VINOD GUPTA & ANR. v. EMAAR MGF LAND LIMITED & 3 ORS.

case of deficiency of service on the part of the Opposite Party Developer. It is also stated that in case of default in making the payment of installment on the part of the Flat Buyers, the Developer is entitled to charge exorbitant interest @24% p.a. in terms of Clause 13(a) of the Agreement, however, for the delay on their part in offering the possession of the allotted Units, they are liable to pay delayed compensation of meagre amount of 7.50 per sq. ft. per month of the Super Area which amounts to an Unfair Trade Practice. Thus, alleging deficiency in service on the part of the Opposite Party Developer, the Complainants have the filed present complaint seeking following reliefs:-

(i) to refund the entire amount of 1,61,61,140/- deposited by the Complainants towards price of residential unit, in question, along with interest @15% p.a. from the respective date of deposits till realization;

(ii) to pay lump-sum compensation in the sum of Rs.5 lakh on account of mental agony, physical harassment, deficiency in providing service, adoption of unfair trade practice, negligence, financial loss, escalation in prices of the real estate;

(iii) to pay cost of litigation to the tune of Rs.2.5 lakh to the Complainant;

04. The Opposite Parties Developer has filed its Written Version denying the contents of the Complaint and contending that the Complainants have been flouting with the terms of the Agreement. They have defaulted in making timely payments of installments despite reminders and delay charges to the tune of 1,35,099/- have been levied upon them. It is further pleaded that; the Complaint is not maintainable before this Commission for want of pecuniary jurisdiction inasmuch as the possession of the allotted Unit had already been offered to the Complainants and the claim, if any, is only for compensation and the same by no stretch of calculation can go beyond 1 crore; since the Complainants owned their house in Chandigarh, the Unit in question has been booked only for commercial purposes or earning profits and as such the Complainants are mere speculators; the Complainants do not fall under the category of "Consumer" as defined under section 2(1)(d) of the Act; the Complaint is barred by limitation as provided u/s 24A of the Act; the terms & conditions of the Agreement are binding upon the parties as held by Hon'ble Supreme Court of India in the matter of Bharti knitting Vs DHL Courier World Wide Express Courier - (1996) 4 SCC 704 ; parties are bound by terms of contract and there is no power or jurisdiction to the Consumer Fora under the Act to direct modification of any Clause of the Agreement; Clause 37 of the Agreement clearly provides that any dispute arising in relation to the terms of the Agreement including interpretation and validity of the terms thereof and the respective rights and obligations of the parties would be settled through Arbitration;

05. On merits of the case, it is rigorously submitted that; there is no cause of action in favour of the Complainants due to delay on their part to make timely payment and as such they are not entitled for the reliefs prayed in the Complaint; Clause 14 (a) of the Agreement clearly provides that the Opposite Party Developer would endeavor to hand over the possession of the allotted Unit within a period of 36 months from the date of commencement of construction subject to force majeure circumstances and on receipt of due installments; time is not the essence of contract; the Hon'ble Supreme Court in the cases of Chand Rani vs. Kamal Rani, 1993 (1) SCC 519 and

Gomathinayagam Pillai vs. Palaniswami Nadar, 1967 (1) SCR 227 , has held that fixation of the period within which the contract has to be performed, does not make the stipulation as to time, the

-3-

essence of the contract and when a contract relates to a sale of immovable property, it will normally be presumed that time is not the essence of the contract; the Project got delayed due to reasons which were beyond their control; the Developer has undergone re-structuring and in order to ensure focused leadership and development of the on-going Projects by way of process of demerger of the Opposite Party pursuant to a Scheme of Arrangement under Section 391-394 of the Companies Act, 1956; the Project in question has been completed and after obtaining the Occupancy Certificate, the offer of possession has been made to the Complainants vide letter dated 14.03.2018; as per Clause 16(a) of the Agreement, if the Developer is not able to hand over the possession to the allottees(s), they shall be entitled to the payment of compensation for delay @ 7.50 per sq. ft. per month of the Super Area till the date of notice of possession;

06. We have heard the learned Counsel for the Parties and perused the material available on record and evidence adduced by the parties.

