Samaresh Presad Chowdhury, Presiding Member
The instant complaint under Section 17 of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of an intending purchaser against the Developer/Builder Company on the allegation of deficiency in services on the part of Developer Company in a dispute of housing construction.
Succinctly put, the Complainant’s case is that being allured by an advertisement about the complex in Uniworld City at New Town, Kolkata by the Opposite Party Company, the complainant filed an application on 18.03.2012 for a residential apartment in the complex christened ‘Fresco’ in Uniworld City to be developed by OP Company on a plot of land situated in Action Area-III, New Town, Kolkata at a total consideration of Rs.70,93,635/-. On that date the complainant paid an amount of Rs.9,81,115/- through a cheque and on payment of the same, an allotment letter was issued by OP Company in favour of the complainant on 19.04.2012. Subsequently, on 16.05.2012 Buyer’s Agreement was executed by and between the parties and the OP Company agreed to sell a residential apartment measuring about 1617 sq. ft. being Apartment No.1402 on the 13h floor in Tower No.03 along with one covered car parking space for exclusive use within the complex named ‘Fresco’ in Uniworld City, Action Area-III, New Town, Kolkata. The complainant has stated that in accordance with the payment schedule, he has already paid Rs.66,01,124/- as part consideration amount towards the said total consideration amount. The complainant has stated that as per terms of the agreement, the OP Company would have to handover the possession of the subject flat and car parking space within 40 months from the date of execution of the Agreement, precisely within September, 2015 subject to force majeure circumstances. The complainant has alleged that the Agreement has been designed only to protect the Company’s interests inasmuch as for failure to make payment by the purchaser, the purchaser is liable to pay interest on outstanding amount @ 18% p.a. compounded quarterly but for the delay in delivery of possession, there was a stipulation of payment of Rs.5/- sq. ft. per month as compensation by the OP Company is extremely negligible. The complainant has alleged that he did not get any opportunity to negotiate or modify any of the terms and conditions of the said Agreement and the said Agreement was prepared on the standard proforma of the OP. On 15.12.2015 the complainant wrote a letter to the OP Company raising an objection about payment of compensation for the delayed period at a higher rate. On 31.12.2015 the complainant was assured that the project will be completed quickly. Inspite of such assurance, no progress was noticed in the project. Ultimately, on 19.09.2017 the complainant and his wife went to the project site and found that Block-Tower-III at the said Fresco Project and found that it was basically lying abundant and there was no omen of any progress. Finding no other alternative, the complainant issued a legal notice on 22.09.2017 to the OP Company but it yielded no result. Hence, the complainant approached this Commission with prayer for several reliefs, viz. – (a) an award to the tune of Rs.3,00,000/- on account of damages and compensation; (b) an order directing the OP to pay an interest @ 18% p.a. from September, 2015 over the consideration amount already paid which comes to Rs.23,76,405/-; (c) a pendente lite interest @ 18% p.a. over the paid amount of Rs.60,01,124/-; (d) compensation of Rs.2,00,000/- for harassment and mental agony; (e) costs of the proceedings etc.
The Opposite Party/development company by filing a written version has stated that as per terms and conditions the company was under obligation to give possession of the apartment to the complainant within 40 months from the date of Agreement but they could not deliver the possession of the subject flat within the time frame and adjusted an amount of Rs.3,50,020/- for the reasons of delivery of possession as per terms of the agreement. Therefore, the complaint should be dismissed with cost.
During hearing of the case, both the parties have tendered evidence through affidavit. They have also given reply against the questionnaire set forth by their adversaries. Both the parties have also relied upon several documents including the Letter of Allotment, Buyer’s Agreement for Sale, possession letter etc. dated 24.07.2019. At the time of hearing on behalf of OP, a brief note of argument has been filed. Though the complainant was represented through the Ld. Advocate yet he did not file any brief notes of argument.
Undisputedly, the Complainant being the applicant filed an application on 18.03.2012 for allotment of a residential apartment measuring about 1617 sq. ft. super built up area being residential apartment No.1402 on the 13th floor in Tower -03 along with one covered car parking space in the basement of the said tower in the complex ‘Fresco’ in Uniworld City, Action Area –III, New Town, Kolkata at a total consideration of Rs.70,93,635/- under construction linked plan. The complainant had booked the said apartment on payment of Rs.9,81,115/- through a cheque bearing No.352766 dated 18.03.2012 drawn on ABN AMRO Bank, Kolkata in favour of OP Company. On 19.04.2012, the OP Company issued an allotment letter along with payment schedule to the complainant intimating the complainant that the complainant had been allotted the said apartment. Subsequently, on 16.05.2012 the Buyer’s Agreement was executed by and between the parties. It is not in dispute that the complainant had paid a total sum of Rs.66,01,124/- as part consideration amount through account payee cheques on diverse dates in favour of OP Company towards the said total consideration amount. In the agreement, it was stipulated that the OP Company will hand over the subject flat/apartment in complete habitable condition to the complainant within 40 months from the date of agreement, precisely within September, 2015.
