The instant complaint under Section 17 (inadvertently mentioned under Section 12) of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of a couple/intending purchaser against a Construction Company (Opposite Party No. 1), its contractor (Opposite Party No. 2) and the negotiator (Opposite Party No. 3) in a dispute of housing construction.
Succinctly put, complainants’ case is that on 29.03.2013 they entered into an agreement for sale with the Opposite Parties to purchase of a flat measuring about 1712 sq. ft. super built up area, being flat No.3B on the second floor in Block 14 together with two car parking space on the stilt floor of the said block in a complex christened ‘Sanjeeva Orchards- II’ lying and situated in Mouza- Thakdari, P.S.- New Town, Dist- North 24 Parganas within the local limits of Mohisbathan –II Gram Panchayat at a total consideration of Rs. 68,48,000/- @ 4,000/- per sq. ft. for the flat and Rs. 6,00,000/- for two car parking spaces aggregating Rs. 74,48,000/-. The complainants have stated that they have already paid Rs. 22,34,400/- as part consideration amount towards the said total consideration amount. As per terms of the agreement, the OP No. 1 agreed to complete the construction and deliver possession of the unit within 30 months from the date of agreement with a grace period of six months thereafter. The complainants have submitted that in the agreement it was stipulated that in case of failure on the part of OP No. 1 to deliver possession within the timeframe, they shall be liable to pay interest @ 15% p.a. for the period of delay beyond the grace period and upon expiry of further period of six months thereafter, the buyer may entitle to terminate the agreement and seek refund of the amount. The complainants have stated that after expiry of the stipulated period, time and again they have requested the developer to execute the sale deed and to handover the possession but all the requests and persuasions went in vain. Finding no other alternative, on 20.02.2017 the complainants sent a legal notice to the Opposite Party No. 1 to which the OP No. 1 replied on 16.03.2017 where they have taken a plea that as the complainants have not paid the instalments in time, they are not liable to refund the money. In that perspective, the complainants approached this commission with prayer for following reliefs, viz.- (a) to direct the Opposite Parties for refund of Rs. 22,34,400/- together with interest thereon @ 15% p.a. in terms of the agreement for sale; (b) compensation of Rs. 1,50,000/- for harassment and mental agony etc.
Despite receipt of notice and having opportunity, the Opposite Party Nos. 1 and 2 did not file written version. However, at the time of final hearing the Opposite Party Nos. 1 and 2 were represented through the Ld. Advocate.
The Opposite Party No. 3 by filing a written version has stated that there is no relationship between the complainant and OP No. 3 and OP No. 3 has not provided any service to the complainant or had received any consideration for rendering any services to the complainants and as such the complaint should be dismissed against them.
During hearing of the case on behalf of complainants and OP No. 3 the evidence on affidavit has been filed. They have also filed a reply against the questionnaire set forth by their adversaries. However, the Opposite Party Nos. 1 and 2 have neither cross-examined the complainants nor they could file any evidence as they did not file any written version. However, at the time of final hearing the parties have relied upon several documents including the agreement for sale dated 29.03.2013.
The overwhelming evidence on record make it abundantly clear that on 29.03.2013 the complainants had entered into an agreement for sale with OP No. 1 company to purchase of a flat measuring about 1712 sq. ft. super built up area, being flat No.3B on the second floor in Block 14 together with two car parking spaces on the stilt floor of the said block in a complex christened ‘Sanjeeva Orchards- II’ lying and situated in Mouza- Thakdari, P.S.- New Town, Dist- North 24 Parganas within the local limits of Mohisbthan –II Gram Panchayat at a total consideration of Rs. 68,48,000/- @ 4,000/- per sq. ft. for the flat and Rs. 6,00,000/- for the car parking space aggregating Rs. 74,48,000/-.
The agreement for sale itself speaks that the complainants have already paid Rs. 22,34,400/- as part consideration amount towards the said total consideration amount of Rs. 74,48,000/- in the following manner:
|Cheque/Draft No.||Date||Bank||Amount (Rs.)|
In the agreement for sale the seller/developer agreed to complete the construction and deliver the possession of the unit within 30(thirty) months from the date of agreement with a grace period of six months thereafter. The agreement for sale between the parties was executed on 29.03.2013 and, therefore, when the developer has failed to advance any Force Majeure circumstances, they were under obligation to hand over the subject flat in complete habitable condition positively within September, 2015. However, the Opposite Party No.1 has failed to fulfil their part of obligations as per terms of the agreement.
