Case BriefsTribunals/Commissions/Regulatory Bodies

Maharashtra Real Estate Regulatory Authority, Mumbai (MahaRERA): While focusing on the definition of carpet area in Pre-RERA and Post-RERA, Coram of Ajoy Mehta (Chairperson MahaRERA) observed that,

“If the promoter is duty-bound to honour the agreement for sale in its true letter and spirit so also the allottee is duty-bound to adhere to the terms of the agreement for sale and either party cannot shun their duties and responsibilities under the agreement for sale.”

In the present matter, respondents had registered their project “EMERALD ISLE-T8” under Section 5 of the Real Estate (Regulation and Development) Act, 2016.

Complainants seeks the following reliefs:

“Refund is demanded for the excess funds collected by LAT Realty for carpet area of 57.60 square feet at the rate of Rs 28,L3L.67 amounting to Rs 1-6,20,384 plus interest at RERA applicable rate from the date of first payment.”

Issue for consideration:

  • Whether the complaint is barred by the principle of res judicata?
  • Whether the Complainants are entitled to claim refund for difference/variation in area of the said apartment and interest thereon from date of payment of the excess amount?

Respondent had raised the issue of the principle of res judicata stating that a matter that was finally decided on merits cannot be litigated again between the same parties.

However, from the submissions of the Respondent herein it is clear that the earlier complaint No. CC00600000000000414 was filed for the purpose of seeking interest for delayed possession and the Complainants in the present complaint is seeking a refund of the difference in the carpet area of the said apartment with interest as applicable thereon.

Further, it was noted that the complainants had signed a letter whereby they confirmed and agreed to their absolute satisfaction and assured the respondent that they shall not be claiming anything further through any forum/Court.

Hence, the above-stated letter certainly binds the complainants from raising any further issues with regard to the said apartment and MahaRERA expresses displeasure with regard to the complainants turning away from their own words and commitments.

Adding to the above, Authority stated that the instant complaint was filed with a different issue and hence the principle of res judicata was not applicable and thus issue 1 was answered in negative.

Definition of carpet area under Section 2(k) of the said Act. It reads thus:

“carpet area” means net usable floor area of an apartment, excluding the area covered by the external walls, area under services, shafts, exclusive balcony or verandah area and exclusive open terrace area, but including the area covered by the internal partition walls of the Apartment.”

 Under MOFA, Section 3(m), Promoter was to disclose one of the particulars in the advertisement for sale of flats and clause (i) states the particulars to the extent of carpet area of the flat including the areas of balconies whereas under RERA, balconies have been excluded in the definition of carpet area.

Coram stated that it was clear from the facts of the complaint that on the date of booking of the said apartment MOFA was in effect and on the date of the said agreement RERA was holding the ground.

A very pertinent observation was made, that the carpet area was defined differently in both the Acts.

Hence, there was no actual change but simply a variation/difference in the methodology of calculation of carpet area as per MOFA and RERA from time to time.

Since the allotment letter was dated 1-10-2015 which was Pre-RERA i.e. MOFA was applicable for calculating carpet area and after May 2017 RERA was applicable after which the said agreement was executed i.e. 20-12-2017

Therefore, no ambiguity on the issue of carpet area was found resulting in no refund and interest.

Coram while concluding added that the discrepancy/variation/difference in terms of the carpet area of the said apartment was as per the said agreement which provided that a variation of up to 3% on account of any design change and construction exigencies which the complainant was aware of and the same had been agreed upon by them. Thus, raising an issue at a later point was not acceptable nor could be changed as the agreement was binding upon both parties.

In the present matter, complainants chose to raise an unreasonable dispute in a very irresponsible manner, leading to wasting the time of the Authority.

Cost of Rs 20,000 was imposed on the complainant and the complaint was dismissed in view of the above.[Deepak Pande v. Larsen & Toubro Ltd., Complaint No. CC006000000100256, decided on 17-08-2021]


Advocate before the Authority:

Advocate Subhashree Chatterjee for the Respondent

Case BriefsTribunals/Commissions/Regulatory Bodies

Delhi State Consumer Disputes Redressal Commission (DSCDRC): Coram of Dr Justice Sangita Dhingra Sehgal (President) and Anil Srivastava (Member)ordered the builder to refund the money deposited by the complainant, as a consequence of not being able to deliver the possession of flat on time. However, it was held that the builder was not liable to refund the EMI amount paid by the complainant towards loan sanctioned in favour of the complainant.

