The complainants, who are non-residents Indians, took two residential apartments with the opposite party in a project namely ‘Uniworld City-Air’ which the opposite party was to develop in Kolkata. Two units in the aforesaid project were allotted to the complainants who then executed two separate agreements with the opposite party, one in respect of each of the two residential units allotted to them. Both the agreements were executed on 16.01.2008. As per clause-5(a)(i) of the agreement, the possession was to be delivered to the complainants by 30.06.2011, subject to force majeure circumstances. The grievance of the complainants is that the possession has not been offered to them despite they having already paid about 95% of the sale consideration to the opposite party. The complainants are, therefore, before this Commission seeking refund of the amount paid by them to the opposite party along with compensation etc.
2. The complaint has been resisted by the opposite party which has taken a preliminary objection that the complainants are not consumers they having booked two units for the purpose of making gains by way of investment, they being non-resident Indians. On merits, the opposite party has not disputed either the agreement executed with the complainants or the payments received from them. It is, inter-alia, stated in the written version that the delay in the execution of the project which was a very large project happened on account of the time taken in approvals etc.
3. The complainants have explained in their rejoinder that they have two daughters and they intended to settle down in Kolkata and secure the future of their daughters. Therefore, they booked two residential units to have a permanent base in Delhi. The submission of the learned counsel for the complainants is that the complainants intended to provide one residential unit each of their daughters and that is why they had booked two units in the same project. There is no material to disbelieve the averments made by the complainants in this regard. It would be a natural desire of the parents to provide an accommodation to each of their children if they are in a position to provide such a facility to them. The complainants cannot be said to have booked the said residential units for the purpose of making subsequent gains only on account they having booked two units. Therefore, it would be difficult to accept that they are not consumers under the Consumer Protection Act.
4. As far as, the ground taken by the opposite party in written version is concerned there is hardly any merit since the time required for obtaining the requisite approvals had to be taken into consideration, while committing the time frame for delivery of possession. A reasonable delay in completion of construction can be understood in such projects. But, here the flats to be delivered, way back by 30.06.2011. More than eight years have already expired since the date by which the possession was to be delivered. The opposite party is not in a position to deliver the allotted houses even as on today. The learned counsel for the opposite party submits that the construction is not completed and they have to take occupancy certificate and will be in a position to deliver the possession of the flats by December, 2019. The learned counsel for the complainants states on instructions that the complainants do not wish to wait any more for the possession for the allotted flats and want to take refund of the amount paid by them alongwith appropriate compensation. Considering the extent of delay which has already taken place in this case, the complainants, in my opinion, cannot be compelled to wait any more and are entitled to seek the refund of the amount paid to the opposite party. A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Civil Appeal No. 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter decided on 02.04.2019 and in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra decided on 25.03.2019.
5. 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 the present case, the complainant did not make a prayer for delivery of possession in the Consumer Complaint and sought refund of the amount paid by him to the builder on account of the delay in offering possession of the allotted unit to him.
6. 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. This Commission having allowed refund to the complainant/respondent, the appellant before the Hon’ble Supreme Court inter-alia contended that as per the terms of the agreement executed between the parties, the flat purchaser could claim refund only after expiry of twelve months from the grace period by terminating the agreement but the Consumer Complaint had been filed even before the said twelve months period after the grace period had come to an end. It was also submitted on behalf of the builder that this Commission had erred in granting interest at the rate of 10.7% per annum to the complainant when the agreement between the parties provided for payment of interest @ 6% per annum in case of delay in handing over possession. Rejecting the contentions advanced by the builder, the Hon’ble Supreme Court inter-alia held as under:
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.
6.3. The National Commission in the Impugned Order dated 23.10.2018 held that the Clauses relied upon by the Builder were wholly one-sided, unfair and unreasonable, and could not be relied upon.
The Law Commission of India in its 199th Report, addressed the issue of ‘Unfair (Procedural & Substantive) Terms in Contract’. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :
“A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”
6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :
“‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.
6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.
The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.
7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent – Flat Purchaser. The Appellant – Builder could not seek to bind the Respondent with such one-sided contractual terms.
8. We also reject the submission made by the Appellant – Builder that the National Commission was not justified in awarding Interest @10.7% S.I. p.a. for the period commencing from the date of payment of each installment, till the date on which the amount was paid, excluding only the period during which the stay of cancellation of the allotment was in operation.
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 en
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titled to a refund of the amount paid, with reasonable Interest thereon from the date of payment till the date of refund. 7. The learned counsel for the complainants states on instructions that the complainants are restricting their claim to the refund of the principal amount paid along with compensation in the form of simple interest @ 10% in terms of Clause-5(f) of the agreement which reads as under: “Alternative property/compensation: That except for reasons mentioned in sub-Article 5.e above, if for any other reason whatsoever the Developer is not in a position to offer the Apartment herein applied for allotment, the Developer shall offer the Purchaser an alternative property or refund the amount in full with simple interest @ 10% per annum without any further liability to pay any damages or compensation.” 8. For the reasons stated above, it is ordered that: 1. The opposite party shall refund the principal amount of Rs.1,59,79,060/- + Rs.1,66,33,991/- to the complainants alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund. 2. The opposite party shall also pay Rs.25,000/- as cost of litigation. 3. The payment shall be made within three months from today.