RUPIKA ARORA & ANR. v. EMAAR MGF LAND LIMITED, National Consumer Disputes Redressal Commission, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

CC/3277/2017

Disposition

in part

Attorney(S)

MR. RABIN MAJUMDER & DEENDAYAL PRAJAPAT

Acts

COMPANIES ACT 1956
SECTION 74 CONTRACT ACT 1872
Section-391-394 of the Companies Act, 1956.

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Smart Summary

Factual and Procedural Background

This case arises from a complaint filed by Rupika Arora and Pankaj Kumar Arora against EMAAR MGF Land Limited, a company engaged in real estate development. The complainants purchased a flat in the "Palm Garden" project, Gurgaon, originally booked by their predecessors-in-interest. They paid approximately 95% of the sale price, financed partly by a loan from HDFC Limited at a high interest rate. The possession of the flat was to be delivered within 39 months from the start of construction, but the opposite party delayed possession beyond this period. The complainants alleged deficiency in service and unfair trade practices, seeking either buyback of the property with interest, provision of an alternative ready-to-move flat, refund of excess charges, compensation for mental agony, waiver of loan interest, and other reliefs. The opposite party admitted the material facts but raised defenses including limitation, jurisdiction, arbitration clause, and alleged default by the complainants in payment. The complaint was filed on 8 November 2017. The Commission noted that possession was offered on 19 November 2019, after significant delay.

Legal Issues Presented

Whether the complainants are entitled to refund of the amounts paid with interest due to delayed possession and deficiency in service by the opposite party?
Whether the complainants can claim compensation for mental agony and harassment arising from the delay and alleged unfair trade practices?
Whether the opposite party’s defenses of limitation, jurisdiction, arbitration, and complainants’ payment default bar the complaint?
Whether the complainants are entitled to alternative reliefs such as buyback of the property at a specified interest rate, provision of an alternative flat, refund of excess charges, and waiver of loan interest?

Arguments of the Parties

Complainants' Arguments

The opposite party misused the money paid for commercial purposes causing financial loss including high interest on loan, loss of rent, and loss of income tax rebate.
They sought buyback of the property at 24% per annum compounded monthly or alternatively provision of a ready-to-move flat of identical size and specifications with compensation at 24% interest.
Alternatively, they sought refund of excess charges levied by the opposite party with interest at 24% per annum.
They claimed compensation for mental agony and harassment.
They requested directions to HDFC Limited to waive interest and reinstate their CIBIL scores.
They sought Rs. 5 lakhs as cost of litigation.

Opposite Party's Arguments

The complaint is time barred according to the complainants’ own allegations.
The relief sought is exorbitant and contrary to Section 74 of the Contract Act, 1872.
The Buyer's Agreement provides exclusive jurisdiction to courts in Gurgaon and contains an arbitration clause, thus the Commission lacks territorial jurisdiction.
The total payment made by the complainants is less than the pecuniary jurisdiction of the Commission.
The complainants defaulted in timely payment of installments causing delay in construction.
The company underwent restructuring under the Companies Act and will fulfill obligations under the Buyer's Agreement.
Denied that the Buyer's Agreement was one-sided or that the layout plan was revised.
During arguments, the opposite party stated the Occupation Certificate was obtained on 17 October 2019 and possession was offered on 19 November 2019.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Laureate Buildwell Pvt. Ltd. Vs. Charanjeet Singh, 2021 SCC OnLine SC 479	Transferee steps into shoes of transferor with same rights and obligations.	Used to determine the timeline for possession obligation, counting period from date of transfer to complainants.
Prabjeet Singh Vs. EMAAR MGF Land Limited, CC/1105/2018 (20.01.2022)	Delay in construction entitles buyer to refund of money.	Applied as precedent for entitlement to refund due to unreasonable delay by the builder in the same project.
Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 442	Home buyers cannot be made to wait indefinitely for possession; compensation for mental agony and harassment is possible.	Supported the court’s view that delay in possession justifies refund and compensation claims.
Fortune Infrastructure Vs. Trevor D'Lima, (2018) 5 SCC 442	Home buyers’ rights regarding timely possession and remedies for delay.	Reinforced the principle against indefinite delay in possession.
Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 SCC OnLine SC 438	Home buyers’ entitlement to timely possession and remedies.	Supported the court’s reasoning on builder’s obligations and buyer’s rights.
DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, II (2019) CPJ 117 (SC)	Awarding interest as compensation in refund cases excludes additional compensation.	Guided the court’s decision on compensation, avoiding double recovery when interest is awarded.

