Unitech case at ncdrc

6/9/2015

http://cms.nic.in/ncdrcusersWeb/ViewProceedingCS.jsp?method=ViewProceedingCS 1/18

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONNEW DELHI

CONSUMER CASE NO. 427 OF 2014

1. Shri SATISH KUMAR PANDEY & ANR.,148, MIG Flats, Suraj Apartments, Pul Prahlad Pur,NEW DELHI 110044. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, Signature Towers, GroungFloor, NH8, South CityI,GURGAON. ...........Opp.Party(s)

CONSUMER CASE NO. 428 OF 2014 1. Shri ABHISHEK RASTOGI & ANR.,Tower4, 804, Orchid Petals, Sector49,GURGAON. ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.,Through its Managing Director, Regd. Office: 6, CommunityCentre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 430 OF 2014 1. SUSHMITA PATHY & ANR.E100, AIIMS Camus Ansari Nagar,New Delhi ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director, 6, Community Center, SaketNew Delhi 17 ...........Opp.Party(s)

CONSUMER CASE NO. 432 OF 2014 1. RUMA BATHEJA & ANR.W/o. Prince Batheja, R/o. J3062, Devendra Vihar, Sector56,Gurgaon. ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through Its Managing Director, 6, Community Center, SaketNew Delhi 17. ...........Opp.Party(s)

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CONSUMER CASE NO. 433 OF 2014 1. VIKAS PARCHHANDAS/o. Sh. Parkash Chand, R/o. 4/401, Beverly Park, Plot No. 2,Sector 2 Dwarka,Delhi ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director, Signature Towers, GroundFloor, NH8, South City1,Gurgaon. ...........Opp.Party(s)

CONSUMER CASE NO. 434 OF 2014 1. JASMINE SAPRA & ANR.R/o. D6, 6106/1, Vasant Kunj,New Delhi. ...........Complainant(s)


CONSUMER CASE NO. 435 OF 2014 1. AMAR GARG & ANR.R/o. 305, Sector 14,Gurgaon,Haryana ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director, 6, Community Center, SaketNwe Delhi 17 ...........Opp.Party(s)

CONSUMER CASE NO. 436 OF 2014 1. SUNIL KUMAR SENGAR & ANR.S/o. Prakash Singh, R/o. H. No. 76 Sector, 17A,Gurgaon. ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through Its Managing Director, 6, Community Center, Saket,New Delhi 17. ...........Opp.Party(s)

CONSUMER CASE NO. 437 OF 2014 1. SHIWALI MAHAJAN

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W/o. Mudit Mahajan, R/o. E37, Anand Niketan,New Delhi 21. ...........Complainant(s)


CONSUMER CASE NO. 438 OF 2014 1. SAKET KUMAR & ANR.S/o. Meghendra Kumar, R/o. S324, Uppal's Southend Floor,Sector 49,Gurgaon. ...........Complainant(s)


CONSUMER CASE NO. 439 OF 2014 1. ARVIND KATOCHS/o. Sh. O.S. Katoch, R/o. 2/31 Cariappa Vihar, Delhi Cant,New Delhi ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director, Signature Towers, GroundFloor, NH8, South CityI,Gurgaon. ...........Opp.Party(s)

CONSUMER CASE NO. 440 OF 2014 1. SURBHI SINGHDaughter Of Late Sri. Surendra Singh, R/o. A27, MawanaRoad, Ganga Nagar,MeerutU.P. ...........Complainant(s)


CONSUMER CASE NO. 453 OF 2014 1. Shri RAHUL SAGGI & ANR.,Flat No. 9, 4th Floor, Building 33, Block10, Essa Al QatamiStreet, Salmiya,

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KUMAIT. ...........Complainant(s)Versus

1. M/S. UNITECH LTD.,Through its Managing Director, 6, Community Centre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 454 OF 2014 1. Shri CHANDRANSHU MISHRA & ANR.,600, Saraswati Vihar,GURGAON. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, 6, Community Cnetre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 455 OF 2014 1. Shri PRASOON DUBEY & 2 ORS.,M479, 1st Floor, Orchid Island, Sector51,GURGAON. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,THrough its Managing Director, 6, Community Centre,Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 456 OF 2014 1. Shri PRASHANT KHATTER & ANR.,B508, Sai Shraddha CHS, Deonar,MUMBAI 400088. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, 6, Community Centre, Saket,GURGAON. ...........Opp.Party(s)

CONSUMER CASE NO. 465 OF 2014 1. Shri AARUSH TALWAR & ANR.,A601, Plot 36B,, Olive Heights Society, Sector56,GURGAON. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, 6, Community Centre,Sakety

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NEW DELHI 110017. ...........Opp.Party(s)CONSUMER CASE NO. 466 OF 2014

