Ackruti Jay Developers and others vs Shashi Govind Gadakh

This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), by a real estate developer, namely, Ackruti Jay Developers, Pune and its two Branch offices, the Opposite Parties in the Complaint, is directed against the order dated 28.7.2015, passed by the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (for short "the State Commission"), in cross-First Appeal Nos. A/14/18 and A/14/294, preferred by the Petitioners and the Complainant, Respondent herein, respectively. By the impugned order, the State Commission has concluded that there was deficiency in service on the part of the Petitioners, inasmuch as there was delay of 49 months in delivering the possession of the flat booked by the Complainant. Resultantly, while dismissing the Appeal preferred by the Petitioners, the State Commission has partly allowed the Appeal, preferred by the Complainant, inter alia, directing the Petitioners to pay to the Complainant a sum of Rs. 7,29,000 for mental agony and inconvenience caused to her due to delay in handing over of the possession of the flat, within a period of 45 days from the receipt of the said order, failing which the said amount would carry interest @ 12% p.a. till realization. 2. The said Appeals had been preferred by both the parties against the order dated 22.10.2013, passed by the District Consumer Disputes Redressal Forum at Pune (for short "the District Forum") in Consumer Complaint No. 667 of 2012. By the said order, white holding the Petitioners liable for severe and deficient services, the District Forum had partly allowed the Complaint and directed the Petitioners to pay to the Complainant an amount of Rs. 1,54,000 as rent for the delay in delivery of possession, besides Rs. 10,000 towards pecuniary damages and Rs. 5,000 as litigation costs. 3. Succinctly put, the facts, material for disposal of the present Revision Petition, are: 3.1 Allured by the reputation of the Petitioners, who had launched a project christened as "Ackruti Countrywoods" at Village Kondhwa Budruk, within the local limits of Pune Municipal Corporation, on 25.12.2009, the Complainant booked a flat in the said project by paying to the Petitioners a booking amount of Rs. 21,000. She was given to understand that the possession of the flat would be delivered in the month of December, 2010. On 10.2.2010, an Agreement for Sale, in respect of flat No. 205 in the said project, against sale consideration of Rs. 21,25,100, was entered into between the parties. The agreement was duly registered, on Complainant''s paying full stamp duty (Rs. 89,000) and registration fee (Rs. 23,000). As per the said Agreement, the Petitioners were obliged to deliver possession of the flat by December, 2010 but ride their several letters, issued between 17.1.2011 to 24.5.2012, they unilaterally extended the delivery date, vide their last tetter, the Petitioners had committed to deliver the possession of the fiat in question by 31.10.2012. Though the sale consideration of the flat was to be paid in 18 instalments but by 10.2.2010 the Complain ant had paid the full sale consideration of Rs. 21,25,100. On perusal of the Agreement for Sale, which had been supplied to the complainant after registration thereof, she found that it was one-sided and loaded in favour of the Petitioners, like Clause 19,5.1 relating to the time period within which possession of the flat had to be delivered, i.e. by any indefinite period of time, if according to the Petitioners the conditions were beyond their control. Further, Clause 19.3 of the Agreement stipulated that in case of delay on the part of the Complainant in taking possession for want of payment, the Petitioners would be entitled to claim/charge Rs. 20 per sq. ft. of the carpet area of the flat per month for the period of such delay. 3.2 In the said background, the afore-noted Complaint came to be filed before the District Forum, inter alia, praying for a direction to the Petitioners to pay to her a total compensation of Rs. 15,78,824, besides litigation costs and future compensation from 1.11.2012 till actual date of possession. The break-up of the compensation claimed was as follows: PARTICULARS OF CLAIM:

(a) In terms of Clause 19.3 charges/Rs. 3,12,400 claims @ Rs. 20 per sq. ft. per month from 10.2.2010 till 31.10.2012 of the area of flat 669 sq. ft. + terrace area 41 sq, ft. Rs. 3,12,400

(b) Damages in lieu of interest @ 18% p.a. on Rs. 21,25,100.00 from 10.2.2010 till 31.10.2012 Rs. 10,51,924

(c) Reimbursement of Rental amount @ Rs. 7,000 p.m. from December 2010 till 31.10.2012 Rs. 1,54,000

(d) Compensation for mental torture be cause of unreasonable delay in handing over possession because of deficiencies in services on your part Rs. 50,000

