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Complaint filed on : 13/09/2017 Complaint disposed of on : 26/09/2019

BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

PANAJI – GOA

C.C. No. 24/2017

Dr. Anirudha Basu,Presently R/o. C/o. Mr. Ajay Basu,Flat 5C, “Suryalok”,12A, Mandeville Gardens,P. Gariahat, Kolkata – 700019. ... Complainant

v/s1. M/s Niche Developers Goa,

A registered partnership firm,Through its Partners,With its Office at F-3, First floor,Sacred World, Wanawadi,Pune, 411040.

2. Mr. Dinesh Vashdev Chhutani,Flat No 503, Rose building,Flower Valley, Wanawadi, Pune, 411040.

3. Mr. Purushottam Ramrakhyani,C/1, Taxila Apartment,Sardar Patel Road (Opp. Parade Ground), Secunderabad, Telangana, 500003.

4. Mrs. Sunta P. Ramrakhyani,C/1, Taxila Apartment,Sardar Patel Road (Opp. Parade Ground), Secunderabad, Telangana, 500003.

5. Mrs. Kavita Dinesh Chhutani,Flat No 503, Rose building,Flower Valley, Wanawadi, Pune, 411040.

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6. Mr. Ram Bhagwandas Sukhramani, Row House No. 32 VasantVihar,Row House Society, Vasant Vihar PokhranRoad No. 2, Thane (w).

7. Mrs. Anita Motandas Gangwani,Flat no. 12, 1st Floor Swatantrya Sainik CHS Ltd,Near Bim’s College, MithBunder Road,Thane-400603.

8. Mr. Rajesh Jeevan UttamchandaniBungalow No A-6, Clover Garden,Naylor Road, Pune, 411001.

9. Mr. Govind Jeevan Uttamchandani,Bungalow No. 1, Nitron Home Lands,Kalyaninagar, Pune, 411006. ... Opposite Parties

Mr. N. G. Kamat, Ld. Counsel for the Complainant. Mr. S. M. Singbal, Ld. Counsel for the OPs No. 1, 3 and 4.Other OPs are absent.

Coram: Shri. Justice U. V. Bakre, President Smt. Vidhya R. Gurav, Member

Dated: 26/09/2019

JUDGMENT[Per Justice Shri. U. V. Bakre, President]

This Complaint has been filed by the Complainant to direct

the Opposite Parties (OPs, for short) to refund to the Complainant

the amount of Rs. 62,66,630/- paid to the OP No. 1 in connection with

the said flat; to pay an amount of Rs. 20,89,106/- being interest

commuted on Rs. 62,66,630/- @ 18% p. a. from 01/11/2015 till

07/09/2017; to pay rent assistance amount of Rs. 3,38,000/- for the

period from 01/11/2015 until 07/09/2017 @ Rs. 15,000/- per month; to

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reimburse the amount of Rs. 8,32,116/- towards the expenses

incurred by the Complainant and to pay costs of Rs. 40,000/-.

2. Case of the Complainant, in short, is as follows:-

The Complainant booked with the OPs, sometime in late

February and early March of the year 2014, a two bed-room

Flat/Unit identified under No. 802, admeasuring 1277.95 square feet

i.e. 118.77 square meters, with an exclusive private terrace, to be

located on the eighth floor of the project known as ”Sky Waters” at

Dabolim, Mormugaon, Goa, (hereinafter referred to as the said

project) at a price of Rs. 62,00,000/- (hereinafter referred to as the

said flat). At that time, the said project was under construction and

had reached the third floor level. The Complainant was assured by

the OPs that the possession would be handed over, complete in all

regards with occupancy certificate, by 31/10/2015. As required, the

Complainant effected the first part-payment in the sum of Rs.

6,50,000/- duly acknowledged under receipt dated 07/03/2014 issued

by OP No. 1. The Complainant was coaxed to pay further amounts

of Rs. 2,17,000/- towards stamp duties at the time of registration of

Agreement; Rs. 2,48,000/- towards registration charges (including

taxes) of Agreement; Rs. 1,35,000/- towards maintenance charges for

two years in advance, Society charges, development charges and

amenities and Rs. 4,00,000/- towards parking lot allotment (total Rs.

10,00,000/-). The Complainant paid the said amount of Rs.

10,00,000/- on 02/04/2014 acknowledged under a receipt on

10/04/2014 by OP No. 1. The Agreement for sale dated 10/04/2014

(hereinafter referred to as the said Agreement) was executed

between the OPs No. 1 to 7 as ‘Promoters & Builders’; the

Complainant as ‘Purchaser’ and the OPs No. 8 & 9 as ‘Owners’, in

terms of which it was agreed that the OPs would develop the said

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plot and construct for the Complainant the said flat in the said

project, with amenities and facilities and infrastructure as agreed, for

said consideration. The Complainant made a further part-payment

of Rs. 48,04,570/- as required, via international Fund transfer on

10/04/2014, duly acknowledged under receipt dated 10/04/2014, by

OP No. 1. The balance consideration of Rs. 7,45,430/- was to be

effected to the OP No. 1 at the time of possession. In May 2014, the

Complainant’s family friend, Mrs Sharbani Dasgupta also agreed to

purchase a flat/unit No. 804 in the said project also on the express

understanding mentioned in her agreement that the OPs shall give

possession of the flat/unit to her on or before 31/10/2015. The

Complainant, along with the husband of Mrs. Sharbani Dasgupta,

namely Tridib Dasgupta visited the said project on 25/03/2015 and

met the OPs No. 3 and 4 who assured delivery of the said flat by

December, 2015. At this time, the structure of the building was

constructed upto 6th floor and partially the 7th floor. Some changes

were discussed inside the said flat and the flat of Dasgupta. The

Complainant revisited the site on 20/07/2015 and found that the

concrete structure upto the 7th floor and he was assured by the OP

No. 3 of the slated completion and delivery by March, 2016. On a

visit on 27/12/2015, at the behest of the Complainant, his friends Mr.

