Citation Codes

Equivalent Citations

citation codes

Case Number

Consumer Case No. 744 of 2018

Disposition

allowed

Advocates

Mr. G.P. Singh, Advocate for the Complainant;
Mr. Pravin Bahadur, Advocate with Ms. Kanika Gomber and Mr. Saurabh Kumar, Advocate for the Opp. Party.

Judges

C. Viswanath, Presiding Member
Subhash Chandra, Member

Acts

SECTION 12 CONSUMER PROTECTION ACT 1986

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Smart Summary

Structured Summary of the Opinion (Subhash Chandra, Member)

Factual and Procedural Background

This complaint was filed under Section 12(1)(a) of the Consumer Protection Act, 1986 alleging deficiency in service and unfair trade practice regarding a residential apartment booked in the project "Emerald Bay", Sector 104, Gurgaon, Haryana.

Key factual chronology based on the opinion:

Booking of the flat: 28.01.2013.
Provisional allotment: 11.02.2013 — unit no. 1503 in Tower A-3 (15th floor) for sale consideration of Rs. 2,39,81,694/- inclusive of all charges.
Builder-Buyer Agreement executed: 10.12.2013. The Agreement promised possession after 48 months with a 6-month grace period, i.e., by 10.03.2018.
Payments by complainant: Rs. 2,23,81,694/- paid between January 2013 and January 2017 under a construction-linked plan (approximately 93% of sale consideration as recorded by the Commission). Earlier payment of Rs. 27,57,376/- had been made before Agreement execution.
Allegations by complainant: failure to hand over possession by promised date; deferment of construction of certain common facilities and relocation of some facilities to a "Future Building Plan" in a later pocket; continued collection of payments on super built-up area despite deferment; loss of promised preferential location benefits (PLC) and view/amenities; claim for refund with 18% interest, Rs. 15 lakhs for mental agony, and other reliefs.
Opposite party's stance (in brief): denied deficiency and unfair trade practice; raised preliminary objections that complainant invested for speculative purposes (thus not a "consumer"), that arbitration clause in the Agreement ousts the Commission's jurisdiction, and that delay was due to force majeure events (demonetisation, NGT orders) and non-payment by other allottees; also contended project was not meant to be in a single phase.
Procedural posture: Parties led evidence and filed written arguments; the Commission heard counsels and considered documents and authorities.

Legal Issues Presented

Whether there was deficiency in service and/or unfair trade practice by the opposite party in relation to delayed possession and alteration/deferment of promised amenities.
Whether the complainant qualifies as a "consumer" within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986, or whether the purchase was speculative.
Whether an arbitration clause in the Agreement bars the Consumer Commission from exercising jurisdiction.
Whether delay in completion and handing over of possession was attributable to force majeure events (such as demonetisation, NGT orders or non-payment/default by other allottees) absolving the opposite party of liability.
Whether the complainant is entitled to refund of amounts paid with interest and/or compensation for mental agony and litigation expenses.

Arguments of the Parties

Complainant's Arguments

Booked and paid for residential flat in Emerald Bay; Agreement promised possession by 10.03.2018.
Paid Rs. 2,23,81,694/- (between Jan 2013 and Jan 2017) yet possession was not delivered by agreed date.
Builder deferred construction of certain common facilities and proposed a "Future Building Plan" relocating amenities — this negates benefits of PLC levied and view/landscaping promised.
Payments continued to be collected on super built-up area though certain constructions were deferred — alleged deficiency in service.
Sought refund of amounts with 18% interest, Rs. 15 lakh for mental agony and harassment, and other appropriate directions from the Commission.