1. Shri RAKESH KUMAR PANDEY & ANR.,E50, Second Floor, Ardee City, Sector52,GURGAON. ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.,Through its Managing Director, 6, Community Centre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 467 OF 2014 1. Shri AJAY CHHIBBER,9037, 121 Street, Surrey, BC V3V 7W9,CANADA. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, 6, Community Centre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 468 OF 2014 1. Shri SANDEEP GUPTA & ANR.,107/4, Golden Jubilee Complex, Air Force Officer's Enclave,Agram Post,BANGALORE 560007. ...........Complainant(s)

Versus 1. M/s UNITECH LTD.,Through its Managing Director, 6, Community Centre, Saket,NEW DELHI 110017. ...........Opp.Party(s)

CONSUMER CASE NO. 474 OF 2014 1. ANANT DAS AGARWAL & ANR.S/o. Shri B D Agarwal, R/o. 303, Wings Apartment Sector9,Gurgaon,Haryana ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director , 6, Community Center, SaketNew Delhi 17. ...........Opp.Party(s)

CONSUMER CASE NO. 475 OF 2014

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1. S.S. SHERGILLS/o. Shri Mohan Singh, R/o. D119, Ranjeet Avenue,Amritsar,Punjab ...........Complainant(s)

Versus 1. M/S. UNITECH LTD.Through its Managing Director, 6, Community Center, Saket,New Delhi 17. ...........Opp.Party(s)

CONSUMER CASE NO. 490 OF 2014 1. RAVI SHANKER KOCHAK & ANR.R/o. VS1, Type V, Railway Officer's Colony, Bilaspur,Chattisgarh 495 004 ...........Complainant(s)


CONSUMER CASE NO. 502 OF 2014 1. ABHISHEK AGARWAL & ANR.R/o. Cosmos A 504, Gundecha Valley of Flowers, ThakurVillage, Kandivali East,Mumbai 400 101 ...........Complainant(s)

Versus 1. M/S. UNITECH LIMITEDThrough its Managing Director, 6, Community Center, SaketNew Delh 17 ...........Opp.Party(s)

BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER

For the Complainant : (In all matters): Mr. Sushil Kaushik, Advocate

For the Opp.Party : For the Opposite PartiesIn CC/427/2014, CC/439/14, CC/467/14:Mr. Sandeep Sharma, AdvocateIn CC/428/14, CC/432435/14, CC/437/14, CC/453/14, CC/466/14,CC/490/14 & CC/502/14: Mr. Mohinder J.S. Rupal, AdvocateMr. Sandeep Sharma, Advocate

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In CC/430/14, CC/436/14, CC/438/14, , CC/454456/14, CC/465/14,CC/468/14 & CC/474475/14: Mr. Sunil Goel, AdvocateMr. Sandeep Sharma, AdvocateIn CC/440/2014 : Ms. Megha Gupta, AdvocateMr. Sangram Singh, Advocate: Ms. Megha Gupta, AdvocateMr. Sangram Singh, Advocate

Dated : 08 Jun 2015ORDER

JUSTICE V.K. JAIN, PRESIDING MEMBER

The complainants in these matters, booked apartments with the opposite party in a complexknown as ‘vistas’ which it is developing in sector 70 of Gurgaon, and they entered into individual“Buyers Agreement” with the opposite party. The possession of the apartments was agreed to bedelivered to them within 36 months from the date of their respective agreements. In CC No. 433/2014,434/2014, 466/2014, 474/2014, 475/2014 and 502/2014, the apartments were initially allotted to someother persons, from whom they were later purchased by the concerned complainants. However, therewas no change in the date stipulated in the Buyers Agreement for delivery of possession of the flat. Thegrievance of the complainants is that neither the possession of the apartments has been given to them noris the construction complete though the last date stipulated in the Buyer’s Agreement for delivery of thepossession to them has already expired more than 2 years ago. The complainants are, therefore, beforethis Commission seeking delivery of the possession of the flats agreed to be sold to them or in thealternative payment of current market value of such houses which is stated to be ₹10,000/ per sq. ft. They are also seeking payment of compensation on account of loss of rental income to them with effectfrom the stipulated date of possession, compensation @₹5/ per sq. ft. as per the agreement enteredbetween the parties and compound interest @18% p.a. with effect from the stipulated date ofpossession. The complainants are also seeking compensation on account of their mental torture, agonyetc.

2. The complaints have been resisted by the OP on several grounds though it has admitted theagreement for sale of apartments to them. It is also stated in the reply that though the possession of theapartments was proposed to be delivered to the purchasers within 36 months, the said date could beextended if the completion of the project was delayed due to nonavailability of essential buildingmaterial, water supply, slow down, civil commotion and other reasons beyond the control of theopposite party. It is claimed that :

(a) Real Estate Industry is adversely affected due to local and national economic conditions,

(b) There is recession in the economy resulting in the availability of labour and rawmaterialsbecoming scarce.