Priyo and Mrs. Bindu Goswami, residents of Chicalim, found no

sample flat ready and noted that the 8th floor was completed but

without a roof slab. On 13/01/2016, Mr. Priyo and Mrs. Bindu

Goswami met the representative of the OP No. 1, Mr. Parikshit

Ramrakhyani, in Pune, who assured them that the project will be

completed by September, 2016. On 19/03/2016, the Complainant met

the OP No. 3 on site and found that although the roof slab on 8 th

floor was partially completed, the interior walls were under

construction in the lower floors but not on the higher floors and the

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OP No. 1, through OP No. 3 indicated the completion by year-end

2016. The OP No. 3 introduced his nephew, Monish Dulani to the

Complainant as the project manager for the said project. Between

18th - 21st, October, 2016, the Complainant saw that the 8th floor i.e.

the last floor roof was still incomplete. Over a period of three days,

the complainant spent considerable time with Monish Dulani for

selection of tiles, kitchen counter granite, civil, plumbing and

electrical line modifications for the said flat, all of which were

approved by the OP No. 3. The Complainant was justifiably upset

with the delay of almost a year and was informed by the OP No. 3

that they expected to complete by April/May, 2017. Between 23rd

and 24th March, 2017, the Complainant found that the project seemed

abandoned with no workmen in sight. On 27th March, 2017, the

Complainant found four workmen installing drain pipes outside,

with no civil, plumbing or electrical work going on at the site. The

lift had not been installed though it was assured by January, 2017.

The project manager, Monish Dulani, when contacted, said that he

was busy at another site in Pune and that he along with crew had

been moved to Pune for completion of some other project. The

Complainant was perturbed to find that the said project was at a

virtual stand-still. On 23/04/2017, the OP No. 4 conveyed that the flat

will be delivered by Dusserah, 2017. The Complainant issued a legal

notice dated 26/04/2017, through Advocate, to the OPs, drawing

attention to inordinate delay and false promises and calling upon

them to pay compensation to the Complainant. Though the OPs

received the said notice, however, they failed to respond. On

21/08/2017, the Complainant found that only 8 to 10 labourers were

on site and it seemed that the said project would take a few years to

get completed. The Complainant engaged an Architect and

government approved valuer to evaluate the extent of the work

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carried out. The said valuer, after inspection, tendered his report

dated 28/08/2017 and inter alia estimated that it would take a

minimum of another 2 to 3 years for completion. The valuer

confirmed that the quality of the works completed as on date were

not of the best standards. The Complainant and the said expert

observed leakage at many places in the said flat, with water actually

found dripping through the RCC slab at many places therein. Damp

patches were also noted on the un-plastered ceiling of the said flat

which is on the last floor of the said project. It was clear that the roof

slab which also forms the ceiling of the said flat had not been water-

proofed adequately and was already leaking, thereby jeopardizing

the life and efficacy of the said roof slab, considering the heavy

monsoon faced in Goa. The Complainant realized that there was no

point in waiting for years for completion of the project which

otherwise was of sub-standard material and works. Failure and

neglect on the part of the OPs to complete the construction within

stipulated time and not obtaining occupancy certificate from

competent authorities, is a deficiency in service. Out of the said

amount of Rs. 10,00,000/-, collected by the OPs towards stamp duty,

registration fee, advance for maintenance charges, parking

allotment, etc., only an amount of Rs. 1,87,950/- was utilized towards

stamp duty and registration fee for the said Agreement, including

service charges of Rs. 10/- for franking and hence an amount of Rs.

8,12,050/- is required to be refunded to the Complainant. Nearly 90%

of the consideration has been collected from the Complainant, which

has been utilized in other projects. Hence the Complainant is

entitled to claim the reliefs from the OPs as prayed for.

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3. The Complainant relied upon the Agreement for sale dated

10/04/2014, brochure of the OP No. 1, receipts of payments made to

the OP No. 1, letters dated 10/04/2014 acknowledging payments,

issued by the OP No. 1, inspection report dated 28/08/2017, legal

notice dated 24/04/2017 sent by Adv. A. Suresh Rao, letter dated

29/05/2017 from the OP No. 3, response dated 04/06/2017 from Adv.

A. Suresh Rao, email communications, documents pertaining to

travel and expenses and permissions/licences and approvals from all

competent statutory authorities ( in possession of the OPs).

4. The OPs No. 1, 3 and 4 (hereinafter referred to as the said OPs)

filed their written version thereby resisting the Complaint. The said

OPs denied the contents of each and every paragraph of the

Complaint which are inconsistent with their case. Case of the said

OPs is as under:-

The cause of action, if at all has arisen in favour of the

Complainant, should be from the date of the said Agreement i.e.