Opposite Party's Arguments

Denied complainant's averments and contended there was no deficiency in service.
Asserted complainant had invested for speculative purposes and therefore is not a "consumer" under Section 2(1)(d)(ii) of the Act.
Raised a jurisdictional objection based on an arbitration clause in the Agreement asserting that the Commission lacks jurisdiction.
Contended delay was attributable to force majeure events including demonetisation, orders of the National Green Tribunal restricting construction, and non-payment of instalments by other allottees; also argued project was never intended to be completed in a single phase.
Denied making false or misleading promises and maintained the apartment would eventually be landscape-facing as per the PLC.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan & Connected Matter (Civil Appeal No. 12238 of 2018) (02.04.2019)	Where there is an unreasonable delay in offering possession, the consumer cannot be compelled to accept belated possession and is entitled to seek refund of the amount paid with compensation.	The Commission relied on this principle to hold that the complainant, faced with a nearly five-year delay, could claim refund and that the prayer for refund with compensation had merit.
Kolkata West International City Pvt. Ltd. v. Devasis Rudra (Civil Appeal No. 3182 of 2019) (25.03.2019)	Supports the position that an unreasonable delay entitles the buyer to refund rather than being compelled to accept belated possession.	Used alongside Pioneer to support the finding that the complainant was entitled to refund and compensation for inordinate delay.
Emaar MGF Land Limited v. Aftab Singh, (2019) 1 CPJ 5 (SC)	An arbitration clause in the Agreement does not bar the jurisdiction of consumer fora to entertain complaints.	The Commission applied this authority to reject the opposite party's preliminary objection that the arbitration clause ousted the Commission's jurisdiction.
Kavita Ahuja v. Shipra Estates, (2016) 1 CPJ 31	The onus of proving that complainants are not "consumers" lies upon the opposite party; absence of documentary proof means the opposite party fails that burden.	The Commission relied on this authority to hold that the opposite party failed to discharge its burden of proving the complainant was not a consumer, and thus the "not a consumer" objection failed.
Ashish Gupta v. Unitech Ltd., CC No. 594 of 2016 (28.11.2016)	Economic slowdown and recession in the real estate market cannot, without evidence, be accepted as a valid ground for delaying possession when buyers have paid significant amounts; lack of funds is not automatically attributable to the opposite party.	The Commission cited this to reject the opposite party's contention that economic slowdown or related factors constituted force majeure excusing delay.
Anil Kumar Jain v. Nexgen Infracon Private Limited, CC No. 1605 of 2018 (23.12.2019)	Absence of proof to substantiate claims of demonetisation and NGT orders causing delay means such reliance on force majeure conditions is not justifiable.	The Commission used this authority to find that the opposite party's reliance on demonetisation and NGT restrictions did not absolve it of responsibility in the absence of supporting evidence.

Court's Reasoning and Analysis

The Commission undertook a step-by-step analysis constrained to the record and the arguments presented:

Admission of delay and payments: It was admitted that there was delay in handing over the flat and that the opposite party had received Rs. 2,23,81,694/-; the opposite party did not deny receipt of those payments and it was accepted that the complainant made payments timely as per the construction-linked plan.
Documentary gaps and admissions by opposite party: The opposite party admitted at arguments that no completion certificate was available and that no offer of possession had been made. The opposite party did not produce evidence that the project was never intended to be completed in a single phase.
Application of precedent on unreasonable delay: The Commission relied on Supreme Court authorities (Pioneer; Kolkata West) establishing that a consumer faced with unreasonable delay may seek refund and is not compelled to accept belated possession. The Commission concluded the complainant's prayer for refund with compensation had merit.
Jurisdictional challenge (arbitration clause): The Commission applied Emaar MGF (SC) which holds that an arbitration clause does not bar consumer fora jurisdiction, and accordingly rejected the arbitration-based objection to its jurisdiction.
Consumer status burden of proof: Relying on Kavita Ahuja, the Commission held that the opposite party bore the onus to prove the complainant was not a consumer; no evidence was produced, so the objection failed.
Force majeure and extraneous events: The opposite party's claims that demonetisation, NGT orders, and non-payment by other allottees caused the delay were examined. The Commission observed that no evidence was furnished to substantiate these force majeure claims and cited Ashish Gupta and Anil Kumar Jain to support the position that such events do not automatically excuse delay in the absence of proof. The Commission noted that risks like economic slowdown are part of project planning and should have been factored into execution.
Unfair trade practice and PLC allegations: The Commission found unfair trade practice because the opposite party amended construction plans, postponed amenities to a future phase while continuing to raise demands inclusive of those amenities (super area and PLC charges), and did not honor obligations related to PLC benefits.
Conclusion of deficiency and remedy: On the basis of admitted delay, lack of possession, inadequate evidence for defenses, and unfair practices relating to deferred amenities and continued charging, the Commission concluded there was deficiency in service and unfair trade practice entitling the complainant to relief.

Holding and Implications

Core Holding: The complaint was allowed and the Commission found the opposite party deficient in service and guilty of unfair trade practice.

Relief Ordered (direct effect on the parties):

The opposite party was directed to refund the entire amount of Rs. 2,23,81,694/- deposited by the complainants together with 9% simple interest on those amounts from the dates of respective deposits.
The refund order was to be complied with within 12 weeks; failing compliance, the opposite party would be liable to pay penal interest of 12% thereafter.