In the written version, the opposite party took the plea of Force Majeure circumstances by stating that the construction in Uniworld City has been delayed for obtaining statutory infrastructural provisions pertaining to road, electricity, water, sewerage, sanction etc. beyond the control of them.
It is trite law that the parties are bound by the terms of agreement. When either of the parties did not pick up any quarrel with the terms and conditions of the agreement, they are certainly bound to follow the terms and conditions contained in the agreement. In a case reported in AIR 1996 SC 2508 (Bharti Knitting Co. – vs. – DHL World Wide Express Courier Division of Airfreight Ltd.) the Hon’ble Supreme Court has observed thus:-
“It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F.Nariman, Ld. Senior Counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit. When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established. The question we need to consider is whether the District Forum or the State Commission or the National Commission could go behind the terms of the contract? It is true, as contended by Mr. M.N.Krishanmani, that in an appropriate case, the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy. But each case depends upon it own facts. In an appropriate case where there is an acute dispute of facts necessarily the Tribunal has to refer the parties to original Civil Court established under the CPC or appropriate State law to have the claims decided between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract”.
It is well settled that after accepting the consideration amount as per agreement, the developer is under obligation to – (a) deliver possession, (b) execute and register the Sale Deed and (c) obtain completion certificate/occupancy certificate from the authority concerned. At the time of final hearing, the OP Company has annexed the possession letter with their BNA which indicates that the complainant has received the possession of the apartment along with fittings and fixtures in perfect condition on 24.07.2019 and the complainant did not deny the factum of acquiring possession of the apartment in question.
Mr. Pramit Kumar Bag, Ld. Advocate for the Complainant appearing with the recorded Advocate has submitted that the amount of compensation for the delay as mentioned in Clause 5.c.ii of the agreement which provides compensation of Rs. 5/- per sq. ft. per month for the delay in offering delivery of the said apartment is much less than the amount of 18% claimed by the O.P. in case of delay in payment of instalments within time. Placing reliance to a judgement/final order of the Hon’ble Supreme Court reported in (2019) 5 SCC 725 [Pioneer Urban Land & Infrastructure Ltd. – Vs. – Gobindan Raghavan] he has forcefully submitted that the complainant had no option but to sign on the dotted line, on the Agreement framed by OP Company and the terms of Buyer’s Agreement dated 16.05.2012 are ex-facie one sided, unfair and unreasonable. He has also submitted that in view of the ratio of the said decision, the complainant is entitled to a simple interest @ 10.7% p.a. for the period commencing from the date of payment of each instalment till the actual date of delivery of possession i.e. till 23.07.2019. To fortify his submission, Ld. Advocate for the complainant has invited out attention to the provisions of Section 18(1) of the West Bengal Housing Industry Regulation Act, 2017 and also Rule 18 of West Bengal Housing Industry Regulation Rules, 2018.
Per contra, Mr. Abhik Kumar Das, Ld. Advocate with Mr. P.R. Baksi, Ld. Advocate for the OP Company has contended that since the parties are bound by the agreement, the OP Company has refunded the amount for delay in delivery of possession in accordance with Clause 5c(ii) of the Agreement and as such complainant is not entitled to any relief more than that. In support of his submission, the Ld. Advocate for OP Company has placed reliance to a decision of this Commission dated 05.04.2019 in CC/508/2016 (Sri Bama Pada Dutta – Vs. – Bengal Unitech Universal Infrastructure Pvt. Ltd.).
For appreciation of the present dispute, let us see the relevant terms and conditions of the agreement. Clause 5.a of the agreement pertains to possession which rewrites below-
“(i). That the developer shall make its best endeavours to deliver the possession of the apartment to the purchaser within 40 months from the date of the execution of the agreement to sell or approval of the building plan whichever is later, subject, however, to ‘Force Majeure circumstances and after all dues in respect of the apartment including stamp duty and registration charges as applicable have been paid. It is, however, understood by the Company and the purchaser that various Towers comprised in the Complex shall be ready and completed in phases and after completion of the Apartment shall be handed over to the prospective purchaser(s) of respective Towers”.
The Force Majeure circumstances has been mentioned in Clause 9.a of the Agreement which provides that if the completion of apartment is delayed for reasons of Force Majeure which inter alia include delay on account of non-availability of steel, cement or any other building materials or water supply or electricity power back-up or slow down, strike or due to dispute with the construction agency employed by the developer, civil commotion or war or criminal action or earthquake or any Act of God, delay in certain decisions/clearance from the statutory bodies or any notice, order, rule or notification of the Government or any public or any competent authority or any change in the policy of government/statutory bodies or for any other reason which are beyond the control of the developer. But it reveals that no such occurrence has happened. The delay in handing over the possession of the apartment could have been justified if there was to be a new legislation, regulation or order suspending, stopping or delaying the construction of the complex and the apartments. Therefore, the Force Majeure circumstances are totally inapplicable in the facts and circumstances of the present case.
Admittedly, on 24.07.2019 i.e. during the pendency of the proceeding, the OP Company has handed over the possession of the apartment to the complainant through a possession letter. However, there has been a total delay for about long four years in handing over the said possession from the committed date of possession. Such inordinate delay in handing over the possession itself amounts to deficiency in services within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act and in that perspective, the complainant is entitled to compensation.