10/04/2014 and hence the Complaint filed in the year 2017 is barred

by the law of limitation. The Complaint is malafide, vexatious,

premature and without any cause of action. The Complaint does not

fall within the purview of the Consumer Protection Act, 1986

(hereinafter referred to as the ‘Act’), as there is no deficiency in

service. The Forum has no jurisdiction to entertain the Complaint

and the jurisdiction lies with the Civil Court. The Complainant is

bound by the terms of the contract which stipulates force majeure

clause and sudden demonetization, service tax issue and

implementation of GST, which are all sudden Governmental

changes/new regulations beyond the control of the parties, delayed

the execution of the project. The present Complaint is a civil dispute

and the parties are bound by the terms of contract which also

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stipulates compensation in terms of rentals which is sufficient and

reasonable for loss/protection. The said Agreement is liable for

specific performance and there is no clause in the contract whereby

the Complainant can rescind or withdraw or terminate the validity

of the contract unilaterally and illegally. Delay is also due to sudden

change in the constitution of the firm and general recession in real

estate market due to which the work in various projects in entire

Dabolim is at standstill. The OP No. 1 is, however, ready and willing

to fulfill the contract as per specifications except for the delay due to

force majeure. The amount of Rs. 10,00,000/- was received as per the

stamp duty and registration fees applicable in the State of Goa and

as per stipulations in the Agreement. The report dated 28/08/2017

prepared by the Architect, Mr. Suvrat Bhobe is at the instructions of

the Complainant to suit his case and is false and fabricated. The OPs

could not give possession to the Complainant on or before

31/10/2015 due to the reasons stated earlier. The said Agreement

stipulates that if the OPs fail or neglect to give possession of the said

flat to the Complainant on or before 31/10/2015, the OPs would be

liable to pay rent at the rate of Rs. 15,000/- per month to the

Complainant and the OPs are ready to abide by the said clause. The

Complainant is not entitled to any of the prayers.

5. The OPs No. 2, 5, 6 and 7 filed an application stating that they

had retired from the partnership firm on 1st April, 2014 and are not

concerned with the matter and praying that they be dropped from

the proceedings. They produced the copy of the retirement deed.

6. The Complainant filed his affidavit-in-evidence. He produced

application dated 20/09/2017 made to the Public Information Officer

of MPDA under R. T. I., Act and reply dated 11/10/2017 sent by the

Public Information Officer, informing that no renewal was issued to

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the project “Sky Waters: on or after 06/09/2015. The Complainant, in

addition to stating all that is pleaded in the Complaint, also denied

the contents of the written version of the said OPs. The Complainant

filed affidavits-in-evidence of Mr. Tridib Dasgupta, the Architect,

Mr. Suvrat Bhobe and Mr. Priyodorsi Goswami. The said OPs filed

the affidavit-in-evidence of the OP No. 4, namely Smt. Sunita P.

Ramrakhyani, who is the partner of the OP No. 1. The said OPs also

filed affidavits-in-evidence of the contractor, Mr. Chilamkurthi

Jayanth Mohan Rao, the Architect, Ar. Vrishali Danve and the site

engineer, Mr. Sayed Shibil Sohail. Along with the affidavit-in-

evidence, the OP No. 4 produced the development permission dated

22/03/2018, Form–F, receipt dated 19/03/2018 issued by Mormugao

Planning and Development Authority (MPDA), letter dated

13/04/2018 from Shri Gionanni Karl Vaz to the Member Secretary of

MPDA and photographs. Questionnaires were put by the said OPs

to the Complainant and to Mr. Suvrat Bhobe and the said persons

have filed affidavit-in in-reply to the queries. Mr. Suvrat Bhobe has

produced pictures taken on 25/07/2018, completion certificate dated

12/04/2018 and completion certificate dated 03/05/2018. The

Complainant put questionnaires to the OP No. 4, Smt. Sunita

Ramrakhyani and to the site engineer, Mr. Sayed Shibli Sohail and

they have answered the queries by way of affidavit.

7. The Complainant and the said OPs have filed written arguments

on record. Along with the written arguments, the Complainant has

produced copies of three emails from the OP No. 4, photographs

showing status of incomplete project, completion certificate dated

12/04/2018, completion certificate dated 03/05/2018, photographs

showing status of the construction progress by month/year wise,

email dated 06/11/2016, photographs showing incorrect internal

finish of flat No. 802, brochures illustrating 8th floor plan and roof

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floor plan, amenities and features in sale agreement. The OPs No. 1,

3 and 4 produced the completion certificate dated 03/05/2018. Vide

application dated 30/10/2018, the said OPs sought leave to produce

the alleged latest photographs at site and certificate issued by the

water proofing contractor. The Complainant filed reply dated

02/11/2018 objecting to the said application for production of

documents and produced several photographs. Oral arguments

have also been heard. Mr. Kamat, Ld. Counsel argued on behalf of

the Complainant and Mr. Singbal, Ld. Counsel argued on behalf of

the said OPs. We have gone through the entire material on record.

On 12/06/2019, the said OPs produced the occupancy certificate

issued by the Village Panchayat of Chikalim. Parties have relied

upon various citations.

8. We have gone through the entire material on record.

9. The OPs No. 2, 5, 6 and 7, though filed the application to drop

them from the proceedings, however, failed to remain present after

filing of the said application and contesting the same and the said

application was dismissed on 15/01/2018. In view of the absence of

the OPs No. 2, 5, 6, 7, 8 and 9, the matter proceeded exparte against

them.

10. The said OPs have contended that the Complaint is barred by

the law of limitation, latches and acquiescence. Clause No. (9) of the

said Agreement, inter alia, provides that the Flat/Unit Purchaser

shall take possession of the said Flat/Unit within 90 days of the

Promoter giving written notice to the Flat/Unit Purchaser intimating

that the said Flat/Unit is/are ready for use an occupation, on

execution of proper possession receipt. Admittedly, till the filing of

the Complaint, the OPs had neither offered possession of the said

flat to the Complainant nor refused to deliver possession. In

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paragraph 9 of the written arguments filed on 16/10/2018, the said

OPs have stated that presently the construction work is almost

completed except for minor finishing. Hence, admittedly, even the

construction is not completed ion all respects. Thus, this is a clear

case of continuing cause of action. Even otherwise, possession of the

said flat was to be delivered on or before 31/10/2015. The Complaint

has been filed on 13/09/2017 i.e. within two years from the date

stipulated for delivery of possession. The Complaint is neither

barred by the law of limitation nor by latches or acquiescence.

