Advantage Consumer

Builder penalised for not handing over possession of the flat

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI

CONSUMER CASE NO. 2557 OF 2017

HARSHAD JAIN & ANR,
R/O F-186, Richmond Park, DLF Phase-IV
Gurgaon-122002
Haryana ...........Complainant(s)
Versus
M/S. UNITECH LIMITED
6, Community Centre, Saket
New Delhi-110017 ...........Opp.Party(s)

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

Dated : 01 Feb 2019

ORDER

JUSTICE V.K. JAIN, (ORAL)

          The complainants, namely, Harshad Jain and Kamini Jain booked a residential flat with the OP in a project namely ‘Unitech South Park, which the OP was to develop in Sector 70 of Gurgaon. Vide allotment letter dated 31.03.2011, Flat No.A4-01-0101 in the aforesaid project was allotted to them for a consideration of Rs.9718120/-. The parties then executed an Apartment Allotment Agreement dated 17.08.2011, incorporating their respective obligations in respect of the said transaction. In terms of clause 4.a(i) of the said agreement, the possession was to be delivered within 36 months of the execution of the agreement. The possession therefore, ought to have been offered by 17.08.2014. The grievance of the complainants is that the possession has not been offered to them and even the construction is not complete despite they having already paid Rs.9370794/- to the OP. The complainants are, therefore, before this Commission seeking refund of the amount paid by them to the opposite party along with compensation etc.

2.       The opposite party was served on 23.11.2017 and filed an application seeking extension of time to file its written version. The delay in filing the written version was condoned and the requisite extension was granted vide order dated 21.2.2018 subject to payment of Rs.25,000/- as cost to the complainants, within two weeks from the date of the order. Since the cost was not paid, the written version filed by the OP was rejected vide order dated 5.7.2018.

3.      I have heard the learned counsel for the parties and have considered the affidavit and documents filed by the complainants.

4.      The documents coupled with the affidavits filed by the complainants prove the allotment made to them as also the payment received by the OP in respect of the flat allotted to the complainants. Since the possession of the allotted flat has not been offered to the complainants within three years of the execution of the agreement, which expired on 17.8.2014 or even thereafter, they are entitled to seek refund of the amount paid by them to the opposite party along with compensation etc.

5.      The learned counsel for the complainants states on instructions that the complainants are restricting their claim to the refund of the principal amount paid by them to the opposite party, along with compensation in the form of simple interest @ 10% per annum in terms of Clause 4.e of the buyers agreement, which reads as under:
          “4.e (Default)          If for any reason, the developer is not in a position to offer the allotted apartment, as agreed herein, the developer will offer the apartment allottee (s) an alternative property in any complex developed, underdevelopment or proposed to be develop in the surrounding area / projects and if no alternative property is available will refund the amount paid by the apartment allottee (s) in full with interest @ 10% per annum from the date of payment (s) by the apartment allottee (s) without any further liability to pay any damages, charges or compensation.”

6.      The learned counsel for the complainant also states that several other consumer complaints in respect of this very project have already been allowed by this Commission. A reference in this regard is made to CC No. 182 of 2015 Ranjana Nagpal & Anr. Vs. M/s Unitech Limited & Anr. decided on 29.09.2016. Reference is also made to several other decisions passed by this Commission following its decision in Ranjana Nagpal (supra), to the extent it is relevant, reads as under:-
“3.      The complaints have been resisted by the opposite party on identical grounds. The grounds taken in the written version of the opposite party have repeatedly been considered and rejected by this Commission in a number of cases. The following primarily are the grounds on which the complaints have been resisted:-
1.   The opposite party submitted application dated 10.9.2011 to the Ministry of Environment and Forests for obtaining environmental clearance for this project but the said environmental clearance came to be accorded only on 10.1.2014, the intervening time having been taken by the State Expert Appraisal Committee (SEAC) and State Environment Impact Assessment Authority (SEIAA).
2.   Some of the buyers in this project filed a complaint with EOW Cell, of Delhi Police under section 406/420/120 B of IPC and the matter is under investigation of Delhi Police.
3.   There was slump in the real estate market, because of overall economic conditions, as a result of which the supply of labour and raw-material became scarce.
4.   There was shortage of labour and the building material due to Common Wealth Games held in October 2010.
5.   There was shortage of labour due to implementation of social schemes such as National Rural Employment Guarantee Scheme (NREGS) and Jawahar Lal Nehru National Urban Renewal Mission (JNNURM)
6.   The use of ground water for building purposes was stayed by Punjab & Haryana High Court vide its order dated 16.7.2012.
7.   Restrictions were placed by Ministry of Environment and Forests vide Notification dated 14.9.1999 which resulted in the reduction in availability of bricks in the market since manufacture of clay bricks was stopped within a radius of 50 km from Coal and Ignite based Thermal Power Plants without mixing at least 25% of ash with soil.
8.   There was shortage of sand on account of mining in the Aravali Region having been stopped by the Hon’ble Supreme Court.