Court's Reasoning and Analysis

The court examined the terms of the Buyer's Agreement, specifically clause 10(a), which required possession within 36 months plus a 3-month grace period from the start of construction. The payment plan was construction-linked, and the complainants paid installments as demanded, with no evidence of default by them. The court relied on the Supreme Court decision in Laureate Buildwell Pvt. Ltd. Vs. Charanjeet Singh to hold that the complainants, as transferees, inherit the rights and obligations of the original allottees, fixing the possession deadline accordingly.

The court noted that possession was not delivered within the stipulated period and was only offered on 19 November 2019, over three years late. The Commission’s earlier decision in Prabjeet Singh Vs. EMAAR MGF Land Limited was cited to affirm that unreasonable delay entitles the buyer to refund. Supreme Court precedents established that buyers cannot be forced to wait indefinitely and are entitled to compensation for mental agony and harassment due to delay.

The court also considered the principle from DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda that awarding interest as compensation precludes additional compensation, guiding the court to limit compensation accordingly.

Considering these principles and the facts, the court found merit in the complainants’ claim for refund with interest but did not elaborate on other reliefs sought.

Holding and Implications

The complaint is partly allowed. The court directed the opposite party to refund the entire amount deposited by the complainants and their predecessors with interest at 9% per annum from the date of respective deposits until actual payment, to be paid within two months from the date of the judgment.

The direct effect is that the complainants will receive a refund with interest for the delayed possession and deficiency in service. The court did not grant the alternative reliefs or compensation claims beyond the refund with interest. No new legal precedent was established beyond the application of existing Supreme Court rulings and prior Commission decisions.

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RUPIKA ARORA & ANR. v. EMAAR MGF LAND LIMITED

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

CONSUMER CASE NO. 3277 OF 2017

1. RUPIKA ARORA & ANR. W/O SHRI PANKAJ KUMAR ARORA R/O 701, TOWER ABYOOS, OMAXE NILE, SEC-49, SOHNA ROAD, GURGAON-122001

2. PANKAJ KUMAR ARORA

S/O DR JAGDISH KUMAR R/O 701, TOWER ABYOOS OMAXE NILE, SEC-49, SOHNA ROAD, GURGAON-122001

HARYANA ...........Complainant(s) Versus

1. EMAAR MGF LAND LIMITED

REGD OFFICE AT: 306-308, 3RD FLOOR, SQUARE ONE, C-2, DISTRICT CENTRE, SAKET,

NEW DELHI-110017

2. .

. ...........Opp.Party(s)

BEFORE:

HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER

For the Complainant : Mr. Nithin Chandran, Advocate : Ms. Sumbul Ismail, Advocate

For the Opp.Party : Mr. Rabin Majumder, Advocate : Ms. Akansha Srivastava, Advocate Dated : 13 Jun 2022

ORDER

1. Heard Mr. Nithin Chandran, Advocate, for the complainants and Mr. Rabin Majumder, Advocate, for the opposite party.

2. Rupika Arora and Pankaj Kumar Arora have filed above complaint for directing the opposite party (i) to buy back the property at a value calculated @24% per annum, compounded monthly plus the amount paid till date from the date of first payment made as the builder has misused the money paid by the complainants for its commercial purposes and the complainants have suffered financial loss including interest paid to HDFC Limited amounting to Rs.3254779/-, including loan processing and legal fees till October, 2015, loss of rent paid from October, 2015 till the date, amounting to Rs.806000/- and loss of Income Tax rebate amounting to Rs.2400000/- towards repayment of principal, OR in the alternative to provide a ready to move in apartment immediately to the buyers which is of identical size and in a similar locality and of the same standard & specification along with compensation @24% per annum on the total amount paid, from due date of possession till the date of actual possession,

