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SUNIL SIKKA v. M/S. RAMPRASTHA PROMOTERS AND DEVELOPERS PVT. LTD. & 7 ORS.
Factual and Procedural Background
The Consumer Complaint was filed by Sunil Sikka against M/s. Ramprastha Promoters and Developers Pvt. Ltd. and seven others regarding a residential flat booked in the "RISE" project located in RP City, Sector 37-D, Gurgaon, Haryana. The complainant booked flat No. 1003, on the 10th floor, Tower D, with a super area of 1765 sq.ft., under a buyer's agreement dated 04.08.2012, for a total consideration of Rs. 79,71,112/-, of which Rs. 62,87,441/- was paid. The possession was contractually to be handed over by 01.09.2015 with a grace period of 120 days.
The complainant alleged deliberate, wilful, dishonest, and intentional cheating by the opposite parties (OPs), claiming deficiency in services and unfair trade practices due to failure to deliver possession within the stipulated period. The complainant sought refund of the paid amount along with interest, compensation for default in possession, damages for mental agony, and legal costs.
Notice was issued to the OPs on 10.09.2018. Both parties filed written statements, replies, and evidence by affidavit. The OPs denied deficiency and unfair trade practices, attributing delay to force majeure and unforeseeable circumstances, including government orders restricting groundwater use, shortage of construction materials, demonetization, labor shortages, and the COVID-19 pandemic. The OPs also contended that the agreement provided compensation for delay and that time was not the essence of the contract. They further challenged the jurisdiction of the Commission and the status of the complainant as a consumer.
The Commission heard the parties, examined pleadings, evidence, and arguments, and considered the legal positions and precedents cited.
Legal Issues Presented
- Whether the opposite parties committed deficiency in service and unfair trade practices by failing to deliver possession of the flat within the stipulated contractual period.
- Whether the complainant is entitled to refund of the amount paid along with interest and compensation for mental agony and legal expenses.
- Whether the delay in possession was excused by force majeure or other unforeseeable circumstances.
- Whether the Commission has pecuniary jurisdiction to entertain the complaint.
- Whether the complainant qualifies as a consumer under the Consumer Protection Act, 1986, given the alleged commercial nature of the purchase.
- Whether the dispute is subject to arbitration as per the agreement between the parties.
Arguments of the Parties
Complainant's Arguments
- Booked a flat in the "RISE" project and paid nearly 95% of the total cost.
- OPs failed to deliver possession by the agreed date, resulting in deficiency of services and unfair trade practices.
- Alleged deliberate cheating and fraud by OPs.
- Loss of faith in the project and refusal to accept possession even if delivered later.
- Claimed refund of amount paid along with interest, compensation for default, damages for mental agony, and legal costs.
Opposite Parties' Arguments
- Denied deficiency in service and unfair trade practices.
- Delay was due to force majeure events and unforeseeable circumstances beyond their control, including government orders, demonetization, shortage of labor, and COVID-19 pandemic.
- Claimed extension of possession date under the agreement's force majeure clause.
- Time was not the essence of the contract; the possession date was tentative.
- Compensation for delay was governed by Clause 17(a) of the agreement at Rs. 5 per sq.ft. per month.
- Complainant purchased the flat for commercial purposes and thus was not a consumer under the Consumer Protection Act.
- The dispute was subject to arbitration as per Clause 37 of the agreement.
- Commission lacked pecuniary jurisdiction as the amount involved was less than Rs. 1 crore.