 Present consumer complaint was filed under Section 17 of the Consumer Protection Act, 1986 against OP 1 and OP 2.

Complainant had applied for booking of a flat in the OP 1’s project and was allotted a flat for the total sale consideration which was agreed at Rs 44,99,387.

Complainant and OP 1 entered into a Flat Buyers Agreement. It was stated in the agreement that the possession of the flat was to be delivered within 18 months from execution of the agreement along with a grace period of 6 months. Though, OP 1 failed to adhere to the stipulated time for delivery of possession and hence the complainant had to withdraw from the project.

Further, OP 1 informed the complainant regarding the deduction. Adding to this, it was submitted that the service tax paid on the entire transaction would also be forfeited.

Complainant got served a legal notice dated 03-10-2015, upon the OP 1 and sought refund of the amount deducted along with compensation for mental agony and harassment.

Alleging deficiency of service and unfair trade practice on the part of OP 1, the complainant approached this commission.

Analysis, Law and Decision

Territorial and Pecuniary Jurisdiction

Whether this commission has the jurisdiction to adjudicate the present complaint?

Coram on perusal of Section 17 of the Consumer Protection Act lead the Commission to the conclusion that it shall have the pecuniary jurisdiction in cases where the total claim including the compensation is more than twenty lakhs and less than One Crore. Moreover, clause 17(2) of the Act provides the extent of territorial jurisdiction, wherein it has been provided that the state commission shall have the jurisdiction to entertain cases where OP 1 at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or the cause of action arose.

Hence, the commission has pecuniary jurisdiction in the present matter.

To strengthen the above finding, Coram relied on the Rohit Srivastava v. Paramount Villas (P) Ltd., 2017 SCC OnLine NCDRC 1198.

Further, the Coram stated that relying on the above case, this Commission has both territorial and pecuniary jurisdiction.

Deficiency of Service 

The stated expression of Deficiency of Service was dealt with by the Supreme Court in Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512.

In Commission’s opinion, OP 1 was deficient in providing its services to the complainant since it had failed to handover the possession of the flat within the stipulated time period and the complainant was entitled to the refund of the money deposited to OP1.

OP 1’s deduction was not justified as the complainant had sought cancellation of the booking of the flat on account of deficient services provided by OP 1, hence the complainant was entitled to refund of the amount forfeited.

However, the Complainant was not entitled to receive an amount of Rs 6,33,289/- since this amount was paid as EMIs towards the loan sanctioned in favour of the Complainant. The OP 1 has no obligation to pay the EMI amount, since there exists no express agreement pertaining to the payment of EMIs to be done by the OP 1. [Kapila Narula v. Logix City Developers (P) Ltd., Complaint No. 149 of 2016, decided on 16-08-2021]


Advocates before the Court:

Ms. Suchita Sharma, Counsel for the Complainant.

Ms. Arushi Pathak, Counsel for the Opposite Party.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Deepa Sharma (Presiding Member) addressed a matter wherein a consumer was subjected to the agony of delayed possession of a flat by being duped and coerced by the project owner.

Factual Matrix

Complainant 3 had booked a flat in Garden Isels project of the OP and the possession was to be handed over within 42 months, i.e. 3 and a half year, for which he had taken a home loan and had paid an EMI.

OP duped the complainant when he complained of the delay in construction, when OP suggested the complainant of buying another flat. Afterwhich, complainants had bought a flat in the project Imperial Courts and in 2015, an allotment letter was issued, and OP promised to hand over the possession within 24 months.

Further, it was contended that in one month of October, 2015, the Complainant as per the plan and advice of OP sought cancellation of the purchased unit in Garden Isels and requested for the transfer of the amount in the account of Imperial Courts flat.  It was stated that due to the transfer of the said amount, complainant lost home loan monthly EMI paid for over 25 months, 5% deduction on cancellation of the unit and the late payment amount of 2 to 4 Lakhs calculated @ 12% p.a. on the late payment of the installments and this amount comes to approximately 14 to 16 Lakhs and it is recoverable from the Opposite Party along with compensation for harassment and mental agony.

OP was paid total sale consideration amount and as per the possession letter, the flat was to be handed over within 45 days, i.e. by 15th February, 2017. However, series of unfortunate events took place. It was submitted that OP informed the complainants about the shortage of material and therefore informed them that it would take a long time for them to install 7 ACs one Jacuzzi, well-furnished modular kitchen and wardrobes in all four bedrooms.

