1. This Appeal has been filed under Section 19 of The Consumer Protection Act, 1986, hereinafter referred to as the ‘Act’, challenging the Order dated 01.02.2019 in C.C. No. 237 of 2014 passed by the State Consumer Disputes Redressal Commission, West Bengal, hereinafter referred to as the ‘State Commission’.
2. The Appellant herein, Bengal Shelter Housing Development Ltd., who was the Opposite Party before the State Commission, is hereinafter being referred to as the ‘Builder Co.’.
The Respondents herein, Mrs. Smita Singh and Mr. Srinivash Singh, who were the Complainants before the State Commission, are hereinafter being referred to as the ‘Complainants’.
3. Heard the learned Counsel for the Builder Co. and the Complainants, and perused the material on record, including inter alia specifically the impugned Order dated 01.02.2019 of the State Commission and the Memorandum of Appeal.
4. This Appeal has been filed with self-admitted delay of 30 days. The stated reasons for delay, as enunciated in the application for condonation of delay, point towards managerial inefficiency and perfunctory and causal attitude to the law of limitation, they are illogical and absurd in explaining convincingly and cogently the delay in filing the Appeal.
Sufficient cause to explain the delay is not forthcoming.
However, in the interest of justice, to provide fair opportunity to the Builder Co., to settle the matter on merit, the delay is condoned.
5. The Complainants’ case is that, against the total consideration of Rs.46,48,125/- + Rs.2,50,000/- = Rs. 48,98,125/- for a residential unit + car parking space, they deposited Rs.46,25,551.10p. with the Builder Co. between 2008 and 2012. Possession was not offered within the agreed and assured period, which elapsed in 2011.
6. The Complainants filed Consumer Complaint No. 237 of 2014 before the State Commission in 2014.
7. The State Commission vide its impugned Order dated 01.02.2019 allowed the Complaint.
It is seen that the State Commission has passed a well-appraised and well-reasoned Order.
For ready appreciation, the said Order dated 01.02.2019 of the State Commission is reproduced below:
The instant complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is at the instance of intending purchasers against the Developer/Builder on the allegation of deficiency in services on the part of them in a consumer dispute of housing construction.
Succinctly put, Complainants’ case is that they had applied for a Type-‘A’ flat measuring about 1675 sq. ft. super built up area in the ‘Teen Kanya’ project at New Town, Kolkata and on 04.08.2008 an Allotment Letter was issued in favour of the complainants in respect of the flat being Apartment No.TKL/T-2/8A (Type-‘A’) of Labanya-Tower-2 at 8th floor measuring an area of 1675 sq. ft. at ‘Teen Kanya’, at a price of said apartment at Rs.46,48,125/- + Rs.2,50,000/- towards cost of one covered car parking space totalling Rs.48,98,125/-. The complainants have already paid Rs.46,25,551.10P on diverse dates in favour of OP as part consideration amount towards the said total consideration amount. As per terms of the agreement, the OP was under obligation to handover possession within 36 months from the date of sanction of plan or permission for construction by HIDCO. The complainants have alleged that even after expiry of the stipulated period, the OP has failed and neglected to handover possession. Finding no other alternatives, the complainants by a letter dated 02.04.2014 through their Advocated requested the OP to refund the amount paid by them which yielded no result. Hence, the complaint with prayer for several reliefs, viz. – (a) an order directing the OP to deliver possession of the flat in question or refund the amount of Rs.46,25,551/- with 18% interest thereon; (b) compensation of Rs.5,00,000/- for harassment and mental agony etc.
Opposite Party by filing a written version did not deny the material allegations made by the complainants.
In support of their case, complainant no.2 Srinivash Singh has tendered evidence through affidavit. The OP has neither filed questionnaire nor filed any affidavit in support of their case.