11. Another untenable contention of the said OPs is that the

Complaint is strictly a civil dispute, involving complicated questions

of facts and technicality and hence this Commission has no

jurisdiction. The OPs have, however, failed to establish that there are

any complicated questions of facts or technicalities which cannot be

decided under the Act. Section 3 of the Act provides that the

provisions of this Act shall be in addition to and not in derogation of

the provisions of any other law for the time being in force.

12. The total consideration for the said flat was Rs. 62,00,000/-. Out

of the above consideration amount, the Complainant has paid to the

OP No. 1 a sum of Rs. 54,54,570/-. Receipt of the amount of Rs.

6,50,000/- on 07/03/2014 has been admitted in the said Agreement

itself. Further, there is receipt dated 07/03/2014 issued by the OPs, in

this regard. The OPs have also issued a receipt dated 10/04/2014 in

respect of the amount of Rs. 48,04,570/-. Thus, the balance

consideration is Rs. 07,45,430/-. Besides the above, the Complainant

has paid an amount of Rs. 10,00,000/- towards stamp duty,

registration fee, advance for maintenance charges, parking

allotment, etc.. In this regard, there is acknowledgment made vide

letter dated 10/04/2014 written by the OP No. 1 to the Complainant.

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Out of the said amount of Rs. 10,00,000/-, an amount of Rs. 1,87,950/

has been utilized towards stamp duty and registration fee for the

said Agreement and the amount of Rs. 8,12,050/- is still to be

utilized. The above facts, regarding the details of balance of Rs.

8,12,050/-, as pleaded in the Complaint and stated in the affidavit-in-

evidence of the Complainant, have not been denied by the OPs. As

per clause (2) of the said Agreement for sale, the balance amount of

Rs. 07,45,430/- towards consideration was to be paid at the time of

possession. In this clause (2) time is stated to be the essence of the

said contract. As per clause (8) of the said Agreement, possession of

the said flat was to be given on or before 31/10/2015. In terms of this

clause No. (8), if the OPs fail or neglect to give possession of the said

flat to the Complainant, the OPs are liable to pay Rs. 15,000/- per

month as rent to the Complainant. It is further added in this clause

No. (8) that the OPs shall not incur any liability if they are unable to

deliver possession of the said flat by the aforesaid date, if the

completion is delayed by reason attributable to “Force Majeure”.

13. The Complainant has fulfilled his part of the contract, within

the stipulated time. But the OPs have failed to fulfill their part of the

contract. Coming to the lame plea of “Force Majeure” taken by the

said OPs, the reasons cited by them are sudden demonetization,

service tax issue and implementation of GST. These reasons have not

been substantiated in the written version by stating as to what

exactly happened due to the above which caused delay. In the

affidavit-in-evidence of the OP No. 3 and in written arguments,

however, the said OPs have alleged that demonetization brought

restrictions on utilization of funds due to which materials required

for construction of the project were delayed. Demonetization was

on 08/11/ 2016 i.e. after 13 months from 31/10/2015 which was the

date for delivery of possession of the said flat to the Complainant.

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The implementation of GST was from 01/07/2017 i.e. after about 20

months from the date of promised flat delivery. Bad real estate

market in Goa was also contended to be the reason for delay.

However, this, even if it was there, cannot come within the purview

of “Force Majeure”. The OPs started a new project in Pune in the

year 2014. The evidence on record reveals that the said project was

almost at a standstill during 2016 -2017 while the OPs diverted

resources to a Pune project. The above can be understood from the

sequences of construction progress photographs produced by the

Complainant. The records more particularly the reply dated

11/10/2017, under RTI, Act given by the PIO of MPDA show that

when the Development Permission expired in on 5th September,

2015, the OPs did not get the same renewed. In his affidavit dated

05/05/2018, Mr. Chilamkurthi, the contractor of the said project has

stated that presently the license is under renewal. The OP No. 2

applied for renewal in March, 2018 providing his address as

“Infinity Bay, Jairam Nagar, Dabolim, Goa instead of his old Pune

address in his application to MPDA. The renewed Development

Permission was granted on 22/03/2018. This itself shows lack of

priority given by the OPs to the said project. The evidence produced

by the said OPs cannot establish that the delay was due to the above

reasons. This is gross negligence/deficiency in service on the part of

the OPs. The delay in completion of the construction, which

otherwise is admitted, cannot be attributed to “Force Majeure”.

14. It was contended by the Ld. Counsel for the said OPs that the

words “time is the essence of the contract” appear only under clause

No. 2 of the said Agreement and hence they apply only to the

schedule of payment of the purchase price given therein. We do not

agree with the above contention of the said OPs. Though the said

words appear under clause 2 of the said Agreement, however, it is

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not stated that the time is the essence of the said clause or for

payment of the balance amount only. The word “contract”

mentioned in the said sentence clearly indicates that the time is the

essence of the Contract and not the payment only. The standard rule

of such condition is that the parties have agreed to perform their

obligation as per the time specified in a contract and there shall not

be any extension of time. Mr. Singbal, Ld. Counsel for the said OPs

submitted that in case of immovable property, time cannot be the

essence of the contract. He has relied upon the order of the Hon’ble

Supreme Court in the case of “Smt. Chand Rani (Dead) By Lrs. Vs.

