Case BriefsHigh Courts

Bombay High Court: G.S. Patel, J., in its opening remarks, expressed with respect to the present matter that:

This is the usual story of a solitary member of a society obstructing the redevelopment of the society building.

 It does not matter to this member that the building is in a dilapidated condition unfit for human habitation.

It does not matter to him that the building has been declared as such by the Planning Authority and categorized as a ‘C1’ building.

It does not matter to that dissenting member that the building now poses a risk to all occupants — including the dissenting himself — and, in addition, others in the vicinity.

It also does not seem to matter to this member that his actions come at the very real cost of other member of the society.

Persistently the respondent has been obstructing the redevelopment work for the past 6 years—which is beyond shocking! 

Further, the Court elaborated that respondent 2 imagines that it is only he who can tell right from wrong, that it is only he who knows what is good for all, and that he is entitled without any assumption of liability to continually obstruct the redevelopment, put his fellow members at risk and continue in this fashion.

With respect to declaring the redevelopment agreement null and void, whether the respondent 2 obtained any order at all? The answer that the Bench received was ‘not yet’.

Stating that respondent 2 is wrong on every single aspect of the matter, Bench added that he is entirely in error in believing that no action could be taken and that he was protected or insulated from the operation of law.

Factual Matrix

 In the present matter, respondent 1 society had 20 tenements and the only tenement that is still in occupation was respondent 2. In 2014, the Society resolved to for redevelopment, followed by a redevelopment agreement, under which a provision for arbitration was included, as per which any disputes were to be referred to arbitration.

The said property was located on MHADA Land. Municipal Corporation of Greater Mumbai declared the said building in the ‘C1’ category, i.e. as unsafe and unfit for human habitation.

As per the Court’s understanding the said proposal for redevelopment was for some ‘illegal’ reasoning.

Submission

Point that was urged was that the building was meant for persons from lower-income group and hence permission of or from the Social Welfare Department was essential and was a requirement. Not having been obtained the permission the entire agreement was illegal, null and void.

But it was not shown how SWD was a ‘Planning Authority’ under the town planning statute or that it has the power to veto, stop or stall any development or re-development project.

MHADA had passed an order with respect to the stated obstruction by respondent 2 under Section 95A of the MAHADA Act, in October 2018.

Mr Singh for the developer made a statement that Kondvilkar at all times will be treated at parity with all other members of the society and won’t be denied a single benefit of re-development. He will be put in possession of his allotted flat in the redeveloped building after the occupation certificate has been obtained.

Bench elaborated with regard to the Society’s general body resolution that, it is simply not possible for a member of the society to disobey, disavow or flout openly taken decisions of the general body of the very society of which he claims to be a member.

Can a development agreement which was signed between the Chairman of the Society and one of the Managing Committee members be binding upon a non-signatory i.e. Kondvilkar?

 While analysing the facts and circumstances of the present matter, Court cited the Bombay High Court decision in Aditya Developers v Nirmal Anand Co-op. Hsg Soc Ltd., 2016 SCC OnLine Bom 100, where it was observed that:

 “21. It is to be noted that once the person becomes a member of the Co-operative Society he loses his individuality with the Society and has no independent rights except which is given to him by the statute and bye-laws. Hence, objection raised by the respondent nos.3, 4, 6 and 7 that there is no privity of contract between them and petitioner, is not maintainable.

In Court’s opinion, the decision of Sarthak Developer’s v. Bank of India Amrut-Tara Staff CHSL, Appeal (L) No. 310 of 2012, provided a complete answer in the present case. Hence, all the decisions by Mr Singh are binding and are apposite.

If it’s suggested that Girish Mulchand Mehta v. Mahesh S Mehta, 2009 SCC OnLine Bom 1986, was a case of tenants, then that argument fails once we see that it has been used again and again in cases involving members of a cooperative society — including Sarthak Developers

What does Kondvilkar want?

Bench noted that he was unable to articulate it beyond saying “the law must be followed.”

Further, the High Court added that Kondvilkar will bend the knee to the law and to this Court’s judgment.