Implications: The decision requires the builder to refund payments with interest and establishes consequences for non-compliance (penal interest). The opinion applies existing Supreme Court and Commission authorities to reject arbitration ouster, to place onus on opposite parties to disprove consumer status, and to require evidence to substantiate force majeure claims. The opinion does not purport to create a new legal precedent beyond applying and following existing authorities; it resolves the instant dispute by ordering specific monetary relief to the complainant.

Disposition: The complaint is disposed of in accordance with the directions noted above.

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Ran Vijay Singh Complainant(S) v. Puri Construction Private Limited And Another Opp. Party(S).

Subhash Chandra, Member:— This complaint has been filed under section 12(1)(a) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in services and unfair trade practice in respect of the residential apartment booked by the complainants with the opposite party.

2. In brief, the facts of the case are that the complainant had booked a residential flat in the project ‘Emerald Bay’, Sector 104, Gurgaon, Haryana on 28.01.2013 being developed and executed by the opposite party. On 11.02.2013 he was provisionally allotted unit number 1503 in Tower A-3 on the 15 floor by the opposite party for a sale consideration of Rs. 2,39,81,694/- inclusive of all charges. A Builder Buyer's Agreement (in short, ‘Agreement’) was signed between the complainant and the opposite party on 10.12.2013 and as per the Agreement possession was promised after 48 months, with a grace period of 6 months i.e. by 10.03.2018 which they have failed to do despite payment of Rs. 2,23,81,694/- between January 2013 and January 2017 by the complainant under the construction linked plan as on the date of filing of this complaint. It is averred that the Agreement was executed after 11 months of the booking of the apartment by which time the complainant had already paid Rs. 27,57,376/- and he was therefore not in a position to contest the one sided agreement loaded in favour of the opposite party. It is also averred that though clause 11(a) of the Agreement promised construction in 48 months, on 26.09.2017 the opposite party informed that the project was delayed, that there was a change in building plans of the project and sought a grace period of 6 months for completion. However, the construction of certain facilities and amenities of the project were deferred by the builder and a ‘Future Building Plan’ was proposed in Pocket III where various common recreational facilities had been originally proposed which was objected to by the complainant before the Director, Town and Country Planning. It is further averred that while certain construction was deferred to the future, the payments under the construction linked plan continued to be collected on the basis of super built area which is a deficiency in service. The complainant avers that the deferment of construction of common facilities has negated his payment of preferential location charges as he does not have any view of landscaped area, swimming pool or club house as originally promised. He is therefore before us with the following prayer:

i. Opposite party be directed to refund the amount with 18% interest for the period of delay;

ii. Opposite party be directed to pay Rs. 15 lakhs for mental agony and harassment and consequential litigation; and

iii. Opposite party be directed to obey any other and such directions as may be deemed fit by the Hon'ble Commission keeping in view the facts and circumstances of the complaint.

3. The opposite party has resisted the complaint by way of written statement. The averments of the complainant have been denied and it has been contended that the complainant is not entitled to claim compensation. The opposite party has taken preliminary objections to the complaint on the grounds that complainant is not a ‘consumer’ within the definition of section 2(1)(d)(ii) of the Act as he has invested in the subject flat for speculative purposes; that this Commission lacks jurisdiction in view of the Agreement providing for arbitration and that there has been no deficiency in service as the project was never intended to be completed in one phase. Unfair trade practice is denied as also the fact that there has been delay in view of force majeure conditions of demonetisation, orders of the Hon'ble National Green Tribunal (NGT) placing restraints on construction and non-payment of instalments by other allottees.

4. Parties led their evidences and filed their written arguments. We have heard the learned counsels for the parties and perused the records carefully. Admittedly, there has been a delay in the handing over the subject flat although for reasons advanced by the opposite party who has not denied the receipt of Rs. 2,23,81,694/- towards the sale consideration. Opposite party has not denied that the complainant made all payments as per plan in a timely manner. Opposite party has denied making false or misleading promises and averred that the apartment of the complainant will eventually be landscape facing as per the PLC levied. While no reasons for the delay in completing the project and obtaining an occupation certificate are advanced by the opposite party except to state that construction was at an advanced state and that force majeure conditions are responsible for the delay, it was admitted during arguments that a completion certificate was not available as on date and that no offer of possession had been made. No evidence has also been furnished by the opposite party in support of its claim that the project was never intended to be completed in a single phase.

5. We have considered the arguments of both parties in the light of the arguments urged, the documents on record and the various judgments of the Hon'ble Supreme Court and this Commission.

