Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of Justice R.K. Agarwal (President) and Dr S.M. Kantikar (Member) decided three complaints in a combined order as the facts were similar.

The complainant had booked three residential flats floated by Opposite Party — Builder Co. Possession of these flats was to be given by the end of the year 2018, however, the builder Co. unilaterally enhanced the period to 42 months.

In the year 2016 itself, the entire loan amount with respect to each flat was disbursed by the Financial Institution concerned to the builder co. Till 2018, the complainant paid about 90% of the total price of the respective flats.

Complainant was aggrieved that the builder Co. failed to fulfil the contractual obligation as there was no remarkable progress at the site in question.

Even though the construction was not completed, Builder Co. was demanding full payment.

Being aggrieved with the above-stated of affairs and attitude and deficiency ins service by the Builder Co., the complainant filed complaints under Section 21(a)(i) of the Consumer Protection Act, 1986 seeking a refund of the entire amount paid to the Builder Co. with 24% per annum interest.

Builder Company also failed to file its written version with the statutory period of 30 days and the extended period of 15 days thereafter as prescribed under Section 13(1)(a) of the Act which expired on 01-01-2020, 04-01-2020 and 16-01-2020 respectively.

Constitution Bench of the Supreme Court in New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd., (2015) 16 SCC 20, held that the Consumer Fora, including this Commission, has no power to condone the delay beyond the period of 45 days from the date of receipt of the notice.

Commission’s Decision

1. Commission firstly addressed whether the purchase of three flats by the complainant would constitute the “COMMERCIAL PURPOSE” within the meaning of Section 2(1)(d) of the Act, 1986?

Bench relied on the decision of Supreme Court in Laxmi Engineering Works v. P.S.G Industrial Institute, (1995) 3 SCC 583, wherein it was held that the,

‘commercial purpose’ is a question of fact to be decided in the facts of each case and it is not the value of the goods that matters but the purpose for which the goods brought are put to. The same would be equally applicable to for hiring or availing service.

In the instant case, Builder Co. failed to show any evidence indicating that the complainant indulged in sale purchase of the properties in question for further sale or for earning benefits, hence the Complainant came under the ambit of Section 2(1)(d) of the Act, 1986 which defines “Consumer”.

2. Were the complaints filed prematurely?

The anxiety and apprehension of the Complainant about the impossibility of the completion of the Project before the agreed date was justified.

Any aggrieved Consumer has a right to approach at any stage the Forum or Commission for the redressal.

3. The refund of the deposited amount with the Builder Co.

Bench stated that for an ordinary common Buyer – Consumer, the two fundamentals, which are significant and material the ‘Cost’ i.e. the total cost, read with the schedule of making payment and the ‘Time’ that the total time period in which possession would be delivered.

Therefore, in the instant case two natural corollaries flow therefrom:

  • Consumer-Complainant has the fundamental option to obtain the possession of the Unit as and when it is offered by the Builder Co. and in addition, seek just and equitable compensation under the Act, 1986 for the delay in offering possession beyond the conveyed and understood period of 42 months if the delay was unreasonable.
  • Consumer-Complainant has the other option to claim a refund of the principal amount; interest thereon; and compensation, if the offer of possession of the Unit is unreasonably delayed beyond 42 months.

In the present matter, the complainant was not interested in taking possession, hence the builder Co. has to refund the entire amount received from the Complainant. 

4. Quantum of Compensation the complainant is entitled to.

Bench stated that indefinite or unreasonable delay with token compensation for delay cannot continue ad nauseam, ad infinitum (such a situation would be absurd).

In view of the line of facts, Bench held that the Complainant availed loan from the Financial Institutions and paid the interest as levied.

Thus, the Complainant is entitled to get a refund of the amount along with the interest which he has deposited with the Bank. The Complainant is also entitled to receive certain interest on the booking amount which he has paid to the Builder Co.

For the above-stated position, Bench relied on the decision of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana v. DLF Southern Homes (P) Ltd., 2020 SCC OnLine SC 667.

While reasoning out it’s decision, Commission stated that any impediments or problems that arise in Planning, Execution and Completion are builder’s responsibility, and not of the Consumer.

Hence, OP is liable to refund the amount which the Complainant paid to them for purchase of the flats in questions, along with appropriate interest on that amount.

However, Commission added that the rate of interest also cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimised, a logical correlation has to be established.

Decision Summarised:

  • Refund to the Complainant the entire booking amount deposited by the Complainant till December 2018 alongwith interest @ 8% per annum from the date of deposit till the date of payment.
  • If the Complainant has paid any amount towards the loan account to the Financial Institutions, the same shall be refunded by the Builder Co. with the amount of interest actually paid to the Financial Institutions to the Complainant.
  • Builder Co. shall pay the entire balance loan amount disbursed to it alongwith the agreed rate of interest (Home Loan), as mentioned in the Tripartite Agreement to the Financial Institutions.

[Ankur Goyal v. Rise Project (P) Ltd., 2020 SCC OnLine NCDRC 465, decided on 14-10-2020]

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]