There is not a vestige of a defence in law, on facts, in equity or in justice

 On the reconstruction of the building and after obtaining the occupation certificate when all other members are put in possession, the 2nd Respondent will also be given possession of his allotted premises.

Further, the High Court held that:

Any attempt by the 2nd Respondent to obstruct the Court Receiver’s department from taking possession, either by fling complaints or otherwise, will be treated as an act of Contempt of Court and will be dealt with as such.

[Chirag Infra Projects Pvt Ltd v. Vijay Jwala Coop. Hsg Soc Ltd., 2021 SCC OnLine Bom 364, decided on 12-03-2021]


Advocates before the Court:

Mr Amogh A Singh, with Bhavin R Bhatia, Rohit Yadav & Moksha M Doshi, for the Petitioners.

Mr Amol Joshi, with Vinod Rane, i/b Rane & Co, for Respondent No.1.

Ms Divya B Parmar, for Respondent No. 2.

Case BriefsHigh Courts

Madras High Court: N. Anand Venkatesh, J., while addressing a matter expressed that:

“…a transaction hit by lis pendens would not result in the same being rendered void or illegal or of no effect. It will only be subject to the result of the litigation and the purchaser would be bound by the same.”

The instant case was with regard to the property originally belonging to a partnership firm which was subsequently dissolved and the same was said to have been vested on the de facto complainant by virtue of decree. Thereafter the building in the property was demolished to put up new construction and a joint venture agreement was also entered into with a developer.

But since the agreement did not go through the property continued to be vacant.

Prosecution’s case was that the petitioner’s vendor had trespassed into the property and had created documents and managed to obtain a patta.

Petitioner knew about the dispute between the parties and the pending criminal case against the vendor, yet they entered into the sale agreements and agreed to purchase properties including the property belonging to respondent 2. Ultimately, a registered sale Deed was executed in favour of the petitioners by undervaluing the property, after which the petitioners started taking steps to take possession of the property and on coming to know of the same, respondent 2 gave a complaint on the basis of which an FIR was registered against the vendor and petitioners.

Analysis and Decision

Bench noted that the petitioners came into the scene in 2016 when they entered into a sale agreement with the vendor Mr Iqbal. On agreeing to purchase certain items of properties which also included the subject property for a total sale consideration of Rs 4 crores.

Further, it was seen that out of the total sale consideration of Rs 4 crores, more than ninety percent of the sale consideration has been paid by way of RTGS transfer from the bank account maintained by the Petitioners. Thereafter, the patta has also been transferred in favour of the Petitioners. That apart, there was also a name transfer by the Corporation in the property tax records from the name of Mr Iqbal to the names of the Petitioners, respectively.

FIR was registered for the offences of making a false document and cheating. Without undertaking the exercise of a mini investigation, it had to be seen whether the offence was made out against the petitioners or not?

Dispute was with regard to the right and title over the subject property between respondent 2 and the vendor of the petitioners.

Vendor of the petitioners was positively claiming a right and title over the subject property and he believed that he was the owner of the property.

Further, it was observed that at the time when the sale deed was executed, in favour of the

Petitioners, and at the time when the parties entered into an agreement of sale, the suit filed by the 2nd Respondent had been dismissed for default, hence no compelling material was available that could have prevented the petitioners from purchasing the subject property.

Property was free from any encumbrance after it was purchased by Mr Iqbal in the year 2010.

It is now a well-settled position of law that even when a document is executed by a person claiming a property which is not his, that does not by itself satisfy the requirements of a false document as defined under Section 464 IPC. If it does not satisfy the requirements of Section 464 IPC, there is no forgery and if there is no forgery, automatically neither Section 467 nor Section 471 IPC will be attracted. 

For the above position of law, Supreme Court referred to the decision in Mohd. Ibrahim v. State of Bihar, (2009) 8 SCC 751, Sheila Sebastian v. R. Jawaharaj, 2018 (3) MLJ (Crl) 39.

Even in the extreme case of branding the Petitioners as speculative buyers of the subject property, knowing fully well about the dispute in title over the subject property, that by itself does not amount to an offence of cheating, forgery and making of false document.

