Raj Shekhar Attri, President
This compliant has been filed by the complainants, seeking refund of the amount Rs. 33,00,000 paid by them to the opposite parties, for the period from 12.9.2016 to 10.4.2018, towards purchase of a plot measuring 143.25 square yards, in the project launched by them, under the name and style ‘The Palm’, New Chandigarh, Mohali, Punjab, on the ground that they failed to offer possession thereof, by 11.1.2019, i.e. within a period of 24 months from the date of allotment being 12.1.2017, as envisaged under Clause 4.1 of the agreement dated 24.6.2017, for dearth of development activities. It has been stated that during the period intervening, since the opposite parties failed to deliver possession of the plot in question, they agreed to refund the amount paid, subject to submission of undertaking/affidavit. It has been averred that thereafter, when the complainants submitted application and affidavits, both dated 2.12.2019, in that regard, the opposite parties put a stamp thereon, that refund will be made within a period of 240 days, to which the complainants objected. Resultantly, the complainants wrote letter dated 1.3.2020, Annexure C-5, to the opposite parties, with a request to refund the amount paid within a period of 7 days, but to no avail.
2. Hence, this complaint has been filed by the complainants seeking refund of the amount paid along with interest, compensation for mental harassment and litigation expenses.
3. The claim of the complainants has been contested by the opposite parties, on numerous similar grounds, inter alia, that the complainants have concealed material facts from this Commission; that since joint permission has not been sought to file this complaint as such it needs to be dismissed on this ground alone; that they being speculators, did not fall within the definition of “consumer”; 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 before the expiry of date of offer of possession of the plot in question, the complainants approached the opposite parties seeking cancellation of allotment of plot and refund of the amount paid on account of personal reasons and submitted application and affidavits in that regard; that despite the fact that the complainants agreed to receive the entire amount paid without any deduction within 240 days from the date of submission of the said documents, they backed out and filed this consumer complaint; and that the entire original documents pertaining to the plot in question have also not been returned by the complainants.
4. On merits, booking of the plot by the complainants; payments made by them as mentioned in the complaint; execution of agreement aforesaid in respect of the plot in question; and also non delivery of possession thereof has not been disputed. Pecuniary and territorial jurisdiction of this Commission, to entertain and decide this complaint has not been disputed by the opposite parties. However, it has been stated that the project of the opposite parties has been got registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA) on 25.9.2017; that completion period for the project was given upto 13.6.2018, vide supplementary agreement dated 16.6.2016 executed with the Government of Punjab; that later on 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, exemption granted will have retrospective effect; that the Competent Authority extended completion period of the project upto 13.6.2020; that claim of the complainants seeking higher rate of interest on the deposited amount is totally unjustified. Rather, it should be as specified under Section 19 of the RERA, i.e. MCLR + 2% interest; that infact the complainants are entitled to interest @6% p.a. only, as envisaged in Clause 4.3 of the agreement; that even the Hon’ble Supreme Court of India in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd., IV (2020) CPJ 10 (SC)=VI (2020) SLT 50, Civil Appeal No. 6239 of 2019, decided on 24.8.2020, granted interest @6% p.a. and no interest can be granted to the complainants under PAPR Act.
5. However, ironically, it has been claimed in the reply that the opposite parties aretrying to complete the project as the development work is going on in full swing and work with regard to provision of basic amenities such as sewerage, water, electricity etc. is near completion; 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. While applying the theory of force majeure circumstances (which means irresistible circumstances beyond one’s control such like act of God ), it has been stated that delay in delivery of possession of plots occurred on account of shortage of building material, as there was ban on mining by the Punjab Government because of litigation with sand-mafias; and that the competent authorities also delayed in granting approvals with regard to sewerage and drainage connections. It has been stated that the opposite parties suffered substantial loss on account of the reasons given above. It has been pleaded that in order to help the developers/builders, the Govt. of Punjab has issued Notification dated 30.1.2020, wherein the completion period of the projects has now been extended till 31.12.2022; that COVID-19 also gave a set back to the opposite parties, as they went under financial strain, yet they are trying to complete the project within the extended period; that still if the complainants want refund of the amount paid, forfeiture clause will be made applicable. 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 contained in written reply filed by the opposite parties.
7. The parties led evidence in support of their case. Written arguments have been filed bythe complainants. However, Sh.I.P. Singh, Advocate, Counsel for the opposite parties has failed to file written arguments, despite opportunities given to him.
