Case BriefsTribunals/Commissions/Regulatory Bodies

Odisha Real Estate Regulatory Authority, Bhubaneswar: Siddhanta Das, Chairperson, Pradeep Kumar Biswal, Member – I and Ramanath Panda, Member – II held that the present matter was not maintainable as the project which was the subject matter of the present case was completed before the commencement of The Real Estate (Regulation and Development) Act, 2016.

Respondent was developing a project and the complainant and her son applied for allotment of a flat in their favour in the project. Respondent was allotted a flat, and later an agreement was executed between both the parties for the sale of flat. Total consideration amount of the house was Rs 58,26,500 which included parking charges.

As per the above-mentioned agreement, the house in completed form should have been delivered within 40 months, i.e., by end of February 2016. Complainant continued to pay the amount as per the payment schedule of the agreement. Later in the year, 2015 the complainant requested another flat instead of the one which was already allotted. The said request was accepted. But the respondent could not complete the project before February 2016 as agreed upon by him in the agreement.

Complainant requested time and to hand over possession and to execute a sale deed.

Respondent in March 2016 requested the complainant to pay the final payment and to take possession of the unit. In September 2016, the complainant paid the rest of the amount towards full and final payment. Inspite of this, the respondent could not complete the flat.

In the year 2017, the flat was handed over to the complainant but the respondent before execution of the sale deed did not obtain an occupancy certificate from the local authority which was in violation of the provisions of the Act.

It was stated that the parking charges were covered under common area, hence the amount for the same should have been refunded. Respondent also took an extra amount towards VAT charges. Further, the complainant also sent a notice to the respondent for payment of Rs 4,59, 360 for delay in delivery of possession.

But the respondent did not make any payment.

In view of the above-stated reasons, the complainant approached the Authority.

Analysis, Law and Decision

Authority opined that delay in getting approval and non-availability of the building material required for construction are no ground to avoid the responsibility of payment of interest for the delay in delivery of possession.

Coram stated that it could not understand as to why the respondent started the project and collected money from buyers before getting sanctioned plan. Therefore, the respondent was held liable to pay interest on the whole amount for a period of 10 months provided the Act has application to the present project.

Further, from the recitals of the sale deed, it could not be established that the complainant paid separately for the parking cost. Hence, the complainant was not entitled to claim a refund of the parking cost.

VAT is collected as per the statutory provisions and paid t the Government. Hence it is only recoverable from Authority if sufficient reason is provided regarding payment made wrongly. Therefore, the complainant was not entitled to recover the VAT charges collected.

The Act of 2016 has application only to the project which are ongoing and the projects which are to be developed after commencement of the Act.

In the present matter, a completion certificate had been issued to the promoter by the empanelled architect of the BDA (local authority) in February 2016. The promoter presented the completion certificate before the local authority on the same day for the purpose of obtaining occupancy certificate. Therefore, for this project completion certificate was already issue prior to commencement of the Act.

It was observed that, The Real Estate (Regulation and Development) Act, 2016 got Presidential assent on 25-3-2016 and published in the Gazette of India on 26-3-2016. Therefore, the project was complete in all respect before the Act came into operation.

Hence, it was held that the Act had no application to the present project and that in view of the matter the case of complainant was not maintainable and complainant had no cause of action to file the case. [Ranjita Pati v. D.N. Homes (P) Ltd., Complaint Case No. 4 of 2021, decide don 2-12-2021]


Advocates before the Authority:

Advocate for the complaint: C. Ray and associates

Advocate for the respondents: P.C. Mohapatra and associates

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member)reiterated that the presence of an arbitration clause in the agreement does not bar the jurisdiction of consumer fora.

Grievance of the Buyer

Complainants alleged that the Project in which they had booked their flat has not been completed till date even after about 8 years from the date of the booking. OP developer indulged in unfair trade practices by utilizing the money collected from the complainants, for its personal gains on benefits and further diverted the funds collected from the complainants to its other projects.

Complainants noting that the project has not even reached the 50% completion stage, clearly showed that the OP had no intention of developing/completing the project.

