Raj Shekhar Attri, President
1. The complainants have filed this complaint seeking directions to the opposite parties to deliver actual physical possession of the plot measuring 300 square yards, purchased by them, in their project named ‘Palm Garden’, Mullanpur, New Chandigarh, District SAS Nagar, Mohali, Punjab, against which they had paid substantial amount of Rs. 31,20,000 for the period starting from 17.8.2012 to 11.10.2013; along with compensation by way of interest, for the period of delay in delivery of possession and litigation expenses. It is the case of the complainants that deficiency in rendering service and adoption of unfair trade practice on the part of the opposite parties is writ large because despite the fact that the plot in question had been booked as far as back on 17.8.2012, yet, neither plot No. has been allocated to them nor agreement has been executed nor possession thereof has been delivered till the date of filing of this consumer complaint, which otherwise was to be delivered by August 2014. It has been averred that it has also come to the knowledge of the complainants that the project has been launched in the absence of necessary approvals/sanctions from the competent authorities, i.e. in complete violation of Punjab Apartment and Property Regulation Act, 1995 (in short the PAPR Act) and other relevant rules and regulations applicable to the project in the State of Punjab. It has been stated that despite the fact that 60% of the total sale consideration stood paid by the complainants, and thereafter, when they saw that there is no development at the project site; neither necessary approvals/sanctions have been obtained by the company in respect of the project in question; and at the same time, the opposite parties were interested only in raising demand of the remaining amount, as such, they did pay the same. When number of requests made in the matter, by the complainants did not yield any result, legal notice dated 22.11.2019, Annexure C-6 was served upon the opposite parties but all in vain. Hence this complaint.
2. Their claim has been contested by the opposite parties on numerous grounds, inter alia, that the complainants have concealed material facts from this Commission; that they being speculators did not fall within the definition of consumer; that this Commission did not vest with territorial jurisdiction to entertain this complaint; that the complainants were defaulters in making payment towards price of the said plot, as a result whereof, number of letters/reminders were sent to them; that they failed to come forward for selection of plot No. and execution of agreement; that time was not essence of the contract; that the complaint filed is barred by limitation; that the complainants are liable to pay the EDC and IDC over and above the taxes, as applicable; that since they are disputing the payment of IDC, as such, the matter cannot be adjudicated before this Commission under summary proceedings and the complaint should be relegated to the Civil Court.
3. On merits, it has been stated that the project was approved on 22.3.2013 and the formal agreement was signed with the Government of Punjab on 14.6.2013; that thereafter some more land was added to the project, for which completion period was given upto 13.6.2018, vide supplementary agreement dated 16.6.2016 executed with the Government and was further extended upto 13.6.2020; that during the period intervening, exemption from the applicability of provisions of the Punjab Apartment and Property Regulation Act, 1995, (PAPR Act) stood granted by the Government on 25.1.2017 and as such it will have retrospective effect and amounts to regularization of the entire project; that delay if any in issuance of the said notification on 25.1.2017 was procedural, which was on the part of the competent authorities; that once the State Government has not held that the opposite parties had violated the provisions of PAPR Act, as such, this Commission cannot go into the said question; that the complainants have not suffered any loss on account of the reason that the title of their plot was approved later on; that Section 35 of PAPR Act bars the jurisdiction of this Commission to entertain the complaint arising out of the project in question; that the project has been got registered under RERA; that in order to facilitate the completion of project, the State Government has further extended period upto 31.12.2022, vide notification dated 30.1.2020; that the opposite parties have also sought extension for completion of the project from the competent authorities, which has been granted to them and as such, they are trying to complete the development work, before the extended period granted to them; that claim of the complainants seeking higher rate of interest on the deposited amount for the period of delay is totally unjustified. Rather, it should be as specified under Section 19 of the RERA, i.e. MCLR + 2% interest and that too, in case, they are seeking refund of amount paid; that infact the complainants are entitled to interest @6% p.a. only, in view of judgment of the Hon’ble Supreme Court of India passed in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd., VI (2020) SLT 50=Civil Appeal No. 6239 of 2019, decided on 24.8.2020; that since there is no agreement in the present case, the complainants are entitled to interest @6% p.a. for the period of delay starting from 14.6.2017 because it generally takes four to five years in completing the project; that the complainants may come forward and make the remaining payment, whereafter, plot No. will be allocated and agreement will also be executed in that regard.