OR in alternative to pay money calculated @ Rs.8000/- per sq.ft. of basic sale price for the super area of the flat, OR In alternative refund the excess amounts collected as (a) BSP @ Rs.500/- per sq.ft., (b) PLC @ Rs.350 per sq.ft. (c) For 24 mtr road @ Rs.350/- i.e. Rs.2064000/- (d) wrongly charging Rs.300000/- as car parking with interest @24% from the date of payment, (e) delayed possession penalty @24% from the due date of possession, (f) refund of service tax with interest and 24% interest on EDC/IDC charged extra and not paid to government, (ii) to pay adequate compensation, for mental agony and harassment, (iii) to direct HDFC Limited to waive off all the interest on loan and refund the amount of interest already realized, (iv) to direct the opposite party to pay loan amount of HDFC Limited, (v) to direct HDFC Limited to write to the CIBIL to reinstate the scores of the complainants as they would have been as if this default did not occur at all and (v) pay Rs.5/- lacs, as cost of the litigation.

3. The facts as stated in complaint and emerged from the documents are that EMAAR MGF Land Limited (the opposite party) was a company registered under the Companies Act, 1956 and engaged in the business of development and construction of residential and commercial buildings and selling its unit to the prospective buyers. The opposite party launched a project of group housing in the name of "Palm Garden" at village Kherki Daula, Sector-89, Gurgaon in the year 2010. Parichit Pandey and Mrs. Sunita Pandey (predecessor-in-interest of the complainants) booked a flat in "Palm Garden" and deposited Rs.750000/- on 02.01.2012. The opposite party allotted Unit No. PGN-01-0804, area 1720 sq.ft., basic sale price Rs7912000/- (total sale price Rs.9346142.16) to them on 30.01.2012 and executed Buyer's Agreement dated 16.02.2012 in favour of Parichit Pandey and Mrs. Sunita Pandey. Payment Plan was

"Construction Linked Payment Plan". The original allottees deposited Rs.333499/- on 14.03.2012, Rs.353699/- on 29.03.2012, Rs.132000/- on 29.03.2012, Rs.485699/- on 17.04.2012, Rs.333499/- on 17.04.2012, Rs.331195/- on 25.05.2012, Rs.423329/- on 13.08.2012 and Rs.23826/- on 06.02.2013, as per demand of the opposite party. With the prior permission of the opposite party, Parichit Pandey and Mrs. Sunita Pandey sold the aforesaid flat to the complainants on 20.02.2013 and their names have been recorded by the opposite party over aforesaid flat on 05.03.2013. Thereafter, the complainants paid the instalments as per demand made by the opposite party. The complainants deposited about 95% of sale price till 2014-2015, including deposit of their predecessors and for that purpose they took loan of Rs.88/- lacs from HDFC Limited on very high rate of interest, for which a tripartite agreement was executed between the parties in March, 2013. Vide clause-10(a) of the Buyer's Agreement, possession had to be given within 36 months with grace period of three months from the date of start of construction. The period of 39 months expired in September, 2015 from the date of sale made in favour of the complainants. The opposite party wrote a letter dated 26.04.2015, asking suggestion for revision of building plan of the project. Although the opposite party used to realize the instalments time to time but they did not proceed with the construction according to the schedule of instalment. This complaint was filed on 08.11.2017 alleging deficiency in service and unfair trade practice.

