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Prescon Realtors & Infrastructures Pvt. Ltd. & Another v/s D.S. Ranganath

    First Appeal No. 296 of 2019 in Complaint No. 862 of 2015
    Decided On, 20 December 2019
    At, National Consumer Disputes Redressal Commission NCDRC
    By, MEMBER
    For the Appellants: Nagaraj V. Hoskeri, Nihant Panicker, Advocates. For the Respondent: A. Subhashini, Advocate with D.S. Ranganath, In person.

Judgment Text

M. Shreesha, Member

1. Aggrieved by the order dated 11.1.2019 in CC/15/862 passed by the State Consumer Disputes Redressal Commission, Maharashtra (for short the “State Commission”), M/s. Prescon Realtors & Infrastructures Pvt. Ltd. and Sh. Vinay Kedia (hereinafter referred to as “Developer”) preferred this First Appeal under Section 19 of the Consumer Protection Act, 1986 (in short “the Act”). By the impugned order, the State Commission has partly allowed the Complaint and granted the following reliefs:

“1. Consumer complaint is partly allowed with costs quantified at 25,000 (Rupees Twenty-Five Thousand only) payable to the complainant by the opponents.

2. Opponents should hand over possession of the flat bearing No. 804 of 2 BHK in Hill View Building No. 18 admeasuring 870 sq. ft. carpet area (1235 sq. ft. saleable area) in the Complex known as “Prestige Residency” constructed on CTS No. 147, Hissa No. 3A, Survey No. 150 & 151, Village Kavesar situated at Waghbil Naka, Kavesar, Thane (West) to the complainant on payment of remaining consideration i.e.43,72,290 (Rupees Forty Three Lakh Seventy Two Thousand Two Hundred Ninety only) [55,27,860 – 11,55,570 =43,72,290].

3. Complainant should deposit said remaining consideration i.e.43,72,290 (Rupees Forty Three Lakh Seventy Two Thousand Two Hundred Ninety only) in this Commission under intimation to the opponents. From the date of deposit within two months opponents should execute the agreement in favour of the complainant and register it and hand over possession of the said flat to the complainant. In case of failure, opponents should pay interest on the entire amount deposited @ 12% p.a. from the date of this order till handing over of possession to the complainant.

2. Briefly stated the facts of the case are that the Complainant in October, 2010 booked a 2 BHK flat bearing No. 804 having 870 sq. ft. carpet area (1235 sq. ft. saleable area) with the Developer for a consideration of 55,27,850 in the Complex known as “Prestige Residency” to be constructed on CTS No. 147, Hissa No. 3A, Survey Nos. 150 and 151, Village Kavesar situated at Waghbil Naka, Kavesar, Thane (West). It is averred that though the Opposite Parties collected 11,55,570 which is more than the 20% of the total sale consideration, did not sign any Agreement which is in violation of Sections 4 and 4(a) of the MOFA Act, 1963. It is also stated that when the Complainant had asked the reasons for stopping the construction work, the Developer informed that they were waiting the commencement certificate for the upper floors from TMC and the same reply continued till December, 2014. It is further averred that several e-mails dated 24.12.2013, 19.3.2013, 18.7.2014 were addressed to the Developer seeing the status of the construction. Thereafter the Developer informed orally that they were in receipt of the commencement certificate for 26 floors in December, 2014 and sought for payment of escalation charges @ 1500 per sq. ft. over and above the booking rate which is 25,00,000 for a two BHK and 30,00,000 for a 3 BHK. It is stated that the Complainant had sought for reasons not only for the delay but also for the escalation in the costs, but was simply informed by Mr. Sanjay Iyer verbally that they had to pay the amount with 9% interest to continue in the Project and were also required to sign a supplementary agreement. Thereafter the Developer issued a letter dated 5.2.2015 to the members who signed the agreement and got it registered stating that the escalation price of 1,500 per sq. ft. should compulsorily paid. They also used their dominant position forcing the Complainants to withdraw the amount with interest @ 9% p.a. The Complainants also refers to the article in Time of India wherein the Developer denied the completion date of the Building as December, 2012.

