First Appeal No.13/2020
This appeal is directed against the order of the State Commission dated 06.12.2017 whereby the appellant was directed as under:
“The complainant hereby partly allowed.
Opponents are hereby directed to handover possession of Flat No.202 situated on 2nd floor of OLIVE Building having carpet area 480 sq.ft. constructed on the plot bearing C.T.S. No.200/A-C, A&B, 204, 206 & 213 of village kandivli, Mumbai suburban district of complainant within a period of three months from the date of passing of this order.
In alternative at the option of complainant, if opponents are not in a position to handover possession of flat to complainant, opponents are directed to return back the amount of consideration of Rs.53,55,000/- (Rupees fifty three lakhs twenty two thousand) to complainant along with interest on that amount @ 14% p.a. from the date of deposit of amount till realization.
Opponents are also directed to pay compensation of Rs.5,00,000/- (rupees five lakhs) to complainant for giving delayed possession of flat and mental agony along with cost of Rs.10,000/- (rupees ten thousand) of this litigation.”
This appeal is directed against the order of the State Commission dated 10.12.2010, which is the extent it is relevant reads as under:
“Merely because the Hon'ble High Court reserved order in Notice of Motion (L) No.1367/2019 in Commercial Suit No.30 of 2016 in chambers, accused cannot escape from consequences for the breach of order dated 06.12.2017 passed in consumer complaint No.399/13 by this Commission. Long period has been lapsed and the learned Advocate for the complainant has exercised option of payment which is alternatively granted, we, therefore, direct the accused to pay sum of Rs.53,22,000/- along with interest @14% p.a. from the date of deposit of the amount until realization. Apart from compensation in the sum of Rs.5 lacs and Rs.10,000/- towards litigation accused. The entire amount shall be paid by next date. Stand over to 15.01.2020.”
2. The complainant/ respondent had booked a residential apartment with the appellant company for a total consideration of Rs.53,22,000/-. A sale agreement was executed between the parties on 12.03.2010. At the time of booking it was represented to the complainant that the possession would be given to him by 31.10.2011. The possession having not being given, the respondent approached the concerned State Commission by way of a consumer complaint.
3. The complaint was resisted by the appellant company, which admitted the allotment made to the complainant as well as payment received from him. It was, inter alia, stated in the written version that the delay in handing over possession was due to late approval of the plan by the municipal authority and due to a stop work notice issued by the corporation in 2010.
4. The appellant has not placed on record the order dated 25.01.2010 issue to it by Municipal Corporation of greater Mumbai under Section 354(a) of the Mumbai Municipal Corporation Act. The aforesaid section permits the corporation to stop a work which has been carried unlawfully. Prima facie it would be mean that the construction was being carried out illegally by the appellant which led to the aforesaid order being passed by the Mumbai Municipal Corporation. The appellant, in my opinion, cannot take advantage of its own act or omission particular when such an act was committed in violation of the law. A person carrying out unauthorized construction cannot justify the delay on account of the order being passed by the concerned municipal corporation.
5. The learned counsel for the appellant submits that the said order was passed since one of the director of the company had to make some payment of Mumbai Municipal Corporation which the present director has since done. However, the facts remains that the work remained stopped for about 8 years solely on account of the lapse on the part of the appellant company irrespective of whether the lapse was in the form of making illegal construction or it was by not making payment of the requisite charges to Mumbai Municipal Corporation. Either way, the appellant cannot derive any benefit taking shelter behind the aforesaid order.
6. The admitted position is that even today, the appellant company is not in a position to deliver the possession of the allotted flat to the complainant since the construction is still going on. The complainant having awaited for more than 9 year cannot allowed to wait indefinitely for the possession of the flat and is entitled to refund of amount which he had paid to the appellant company along with appropriate compensation.
“ A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected matter (2019) 5 SCC 725 and the decision of the Hon’ble Supreme Court in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra decided on 25.03.2019.
In Devasis Rudra (supra), the possession was offered to the complainant/appellant during the pendency of the complaint before the State Commission and it was contended that the said builder having made substantial investment in terms of the agreement, a direction for refund was not warranted. In the Consumer Complaint filed in Devasis Rudra (supra), the complainant/appellant had prayed for possession of the house and in the alternative, for refund of the amount paid by him to the developer. In view of the said prayer made in the Consumer Complaint, it was argued on behalf of the builder that he should be made to accept possession of the allotted house and refund and not be allowed to him. The complainant, on the other hand, contended that at the time the Consumer Complaint was filed, he was ready and willing to accept the possession, but seven years having elapsed, he was not more willing to accept possession. Allowing the appeal, the Hon’ble Supreme Court inter-alia held as under:
“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.”