4. However, ironically, it has been claimed in the reply that the opposite parties are trying to complete the project, as early as possible, i.e. within the extended period, as the development work is going on in full swing and work with regard to provision of basic amenities such as landscaping, street lights, open green spaces, sewerage, water, electricity etc. is near completion and that two wings of flats have already been delivered to the customers; that the opposite parties are trying to complete the project, as soon as possible. It has been alleged in the reply that the project was delayed on account of red-tapism in the different offices of the Government and also due to the business and political rivalries and that was why; the competent authorities delayed in granting approvals/sanctions. While applying the theory of force majeure circumstances ( which means irresistible circumstances beyond ones control such like act of God ), it has been alleged that delay in delivery of possession of plots occurred, also on account of shortage of building material and ban on mining by the Government concerned; that due to COVID-19 also the development at the project was hampered.
5. On merits facts with regard to purchase of plot by the complainants; payment made by them as mentioned in the complaint; non allocation of plot No.; non execution of buyer agreement despite the fact that booking of the plot was made in the year 2012; non delivery of possession by the date when this complaint has been filed or even thereafter; and that the project was approved for the first time only on 22.3.2013, Letter of Intent (LOI) was released in the favour of the company on 3.5.2013, CLU was granted on 31.3.2014/12.5.2014, layout plans were approved on 06.10.2015; have not been disputed by the opposite parties. Remaining averments of the complaint have been denied. Prayer has been made to dismiss the complaint with costs
6. In the rejoinder filed, the complainants reiterated all the averments contained in thecomplaint and controverted those of the written reply filed by the opposite parties.
7. The parties led evidence in support of their case. Written arguments have also beenfiled by the parties.
8. We have heard the contesting parties and have gone through the record of the case, including the written arguments filed by them, very carefully.
9. First we will deal with the objection taken by the opposite parties to the effect that the complainants did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainants, who are still seeking possession of their plot, have purchased the plot in question to indulge in ‘purchase and sale of plots’ as was held by the Hon’ble National Commission in Kavit Ahuja v. Shipra Estates, I (2016) CPJ 31 (NC), but since they failed to discharge their onus, hence we hold that the complainants are consumers as defined under the Act. In this view of the matter, objection taken in this regard stands rejected.
10. As far as objection taken with regard to territorial jurisdiction of this Commission is concerned, it may be stated here that perusal of expression of interest, Annexure C-1, reveals that the same was received by the opposite parties at their Chandigarh Office, i.e. SCO No. 139-141, Sector 17-C, Chandigarh. Along with the said expression of interest, the amount of Rs. 16,20,000 has also been shown to be received by the opposite parties at the said Chandigarh Office. It is further evident from the document Annexure C-5, that the complainants were directed to deposit the entire amount, in HDFC Bank account No. 02132560002492, SCO 145-146, Sector 17-C, Chandigarh, in the name of Manohar Infrastructure and Constructions Pvt. Ltd.; the payment receipt dated 11.10.2013, Annexure C-4, in the sum of Rs. 15 lacs, was also issued by the opposite parties from the said Chandigarh Office, meaning thereby that the opposite parties were actually and voluntarily residing and carrying on their business, at the said Chandigarh Office for gain. Not only as above, the said fact is further fortified when we perused the information dated 30.1.2021 (at page 115 of the paper book) placed on record by Counsel for the opposite parties, wherein the address of the Company has been mentioned as SCO No. 139-141, Sector 17-C, Chandigarh-160017 only. Thus, this Commission at Chandigarh has territorial jurisdiction to entertain this complaint. Objection taken by the opposite parties in this regard stands rejected.
