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Govindan Raghavan v/s Pioneer Urban Land & Infrastructure Ltd.


Company & Directors' Information:- L & T URBAN INFRASTRUCTURE LIMITED [Amalgamated] CIN = U45203TN2006PLC059133

Company & Directors' Information:- THE PIONEER LIMITED [Amalgamated] CIN = U22121DL1932PLC199787

Company & Directors' Information:- PIONEER URBAN LAND & INFRASTRUCTURE LIMITED [Active] CIN = U65910DL1985PLC019985

Company & Directors' Information:- PIONEER INFRASTRUCTURE LIMITED [Active] CIN = U65923GJ1994PLC021579

Company & Directors' Information:- P S LAND AND INFRASTRUCTURE PRIVATE LIMITED [Active] CIN = U45209HR2008PTC037740

Company & Directors' Information:- PIONEER CO PVT LTD [Strike Off] CIN = U65921CT1964PTC000994

Company & Directors' Information:- PIONEER INDIA PRIVATE LIMITED. [Strike Off] CIN = U24299DL1985PTC022842

Company & Directors' Information:- URBAN LAND INFRASTRUCTURE PRIVATE LIMITED [Strike Off] CIN = U45201MH2006PTC164987

    Consumer Case No. 239 of 2017

    Decided On, 23 October 2018

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE V.K. JAIN
    By, PRESIDING MEMBER

    For the Complainant: Aditya Parolia, Nithin Chandran, Zahid Hussain, Kumar Pradyuman, Advocates. For the Respondent: T.V.S. Raghavendra Sreyas, Advocate.



Judgment Text

Oral:

1. The complainants booked a residential flat with the OP in a project namely ‘Araya Complex’ which the OP was to develop in Sector-62 of Gurgaon. The booking was made on 17.11.2011. Unit No. C-1702 in Tower-C of the aforesaid project was allotted to the complainants for a consideration of Rs. 5,11,01,238. The parties then executed an Apartment Buyers Agreement dated 16.3.2012, incorporating their respective obligations. As per Clause 11.2 of the said agreement, the developer was to make all efforts to apply for the Occupancy Certificate within 39 months from the date of excavation, thought it was also entitled to a grace period of 180 days, after expiry of the said 39 months period. The grace period was available for applying and obtaining the requisite Occupancy Certificate. Admittedly, the excavation started on 4.6.2012. The construction therefore, ought to have been completed and the developer ought to have applied for the Occupancy Certificate on or before 4.9.2015. Since the construction was not completed within the aforesaid period, the complainants have approached this Commission seeking refund of the amount of Rs. 4,43,99,622 which they have already paid to the OP.

CC/239/2017

2. The complainant booked a residential flat with the OP in the aforesaid project namely ‘Araya Complex’, on 27.2.2012. Unit No. A-1802 was allotted to him for a total consideration of Rs. 4,83,25,280. He executed a Buyers Agreement with the OP on 8.5.2012. Since the excavation started on 4.6.2012 in his case also, the construction ought to have been completed by 4.9.2015. He also has an identical grievance that the construction was not completed and possession was not offered to him despite he having already paid Rs. 4,48,43,026.

3. The complaints have been resisted by the OP which had admitted the allotment made to the complainants as well as the payment received from them. It is inter alia stated in the written version filed by the OP that the construction could not be completed within the stipulated time on account of reasons beyond its control. The said reasons, according to the OP, are as under:

(a) The delay on the part of several flat buyers in making timely payment,

(b) The dispute of the developer with the contractor, (c) Shortage of water,

(d) Lack of infrastructural support from the State Government,

(e) Shortage of raw material,

(f) Delay in approvals, (g) Jat reservation agitation,

(h) NGT order stopping construction and

(i) Demonetization of the currency.

4. As far as the delay on the part of the several flat buyers is concerned, admittedly, the OP had a right to cancel the allotment due to the alleged non-payments. After cancelling the allotments made to the defaulting customers, the OP could have sold those flats in the open market to other willing buyers. Having not exercised the right available to it, to cancel the allotment on account of the alleged non-payment, the OP, in my view, cannot deny refund and compensation to the flat buyers who have been making payments in time or from whom interest for delay in payment has been charged. Therefore, I find no merit in the aforesaid ground.