In Pioneer Urban Land & Infrastructure Ltd. (supra), the builder submitted before this Commission itself that since the construction of the apartment was complete and Occupancy Certificate had been obtained, the flat purchaser must be directed to accept the possession instead of directing refund of the amount deposited. In that case, there was a delay of about three years in offering possession and the flat purchaser had submitted that he was not interested in taking possession after delay of about three years. He also stated that he had taken an alternative property in Gurgaon.
6.1. In the present case, admittedly the Appellant – Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent – Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.
In Lucknow Development Authority v. M.K. Gupta,2 this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.
In Fortune Infrastructure & Anr. v. Trevor D’Lima & Ors.,3 this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.
6.2. The Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant – Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent – Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.
In Bangalore Development Authority v. Syndicate Bank, a Coordinate Bench of this Court held that when possession of the allotted plot/flat/house is not delivered within the specified time, the allottee is entitled to a refund of the amount paid, with reasonable Interest thereon from the date of payment till the date of refund.”
7. It is next submitted by the learned counsel for the appellant that the interests awarded by the State Commission on a higher side and therefore needs to be reduced. The quantum of compensation by way of interest would depend upon the loss suffered by the allottee on account of the failure of the builder to owner his comments.
8. The appellant company has approached this Commission after about delay of about two years, the impugned order in the consumer complaint having been passed on 06.12.2017 and this appeal having been instituted on 03.01.2020.
9. The application which the appellant has filed for condonation of delay in institution of this appeal, to the extent it is relevant reads as under:
“It is submitted that while proceedings before State Commission going on other 100 flat owners have filed Commercial suit No.30/2016 in Hon'ble Bomday High Court seeking timely completion of the said project and peaceful possession.
It is submitted that while proceeding in above commercial suit going on Hon'ble State Commission has passed ex parte impugned order.
It is submitted that in the consumer complaint proceedings earlier director of the appellant company is looking after the project. While State Commission has passed ex parte impugned order on 16.12.2017 and the present director has taken over the project as per direction of the Hon'ble Bomday High Court by order dated 27.02.2018 for the sake of flat owners.
It is submitted that Hon'ble Bomday High Court while considering commercial suit filed by about 100 flat owners of said building asked first time present appellant director Mr.Abdul Hamid of the appellant company herein whether he is ready to complete said project in Feb 2018, due to inability shown by earlier director of the appellant company taking into reasonable and fair interest of the 100 flat owners.”
10. It would be seen from a perusal of the application that the appellant company was all along aware of the order passed by the State Commission. This is not the case of the appellant company that it was not aware of the order which the State Commission had passed on 06.12.2017. In fact director of the appellant company has appeared before the State Commission in the execution proceedings which the respondent/ complainant had initiated before the State Commission and orders from time to time were passed in the execution proceedings, the last order dated 10.12.2019 which has been challenged in Appeal Execution No.01/2020. Since the appellant company was all along aware of the order of the State Commission in the consumer complaint on 06.12.2017, it ought to have come to this Commission within the prescribed period of limitation. The delay in the institution of appeal is abnormal, the same being about two years and in the absence of adequate explanation such an abnormal delay cannot be condoned. This is more so when the glaring facts of the case as noted here in above indicate a clear cut case of deficient on the part of the appellant company in rendering service to the complainant.
11. For the reasons stated above, I do not find any justification for condonation of delay of about two years in institution of First Appeal No.13/2020 which is accordingly dismissed. Consequently, Appeal Execution No.01/2020, also is dismissed the same being only an appeal against the order passed in the execution application which requires the appellant to comply with order passed by the State Commission in consumer complaint on 06.12.2017. The appeal is theref
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ore, dismissed. 12. At this stage, the learned counsel for the appellant states after taking instructions from both the Directors of the appellant company that if three months are given to them for the purpose, they shall comply with the order passed by the State Commission in all respects. The appellant is therefore, granted three months from today to comply with the order of the State Commission dated 06.12.2017 subject to the following conditions: 1. Both the Directors of the appellant company shall file their personal undertakings before the concerned State Commission undertaking therein to comply with the order passed by the said Commission on 06.12.2017 within three months from today. 2. Both the Directors of the appellant company shall remain present before the State Commission whenever the said Commission requires their personal presence and neither of them shall leave the country till the order passed by the State Commission is completed in all respects. 3. The Passports of both the directors of the appellant shall be deposited with the concerned State Commission within one week from today unless the said Passports are already deposited before any other Court/Forum.In that case, if the Passports are released to them by the Court/Forum with which the same have been deposited, the Directors of the appellant company shall immediately deposit the same with the concerned State Commission.