3. It is also averred that the promoter has written to ICICI Bank, Bandra, Mumbai on 19.11.2012 stating that all the necessary sanctions and approvals from the competent authority has been received. Thereafter, a cancellation letter dated 30.5.2015 to the Complainant despite the fact that he has paid 20% of the total flat cost. A reply was sent by the Complainant on 10.7.2015 stating that the building was initially approved for 21 floors, the plan and specifications were changed without a written consent of the flat purchasers, approval was got for 26 floors which resulted in the stoppage of the construction work of the building for almost three years and this affected the interests of the flat purchasers, who were under the impression that the original completion date of the building i.e.December, 2012 would be adhered to. It is also pleaded that the Developer violated Sections 2, 3, 4A, 7, 7A and 10 and failed to provide the details of the flat purchasers as per Sub-section (ix) of the Section 3 of the Act. Aggrieved by the attitude of the Developer the Complainant preferred this Complaint seeking the following reliefs:

“(1) immediate stay on the sale of flats we booked to any third parties;

(2) immediate registration of flat in our name as per allotment;

(3) direct the builder to make payment of 24% interest for delays on the amount already paid to the builder from December, 2012 till date of likely possession;

(4) furnish list of buyers and co-operate on society formation;

(5) instructing the builder to complete the project as per the agreed specification within a given time frame;

(6) giving the possession as per the given date at least as agreed by the builder.”

4. The Developer filed the Written Statement denying all the allegations made by the Complainant. It was denied that they ever promised possession in December, 2012 and state that right from the inspection the floors which were to be constructed were to be 26 floors. Sanctions and approvals for the construction from TMC was denied and, therefore, there was delay in the work. It was averred that the Developer offered the money back option through various letters, but the Complainant has chosen to continue with the Sale Agreement with the revised terms though an exit option was given to him also. Finally, the approvals and sanctions from TMC were given in the year 2015, for which time there was a substantial increase in the cost of the construction material and, therefore, a demand letter was sent to the Complainant seeking the escalated cost.

5. It is averred that the Brochure of the Project clearly mentioned that the building is of 26 floors including the Development Agreement registered by the Developer way back in the year November, 2010. There has been substantial rise in the other costs including TMC charges and deposits due to which the Developer had to incur huge losses in their already purchased stock of TDR. Hence no deficiency of service or unfair trade practice can be attributed to them and they seek dismissal of the Complaint with costs.

6. The State Commission while allowing the Complaint observed as follows:

12. Advocate for opponents contended that now building is completed, Occupation Certificate is obtained, Society is formed and they are ready to hand over possession of the flat provided they should get enhanced price and for that they have filed some document showing what was the rate in the year 2010 and in the year 2015 when complaint was filed as per Ready Reckoner. However, we have already discussed above that delay in construction is not because of complainant. If there is delay in obtaining any permission for construction, it is the duty of the opponents to obtain all the necessary permissions and then only opponents should take the booking. Without obtaining necessary permissions how the opponents/builder are taking booking. That means it is not certain whether they will get permissions or not and upto which floor they will get permission. In spite of that builder/opponents had accepted booking and then came with the defence that they have not obtained or received necessary permissions and authorities have delayed the permissions or not giving the permissions. Such defence cannot be entertained. Hence, defence taken by the opponents cannot be entertained in law and on that ground, opponents cannot ask enhanced price of the flat. Thus, it is for the complainant to pay remaining consideration i.e. Rs. 43,72,290 (Rupees Forthy Three Lakh Seventy Two Thousand Two Hundred Ninety only) [Rs. 55,27,860 minus Rs. 11,55,570 = Rs. 43,72,290 ] to the opponents.