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(c) Commonwealth games organised in October 2010 resulted in extreme shortage of labourin the NCR region.

(d) There was shortage of labour due to implementation of social schemes like National RuralEmployment Guarantee Act (NREGA) and Jawaharlal Nehru Urban Renewal Mission(JNNURM).

(e) There was extreme shortage of water in NCR region, which was further accentuated due toorders of Punjab and Haryana High Court stopping of use of ground water for constructionactivities.

(f) There was shortage of bricks due to restrictions imposed by Ministry of Environment andForest on brick klins.

(g) There was shortage of sand due to mining having been suspended in Aravali Hill Range.

3. It is also claimed in the reply that in view of clause 4.c.ii) of the agreement, the opposite party isrequired to pay only the compensation @₹5/ per sq. ft. per month for the delay in offering possession. Yet, another plea taken in the reply is that since the cost of the flat was less than ₹ 1 crore, the complaintis maintainable only before the concerned State Commission and not before this Commission.

4. During the course of hearing, the learned counsel for the opposite party placed on record a letterdated 27.05.2015 offering possession as per the following schedule:

BlockCompletion of construction &application of OC

Offer of possession ofapartments

A9 to A11 31st Dec15 28th Feb16A1 to A4 31st May16 31st Jul16A5 to A8 30th Sep.16 30th Nov16B1 to B5 31st Dec16 28th Feb17E1 – E2 30th May17 31st Jul17D1 – D2 31st Oct 17 31st Dec17C1 to C3 31st Dec17 28th Feb.18

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The opposite party also offered to pay compensation at the revised rate, i.e., ₹13/ per sq. ft., afterexpiry of the revised date of possession. Yet another condition imposed in the said letter is that post15.06.2015, the transfree or nominees of the existing allottees shall not be eligible for the revisedpenalty of ₹13/ per sq. ft. per month. It is also stated in the aforesaid letter that if possession is delayedbeyond the abovementioned time limits, revised penalty shall be ₹13/ per sq. ft. per month.

5. During the course of hearing, the learned counsel for the complainants stated, on instructions, thatthe complainants are not interested in taking refund of the money paid by them to the opposite party andthey want to have possession of their respective flats even if the said possession is to be delivered interms of the revised date of possession indicated in the abovereferred letter of opposite party. Inview of the aforesaid statement, the only question which survives for consideration in these complaintsis as to what interest/compensation should be paid to the complainants by the opposite party, till the datethe possession is delivered to them.

6. Clause 4.a of the Buyers Agreement reads as under:

“4.a Delivery of Possession:

(i) Subject to the Apartment Allottee (s) complying with various terms andconditions of this agreement and other requirements as indicated by theDeveloper, the Developer proposes to offer possession of the Apartment within aperiod of 36 months from the date of signing of this agreement and uponexecution and registration of Conveyance Deed in favour of the ApartmentAllottee (s). It is understood by the Allottee that the possession of various Towers/Blocks comprised in the complex shall be ready and shall be completed by theDeveloper in phases and handed over to the allottees of the completed Tower/Block according.

(ii) It is agreed by the Apartment Allottee (s) that in the followingcircumstances the date of possession shall stand extended:

In the event of any default or negligence attributable to the Apartment Allottee(s) incompliance and fulfilment of conditions of this agreement and the letter of allotmentissued by the Developer.

Completion of the Group Housing Complex and the apartment is delayed by reasons oflockout, strike, slow down or civil commotion or by reasons of war or enemy action orterrorist action or earthquake or by any act of GOD or due to any reasons or

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circumstances beyond the control of the Developer.

If consequent upon any new legislation or amendment of existing rules, regulations ororders issued by the Government or any statutory authority the construction of thecomplex and the Apartment is suspended or stopped or delayed.”

Clause 4.c.ii) of the aforesaid Agreement reads as under:

“(ii) Similarly, the Developer shall be liable to pay compensation calculated @Rs.5/ per sq.ft. per month of the Super Area of the Apartment for the period ofdelay in offering the possession of the said apartment beyond the period indicatedin clause 4.a.i, save and except for reasons beyond the reasonable control of thedeveloper. These charges shall be adjusted at the time of issuance of Notice ofPossession issued by the Developer under clause 4.b. above subject to theapartment allottee (s) having complied with the provisions of this agreement. Incase the delay is occasioned in offering possession by the developer, the developershall be liable to pay.”

7. It would thus be seen that but for the exceptional circumstances mentioned in Clause 4.a.ii, theopposite party was required to hand over the possession of the apartment to the flat buyers within 36months from the date of signing the agreement with them. The exceptional circumstances whichcould justify delay in hand over the possession of the apartments were:

(a) Lockout

(b) Strike

(c) Slowdown

(d) Civil Commotion

(e) War, enemy action, terrorist action, earthquake or act of God and

(f) any reason or circumstance beyond the control of the developer.

