have stated that till the date of filing of the Complaint they have
1
paid a sum of ₹5,12,14,931/- out of the total sale consideration of ₹5,72,17,194/- and that the Complainants, in order to pay the sale consideration, took home loan of ₹4,25,00,000/- from ICICI Bank at floating rate of interest from 8.75% to 10.65% for a period of 180 months, which stands completely repaid. It is stated that the Complainants have opted for a construction linked payment plan and have paid all installments till 13th installment, as and when demanded by the Opposite Parties. The Complainants have further stated that the Opposite Parties have demanded 14th instalment, despite no progress in the development at project site.
4. It is stated that as per Clause 14.3 of the Agreement, the possession of the Apartment was to be handed over within 42 months from the date of sanction of Building Plans along with grace period of six months. It is averred that the Building Plans were sanctioned on 17.05.2012, therefore, the possession should have been handed over latest by May, 2016. It is alleged that till date the project is lying underdeveloped and is not habitable and the Opposite Parties have also failed to get the project register before the RERA. The Complainants have stated to have made various attempts to communicate and put forth their grievances, however, their grievances have not been adhered to by the Opposite Parties. As the Opposite Parties failed to give any definite reply on the issue of handing over the possession of the Apartment and after waiting for more than six years from the date of booking, the Complainants, via email dated 11.12.2018, sought refund of the deposited amount along with compensation and interest as they are no longer interested in the project of the Opposite Parties. However, the Opposite Parties have not replied to the same.
5. Vexed with the attitude of the Opposite Parties, the Complainants having lost trust in the Opposite Parties and alleging deficiency in service and unfair trade practice on the part of the Opposite Parties, have filed the present Complaint with the following prayer:-
"i. Direct the Opposite Party to refund the entire amount paid by the Complainants i.e., Rs. 5,12,14,931/- along with interest @20% p.a. from the respective dates of deposit till the its actual realization; and
ii. Direct the Opposite Party to repay amount of interest paid on home loan i.e., Rs. 44,24,902/- along with 20% interest per annum from the respective dates of payment till the date of repayment; and
iii. Direct the Opposite Party to pay an amount of Rs. 10 lakhs on account of compensation for mental agony, torture and harassment and inconvenience suffered by the Complainants due to the acts and conduct of the Opposite Party; and
iv. direct Opposite Party to pay an amount of Rs. 5 lakhs as litigation expenses; and
2
v. grant such other/further relief as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the present case."
6. Upon notice, the Opposite Parties contested the Complaint by filing their Written Version admitting to the booking of the Apartment, receipt of an amount of ₹5,12,14,931/-, execution of the Apartment Buyer's Agreements dated 07.11.2012 and to Clause
14.3 of the Agreement, wherein the Opposite Parties have agreed to handover possession of the Apartment within 42 months. It is averred that as per this Clause the Opposite Parties are entitled for a grace period of six months and this Clause was subject to certain conditions including force majeure circumstances. It is also averred that though the Building Plan was approved on 17.05.2012, the same had several preconditions, which were required to be complied with and all the pre-requisite approvals and NOCs from various authorities including the Fire Fighting Scheme were obtained by 26.12.2013 only, therefore the period of 48 months for delivery of possession including the grace period of six months has to be calculated from 26.12.2013, and the same expired on 25.12.2017. It is stated that the Complainant have willfully signed the Agreement out of their free will and volition and at this belated stage they cannot question the terms of the Agreement.