It is undisputed proposition of law that the parties are bound by the agreement. A person who signs a document contain certain contractual terms is normally bound by them even though he is ignorant of their precise legal effect. In a decision reported in AIR 1996 SC 2508( Bharati Knitting Company –vs. – DHL Worldwide 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'
Evidently, the OP No. 1company has failed to keep their promise to deliver possession within the time framed. In this regard, against the legal notice issued by the complainants dated 20.02.2017 the OP No. 1 replied vide their letter dated 16.03.2017 that as the complainants have not paid their instalments in time, they are not liable to refund the money. In this regard, it would be pertinent to have a look to the payment schedule which is spell out in third schedule (Part II) of the agreement is set out below:
|SL. NO.||PARTICULARS||AMOUNT PAYABLE|
|2||At or before stilt casting||7,44,800/-|
|3||On or before ground floor roof casting||7,44,800/-|
|4||On or before 1stfloor roof casting||7,44,800/-|
|5||On or before 2ndfloor roof casting||7,44,800/-|
|6||On or before 3rdfloor roof casting||3,72,400/-|
|7||On or before 4thfloor roof casting||3,72,400/-|
|8||On or before completion of Brick work||3,72,400/-|
|9||On or before finishing work||3,72,400/-|
|10||On or before possession||7,44,800/-|
Therefore, it is quite clear that it was a construction linked payment plan by way of instalments. There is no evidence whatsoever that the OP No. 1 had ever issued any letter to the complainant intimating them the stage wise progress of the construction and claimed any amount for such progress. Therefore, the OP No. 1 cannot absolve their responsibility by taking a plea for non-payment of instalments by the complainants. In this regard, it would be worthwhile to have a look to the relevant provision of the agreement where it has been specifically mentioned that in case of delay in delivery of possession by the seller beyond the stipulated period, unless occasion by force majeure conditions or for reasons beyond its control and only the buyer had made payment in full of amount payable in terms hereof punctually as stipulated herein and there had not been any changed/modification carried out by the seller in the unit as may have been required by the buyer, the seller shall pay interest @ 15% per annum for the period of delay beyond the grace period and upon expiry of a further period of 6 months thereafter, the buyer may upon notice in writing to the seller be entitled to either terminate or cancel the agreement and/or seek refund of the amount paid till then or to extend the time to deliver possession without any damages. In this regard, the evidence given by the complainants remained unchallenged.
In fact, the complainants filed affidavit by way of evidence but the OP No. 1 /developer has neither filed any affidavit by way of evidence nor filed questionnaire against the evidence given by the complainants. In such situation, keeping in view the proposition of law, the allegations of the complainants which remains uncontroverted shall prove their case in absence of any counter affidavit filed by OP No.1.
In landmark decision reported in (1994) 1 SCC 243 (Lucknow Development Authority –vs- M.K. Gupta) the Hon’ble Supreme Court has 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 in Section 2(1)(o) of the Act. the inordinate delay in handing over the possession of the flat/unit clearly amounts to deficiency of services. In another decision reported in (2018) 5SCC 442 (Fortune Infrastructure –vs- Trevor D’lima) the Hon’ble Apex Court has 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.
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>On evaluation of materials on record and having heard the Ld. Advocate for the parties and on going through the materials on record we think considering the facts and circumstances and in view of the proposition of law enunciated by the Hon’ble Supreme Court, the complainants are entitled to some reliefs. In our view, an order directing the Opposite Party No. 1 company to refund the amount of Rs. 22,34,000/- along with compensation in the form of simple interest @ 15% p.a. as per terms of the agreement will sub-serve the object of justice. Under compelling circumstances, the complainants have to approach this commission for which they are entitled to litigation costs which we quantify at Rs. 20,000/-. With the above discussion, the complaint is allowed on contest with the following directions: (i) The Opposite Party Nos. 1 and 2 are jointly and/or severally directed to refund 22,34,400/- along with compensation in the form of simple interest @ 15% p.a. as per terms of the agreement in favour of the complainants from the date of agreement i.e. from 29.03.2013 till its realisation; (ii) The Opposite Party Nos. 1 and 2 are jointly and/or severally directed to pay a sum of Rs. 20,000/- to the complainants as costs of litigation. (iii) The above payments should be made within 45 days in terms of the above order.