5. Though the complainants in CC No. 238/2017 had defaulted in payment of a few installments, even before the last date stipulated for the delivery of possession, the said default was condoned by the OP by charging interest from them. Having charged interest for the said delay and having condoned the default instead of cancelling the allotment, the OP, in my view, cannot deny refund with compensation on account of the aforesaid condoned defaults.

6. As far as the alleged dispute with the contractor is concerned, the case of the OP is that initially, the work was awarded to M/s. Urban Eco Infra Pvt. Ltd. which did not maintain the assured timeline and therefore, the OP took over the construction work from the said contactor and awarded the same to another contractor M/s. Leighton Contractors Pvt. Ltd. In my view, the dispute if any, between OP and the contractor engaged by it, cannot justify the delay in completion of the construction. If the OP suffers any loss or has to pay compensation/damages on account of the delay committed by the contractor engaged by it, it will be entitled to avail such remedy as may be available to it in law against the contractor responsible for the delay, but it cannot deny refund and a fair compensation to a flat buyer who does not wish to wait any more for the possession of the alleged flat and wants refund of the money paid by him along with compensation.

7. As far as the alleged water shortage and labour shortage is concerned, there is no evidence on record to prove that no water or labour was actually available in the market at the relevant time to carry out construction. The delay cannot be justified on such bald allegations without substantiating the same by hard evidence showing actual non-availability of water and labour in the market.

8. As far as the alleged delay on the part of the Government agencies in laying infrastructure is concerned, there is no evidence of any particular timeline having been committed by such agencies to the developer for laying infrastructure and having not maintained the said timeline. As far as the alleged shortage of raw material is concerned, the case of the OP is that sand was not available in the vicinity of the complex due to restriction on mining imposed in Aravali region and therefore, they had to procure sand from the neighbouring city of Rajasthan. In its written version, the OP has referred to an order dated 8.5.2009 stated to have been passed by the Hon’ble Supreme Court stopping the mining operations in Aravali range. The agreement with the complainant having been executed much much later on 4.6.2012, the said order was already in the knowledge of the developer and therefore, it knew that it will have to procure sand from other places, on account of mining having been stopped in Aravali region. Therefore, shortage of sand in Aravali region cannot be a good ground for delaying the construction.

9. As regards the delay in grant of approvals from the State Government is concerned, neither any particulars of the alleged delay have been given nor any evidence has been led to prove that there was abnormal delay on the part of Government Authorities in granting approval and the said delay had contributed to the delay in completion of the construction.

10. As regards the Jat reservation agitation, there is no evidence of the said agitation having actually resulted in stoppage of work at the site of the project. More importantly, the aforesaid protest is stated to have started in February 2016 whereas the construction was required to be completed by September 2015, much before the said agitation started in Gurgaon.

11. As regards NGT having stopped construction in April 2015 and November 2016, no order of NGT passed in April 2015 and stopping construction on the project in question has been placed on record. As far as the order of NGT dated 8.11.2016 is concerned, that came to be passed much later than the last date stipulated in the Buyers Agreement for completion of the construction. Moreover, the said order was operative only for a period of one week.

12. As far as demonetization is concerned, I fail to appreciate how it could have affected the construction since there was no restriction on payment by means of cheques/demand drafts and through other modes of banking transactions. Moreover, the demonetization came to force on 8.11.2016, much after the last date stipulated for completion of the construction had already expired.

13. The learned Counsel for the OP has drawn my attention to Clause 11.5(ii) and (iv) and Clause 20 of the agreement which read as under:

11.5. (ii) In the event of further delay by the Developer in handing over of the possession of the Unit even after 12 months from the end of grace period, then in such case, the intending Allottee shall have an additional option to terminate this Agreement by giving termination notice of 90 days to the Developer and refund of the actual installment paid by him against the Unit after adjusting the taxes paid/interest/penalty on delayed payments.