11. The next question which falls for consideration is, as to whether, the opposite parties were in possession of all the requisite licences, approvals and permissions, before launching the project in question, and selling the units/plots therein to the general public including the complainants or not. Admittedly, the plot in question was sold to the complainants on 17.8.2012, vide expression of interest Annexure C-1, on receipt of amount of Rs. 16,20,000 which was equal to 30% of the total sale consideration of Rs. 54 lacs. Thereafter, also another amount of Rs. 15 lacs was received from the complainants on 11.10.2013. However, on the other hand, when we peruse the documents Annexure C-7 and C-8 colly., having been issued by the Competent Authorities, i.e. PUDA and GMADA, which are the controlling authorities of the opposite parties, it reveals that the project was approved for the first time only on 21.2.2013, whereas the plot in question was sold to the complainants on 17.8.2012. Thereafter, Letter of Intent (LOI) dated 3.5.2013 was granted in favour of the opposite parties in respect of the project in question. In condition No. 3 (III) v) of the said LOI it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under Section 44 of PAPR Act is issued by the State Govt. Relevant part of the said condition of LOI is reproduced hereunder:
“v. ….The project shall not be advertised/launched and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption under Section 44 of PAPR Act 1995 is issued by the State Govt….”
It is further evident from the contents of said LOI that application for setting up the residential project was moved by the opposite parties before the Competent Authority, for the first time on 16.9.2011 and project was approved only on 22.3.2013. It is also evident that Change of Land Use was approved for the first time on 31.3.2014 and layout plan was approved only on 6.10.2015. It is also evident from the contents of notification dated 25.1.2017 aforesaid, that the opposite parties got the layout plans revised on 21.10.2015.
12. It was further, in a very clear manner, stated in condition No. 6 of the LOI that it does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid approvals & requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development. Relevant part of the condition No. 6 of the LOI is reproduced hereunder:
‘.....This LOI is only a letter of intent issued by Punjab Urban Planning & Development Authority in its capacity as Nodal Agency and does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid approvals and requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development…’
Similar condition is found mentioned in the agreement dated 14.6.2013, having been executed between the State Govt. of Punjab and the opposite parties, wherein, in condition No. ix, it has been mentioned as under:
‘….The project shall not be advertised/launched and no money will be collected from General Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are cleared by the Competent Authority and exemption under Section 44 of PAPRA is issued by the Govt…’.
Bare perusal of the aforesaid conditions of the said LOI and also the agreement dated 14.6.2013 aforesaid, clearly barred the opposite parties to advertise/launch the project and collect money from general public for allotment of land, plot etc. without the approval of layout and zoning plans, (which in the present case has been approved only on 21.10.2015) and also exemption under Section 44 of PAPR Act is issued by the State Govt. (which in the present case has been issued only on 25.1.2017). However, in the present case, the opposite parties violated the said conditions of the LOI and agreement referred to above, and launched the project and sold the plots therein, starting from February 2012, when they were not even the owners of the land underneath the said project.
13. Surprisingly, the Government of Punjab, Department of Housing and Urban Development (Housing II Branch), i.e. the Competent Authority was well aware of the fact that the project has been launched and plots/units have been sold to the general public starting from the year 2012 itself, without necessary approvals/permissions and huge money has been collected and usurped by the opposite parties from the innocent buyers, yet, it did not hear the aggrieved consumers before granting exemption to the project on 25.1.2017 from the provisions of PAPR Act. It cannot be assumed that the said project was launched by the opposite parties and the Competent Authorities were not aware of illegal activities, happening in their territory. As such, the said act of the Competent Authorities is against the principles of natural justice; fair play and not binding on the complainants and other prospective buyers. If the competent Authorities failed to take any action under relevant Rules and Regulations against the Company, no benefit can be taken out there-from by the opposite parties, in this complaint filed by the complainants under Consumer Protection Act, filed for deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties.
14. Not only as above, it is further evident from the documents Annexure C-7 and C-8 that permission for solid waste water, sewage storm and water disposal was granted to the opposite parties on 6.7.2015; NOC from Punjab Pollution Control Board was obtained on 1.12.2015; permission for construction of houses was obtained on 18.1.2016; environment clearance was obtained on 3.6.2016; NOC by electricity board was obtained on 15.3.2017. Thus, perusal of the documents, referred to above, reveals that not even a single permission had been obtained by the opposite parties in the year 2012, when the project in question was launched and plots were sold therein to the complainants and well as other persons. Even the Certificate of Registration as Promotor, which qualified the opposite parties for obtaining licence under PAPR Act was obtained by them on 27.6.2014 only i.e. after more than 1 years from the date of selling the plot to the complainants. The aforesaid fact leaves no doubt with this Commission to hold that the project in question was launched in complete violation of the relevant rules and regulations and money was collected from the complainants and other buyers with the animus of cheating. Collecting money from the perspective buyers and selling the project, without obtaining the required permissions and sanctions is an unfair trade practice on the part of the project proponent. It was so said by the Hon’ble National Commission, in a case titled as M/s. Ittina Properties Pvt. Ltd. & 3 Ors. v. Vidya Raghupathi & Anr., III (2018) CPJ 12 (NC). Relevant part of the said order reads as under:
“…………….This Commission in Brig. (Retd.) Kamal Sood v. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.