The delay in handing over the possession of the apartments could also be justified if there was tobe a new legislation, regulation or order suspending, stopping or delaying the construction of thecomplex and the apartments.

8. Neither any new legislation was enacted nor an existing rule, regulation or order was amendedstopping suspending or delaying the construction of the complex in which apartments were agreed to besold to the complainants. There is no allegation of any lockout or strike by the labour at the site of the

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project. There is no allegation of any slowdown having been resorted to by the labourers of theopposite party or the contractors engaged by it at the site of the project. There was no civil commotion,war, enemy action, terrorist action, earthquake or any act of God which could have delayed thecompletion of the project within the time stipulated in the Buyers Agreement. It was contended by thecounsel for the OP that the expression ‘slow down’ would include economic slowdown or recession inthe Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having beenused alongwith the words lockout and strike, I has to be read ejusdem generis with the words lockoutand strike and therefore, can mean only a slow down if resorted by the labourers engaged in constructionof the project.

9. As regards, alleged shortage of labour, I find that no material has been placed on record by the OPthat despite trying, it could not be get labourers to complete the construction of the project within thetime stipulated in the Buyers Agreement. It was submitted by the learned counsel for the complainantsthat ordinarily big builders such as the OP in these cases, are contracting/subcontracting theconstruction work to the contractors engaged by them, instead of employing their own labourers on aregular basis, the purpose being to ensure that they are not saddled with the wage bill of those regularlabourers, in case the opposite party does not have adequate work for them. There is no evidence of theOP having been invited tenders for appointment of contractors / subcontractors for executing the workat the site of those projects and no contractor/ subcontractor having come forward to execute the projecton the ground that adequate labour was not available in the market. Therefore, it cannot be accepted thatthe opposite party could not have arranged adequate labour, either directly or through contractors/subcontractors, for timely completion of the project. As regards the alleged shortage of water, bricks andsand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procurewater, sand and brick in adequate quantity. This is also their case that the notification of theGovernment, being relied upon by the opposite party, is an old notification, which was in force even atthe time the opposite party promised possession in 36 months. There is no evidence of the opposite partyhaving invited tenders for supply of bricks and water and there being no response to such tenders. Infact, if the work is to be executed through contractors/subcontractors, the material such as bricks, sandand even water will be arranged by the contractor/subcontractor and not by the opposite party. Asnoted earlier, there is no evidence of the opposite party having invited tenders after awarding the workof project in question to the contractors/subcontractors and there being no response to such tenders. Therefore, I find no merit in the plea that the completion of the project was delayed due to nonavailability of water, sand and bricks in adequate quantity. As regards commonwealth games projectswork, on those projects was complete before the games were held in October 2010. The project inquestion on the other hand was required to be completed in phases, beginning end of 2012, i.e., morethan 2 years after the aforesaid games were concluded. In any case, it has been more than 4 ½ yearssince commonwealth games were held and even today the project in question is far from complete. Therefore, there is no merit in the contention that the completion of the project was delayed on accountof commonwealth games. Consequently, there is no escape from the conclusion that the delay inconstruction of the apartments cannot be attributed to any of the reasons mentioned in clause 4.a.ii of theBuyers Agreement.

10. Since the delay in construction of the apartments could not be justified by the OP, it is required topay compensation to the flat buyers. The contention of the learned counsel for the OP is that suchcompensation has to be calculated @ ₹5/ per sq. ft. of the super area of the apartment for the period ofdelay in offering the possession beyond the period indicated in clause 4.a.i of the Buyers Agreement, thecomplainants having agreed to the aforesaid term while agreeing to purchase the apartments. This wasalso the contention of the learned counsel for the OP that the terms of the contract are binding on theparties and cannot be altered by a consumer forum.

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The learned counsel for the complainant on the other hand, submitted that since they are requiredto pay interest to the OP @18% p.a. compounding quarterly, in the event of delay in making payment asstipulated in clause 2.c of the Buyers Agreement, there is no reason why the opposite party should notpay interest at the same rate to them, as compensation. The learned counsel for the parties, however,admitted that the current interest of taking housing loans from the banks is about 10% p.a. though it hadshot up to 11.5% per annum in last few years. It is also an admitted position that had the complainantsdeposited their money with a bank in a FDR instead of investing in the project of the OP, they wouldhave earned interest @ about10% p.a.