7. It is averred that the Complainants are not Consumers as defined under Section 2 (1)
(d) of the Act as they have invested in the project in order to gain profits and have made several investments. It is stated that the Project is being carried out in a phased manner, wherein construction of approximately 195 apartment is complete. The Opposite Parties have also relied upon the order dated 07.02.2019 passed by the Haryana Real Estate Regulatory Authority, Gurugram (HRERA) in Complaint No. 1216 of 2018, wherein HRERA had opined that refund will not be proper to allow at this stage keeping in view the status of completion of construction of the project and in the interest of the other allottees. The Opposite Parties have further raised the preliminary objections that the Complainants have defaulted in making timely payments since the Opposite Parties issued payment request on 25.09.2018, which fell due on 17.10.2018, and the Complainants have failed to make the said payment, therefore the Complainants have committed breach of contract. It is pleaded that the delay in possession is to be dealt with as per clause 14.4 of the Agreement, according to which, the Developer would pay a sum of ₹10/- sq. ft. per month. It is averred that construction of the Tower/ Apartment of the Complainants is complete and the Opposite Parties have applied for part Occupation Certificate on 24.09.2018 and possession will be handed over as soon as possible. Therefore, there is no deficiency of service on their behalf and prayed for dismissal of Complaint with costs.
8. Heard Mr. Manoj Swarup, learned Sr. Counsel appearing on behalf of the
3
Complainants, Mr. Abhimanyu Bhandari, learned Counsel appearing on behalf of the Opposite Parties and perused the material on record.
9. Learned counsel for the Complainants has argued that since the Building Plan was sanction on 17.05.2012, the possession should have been handed over by 17.05.2016 including the grace period of six months and the Opposite Parties have not given any explanation for
"unforeseen delays". That there was no default by Complainants in making payments since the Complainants had opted for a construction-linked payment plan and have already paid almost 90% of the total consideration. That the Clauses of the Agreement were wholly one-sided and that Complainants were forced to agree with the terms of the Agreement. It is also argued that the project is still not complete and no Occupation Certificate is there and offer of possession has not been given by opposite Parties till date despite collecting a substantial amount of ₹5,12,14,931/- which comes to around 90% of the total sale consideration. That the Opposite Parties are making wrong statements by falsely relying on the Order of HRERA, as the Parties before the HRERA in the referred case did not seek refund and thus the Authority had directed the Opposite Parties to offer possession. Learned Counsel has thus prayed that the Complaint be allowed in terms of the payer clause.
10. Learned Counsel for the Opposite Parties has vehemently argued that the Complainants are not 'Consumers' as they have other properties also. That the Complainants were offered permissive permission for furnishing and interiors on 20.01.2017. Reliance is being placed on clause 13.1 and 13.3 of the Agreement, wherein the Complainants were to complete interiors within 9 months from the date of permission for interior works, falling which the Complainants had to pay penalty and since the Complainants did not complete the interior works thus the Complainants failed to comply with the conditions of the Agreement and are liable to pay penalty in terms of the Clause 13.3 of the Agreement. It is also argued that the Opposite Parties have applied for Occupation Certificate on 24.09.2018, but the DTCP, Haryana has rejected the same stating that the constructions are not as per approved Building Plans and thereafter, the Opposite Party has completed the construction in terms of the Haryana Building Code, 2017 and again applied for Occupation Certificate on 13.08.2019. Further Learned Counsel has stressed upon the fact that time is not the essence of the Agreement since the project such large would require several approvals from Government Authorities apart from other operational obstacles and thus time is not the essence in matters of construction. It is finally submitted that the Parties are bound by the terms of the contract and the Consumer Fora is not entitled to go behind the agreed terms, therefore the Complaint is liable to be dismissed.
11. We have given our thoughtful consideration to the Arguments advanced by Learned Counsels. Factually, the amount of sale consideration paid, details of the Apartment, etc. are not disputed.
12. The preliminary objection of the learned Counsel for the Opposite Parties that the Complainants are not 'Consumers' and that they have booked the Apartments in the project for earning profits is completely unsustainable in the light of the various decisions of the this Commission and the Hon'ble Supreme Court, wherein it is held that the onus of establishing that the Complainants were dealing in real estate i.e. in the purchase and sale of plots/ flats in
4
his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case they had failed to discharge by filing any documentary evidence to establish their case except averring that the Complainants have other properties also. Therefore, we are of the considered view that, the Complainants are 'Consumers' as defined under Section 2 (1)(d) of the Act.