Since it has been proved beyond any shadow of doubt that the OP Company was negligent or deficient in rendering services to the complainant, the complainant is entitled to compensation from the committed date of delivery of possession till the actual date of delivery of possession. To assess the compensation, it would be worthwhile to reproduce the provision of Section 14(1)(d) of the Act which runs as follows –
“14. Finding of the District Forum. – (1) if, after the proceeding conducted under Section 13, the District Forum is satisfied that the goods complaint against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to do one or more of the following things, namely :
(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party”.
The sine qua non for entitlement of compensation is proof of loss or injury suffered by the consumer due to the negligence of the opposite party. Once the said conditions are satisfied, the Consumer Forum would have to decide the quantum of compensation to which the consumer is entitled. There cannot be any dispute that the computation of compensation has to be fair, reasonable and commensurate to the loss or injury. There is a duty cast on the Consumer Forum to take into account all relevant factors for arriving at the compensation to be paid.
In a decision reported in II (2018) CPJ 1 (SC) [Fortune Infrastructure – Vs. – Trevor D’Lima] the Hon’ble Supreme Court while discussing about compensation has observed thus –
“That compensation cannot be uniform and can be best be illustrated by considering cases where possession is being directed to be delivered and in cases where only monies are directed to be returned. In cases where possession being directed to be delivered, the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases, where monies are being simply returned, then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot .....” .
The Agreement speaks that in case of failure on the part of purchaser to make payment in time, the purchase shall be liable to pay interest on outstanding amount of 18% p.a. compounded quarterly and on the other hand, if the OP company fails to deliver the possession within the stipulated date, they are only liable to pay a compensation @ Rs.5/- per sq. ft. per month. It is quite evident that the term of this nature is wholly one sided, unfair and not conscionable. The developer charges interest @18% p.a. in the event of that delay on the part of purchaser in making payment but seeks to pay Rs.5/-per sq. ft. per month which is less than 3% p.a. of the capital investment. Needless to say, such a term in the GTC encourages the developer to divert the funds collected by them for one project to another project being undertaken by them. Therefore, the interest being charged by the bank and financial institution for financing projects of the builders is many times more than nominal compensation which the builder would pay to the flat buyers in the form of compensation.
In Pioneer Urban Land & Infrastructure Ltd. (supra) the Hon’ble Supreme Court while discussing on the point has observed –
“6.8 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 18.05.2012 are ex-facie one-sided, unfair and unreasonable. The incorporation of such one-sided clause in an agreement constitutes an unfair trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder”.
The above observation of the Hon’ble Supreme Court is equally applicable in the facts and circumstances of the case. In this regard, the provisions of Section 18(1) of the West Bengal Housing Industry Regulation Act, 2017 appears to be applicable in the facts and circumstances of the case, which is reproduces below-
“18(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building –
(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason;
he shall be liable on demand to the allottees, in case the allottees wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot or building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act;
Provided that where an allottee does not intend to withdraw from the project, he shall be paid by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed”.
In the case of Pioneer Urban Land & Infrastructure Ltd. (supra) the Hon’ble Supreme Court has observed that the National Commission has rightly awarded an interest @ 10.7% S.I. p.a. by applying Rule 15 of the Haryana Real Estate (Regulation & Development) Rules, 2017 from the date of each instalment till the date of cancellation of the allotment and thereafter, from the date of Commission’s final order till the date on which amount is refunded with interest. The provisions of Rule 15 Haryana Real Estate (Regulation & Developmen
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t) Rules, 2017 appears to be pari materia to Rule 18 of the West Bengal Housing Industry Regulation Rules, 2018 which is set out below – “18. Rate of interest payable by the promoter and the allottee under Section 13. - The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be under Section 13 shall be the State Bank of India Prime Lending Rate plus two per cent per annum in case of delay of payment by the allottee and delay on handing over the possession by the promoter, as the case may be”. On evaluation of materials on record, it transpires that the complainant being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP Company on consideration in housing construction and OP Company has failed to fulfil their part of obligations as per Buyers’ Agreement dated 16.05.2012 in handing over possession within the time frame i.e. within September, 2015 and thereby deficient in rendering services towards the complainant within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. Therefore, the complainant is entitled to some reliefs. In our view, a direction upon OP Company to make payment of compensation in the form of simple interest @ 10.7% p.a. from the committed date of possession (say from 01.10.2015) till the date of actual date of delivery of possession i.e. for the period between 01.10.2015 to 23.07.2019 will meet the ends of justice. Under compelling circumstances, the complainant has to knock the door of this Commission and therefore, complainant is entitled to litigation cost which we quantify at Rs.20,000/-. With the above discussion, we dispose of the complaint with the following directions – i. The Opposite Party is directed to pay compensation in the form of simple interest @ 10.7% p.a. from 01.10.2015 to 23.07.2019 subject to adjustment of Rs.3,50,020/- as per final notice dated 02.05.2019; ii. The Opposite Party is directed to pay Rs.20,000/- to the complainant as costs of litigation.; iii .The above payments must be paid within 60 days from date positively.