(e) Costs of notice dated 24.8.2012 Rs. 7,500

(f) Cost of Reply to VAT Notice dated 18.12.2012 Rs. 3,000,00

Total: Rs. 15,78,824

Despite service of notice in the complaint, the Petitioners neither filed their Written Version nor were they represented before the District Forum. Consequently, the District Forum set the Petitioners ex parte and proceeded to dispose of the Complaint on merits. 5. On evaluation of the evidence adduced by the Complainant; the District Forum came to the conclusion that since despite service, the Petitioners did not exercise their right to defend themselves, it lent a strong support to the allegations levelled by the Complainant in the Complaint; the Complainant had paid Rs. 21,25,100 to the Petitioners in advance; despite having received the full cost of the flat, the same was not delivered to the Complainant; due to non-delivery of the flat, she had to spend an amount of Rs. 1,54,000 as rent @ Rs. 7,000 per month for the accommodation for her son and that the Petitioners were deficient in rendering service to the Complainant, due to which she had suffered pecuniary damages as well as mental agony. However, the District Forum rejected the claim of the Complainant for payment of charges @ Rs. 20 per sq. ft. per month for the delay in delivery of the flat, under Clause 19.3 of the Agreement, observing that since the said Clause was attracted against the Complainant for default in payment of sale consideration, no benefit under the clause accrued in favour of the Complainant. Consequently, the District Forum partly allowed the Complaint and directed the Petitioners to pay to the Complainant the afore-stated amount of Rs. 1,54,000 as rent for the period of delay in delivery of possession. 6. Aggrieved, as noted above, both the parties carried the matter further in their respective Appeals to the State Commission. As afore stated, white dismissing the Appeal preferred by the Petitioners, the State Commission has partly allowed the Appeal, preferred by the Complainant observing thus: "22. From the aforesaid facts it is clear that the complainant had booked the flat, paid the entire consideration, not committed any default as per the terms and conditions of the agreement. However, the opponent has miserably failed to hand over the possession before December, 2010 without any lawful reason. No doubt the opponent has written letters to the complainant informing the reasons for delay in handing over the possession but we do not find the clauses under force majeure. The learned Counsel for the opponent informed us that the opponent has handed over the possession during the pendency of appeal. 23. Even if the opponent has handed over possession during the pendency of appeal there is inordinate delay on the part of opponent in handing over the possession. There is clear cut deficiericy in service on the part of opponent and justice and equity demand the compensation to the complainant for mental agony, inconvenience and additional financial burden. The learned Counsel for the complainant has drawn our attention to Clause 19.3 of the agreement, whereby the opponent is authorised to charge Rs. 20 per sq. ft. of the carpet area to the complainant per month on failure of the complainant to take possession. Here is a different situation. Here there is no failure on the part of complainant. It is failure on the part of opponent and justice and equity demands that the same clause be made applicable to opponent as the opponent failed to hand over the possession. 24. Learned Counsel for the complainant has argued that the learned Forum below overlooked the fact that the complainant has paid the entire consideration of the flat till 10.2.2010 and the possession of the flat was to be handed over before 30.12.2010. However, the opponent has utilized the amount paid by the complainant and earned profit, however, failed to hand over possession without any fault on the part of complainant. The learned Advocate has also drawn our attention to the clauses in the agreement, whereby the opponent is entitled to charge interest for delayed payment or failure on the part of complainant to take possession and argued that the complainant also deserves for compensation in view of justice and equity, when there is no fault on the part of complainant. The learned Advocate further pointed out that as full and final settlement the complainant is ready to accept an amount of Rs. 7,28,909 as the consideration amount is used by the opponent for a period of 49 months causing mental agony, inconvenience and financial loss. 25. From the aforesaid facts, it is dear that the opponent is deficient in service. The opponent has delayed the possession of the flat booked by the opponent for 49 months without any fault on the part of complainant. The reasons put forth by the opponent for the delay in handing over possession are not convincing. The District Forum failed to take the note of inordinate delay in handing over possession. The order passed by the District Forum needs modification for want of justice and equity." (Emphasis supplied) 7. Hence, the present Revision Petition. The Complainant seems to be satisfied with the order as she has not approached this Commission. 8. From the afore-extracted observations in the impugned order, it clearly emerges that, (i) there was no default on the part of the Complainant in making payment(s) towards the cost of the flat; (ii) the entire sale consideration was paid by 10.2.2010; (iii) although at the time of booking of the flat, the stipulated date for its delivery was December, 2010 but even after unilateral extension of time upto 31.10.2012, the possession of the flat was actually delivered on 5.4.2014; (iv) the offer made by the Complainant to accept a lump sum amount of Rs. 7,29,000 as compensation for the agony suffered by her on account of delay of 49 months in delivery of possession, as against the claim of Rs. 10,41,299 which worked out to interest @ 8.6% p.a. from 10.2.2010, i.e. the date of payment to 31.03,2014, was not acceptable to the Petitioners. 