13. Advocate for opponents contended that interest on the remaining amount be given to the opponents. We find that opponents are not entitled for enhanced price of the flat. So there is no question of granting any interest on the remaining payment, otherwise that will amounting to enhance price of the flat and hence, complainant is entitled for possession of said flat on payment of remaining consideration i.e.Rs. 43,72,290 (Rupees forthy three lakh seventy two thousand two hundred ninety only). Hence, we answer Point No. 3 accordingly.

14. Point No. 4 (Compensation) : Complainant has claimed interest on the amount paid @ 24% p.a. from December 2012 till handing over of possession. He has drawn our attention to said document of Quotation, where there is a mention of interest rate of 24% p.a. when there is delay on the part of purchaser to pay the amount, interest on the amount due. We find that said interest is claimed by way of compensation. However, in the present case, in view of facts of the case, we find that no compensation can be granted to the complainant. The reason is that the booking was in the year 2010 and now we are in 2019. Out of total consideration of Rs. 55,27,860 complainant has paid Rs. 11,55,570. We have already passed the order that the complainant is entitled for possession of the flat on remaining consideration which was fixed in the year 2010. We have already discussed above that delay in construction was not because of complainant. However, at the same time, it is clear that complainant did not pay major part of the consideration. Complainant is getting possession of the flat on the basis of rate fixed in the year 2010 and it is because of that we are not inclined to grant any compensation on this count of delay in possession. Hence, we answer Point No. 4 in negative.

7. Learned Counsel appearing for the Appellant vehemently contended that there was no concluded contract between the Appellants and the Respondent and the quotations which were given along with the booking form clearly states that the charges and other details were subject to revision and this was ignored by the State Commission. He argued that the construction of the proposed building was obstructed due to circumstances beyond the control of the Developer which was brought to the notice of the Respondent to take appropriate decision regarding the continuing or discontinuing in the project. The Complainant instead of opting for existing scheme has chosen to remain the scheme but has not paid the balance sale consideration along with rise in the escalated cost and, therefore, for the default of the Complainant the builder cannot be made liable. He further contended that the construction was duly completed by the Developer, the Occupation Certain was obtained and even the Society was formed. Therefore, the Developer cannot be directed to offer possession to the Complainant who has not paid the balance sale consideration or the escalated cost.

8. It is also not disputed that the total sale consideration is 55,27,860, that there was delay in the project on account of obtaining sanctions from TMC and also that the Complainant was asked to pay escalated cost on account of the delay which has occurred. The contention of the Learned Counsel appearing for the Developer that the Complainant was given a choice to exit from the Project with sufficient notice is unsustainable specially keeping in view the letter dated 30.5.2015 in which the Developer has cancelled the booking on the ground that on account of the enhanced price of the material for construction, the project is not viable. For better understanding of the case the relevant portion of the letter dated 30.7.2015 is reproduced as hereunder:

“2. Shortly thereafter, we had applied for further sanctions and approvals, including approvals for the building plans on the upper floors. Matters were not moving on the part of the Corporation. The Corporation continually revised its requisitions and compliances causing extreme stress on us and disrupting the Project. After having given initial approvals, the Corporation has raised requisitions, which entail amending the existing sanctions and approvals. As a result there have been changes in the areas of the flats also. In the meanwhile costs have gone up to a level where it is unviable for us to proceed with the transaction on the terms which you had originally negotiated with us.

3. In the circumstances, we cannot enter into an agreement to sale with you, and have no choice but to cancel/revoke the earmarking of the Premises made in your favour. As provided under Section 8 of the MOF Act, we are willing to refund the monies paid by you to us. We call upon you to visit our Site Sales Offices on any working day during working hours within a period of seven days form the date hereof and comply with the necessary formalities to enable us to refund the amounts paid by you to us with interest.