13. The issue regarding the determination of the date from the which the period for delivery of possession is to be calculate has been dealt with by the Hon'ble Supreme Court in the case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors.,(2021) 3 SCC 241, decided on 11.01.2021, wherein the same issue came before the Hon'ble Supreme Court and similar averments were made by the respective parties. The relevant portion of the Decision in Abhishek Khanna (Supra) is reproduced below for ready reference:
"18.8 We are of the view that it was a mandatory requirement under the Haryana Fire Safety Act, 2009 to obtain the Fire NOC before commencement of construction activity. This requirement is stipulated in the sanctioned Building Plans, as also in the Environment Clearance.
18.9 The 42 months' period in Clause 13.3. of the Agreement for handing over possession of the apartments would be required to be computed from the date on which Fire NOC was issued, and not from the date of the Building Plans being sanctioned."
14. Therefore, we are of the opinion that the period of 42 months plus 6 months grace period for handing over of possession is to be calculated from 26.12.2013, when the Opposite Parties have obtained a approval for Fire Safety Scheme and not from 17.05.2012, when the Building Plans were approved and the possession was to be delivered by 26.12.2017, including the grace period of 6 months.
15. Now we address to the Contention of the Complainants that many of the Clauses of the Agreement are unfair and one-sided in favour of the Opposite Parties and the averments of the Opposite Parties that the terms of the Agreement are just, fair and reasonable and this Commission has no jurisdiction to go beyond the Agreement. The Hon'ble Supreme Court in Abhishek Khanna (Supra), after examining the Clauses similar to Clauses 7.4, 14.2, 14.4, 14.5 and 22 contained in the Builder Buyers' Agreement dated 07.11.2012, while holding these type of Clauses as unreasonable and one-sided has observed as hereunder:
"19.7 We are of the view that the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An "unfair contract" has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986
5
Act. In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement."
16. After examining the Clauses of the Agreement and following the above-referred authority as also the decision of the Hon'ble Supreme Court in "Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725", we have no hesitation in holding that the Clauses 7.4, 14.2, 14.4, 14.5 and 22 of the Agreement are unfair and one-sided in favour of the Opposite Parties and against the Allottees, which constitute 'unfair trade practice' as defined under Section 2 (1) (r) the Consumer Protection Act, 1986.
17. The Opposite Parties have relied upon the Order of the Haryana Real Estate Regulatory Authority (HRERA), wherein the HRERA had opined that the refund will not be proper keeping in view the status of completion of construction of the project and in the interest of the other allottees. The Hon'ble Supreme Court in Abhishek Khanna (Supra), has gone into very detail whether primacy to be given to RERA over the Consumer Protection Act and after examining the various provisions of the Consumer Protection Act, 1986 and Real Estate Regulatory Authority Act, as also the various judgments of the Hon'ble Supreme Court regarding the applicability of the provisions of Consumer Protection Act as an additional remedy, when there are already remedies available under special statutes, the Hon'ble Apex Court relying upon its earlier Judgment in Pioneer Urban Land Infrastructure Ltd. & Anr. Vs. Union of India & Ors. (2019) 8 SCC 416, has held that remedies under the Consumer Protection Act, 1986 are in addition to the remedies available under special statutes as there is the absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear and Section 18 of the RERA Act specifies that the remedies are without prejudice to any other remedy available. From the aforenoted discussions it is clear that this Commission has the power to entertain the present Complaint and decide it in accordance with law and the Order of HRERA does not bar this Commission from entertain and deciding the present Complaint as the present Complaint has been filed by the different allottees, who have approached the
HRERA.
18. The plea of the Opposite Parties that the Complainants have defaulted in making timely payment of installments cannot be accepted as admittedly the Complainants have paid a sum of ₹5,12,14,931/-, which comes to around 90% of the total sale consideration in 13 installments on time and only the 14th installment has not been paid, after seeing no development at the project site.