The uncontroverted and unchallenged testimony of the complainants clearly depicts that they had applied for a flat to OP and being satisfied, the OP issued one Allotment Letter on 04.08.2008 by which one apartment being Apartment No.TKL/T-2/8A (Type-‘A’) of Labanya-Tower-2 at 8th floor measuring an area of 1675 sq. ft. at ‘Teen Kanya’, at a price of said apartment at Rs.46,48,125/- + Rs.2,50,000/- towards cost of one covered car parking space totalling Rs.48,98,125/. Evidently, the complainants have already paid Rs.46,25,551/- out of total consideration amount of the flat i.e. Rs. 46,48,125/-. The allotment letter is accompanied with terms and conditions of transactions. Clause 11 of the Agreement provides that the OP Company shall give possession of the apartment to the allottees within 36 months from the date of sanctioned of plans or permission for construction by HIDCO subject, however, to payment by the allottees of all dues in respect of the allotted apartment.
After lapse of three years, OP could not start the construction of the project. In their written version, the OP could not assure when they will be able to handover the possession of the subject flat in favour of the complainants. The complainants by a letter dated 28.05.2014 have prayed for refund of the amount paid by them along with interest thereon @ 18% p.a. w.e.f. 12.09.2008. In this regard, it may be pertinent to record that by a letter dated 07.09.2011 (after expiry of committed date of possession), the OP has admitted that they could not start the construction of the project and the said letter also could not assure the complainants as to when they will be able to start construction and complete the said construction.
On evaluation of materials on record, it transpires that the complainants being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP on consideration and OP has failed to fulfil their part of obligations as per agreement and thereby deficient in rendering services towards the complainants within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. Therefore, the complainants are entitled to some reliefs. In our view, direction upon the OP to refund the amount of Rs.46,25,551/- along with compensation in the form of interest @ 8% p.a. (as per terms contained in Clause 16 of the Agreement) will sub-serve the object of justice. Under compelling circumstances, complainants had to file this complaint for which they are entitled to litigation cost which we quantify at Rs.10,000/-.
With the above discussion, we dispose of the complaint with the following directions –
i. The Opposite Party is directed to refund Rs.46,25,551/- along with compensation in the form of simple interest @8% p.a. in favour of complainants from the date of each payments till its full realisation;
ii. The Opposite Party is directed to pay Rs.10,000/- to the complainants as costs of litigation;
iii. The above payments must be paid within 30 days from the date of communication of order.
8. It is seen that, before the State Commission, the Builder Co. did not deny the material allegations made by the Complainants.
Construction of the project had not even started after lapse of three years, i.e. after lapse of the agreed and assured period of offering possession (in 2011).
The Builder Co. could not assure before the State Commission, in 2019, as to when they would be able to offer possession of the subject unit to the Complainants.
(For that matter, such assurance is also not forthcoming before this Commission, in 2020.)
9. In such uncontroverted and unchallenged facts, the State Commission directed the Builder Co. to refund the amount deposited by the Complainants (Rs. 46,25,551/-) with interest (@ 8% p.a.) from the date/s of respective deposits till the date/s of realization along with cost of litigation (Rs. 10,000/-).
10. The Award made by the State Commission appears just and equitable.
There can be no two opinions that the amount deposited has necessarily to be refunded. The rate of interest (8% p.a.) appears reasonable, the cost of litigation (Rs.10,000/-) appears reasonable.
11. Prior to, or, at the least, simultaneous to, getting a Consumer to enter into its Agreement and accepting the first payment towards the total cost of the subject unit, the Builder Co. was required and expected to have the due pragmatic and realistic assessment and preparation of the Project Planning, Execution and Completion.
It was the responsibility of the Builder Co. to ensure that it was in a position to deliver the possession of the subject unit(s) to the Buyer(s) Consumer(s) within the agreed and assured period and in all contingencies within a reasonable period thence (reasonable period here would connote such period as a reasonable man would not normally agitate).
Project Planning, Execution and Completion were its responsibility, and not of the Consumer(s).
(Normal) impediments or problems that arise in Planning, Execution and Completion were its responsibility, and not of the Consumer(s).
Specifically, availability of land (/ acquisition of land), as well as all approvals from the concerned Government / Development / Municipal authorities, as and when due, as also adequate finance, as and when required, being fundamental basic requirements of a construction Project, were decidedly the Builder Co.’s primary responsibilities, and not of the Consumer(s).