6. The opposite party has denied the averments of the complainant while admitting the delay in completion of the project. The complainant has sought refund with compensation in the form of interest on the amount deposited by him. The delay of nearly 5 years by the opposite party in handing over of the subject flat is certainly inordinate and needs to be viewed as such. The Hon'ble Supreme Court in Civil Appeal No 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan & Connected Matter on 02.04.2019 and in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt., Ltd. v. Devasis Rudra decided on 25.03.2019 has also held that in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation. Accordingly, the prayer of the complainant has merit.

7. As regards the opposite party's preliminary objection that this Commission lacks jurisdiction in view of the provision for arbitration in the Agreement, it is relevant to note that this issue has been settled by the Hon'ble Supreme Court in Emaar MGF Land Limited v. Aftab Singh, (2019) 1 CPJ 5 (SC) wherein it was held that an arbitration clause in the Agreement does not bar the jurisdiction of the consumer fora to entertain the complaint. Hence, the objection of the opposite party that the clause of arbitration bars this Commission from entertaining the complaint is unsustainable.

8. The opposite party's contention that the complainant is not a consumer within the definition of section 2(i)(d) of the Act needs to be considered in the light of the documentary evidence submitted. It is seen that the opposite party has not submitted any evidence in support of this assertion. In Kavita Ahuja v. Shipra Estates, (2016) 1 CPJ 31 it has been categorically laid down by this Commission that the onus of proving that complainants are not consumers lies upon the opposite party which in the instant case it has failed to prove by way of any documentary evidence. This contention is therefore not valid.

9. As regards the issue of force majeure as the reason for the delay, it is seen that no evidence in support of this assertion has been provided. No evidence has been produced by the opposite party to prove that delay is on account of reasons beyond their control. Reasons such as economic slow down or restrictions on construction are risks that the opposite party should have factored in as part of the project execution planned by it. This Commission in Ashish Gupta v. Unitech Ltd. in CC No. 594 of 2016 dated 28.11.2016 while considering such extraneous events as likely reasons for delay and qualifying as force majeure events has held that:

“As regards the alleged economic slowdown and consequent recession in the real estate market, the same cannot be a valid ground for delaying the possession of the flats to the complainant since some of the buyers made advance payment of almost 95% of the sale consideration whereas the other buyers were to make payment linked with the progress of construction and this is not the case of the opposite party that they had defaulted in performing their contractual obligations as regards the payment of the sale consideration. Therefore, it cannot be said, as far as this project is concerned, that the construction was delayed on account of funds not being available with the opposite party.”

10. The same argument would apply also to the issues of demonetisation and restrictions on account of orders of the NGT advanced by the opposite party as being factors responsible for the delay but not attributable to it. Such issues have also been extensively considered in this Commission's orders in Anil Kumar Jain v. Nexgen Infracon Private Limited CC No. 1605 of 2018 dated 23.12.2019 which held that in the absence of any proof to substantiate the claims of demonetisation and NGT adversely causing delay in completion of the project and impacting the date of handing over of flats, such reliance on force majeure conditions was not justifiable.

11. No evidence has been submitted to also support its claim that there had been a widespread default by the bulk of the allottees which impacted his cash flow. In any case, it was for him to have planned for such contingencies before commencing a project of such magnitude. It was also not disclosed in any manner to the allottees that the project was contingent upon timely payments by them.

12. In view of the foregoing, we are of the considered view that the opposite party has been deficient in not making an offer of possession of the subject flat to the complainants within the stipulated period of 10.03.2018 which had been promised while signing the Agreement on 10.12.2013 despite having accepted deposits of Rs. 2,23,81,694/- from the complainants which amounts to approximately 93% of the total sale consideration. There is also unfair trade practice on part of the opposite party in that it has amended the construction plans and postponed certain amenities to a future, second phase while raising demands from the complainant by including the same in the super area for payments collected and not honouring its obligations undertaken as part of the PLC charges levied.

13. We, therefore, find merit in the complaint and allow the same with the following directions:

(i) Opposite party is directed to refund the entire amount of Rs. 2,23,81,694/- deposited by the complainants along with 9% simple interest on it from the dates of respective deposits;

(ii) Order be complied within 12 weeks failing which penal interest of 12% shall be paid to the complainant.

14. The complaint is accordingly disposed of with these directions.

Ran Vijay Singh Complainant(S) v. Puri Construction Private Limited And Another Opp. Party(S).

Structured Summary of the Opinion (Subhash Chandra, Member)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Complainant's Arguments

Opposite Party's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Ran Vijay Singh Complainant(S) v. Puri Construction Private Limited And Another Opp. Party(S).

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