Allegations made by respondent 2 did not make out any offence against the petitioners and the continuation of investigation against the petitioners would be an abuse of process of law, which requires interference of the Court.

Hence in view of the above discussion, present petition was allowed.[Dr Subba Somu v. Inspector of Police, 2021 SCC OnLine Mad 877, decided on 01-03-2021]


Advocates who appeared before the Court:

For Petitioners: Mr ARL. Sundaresan, Senior Counsel and Mr R. Umasuthan

For 1st Respondent: Mr A. Natarajan, State Public Prosecutor for R1

Asstd: by Mr M/Mohamed Riyaz Additional Public Prosecutor

Mr G. Mohanakrishnan Mr S. Janarthanan for R 2

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 BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): V.K. Jain (Presiding Member), held that homebuyers cannot be made to wait indefinitely for the possession of the plots allotted to them and they are entitled to refund of the amount which they paid

Developer Company was selected by Government of Uttar Pradesh for the development of a township in Greater Noida in the name of ‘Sushant-Megapolis’.

No Time Frame

Large number of complainants booked residential plots and executed agreements with the OP. In the agreement, no time frame for delivering possession of the plots to the allottees was incorporated but the complainants were verbally told that the possession would be handed over within 36 months from the execution of the agreement.

Case of the Complainants

Complainants stated that the township has not been developed, hence no possession was offered to them along with other allottees.

Class Action

Therefore complainants approached the commission by way of class action under Section 12(1)(c) of the Consumer Protection Act seeking a refund of the amount paid by the allottees along with compensation.

Vide an order in 2017, Commission granted the permission to the complainants to institute this complaint on behalf of all the allotted who wanted a refund of the amount paid to the OP. Hence, public notice in two newspapers, circulated in Delhi/NCR were published and several allottees were permitted to join the complaint.

Preliminary objection raised by the OP was that the complaint is barred by limitation.

Analysis & Decision

OP having not completed the development and having not offered possession of the allotted plots to the allottees, they had a recurrent cause of action to file the Consumer Complaint, bench relied on the decision of Meerut Development Authority v. Mukesh Kumar Gupta, (2012) CPJ 12 (SC).

Commission found no merit in the above contention.

Farmers’ Protest | Compulsory Acquisition

With regard to delay in development due to the farmer’s protest, bench on perusal of the communication sent by OP noted that there was no dispute with the farmers as the land comprised in the project namely ‘Megapolis’ was concerned, the said land having been purchased by the complainant on market rate with the consent of landowners, the said case is not of compulsory acquisition of land by the State government.

Small Parcels of Land | Patches required to be acquired from State Government

The proposed project was a large land acquired directly from the farmers, though there were some small patches which were to be acquired from the State Government. OP having advertised the project and having executed the agreements for development and sale of plots, it was for them to purchase those small patches of land from the landowners at a negotiated price even if they had to pay a price higher than the price they were willing to pay.

Hence, it could not be said that the non-acquisition of such small parcels of land delayed the project.

Further, the bench stated that even if the plea taken by the OP with respect to non-acquisition of those small parcels of land is accepted on its face value, the allottees cannot be made to suffer for the inability of the OP to acquire those land parcels.

It’s been 12 years since the sale of the said plots started, but till this date, it is not known whether the OP will be able to complete the development work and if so when the said development would be completed.

Class Action

Counsel for the complainant stated that they have settled with eleven allottees other than the original complainants and they are in negotiations with thirteen other allottees.

For the above-stated, Commission stated that even if the above situation prevails, that would not lead to the dismissal of the class action. Once the jurisdiction of this Commission by way of a class action is invoked, the Commission is required to take the matter to its logical conclusion unless the matter is settled with each and every member of the class.

No Specific Time Period

Commission added to its analysis that though no specific time period for completing the development and offering possession to the allottees was indicated in the agreement, that would not entitle the builder to prolong the development work to an indefinite period.

As far as the development of plots is concerned, such a work does not require as much time as required for construction of group housing flats in multistoried buildings.

“…the development work of the plots, even on a large scale, must be completed within a period of three years from the approval of the lay-out plans.”

