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TMI Blog2024 (2) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... the apartment, such delay was not unreasonable enough to warrant cancellation of the Agreement. It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply its own subjective criteria to determine the course of action to be adopted by either of them. The fact that the appellants were anxious to avoid the additional tax liability, owing to the introduction of the Goods and Service Tax regime, cannot be held against them or be imputed to them as an underhand motive for backing out of the Agreement. Avoidance of tax is neither illegal nor equivalent to tax evasion and, therefore, the urgency shown by the appellants in trying to complete the process quickly so as to avoid an additional tax burden was natural. Further, it cannot be presumed that the appellants, who were willing to spend over 7.5 ₹ Crore for the apartment, would back out at the eleventh hour only because the tax component was increasing by ₹40 lakh or so. There are no hesitation in holding that the NCDRC overstepped its power and jurisdiction in ignoring the binding covenants in the Agreement and in introducing its own logic and rationale to decide as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -, ₹74,79,545/- and ₹21,62,700/- respectively, and the balance amount, being ₹5,83,53,615/-, was to be paid on initiation of fit outs. It is not in dispute that the appellants paid ₹2,25,31,148/- in all to the respondent-company by the date of institution of their consumer complaint before the NCDRC and were not in default. As per the Agreement, possession of the apartment was to be delivered to the appellants for fit outs by 30.06.2016 or, with a grace period of one year, by 30.06.2017. Alleging that the respondent-company had not delivered possession of the apartment for fit outs by the said date and that they had terminated the Agreement, the appellants approached the NCDRC. Their prayer was for refund of the amount paid by them with compound interest thereon @ 18% p.a. along with compensation for the harassment, mental agony and torture suffered by them, apart from litigation costs. 3. By the impugned order dated 09.11.2022, the NCDRC disposed of the appellants consumer complaint with the following directions: - i. OP shall deliver the actual physical possession of the unit in question, complete in all respects, as per specifications and with am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this order. In such a situation OP shall be entitled to deductions/forfeiture of earnest money as per provisions of the agreement. OP shall, on receipt of such written request for refund the amount paid by the Complainants after making deductions towards forfeiture of earnest money, as per provisions of the agreement, within two months from the date of request from the complainants. The appellants are referred to as complainants in the order extracted above while the respondent-company is OP . 4. Aggrieved by the disposal of their case on the aforestated lines and more particularly, para v of the directions set out hereinabove, the appellants assert before us their right to terminate the Agreement and claim unconditional refund of the total amount paid by them with interest thereon. 5. It would be appropriate at this stage to note the terms and conditions which were arrived at by and between the parties and reduced to writing in the Agreement executed by them. The relevant definitions, set out in Clause 1, titled Definition and Interpretation , read as under: - 1.13 Date of Offer of Possession (for fit outs) shall mean the date as specified in Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r may elect to continue with this Agreement in which case, the date of offer of possession for fit outs mentioned in Annexure-2 shall stand revised to and substituted by the revised date of offer of possession (for fit outs) as communicated by the Company. Alternatively, the Purchaser may by giving notice in writing elect to terminate this Agreement. Provided that such right to terminate shall be exercised by the Purchaser within a period of 90 days from the expiry of the aforesaid grace period. In the event, the letter of termination is not received by the Company within the said period of 90 days or is received after the said period of 90 days, the Purchaser shall, without the Company being liable to the Purchaser be deemed to have elected to continue with the Agreement to Sell and the Purchaser shall deemed to have waived his right to terminate this Agreement. In the event that the termination is done within 90 days from the expiry of the aforesaid grace period, the Company shall refund to the Purchaser the Total Consideration amount or part thereof paid by the Purchaser in 12 equal monthly installments through post dated cheques together with simple interest thereon at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarified that the Offer of Possession (for fit outs) entitles the Purchaser to carry on interior and other related works in the Unit but does not entitle the said Unit to be occupied till such time that the Occupation Certificate is received in relation to the said Unit. 8. Cursory overview of the above clauses manifests that the respondent-company was to deliver possession of the apartment to the appellants for fit outs by 30.06.2016 but grace period of one year was provided under Clause 11.2, whereby the date for delivery of such possession stood extended till 30.06.2017. Clause 21.u indicates that the works in the apartment, so