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TMI Blog2020 (11) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made without prejudice to any other remedy available to him . The right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed. The proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession. It is upto the allottee to proceed either Under Section 18(1) or under proviso to Section 18(1). - It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora. Proviso to Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it And Vineet Saran , JJ. For the Petitioner : Mr. Simranjeet Singh, Adv. Ms. Rea Dube, Adv. Mr. Gautam Talukdar, AOR For the Respondent : Respondent-in-person Ms. Priyanjali Singh, AOR Mr. Rahul Rathore, Adv. Mr. Karunesh Kumar Shukla, Adv. JUDGMENT Uday Umesh Lalit, J. 1. These appeals- Arising out of Civil Appeal Diary No. 9796 of 2019 Under Section 23 of the Consumer Protection Act, 1986 (hereinafter referred to as the CP Act ) are directed against the common judgment and order dated 12.09.2018 passed by the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as the Commission ) in Consumer Case Nos. 3011, 3012, 3013, 3014, 3015, 3016, 3017, 3018, 3019 and 3020 of 2017. The relevant facts leading to the filing of the aforesaid Consumer Cases are almost identical and for the present purposes the facts leading to the filing of Consumer Case No. 3011 of 2017 are set out in detail and the appeal arising therefrom is taken as the lead appeal. The connected appeal- Arising out of Civil Appeal Diary No. 9793 of 2019 seeks to challenge the judgment and order dated 09.08.2018 passed by the Commission in Consumer Case No. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) not being in default under any term of this Agreement, compensation @ ₹ 5/- per sq. ft. equal to ₹ 53.8/- Per Sq. Meter of the super area of the said Apartment per month for the period of such delay beyond three half years or such extended periods as permitted under this Agreement. The adjustment of such compensation shall be done only at the time of settling the final accounts for handing over/conveyancing the said Apartment to the intending Allottee(s) first named in this Agreement and not earlier. Clause 41 of the Agreement was as under: 41. FORCE MAJURE The Developer/Company shall not be held responsible or liable for not performing any of its obligations or undertakings provided for in this Agreement if such performance is prevented, delayed or hindered by an act of God, fire, flood, explosion, war, riot, terrorist acts, sabotage, inability to procure or general shortage of energy, labour, equipment, facilities, materials or supplies, failure of transportation, strikes, lock outs, action of labour unions or any other cause (whether similar or dissimilar to the foregoing) not within the reasonable control of the Developer/Company. 5. On 01.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges are to be paid after 42 months of period that is taken by the O.P. to construct the houses as per the buyer's agreement. This shows that the O.P. has found a cheap source of funding the commercial projects from the hard earned savings and borrowed money of innocent residential apartments/house buyers like the present complainants. The O.P. is raising funds at the interest rate of mere 1.4% per annum and that too with initial 42 months of interest free duration. 30. That the value of goods/services along with compensation claimed in the present complaint is above one crore rupees hence the complainants are entitled to invoke the pecuniary jurisdiction of this Hon'ble Commission. The present complaint has been assessed for a sum of ₹ 1,16,94,579/- and requisite fee i.e. ₹ 5000/- by way of a demand draft payable to THE REGISTRAR, NCDRC New Delhi is being paid with this complaint. Value of goods and services ₹ 76,43,000/- Compensation claimed ₹ 40,51,579/- 32. In view of the above, it is, therefore, most respectfully prayed that this Hon'ble Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, bank and financial institutions which are related to the project until he transfers the physical possession of the real estate project to the allottees or the associations of allottees, as the case may be; (vii) The Promoter shall be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the Municipal Corporation, Gurugram or any other local authority/Association of the Allottees, as the case may be; (viii) The Promoter shall not accept a sum more than ten percent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force; (ix) The Promoter shall adhere all the terms and conditions of this registration and license, sanctioned plans and other permissions issued by Competent Authorities under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provision of the Real Estate (Regulation and Development) Act 2016 and the same shall be displayed at the site or such other place as may be specified by the Regulations made by the Authority. 8. In its response dated 18.01.2018 to the aforestated Consumer Case No. 3011 of 2017, the Appellant challenged the jurisdiction of the Commission inter alia, on the ground that the apartment having been booked for commercial purposes, the Respondents would not come within the definition of the consumer Under Section 2(d) of the CP Act. No reference was however made to the fact that the Project had been registered under the RERA Act. It was submitted: 8. That the contents and averments made in para 8 are wrong and denied. It is denied that the date of possession of the unit was 30th May, 2017. It is submitted that the Respondents had clearly mentioned the Schedule for possession of the said apartment/Unit was based upon its present plans and estimates and subject to all just exceptions, contemplates to complete the construction of the said building/said apartment within a period of three and half years for the date of execution of this agreement unless there is delay or there shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission by the Developer that the construction is still not completed. Additionally, even the specific date of delivery of possession has not been mentioned anywhere either in the Written Version or in the Affidavit or even in the letter dated 03.04.2017 which the Counsel is relying upon. Concluding that the Appellant was deficient in rendering service, the Commission granted relief to the Respondents in following terms: 14. Keeping in view the admitted incomplete construction, the fact that some of the Complainants have also taken bank loans and are paying EMIs and considering the stipulation provided in Clause 11.4, this Complaint is partly allowed directing the Developer to refund the amounts deposited with simple interest @ 9% p.a. from the respective dates of deposits till the date of realization together with costs of ₹ 50,000/- to be paid to each of the Complainants. The directions are to be complied within fours weeks from the date of receipt of a copy of the order, failing which, the amount shall attract interest @ 12% p.a. for the said period. 