- OP-5 contended it was only a financer and not liable for construction or financial transactions with the complainant.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Deepak Kumar etc. Vs. State of Haryana | Context of shortage of construction materials due to Supreme Court orders. | OPs cited this case to justify delay due to material shortage as force majeure. |
| Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725 | Unfair trade practices in one-sided contracts and protection of flat purchasers. | Court rejected OPs' reliance on one-sided contractual terms and held that such clauses constitute unfair trade practices. |
| Imperia Structures Ltd Vs Anil Patni and Anr (2020) 10 SCC 783 | Remedies under Consumer Protection Act are in addition to remedies under special statutes. | Court held that consumer remedies are not barred by arbitration clauses. |
| Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors (2020) 16 SCC 512 | Failure of developer to provide possession within contractual period amounts to deficiency. | Court applied this principle to hold that OPs committed deficiency by failing to deliver possession. |
| Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra (2020) 18 SCC 613 | A buyer can be expected to wait for possession for a reasonable period. | Court found the delay in this case inordinate and unreasonable, justifying refund and compensation. |
| Kavita Ahuja Vs Shipra Estates Ltd, CC 137 of 2010; Santosh Johri Vs M/s Unitech Ltd, CC 429 of 2014; Aloke Anand Vs M/s Ireo Grace Pvt Ltd & Others, CC no 1277 of 2017 | Definition of consumer and distinction between commercial and personal purchases. | Court rejected OPs' claim that complainant was not a consumer, applying principles from these precedents. |
| Puri Constructions Pvt Ltd Vs Harish Chawla etc, Civil Appeal no. 4472-75 of 2019 | Interest rate on delayed payment/refund should be reasonable (8% per annum). | Court fixed interest at 8% per annum on refund amount, relying on this precedent. |
Court's Reasoning and Analysis
The Court analyzed the facts and submissions, noting the contractual commitment for possession by 01.01.2016 (including grace period) and the failure of OPs to deliver possession even after more than seven years. The Court rejected the OPs' force majeure plea due to lack of documentary evidence supporting the claimed circumstances as force majeure events.
The Court also dismissed the contention that time was not of the essence and that compensation under the agreement was the complainant's sole remedy. It relied on Supreme Court precedents establishing that one-sided contractual terms are unfair trade practices and that consumer remedies under the Consumer Protection Act are in addition to other remedies, including arbitration.
The Court rejected the OPs' jurisdictional challenge, holding that the Commission had pecuniary jurisdiction as the value involved exceeded Rs. one crore. It further rejected the claim that the complainant was not a consumer, applying precedents that a purchaser who does not regularly trade in properties is a consumer.
Considering the inordinate delay and financial hardship caused to the complainant, the Court held that the complainant was entitled to refund of the amount paid along with interest at 8% per annum from the date of each payment until refund. The Court also directed payment of litigation costs and held the liability of the OPs to be joint and several.
Holding and Implications
The Consumer Complaint is allowed and disposed of.
The Court directed the opposite parties to refund the entire principal amount of Rs. 62,87,441/- to the complainant along with simple interest at 8% per annum from the date of each payment until actual refund. The refund amount is subject to verification based on receipts. The OPs are also directed to pay Rs. 25,000/- as litigation costs to the complainant. The liability of the OPs is joint and several.
The payment must be made within three months from the date of the order. If the complainant has any outstanding loan against the flat, the refund amount will first be used to repay the loan balance, with the complainant submitting necessary documentation to enable appropriate refund payments.
No broader precedent beyond the direct relief to the complainant is set by this decision.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 746 OF 2018
1. SUNIL SIKKA
A-1/103, SAFDARJUNG ENCLAVE, NEW DELHI-110029 ...........Complainant(s) Versus
1. M/S. RAMPRASTHA PROMOTERS AND DEVELOPERS PVT. LTD. & 7 ORS.
REGD. OFFICE AT: C-10, C BLOCK MARKET, VASANT
VIHAR,
NEW DELHI-110057
2. BALWANT CHAUDHARY SINGH, MANAGING
DIRECTOR,
REGD. OFFICE AT: C-10 C-BLOCK MARKET, VASANT
VIHAR,
NEW DELHI-110057
3. ARVIND WALIA, DIRECTOR,
REGD. OFFICE AT: C-10, C BLOCK MARKET, VASANT
VIHAR,
NEW DELHI-110057
4. SANDEEP YADAV, DIRECTOR,
REGD. OFFICE AT: C-10, C BLOCK MARKET, VASANT
VIHAR,
NEW DELHI-110057
5. BLUE BELL PROPTECH PRIVATE LIMITED
REGD. OFFICE AT: C-10, C BLOCK MARKET, VASANT
VIHAR,
NEW DELHI-110057
6. AMIT YADAV, DIRECTOR
SECTOR-44, PLOT NO. 114, GURGAON-122002
HARYANA
7. SANJAY DAROLIA, NOMINEE DIRECTOR
SECTOR-44, PLOT NO. 114,
GURGAON-122002
HARYANA
8. VIJAY KRISHNA CHAUDHARY, NOMINEE DIRECTOR
HAVING OFFICE AT: C-10, C-BLOCK MARKET,
VASANT VIHAR,
NEW DELHI-110057 ...........Opp.Party(s)
BEFORE:
HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER HON'BLE DR. INDER JIT SINGH,MEMBER
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For the Complainant : Mr. Rishi Kapoor, Advocate For the Opp.Party : Ms. R. Gayathri Manasa, Advocate Dated : 23 Mar 2023
ORDER
DR.INDER JIT SINGH, MEMBER
The present Consumer Complaint (CC) has been filed by the Complainant against Opposite Parties (OPs) as detailed above, inter alia praying for directions to the OP(s) to:-
1.