11. It is an undisputed proposition of law that ordinarily the parties are bound by the terms andconditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even aCourt to revise the said terms. The following view taken by the Hon’ble Supreme Court in this regard inBharathi Knitting Company Vs. DHL Worldwide Express JT 1996 (6) SC 254 is pertinent:

“It is seen that when a person signs a document which contains certain contractual terms,as rightly pointed out by Mr. R.F. Nariman, learned senior counsel, that normally parties arebound by such contract; it is for the party to establish exception in a suit. When a party to thecontract disputes the binding nature of the signed document, it is for him to prove the terms inthe contract or circumstances in which he came to sign the documents need to be established. Itis true, as contended by Mr. M.N. Krishnamani, that in an appropriate case the Tribunal withouttrenching upon acute disputed question of facts may decide the validity of the terms of thecontract based upon the fact situation and may grant remedy. But each case depends upon itsown facts”.

In PUDA Vs. Mrs. Shabnam Virk II (2006) CPJ 1(SC), it was stated in an advertisement issued byPUDA that the price quoted therein was purely tentative based on the then cost of construction and waslikely to be revised on the higher side by the time houses were completed. The respondent before theHon’ble Supreme Court challenged the demand of the additional cost raised by PUDA. The demandhowever, was upheld noticing the aforesaid clause in the advertisement.

However, a term of a contract, in my view will not be final and binding if it is shown that the consent tothe said term was not really voluntary but was given under a sort of compulsion on account of the persongiving consent being left with no other choice or if the said term amounts to an unfair trade practice. Itwas submitted by the learned counsel for the complainants that the term providing for payment of anominal compensation such as Rs.5/ per square foot of the super area having become the order of theday in the contracts designed by big builders, a person seeking to buy an apartment is left with no optionbut to sign on the dotted lines since the rejection of such term by him would mean cancellation of theallotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing aplot and then raising construction on it, therefore, is not in a position to protest resist the inclusion ofsuch a term in the Buyer’s Agreement, and has to rely upon the reputation of the builder, particularly ifhe is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer’s Agreement isnever shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer’sAgreement on the format provided by the builder, not only will he lose the booking, even the bookingamount/earnest money paid by him will be forfeited by the builder. I find merit in the above referredsubmissions of the learned counsel. A person who, for one reason or the other, either cannot or does notwant to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built upflat. It is only natural and logical for him to look for an apartment in a project being developed by a big

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builder such as the opposite party in these complaints. Since the contracts of all the big builders containa term for payment of a specified sum as compensation in the event of default on the part of the builderin handing over possession of the flat to the buyer and the flat compensation offered by all big buildersis almost a nominal compensation being less than .25% of the estimated cost of construction per month,the flat buyer is left with no option but to sign the Buyer’s Agreement in the format provided by thebuilder. No sensible person will volunteer to accept compensation constituting about 23% of hisinvestment in case of delay on the part of the contractor, when he is made to pay 18% compound interestif there is delay on his part in making payment.

12. It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of thebuyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, incase he does not honour his part of the contract by defaulting in giving timely possession of the flat tothe buyer. Such a term in the Buyer’s Agreement also encourages the builder to divert the fundscollected by him for one project, to another project being undertaken by him. He thus, is able to financea new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest whichthe Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest beingcharged by the Banks and Financial Institutions for financing projects of the builders is many timesmore than the nominal compensation which the builder would pay to the flat buyers in the form of flatcompensation. In fact, the opposite party has not even claimed that the entire amount recovered by itfrom the flat buyers was spent on this very project. This gives credence to the allegation of thecomplainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfairtrade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adoptsunfair methods or practice for the purpose of selling the product of the builder. Though, such a practicedoes not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterialconsidering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act areinclusive and not exhaustive, as would be evident from the use of word “including” before the words“any of the following practices”.

13. It was contended by the learned counsel for the opposite party that there are no specific pleadingsalleging unfair trade practices and therefore this Commission should not go into the question as towhether the inclusion of such a clause in the Buyer’s Agreement amounts to unfair trade practice or not. In support of his contention he relies upon the following observations made by the Hon’ble SupremeCourt in Secretary, Bhubneshwar Development Authority Vs. Susanta Kumar Mishra, (2009) 4SCC 684:

“Further, any fora under the Consumer Protection Act, 1986 (“the Act”, for short) beforegranting any relief to a complainant, should be satisfied that the complaint relates to any of thematters specified in Section 2(1)(c) of the Act, and that the complainant has alleged and madeout either unfair or restrictive trade practice by a trader, or defects in the goods sold or anydeficiency in a service rendered, or charging of excessive price for the goods sold, or offering ofany goods hazardous to life and safety without displaying information regarding contents, etc. Ifnone of these is alleged and made out, the complaint will have to be rejected”.