4.      As far as the delay in grant of the environmental clearance is concerned, admittedly it was not disclosed to the flat buyers, either in the Buyer’s Agreement or in the allotment letters that the requisite environmental clearance had not been granted by the concerned authorities. Ideally the environmental clearance ought to have been obtained before accepting the booking of the flats. In any case, if the opposite party had applied for the grant of the requisite environmental clearance before booking of the flats allotted to the complainants, it ought to have disclosed to them that though the said environmental clearance had been applied, the same had not been granted. In case the environmental clearance was applied after the booking, the opposite party ought to have disclosed to the buyers at the time of booking itself that they were yet to apply for the grant of the requisite environmental clearance. Thus neither the opposite party obtained the requisite environmental clearance before booking of the flats nor did it disclose to the flat buyers that the requisite environmental clearance was yet to be granted.
This issue came to be considered by this Commission in Ravikant Bhatt Vs. M/s Unitech Ltd. – CC No.1232 of 2015 decided on 22.9.2016 and the following view was taken:-
“6.     As regards the delay in obtaining the environmental clearance, the opposite party knew before accepting booking from the complainants and allotting a flat to them that since the size of the project was more than 20,000 sq.ft. of built up area, environmental clearance in terms of the Notification dated 14.9.2006 would be necessary and the said clearance would be given only after the project was approved by State Environment Impact Assessment Committee and then by State Level Environment Impact Assessment Authority. It was, therefore, necessary for the opposite party to either obtain the requisite environmental clearance before accepting the booking or at least inform the buyers that the construction would commence only after obtaining the requisite environmental clearance which they were yet to receive. This is particularly necessary in a case where the builder is promising delivery of the apartment in a time-bound manner linked with the date of the Buyer’s Agreement and not with the date on which the construction actually commences after obtaining all the requisite clearances. If such a disclosure is made to the buyer and still he chooses to make a booking knowing fully well that the builder may not be held responsible for the delay to this extent it is attributable solely to the concerned environmental authority, it will not be possible to hold the builder responsible for the delay in the aforesaid extent.”

5.      More importantly even after obtaining the requisite environmental clearance, the opposite party has not been able to complete the construction and in fact the construction admittedly has not even reached the level of completing the superstructure. The time of more than rather 2 years and 8 months which was available to the opposite party after grant of the requisite environmental clearance was sufficient if the said opposite party was keen to complete the project, to either complete the construction or at least reach an advanced stage of the construction. Therefore, it would be difficult to accept the plea that the delay in offering possession of the flats to the complainants has happened on account of the time taken in obtaining the environmental clearance.