It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.9.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency…………”
It is therefore held that by launching and selling the project before 25.1.2017, i.e. the date when the said exemption was granted to the opposite parties from the provisions of PAPR Act, they indulged into unfair trade practice.
15. As stated above, on 17.8.2012, the complainants had booked the plot in question in the said project on making payment of Rs. 16,20,000 for the period from 17.8.2012 to 11.10.2013, which was equal to 30% of the total sale consideration of Rs. 54,00,000. However, it is also coming out from the record that thereafter, neither plot No. was allocated nor agreement was executed between the parties. It is significant to mention here that once the opposite parties, in the first instance, had already received substantial amount which was equal to 30% of the total sale consideration from the complainants, it was required of them to execute agreement under law within a reasonable period say two to three months; raise demands in accordance with the stage of development at the project site; complete the development work; obtain completion certificate from the Competent Authorities; and then deliver possession of the plot in dispute to the complainants. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demands from the complainants by way of sending letters 12.5.2014, Annexure O-1 and 30.6.2014, Annexure O-2. In these letters not even a single word has been mentioned, inviting the complainants for allocation of plot No. or execution of agreement. Thus, the act of raising demands and receiving substantial amount, without executing the agreement and also in the absence of development work at the project site; was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite parties to execute the agreement for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision:
“6. Contents of agreement of sale: (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906);
Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots.
The opposite parties were legally bound under law to execute the agreement and to get the same registered under the Registration Act, 1908, after obtaining 25% of the sale consideration, but in this case, the said provision has been violated. The opposite parties also cannot take shelter under the exemption certificate from the provisions of PAPR Act, which was issued in their favour only on 25.1.2017, i.e. much after booking of the plot in question. It has no where been proved that the said exemption will have retrospective effect but in our considered opinion, it will have prospective effect only. The opposite parties were deficient in providing service and adopted unfair trade practice on this count.
16. Now coming to the question, as to whether, the opposite parties are ready with possession of the plot in question, to be delivered to the complainants or not? It may be stated here that it is well settled law that onus to prove the stage and status of infrastructure and development work at the project site and that all the permissions/certificates/approvals have been obtained in respect of the project in question, is on the builder/developer. It was so said by the Hon’ble National Commission, in Emaar MGF Land Limited and Another v. Krishan Chander Chandna, IV (2014) CPJ 589 (NC)=First Appeal No. 873 of 2013 decided on 29.9.2014 . However, in the present case, there is a strong reason with this Commission to believe that opposite parties are still not ready with the delivery of possession of the plot in question, and the said reason is the candid admission made by them in para No. 17 (preliminary objections) that development work at the project site is still going on and that basic amenities such as roads, electricity, sewerage, landscaping etc. are near completion. However, except some photographs, perusal of which too reveal that still a lot of work is pending to be done at the project site, no other cogent and convincing evidence has been placed on record, to prove that the development is at the advance stage and that basic amenities such as roads, electricity, sewerage etc. are near completion, as alleged in the reply. Infact contrary stands have been taken by the opposite parties in their written reply. In para No. 17, referred to above, it has been stated that the development work is near completion, whereas in para No. 36 (preliminary objections), it has been stated that as per notification dated 30.1.2020 issued by the Govt. of Punjab, the period of completion of the project has been extended upto 31.12.2022 and the opposite parties are trying to the complete the project in extended period.