Smt. Kamal Rani (Dead) By Lrs.” (AIR 1993 SC 1742), wherein it has

been held that it is a well-accepted principle that in case of sale of

immovable property, time is never regarded as the essence of the

contract. However, in the case supra, there was no specific clause in

the agreement that “time shall be the essence of the contract”, which

is there in the present case before us. In the case of “Bengalore

Development Authority Vs. Syndicate Bank”, [ (2007) 6 SCC 71], the

Hon’ble Supreme Court has held that in a contract involving

construction, time is not the essence of contract, unless specified. In

the case of “Saradamani Kandappan Vs. S. Rajalakshmi & Ors.”,

[ (2011) 12 SCC 18], the Hon’ble Supreme Court has observed that as

a general preposition of law time is not essence of contract unless the

parties to the contract intend to make time an essential condition for

performance of contract, by expressly providing so or it can be

inferred by necessary implication from conduct of the parties. The

Apex Court has appears to have said that the said general

presumption of law that time is not the essence of a contract that is

for sale of immovable properties needs to be revisited as time forms

an essential condition for the performance of contract in

circumstances of ever-increasing prices of real-estate property which

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are bound to affect transactions of sale of immovable property. In

our considered view, the condition that “time shall be the essence of

this contract” is an essential condition applying to any clause in the

Agreement where time is fixed.

15. It was further submitted by the Ld. Counsel for the said OPs

that as provided by clause No. (8) of the said Agreement, the

Complainant, in the Complaint, has prayed for rent assistance

amount and the OPs are ready and willing to pay to the

Complainant the sum of Rs. 15,000/- per month rent, except for the

delay due to force majeure and there is no clause for refund of the

amount paid. It was also argued that the said Agreement is still in

force and is not terminated. Ordinarily the parties are bound by the

terms and conditions of the contract. Clause (5) of the said

Agreement provides that without prejudice to the rights of the

Promoter under Clause (2) of this agreement, the Flat/Unit

Purchaser agrees to pay to the Promoter interest at 18% per annum

on all the amounts which become due and payable by the Flat/Unit

Purchaser to the Promoter under the terms of this agreement, from

the date the said amount becomes payable by the Flat/Unit

Purchaser to the Promoter till the actual payment. Clause No. (6) of

the said Agreement gives right to the OPs to terminate the

agreement if the Complainant commits default in payment on due

date of the amount due to the OPs or if the Complainant commits

breach of any of the terms of the said Agreement. Further if the said

Agreement is terminated by the OPs, the OPs have to refund only

the installments of sale price of the said flat which may have been till

then paid to the OPs and the OPs shall not be liable to pay any

interest on the said amount so refunded and upon termination of the

said Agreement, the OPs are free to dispose of the said flat to any

other person at any price at the discretion of the OPs. Thus, in case

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of delay in payment, the OPs get 18% interest on the due amount

and in case of default in payment and breach of the contract by the

Complainant, the OPs get right to rescind the contract and refund

the amount without interest but if the OPs delay in delivery of

possession, the delay be of whatever length, the Complainant gets

only Rs. 15,000/- per month. The said terms of the said Agreement

are wholly one sided, unfair and unreasonable and amount to unfair

trade practice. In this regard, the Ld. Counsel for the Complainant

has relied upon the Judgment dated 31/07/2017 of the Hon’ble

National Commission in Consumer Complaints No. 1131 to 1140 of

2016 ( C.C. No. 1130/2016.—Niru Kaushal & Anr. Vs. Unitech Ltd.)

and Judgment dated 06/05/2019 in Consumer case No. 1702/2016,

[“Shalab Nigam Vs. Orris Infrastructure and 3C Company

(NCDRC)]”. In the cases supra and in many other cases like

Complaint No. 347 of 2014, “Swarn Talwar and 2 Ors Vs. Unitech

Ltd.’ and other connected consumer complaints. (Judgment dated

14/08/2015), “Satish Kumar Pandey & Anr. Vs. Unitech Ltd.” and

connected matters. (Judgment dated 08/06/2015), similar view has

been taken. In the case of “Shalab Nigam” (supra), it is observed as

under:-

“It is an undisputed proposition of law that ordinarily the

parties are bound by the terms and conditions of the contract

voluntarily agreed by them and it is not for a Consumer Forum

or even a Court to revise the said terms.

However, a term of a contract, in my view will not be final

and binding if it is shown that the consent to the said term was

not really voluntary but was given under a sort of compulsion

on account of the person giving consent being left with no other

choice or if the said term amounts to an unfair trade practice. It

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was submitted by the learned counsel for the complainants that

the term providing for payment of a nominal compensation such

as Rs. 5/- per square foot of the super area having become the

order of the day in the contracts designed by big builders, a

person seeking to buy an apartment is left with no option but to

sign on the dotted lines since the rejection of such term by him

would mean cancellation of the allotment. He further submitted

that a person seeking to acquire a built up flat instead of

purchasing a plot and then raising construction on it, therefore,

is not in a position to protest resist the inclusion of such a term

in the Buyer’s Agreement, and has to rely upon the reputation of

the builder, particularly if he is a big builder such as Unitech

Ltd.. He also submitted that the format of the Buyer’s

Agreement is never shown to the purchasers at the time of

booking the apartment and if he refuses to sign the Buyer’s

Agreement on the format provided by the builder, not only will

he lose the booking, even the booking amount/earnest money

paid by him will be forfeited by the builder. I find merit in the

above referred submissions of the learned counsel. A person who,

for one reason or the other, either cannot or does not want to buy

a plot and raise construction of his own, has to necessarily go in

for purchase of the built up flat. It is only natural and logical for

him to look for an apartment in a project being developed by a

big builder such as the opposite party in these complaints. Since

the contracts of all the big builders contain a term for payment of

a specified sum as compensation in the event of default on the

part of the builder in handing over possession of the flat to the

buyer and the flat compensation offered by all big builders is

almost a nominal compensation being less that 25% of the

estimated cost of construction per month, the flat buyer is left

18

with no option but to sign the Buyer’s Agreement in the format

provided by the builder. No sensible person will volunteer to

accept compensation constituting about 2-3% of his investment

in case of delay on the part of the contractor, when he is made to

pay 18% compound interest if there is delay on his part in

making payment.