6.      As regards the alleged non-availability of ground water on account of the use of ground water in building activities, having been stayed by the Punjab and Haryana High Court, the following view taken by this Commission in Cap. Gurtaj Singh Sahni Vs. Unitech Limited, Consumer Complaint No.603 of 2014 and connected matters, decided on 2.5.2016 is pertinent:-
“6. The next question which arises for consideration is the quantum of compensation which should be paid to the complainants for the delay in completion of the villas. As far as the prohibition on use of underground water in construction is concerned, the learned counsel for the complainant has drawn my attention to the order dated 21.08.2012 passed by a Divisional Bench of Punjab & Haryana High Court in Civil Writ Petition No. 20032 of 2008 wherein the High Court noted that the public notice issued under Section-5(3) of the Environment Protection Act, 1986 was published in the newspaper on 26.12.2000. It further shows that the said notice had imposed a complete ban upon the use of underground water in the construction without prior approval of the competent authority. It was noted by the High Court that despite publication of the aforesaid notice, the builders continued to use underground water for construction purposes. If there was a complete ban on use of underground water for construction and the said prohibition was notified on 26.12.2000, the opposite party must have taken into account, the impact of the said prohibition while entering into Buyers Agreements with the complainants. Therefore, it is not open to the opposite party to rely upon the said prohibition in order to justify the delay in construction of the villas sold to the complainants. The opposite party knew at the time of entering into agreements with the complainants that it will not be able to use underground water for construction of the villas and therefore, will have to make alternative arrangements from authorized sources for making the water available for the said construction. Therefore, the aforesaid prohibition on use of the underground water for construction purpose does not justify the delay in completion of the construction. In any case, no material has been placed by the opposite party on record to show that efforts were made by it during the relevant period to procure water from alternative sources but it was unable to obtain the water from the said sources. More importantly, in the Buyers Agreement executed between the parties, it was not disclosed to the buyers that since no underground water can be used for construction purpose, the developer will have to arrange water from alternative sources and in case it is not able to arrange water, the construction would be delayed and in that case, it will not be held responsible for the delay in completion of the construction.”

7.      As regards the alleged shortage of labour and building material on account of Commonwealth Games, the plea taken by the opposite party is wholly misplaced since the said games were over in October 2010 much before the allotment in this project was made to the complainants.

8.      As regards the alleged economic slowdown and consequent recession in the real estate market, the same cannot be a valid ground for delaying the possession of the flats to the complainants since some of the buyers made advance payment of almost 95% of the sale consideration whereas the other buyers were to make payment linked with the progress of construction and this is not the case of the opposite party that they had defaulted in performing their contractual obligations as regards the payment of the sale consideration. Therefore, it cannot be said, as far as this project is concerned, that the construction was delayed on account of funds not being available with the opposite party.

9.      As regards the alleged shortage of labour due to NREGS and Jawahar Lal Nehru National Urban Renewal Mission, there is no evidence of the opposite party having attempted to recruit labour and having not found the requisite labour available in the market. Ordinarily such big builders operate by giving contracts/sub-contracts to third parties. There is no evidence of the opposite party having not been able to get any contractor/sub-contractor on account of non-availability of labour and/or building material in the market. Moreover, this is not the case of the opposite party that no construction activity took place in Gurgaon in the last 5 years or so. Had the labour and/or building material not been available in the market, the problem would have been faced not only by the opposite party but by all other builders as well as the individuals who were seeking to construct houses in this area. Therefore, I find no merit in the aforesaid plea taken by the opposite party.

10.    As far as filing of a complaint with EOW Cell of Delhi Police, I fail to appreciate how filing such a complaint could have justified the delay in completing the construction. Such a complaint rather should have put pressure on the opposite party to expedite the completion of the construction in order to ventilate the grievance of the flat buyers.

11.    As regards the alleged shortage of bricks and sand, there is no evidence of the opposite party having invited tenders for supply of bricks and sand and the said material having not been available in the market. Moreover, there is no evidence of any sub-contractor/contractor of the opposite party having stopped the work awarded to him on account of non-availability of labour and/or building material in the market. It is possible that the wages of the labour and the cost of the building material may have gone up with the passage of time but it would be difficult to accept that neither the required labor nor the building material in sufficient quantity was available in the open market.

12.    For the reasons stated hereinabove, I am satisfied that the delay in construction of the flats allotted to the complainants did not happen on account of reasons beyond the control of the opposite party. Therefore, the said opposite party was deficient in rendering services to the complainants by not delivering timely possession of the flats allotted to them.”

7.    For the reasons stated hereinabove, the complaint is disposed of with the following directions:-
(i)     The OP shall refund the entire principal amount of Rs.9370794/- to the complainants along with compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.
(ii)      The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants.
(iii)     The payment in terms of this order shall be made within three months from today.

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