A.K. GUPTA vs UNITECH LIMITED

The complainant booked a 3 BHK residential flat with the opposite party in a project, namely, Unitech Horizon, which the said opposite party was to develop in Greater Noida. An agreement dated 17.5.2006 was executed between the parties in this regard. As per clause 4.a of the said agreement, the possession was to be delivered to the complainant by 15.11.2008 subject to force majeure circumstances beyond the control of the opposite party. The complainant paid a total sum of Rs.51,64,174/- to the opposite party as against the agreed total consideration of Rs.49,93,665/-. The aforesaid payment included some interest which the complainant had to pay for shifting his booking to a tower other than the tower in which the initial booking was made by him. The possession, however, has not been delivered to the complainant till date. Being aggrieved, he is before this Commission seeking the following relief:- "A . Direct the opposite party to pay an amount of Rs.1,29,36,833/- (Rupees One Crore Twenty Nine Lakhs Thirty Six Thousand Eight Hundred And Thirty Three only) to the complainant.

B. Direct the opposite party to discontinue the unfair trade practice adopted by the opposite party in the manner as this Hon''ble Commission may deem fit and proper in the facts and circumstances of the case."

The complaint has been resisted by the opposite party on several counts but the payment made by the complainant has been admitted. The opposite party has also admitted the booking made by the complainant but has alleged that the claim made by him is highly exaggerated, made only with a view to bring the complaint within the pecuniary jurisdiction of this Commission. Yet another plea taken in the reply that the complaint is barred by limitation and in the event of delay, the opposite party is required to pay only the agreed compensation of Rs.5/- per sq.ft. per month for the period of delay.

In Swarn Talwar & Ors. vs. Unitech Ltd., C.C. No.347 of 2014 and connected matters decided on 14.08.2015, the complainants had booked residential apartment in project known as Unitech Habitat, which the opposite party was to develop on plot no.9, Sector PI-II (Alistonia Estate) in Greater Noida. The opposite party however failed to deliver possession of the flats to the complainants within the time agreed between the parties and consequently the complainant sought refund along with interest @ 18% p.a. besides damages and cost of litigation. The complaints were resisted on the grounds identical to those on which the present complaint has been opposed. Rejecting all the grounds taken by the opposite party inter alia relying upon the decision of the Hon''ble Supreme Court in K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board, C.A. No.6730-6731, decided on 19.09.2012 and considering the extent of appreciation in the land value and increase in the cost of construction since 2006, this Commission directed the opposite party to refund the amount paid to it by the complainants, along with compensation in the form of simple interest on that amount @ 18% per annum from the date of deposit till the date the said amount was paid to the flat buyers. The payment was directed to be made within six weeks. Being aggrieved from the order passed by this Commission, the opposite party preferred an appeal before the Hon''ble Supreme Court being Civil Appeal (Diary No. 35562 of 2015). Vide signed order dated 11.12.2015, the Hon''ble Supreme Court dismissed the said appeal. The order passed by the Hon''ble Supreme Court reads as under:- "We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference. The Civil Appeal is dismissed."

The grounds on which the complaint has been resisted have been rejected not only in Swarn Talwar & Ors. (supra), but also in several other matters including CC No. 487/2014, Manoj Kumar Jha & Anr. Vs. M/s. Unitech Ltd., decided on 18.01.2016. Those grounds have also been rejected by another Bench of this Commission in Suman Nandi & Anr. Vs. M/s. Unitech Limited & Anr., decided on 17.12.2015. In CC No. 368/2014, Shweta Kapoor & Anr. Vs. M/s. Unitech Limited & Anr., decided on 14.01.2016, this Commission again rejected identical grounds taken by the opposite party.

The learned counsel for the complainant submits that though in Swarn Talwar & Ors. (supra), this Commission had awarded compensation in the form of interest @ 18% per annum,

the complainant in order to bring an early closure to the issue and to avoid any litigation, is pressing for grant of compensation in the form of interest only @ 12% per annum from the date the payment was made till the date on which the entire amount is refunded along with interest. The learned counsel for the opposite party, however, opposes even the concessional prayer made by the learned counsel for the complainant and she submits that the opposite party is ready to offer a flat in another tower of the same project. She further submits that the construction in that tower is completed though they have not obtained the completion certificate as yet. The learned counsel for the complainant submits that considering the conduct of the opposite party which failed to deliver its promise for more than 7 years, the complainant is not ready to accept the possession without any compensation for the period the possession has been delayed.