Refund amount of Rs. 62,87,441/- as principal amount received by OP(s) alongwith an interest @ 24% on principal amount from date of receiving the principal amount from complainants up to actual realization of payment and;
i.
Compensate the complainant with an amount of Rs. 5,00,000/- to the complainants in lieu of default in offering possession;
ii.
Pay an amount of Rs. 5,00,000/- towards damages, pain, mental agony, hardships, suffered by the complainants;
iii.
Pay Rs.2,00,000/- as to cost of legal expenses.iv.
Notice was issued to the OP(s) on 10.09.2018. Parties filed Written Statement/Reply and Evidence by way of an Affidavit as per details given in the Table at Annexure-A. The details of the flats allotted to the Complainant /other relevant details, based on pleadings of the parties and other records of the case are also given in the Table at Annexure-A.
2.
It is averred/stated in the Complaint that:3. That the complainant booked a flat in the residential Project launched by the Opposite Parties in the name of "RISE", situated in RP City, Sector 37-D, Gurgaon, Haryana and was allotted flat No. 1003, on the 10thFloor, tower D with a Super Area 1765 sq.ft. Buyer's agreement dated 04.08.2012 was entered between the parties. The total consideration for the flat was Rs. 79,71,112/- out of which, the complainants paid Rs.62,87,441/-. The OPs were liable to handover the possession of the unit by 01.09.2015 i.
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with a grace period of 120 days. OPs have deliberately, wilfully, dishonestly and intentionally cheated and defrauded the complainants of their hard earned money. That there is deficiency in services on the part of OPs and OPs are indulged in unfair trade practices. After having paid almost 95% of the total cost of the flat, the OPs failed to hand over the possession within the stipulated period and it is alleged that the construction has not been completed so far. The Complainants are the original allottee.
ii.
As per ABA clause 15 (a), OPs were bound to give possession of the apartment to complainants by September, 2015. There is a significance delay in handing over the possession hence OPs are deficient in rendering services. It is further stated that the complainants have now lost all faith in the project of the OPs. The complainants do not now wish to reside in the apartment even if the OPs deliver the possession of the same to him in the near future. Hence the complainants wish refund of the amount paid by them along with interest.
iii.
The OP-1 in their written statement/reply stated that:4.
OP-1 is a company incorporated under the Companies Act 1956, and is a real estate developer. OP-1 denies the fact of deficiency in providing its services and being involved in unfair trade practices and restrictive trade practices as alleged in the complaint. The OP has received an extension for completion and development of project up till 31.12.2023 vide memo no. 278 of 2017/7/2021/2 of RERA dated 20.07.2021. That the present project "RISE" has received funding from Govt. of India under the SWAMIH (Special Window for Affordable and Mid-Income Housing). The written statement filed by OP-1 shall also be considered to be on behalf of OP-2, OP-3, OP-4, OP-6. i.
OP-1 stated that the delay in handing over the possession of the Apartment was on account of force majeure and unforeseeable circumstances beyond the control of OPs, including a ban on use of ground water by Hon'ble High Court of Punjab & Haryana vide its order dated 16.07.2012 directing to use only treated water from available Sewerage Treatment Plants followed by a letter dated 01.9.2012 from Dy. Commissioner, Gurgaon in this regard, heavy shortage of supply of construction material pursuant to orders of Hon'ble Supreme Court in the Case Deepak Kumar etc. Vs. State of Haryana, Demonization announced by Government of India on 08.11.2016, shortage of labour/workforce in the real estate market due to implementation of Government Programmes like NREGA, JNNURM, etc.
ii.