However, on fact, I find no merit in this contention. The complainants have specifically alleged thatsome of the clauses in the Buyer’s Agreement were one side and they were made to sign already

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prepared documents. It is also alleged that some of the clauses contained in the Buyer’s Agreement aretotally unreasonable and in favour of the opposite party only. It is further alleged that the clauseproviding for compensation at the nominal rate at Rs.5/ per square foot of the super area is unjust andexploits the complainants. It is also alleged that the opposite party has been utilizing the money of thecomplainants for its own purposes. Therefore, it would not be correct to say that the complaints lackpleadings which would make out a case of adoption of unfair trade practice on the part of the oppositeparty. I therefore, have no hesitation in holding that instead of paying nominal compensation of Rs.5/per square foot of the super area, the opposite party should pay adequate compensation to thecomplainants which would not only take care of the additional financial burden on them on account ofthe delay in construction of the flat but will also give some compensation to them for the harassment andmental agony which they have suffered all along and are likely to suffer atleast for some more time onaccount of the opposite party having not delivered the possession of the flat to them by the datestipulated in the Buyer’s Agreement.

14. As noted earlier, the cost of the borrowing for individual home buyers is about 10% per annumthough it had gone upto 11.5% in last few years. In my view, if the opposite party, pays simple interest@ 12% per annum to the complainants, that would not only take care of the additional financial burdenon them but also give some monetary compensation to them for their sufferings on account of the delayin handing over possession of the flat purchased by them.

15. It was contended by the learned counsel for the opposite party that some of the complainants planto shift to the flats booked by them only after their retirement, meaning thereby that right now they donot need a flat for their personal residence and they will let out the flat on taking possession from theopposite party. The contention is that that purchase of the flat by such persons would be for acommercial purpose and, therefore, they are not consumers within the meaning of Section 2(1)(d) of theConsumer Protection Act. I, however, find no merit in this contention. The expression commercialpurpose used in Section 2(1)(d) of the Act came up for consideration of this Commission in KavitaAhuja Vs. Shipra Estates Ltd., CC 137 of 2010 decided on 12022015 and the following view wastaken:

“The expression ‘commercial purpose’ has not been defined in the Act and therefore, asheld herein below by the Hon’ble Supreme Court in Laxmi Engineering Works Vs. P.S.G.Industrial Institute (1995) 3 SCC 583, we have to go by the dictionary meanings,

“In the absence of a definition, we have to go by its ordinary meaning ‘Commercial’denotes “pertaining to commerce” (Chamber’s Twentieth Century Dictionary); it means“connected with, or engaged in commerce; mercantile, having profit as the main aim” (CollinsEnglish Dictionary) whereas the word ‘commerce’ means “financial transactions especiallybuying and selling of merchandise on a large scale” (Concise Oxford Dictionary)”.

6. Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring oravailing services are concerned, a person can be said to have hired or availed services only ifthey are connected or related to the business or commerce in which he is engaged. In otherwords, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Actshould be availed for the purpose of promoting, advancing or augmenting an activity, theprimary aim of which is to earn profit with use of the said services. It would ordinarily includeactivities such as manufacturing, trading or rendering services. In the case of the purchase ofhouses which the service provider undertakes to construct for the purchaser, the purchase can besaid to be for a commercial purpose only where it is shown that the purchaser is engaged in the

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business of purchasing and selling houses and / or plots on a regular basis, solely with a view tomake profit by sale of such houses. If however, a house to be constructed by the service provideris purchased by him purely as an investment and he is not undertaking the trading of houses on aregular basis and in the normal course of the business profession or services in which he isengaged, it would be difficult to say that he had purchased houses for a commercial purpose. Aperson having surplus funds available with him would not like to keep such funds idle and wouldseek to invest them in such a manner that he gets maximum returns on his investment. He mayinvest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/areproposed to be constructed by the service provider, in the hope that he would get better return onhis investment by selling the said house(s) on a future date when the market value of such house(s) is higher than the price paid or agreed to be paid by him. That by itself would not mean thathe was engaged in the commerce or business of purchasing and selling the house (s).

7. Generating profit by way of trading, in my view is altogether different from earning capitalgains on account of appreciation in the market value of the property unless it is shown that theperson acquiring the property was engaged in such acquisition on a regular basis and it was byway of a business activity.”

If a person is residing, say, in a government accommodation and, therefore, does not immediatelyneed to occupy a residential flat and, hence let it out in the interregnum till he retires and has to vacatethe government accommodation it cannot be said that the residential accommodation is acquired by himfor a commercial purpose. The objective behind acquiring accommodation is to live in it, though on afuture date. Mere postponement of the date on which the purchaser has to shift to the residentialaccommodation does not convert the purpose for which accommodation is acquired to a commercialpurpose. I, therefore, find no merit in the contention.