It was also alleged that even after 8 years, the construction of the project is not even close to completion, there are no laying of roads, utility supplies, access/service roads, facilities, clubs, no sign of rail over bridge etc. It was further alleged that the unexpected, unreasonable and inordinate delay in developing and constructing the project, and facilities and also the delay in handing over possession of the flat, clearly amounts to deficiency in services.

Builder’s Contention

OP contended that the present Complaint is not maintainable in light of Clause 33 of the Agreement executed between the Parties, according to which, all or any disputes arising out of or touching upon or in relation to the terms of the Agreement including its interpretation and validity and the respective rights and obligations of the parties have to be settled amicably by mutual discussion failing which the disputes have to be settled through arbitration. The Opposite Party has further submitted that Complainant 1 has no privity of contract with the Opposite Party and no relief can be granted to the said Buyer’s Association.

Analysis, Law and Decision

Coram while analysing the matter and noting the contention with respect to the arbitration clause relied on the Supreme Court decision of Emaar MGF Land Ltd. v. Aftab Singh – I, (2015) CPJ 5 (SC), in which it was laid down that an Arbitration clause on the agreement does not bar the jurisdiction of the Consumer Fora to entertain the complaint.

Hence, the objection raised by the Counsel for the OP that the clause of the Arbitration bars this commission from entertaining the complaint was unsustainable.

Counsel’s contention for the Developer that the Complainants are not ‘Consumers’ and that the subject Flats were booked for investment purpose was completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja v. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainants were dealing in real estate i.e. in the purchase and sale of plots/ flats in his normal course of business to earn profits, shifts to the OP Developer, which in the instant case the Opposite Party Developer had failed to discharge.

Further, as per Clause 4.5 of the Agreement of the Flat Buyer Agreement, in case of failure to deliver possession, the OP developer was liable to refund the amounts paid by the allottees with simple interest 10% pa for the period such amounts were laying with the Developer/SPV and to pay not other compensation whatsoever, whereas, in terms of Clause 1.19 in case of late payment, the Complainant/Buyer is liable to pay interest @18% p.a.

The above-stated terms depicted that they were wholly one-sided and unfair, therefore the complainant cannot be made bound to the terms of the agreement.

Elaborating further, Commission stated that it was not in dispute that the Complainants were allotted the Flats in the year 2009 and till date the construction of the flat has not been completed.

Coram opined that buyer cannot be made to wait indefinitely for the delivery of possession and the act of OP with regard to relying on Farmers’ agitation while retaining the amounts deposited by the complainants was not only an act of deficiency of service but also amounted to Unfair Trade Practice.

Direction

Complainants are entitled to refund of the principal amount with a reasonable interest of @9% p.a. from the date of the respective date of deposit till the date of actual refund. [Ansal API Megapolis Buyer’s Assn. v. Ansal Hi-Tech Townships Ltd., 2021 SCC OnLine NCDRC 330, decided on 8-11-2021]


Advocates before the Commission:

For the Complainants: Mr Saurabh Jain, Advocate

For the Opposite Party: Mr Rakesh Kumar, Advocate Mr Rupesh Kumar Sinha, Advocate

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Expressing that the builder cannot take shelter of “Force Majeure” while delay in handing over possession Coram of C. Viswanath (Presiding Member) and Ram Surat Ram Maurya (Member) directed for a refund of buyers’ amount along with interest.

Facts in a Nutshell

Complainants had booked a unit in OP’s project and paid a booking amount as well. Later they were allotted a unit vide an allotment letter.

Subsequently, an Apartment Buyer’s Agreement was executed, wherein possession of the unit was promised within 39 months from the date of excavation, excluding an additional grace period of 6 months to complete the project.

Grievance

The grievance of the Complainants was that the OP, despite receiving more than 90% of the total consideration, failed to hand over possession of the Unit, within the promised time period and even possession in the near future seemed unlikely.

Contentions of the OP

OP while contending that the possession could not be delivered in time because some of the customers did not make timely payments also added that there was a shortage of labour due to construction of Commonwealth Games Village, shortage of water, dispute with construction agencies, delays in obtaining licenses, approvals, etc. Further, it was added that as per the Agreement, in case of delay caused due to “Force Majeure” events, the OP would be entitled to an extension of time, without incurring any liability.

Though, the Opposite Party failed to prove that there was an unforeseen and unexpected event that prevented the completion of the Project within the stipulated time period.