07. The preliminary issues raised by the Developer and the defence taken by them justifying delay in completion of the Project in question have already been dealt with by this Commission in the case of Deepika Chaudhary Chandra & Ors. Vs. Emaar MGF Land Ltd. - Consumer Complaint No. 1337 of 2018 decided on 02.06.2022 which relates to the same Project, namely,

"Palm Terrace Select" and the same Opposite Parties. While rejecting all the afore-mentioned contentions of the Opposite Parties, this Commission has held as under:-

" The Complaint was resisted by the Opposite Party Developer by filing its Written Statement in which the Opposite Party Developer averred that there is Arbitration Clause in the Agreement, therefore, the present Complaint is not maintainable before this Commission; the Complainants has owned their house in Gurgaon itself and have booked the Apartment in question for commercial/investment/speculative purpose, therefore, they do not fall within the definition of Consumer in terms of Section 2(1)(d)(ii) of the Act. It was also averred that this Commission has no pecuniary jurisdiction to entertain the Complaint as the compensation sought cannot go beyond 1 Crore. Relying upon Judgments passed by the Hon'ble Supreme Court, it was averred that terms & conditions of the Agreement is binding upon the Parties and thus in the case of delay in handing over physical possession of the Apartment, the Complainants are entitled for delayed compensation @ 7.50/- per sq. ft. per month in terms of Clause 16(a) of the Agreement….

We have heard Mr. Varun Garg, learned Counsel for the Complainants, Mr. Sunil Mund, learned Counsel for the Opposite Party Developer and perused Complaints, Written Statements and given a thoughtful consideration to the various pleas raised by them.

The Hon'ble Supreme Court in M/S Emaar MGF Land Limited vs. Aftab Singh - I (2019) CPJ 5 (SC), has laid down the law that an Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint. Hence, the objection raised by the Opposite Party Developer that the clause of Arbitration bars this Commission from entertaining the Complaint is unsustainable.

-4-

The contention of the Opposite Party Developer that the Complainants have already owns a house in Gurugram and have booked the subject Apartment for commercial/investment/ speculative purpose, is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots/ flats in 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. Therefore, we are of the considered view that the Complainants do fall under the definition of 'Consumer' as defined under Section 2 (1)(d) of the Act .

So far as the pecuniary jurisdiction is concerned, in terms of Section 21 of the Consumer Protection Act, this Commission possesses the requisite pecuniary jurisdiction where the value of the goods or services as the case may be and the compensation claimed exceeds 1 Crore.As held by a three Members Bench of this Commission in CC No.97 of 2016 Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., decided on 07.10.2016, the value of the services in such a case would mean the sale amount agreed to be paid by the Flat Buyer to the Developer, which has been held to lay down the law correctly on the issue relating to pecuniary jurisdiction and the sale consideration which was agreed between the Parties for buying the goods or hiring or availing the services is relevant for determination of pecuniary jurisdiction in cases of refund also by a larger Bench of 5 Members of this Commission in "CC No. 1703 of 2018, Renu Singh vs. Experion Developers Private Limited" and other connected matters decided on 26.10.2021.In the present case, even the agreed sale consideration is 1,71,56,670/-.Therefore, it would be difficult to say that this Commission does not possess the requisite pecuniary jurisdiction.

The plea of the learned Counsel for the Developer regarding binding nature of the Agreement/Contract whereby the Parties are bound by the terms and conditions of the Agreement, to compensate the Complainant for delay in terms of Clause 16(a) of the Agreement, we have gone through the Clause 13(a) and 16(a) of the Agreement, which read as under:-

"13(a) In case of delay in making payment by the Allotment (s) to the Developer as per the Schedule of Payment as stated in Annexure-2, the Developer shall have right to terminate the Agreement and forfeit the Earnest Money as detailed hereinabove. The Developers shall also be entitled to charge interest @24% p.a. till the date of payment. 16(a) Subject to Clause 31, in case within a period as set out in clause 14(a), the Developers is not able to hand over the possession to the Allottee(s), the Allottee(s) shall be entitled to the payment of compensation for delay at the rate of 7.50/- (Rupees seven and fifty paise only) per sq. ft. per month of the Super Area till the date of notice of possession under the provision of clause 15(a) provided the

-5-

Allottee(s) has complied with all the terms and conditions of this Agreement. The Allottee(s) shall have no other claim against the Developer in respect of the said Unit and Parking Space under this Agreement during the said period of twelve (12) months" A bare perusal of above Clauses makes it clear that as per Clause 16(a) of the Agreement, in case of delay the Opposite Party Developer is liable to pay 7.50/- per sq. ft. of the super built up area of the Apartment per month for the period of delay in offering of possession, whereas in terms of Clause 13(a) in case of late payment, the Complainants/Buyers are liable to pay interest @24% p.a.This shows that the terms of the Agreement are wholly one-sided and unfair. Therefore, the Complainants cannot be made bound to the terms of the Agreement, which are one-sided and unfair in the light of the recent Judgment of the Hon'ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34 (SC), wherein the Apex Court has observed as follows:

"6.7. A terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder."