Bench relied on the Supreme Court decision of Pioneer Urband Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725 and Kolkata West International City (P) Ltd. v. Devasis Rudra II, (2019) CPJ 29 (SC).

In view of the above discussion, Commission held that the allottees of residential plot in the project namely ‘Sushant Megapolis’ cannot be made to wait indefinitely for the possession of the plots allotted to them and they are entitled to refund of the amount which they paid to the OP along with appropriate compensation.

Further, the OP shall refund the entire principal amount received and pay Rs 50,000 as cost of litigation.[Bhrigu Kaushik v. Ansal Hi-Tech Township Ltd., Consumer Case No. 1951 of 2016, decided on 16-10-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division bench of Justice R.K. Agrawal (President) and S.M. Kanitkar (Member) directed the developer to refund the principal amount along with compensation in the form of 9% p.a. interest and 25,000 as litigation costs in view of a 4-year delay in giving the possession of the apartment.

Consumer complaint was filed against Pioneer Urban Land and Infrastructure Limited.

Complainants booked an apartment in the Pioneer Group Housing Project called “Araya” for an amount of Rs 30,00,000. Pursuant to the execution of apartment buyer’s agreement, a unit was allotted to the complainants.

Complainants submitted that on visiting the site regularly they were surprised to see no progress in the construction of the project. Entire site seemed to be an abandoned piece of land with semi constructed structure. 

Failed to deliver the possession of Apartment

Till 16.12.2015 complainants had paid a sum of 3,22,18,954 out of the total consideration of 3,45,22,779 i.e. almost 95% of the total Consideration towards the cost of the apartment.

However, the Developer failed to deliver the possession of the Unit, complete in all respect, even after expiry of a long period of approx. five years despite repeated requests and remedies over letters, email, phone calls and personal visits.

Hence, in view of the above, complainants alleged deficiency in service on the developer’s part.

Complainants by the present petition sought more than contractual benefits from the developer.

Natural causes

Developer contended that the delay in completing the project was due to reasons beyond their control. Further, for refund and compensation, the Complainants have to adhere to the provisions made in Clause 11.5 of the Agreement.

Clause 11.5 of the Apartment-Buyer’s Agreement

Bench observed that, with regard to Clause 11.5 of the Agreement upon which the reliance has been placed by the Developer for refund and compensation payable to the Complainants, this Commission in Consumer Complaint No. 2000 of 2016 – Geeta Bansal v. Ireo Grace Realtech (P) Ltd.  – decided on 24-09-2018,  held that such a Clause is wholly one sided and unfair and, therefore, the Complainants would not be bound by the same. If the Developer is unable to justify the delay, this Commission would be competent to direct refund of the amount paid by them to the Developer along with appropriate compensation.

However, Pioneer had approached Supreme Court against the decision taken by Commission in the above Order, but Supreme Court affirmed the finding returned by this Commission and dismissed the Civil Appeals.

Hence, in the present matter, commission referring to the Supreme Court’s decision, allowed the complainant and directed the OP-Developer to refund the principal amount with compensation in form of simple interest @9% p.a. with costs of Rs 25,000 to be pid to the complainants.

Interest was awarded in light of the current market situation and three months times has been granted to the developer to refund the same. [Smita Uban v. Pioneer Urban Land & Infrastructure Ltd., Consumer Case No. 1430 of 2017, decided on 23-07-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Justice V.K. Jain (Presiding Member), while disposing of a complaint, directed the builder to provide compensation in the form of simple interest at 7 percent per annum from the expected date for delivery of possession till the date on which the possession was actually offered to the allottees. 

In the present matter, DLF Universal Limited, was the developer of a residential project. The residential apartments constructed by it were allotted to buyers who executed a Buyers’ Agreement. Developer was to complete construction within 36 months. Complainants submitted that Buyers’ Agreements were unilaterally prepared by the developer and since the earnest money paid by them could be forfeited if they refused to execute the agreement they were forced to sign it. On delay, the developer intimated the allottees to either accept delay of 16 months or to exit taking refund with simple interest at 9 percent per annum. They also disputed the increase in super area, and claimed refund of parking and club charges facility and service tax, and also demanded timely payment rebate and early payment rebate to all the apartment owners.