(iv) Developer shall, within ninety (90) days from the date of receipt of termination notice of said Unit, refund to the intending Allottee, all the monies received excluding the service tax collected on various remittances, till the date of refund, from the intending Allottee under this Agreement. In case the Developer fails to refund the Sale Price, the Developer shall pay interest to the intending Allottee @ 9% per annum for any period beyond the said period of ninety (90) days. The intending Allottee shall have no other claim against the Developer in respect of the said Unit along with the parking space. The intending Allottee in this event shall have no right to seek any compensation apartment from the interest as stipulated herein.

20. RIGHT OF CANCELLATION BY THE ALLOTTEE

Except to the extent specifically and expressly stated elsewhere in this Agreement, the intending Allottee shall have the right to cancel this Agreement solely in the event of the clear and unambiguous failure of the warranties of the Developer that leads to frustration of the contract on that account. In such case, the Allottee shall be entitled to a refund of the installments actually paid by it along with interest thereon @ 6% per annum, within a period of 90 days from the date of communication to the Developer in this regard less any payments made towards taxes paid by the Developer or interest paid, due or payable, any other amount of a non-refundable nature. No other claim, whatsoever, monetary or otherwise shall lie against the Developer nor shall be raised otherwise or in any manner whatsoever by the Allottee. Save and except to this limited extent, the Allottee shall not have any right to cancel this Agreement on any ground whatsoever.

Relying upon the aforesaid clauses contained in the agreement, it is contended by the learned Counsel for the OP that though the complainants did not exercise the option to terminate the agreement despite delay of more than 12 months from the end of the grace period, had they exercised the said option, they would have been entitled only to refund with interest @ 9% per annum after deduction of the service tax or in any case they had exercised the option available in Clause 20, they would have been entitled to refund that interest @ 6% per annum, after deduction of taxes and Other amount of a non-refundable nature paid by them. Somewhat similar clauses came up for consideration of this Commission in CC No. 2000 of 2016, Geeta Bansal v. M/s. Ireo Grace Realtech Pvt. Ltd. & Ors., decided on 24.9.2018. The clauses relied upon in Geeta Bansal (supra), read as under:

43. Subject to Force Majeure, as defined herein and further subject to the applicant having complied with all its obligations under the terms and conditions of this Agreement and the applicant not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of the total Sale Consideration, stamp duty and other charges prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the applicant within a period of 42 months from the date of approval of the building plans and/or fulfilment of the pre-conditions imposed thereunder (“Commitment Period”). The applicant further agrees and understands that the Company shall additionally be entitled to a period of 180 (6 months) days (“Grace Period”), after the expiry of the said commitment period to allow for unforeseen delays beyond the reasonable control of the Company. Subject to the condition contained herein, if the Company fails to offer possession of the said apartment to the applicant by the end of the Grace Period, it shall be liable to pay to the applicant compensation calculated at the rate of Rs. 7.5 (Rupees seven and fifty paisa only) per sq. ft. of Super Area (“Delay Compensation”) for every month of delay thereafter until the actual date fixed by the Company for offering the possession of the said such ‘Delay Compensation’ only at the time of ‘Notice of Possession’ or at the time of payment of the final installment, whichever is earlier.

44. Subject to the above, in the event of delay by the Company in offering the possession of the said Apartment beyond a period of 12 months from the end of the Grace Period (such month period hereinafter referred to as the ‘Extended Delay Period’ then the applicant shall become entitled to opt for termination of the Agreement and refund of the actual paid up installment paid by it against the said Apartment. It is clarified that the delay compensation calculated for the fixed period of 12 months only shall be paid by the Company along with the installments refundable under this clause without any interest. This option may be exercised by the applicant only uptill dispatch of the Notice of Possession by the Company to the Applicant. No other claim, whatsoever, monetary or otherwise shall lie against the Company nor be raised otherwise or in any other manner by the Applicant.

49. Notwithstanding anything contained in this Agreement, timely performance by the applicant of all its obligations under this Agreement, including without limitation, its obligations to make timely payment of the Sale Consideration, maintenance charges and other deposits and amounts, including any interest, in accordance with this agreement shall be of essence under this Agreement. If the applicant neglects, omits, ignores, or fails in the timely performance of its obligations agreed or stipulated herein for any reason whatsoever or to pay in time to the Company any of the installments or other amounts and charges due and payable by the Applicant by respective due dates, the Company shall be entitled to cancel the allotment and terminate this Agreement in the manner described hereunder.