19. Now we address ourselves, whether the Complainants are entitle for refund of the amount deposited by them with Delay Compensation. Admittedly, there is a delay in completion of the project and the stipulated period for delivery of possession has expired on 26.12.2017, including the grace period of six months as held in Paragraph 14 of this Order and there is no explanation or reason forthcoming from the Opposite Parties for that. Further, there is no Occupation Certificate and at the time of the arguments, the learned Counsel for the Opposite Parties have admitted that the their Application for Occupation Certificate has been
6
rejected as the construction was not as per the approved Building Plans and they have again applied for the same on 13.08.2019. Therefore, we are of the opinion that there is deficiency of service on the part of the Opposite Parties as they have failed to deliver the possession of the Apartment in question with Occupation Certificate after a lapse of considerable time from the stipulated date of delivery i.e., 26.12.2017, despite collecting a substantial amount of ₹5,12,14,931/-, and the Complainants are entitled for refund of their money along with reasonable compensation in the form of interest as they have paid interest to the Bank for the home loan they obtain to pay the money to the Opposite Parties. We place reliance on the Judgments of the Hon'ble Apex Court in Abhishek Khanna (Supra), Fortune Infrastructure Vs. Trevor D' Limba, (2018) 5 SCC 442, Pioneer Urban Land & Infrastructure Ltd. Vs. Govind Raghavan, (2019) 5 SCC 725, Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 (6) SCALE 462 and Wg.Cdr. Arifur Rahman Khan Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512, wherein it is held that the Buyer cannot be made to wait indefinitely for possession, in case of inordinate delay in offer of possession and the buyer is entitled for refund of money, we are of the considered opinion that the Complainants are entitle for refund of the amount deposited by him with adequate compensation in the form of interest as the Opposite Party has failed to deliver the possession even after lapse of more than 10 years from the date of booking and the Opposite Party has itself admitted in the Written Statement that it has not yet obtained the Occupancy Certificate and no specific date is given for delivery of possession of the Apartment.
20. Now we come to the quantum of compensation to be awarded. We have considered the rival submissions made by both the parties. On the one hand the learned Counsel for the Complainant has prayed for a refund of the amount along with interest @ 20% and on the other hand the learned Counsel for the Opposite Parties have argued that the compensation for delay, if any, is to be awarded, the same is to be awarded only in terms of Clause 14.4 of the Agreement. The Delay Compensation specified in Clause 14.4 of the Apartment Buyer's Agreement of ₹7.5 per sq. ft. which comes roughly to 1.4% p.a. on the amount deposited by the Complainants cannot be accepted as being adequate compensation. At the same time, we also cannot accept the prayer of the Complainants for payment of interest @ 20% p.a., which is on the higher side. To meet the ends of justice and keeping in view the prevailing market situation and following the decisions of the Hon'ble Supreme Court, which have been awarding interest @ 9% per annum, the simple interest @ 9% per annum on the amount deposited would be just and reasonable. Though the Hon'ble Supreme Court in Abhishek Khanna (Supra), which has been referred to above has directed the refund of amount along with simple interest @ 9% per annum from the promised date of delivery till the date of payment of the entire amount, but the Hon'ble Supreme Court in its recent ruling in Civil Appeal No. 6044 of 2019, Experion Developers Pvt. Ltd. Versus Sushma Ashok Shiroor, decided on
7
07.04.2022 has held as under :
"22.1 We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. v. DS Dhanda and Ors. (2020) 16 SCC 318 and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.
22.2 At the same time, we are of the opinion that the interest of 9 per cent granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the Consumer for enhancement of interest."
(Emphasis Supplied)
21. Following the aforenoted ruling, we are of the Opinion that the Complainants are entitled for refund of their money along with simple interest @ 9% per annum from the respective dates of deposit till realization.
22. In the result, the Complaint is allowed in part and the Opposite Parties are directed to refund the amount deposited by the Complainants along with simple interest @ 9% p.a. from the date of each deposit till the date of actual payment. The Opposite Parties are also directed to pay the litigation cost of ₹50,000/-. This amount is directed to be paid within a period of eight weeks from the date of receipt of a certified copy of this order, failing which, the amount shall attract interest @ 12% p.a. for the same period.
......................J
R.K. AGRAWAL
PRESIDENT
......................
DR. S.M. KANTIKAR
MEMBER
8