Analysis, Law and Decision

Commission expressed that the OP cannot take shelter of the “Force Majeure” Clause and the reasons cited by the OP for the delay of the project, appeared to be delaying tactics veiled as “Force Majeure” conditions and seemed to be an attempt to wriggle out of its contractual obligations.

It was noted that even after receiving the substantial amount OP failed to fulfil its contractual obligation of delivering possession of the Unit to the complainant within the time stipulated.

Conclusion

A person cannot be made to wait indefinitely for the possession of the flats allotted to him/her. The Complainants are, therefore, entitled to seek the refund of the amount paid along with compensation. [Manoj Kawatra v. Pioneer Urban Land & Infrastructure, 2021 SCC OnLine NCDRC 325, decided on 1-11-2021]


Advocates before the Commission:

For the Complainant: Aditya Parolia, Advocate

For the OP: T.V.S. Raghavendra Sreyas, Advocate

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Noting unfair trade practice by the builder while insisting the buyers to sign a paper wherein it was stated “that they were receiving possession in full ready condition” which was false, Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) allowed the complaint of the buyer and directed refund of their amount along with compensation of Rs 1 lakh.

Complainants filed a complaint about directing the OP (Builder) to refund the amount deposited by the complainants along with interest from the date of each deposit till its payment. Compensation was also sought for mental agony and harassment.

Factual Background

Present complaint emerged from the documents attached with it. Builders launched a project wherein the complainant booked a villa and were allotted a Unit. Payment plan was “Construction Linked Payment Plan”. Agreement for Sale and Agreement for Construction were executed between the parties.

Complainants diligently followed the payment plan and deposited money as and when demanded by the builder, but the builder delayed the construction.

In 2017, the complainants were invited to take possession of the villa and on reaching the villa, they found that the villa was not complete in all respect and was not in a liveable condition. On the other hand, the builder was insisting to sign the paper, in which, it was written that they were receiving possession of the villa in fully ready condition.

Complainants did not agree to sign that paper and were disappointed with the attitude of the builder, who was insisting to sign above said paper in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

Complainants sought for refund vide a legal notice, but no reply was given by the builder.

Analysis, Law and Decision

Commission noted that the builder did not raise any dispute that the complainants had committed any default in payment, on issue of demand notice.

According to the builder, the construction was completed in August, 2017, as such, there was delay in construction for more than two years, according to their own version.

Clause-E(2) of Agreement For Construction provides as follows:-

“2. Possession/Handing over Possession in this agreement is limited to the developer obtaining Completion Certificate from the concerned local authority/Project Architect and intimating the purchaser to take possession of the Villa.”

Builder nowhere stated that he had obtained a Completion Certificate. Instead, he argued while relying upon Rule 20 of Tamil Nadu Combined Development and Building Rules, 2019 and argued that “Completion Certificate” was not required for the villa. The said Rules were not in existence in 2017.

The paper, which the builder insisted the buyers sign upon stated that they were receiving the possession of the villa in fully ready condition, in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

In Commission’s opinion, the above was an unfair trade practice.

Offering possession of incomplete construction and without obtaining “Completion Certificate” does not justify the act of the builder.

 Therefore, complaint was allowed with cost of Rs 1 lakh and builder was directed to refund the entire amount along with interest @9% per annum within a period of 2 months.[Suman Kumar Jha v. Mantri Technology Constellations Pvt. Ltd., Consumer Case No. 54 of 2018, decided on 29-10-2021]


Advocates before the Commission:

For the Complainant: Mr Aditya Parolia, Advocate

For the Opp. Party: Mr Sunder Patjoshi, Senior Advocate and Mr. Manish Tiwari, Advocate

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): In a builder-buyer dispute, Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) noting the 9 years delay in delivery of possession of the apartment directed refund to the buyer.

Instant complaint was filed under Section 21 of the Consumer Protection Act, 1986 against Wave Mega City Centre (P) Limited.

Factual Background

Complainants lured by the eye-catching advertisements and assurances given by the representatives of the Developer, applied for the allotment of an apartment. Vide the allotment letter, complainants were allotted an apartment.