The counsel for respondent submitted that at time of booking itself, allottees were informed that schedule for delivering possession was tentative. It was submitted that early payment rebate had been given to all the allottees who made early payment, whereas timely payment rebate was adjusted for all allottees who were not in default at the time possession According to the developer the delay happened primarily on account of the abnormal time taken in approval of the building plans and the order issued by the Government of Delhi, stopping construction for a considerable time.

NCDRC held that the developer had not sought payment for increase in the super area beyond 15 percent, the allottees were required to pay for such an increase. Developer could not be allowed to charge separately from the allottees for the club area and the basements used for car parking. No force majeure circumstance had been sought on account of the delay in sanction of the building plans, in the force majeure chart submitted by the developer. 

Regarding the quantum of compensation, reliance was placed on  Pioneer Urban Land and Infrastructure Ltd v. Govindan Raghavan, (2019) 5 SCC 725, and ordered the developer to pay compensation in the form of simple interest at 7 percent per annum from the expected date for delivery of possession till the date on which the possession was actually offered to them.

The Commission disposed off the petition,a sking  the developer to pay Rs 50,000 as litigation cost. [Capital Greens Flat Buyers Association v. DLF Universal Ltd., Consumer Case No. 351 of 2015, decided on 03-01-2020]

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]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumers Disputes Redressal Commission (NCDRC): The Bench comprising of Justice R.K. Agrawal (President) and M. Shreesha (Member) while addressing a complaint filed under the Consumer Protection Act stated that:

“Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 6 years has lapsed from the date of booking.”

The present complaint was filed against the “Developer” and “Construction Company” under Section 21(a)(i) of the Consumer Protection Act, 1986.

In accordance with the facts of the case, Complainant had been looking for residential accommodation in Gurgaon, wherein he wanted to reside after his return from Tokyo, Japan. Complainant on his return to India booked a residential apartment of 5450 sq. ft. and paid an amount of Rs 4,12,98,926 by 03-09-2015.

It has been averred that, Flat Buyer’s Agreement was executed between the Developer and Complainant on 19-02-2013 and as per Clause 12 of the agreement, the possession of the apartment was to be delivered within 36 months with an additional grace period of 6 months, which ended on 19-08-2016.

Adding to the above, in December 2015, the complainant visited the site to see the development work and was shocked to see that the construction work had been completely stopped since January 2015. Complainant visited the corporate office of the developer and was informed that due to disputes with Construction Company, they had terminated the contract with them. The complainant was further assured that a new construction company would complete the balance work and the complainant shall receive the possession in terms of the agreement by February 2016 or at least within the extended period.

Again in January, 2017 complainant was disappointed to observe that no work was being carried out and he was assured by the officials of the “Developer” that the new construction company would complete the balance work. Once again in April 2018, on visiting the construction site he found that the site office was locked.

Thus, on multiple failures by the developer to respect the agreement in regard to the construction of the flat, Complainant had to send a legal notice to the Opposite Parties and further vexed with the attitude of the OP’s, the complainant approached the Commission.

Siddharth Yadav and Wasim Ashraf, Counsel appearing on behalf of the Complainants argued that despite repeated attempts to contact the “Developer” and seeking information regarding the progress of construction, there was no response for the same.

Commission in view of the above, relied on the decisions of the Supreme Court case in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725 and Kolkata West International City (P) Ltd. v. Devasis Rudra, (2019) CPJ 29 (SC), and opined in regard to the instant case that, “Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 6 years has lapsed from the date of booking.”

Further, the Commission added to its observation that, there has been a deficiency of service on behalf of the OP’s. However, since the amounts were paid to the “Developer” the liability is fastened on the developer and not the “Construction Company”.

With the above, Complainant is allowed in part directing the “Developer” to refund 4,12,98,926 with interest at 12% p.a. from the respective dates of deposit till the date of realisation. [Alok Kumar v. Golden Peacock Residency (P) Ltd., 2019 SCC OnLine NCDRC 314, decided on 06-09-2019]