16. It was next contended by the learned counsel for the opposite party that since the saleconsideration paid by the complainants was less than Rs.1,00,00,000/ the complaint is maintainablebefore the concerned State Commission and not before this Commission. Again, I find no merit in thecontention. The case of the complainants is that current market value of such apartments is not less thanRs.10,000/ per sq. ft. calculated accordingly the current market value of the individual flats booked bythe complainants comes to more than Rs.1,00,00,000/ in every complaint. One of the prayers made inthe complaint is to direct the opposite party to handover possession of the flat to the complainants. Forthe purpose of this relief, the current market value of the flat would be the pecuniary value of the serviceand since the said value is more than Rs.1,00,00,000/ in each case, it cannot be disputed that only thisCommission has the jurisdiction to entertain this complaint.

17. It was next contended by the learned counsel for the complainant that since the last date stipulatedin the buyers agreement for giving possession of the flat to them expired more than two years ago thecomplaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. It is by nowsettled legal proposition that failure to deliver possession being a continuous wrong it constitutes arecurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers canalways approach a Consumer Forum. It is only when the seller flatly refuses to give possession that theperiod of limitation prescribed in Section 24A of the Consumer Protection Act would began to run. In

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that case the complaint has to be filed within two years from the date on which the seller refuses todeliver possession to the buyer. However, in the present cases the opposite party did not refusepossession of the flats to the complainants at any point of time and, therefore, the cause of actioncontinues to subsist in favour of the complainants. Reliance in this regard may be place upon thedecision of the Hon’ble Supreme Court in Meerut Development Authority Vs. M.K. Gupta, IV(2012)CPJ 12 where the Hon’ble Supreme Court held that in such a case the buyer has a recurrent cause forfiling a complaint for nondelivery of possession of the plot.

18. It was also contended by the learned counsel for the opposite party that since the agreementsbetween the parties contains arbitration clause, arbitration and not a complaint before this Commissionis the appropriate remedy. I, however, find no merit in this contention. As provided in Section 3 of theConsumer Protection Act, the provision of this Act are in addition to the other remedies available to aconsumer. Therefore, the availability of arbitration as a remedy does not debar the complainant fromapproaching a consumer forum in a case of deficiency in the services rendered to him by the serviceprovider or adoption of unfair trade practices by him. This issue came up for consideration of theHon’ble Supreme Court in National Seeds Corporation Vs. M. Madhusudhan Reddy & Anr.(2012)2 SCC 506 and after taking into consideration the provisions of the Section 8 of the ArbitrationAct of 1996 and the Section 3 of the C.P. Act it was held that the plain language of Section 3 of the C.P.Act makes it clear that the remedy available in that Act is in addition to and not in derogation of theprovisions of any other law for the time being in force. The Hon’ble Supreme Court has also held thatthe complaint filed by a consumer before the consumer fora would be maintainable despite their beingan arbitration clause in the agreement to refer the dispute to the Arbitrator. In view of the above referredauthoritative pronouncement of the Hon’ble Supreme Court which was later followed by a ThreeMembers Bench of this Commission in DLF Ltd. Vs. Mridul Estate Pvt. Ltd., R.P. No.412 of 2011decided on 13052013, the aforesaid contention advanced by the learned counsel for the opposite partyis liable to be rejected.

19. For the reasons stated hereinabove, I am of the considered view that the opposite party shouldhandover possession of the apartments booked by the complainants on or before the last date stipulatedin the letter of the opposite party dated 27052015. In the cases of those complainants who are theinitial allottees of the apartments or who acquired the same within one year of the initial allotment, theopposite party should also pay compensation to them in the form of simple interest at the rate of 12%per annum with effect from the date of possession stipulated in the agreement till the date on which thepossession is actually handed over to them. The persons who purchased the flats within one year of theinitial allotment, ought to be treated at par with the initial allottees, because atleast two more years beingstill available to the opposite party at the time of purchase by them, they could not have anticipated thatthe builder will not be able to honour its commitment, as regards the stipulated date of delivery ofpossession. No separate compensation for the mental agony, harassment and suffering needs to be paidby the opposite party to the complainants. However, in the case of those complainants who acquire theflats by way of resale more than one year after the initial allotment, the opposite party should paycompensation in the form of simple interest at the rate of 12% per annum with effect from three yearsfrom the date of the repurchase till the date on which the possession is delivered to them. As in othercases no compensation would be payable for the first three years from the date of initial allotment of theflat. For the interregnum i.e. between three years from the date of initial allotment and three years fromthe date of repurchase by them, compensation shall be paid by the opposite party at the rate of Rs.5/ persq. ft. of the super area in terms of clause 4.c of the buyers agreement. I am awarding lessercompensation to those purchased the flat from the initial allottee more than one year after the date of