An allottee arrangement was also executed between the parties. As per the Agreement, the possession of the apartment was to be delivered within 48 months from the date of the execution of the agreement by July 2016 with a grace period of 6 months.

Complainants kept following up with the Developer regarding the date of possession by visiting their office, but the Developer gave false assurances to the Complainants about the delivery of possession.

Complainants alleged that despite collecting a hefty amount from the complainants, the developer has neither offered the possession of the apartment to the complainants till date nor has refunded the amount collected from them.

Analysis, Law and Decision

Commission stated that it cannot ask the complainant to wait indefinitely for possession of the Flat, as the construction was yet to be completed even after almost 9 years from the date of booking.

Therefore, Coram opined that complainants were entitled to the refund of the amount with reasonable interest.

Commission partly allowed the complaint with a direction to the Developer to refund the entire deposited amount with interest in the form of compensation @ 9% per annum. [Mili Jain v. Wave City Centre Pvt. Ltd., Consumer Case No. 3304 of 2017, decided on 29-10-2021]


Advocates before the Commission:

For the Complainants: Mr Jalaj Agarwal, Advocate

For the OP: Ms Shreya Nair, Advocate

Case BriefsHigh Courts

Bombay High Court: The Division Bench of S.J. Kathawalla and Milind N. Jadhav, JJ., directed the builders who failed to refund the buyers their amount to date to establish that they are virtually paupers not having funds in their bank accounts and their standard of living also bears out the same.

Instant petition was filed by a retired pensioner. It was submitted that the petitioner by registered sale agreement purchased a residential flat for a total consideration of Rs 62, 77,310.

Respondents 6 and 7 were the partners of Respondent 5-Firm.

It was submitted that the possession of the said flat was to be given by 31-05-2015. An amount of Rs 61,58, 136 was paid from time to time to respondent 5 towards the purchase of the said flat. Though the building could not be completed due to several irregularities.

Petitioner filed a statutory complaint with respondent 4 – Maharashtra Real Estate Regulatory Authority seeking withdrawal from the project and refund of monies paid along with interest. Respondent 4 directed respondent 5 to refund the amount collected with the interest of @10.05% p.a.

Petitioner had again approached the respondents 5 to 7 for seeking compliance with the RERA Order, yet the same was neglected. Further, an execution application was filed wherein recovery warrant was issued under Section 40(1) of the RERA Act against respondents 5 to 7 which was forwarded to respondent 2 – Collector for execution and enforcement.

Till 2018, no action took place.

Further, the petitioner apprehended that the respondents 5 to 7 were attempting to avoid and delay the execution of the Recovery Warrant and meanwhile they were disposing of their assets in order to circumvent the due process of law.

In 2021, respondents 5 to 7 approached the petitioner for settlement, however, they committed default in payment of the first installment itself and breached the Memorandum of Understanding.

Petitioner, being aggrieved by the laxity on the part of the Statutory Authorities in execution and enforcement of the Recovery Warrant, approached this Court by the present petition.

Analysis, Law and Decision

Bench noted that respondents 5 to 7 have repeatedly brazenly breached the orders passed by this Court as well as undertakings given to this Court.

The said respondent’s counsel again reiterated in the Court that the respondents do not have any funds and they shall be in a position to pay only a sum of Rs 10 lacs only on 25-08-2021.

In view of the above stated, Court directed the respondents 5 to 7 to give complete disclosure of their movable and immovable, encumbered and unencumbered assets and properties before the next date. They shall also produce their bank statements as well as accounts operated by the firms/s and/ or companies in which they are partners and/or directors; particulars of their standard of living, as indicated through their electricity bills, their credit card statement/ s and the income tax returns that they have failed in the last three years.

Hence, the matter was adjourned to enable the respondent’s advocate to satisfy the Court that they do not have funds whatsoever.

Therefore, respondents 5 to 7 have repeatedly not only taken several flats, purchasers, for a ride, by taking their hard-earned monies and not providing them with their flats on time, nor returning their hard-earned monies, but have also repeatedly taken the Courts for a ride by giving solemn undertaking/s in order to avoid any adverse orders being passed against them, knowing fully well that they have no intention to honour the undertaking/s given by them to the Court. They are also well aware that assignments keep changing from time to time and they can, therefore, endeavour to convince the next Judge taking up the said assignment to grant them further extension of time to make payment, which order would once again be breached with impunity.