7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer's Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms."

08. We also do not find any substance in the contention of the Developer that due to default on the part of the Complainants in timely making payment of the installments, there was delay in completion of the Project. If there was default on the part of the Complainants in making the payments on due time, the Developer in terms of the Agreement was at liberty to either cancel their booking and refund the amount or to charge the interest on delayed payment. Having not exercising the option to cancel the booking and to charge the interest on the delayed payment, the Developer cannot take shelter under this pretext for delay in the Project.

09. The undisputed facts of the case are that the Complainants have applied for purchase of Unit in the aforesaid Project of the Opposite Party Developer on 22.11.2010. The Complainants were allotted Unit No. PTS-05-0801 on 8^thFloor in Tower/Block No.5. The Builder Buyer's Agreement was executed between the parties on 221.11.2010. As per Clause 14(a) of the Agreement dated 22.11.2010, the Developer was under an obligation to hand over the physical possession of the allotted unit, complete in all respect, within a period of 36 months from the date of start of construction subject to force majeure conditions. There is no denial to the fact that the Complainants have paid a sum of 1,61,61,140/- i.e. approx.. 96% of the total sale consideration of

-6-

1,66,75,890/- to the Developer, however, they have completely failed to complete the Project and hand over the possession of the allotted Unit to the Complainants till 22.11.2013 as promised. As admitted in the Written Version, the offer of possession was made to the Complainants only on 14.03.2018 i.e after expiry of period of about 5 years from the committed date of delivery. According to the Developer, the delay in offering the possession has occurred due to the reasons which were force-majeure and beyond their control. However, no cogent material has been adduced by the Developer to establish that the completion of construction and offer of possession has been delayed on account of reasons beyond their control. In this regard, a reference is made to the Order passed by this Commission in Sivarama Sarma Jonnalagadda & Anr vs. M/s Maruthi Corporation Limited & Anr - Consumer Complaint No. 379 of 2013 decided on 21.09.2021

wherein it was held as under:-

" We are of the view that the Complainant cannot be made to wait indefinitely for the delivery of possession and 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."

10. In the case of Emmar MGF Land Ltd. & Ors. vs. Amit Puri - [II (2015) CPJ 568 (NC)],

this Commission has held that 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.

11. In another Landmark judgement of the Hon'ble Supreme Court, titled Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, ll (2019) CPJ 34 (SC), decided on 02.04.2019 it was held as under:

" In the present case, admittedly the Appellant-Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer's Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent-Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.

In Lucknow Development Authority v. M.K Gupta .. Gupta: (1994) 1 SCC 243, this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a

"service" as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.

In Fortune Infrastructure and Anr. v. Trevor D'Lima and Ors., : (2018) 5 SCC 442 this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

-7-

The Respondent-Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant-Builder. The Respondent-Flat Purchaser was justified in terminating the Apartment Buyer's Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent-Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation."

12. Further, in the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra - II (2019) CPJ 29 SC, the Hon'ble Apex Court has observed as under :-

".....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 the SCDRC and by the NCDRC for refund of moneys were justified."

13. In the instant case also, the Complainants cannot be made to wait indefinitely for possession of their allotted Unit and the Complainants are entitled for refund of the principal amount with reasonable interest. Accordingly, keeping in view the ratio laid down by the Hon'ble Supreme Court in DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda - II (2019) CPJ 117 (SC) , that compensation under multiple heads cannot be awarded, we are of the considered view that simple interest in the form of compensation @ 9% p.a. would meet the ends of justice together with costs of 50,000/-.

14. In view of the aforesaid discussion, we partly allow the Complaint with a direction to the Opposite Party Developer to refund the entire principle amount along with interest @9% p.a. from the respective date of deposit till payment, within a period of six weeks from the date of passing of this Order failing which the amount shall carry interest @12% p.a. for the said period. The Complainants are also entitled for costs of 50,000/-.

15. The Consumer Complaint is allowed in above terms. The pending applications, if any, also stand disposed of.

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

R.K. AGRAWAL

PRESIDENT

......................

DR. S.M. KANTIKAR

MEMBER

-8-

......................

BINOY KUMAR

MEMBER

-9-