On the advice of the OP, the Complainants under duress decided to give up all the materials like installation 7 ACs, one Jacuzzi, well-furnished modular kitchen and wardrobes in all four bedrooms and for that purpose, the Opposite Party had given a discount of 4,72,900, while the actual cost of all those articles were more than 15 Lakhs.

It was submitted that the OP had done nothing to ensure the handing over of the possession of the Imperial Courts flat.

The agreement between the parties was biased and contrary to the settled principle of law and public policy, hence, the agreement could not be implemented in the present form. The Complainants were induced to enter into this agreement which OP now sought to enforce.

OP was forcing the complainants to take possession of a flat that was not proposed and the overall condition of the project was not what was represented. Therefore, the agreement stood breached and deserved to be cancelled.

Analysis, Law and Decision 

Crux of the problem was that the flat was to be handed over within 42 months plus 6 months of a grace period, i.e. within 4 years. Before the expiry of 4 years, the complainant had booked a flat at the other project of OP for which the allotment letter was handed over and possession was promised within 24 months.

Coram stated that it is a settled proposition of law that if somebody complaints inducement, force or coercion it is his duty to plead the facts which led to said inducement, coercion or force and thereafter, prove those facts.

It was noted by the Commission that the complainants acted voluntarily and during the existence of an allotment of their flat in Garden Isles project, they booked another flat in Imperial Courts and finding difficult in paying installments towards Imperial Courts flat, they sought cancellation of the allotment of the flat in Garden Isles even before the period within which the possession of the said flat was to be handed over to them and requested for transfer of the money paid against the said flat in the account of Imperial Courts.

When can possession of a flat not be refused?

Commission while referring to the decision of the Supreme Court in Ireo Grace Realtech (P) Ltd. v. Abhishek Khanna, (2021) 3 SCC 241 expressed that where the offer of possession is made along with Occupation Certificate, even if there is a delay in the said offer, the allottees cannot refuse to take the possession.

In light of the above facts and contentions of the matter, Coram held that there was no delay in the offer of possession and complainants since failed to give any valid reason and there existed no valid reason for the complainants to refuse to take possession and terminate the contract, the refusal to take possession is hence not justifiable.

Therefore, Complainants have failed to prove any fact on record to show that the OP had adopted an unfair trade practice or that the agreement was biased or one-sided. [Sudha v. Jaiprakash Associates Ltd., 2021 SCC OnLine NCDRC 166, decided on 29-04-2021]


Advocates before the Commission:

For the Complainant: Nakul Singh Pathania, Advocate

For the Opp.Party: Sukumar Pattjoshi, Sr. Advocate With Sumeet Sharma, Advocate

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench of Dr Dhananjaya Y Chandrachud, Indu Malhotra and Indira Banerjee, JJ., observed that

“Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer‘s Agreement.”

Judgment passed by the National Consumer Disputes Redressal Commission is in Challenge

Appellant-Developer challenged the decision of NCDRC wherein refund of the amounts deposited by the Apartment Buyers was directed on account of inordinate delay in completing the construction and obtaining the Occupation Certificate.

Issues for Consideration:

  • Determination of the date from which the 42 months period for handing over possession is to be calculated under Clause 13.3, whether it would be from the date of issuance of the Fire NOC as contended by the Developer; or, from the date of sanction of the Building Plans, as contended by the Apartment Buyers;
  • Whether the terms of the Apartment Buyer‘s Agreement were one-sided, and the Apartment Buyers would not be bound by the same;
  • Whether the provisions of the Real Estate (Regulation and Development) Act, 2016 must be given primacy over the Consumer Protection Act, 1986;
  • Whether on account of the inordinate delay in handing over possession, the Apartment Buyers were entitled to terminate the agreement, and claim a refund of the amounts deposited with interest.

Analysis

Bench made a pointwise analysis of the instant matter wherein in the first issue, the point of controversy was whether the 42 months’ period is to be calculated from the date when the Fire NOC was granted by the authority concerned as contended by the Developer; or, the date on which the Building Plans were approved as contended by the Apartment Buyers.

In accordance with Section 15 of the Haryana Fire Safety Act, 2009, it is mandatory for a Builder/Developer to obtain the approval of the Fire Fighting Scheme conforming to the National Building Code of India, and obtain a ‘No objection Certificate’ before the commencement of construction.

Clause 13.3 of the Apartment Buyer’s Agreement provides that the 42 months’ period has to be calculated from the date of approval of Building Plans and/or fulfilment of the pre-conditions imposed thereunder.