The Builder Co.’s arrangements with its contractors or sub-contractors etc. or its litigation etc. were its own concern / problem, and not of the Consumer(s).
Cost and Time Overruns were its responsibility, and not of the Consumer(s).
Non-fulfilment of its overall responsibilities of Project Planning, Execution and Completion can not be and are not grounds for condoning or overlooking delay in completion and failure to hand over possession within the agreed and assured period.
12. A Consumer cannot be made to wait indefinitely or unreasonably. Indefinite or unreasonable delay cannot continue ad nauseam, ad infinitum. In the facts of the present case, unreasonable delay is writ large. A natural corollary thereof is that two rights accrue to the Consumer:
one: the option to wait for the subject unit to be handed over, if and when the construction is completed and possession of the subject unit offered by the Builder Co., at his (the Consumer’s) considered wisdom and discretion, and in addition to seek just and equitable compensation under the Act for unreasonable delay and consequential loss and injury.
two: to claim refund of the deposited amount with just and equitable interest / compensation / cost of litigation.
That is, the Consumer has both options available, one, to obtain possession of the subject unit if and when offered by the Builder Co. and in addition seek just and equitable compensation under the Act for unreasonable delay in possession, and, two, to opt for a fair amount from the Builder Co. comprising of refund of the deposited amount with just and equitable interest / compensation / cost of litigation.
13. In the instant case, the Consumer, before the State Commission, prayed for either of the two alternative remedies. The remedy of delivering possession with just and equitable compensation being unfeasible and unrealistic in the obtaining facts and situation, the State Commission (rightly) awarded the other remedy of a fair amount comprising of refund of the deposited amount with just and equitable interest / compensation / cost of litigation.
14. Ingredients of ‘deficiency in service’ within the meaning of Section 2(1)(g) & (o) of the Act are well and truly evident on the part of the Builder Co.
15. One contention raised during arguments that the Builder Co. is a joint venture between Shelter Projects Ltd., a private company, and West Bengal Housing Board, a government development authority, is, per se, non sequitur, out-and-out untenable. Being a joint venture does not make it differently placed, it remains accountable for ‘deficiency in service’ and / or ‘unfair trade practice’ under the Act.
16. Another contention raised during arguments that the functioning of the Builder Co. is being monitored by Hon’ble High Court, and as such the proceedings be adjourned sine die, is also not tenable. Admittedly, there is no order of Hon’ble High Court to stay or preclude proceedings before Consumer Protection Fora established under the Act. Its functioning being before Hon’ble High Court does not do away with its accountability for ‘deficiency in service’ and / or ‘unfair trade practice’ under the Act.
17. Yet another contention raised during arguments that upholding and affirming the State Commission’s impugned Order would set a precedent for similarly situate persons, and as such the proceedings be adjourned sine die till the financial health of the Builder Co. improves, is again untenable. The solution lies in inculcating managerial efficiency, imbibing systemic improvements, improving administrative and financial health, it does not lie in denying remedy to Consumers under the Act, me
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ant for “better protection of the interests of consumers”. 18. Sequel to the above discussion, the Appeal is dismissed. The State Commission’s impugned Order dated 01.02.2019 is affirmed. The Award made by the State Commission is confirmed. 19. The Builder Co. shall ensure compliance within four weeks of the pronouncement of this Order. 20. The State Commission shall undertake execution as per the law for failure or omission in compliance within the stipulated period. 21. Towards this end, the Registry is directed to send a copy of this Order to the State Commission within three days of its pronouncement. 22. It may be added that the liability qua the Complainants initiated the day they made their first deposit with the Builder Co., and it continues, as a continuing wrong. The duties / responsibilities of Director are laid-down in The Companies Act, 2013. The substantive principles of law as contained in Section 47 (‘Questions to be determined by the Court executing decree’) under Part II, Execution, of the CPC, may also be referred to. The Director(s) of the Builder Co. shall have to discharge the onus to show that they are not liable, along with the Builder Co., jointly and severally, on the question being raised in the executing Forum in execution proceedings. This observation is being made in reference to ‘Enforcement’ under Section 25(3) and ‘Penalties’ under Section 27 of the Act. 23. So disposed.