In our opinion, considering the default on the part of the opposite party in meeting its contractual obligation to deliver possession of the flats by 15.11.2008 and taking into account the abnormal delay of more than seven years in delivering possession coupled with the fact that the opposite party does not even possess the requisite completion certificate, in the absence of which, possession cannot be delivered, the complainant cannot be compelled to accept possession of an alternative flat.

The contention that since the apartment in question was purchased for less than Rs. 1 crore and therefore, this Commission lacks jurisdiction to entertain this matter has already been rejected by this Commission in Swarn Talwar (supra) and the said order, to the extent, it is relevant reads as under: The learned counsel for the opposite party submits that since the apartment in question was purchased for less than Rs.1 Crore, this Commission lacks pecuniary jurisdiction to entertain this complaint and the complainants should be relegated to the concerned State Commission for the redressal of their grievance. We however find no merit in this contention. This issue was raised by the opposite party in Swarn Talwar (Supra) and was rejected. The aforesaid decision to the extent relevant to this plea reads as under:- "5. The first question which arises for our consideration in these cases is as to whether this Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. Section 11(1) of the Consumer Protection Act read with Section 21 of the Consumer Protection Act to the extent it is relevant provides that this Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000/-. The contention of the learned counsel for the opposite party is that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/- except in one case. The learned counsel for the complainants on the other hand contended that the interest which they have claimed along with refund of the principal sum even if not so described specifically, is by way of compensation only, since the opposite party has been deficient in rendering services to the complainants by not delivering possession of the flats on or before the time agreed in this regard.

In our view, the interest claimed by the flat buyers in such a case does not represent only the interest on the capital borrowed or contributed by them but also includes compensation on account of appreciation in the land value and increase in the cost of construction in the meanwhile. As noted by us in CC No.232 of 2014, Puneet Malhotra Vs. Parsvnath Developers Ltd. decided on 29-01-2015, there has been steep appreciation in the market value of the land and cost of construction of the residential flats in Greater Noida in last about 7-10 years and consequently the complainants cannot hope to get a comparable flat at the same price which the opposite party had agreed to charge from them. In fact it would be difficult to get a similar accommodation, even at the agreed price plus simple interest thereon at the rate of 18% per annum. Therefore, the payment of interest to the flat buyers in such a case is not only on account of loss of income by way of interest but also on account of loss of the opportunity which the complainants had to acquire a residential flat at a particular price.

In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Hon''ble Supreme Court inter alia observed and held as under:

"However, the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury. Thus the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure... ...Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best of illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher. It would, thus, be seen that the Hon''ble Supreme Court recognized that the interest to the flat buyers in such cases is paid by way of compensation. Therefore, there is no reason why the interest claimed by the complainants or at least part of it should not be taken into consideration for the purpose of deciding the pecuniary jurisdiction of this Commission. If this is done, the aggregate amount claimed in each of the complaints exceeds Rs.1,00,00,000/- and, therefore, this Commission does possess the requisite pecuniary jurisdiction.

In the cases where the complainant does not want refund and is seeking possession, alongwith compensation for the delayed possession, this Commission would have jurisdiction to entertain the complaint, if the aggregate of the value of the flat, on the date of filing of the complaint and the compensation claimed for the delay in delivering possession, exceeds Rs. 1 Crore. In terms of Section 21(a) of the Consumer Protection Act, this Commission can entertain complaints where the value of the goods or services and compensation exceeds Rs. 1 Crore. Since the buyer is seeking possession of the flat booked by him, the value of the service, in such a case in our opinion, in terms of Section 21(a) of the Consumer Protection Act means the value of the flat as on the date of filing of the complaint and not the value on the date the flats were booked.

In the present case, the total amount claimed by the complainant is more than Rs. 1 crore. Therefore, considering the extent of the claim made in the complaint, this Commission does possess the requisite pecuniary jurisdiction to entertain and decide this complaint.

In my view, considering the cost of borrowing in the market alone, compensation in the form of simple interest @ 12% per annum can in no case be said to be exaggerated or inflated. The cost of borrowing in the market from the banks/financial institutions was about 12% per annum. Even if no compensation is awarded to the complainant for the mental agony and harassment suffered by the complainant on account of the failure of the opposite party to deliver on its promise, the compensation in the form of simple interest @ 12% per annum would be eminently justified.

For the reasons stated hereinabove, I direct the opposite party to refund the entire amount paid to it by the complainant alongwith compensation in the form of simple interest @ 12% per annum from the date of each deposit till the date on which the entire payment including compensation by way of interest in terms of this order is made. The payment shall be made within six weeks from today.