In view of the above, the matter was adjourned to 22-07-2021. [Arun Parshuram Veer v. State of Maharashtra, 2021 SCC OnLine Bom 1132, decided on 3-07-2021]


Advocates before the Court:

Mr. Nilesh Gala i/by Law Square for the Petitioner

 Mr. P.G. Sawant, AGP for Respondents 1 to 3 – State

Mr. Ashutosh M. Kulkarni a/w Mr. Akshay Kulkarni for Respondent 4

Mr. Makarand V. Raut a/w Mr. Manoj Nikam for Respondents 5 to 7

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): R.K. Agrawal (President) while deciding the present consumer case held that,

“Wherever the Builder commits a particular date or time frame for completion of the construction and offering possession to the Buyer, they must necessarily honour the commitment made by them.”

In the present matter, Consumer Complaints, under Section 21 read with Section 12(1)(a) of the Consumer Protection Act, 1986  have been filed by the Complainants, the Allottees of Residential Flats/Apartments in a Project, namely, “Mahagun Mezzaria” to be developed and constructed by the Opposite Party, seeking possession of their respective booked Flats or refund of the amount paid with interest and compensation for the losses suffered by them on account of Unfair and Restrictive Trade Practices adopted and the deficient services rendered by the Opposite Party in not handing over the possession of the allotted Flats/Apartments within the stipulated time.

Complainant stated that despite paying the entire sale consideration for the booked flat, the possession of the same, which was to be delivered has not materialized till date, penalty promised in the Allotment Letter for the delay in construction has also not been paid, layout plan of the project has been got amended twice making various changes to the Project including addition of commercial shops open to general public raising various concerns including safety and security, that the Complainants have to pay enhanced Samp duty due to delay in handing over of possession and that the OP has levied the maintenance charges that would be enhanced @15% annually.

Analysis & Decision

Counsel for OP’s contention that Complainants are not ‘Consumers’ and have booked the Flat for earning high speculative gains is not supported by any documentary evidence. Court also noted that Complainants are ‘Consumer’ as defined under Section 2(1) (d) of the Consumer Protection Act, 1986.

Tribunal further stated that the only question for consideration in the present case is, as to whether the Complainants are entitled to any compensation for the delay on the part of the OP in offering possession to them and if so, what should be the quantum of compensation that OP needs to pay to them.

With respect to delay in completion of the construction, the tribunal stated that unless prevented by reasons beyond it control, the OP was under a contractual obligation to complete the construction and handover possession of the apartments within 38 months from the date of completion of raft or on or before 31-12-2012.

The reasons for the delay as stated by the Developer amounted to demonetization and implementation of GST, which ultimately resulted to cause delay on account of the shortage of cash for payment to the labour, shortage of labour and material, no documents were placed on record by the OP. Therefore the said contention cannot be accepted.

OP is ready and willing to hand over possession of the allotted flats with compensation to the Complainants, but some Complainants are not interested in the same due to delay of more than 4 years in delivering the possession change in layout plan and there being no committed date in the near future of completion of the Project. Therefore, they have sought a refund of the amount along with interest and compensation.

Tribunal in view of the stated that, Complainants cannot be made to wait indefinitely for the delivery of the possession when they had already paid almost entire consideration. In such circumstances, it is well within the Complainant’s right to seek for refund of the principal amount with interest and compensation.

In the present case, Tribunal in favour of the Complainants also stated that, Complainants cannot be made to wait indefinitely as the possession of the Unit has not been handed over to them so far and the Opposite Party is enjoying the benefits of their hard-earning money deposited with it.

“If the Builder fails to comply with the contractual obligation and at the same time, is unable to show that the delay in completion of the Flat and offering its possession to the Consumer is on account of circumstances beyond his control, this would constitute deficiency on the part of the Builder/Service Provider in rendering services to the Consumer.”

Hence, Complainants cannot be made to wait for such a long period, they are entitled to refund of the deposited amount along with compensation @12%. [Anil Kumar Jain v. Nexgen Infracon (P) Ltd., 2019 SCC OnLine NCDRC 716, decided on 23-12-2019]