Clause 21.3 of the Buyers Agreement on which reliance was placed by the learned Counsel for the OPs, reads as under:

21.3 The allottee understands, agrees and consents that upon such termination, the Company shall be under no obligation save and except to refund the amounts already paid by the Allottee to the Company, without any interest, and after forfeiting and deducting the Earnest Money, interest on delayed payments, brokerage/commission/charges, service tax and other amounts due and payable to it, only after resale of the said Apartment. Upon termination of this Agreement by the Company, save for the right to refund, if any to the extent agreed hereinabove, the Allottee shall have no further right or claim against the Company and/or the Confirming Parties which, if any, shall be deemed to have been waived off by the Allottee and the Allottee hereby expressly consents thereto. The Company shall thenceforth be free to deal with the said Apartment in any manner whatsoever, in its sole and absolute discretion and in the event that the Allottee has taken possession of the said Apartment and everything whatsoever contained therein and in such event, the Allottee and/or any other person/occupant of the said Apartment shall immediately vacate the said Apartment and otherwise be liable to immediate ejectment as an unlawful occupant/trespasser. This is without prejudice to any other rights available to the Company against the Allottee.

Rejecting the contentions based upon the aforesaid Clauses of the Buyers Agreement, this Commission inter alia held as under:

11. As far as Clause 44 of the indicators from the terms and conditions of the Apartment Buyers Agreement is concerned, this Commission has vide its order dated 18.9.2018 passed in CC No. 190/2017 and connected matters, has already held that the said clause is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite the said clause. The decision of this Commission in CC No. 190/2017, to the extent it is relevant, reads as under:

7. The learned Senior Counsel for the OP has drawn my attention to Clause 44 of the terms and conditions, extracted hereinabove and he submits that the aforesaid clause gives only a limited right to the complainants to terminate the agreement and seek refund of the amount paid by them. He also submits that in terms of the aforesaid clause, the contract could be terminated after a delay of at least 12 months, and only the delay compensation in terms of the agreement, for twelve months, is payable along with installments refundable to the allottee without any interest. However, in my view, since the OP failed to deliver possession of the allotted flats to the aforesaid complainants, it amounted to a deficiency in rendering service to them and therefore, this Commission is entitled to direct refund of the amount paid by them to the OP along with appropriate compensation. In my view, Clause 44 which postpones the right of the flat buyer to terminate the agreement and seek compensation even after the grace period has expired, is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite Clause 44 extracted hereinabove.

12. As far as Clause 21.3 of the Buyers Agreement extracted hereinabove is concerned, the said clause, when read in conjunction with the other clauses of the agreement extracted hereinabove, is patently unfair, besides being one sided. If these Clauses are given effect, it would result in a situation where a flat buyer, despite the failure of the builder to offer possession within the time stipulated in this regard and without there being any justification for doing so, will be practically remediless for 1 years from the date of the default, no interest or compensation will be paid to him for the period his money is utilized by the builder, and even the principal amount will be repaid to him in an uncertain future, when the builder has already sold the apartment which was allotted to him. Such a term in the contract would be wholly one sided, unfair and unjust particularly when examined in the light of the fact that as far as the builder is concerned, he has a right to terminate the transaction in the event of even a single default on the part of the flat buyer and not only forfeit the earnest money but also deduct the other charges specified in Clause 21.3 of the Buyers Agreement.

14. The learned Counsel for the OPs submits that the parties having agreed to all the above referred stipulations, are bound by the same and cannot be allowed to have a grievance at a later date claiming the same to be unfair or one sided. No doubt the parties are ordinarily bound by the terms and conditions agreed between them in respect of a particular transaction, but the position would be altogether different where such terms are found to be wholly one sided and unfair, operating only to the detriment of the flat buyers without any corresponding detriment to the builder.