4. Please take notice that we shall hereafter be holding your amounts at your risk, and in the event you do not collect refund of the amounts within a period of 14 days from the date hereof after executing necessary documents, we shall cease to be liable to pay interest on the said amount on the period of delay thereafter. “

(Emphasis supplied

9. From the tone and tenor of the afore-noted letter, it is clear that the Complainant was not given any opportunity to exercise his ‘choice’ and in fact was told that the Developer was not in a position to enter into any Agreement with him, which is not only an act of deficiency of service but also unfair trade practice and against the principles of natural justice. Learned Counsel appearing for the Complainant drew our attention to the letter dated 3.7.2015 addressed by the Developer to the Complainant stating that the revised consideration on escalation as authorized by the agreement works out to 77,22,985 and an amount of 47,87,742 was still due against the Complainant and that delay in payment of consideration would attract interest @ 24% p.a. for the period of delay. Seven days’ time was given to make the payment. Such one-sided Clauses construe unfair trade practice and the ratio laid down by the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, II (2019) CPJ 34 (SC)=III (2019) SLT 435, (Civil Appeal No. 12238 of 2018), squarely applies to the facts of this case. The material on record evidences that the Developer was repeatedly requested to give the date of offer of possession.

10. On a pointed query from the Bench as to when actually the offer of possession was made, Learned Counsel appearing for the Developer submitted that the offer of possession was made orally and that the Occupation Certificate was obtained on 16.2.2017. The Hon’ble Supreme Court in a catena of judgments has laid down that offering possession without the Occupation Certificate cannot be construed as ‘legal possession.’ Admittedly, the permissions were obtained only in the year 2014. The project was stalled for a period of 30 months. Admittedly, it is a construction linked payment plan and a perusal of the quotations of construction linked plan given to the Complainant marked as Annexure ‘A’ evidences that initially the floors were only 22 in number. We find force in the contention of the Learned Counsel for the Complainant that the floors were thereafter increased to 26 which led to delay in getting the necessary sanctions and approvals. The change of rates is evidenced in the report of the proposal that has been filed for the 21 buildings.

11. Learned Counsel for the Complainant further argued that if the NoC together with the relevant documents are given to the Complainant then LIC would release sanctioned loans and amounts directed to be paid by the State Commission. Needless to add, the stamp charges and also the service tax due and payable to the Government are to be borne by the Complainant. We find force in the contention of the Complainant that the society maintenance charges of 3,52,900 shall be paid by the Complainant from the date of possession and not earlier.

12. Learned Counsel appearing for the Developer drew our attention to the Civil Suit that was filed by the Developer before the Court of Civil Judge

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(Senior Division), Thane. It is observed from the Plaint Copy that the Civil Suit was filed on 7.6.2016 which is subsequent to the filing of the Complaint and the nature of prayer sought for do not bar the jurisdiction of Consumer Fora. 13. We do not find any illegality in the observations of the State Commission that the Developer was deficient in not obtaining the necessary permissions prior to accepting the money and that they were deficient in cancelling the flat after seeking enhanced price. The State Commission has rightly observed that the Complainant should deposit the remaining consideration and within two months from the date of deposit, the Developer shall execute an Agreement, register it and hand over the possession of the said flat. In case of non-compliance, the Developer was directed to pay interest on the entire amount deposited @ 12% p.a. from the date of the order i.e. 11.1.2019 till the date of handing over possession to the Complainant. At the cost of repetition, keeping in view the facts of the case and the admitted position that the project was stalled for almost 30 months on account of lack of sanctions, that the occupation certificate was obtained only on 16.2.2017 and further without affording any opportunity to the Complainant, the Developer sought to cancel the booking and has not entered into any Agreement, we are of the considered view that there is no illegality in the order of the State Commission. 14. Hence this Appeal is dismissed accordingly. No order as to costs. Needless to add, if any amounts have been deposited by the Developer in the Fora below, the same, with accrued interest, shall stand released to the Complainants and will be adjusted in the decretal amount. The Statutory Deposits made by the Developer at the time filing the present Appeal be released to the Complainant. Appeal dismissed.