8. Accordingly, we have heard the contesting parties and have gone through record of thecase, including the rejoinder and written arguments filed by the complainants, 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 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 they failed to discharge their onus. On the other hand, the complainants, in their complaint have clearly stated that the plot in question was purchased by them for their residential purposes. Hence we hold that the complainants are consumers as defined under the Act. In this view of the matter, objection taken by the opposite parties stands rejected.
10. There is no dispute with regard to purchase of plot by the complainants in the aforesaid project of the opposite parties. It has also not been disputed that despite the fact that substantial amount of Rs. 33,00,000 against the total sale consideration of Rs.39,39,375 ,i.e. equal to more than 80%, stood received by the opposite parties from the complainants, for the period from 12.9.2016 to 10.4.2018, yet, they failed to deliver possession of the plot even by the date when this complaint has been filed or thereafter. Thus, at this stage, it is necessary for this Commission to find out, as to by which date, possession of the plot in question was required to be delivered to the complainants by the opposite parties. Admittedly, allotment letter in respect of the plot bearing No. 1558 was issued in favour of the complainants on 12.1.2017, Annexure C-3 and agreement, Annexure C-2, in respect thereof was executed between the parties on 24.6.2017. As per Clause 4.1 of the agreement dated 24.6.2017, the opposite parties committed to deliver possession of the said plot within a period of 24 months from the date of allotment thereof or even earlier to that. Relevant part of the said clause reads as under:
“4. HANDING OVER OF POSSESSION OF THE SAID PLOT AND EXECUTION OF DEED
4.1 Subject to other terms of this Agreement, including but not limited to timely payment of the Total Price and other charges mentioned in this Agreement, the Company shall endeavor to offer possession of the Said Plot within 24 (twenty four) months from the date of allotment with a grace period of 6 (six) months/even earlier to said 24 (twenty four) months from date of allotment upon receipt of written intimation by the Company in this regard to the said Allottee(s).
4.2 The Allottee(s) agrees and understands that the Company shall be entitled to a grace period for applying and obtaining the occupation/completion certificate (partial or complete, as the case may be) in respect of the Said Plot and/or the Project…”
Thus, if the period of 24 months referred to, in Clause 4.1 extracted above, is counted from the date of allotment, i.e. from 12.1.2017, the date of delivery of possession of the plot comes to 11.1.2019, yet, as stated above, the opposite parties have failed to do so.
11. During arguments, Counsel for the opposite parties failed to give any justification, as to why, when the opposite parties have already received substantial amount of Rs. 33,00,000 against the total sale consideration of Rs. 39,39,375 for the period from 12.9.2016 to 10.04.2018, from the complainants, possession of the plot in question, has not been offered to them by the committed date or even thereafter. At the same time, the opposite parties in their written reply in para No. 16 (preliminary objections) have very candidly admitted 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 (most of which pertain to the flats), 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. 16, referred to above, it has been stated that the development work is near completion, whereas in para No. 12 (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. It may be stated here that burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/opposite parties. 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 .
12. 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 regarding sewerage and drainage connection; 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 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 completing the development work nor delivering the possession of the plot by the committed date, i.e. 11.1.2019 or even thereafter, despite the fact that the same was booked as far as back in 2016, indulged into unfair trade practice and were also negligent and deficient in providing service.
13. At the same time, it is also held that plea taken by the opposite parties to the effect that delay took place in completing the development works at the project site, because the company suffered force majeure circumstances, i.e. due to COVID-19 the company suffered financial stress; litigation between sand mafia and govt. resulted into shortage of material like sand etc.; delay in approvals by the competent authorities with regard to connections of sewerage and drainage etc. does not carry out any weight for the reasons to be recorded hereinafter.
14. First coming to delay in approvals on the part of the Govt. Departments, regarding connections of sewerage and drainage, 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 Competent 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.
15. Now coming to the plea regarding shortage of material like sand etc. on account of litigation between the sand mafia and govt., 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 material, in adequate quantity, on account of the alleged litigation or ban thereon. There is no evidence of the opposite parties having invited tenders for supply of 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 complainant.