15. If a builder fails to deliver possession of the flat/plot booked with him, within the time period committed for this purpose and is unable to justify the said delay, this, in my opinion, would constitute a defect or deficiency in the services rendered by him to the buyer and in such a case, this Commission, in exercise of the powers conferred upon it by Section 14(1)(c) and (d) of the Consumer Protection Act would be competent to direct refund of the amount paid by the buyer to the builder, along with appropriate compensation for the loss or injury suffered by the buyer due to the defect/deficiency in the services rendered to him by the builder.

14. Therefore, the clauses on which reliance is placed by the learned Counsel for the OP being wholly one sided and unfair, the complainants would not be bound by the same and if the developer is unable to justify the delay, this Commission would be competent to direct refund of the amount payable by them to the developer along with appropriate compensation.

15. It is also pointed out by the learned Counsel for the OP that the complainants in CC No. 238/2017 did not make payment of the second last installment demanded vide letter dated 5.11.2015. However, since the last date for completion of the construction had already expired by the time the said demand letter was issued and admittedly, the construction was not complete even at that stage, the failure of the complainants to make the said payment cannot be held against them. This is more so when the OP did not even seek to cancel the allotment on account of the said non-payment.

16. The learned Counsel for the OP submits that in CC No. 239 of 2017, not only the construction of the apartment has already been completed, even the requisite Occupancy Certificate has been obtained on 23.7.2018 and therefore, the complainant should now take possession of the allotted flat instead of insisting upon the refund of the amount paid by him towards the cost of the flat. The learned Counsel for the said complainant states on instructions that the complainant is no more interested in taking possession of the allotted flat and wants refund of the amount paid by him along with appropriate compensation. Considering that the last date for completion of the construction expired about three years before the Occupancy Certificate was obtained, and in fact, it had expired more than one year before this complaint was instituted, the complainant, in my opinion, cannot be compelled to accept possession of the flat at this belated stage.

17. For the reasons stated hereinabove, I hold that the complainants are entitled to refund of the entire amount paid by them to the OP along with appropriate compensation. The learned Counsel for the complainants has drawn my attention to Clause 15 of Haryana Real Estat

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e (Regulation And Development) Rules, 2017 which inter alia provide for payment of interest by the promoter to the allottee at State Bank of India highest marginal cost of lending + 2% where the promoter fails to give possession of the apartment/plot/building in accordance with terms and conditions of agreement for sale in terms of Section (4) of Section 19. As per the information collected by the complainant from the website of State Bank of India, the maximum marginal cost of lending rate is 8.7%. This is not disputed by the learned Counsel for the opposite party. Adding 2% to the aforesaid rate, the complainants, in my view, are entitled to compensation in the form of interest @ 10.7% per annum, from the date of each payment. However, considering that the complainants had sought and obtained an ex parte order dated 6.2.2017, restraining the OP from cancelling the allotment made to them, they are not entitled to compensation in the form of interest w.e.f. 6.2.2017 till the date of this order. 18. Loan is stated to have been taken by the complainants from City Bank, NA. The OP therefore shall first pay the entire amount payable to the said bank and the balance if any, shall be paid to the complainants. Such payment to the bank shall be deemed to be the payment made to the complainants in compliance of this order. If however, the entire loan taken by the complainants is paid along with interest on that loan, the entire payment in terms of this order shall be made to the complainants instead of making any payment to the bank. 19. The complaint is therefore, disposed of with the following directions: (i) In CC No. 238 of 2017, the OP shall refund the entire principal amount of Rs. 4,43,99,622 in terms of this order along with compensation in the form of simple interest @ 10.7% per annum from the date of each payment till 5.2.2017 and w.e.f. the date of this order, till the date of refund. (ii) In CC No. 239 of 2017, the OP shall refund the entire principal amount of Rs. 4,48,43,026 in terms of this order along with compensation in the form of simple interest @ 10.7% per annum from the date of each payment till 5.2.2017 and w.e.f. the date of this order, till the date of refund. (iii) The OP shall also pay a sum of Rs. 25,000 as the cost of litigation in each complaint. (iv) The payment in terms of this order shall be made within three months from today. Complaint disposed of.
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