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initial allotment, considering the decision of the Hon’ble Supreme Court in Haryana UrbanDevelopment Authority Vs. Raje Ram, AIR 2009 SC 2030. In that case, HUDA allotted a plot ofland to one Madan Lal who deposited the 25% of the cost of the plot. Later, HUDA notified revision ofthe price and gave an option to the allottees to either accept the revision or receive back the initialdeposit with interest. Onn the request of the allottee and the respondent the allotment was transferred infavour of the respondent. Since HUDA failed to deliver possession of the plot within the stipulated time,the respondent approached the concerned District Forum expressing grievance against nondelivery ofthe possession within the stipulate time. HUDA then offered possession of the plot to him and theDistrict Forum disposed of the complaint with a direction to HUDA to pay interest to the respondent atthe rate of 18% per annum from the date of deposit till the date of offer of possession. Having beenunsuccessful before the State Commission and this Commission, HUDA approached the Hon’bleSupreme Court by way of special leave. It was held by the Hon’ble Supreme Court that the respondentknew at the time the plot was realloted to him that there was delay and in spite of that he took the reallotment. It was held that the case of the respondent could not be compared to the case of the originalallottees. The respondents were aware at the time of purchase that the time for performance was notstipulated as the essence of the contract and the original allottee had accepted the delay. It was,therefore, held that the respondents were not entitled to interest on the amount deposited by them. Thepersons who purchased flats more than one year after the date of initial allotment, could foresee that thebuilder will not be able to deliver the possession of the flat by the stipulated date. This is not their casethat when they acquired the allotment by way of repurchase, they had found that the builder had alreadycompleted the development which it was expected to complete by that time or that the builder hadassured them that it would give possession to them by the original date stipulated in the agreement. Suchpersons therefore cannot be treated at par with the original allottees or those who acquired the allotmentwithin one year of the initial allotment.

20. It was contended on behalf of the complainants that they should be awarded compound interest atthe rate of 18% per annum, which was the rate at which they were to pay interest to the builder, in theevent of default on their part in making timely payment. I however, find no merit in the contention. Theopposite parties admittedly did not agree to pay compounded interest to the complainants @ 18% perannum in case they were not able to hand over possession of the apartments within the time stipulated inthe agreement. In such a case, the complainants would be entitled only to compensation commensuratewith the financial loss actually suffered by them on account of the delay on the part of the oppositeparties in handing over possession of the apartments to them and some compensation for the mentalagony claimed by them on account of the delay in getting possession of the flats, but, they cannot seekto make a windfall over and above the actual financial loss suffered by them. A consumer coming to theConsumer Forum alleging deficiency on the part of the opposite party in rendering services to him canseek and recover a just and fair compensation but cannot seek to earn profit like in a commercialventure.

21. It transpired during the course of arguments that the service tax has increased with effect from01.06.015. Had the opposite party delivered possession in time, the complainants would have paidservice tax at the prerevised rate. I therefore, hold that the increase in service tax with effect from01.6.2015 should be borne by the opposite party.

22. I also feel that in order to ensure that the opposite party does honour the revised date of delivery of

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possession; compensation in the form of interest at a rate higher than 12% per annum should be paid bythe opposite party, if the revised date of delivery of possession is not honoured by the opposite party.

23. For the reasons stated herein above, the complaints are disposed of with the following directions:

(a) The opposite party shall deliver possession of the respective flats of thecomplainants to them on or before the last date stipulated in its letter dated 27.05.2015;

(b) The opposite party shall pay to (i) the original allottees and (ii) to those whoacquired the allotment by way of repurchase, within one year of the date of the initialAgreement of their respective flats, compensation in the form of simple interest at therate of 12% per annum with effect from 36 months from the date of the initial Agreementtill the date possession is delivered to them. The interest payable till 31.08.2015 shall bepaid by 10.09.2015, in three equal instalments, by the 10th of each month i.e. by 10th

July, 2015, 10th August, 2015 and 10th September, 2015. Thereafter, compensation inthe form of interest, in terms of this order, shall be paid on monthly basis by the 10th ofeach succeeding month.

(c) Such of the complainants, who acquired allotment of the flat by way of repurchasemore than one year after the date of the initial allotment of their respective flats, shall bepaid compensation by way of simple interest at the rate of 12% per annum, with effectfrom 36 months from the date of repurchase by them, till possession is delivered to them. They will also be paid compensation at the rate of Rs.5/ per square foot of the super areaof their respective flat for the period between 36 months from the date of the initialBuyers Agreement of their respective flats and 36 months from the date of repurchase ofthe flat by them.

(d) The increase in service tax with effect from 01.06.2015 shall be borne by theopposite party, in all these cases.

(e) If the opposite party fails to deliver possession by the last date stipulated in its letterdated 27.05.2015, it shall pay compensation to all the complainants in the form of simpleinterest at the rate of 18% per annum, for each day there is delay, beyond the datestipulated in the said letter dated 27.05.2015, in delivering possession to thecomplainants.

(f) The opposite party shall pay Rs.5,000/ as the cost of litigation in each complaint.

......................JV.K. JAIN

PRESIDING MEMBER

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