11. Similarly, all other complaints were allowed by the Commission granting relief of refund of the amounts depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a consequence of the said event, numerous persons including the Appellant suffered shortage of cash which resulted in delay in delivering possession to the Respondent. It is humbly submitted that the shortage of cash ensuing as a result of the Demonetization policy resulted in the stopping of work since the process of construction requires many payments to be made in cash on a day to day basis, for example, wages paid to daily wage workers, payments made against delivery of construction materials, etc. 14. After issuance of notice on 05.04.2019, it was submitted by the Respondents that the Appellant had partially refunded the amounts in terms of the directions of the Commission. Following details indicate that in four out of ten cases, partial refund was made. S. No. Consumer Case Number Amount Directed to be Refunded by Appellant to Complainant(s) (In Rupees) Amount Refunded by Appellant (In Rupees) 1. Consumer Case No. 3011 of 2017 ₹ 63,53,625/- 10,00,000/- 2. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the RERA Act. The Commission, therefore, ought not to have entertained the Consumer Cases. e) The Registration Certificate dated 17.11.2017 being valid upto 31.12.2020, the Appellant could not be said to have delayed the construction and consequently, there could be no finding that there was deficiency on part of the Appellant. f) The order passed in the case of Himanshu Giri had directed payment of interest @ 10.75% per annum without issuing any direction for refund of money. The approach so adopted would be conducive to completion of construction and at the same time would balance the interest of the allottees. g) Considering the provisions of the RERA Act and the fact that the registration being valid upto 31.12.2020, the orders passed by the Commission be set aside and instead the Complainants be granted interest @ 10.75% p.a. on the amounts deposited; whereby the Project would be completed without putting the Appellant under any financial strain and at the same time the relief in the nature of interest on investment would also be accruable to the allottees. 16. Ms. Priyanjali Singh, learned Advocate for the Respondents as well as for some of the other Complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e we deal with the issues about the applicability and effect of the RERA Act as well as the effect of registration of the Project under the RERA Act, the relevant provisions of the CP Act and the RERA Act may be extracted: A] The Consumer Protection Act, 1986 The CP Act was enacted, inter alia, to provide for better protection of the interest of the consumer ; to promote and protect the rights of consumers such as the rights to seek redressal against unfair trade practices or unscrupulous exploitation of consumers . Sections 3, 12(4) and 24 were to the following effect: 3. Act not in derogation of any other law.-The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. 12. Manner in which complaint shall be made. .... (1) ... ... ... (2) ... ... ... (3) ... ... ... (4) Where a complaint is allowed to be proceeded with Under Sub-section (3), the District Forum may proceed with the complaint in the manner provided under this Act: Provided that where a complaint has been admitted by the District Forum, it shall not be transferred to any other court or tribunal or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a real estate project prior to commencement of this Act; (c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project. Explanation.-For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately. 4. Application for registration of real estate projects (1) Every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be prescribed. (2) The promoter shall enclose the following documents along with the application referred to in Sub-section (1), namely: (a) a brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority), and the particulars of registration, and the names and photographs of the promoter; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details; (C) the time period within which he undertakes to complete the project or phase thereof, as the case may be; (D) that seventy per cent of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose: Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project: Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project: Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Sub-section (2) of Section 4 for completion of the project or phase thereof, as the case may be. 18. Return of amount and compensation (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,- (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: PROVIDED that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. (2) The promoter shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apartment or plot or building as the case may be, by the promoter. (6) Every allottee, who has entered into an agreement for sale to take an apartment, plot or building as the case may be, Under Section 13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any. (7) The allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges to be paid Under Sub-section (6). (8) The obligations of the allottee Under Sub-section (6) and the liability towards interest Under Sub-section (7) may be reduced when mutually agreed to between the promoter and such allottee. (9) Every allottee of the apartment, plot or building as the case may be, shall participate towards the formation of an association or society or cooperative society of the allottees, or a federation of the same. (10) Every allottee shall take physical possession of the apartment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a Technical or Administrative Member, he is a person who is well-versed in the field of urban development, housing, real estate development, infrastructure, economics, planning, law, commerce, accountancy, industry, management, public affairs or administration and possesses experience of at least twenty years in the field or who has held the post in the Central Government or a State Government equivalent to the post of Additional Secretary to the Government of India or an equivalent post in the Central Government or an equivalent post in the State Government. (2) The Chairperson of the Appellate Tribunal shall be appointed by the appropriate Government in consultation with the Chief Justice of High Court or his nominee. (3) The Judicial Members and Technical or Administrative Members of the Appellate Tribunal shall be appointed by the appropriate Government on the recommendations of a Selection Committee consisting of the Chief Justice of the High Court or his nominee, the Secretary of the Department handling Housing and the Law Secretary and in such manner as may be prescribed. 71. Power to adjudicate (1) For the purpose of adjudging compensation Under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in pursuance of any power conferred by or under this Act. 88. Application of other laws not barred The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. 89. Act to have overriding effect The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 20. The question whether the remedies available to the consumers under the provisions of the CP Act would be additional remedies, was considered by this Court in some cases, the notable cases being: i) In Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (dead) through L.Rs. and Ors. (2004) 1 SCC 305, this Court observed: 11. From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, any attempt to exclude the farmers from the ambit of the Consumer Protection Act by implication will make that Act vulnerable to an attack of unconstitutionality on the ground of discrimination and there is no reason why the provisions of the Consumer Protection Act should be so interpreted. ......... 62. Since the farmers/growers purchased seeds by paying a price to the Appellant, they would certainly fall within the ambit of Section 2(1)(d)(i) of the Consumer Protection Act and there is no reason to deny them the remedies which are available to other consumers of goods and services. In this case the provisions of the CP Act and those under the Seeds Act, 1966 were considered. iii) In Virender Jain v. Alaknanda Cooperative Group Housing Society Limited and Ors. (2013) 9 SCC 383, it was observed by this Court as under: 13. The other question which needs to be considered is whether the District Forum should not have entertained the complaints filed by the Appellants and directed them to avail the statutory remedies available under the Cooperative Societies Act. Shri Neeraj Jain vehemently argued that the forums constituted under the Act cannot grant rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ottee placed in circumstances similar to that of the Complainants, could have initiated following proceedings before the RERA Act came into force. A) If he satisfied the requirements of being a consumer under the CP Act, he could have initiated proceedings under the CP Act in addition to normal civil remedies. B) However, if he did not fulfil the requirements of being a consumer , he could initiate and avail only normal civil remedies. C) If the agreement with the developer or the builder provided for arbitration: i) in cases covered under Clause 'B' hereinabove, he could initiate or could be called upon to invoke the remedies in arbitration. ii) in cases covered under Clause 'A' hereinabove, in accordance with law laid down in Emaar MGF Ltd. and Anr. v. Aftab Singh (2019) 12 SCC 751, he could still choose to proceed under the CP Act. 23. In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the Promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. (See Bharat Bank Ltd. v. Employees AIR 1950 SC 188 : 1950 SCR 459 and Nahar Industrial Enterprises Ltd. v. Hong Kong Shanghai Banking Corpn. (2009) 6 SCC 635. On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint. 28. Proviso to Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an appropriate application before the adjudicating officer under the RERA Act. The proviso thus gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and Anr. v. Union of India and Anr. (2019) 8 SCC 416, where a bench of three Judges of this Court was called upon to consider the provisions of Insolvency and Bankruptcy Code, 2016, RERA Act and other legislations including the provisions of the CP Act. One of the conclusions arrived at by this Court was: 100. RERA is to be read harmoniously with the Code, as amended by the Amendment Act. It is only in the event of conflict that the Code will prevail over RERA. Remedies that are given to allottees of flats/apartments are therefore concurrent remedies, such allottees of flats/apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the Code. 32. We, therefore, reject the submissions advanced by the Appellant and answer the questions raised in paragraph 26 hereinabove against the Appellant. 33. We may now consider the effect of the registration of the Project under the RERA Act. In the present case the apartments were booked by the Complainants in 2011-2012 and the Builder Buyer Agreements were entered into in November, 2013. As promised, the construction should have been completed in 42 months. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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