16. 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 2016. Even as per Clause 4.1 of the agreement, possession of the plot was to be delivered to the complainants latest by 11.1.2019, i.e. the date when there was no COVID-19. Even grace period of 6 months also stood lapsed on 11.7.2019, when still there was no COVID-19 and possession of the plot in question was not delivered by the opposite parties. 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.
17. However, in order to wriggle out of the situation, Counsel for the opposite parties contended with vehemence that since the complainants had submitted application/affidavits dated 2.12.2019, whereby they agreed to seek refund of the amount paid and further mutually agreed to receive the said amount in 240 days, as such, now they are barred from filing this complaint. On the other hand, Counsel for the complainants submitted that no doubt, the complainants had agreed to receive the refund of amount paid from the opposite parties and submitted the documents aforesaid, yet, later on, when they collected the said documents from the opposite parties, it was found that a stamp has been endorsed thereupon to the effect that the said amount will be refunded in 240 days, which was never consented by the complainants. It has been further contended with vehemence by Counsel for the complainants that despite the fact that the opposite parties took in writing from the complainants that the amount paid has been refunded to them, yet, it was not refunded and on the other hand, in a very arbitrary manner, endorsed the stamp aforesaid upon the aforesaid documents submitted by the complainants, which was challenged by them vide letter dated 1.3.2020 and request was made to make payment within a period of 7 days, but the opposite parties failed to do so.
18. It may be stated here that we have gone through the contents of the said application and affidavits dated 2.12.2019 and found that it has nowhere been agreed by the complainants that the amount paid be refunded to them in 240 days. On the other hand, in para No. 4 of the said affidavits, it has been written that the amount paid has been refunded to them, though, admittedly, the opposite parties have not refunded the same. It is very significant to mention here that not even an iota of evidence has been placed on record by the opposite parties, to prove their stand that the complainants have given their consent and have agreed to receive their amount within a period of 240 days from the date of execution of the said affidavits. The mere fact that the opposite parties, in an arbitrary manner endorsed their stamp to the effect that ‘Refund after 240 days’ on the documents submitted by the complainants, has no significant value in the eyes of law. In our considered opinion, the said endorsement is not binding upon the complainants and since the amount paid by them was not refunded by the opposite parties, they were at liberty to file this consumer complaint.
19. As stated above, still, in the reply filed by the opposite parties, it has been candidly admitted that the landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works are near completion. This reply has been filed by the opposite parties in October 2020, wherein, they are still saying that landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works at the project site are near completion. This candid admission of the opposite parties itself leaves no doubt, to say that they were not ready with the delivery of possession of the plot by the committed date, i.e. 11.1.2019 or even by October 2020 when reply in this complaint has been filed by them. The case of the complainants is proved from the admission made by the opposite parties themselves. Under these circumstances, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period, at the whims and fancies of the opposite parties. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon’ble National Commission in Sujay Bharatiya & Anr. v. Unitech Reliable Projects Pvt. Ltd., Consumer Case No. 1814 of 2017, decided on 5.7.2018. The above view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, II (2019) CPJ 34 (SC)=III (2019) SLT 435=Civil Appeal No. 12238 of 2018, decided on 2.4.2019 and also in Fortune Infrastructure v. Trevor D’ Lima & Ors., II (2018) CPJ 1 (SC)=III (2018) SLT 556=(2018) 5 SCC 442 . In the present case also, there has been an inordinate delay in the matter, and still the opposite parties are not sure as to by which date development work will be completed and possession of the plot will be delivered to the complainants and on the other hand still they are saying that the time period for completion of the project could be upto 2022. As such, we are of the considered opinion that if we order refund of the amount paid along with interest @12% p.a. from the respective dates of deposits in view of principle of law laid down by the Hon‘ble Supreme Court of India in H.U.D.A. v. Neelam Sharma, Civil Appeal No. 3417 of 2003 decided on 18.8.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited and also the Hon’ble National Commission, in Alok Kumar v. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 6 Sep., 2019 and Anil Kumar Jain & Anr v. M/s. Nexgen Infracon Private Limited, I (2020) CPJ 368 (NC)= (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23rd Dec., 2019, awarded interest @12% p.a. to the complainant, on the amounts to be refunded to them from the respective dates of deposits; that will meet the ends of justice.
