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TMI Blog2015 (6) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... o him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer’s Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him.Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. The cost of the borrowing for individual home buyers is about 10% per annum though 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 burden on them but also give some monetary compensation to them for their sufferings on account of the delay in handing over possession of the flat purchased by them. I am of the considered view that the opposite party should handover possession of the apartments booked by the complainants on or before the last date stipulated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plex known 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 be delivered 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 some other persons, from whom they were later purchased by the concerned complainants. However, there was no change in the date stipulated in the Buyers Agreement for delivery of possession of the flat. The grievance of the complainants is that neither the possession of the apartments has been given to them nor is the construction complete though the last date stipulated in the Buyer s Agreement for delivery of the possession to them has already expired more than 2 years ago. The complainants are, therefore, before this Commission seeking delivery of the possession of the flats agreed to be sold to them or in the alternative 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Completion of construction application of OC Offer of possession of apartments A-9 to A-11 31st Dec-15 28th Feb-16 A-1 to A-4 31st May-16 31st Jul-16 A-5 to A-8 30th Sep.-16 30th Nov-16 B-1 to B-5 31st Dec-16 28th Feb-17 E-1 E-2 30th May-17 31st Jul-17 D-1 D-2 31st Oct -17 31st Dec-17 C-1 to C-3 31st Dec-17 28th Feb.-18 The opposite party also offered to pay compensation at the revised rate, i.e., ₹ 13/- per sq. ft., after expiry of the revised date of possession. Yet another condition imposed in the said letter is that post-15.06.2015, the transfree or nominees of the existing allottees shall not be eligible for the revised penalty of ₹ 13/- per sq. ft. per month. It is also stated in the aforesaid letter that if possession is delayed beyond the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- (ii) Similarly, the Developer shall be liable to pay compensation calculated @ ₹ 5/- per sq.ft. per month of the Super Area of the Apartment for the period of delay in offering the possession of the said apartment beyond the period indicated in clause 4.a.i, save and except for reasons beyond the reasonable control of the developer. These charges shall be adjusted at the time of issuance of Notice of Possession issued by the Developer under clause 4.b. above subject to the apartment allottee (s) having complied with the provisions of this agreement. In case the delay is occasioned in offering possession by the developer, the developer shall be liable to pay. 7. It would thus be seen that but for the exceptional circumstances mentioned in Clause 4.a.ii, the opposite party was required to hand over the possession of the apartment to the flat buyers within 36 months from the date of signing the agreement with them. The exceptional circumstances which could justify delay in hand over the possession of the apartments were:- (a) Lock-out (b) Strike (c) Slow-down (d) Civil Commotion (e) War, enemy action, terrorist action, earthquake or act of God and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not available in the market. Therefore, it cannot be accepted that the opposite party could not have arranged adequate labour, either directly or through contractors/sub-contractors, for timely completion of the project. As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity. This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in 36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders. In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party. As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms. The following view taken by the Hon ble Supreme Court in this regard in Bharathi 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 are bound by such contract; it is for the party to establish exception in a suit. When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established. It is true, as contended by Mr. M.N. Krishnamani, that in an appropriate case the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy. But each case depends upon its own facts . In PUDA Vs. Mrs. Shabnam Virk II (2006) CPJ 1(SC), it was stated in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding over possession of the flat to the buyer and the flat compensation offered by all big builders is 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 the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if 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 the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer s Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aying information regarding contents, etc. If none 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 that some of the clauses in the Buyer s Agreement were one side and they were made to sign already prepared documents. It is also alleged that some of the clauses contained in the Buyer s Agreement are totally unreasonable and in favour of the opposite party only. It is further alleged that the clause providing for compensation at the nominal rate at ₹ 5/- per square foot of the super area is unjust and exploits the complainants. It is also alleged that the opposite party has been utilizing the money of the complainants for its own purposes. Therefore, it would not be correct to say that the complaints lack pleadings which would make out a case of adoption of unfair trade practice on the part of the opposite party. I therefore, have no hesitation in holding that instead of paying nominal compensation of ₹ 5/- per square foot of the super area, the opposite party should pay adequate compensation to the complainants which would not only take care of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the expression Commerce as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - in every complaint. One of the prayers made in the complaint is to direct the opposite party to handover possession of the flat to the complainants. For the purpose of this relief, the current market value of the flat would be the pecuniary value of the service and since the said value is more than ₹ 1,00,00,000/- in each case, it cannot be disputed that only this Commission has the jurisdiction to entertain this complaint. 17. It was next contended by the learned counsel for the complainant that since the last date stipulated in the buyers agreement for giving possession of the flat to them expired more than two years ago the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. It is by now settled legal proposition that failure to deliver possession being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers can always approach a Consumer Forum. It is only when the seller flatly refuses to give possession that the period of limitation prescribed in Section 24A of the Consumer Protection Act would began to run. In that case the complaint has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, I am of the considered view that the opposite party should handover possession of the apartments booked by the complainants on or before the last date stipulated in the letter of the opposite party dated 27-05-2015. In the cases of those complainants who are the initial allottees of the apartments or who acquired the same within one year of the initial allotment, the opposite 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 the possession is actually handed over to them. The persons who purchased the flats within one year of the initial allotment, ought to be treated at par with the initial allottees, because atleast two more years being still available to the opposite party at the time of purchase by them, they could not have anticipated that the builder will not be able to honour its commitment, as regards the stipulated date of delivery of possession. No separate compensation for the mental agony, harassment and suffering needs to be paid by the opposite party to the complainants. However, in the case of those complainants who acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allottee had accepted the delay. It was, therefore, held that the respondents were not entitled to interest on the amount deposited by them. The persons who purchased flats more than one year after the date of initial allotment, could foresee that the builder will not be able to deliver the possession of the flat by the stipulated date. This is not their case that when they acquired the allotment by way of repurchase, they had found that the builder had already completed the development which it was expected to complete by that time or that the builder had assured them that it would give possession to them by the original date stipulated in the agreement. Such persons therefore cannot be treated at par with the original allottees or those who acquired the allotment within one year of the initial allotment. 20. It was contended on behalf of the complainants that they should be awarded compound interest at the rate of 18% per annum, which was the rate at which they were to pay interest to the builder, in the event of default on their part in making timely payment. I however, find no merit in the contention. The opposite parties admittedly did not agree to pay compounded interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, compensation in the form of interest, in terms of this order, shall be paid on monthly basis by the 10th of each succeeding month. (c) Such of the complainants, who acquired allotment of the flat by way of repurchase more than one year after the date of the initial allotment of their respective flats, shall be paid compensation by way of simple interest at the rate of 12% per annum, with effect from 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 ₹ 5/- per square foot of the super area of their respective flat for the period between 36 months from the date of the initial Buyers Agreement of their respective flats and 36 months from the date of repurchase of the flat by them. (d) The increase in service tax with effect from 01.06.2015 shall be borne by the opposite party, in all these cases. (e) If the opposite party fails to deliver possession by the last date stipulated in its letter dated 27.05.2015, it shall pay compensation to all the complainants in the form of simple interest at the rate of 18% per annum, for each day there is delay, beyond the date stipulated in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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