4. The opposite party filed its written reply on 20.08.2018, in which the material facts were not disputed. The opposite party stated that the complaint was time barred according to own allegations of the complainants. The complaint has been filed for exorbitant relief which is contrary to Section 74 of the Contract Act, 1872. Under Clause-32 of Buyer's Agreement dated 16.02.2012, exclusive jurisdiction of Courts of Gurgaon, Haryana was agreed between the parties. Clause-37 of Buyer's Agreement dated 16.02.2012 provides for arbitration in case of

any dispute. This Commission has no territorial jurisdiction in the matter. Total payment made by the complainants to the opposite party is less than the pecuniary jurisdiction of this Commission. The complainants and other allottees committed default in timely payment of the instalments as such the construction was delayed. In order to improve the development work of the project, the company has undergone re-structuring and a Scheme of Arrangement has been submitted under Section-391-394 of the Companies Act, 1956. The company shall fulfil all its obligation under Buyer's Agreement. It was denied that Buyer's Agreement was one sided or layout plan was revised.

5. The complainants filed Rejoinder Reply on 14.01.2019, in which, the facts stated in the complaint were reiterated. The complainants filed Affidavits of Evidence of Rupika Arora and Pankaj Kumar Arora, Affidavit of Admission/Denial of document of Pankaj Kumar Arora. The opposite party filed Affidavit of Evidence of Rajendra Prasad and Affidavit of Admission/Denial of document of Nikhil Srivastava. The complainants filed their short synopsis. During arguments, the counsel for the opposite party orally informed that

"Occupation Certificate" for the project "Palm Gardens" was obtained on 17.10.2019 and the complainants were offered possession on 19.11.2019. This fact has not been disputed by the counsel for the complainants.

6. I have considered the arguments of the counsel for the parties and examined the record. Payment plan was "Construction Linked Payment Plan". The complainants have stated that they were depositing instalment as per demand. The opposite party although took plea that the complainants were defaulter but did not produce any reminder letter issued to the complainants to prove that they had not deposited the instalment as per demand letter. Vide clause-10(a) of the Buyer's Agreement, possession had to be given within 36 months with grace period of three months from the date of start of construction. Payment plan was "Construction Linked Payment Plan". The opposite party was realizing instalment from predecessor of the complainants from 14.03.2012. As such the period of 39 months expired in June, 2015. Supreme Court in Laureate Buildwell Pvt. Ltd. Vs. Charanjeet Singh, 2021 SCC OnLine SC 479, held that a transferee steps in shoes of his transferor with same right and obligation. Even if the period of 39 months is counted from the date of transfer in favour of the complainants, then also it expired in May, 2016. The construction was not completed till filing of written reply of the opposite party on 20.08.2018. According to the opposite party possession was offered on 19.11.2019 i.e. with delay of more than 3 years 5 months. This Commission in CC/1105/2018 Prabjeet Singh Vs. EMAAR MGF Land Limited (decided on 20.01.2022) in respect of the same project, in which, Buyer's Agreement was dated 16.04.2012, held that the construction was unreasonably delayed by the opposite party as such the buyer was entitled for refund of his money.

7. Supreme Court in Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 442, Fortune Infrastructure Vs. Trevor D'Lima, (2018) 5 SCC 442 and Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 SCC OnLine SC 438, held that a home buyer cannot be made to wait for possession of the flat for indefinite period.

8. Supreme Court in Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 442, held that in the matter of contractual obligation, there is scope for compensation for mental agony and harassment. In DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, II (2019) CPJ 117 (SC) held when interest is awarded as compensation in the cases of refund of

money, then awarding additional compensation was not justified.

ORDER

In view of the aforesaid discussions, the complaint is partly allowed. The opposite party is directed to refund entire amount deposited by the complainants and their predecessor with interest @9% per annum from the date of respective deposit till the date of actual payment to the complainants within a period of two months from the date of this judgment.

......................J

RAM SURAT RAM MAURYA

PRESIDING MEMBER

RUPIKA ARORA & ANR. v. EMAAR MGF LAND LIMITED

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Complainants' Arguments

Opposite Party's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

RUPIKA ARORA & ANR. v. EMAAR MGF LAND LIMITED

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