17. In the present case, perusal of contents of the written reply filed by the opposite parties, reveal that self-contradictory pleas have been taken with regard to delay in offer of possession of the plot in question to the complainants. In some paragraphs it has been stated that delay took place in offering possession because there was delay on the part of the Government Departments in sanctioning approvals/permissions; shortage of construction material due to ban on mining etc. etc. whereas, on the other hand, it has also been stated that permission was sought from the competent Authorities for extension of time for completing the project in question, as more land was added in the project site. As such, perusal of contents of reply filed by the opposite parties clearly go to show that they were not serious in completing the project wherein the plot in question was sold to the complainants and are now taking bald excuses for causing delay, just with a view to defeat the genuine claim of the complainants. Under these circumstances, it is held that the opposite parties by neither allocating plot No. nor executing buyers’ agreement nor completing the development work nor delivering the possession of the plot, despite the fact that the same has been purchased as far as back in 2012 and now it is July 2021, indulged into unfair trade practice and were also negligent and deficient in providing service.
18. To wriggle out of the allegations leveled by the complainants, with regard to inordinate delay in delivery of possession of the plot in question, the opposite parties have stated that delay in completing the project occurred on account of force majeure circumstances having been faced by the company, i.e. due to COVID-19 the project was hampered; ban on mining by the state Govt. resulting into shortage of building material; and delay in approvals by the competent authorities concerned, due to red-tapism and business rivalries.
19. First coming to delay in approvals on the part of the Govt. Departments, it may be stated here that not even a single letter has been placed on record by the opposite parties showing that they ever reported the Govt. Authorities concerned that there is a delay on their part in granting such sanctions/approvals in respect of the project in question or that any such letter, by which they have given notice to the said Authorities that in case the needful is not done in a prescribed time, the Company shall move to the appropriate platform of law, in the matter.
20. Now coming to the plea regarding shortage of construction material like sand etc. it may be stated here that nothing has been placed on record by the opposite parties to prove that they were unable to procure the said construction material, in adequate quantity. There is no evidence of the opposite parties having invited tenders for supply of construction material and there being no response to such tenders. A similar plea with regard to shortage of building material as a cause for delay in delivery of possession of the plots/units was taken by a builder before the Hon‘ble National Consumer in Consumer Case No. 347 of 2014, titled as Swaran Talwar & 2 Others v. M/s. Unitech Limited, (along three connected complaints), decided on 14 Aug., 2015, which was rejected and the complaint was allowed in favour of the complainants.
21. As far as plea taken with regard to COVID-19 is concerned, it may be stated here that the said pandemic took place in India in March 2020, when lockdown was executed. However, lockdown which took place in March 2020 due to COVID-19, has no relation whatsoever, with the inordinate delay in the matter, as the plot in question had been purchased by the complainants as far as back in 2012. In this view of the matter, no help therefore can be drawn by the opposite parties, in this regard. Thus, in the present case, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God etc. ) as a result whereof, delay in handing over possession of the plot occurred. Plea taken by the opposite parties, in this regard, therefore stands rejected.
22. The opposite parties also cannot wriggle out of the situation, by placing reliance onletters dated 12.5.2014, Annexure O-1 and 30.6.2014, Annexure O-2, to say that the complainants defaulted in making remaining payment. It may be stated here that if the complainants, in the present case, did not make remaining payment or withheld the same, when they came to know that the project has been launched without obtaining necessary approvals/sanctions from the Competent Authorities; plot No. has not been allocated; there was no development at the project site; and also there was gross violation on the part of the opposite parties, of the provisions of Section 6 of PAPR Act, in not getting the agreement executed within a reasonable period of receiving amount equal to 25% of the total sale consideration or thereafter, they were right in doing so . Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in Haryana Urban Development Authority v. Mrs. Raj Mehta, I (2005) CPJ 16 (SC)=VII (2004) SLT 438=Appeal (Civil) 5882 of 2002, decided on 24.9.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date or within a reasonable period where no agreement is executed, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon’ble National Commission, in Prasad Homes Private Limited v. E. Mahender Reddy and Ors., I (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. As such, plea taken by the opposite parties, in this regard stands rejected.