20. The opposite parties have also placed reliance on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana’s case (supra) , to say that since in this case, 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’s case (supra) and found that, in the first instance, the said order has been passed with regard to compensation for delay in offering possession of the units therein and also over and above the interest rate of 6% p.a. the penalty amount as mentioned in the agreement has also been ordered to be paid to the complainant by the builder. Since, in the present case, the complainants have sought refund of the amount paid, as such, reliance placed by the opposite parties on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana’s case (supra) is misplaced.
21. As far as reliance placed by Counsel for the opposite parties on Notification dated30.1.2020, (Annexure O-6) is concerned, to say that the company got extension to complete the project in question, it may be stated here that we have gone through the said Notification and found that the validity of licences of only the colonies for which outstanding dues of EDC etc. have been deposited by way of post dated cheques in compliance to Government notification dated 28.11.2019, were deemed to have been extended upto 31.12.2022. It has nowhere been mentioned in the Notification dated 30.01.2020, that the builders/developers who have adopted unfair trade practice and are deficient in providing service by not delivering possession of the plots/units by the committed date for want of development works, despite receiving substantial amount from the buyers, are also covered under the said notification, for completion of the project. As such, no help can be drawn by the opposite parties from the said notification, as far as the present case is concerned.
22. Furthermore, the opposite parties also cannot wriggle out of their liability, by saying that delay took place on account of the reason that the complainants defaulted in making remaining payment, in view of 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, 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. In the instant case also, if the complainants after making payment of substantial amount equal to more than 80% of the total sale consideration, did not make remaining payment when they came to know that there was no development at the project site and possession is not expected in the near future or they withheld some part of the payment for some time, on account of the said reasons, they were right in doing so, in view of principle, referred to above, laid down by the Hon’ble Supreme Court in Haryana Urban Development Authority (supra). Objection taken in this regard stands rejected.
23. At the same time, it is also held that the opposite parties are not entitled to forfeit any amount, out of the deposited one because it is not the case of the opposite parties that despite the fact that they were ready with delivery of possession of the plot in question by the committed date, complete in all respects with completion certificate, but the complainants want to rescind the contract, on account of some financial constraints, at that stage. As such, plea taken by the opposite parties in this regard stands rejected.
24. Now coming to the objection taken to the effect that application seeking permission to file joint complaint has not been filed by the complainants, as such, it is liable to be dismissed on this ground alone, it may be stated here that because the plot in question stood purchased jointly by the complainants, they were not required to file any application seeking permission to file a joint complaint. The view taken by this Commission is supported by the judgment of the Hon’ble National Commission titled as Karnail Singh & 2 Ors. v. M/s. Emerald Lands (India) Private Limit
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ed & 5 Ors., VI (2009) SLT 246=III (2009) DLT (CRL.) 816 (SC)=III (2009) CCR 615 (SC)=Consumer Case No. 2809 of 2018, decided on 2 Jan., 2019, wherein the three complainants who had jointly been allotted plot in a project, moved an application under Section 12(1)(c) of the Act, which was rejected by it saying that it is wholly misconceived and the complaint was treated to have been filed under Section 12(1)(a) of the Act. Relevant part of the said order is reproduced hereunder: “..The present Complaint appears to have wrongly been filed along with an Application under Section 12(1)(c) of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) on behalf of three Complainants. As all the three Complainants have jointly been allotted Plot No. D-110, admeasuring 1290.98 sq. yards in Imperial Golf Estate at Village Mullanpur and Talwandi Khurd, District Ludhiana (Punjab) by Opposite Party No. 1, the Application filed under Section 12(1)(c) of the Act is wholly misconceived and is hereby rejected. The Complaint is treated to have been filed under Section 12(1)(a) of the Act…” 25. For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under: (i) Refund the amount of Rs. 33,00,000 to the complainants, along with compensation by way of interest @12% p.a., without deducting any TDS, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 33,00,000 shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization. (ii) Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs. 50,000 to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs. 50,000, shall carry interest @9% p.a. from the date of passing of this order, till realization. 26. However, it is made clear that in case the complainants have availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of the plot in question, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants. 27. The miscellaneous applications bearing No. 245 of 2021 and 283 of 2021 filed by the opposite parties, have been dismissed with no order as to costs, by this Commission, vide separate orders dated 6.7.2021. 28. Certified Copies of this order and also the orders passed in both the miscellaneous application, referred to above, be sent to the parties, free of charge. 29. The file be consigned to Record Room, after completion. Complaint partly allowed.