That the complainants have filed the present complaint with malafide intention to extract iii.
3
huge sums of money from the OPs. It is also averred that clause 15(a) of the ABA is subject to Clause 31-Force Majeure, and in certain circumstances the date of possession gets extended automatically. Moreover, as per Clause 17(a) of ABA, in the eventuality of delay in handing over possession beyond the period stipulated in Clause 15(a), the allottee will be compensated with Rs5/- per sq ft per month of super area. It is contended that, time is not the essence in respect of delivering the possession of the apartment, and the stipulated date of delivery was only tentative and was not a firm date. That by the amendment of section 2(1)(d)(ii) of the Consumer Protection Act, 1986, definition of "consumer" has been redefined to oust the person availing services for commercial purposes, the Hon'ble Commission has held in catena of cases that a person whose sole objective is to make a profit in relation to its claim and not to redress any alleged injury or the one who obtains an Apartment not for their own use, does not fall under the ambit of definition of "consumer". That the parties have agreed in Clause 37 of the agreement, where in case of a dispute it should be initially referred to conciliation and if not resolved, be finally settled by arbitration under provisions of Arbitration and Conciliation Act, 1966. This Commission lacks pecuniary jurisdiction since the amount involved is less than Rs. One crore.
iv.
OP-5 in their written statement/reply stated that they are not a proper and necessary party to the present complaint. OP-5 is only a financer of the project and in order to secure and recover its funding has executed a Joint Development Agreement (JDA) dated 29.11.2011 with OP-1, which is also referred to in the ABA dated 26.12.2012. The OP-5 is neither the owner of the land nor liable for the construction and development works in any way whatsoever. OP-5 is in no way responsible for the financial transactions between the Complainant and OP-1, therefore no amount of liability in any manner can be imposed on OP-5. Thereafter, the OP-5 in its written statement has made averments similar to OP-1 and has supported the stand taken by OP-1.
5.
Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the Complaint, based on their Complaint/Reply, Evidence, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
6.
It was argued by the OP that they have utilized all resources towards completion of the project. However, the delay is attributable to reasons beyond the control of the Opposite Party. Another major reason contributing to the impossibility of performance is that of COVID-19 which caused a major havoc and sudden halt in every industry, specially, in the real estate industry. The Complainants are only entitled to the Compensation as provided under Clause 17 of the Agreement. The Apex Court of India in Puri Constructions Pvr Ltd Vs Harish Chawla etc, Civil Appeal no. 4472-75 of 2019 vide an
7.
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Order dated 07.05.2019 observed that " However, having regard to the market conditions, we are of the view that 12% per annum is on the higher side. We accordingly direct that the interest shall be payable at the rate of 8% per annum." The construction has begun in full swing after disbursement of funds in favour for the project "PRIMERA"
and thereafter, the Opposite Party has been rapidly pacing towards completion of the project RISE and will be able to deliver possession of the apartments soon. It is essential that any cash outflow is properly planned and provided and is not random which will have a negative impact on the project.
The contention of OP(s) that this Commission lacks pecuniary jurisdiction is not valid. Under Section 21 of the Act, Commission has the jurisdiction where value of goods and services and compensation, if any, claimed exceeds Rs. one crore. The contention that complainant is not a consumer as he has purchased the unit for commercial purpose is also rejected as no such evidence has been adduced by the OP(s) in this regard. It has been observed by this Commission in various cases (Kavita Ahuja Vs Shipra Estates Ltd, CC 137 of 2010, decided on 12.02.2015, Santosh Johri Vs M/s Unitech Ltd, CC 429 of 2014 and connected Cases, decided on 08.06.2015, Aloke Anand Vs M/s Ireo Grace Pvt Ltd & Others, CC no 1277 of 2017 decided on 01.11.2021) that purchase of a house can only be for a commercial purpose if the purchaser is engaged in the business of purchasing and selling houses or plots on a regular basis, solely with a view to make profit by way of sale of such houses, if the house is purchased purely as an investment and the purchaser is not undertaking the trading of houses on regular basis, then it would be difficult to say that he had purchased it for commercial purpose. The plea of OP(s) that delay was due to force majeure circumstances is not valid as even after a gap of more than 07 years from the committed date given in the ABA, possession of flat has not been given. There is no documentary evidence to support the contention of the Opposite Parties that the reasons pleaded by them, can be construed as 'Force Majeure. The contention of the OP(s) that the parties are bound by the agreement is also not acceptable. In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon'ble Supreme Court observed that "a term 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 incorporation of one sided clause in an agreement constitute 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 flats by the builder ........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms." Plea of the OP(s) for Arbitration as per conditions in the Agreement is also not accepted. It was held by Hon'ble Supreme Court in Imperia Structures Ltd Vs Anil Patni and Anr (2020)10 SCC 783 "Remedies under the Consumer Protection Act are in addition to the remedies under special statutes".