23. In the present case, not even an iota of evidence has been placed on record, whereby,the complainants were ever contacted by the opposite parties to come for allocation of plot No. and for execution of buyers’ agreement. As stated above, once the opposite parties have already received substantial amount equal to 60% of the total sale consideration, they were duty bound to allocate plot No. and also execute buyer agreement but they miserably failed to do so. Thus, the said inaction on their part, which constitutes deficiency in service, negligence and unfair trade practice on their part, cannot be used as a tool against the complainants to say that they (complainants) did not come forward for allocation of plot No . and execution of agreement. It cannot be expected and also not feasible that the buyer has to keep on visiting the office or the project site, every month with a request for allocation of plot No. and also for execution of agreement, once he has complied his part, by making the required payment. On the other hand, it is the builder/developer, to issue letter(s) with regard to further action to be taken in the matter, with regard to allocation of plot No., execution of agreement and delivery of possession of the unit/plot. In this view of the matter, plea taken by the opposite parties to the effect that the complainants failed to contact them for allocation of plot No. or for execution of agreement, especially in the face of the findings given above, being devoid of merit, stands rejected.
24. Now coming to the objection taken by Counsel for the opposite parties to the effect that in the face of registration of the project under the RERA in the year 2017 or Section 35 of the PAPR Act, jurisdiction of this Commission is barred to entertain this complaint arising out in respect of the plot in question. First coming to objection that this Commission is not competent to entertain this complaint as the project has been registered under RERA, it may be stated here that the same does not merit acceptance, in view of the ratio of law laid down by the Hon’ble Supreme Court of India in Civil Appeal No. 3581-3590 of 2020, M/s Imperia Structures Ltd. v. Anil Patni and Another, I (2021) SLT 85=I (2021) CPJ 3 (SC)=decided on 2.11.2020, wherein it was held that the provisions of RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any consumer complaint. This view has been reiterated by the Hon’ble Supreme Court of India in Civil Appeal No. 5785 of 2019, Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna & Others, I (2021) CPJ 60 (SC)=I (2021) SLT 337=decided on 11.1.2021.
25. Now coming to the objection raised to the effect that in the face of provisions of Section 35 of the PAPR Act, this Commission is not competent to entertain this complaint, it may be stated here that in the present case, the opposite parties were legally bound to allot plot No. and execute agreement within a reasonable period from the date of booking and then deliver possession of the plot in question to the complainants (which they failed to do so) and, as such, the nature of such transaction is covered by the expression ‘service’. Our this view is supported by the principle of law laid down in Narne Construction P. Ltd., etc. etc. v. Union of India and Ors. Etc., II (2012) CPJ 4 (SC)=III (2012) SLT 669. Furthermore, because it is an undisputed fact that the opposite parties neither allocated plot No.; nor executed buyers’ agreement; nor delivered possession of the plot purchased by the complainants and no cogent and convincing reason has been given for the same, as such, it can very well be said that there is a denial of service to the complainants on the part of the opposite parties, for a very long time, for which the complainants were at liberty to avail remedy by way of filing this consumer complaint. In view of above findings, we can safely say that the provisions of the RERA and PAPR Act will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the builder/developer. Since, this complaint involves the consumer dispute and the same is maintainable before this Commission, as such, objection taken in this regard by the opposite parties stands rejected.
26. Now the question arises, as to what amount of compensation, the complainants are entitled to, for delay in delivery of possession of the plot to them and for which period?. Admittedly, in the present case, agreement has not been executed by the opposite parties, which act has been held to be an unfair trade practice on their part. Thus, in the absence of a specific date of delivery of possession in any of the documents, placed on record, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period in the matter. Thus, if we take a reasonable period of three years from the date of booking of the plot, i.e. from 17.8.2012, as period of completion of development works at the project site and delivery of possession of the plot in question to the complainants, which comes to 16.8.2015, in view of principle of law laid down by the Hon’ble Supreme Court of India in Fortune Infrastructure v. Trevor D’ Lima & Ors., II (2018) CPJ 1 (SC)=III (2018) SLT 556=(2018) 5 SCC 442, relevant part whereof is reproduced hereunder, that will meet the ends of justice:
‘…… Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract… ’
In this view of the matter, plea taken by the opposite parties that the completion period/date of project be assumed as 14.6.2017 i.e. four years from 14.6.2013 i.e. the date when the agreement with Govt. was executed by the opposite parties, being devoid of merit, stands rejected. It is therefore held that the complainants are entitled to get compensation for the period of delay, by way of interest, starting from 16.8.2015 till possession is delivered to them, complete in all respects.