It can hardly be disputed that a term of this nature is

wholly one sided, unfair and unreasonable. The builder charges

compound interest @ 18% per annum in the event of the delay

on the part of the buyer in making payment to him but seeks to

pay less than 3% per annum of the capital investment, in case he

does not honour his part of the contract by defaulting in giving

timely possession of the flat to the buyer. Such a term in the

Buyer’s Agreement also encourages the builder to divert the

funds collected by him for one project to another project being

undertaken by him. He, thus, is able to finance a new project at

the cost of the buyers of the existing project and that too at a

very low cost of finance. If the builder is to take loan from Banks

or financial Institutions, it will have to pay the interest which

the Banks and Financial Institutions charge on term loan or cash

credit facilities, etc. The interest being charged by the Banks and

Financial Institutions for financing projects of the builders is

many times more than the nominal compensation which the

builder would pay to the flat buyers in the form of flat

compensation. In fact, the opposite party has not even claimed

that the entire amount recovered by it from the flat buyers was

spent on this very project. This gives credence to the allegation

of the complainants that their money has been used elsewhere.

Such a practice constitutes unfair trade practice within the

meaning of Section 2(r) of the Act since it adopts unfair methods

19

or practice for the purpose of selling the product of the builder.

Though, such a practice does not specifically fall under any of

the Clauses of Section 2(r)(1) of the Act that would be

immaterial considering that unfair trades, methods and practices

enumerated in Section 2(r)(1) of the Act are inclusive and not

exhaustive, as would be evident from the use of the word

“including” before the words “any of the following practices.

The view taken in Satish Kumar Pandey (supra) and

reiterated by this in Swarn Talwar (supra) was upheld by the

Hon’ble Supreme Court.

Therefore, I have no hesitation in reiteration that the

compensation which the builder has to pay to the buyers in such

cases cannot be restricted to the compensation stipulated in the

wholly one sided Buyers Agreement and as to be based upon the

loss suffered by the consumer on account of deficiency in services

rendered to him”

16. Merely because the said Agreement provides for payment of Rs.

15,000/- monthly rent to the Complainant in case of delay and does

not provide for a right in the Complainant to terminate the

agreement and claim refund of the amount paid, that does not mean

that the Complainant cannot terminate the said Agreement. It is

well-settled that the provisions of the Indian Contract Act apply to

the Consumer Cases. Section 55 of the Indian Contract Act provides

for the effect of failure to perform at a fixed time in contract in which

time is essential. It says that when a party to a contract promises to

do a certain thing at or before a specified time or certain things at or

before a specified time, and fails to do such thing at or before a

specified time, the contract or so much of it as has not been

performed, becomes voidable at the option of the promisee, if the

20

intention of the parties was that time should be essence of the

contract. In the case of “Shalab Nigam” (supra), the Hon’ble

National Commission has observed that clearly the OPs have not

been able to complete the project in time and deliver the possession

of property in question to the complainant in time as per the

allotment letter or the Apartment Agreement and it is now clearly

established that the allottees have right to ask for refund if the

possession is inordinately delayed beyond one year. In the present

case possession was to be delivered on or before 31/10/2015 but even

about two years thereafter, i.e. on the date of filing of the Complaint,

the construction was not complete, forget about delivering the

possession. The learned counsel for the said OPs submitted that in

the present case it is nobody’s case that the consent to fixing

compensation by way of rentals of Rs. 15,000/- per month was not

voluntary or that it is nominal in nature or is one sided, unfair or

unreasonable. In this regard, there no merit in the above contention

of the said OPs since the relief of refund of the amount paid to the

said OPs is covered by Section 55 of the Contract Act since there is

inordinate delay in completing the said flat and the facilities and

amenities agreed upon and handing over the possession of the said

flat, along with promised facilities and amenities. In this regard,

there no merit in the above contention of the said OPs since the relief

of refund of the amount paid to the said OPs is covered by Section

55 of the Contract Act since there is inordinate delay in finishing and

handing over the possession of the said flat along with promised

facilities and amenities. The final arguments in the matter were

concluded on 28/03/2019 and thereafter on 14/06/2019, the said OPs

placed on record the copy of the occupancy certificate dated

21/05/2019, which is about three years and 6 months from

31/10/2015, the last date fixed for delivery of possession. There is no

21

affidavit filed. There is no evidence of both the parties regarding the

said occupancy certificate. There was no opportunity to the

Complainant to comment on the said occupancy certificate. We are

therefore unable to hold that the entire work of the said flat and the

facilities and amenities to which the complainant was entitled, are

completed in all respects. In Consumer case No. 2590 of 2017

(“Chandan Gupta Vs. M/s Supertech Ltd.”), the possession of the

residential flat booked by the complainant was to be delivered by

June, 2016 or latest by December, 2016 after including the grace

period od six months which was available to the opposite party.

Since the construction was not completed and the possession was

not offered, in the year 2017, the complainant filed the consumer

case seeking refund of the amount of Rs. 1,08,16,881/- paid to the

opposite party along with compensation, etc.. By order dated

01/05/2019, the Hon’ble National Commission found that there was

no justification for the delay on the part of the opposite party in

offering possession to the complainants. It was found that the

construction of the house was not complete till the date of the order

and there was no certainty as to when the construction would be

completed and the OP would be in a position to offer possession of

the allotted flat after obtaining the requisite Occupancy Certificate.

The complainant restricted his claim to the refund of the entire

principle amount alongwith compensation in the form of simple

interest @ 10% per annum from the date of each payment till the

date of refund. The National Commission allowed the complaint

and ordered the refund of the entire principle amount of Rs.