8.
Committed date of possession as per ABA, with grace period was 01.01.2016. Even after a gap of more than 07 years, construction is not complete, OC has not been obtained and OPs are not in a position to give any firm date for delivering the possession to the complainant. It was held by Hon'ble Supreme Court in Wg. Cdr. Arifur Rahman Khan
9.
5
and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors. (2020) 16 SCC 512, "failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency". In Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra- (2020)
18 SCC 613, Hon'ble Supreme Court observed that "A buyer can be expected to wait for possession for a reasonable period."
In the instant case, there is an inordinate delay in handing over the possession of flat by the OP(s). The complainant cannot be made to wait for an indefinite time and suffer financially. Hence, the complainant in the present circumstances has a legitimate right to claim refund alongwith fair delay compensation/interest from the OP(s). The plea of OP(s) for entitlement of compensation to the complainant in accordance with provisions of the ABA is not valid.
10.
This Commission in various CCs, against the same OP, involving similar/identical facts, keeping in view the submissions of counsel of the parties regarding rate of interest, have allowed refund to the concerned complainant along with interest @ 8%. During the argument, the counsel for Complainant in the present cases also relied upon some of these earlier judgements of this commission. Hence in the present cases also the interest is restricted @ 8%.
11.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -
12.
The OP(s) shall refund the entire principal amount of Rs. 62,87,441/- (Rupees Sixty Two Lakhs Eighty Seven Thousand Four Hundred and Forty One only) to the complainant, alongwith compensation in the form of simple interest @ 8% per annum from the date of each payment till the date of refund. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainant based on receipts etc.
i.
The OP(s) shall pay a sum of Rs.25,000/- as cost of litigation to the complainants.ii.
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The liability of the OP(s) shall be joint as well as several.iii.
(iv) The payment in terms of this order shall be paid within three months from today.
(v) In case the complainant has/have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant. The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP(s) four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.
The pending IAs, in the Consumer Complaint, if any, also stand disposed off.13.
Annexure-A Details of the Unit and other related details Sr
No Particulars
1 Project Name/Location etc.
"RISE", situated in RP City, Sector 37-D, Gurgaon, Haryana
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2 Apartment no. D - 1003
3 Size (Built up/Covered/Super Area) 1765 sq.ft.
4 Date of signing Agreement (ABA) 04.08.2012
5
Committed date of possession as per Agreement (with Grace period of 120 days)
01.01.2016
6 Total Consideration as per agreement Rs. 79,71,112/-
7 Amount Paid Rs. 62,87,441/-
8 D/o Filing CC in NCDRC 26.03.2018
9 D/o Issue of Notice to OP 10.09.2018
10 D/o Filing Reply/Written Statement by OP-1 11.07.2018
11 D/o Filing Reply/Written Statement by OP-2 12.07.2018
12 D/o Filing Reply/Written Statement by OP-5 20.08.2019
13 D/o Filing Rejoinder by the Complainant 20.08.2019
14
D/o Filing Evidence by way of Affidavit by the Complainant
20.08.2019
15 D/o Filing Evidence by way of Affidavit by the OP-1 16.07.2019
16
D/o Filing Evidence by way of Affidavit by the OP-2, OP-3, OP-4, OP-6
23.07.2018
17 D/o Filing Evidence by way of Affidavit by the OP-5 17.03.2020
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......................J
RAM SURAT RAM MAURYA
PRESIDING MEMBER
......................
DR. INDER JIT SINGH
MEMBER
18 D/o filing Written Synopsis by the Complainant 25.07.2022
19 D/o filing Written Synopsis by the OP-1 18.01.2023
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