27. Now we will deal with the question, as to what rate of compensation is required to be awarded to the complainants for the period of delay? No doubt, the opposite parties have placed reliance on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors., case (supra) , to say that since in these cases, the Hon’ble Supreme Court of India has awarded interest @ 6% p.a., as such, this Commission cannot grant interest beyond that, in the present case also. We do not agree with the contention raised for the reasons recorded hereinafter. It may be stated here that we have gone through the contents of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. Case (supra), and found that, for delay in offering possession of the units therein, over and above the interest rate of 6% p.a., the penalty amount as contained in the agreement has also been ordered to be paid to the complainants by the builder. Since, in the present case, agreement has not been executed by the opposite parties, as such, if we award lumsump interest @ 9% p.a. as compensation to be paid by the opposite parties to the complainants, on the amounts deposited, for the period of delay in delivery of possession, that will meet the ends of justice.
28. As far as dispute with regard to payment of IDC is concerned, it may be stated here that since the complainants vide expression of interest dated 17.08.2012, Annexure C-1 and application dated 4.9.2012, Annexure C-3, has agreed to pay only EDC charges, over and above taxes as applicable and also PLC in case the plot in question is preferentially located, as such, now the opposite parties cannot charge IDC, arbitrarily. In this view of the matter, plea taken by the opposite parties that the complainants are also liable to pay IDC being devoid of merit stands rejected.
29. As far as objection taken to the effect that opposite parties No. 2 and 3 have been wrongly impleaded as necessary parties to this complaint
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in their personal capacity, it may be stated here that since both these persons are holding such important positions in the Company, where they are directly involved with the decision-making process in the Company, as such, they will be jointly and severally liable along with the Company, for all the acts done by it (company). Similar view was taken by the Hon’ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors. v. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug., 2017. As such, objection taken in this regard stands rejected. 30. As far as objection taken to the effect that the complaint filed is beyond limitation, it may be stated here that since it is an admitted fact that possession of the plot in question has not been delivered even by the date when this complaint had been filed before this Commission or thereafter, for want of development activities, as explained above, as such, objection taken with regard to limitation is not sustainable in view of principle of law laid down in Lata Construction & Ors. v. Dr. Rameshchandra Ramniklal Shah and Anr., X (1999) SLT 77=III (1999) COJ 46 (SC)=AIR 1999 SC 380 and Meerut Development Authority v. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC) , wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action, in favour of the allottee/buyer. As such, objection taken in this regard is rejected. 31. At the same time, it is also held that when a specific objection with regard to limitation has been taken by the opposite parties, as such, in the same breadth, objection taken to the effect that since no agreement was executed between the parties giving specific time for delivery of possession of the plot in question as such, time was not the essence of contract, is not sustainable in the eyes of law. Even otherwise, this objection needs rejection, in view of the findings given above, to the effect that when there is no date specified for delivery of possession of the unit/plot, a reasonable period of three years from the date of booking thereof, has to be taken into consideration, in view of principle of law laid down in Fortune Infrastructure v. Trevor D’ Lima’s case (supra). 32. For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under: 1. To deliver actual physical possession of the plot in question, complete in all respects i.e. after providing all the basic amenities, referred to above, to the complainants, within a period of 3 months from the date of receipt of a certified copy of this order, on receipt of balance sale consideration, EDC, PLC (if the plot is preferentially located) and also Govt. taxes as applicable, from the complainants. It is also made clear that the opposite parties are not entitled to charge IDC from the complainants, as there is no document on record to prove that the same was payable by the complainants. 2. To pay compensation by way interest @ 9% p.a. on the entire deposited amount, to the complainants, starting 16.8.2015 till 31.7.2021, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry penal interest @12% p.a. from the date of default till this payment is made. 3. To pay interest by way of compensation @ 9% p.a. on the entire deposited amount w.e.f. 1.8.2021, onwards (per month), by the 10th of the following month to the complainants till actual delivery of physical possession of the plot, complete in all respects. 4. To pay compensation to the tune of Rs. 1 lac, for causing mental agony and harassment to the complainants and also deficiency in providing service and adoption of unfair trade practice and cost of litigation to the tune of Rs. 50,000, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @ 9% p.a. from the date of passing of this order till realization. 5. Certified copies of this order be sent to the parties, free of charge. 6. The file be consigned to Record Room, after completion.