1,08,16,881/- to the complainant alongwith compensation in the form

of simple interest @ 10% per annum from the date of each payment

till the date of refund and payment of costs of Rs. 25,000/-. Ld.

Counsel for the said OPs has tried to distinguish the above order in

22

the case of “Chandan Gupta”(supra) by alleging that in the abocve

case the construction of the house was not complete till the date of

the order and there was no certainty as to when the construction

would be completed and the OP would be in a position to offer

possession of the allotted flat after obtaining the requisite

Occupancy Certificate whereas in the present case the occupancy

certificate is procured and the said OPs are ready to offer possession

with electricity and water connection. We are unable to agree to the

above. It should be kept in mind that in the present case, the final

arguments in the matter were concluded on 28/03/2019 and

thereafter on 14/06/2019, when the matter was pending for

Judgment, the said OPs placed on record the copy of the occupancy

certificate dated 21/05/2019, which is about three years and 6 months

from 31/10/2015, the last date fixed for delivery of possession. A

document produced at such a belated stage without giving

opportunity to the Complainant to rebut, cannot be considered. In

the case of “Kolkata West International City Pvt. Ltd. Vs. Devasis

Rudra” [Civil Appeal No. 3182 of 2019 @ SLP (C) No(S). 1795 of

2017], the respondent had paid an amount of Rs. 39,29,280/- in 2006

in terms of letter of allotment dated 20/09/2006. The agreement

between the parties envisaged that the appellant would hand over

possession of a Row House to the respondent by 31/12/2008 with a

grace period of a further six months ending on 30/06/2009. The

respondent filed a consumer complaint praying for possession of the

Row House and in the alternative for the refund of the amount paid

to the developer together with interest at 12% per annum.

Compensation of Rs. 20 lakhs was also claimed. The State

Commission allowed the complaint by directing the appellant to

refund the moneys paid by the respondent together with interest at

12% per annum and compensation of Rs. 5 lakhs. The National

23

Commission, by Judgment dated 21/11/2016, modified the order by

reducing the compensation from Rs. 5 lakhs to Rs. 2 lakhs. It was

contended before the Hon’ble Supreme Court that the primary relief

which was sought in the consumer complaint was for delivery of

possession and the completion certificate was received on

29/03/2016, which was intimated to the respondent on 11/04/12016.

Before the State Commission, in its written submissions, the

appellant had offered possession of the Row House to the

respondent. Nearly seven years had elapsed after extended date for

the delivery of possession which expired on 30/06/2009. When the

buyer was in default, the agreement stipulated that interest at the

rate of 18% per annum from the date of default untill the date of

payment would be charged for a period of two months, failing

which the allotment would be cancelled by deducting 5% of the

entire value of the property. The Hon’ble Apex Court held that the

agreement was evidently one sided since for a default on the part of

the buyer, interest at the rate of 18% was liable to be charged but a

default on the part of the developer in handing over possession

would make him liable to pay interest only at the savings bank rate

prescribed by the SBI. The Hon’ble Supreme Court held that a

period of seven years is beyond what is reasonable. The orders

passed by the State Commission and the National Commission for

refund of moneys were held to be justified. Only the interest of 12%

per annum as granted by the National Commission was reduced to

9% per annum. It was contended by the Ld. Counsel for the said OPs

that the case supra is distinguished since the period of delay was

seven years. In the present case, the delay is more than 3 years and

this delay also cannot be considered as negligible. In our considered

view, this delayis also not reasonable. In the present case, though the

Complainant has prayed for compensation (rent assistance) amount

24

on account of delay in handing over possession, however, the

principle prayer is for refund of the amount paid to the said OPs. In

the Consumer Case No. 2524 of 2017 (“Amit Soni & Anr. Vs. M/s.

Umang Realtech Pvt. Ltd. & Anr.”), in similar circumstances, the

Hon’ble National Commission, by relying upon the Judgment of the

Apex Court in the case of “Kolkata West International City Pvt.”

(supra), has allowed the complaint in part directing both the

opposite parties jointly and severally to refund the principle amount

with interest @ 12% per annum from the respective dates of deposit

till the date of realisation together with compensation of Rs.

1,00,000/- and costs of Rs. 25,000/-. The said OPs have relied upon

the Judgment dated 11/02/2019 of the Hon’ble Supreme Court in

Civil Appeal No. 1232 of 2019 (“R. V. Prasannkumar & Ors. Vs.

Mantri Castles Pvt. Ltd. & Anr.”). According to the said OPs the

above decision is directly on the issue involved in the present case.

We do not agree with the same. In the case supra, there was no

prayer for refund of the amount paid to the developer. The question

was whether the liability to pay interest to the flat buyers confined

to 31/07/2016 was proper. The Hon’ble Supreme Court found merit

in the submission of the flat buyers that the liability to pay interest

has been inappropriately confined only upto 31st, July, 2016. The

Apex Court directed that the liability of the developer to pay interest

of 6% per annum shall continue to operate untill the date on which

each of the respective flat purchasers is offered possession. This

decision of the Apex Court cannot help the said OPs in any manner.

17. Several visits were given by the Complainant or complainant’s

friends, etc to the project and every time false promises of delivery

schedule were given. The affidavit of Mr. Tridib Dasgupta has been

filed in support of the case of the Complainant. On 25/03/2014, the

OPs No. 3 and 4 assured to give possession by December, 2015. On

25

20/07/2015, the OP No. 3 assured completion and delivery by March,

2016. On 27/12/2015 Mr. Prio and Mrs. Bindu Goswami, friends of

the Complainant, visited the project and found that no sample flat

was ready to be shown and there was no slab on the 8 th floor. On

13/01/2016, the representative of the OP No. 1 assured them to

complete the project and to deliver possession by September, 2016.