Bench opined that it was a mandatory requirement under the Haryana Fire Safety Act, 2009 to obtain the Fire NOC before the commencement of construction activity. The said requirement was stipulated in the sanctioned Building Plans, as also in the Environment Clearance.

 The 42 months‘ period in Clause 13.3. of the Agreement for handing over possession of the apartments would be required to be computed from the date on which Fire NOC was issued, and not from the date of the Building Plans being sanctioned.

In the instant matter, there was a delay of approximately 7 months in obtaining the fire NOC by Developer.

Whether the terms of the Apartment Buyer’s Agreement are one-sided?

Court observed on perusal of the clauses mentioned in the Agreement that the said clauses were wholly one-sided terms of the Agreement Buyer’s Agreement, which were entirely loaded in favour of the Developer and against the allottee at every step.

For the said issue, Court held that the terms of the Apartment Buyer‘s Agreement are oppressive and wholly one-sided, and would constitute an unfair trade practice under the Consumer Protection Act, 1986.

Incorporation of one-sided and unreasonable clauses in the Apartment Buyer’s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act.

Whether primacy to be given to RERA over the Consumer Protection Act?

Bench expressed that this Court has upheld the applicability of provisions of Consumer Protection Act as an additional remedy, despite the existence of remedies under special statutes, including the Arbitration and Conciliation Act, 1996.

In the decision of  Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751, it was held that the remedy under the Consumer Protection Act, 1986 is confined to the Complaint filed by a Consumer as defined by the Act, for defects and deficiency caused by the service provider.

In a recent decision of this Court in Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783, it was held that remedies under the Consumer Protection Act were in addition to the remedies available under special statutes. The absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear. Section 18 of the RERA Act specifies that the remedies are “without prejudice to any other remedy available”.

Whether the Apartment Buyers are entitled to terminate the Agreement or refund of the amount deposited with Delay Compensation?

Answering this issue, the Court categorised the buyer/allottees into two categories:

  • Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made
  • Apartment Buyers whose allotments fall in Phase 2 of the project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far.

For category 1, it was held that such allottees (barring an exception) were obligated to take possession of the apartments, since the construction was completed, and possession offered on 28-06-2019, after the issuance of Occupation Certificate on 31-05-2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from  27-11-2018 till the date of the offer of possession was made to the allottees.

So far category 2 is concerned, it was held that such allottees are entitled to refund of entire amount deposited by them, along with compensation and interest.

In view of the above discussion, civil appeals were disposed of. [Ireo Grace Realtech (P) Ltd. v. Abhishek Khanna, 2021 SCC OnLine SC 14, decided on 11-01-2021]

Case BriefsHigh Courts

Orissa High Court: S. K. Panigrahi J., granted bail and directed the petitioner company to pay the amount in accordance with the manner indicated.

The facts of the case as per the FIR lodged alleging charges under Sections 406/420/120-B of Penal Code, 1860 read with Section 6 of the Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011 (O.P.I.D.) are that, one Biswa Bhushan Biswal husband of the petitioner herein, 6-7 years back approached the informant and introduced himself as a land broker doing business in plotting, land development, construction of buildings and flats through his company B. N. Infra Services Pvt. Ltd. where petitioner is the Managing Director. Br. Biswal insisted the informant to invest in the company and promised him assured returns vide agreement dated 19-5-2014, pursuant to which disbursal of Rs 1,89,00,000 was made by the informant. Biswas defaulted with return payments and consented to give one of his plots having Plot No. 3/441 to the informant in case of further default in payment vide a written letter. The said plot was later revealed to be already sold to someone else, subsequent to which another agreement dated 25-01-2017, wherein Biswas committed to pay Rs 1,76,00,000 out of which Rs 1 Lac was paid at the time of signing. The petitioner issued 10 cheques each amounting to Rs 1,50,00,000 which were dishonored by the bank due to insufficient funds. Thereafter FIR was lodged and during the investigation, Mr. Biswal and petitioner were arrested and later filed for bail which was rejected by Trial Court. Aggrieved by the same, an instant bail petition has been filed for seeking regular bail under Section 439 CrPC, 1973.

Counsel for the petitioner D.P. Dhal submitted that the petitioner is a housewife and Biswas is responsible for managing the day to day affairs of the company. It was further submitted that the company is a real estate company and hence comes within the ambit of Real Estate Regulation & Development Act, 2016 and Odisha Real Estate (Regulation and Development) Rule, 2017, hence Section 6 of the O.P.I.D. Act will not be attracted. He also prayed for the relief of bail to be granted.

