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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
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