Mr. Prio (Priodorsi) Goswami has filed his affidavit in support of the

above. During 18th–21st, October, 2016, the date of completion was

rescheduled to April/May, 2017. The Complainant, in detail, has

stated about the stages of construction and incomplete works. By

three emails dated 23/04/2017, the OP No. 4 stated that they could

hand over possession of the flats by Dusara, i.e. October, 2017. The

Architect and Government approved valuer, Shri Suvrat Bhobe

inspected the project and gave report dated 28/08/2017. He has

specifically stated about the incomplete works and has reported that

insofar as the flat No. 802 is concerned, 60% of the work can be said

to have been completed and the balance 40%, yet to be done, would

include completing of the concealed electrical and plumbing works,

fixing of door and window frames, the internal plastering including

the finishing coat, floor tiling, toilet flooring and dados, kitchen

platform, electrical fittings and plumbing and sanitary fittings, doors

and windows shutters, balcony railing, painting, etc. Insofar as the

whole building is concerned, internal partition masonry works were

partly completed. The work of shuttering and centering work of the

overhead water tank at the terrace level was going on. Works of

common areas like the passages, staircase, lift, terrace, parking

(stilted area), etc. were not completed. Only 50% of the said works

was done. Basic services and infra structure like external plumbing,

downtake pipelines for water supply, supply line from pump to

overhead tank, waste water pipes, soil pipes, rain water pipes, etc. ,

26

septic tank & Soak Pit or STP, electricity supply lines, electric panel

board, fire fighting pipelines & accessories, security, CCTV, etc.,

were not completed and only 10& of said work was done. Further,

the works of providing of transformer for additional load, pathways,

street lighting, drains & gutters, water supply line, rain water

harvesting, garbage disposal arrangement, etc. were not completed.

The Architect has clearly stated that it will take another 24 months

or more for completion. The said Architect has filed affidavit in

support of his report. The OPs have simply denied the report of the

said Architect saying that it is false. We have no hesitation to rely

upon the said report, since the building was admittedly not

completed. It was because of all the above, that occupancy certificate

was not issued by the concerned authority. The statement made by

Shri Chilamkurthi Jayanth Mohan Rao, the junior contractor of the

project, in his affidavit, that the project is complete except for water

proofing and that the flat is ready for occupation and the statement

made by the Architect of the OPs, namely Vrishali Danve, in her

affidavit, that the flat is almost complete except minor finishing and

90% of the work is complete, is half-hearted, without required

details and false. The photographs produced by the said Architect

shows the flat with no tiles, no doors & windows and no electrical

wiring. Even during the course of oral arguments. Ld. Counsel for

the OPs had submitted that a time frame be fixed and the OPs would

complete swimming pool, etc. and give possession of the said flat to

the Complainant. on 07/07/2018, as can be seen from the answers to

the queries of the Complainant given by the OP No. 4, the following

works were not completed:- the electricity and water connection was

not given, bathroom tiles, fittings, toilet, sink, shower inside flat no.

802 was not completed, installation of power supply electrical

transformer not done, swimming pool not completed, landscaped

27

garden area adjacent to Sky Water building not done. The

photographs produced by the Complainant show month/year wise

progress of the project. The photographs show that parking areas

and building entrance is left incomplete, no electric meters installed,

no sewage treatment plant installed, no swimming pool, baby pool

constructed, etc.

18. Besides the above, there is allegation of substandard material

used for the said flat. It was observed by the expert, Mr. Suvrat

Bhobe that there were leakages at many places in the said flat, with

water actually found dripping through the RCC slab at many places

therein. Damp patches were also noted on the un-plastered ceiling of

the said flat which is on the last floor of the said project. There was

clear indication that the roof slab which also formed the part of the

ceiling of the said flat had not been water-proofed adequately and

was already leaking. There are photographs produced by the

Architect in support of his report. A question was put by the said

OPs to the said Architect, Shri. Suvrat Bhobe as to “that except for

leakage from the slab you have not cited any defects in construction

work.” The above question itself contains an admission that there

was leakage form the slab. There are also mistakes pointed out by

the Complainant with the interior construction of the said flat.

19. In view of the discussion supra, instead of granting the reliefs

(a) and (b) in the manner as prayed for by the Complainant, inter

alia, we are inclined to grant the relief of refund of the principle

amount paid by the Complainant to the OPs and we are of the

considered opinion that the said amount should be paid along with

interest at the rate of 10% per annum as compensation as from the

date of each payment till the date of realization of the total amount.

Since we are granting interest of 10% per annum as compensation,

28

we are not inclined to grant the relief (c) of rent assistance amount.

The Complainant has stated about the expenses incurred for visits to

the project and has produced documentary evidence in support of

the same. Hence we are inclined to grant the relief (d). Costs of Rs.

40,000/- as prayed for are reasonable.

20. In the result, we pass the following:

ORDER

(a) The Complaint is partly allowed.

(b) The OPs are directed to refund to the Complainant the

amount of Rs. 62,66,630/- paid to the OP No. 1 in connection

with the said flat, along with interest @ 10% per annum from

the date of each payment till the date of realization of the

entire amount.

(c) The OPs shall reimburse the Complainant in the amount of

Rs. 8,32,116/- towards the expenses incurred by him within a

period of six weeks from today failing which the same shall

carry interest @ 10% per annum from the date of expiry of the

said period of six weeks till the date of realization of the entire

amount.

(d) The OPs shall pay costs of Rs. 40,000/- to the Complainant.

[Smt. Vidhya R. Gurav] [Justice Shri. U. V. Bakre] Member President