Counsel for the respondent opposed all the arguments and stated that the instant case makes out for a clear offence of cheating and fraud and provisions of the O.P.I.D Act will squarely apply in the present case.

The Court after hearing both sides observed that characteristics of the agreement entered into between the parties is in the nature of an “agreement to sale” of a flat that was to be constructed by the defaulting petitioners company and hence is a simple flat buyer agreement. It was also observed that the defaulting company is registered under the Companies Act, 1956 and its MOA and AOA clearly states that it is not a “Financial Establishment” instead comes under the purview of the Real Estate (Regulation and Development) Act, 2016.

The Court also observed that it is imperative that the background of the Act needs to be understood before dealing with the legislation.

Whether the instant case falls under O.P.I.D Act or not?

Section 2 (d) of O.P.I.D Act defines “Financial Establishment” as a company registered under the Companies Act carrying on the business of receiving deposits under any scheme or arrangement or in any other manner.

It clearly states that in MOA and AOA it has to be mentioned that the primary business is receiving “deposits” pursuant to any “scheme or arrangement”. On a conjoint reading of Sections 2(d), 3 and 5 of O.P.I.D Act it is clear that the business should be in the nature of accepting or receiving “deposits”.
Section 10 of O.P.I.D Act provides for attachment of the Financial Establishments in case of default payment. Hence the operation of Section 10 of the Act would result in a piquant situation where one lone buyer while claiming refund of his deposit would cause the attachment of the other flats so constructed, irrespective of the fact as to whether such flats have been transferred to other transferees by the builder and corresponding rights thereupon have been created or not.

In case of flat buyer agreement, it provides for the consideration to be paid for the flat/apartment purchased which are sale transactions and are mandatorily registerable under the relevant laws wherein the question of the return of deposit or payment of interest on such deposits does not arise.

The Court relied on various judgments titled Viswapriya [India] Limited v. Government of T.N, 2015 SCC OnLine Mad 10349 and Prasan Kumar Patra v. State of Odisha, 2019 SCC OnLine Ori 93 and held that an inevitable situation will invariably arise when the provisions of the O.P.I.D Act are invoked in real estate transactions especially where a builder has constructed multiple flats/apartments. This kind of situation could not have been the intention of the legislature considering the practices, problems and complexities involved in the real estate sector. Hence the instant case is a classic example of a transaction gone awry which has been strenuously given the color of a criminal offence.

The Court also relied on a judgment titled Tetra Pak India (P) Ltd. v. Tristar Beverages (P) Ltd., 2015 SCC OnLine Bom 4707 and held that though a case of breach of trust may be both a civil wrong and a criminal offence there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence and giving colour of criminal case to dispute which is otherwise purely civil and commercial in nature would tantamount to an abuse of the process of court.

The Court further directed the State Government to give wide publicity to the provisions of the said RERA Act, 2016 in order to injunct any such unnecessary litigations arising out of builder-buyer relations.

In view of the facts and overall circumstances, the bail was granted.[Mahasweta Biswal v. State of Odisha, 2020 SCC OnLine Ori 633, decided on 25-08-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Prem Narain, Presiding Member, has directed the developers of “Greenopolis” to refund homebuyers their amount deposited at the interest rate of 9% p.a. and in a few complaints the bench has asked for the possession to be handed over by 30-09-2020 with the occupancy certificate and with a delayed penalty of 6% p.a. on the deposited amount.

Consumer Complaints

Allottees of the project “Greenopolis” situated in Gurgaon alleged deficiency in service on the part of Opposite parties — Three C Shelters (P) Ltd.

Original allottee booked an apartment in OP’s project for a consideration of Rs 87,16, 800/-, apartment was allotted and later the same was endorsed in favour of complainant.

OP’s failed to deliver the possession in 42 months inclusive of 6 months grace period. Till date, the complainant has paid Rs 75,96,776/- to OP’s.

Several complaints have been filed by homebuyers with regard to no delivery and possession of the apartments for which they have paid installments of a very huge amount.

Analysis and Decision

No breach of agreement by complainants | Entitled to relief under Sections 54 and 55 of the Indian Contract Act, 1872

Argument with regard to Sections 54 and 55 of the Indian Contract Act, 1872, OPs relied on the Commission’s decision in DLF Southern Town (P) Ltd. v. Dipu C. Seminal, wherein the complainant had deposited only the booking amount and no installments were paid whereas in the present complaints installment have been paid upto reasonable limit and on no progress in construction, the payment was stopped later.