9. We have heard learned Counsel for the Petitioners and perused the pleadings and other documents on record. The thrust of the submissions made on behalf of the Petitioners was that, (i) having failed to exercise option in terms of Clause 19.4 of the Agreement for Sale, which stipulates that if the Builder fails to deliver possession of the flat within 12 months from the committed date of possession, or such further extended date, the purchaser may, by a written notice, terminate the agreement and in that event the Developer is obliged to refund to the purchaser all the amounts received from him/her with interest @ 9% p.a. within 120 days of such notice, the State Commission could not vary the terms of the Contract between the parties and award compensation under Clause 19.3 of the Agreement; (ii) while awarding the afore noted amount, the State Commission has failed to draw distinction between the case where possession of the flat is not delivered and a case where there is delay in delivery of possession, as in the present case. It was also pleaded that award of interest which was also one of the components of the afore noted amount of Rs. 7,29,000 in addition to the compensation, was not justified. 10. It is well settled by a catena of decisions of the Hon''ble Supreme Court that the word "compensation" is of a vide connotation. It may constitute actual loss or expected loss and extends to compensation for physical, mental or even emotional suffering, insult or injury or loss. A Consumer Fora is competent to adequately compensate a consumer for the injustice suffered by him. Nevertheless, before undertaking the exercise to determine adequate Compensation, the Fora has to first determine that there has been deficiency in service on the part of the supplier of goods or a service provider, which has resulted in loss or injury to the Consumer. On arrival at the said conclusion, it can proceed to determine adequate compensation for the injury or the loss suffered. However, there is no hard-and-fast rule to determine the quantum of compensation. It would depend on extent of harassment and loss suffered by the Consumer. Obviously, it cannot be uniform irrespective of the factual situation. As observed by the Hon''ble Supreme Court that while determining the compensation for delay or non-delivery of possession of a flat/plot, the distinction between a case where possession of the flat/plot is directed to be delivered and a case where only monies are directed to be returned, has to be borne in mind, because in cases where delivery of possession is being directed, the compensation for harassment will necessarily have to be less because in a way the Complainant/allot tee is being compensated by increase in the value of the property he is getting. However, in cases where monies are directed to be refunded, then the allottee is suffering a loss, inasmuch as he had deposited the money in the hope of getting a flat/plot, but is deprived of the flat/plot as well as the benefit of escalation in the price of the flat/plot and, therefore, in such like cases, compensation would necessarily be higher. 11. Applying the afore noted broad principles on facts at hand, admittedly there was a delay of over four years in delivery of possession of the flat to the Complainant. The factum of the Complainant having obtained housing loan from the Bank, on the mortgage of the flat in question and her plea that her son had to live in a rented accommodation all this period, was not specifically controverted by the Petitioners. Undoubtedly, on account of the said delay, there was "deficiency" on the part of the Petitioners towards Complainant. Therefore, the Complainant has to be adequately compensated for the loss suffered by her not only on account of payment of rent @ Rs. 7,000 p.m. for the period, stated in the proposal for compromise as well as for the mental agony because of enormous delay in getting possession of the flat. As regards the interest claimed by the Complainant @ 12% on Rs. 21,25,100 from 10.2.2010 till 31.3.2014, quantified at Rs. 10,41,299 in addition to the charges computed in terms of Clause 19.3 of the sale agreement, is concerned, we are of the view that when a purchaser can be penalized by the Developer for not taking possession of the flat/plot, the same logic or the yardstick must hold good against a Developer when he fails to deliver possession of the flat at the scheduled time. Regard being had to the fact that the Complainant has received possession of the flat, though after a delay of over four years, in our opinion, the ends of justice would be sub-served by directing the Petitioners to pay to the Complainant a lump sum amount of Rs. 5,00,000 instead of the sum of Rs. 7,29,000 as directed in the impugned order, for both, the mental harassment as well as the expenditure incurred on account of payment of rent etc. It is ordered accordingly. The said amount shall be paid by the Petitioners to the Complainant within four weeks of the date of receipt of a copy of this order, failing which the amount shall carry interest @ 9% p.a. from the date of filing of the Complaint till realization. 12. In the final result, the Revision Petition succeeds partly to the extent indicated above, but with no order as to costs. Revision Petition partly allowed.