National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission: In a batch of Consumer Complaints for delay in delivery of possession and difference of promises in brochure and agreement with the buyers, the Commission presided by Ram Surat Ram Maurya and Dr. Inderjit Singh, Member* directed the builder to compensate complainants for delay in possession, failure in providing promised facilities and litigation costs.

The facts of the lead matter reveal that the complainant bought a flat in the project originally allotted to another. The amount of consideration for the unit, including IFMS Security, Club Membership and contingency final charges was Rs. 55,41,184. However, the complainants being threatened of cancellation of allotment were forced to pay Rs. 72,25,417 included stamp duty and registration, by levying unconscionable, unsubstantiated and illegal charges in the name of electricity connection charges, excess area charges, BOCW Cess, IFMS maintenance security, besides delaying handing over of the apartment by more than a year. The complainants also complained about the builder not providing the facilities and features promised, probably overcharging them for non-existent features.

As against the objections raised by the opposing parties, the Commission clarified that NCDRC has jurisdiction under Section 21 Consumer Protection Act, 2019, since the value exceeds Rs 1 crore. It further added that the cause of action is continuing since the builder failed to deliver possession of the unit to complainants till date.

The Commission referred to Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725 wherein, the Supreme Court rejected the finality of a contract where flat purchasers lack any option other than signing the dotted line on a contract framed by the builder, holding the same as unfair practice. The Commission placed reliance on Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512 wherein it has been held that failure to comply with contractual obligations within contractually stipulated period amounts to deficiency in service for jurisdiction of consumer fora and clarified delay in possession for award of compensation beyond the rate stipulated by the consumer forums.

The Commission directed the builder to pay compensation @6% p.a. on the amount paid by complainants, a lumpsum compensation of Rs. 1.00 lakh (per unit) for the facilities/ features promised and not provided, pay a sum of Rs. 25,000/- as cost of litigation, disclose the details in a transparent manner, wrapping the payments mentioned within 3 months.

The Commission dealt with several pointers through the present order as mentioned below:

  • Regarding compensation for delay in possession, the Commission held the subsequent allottees entitled to count the committed period of possession and delay compensation as applicable to original allottees.

  • For refund of Club Membership Charges, the cost of such services is excluded from the agreement, hence, the Commission did not hold the complainant entitled to any refund on account of club membership charges.

  • Return of contingency fund deposit has been denied by the Commission, however, the builder has been directed to disclose the purpose for which such fund has been used or will be used in future.

  • Regarding refund of excessive electricity charges, the Commission directed the builder to declare/disclose details of amount collected, and broad item-wise amount spent out of same and if any balance is still left, how it proposes to use the same, and how the rate of Rs.100/- per sq. ft. to each unit has been worked out.

  • Refund of IFMS has been denied by the Commission since levy @ Rs.50/- per sq.ft. Is specifically mentioned in the buyer’s agreement. The Commission directed builder to transfer the said funr to LCA since it is now maintaining the common areas and facilities.

  • On refund of Administration charges, the Commission directed the builder to declare/disclose in a transparent manner as to how much and in what manner funds collected under such heads have been utilized, since the agreement does not envisage payment of any administration charges.

  • On refund of illegally charged amount on account excess area charges, the Commission found the complainant’s concern genuine and directed the builder to disclose/declare regarding covered area and common area in a transparent manner.

  • Regarding refund of illegally charged amount on account of BOCW Welfare Cess, the Commission observed that the agreement does not mention anything specifically Building & other Construction Workers Welfare Cess (BOCWW Cess) payable by complainants, and directed the builder to disclose the total amount collected under this head, amount already paid/deposited to/with concerned government authority, further amount payable, if any, balance available if any, and how it proposes to use the balance.

  • For unauthorized changes in the specifications, the Commission held differences in brochures and agreements as deficiency in service and unfair trade practice, making the developer liable.

  • Delay in handing over the basement parking and reduced number of visitor parking slots, the Commission denied any specific relief due to lack of documents on record.

  • With respect to compensation for nonexistent and deficient common area facilities, the Commission denied specific relief.

  • Compensation for exposing complainants to extreme risk and hazard on account of poor mechanical electrical and plumbing works was also denied due to lack of documents on record.

  • For returning satisfaction note, no objection note, handing over/taking over note and other blank papers which the complainants were forced to sign before registration of apartments, the Commission did not grant any relief holding that the complainants failed to prove their case.

[Anil Rawat v. Clarion Properties Ltd., Consumer Case No. 1512 of 2017, decided on 6-03-2023]

*Order authored by: Dr. Inderjit Singh.

Advocates who appeared in this case :

For Complainants: Advocate Bhupender Pratap Singh, Advocate Ranjita Pal;

For Opposite Parties: Advocate Kaadambari, Advocate Ayushi, Advocate Sahil.

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