Force Majeure

Defence of force majeure by OPs cannot be taken as there was no ban on construction and OPs should have put their resources and managerial skills to bring water from outside to complete the construction in time.

Joint Project

Three C Shelters (P) Ltd. pleaded for force majeure conditions for the delay and on the other hand Orris Infrastructure (P) Ltd. pleaded that Three C Shelters was responsible for delay in construction. Both of them had signed on the “Apartment buyer Agreement” and hence Commission stated that both of them were responsible for delay.

Apartment Buyer Agreement

Bench observed that the OP’s clearly have failed to complete the project and give the possession in time to the homebuyers as per the Apartment Buyer Agreement.

Hence allottees have the right to ask for a refund due to the inordinate delay which has been beyond 1 year, the possession was to be given in the year 2016.

No Forfeiture of earnest money

So far as the question of forfeiture of earnest money is concerned, it is seen that the complainants are seeking refunds as the project has been inordinately delayed. Even though the RERA, Haryana has taken a meeting to expedite the project and Three C Shelters (P) Ltd. has agreed to complete the project in phases.

Commission noted that OPs have not paid EDC and IDC to the Government and it seems that the OPs were not serious in timely completing the project. Thus, in these circumstances, there can be no question of forfeiture of earnest money.

Supreme Court in Haryana Urban Development Authority v. Diwan Singh, (2010) 14 SCC 770, observed that subsequent buyers are entitled to receive interest only after the date of endorsement in their favour.

In view of the above, Commission directed Three C Shelters to refund the amount at 9% interest per annum.

In one of the cases, Orris Infrastructure (P) Ltd. is directed to complete the construction work and handover the possession till 30-09-2020 after obtaining an occupancy certificate, and it shall pay interest of 6% p.a. on the deposited amount.

If the possession is not delivered till 30-09-2020, the complainant shall be at liberty to take a refund of the total deposited amount Rs 77,58,581/- along with interest @ 9% p.a. from the date of respective deposits till actual payment. [Sanjay Gupta v. Three C Shelter (P) Ltd., 2020 SCC OnLine NCDRC 178, decided on 20-07-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): A four-member bench comprising of Devender Kumar Sikri, Chairperson and Sudhir Mital, U.C. Nahata and G.P. Mittal, Members, directed closure of the matter alleging contravention of provisions of Sections 3 and 4 of the Competition Act 2002, by the Opposite Party 1 (OP 1)- Panchsheel Buildtech (P) Ltd. and Opposite Party 2 (OP 2)- Tata Capital Housing Finance Ltd.

The information was filed under Section 19(1)(a) by the informant stating that he had booked an apartment in one of the residential projects of OP 1. For payment of the same, the informant took loan from OP 2. A Tripartite Agreement was entered into between the informant and both the OPs, according to which OP 1 undertook to pay the loan installments (EMIs) to OP 2 till such time as the possession of the concerned apartment was not handed over to the informant. However, the informant alleged, OP 1 stopped paying EMI despite repeated communication. Further, he alleged, it was the duty of OP 2 to collect EMI from OP 1 but it failed to discharge its duty. Such non-payment of EMIs spoiled the informant’s CIBIL score. It was further alleged that OP 1 had arbitrarily cancelled allotment of the apartment made in favour of the informant and refused to return the down payment deposited by him. The informant averred that there was a nexus between the OPs and they indulged in illegal trade practices amounting to contravention of provisions of the Competition Act.

At the outset, the Commission noted that to prove an anti-competitive agreement under Section 3, the basic requirement to be fulfilled is the existence of an ‘agreement’. However, in the instant case, there was no evidence which could remotely suggest the existence of any agreement between the OPs. Moreover, the Commission noted that OP 1 was a real estate developer while OP 2 was a loan provider.  The two were not “engaged in similar or identical trade of goods or provision of services” or “at different stages or levels of production chain in different markets”. Since both the OPs were providing completely different services, they were neither horizontal competitors nor vertically integrated. As such their conduct could neither be examined under Section 3(3) or (4) of the Act. Furthermore, it was found that OP 1 was not a dominant player in the relevant market, thus, no contravention of Section 4 could be made out. Accordingly, the matter was directed to be closed under Section 26(2) of the Act. [Ashish Gupta v. Panchsheel Buildtech (P) Ltd.,2018 SCC OnLine CCI 45, order dated 11-06-2018]