far as the respondent-company is concerned, were to be completed by that date and the apartment was to have regular water and electricity supply, apart from lift access, and the appellants could carry on interior and other related works therein. Further, as per Clause 11.1, the respondent-company was required to obtain the Occupation Certificate in respect of the apartment and make available the key common areas and amenities in the building within one year from the date of offer of possession for fit outs. That was deemed to be the final possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Division of the Mumbai Metropolitan Region Development Authority and recorded, under Condition No. 6 thereof, that the respondent-company should complete the unfinished internal works before applying for grant of a Full Occupation Certificate of the building or before handing over physical possession of the premises for habitation, whichever was earlier. Notably, in the State of Maharashtra, Occupancy Certificate is defined under Regulation 6(7) of the Development Control Regulations, 1991, and it reads as follows: - 6(7). Occupancy Certificate: - On receipt of the acceptance of completion certificate in the form in Appendix XXI, the owner through his licensed surveyor/engineer/structural engineer/supervisor of this architect shall submit to the Commissioner a development completion certificate in the form in Appendix XVIII with three copies of the completion plan, one of which shall be cloth mounted for record. The Commissioner may inspect the work and after satisfying himself that there is no deviation from the sanction plans, issue an occupancy certificate in the form in Appendix XXII or refuse to sanction the occupancy certificate within 21 days from the date of receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2017, the appellants were well within their rights, under Clause 11.3, in getting issued a legal notice on 01.07.2017 stating that they had not received any letter of offer of possession for fit outs and that they had elected to terminate the Agreement. The respondent-company was called upon, in consequence, to refund the monies paid by them with interest thereon. The respondent-company, however, disclaimed liability, by its reply legal notice dated 21.07.2017, constraining the appellants to move the NCDRC. 13. This being the factual backdrop of the case, the NCDRC noted that there was some delay in handing over of possession of the apartment by the respondent-company, but opined that it was not unreasonable , whereby the appellants could cancel the Agreement and seek a refund. The NCDRC further opined that in the event they wish to seek a refund, the respondent-company was entitled to deduction/forfeiture of the earnest money as per the provisions of the Agreement. Having said so, the NCDRC observed that the respondent-company was still bound to provide actual physical possession of the apartment, complete in all respects, and issued the directions set out hereinabove. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w contract, however reasonable, if the parties have not made it themselves. Thereafter, in Rajasthan State Industrial Development Investment Corporation vs. Diamond Gem Development Corporation Ltd. (2013) 5 SCC 470 , this Court reiterated that a contract, being a creature of an agreement between two or more parties, is to be interpreted giving the actual meaning to the words contained in the contract and it is not permissible for the Court to make a new contract, however reasonable, if the parties have not made it themselves. 17. More recently, in Shree Ambica Medical Stores vs. Surat People's Coop. Bank Ltd. (2020) 13 SCC 564 , it was observed that, through its interpretative process, the Court cannot rewrite or create a new contract between the parties and has to simply apply the terms and conditions of the agreement as agreed between the parties. Again, in GMR Warora Energy Ltd. vs. Central Electricity Regulatory Commission (2023) 10 SCC 401 , it was observed that Courts cannot substitute their own view of the presumed understanding of commercial terms by the parties, if the terms are explicitly expressed. It was held that the explicit terms of a contract are alway ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Tax regime, cannot be held against them or be imputed to them as an underhand motive for backing out of the Agreement. Avoidance of tax is neither illegal nor equivalent to tax evasion and, therefore, the urgency shown by the appellants in trying to complete the process quickly so as to avoid an additional tax burden was natural. Further, it cannot be presumed that the appellants, who were willing to spend over 7.5 ₹ Crore for the apartment, would back out at the eleventh hour only because the tax component was increasing by ₹40 lakh or so. 21. Reliance is placed by the respondent-company on the decision of this Court in Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna (2021) 3 SCC 241 in the context of the rate of interest payable on the refund. However, we find that the aforestated decision is distinguishable on facts. Therein, the contract condition provided for payment of delay compensation and in the event of such delay exceeding twelve months from the end of the grace period, the allottee could opt for termination of the contract and for refund of the amount paid by him. The contract condition, however, provided that the refund would be made without any in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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