CANCELLATION OF PROVISIONAL ALLOTMENT OF A RESIDENTIAL FLAT

In ‘Chandan Gupta v. Supertech Limited [2019 (6) TMI 357 - NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION]’ –Consumer case No. 2590/2017 – decided by National Consumer Disputes Redressal Commission on 01.05.2019, the complainant booked a residential flat with the opposite party in Sector 74 of Noida.  The opposite party allotted a flat on 10.12.2014 for a consideration of ₹ 2.36 crores.  The allotment letter says that the flat will be handed over to the complainant within 30 months from the date of the allotment letter.   Accordingly the opposite party has to give possession of the flat to the complainant by June 2016 or by December 2016 after including the grace period of 6 months available to the opposite party. 

The complainant had paid ₹ 1.08 crores to the opposite party.  Since the opposite party has not come forward to complete the construction and hand over the same to the complainant, the complainant filed a complaint before the National Consumer Disputes Redressal Commission (‘Commission’ for short).  The complainant, in his complaint, prayed for the refund of the amount paid by him to the opposite party with interest.

The opposite party put forth the following contentions before the Commission-

• Several writ petitions were filed by the farmers before the High Court challenging the acquisition of land that has been allotted to the opposite party.
• There was unrest among the farmers and demonstrated dharnas before various projects and halted the construction which caused the delay in completion of the construction.
• Vide order dated 11.01.2013 the National Green Tribunal has passed order stopping extraction of ground water for construction purposes, as a result the builders are to be dependent upon Noida Authority for water.
• The environmental clearance certificate has been suspended by the National Green Tribunal vide their order dated 28.10.2013.
• The National Green Tribunal has also passed an interim order stopping the construction work within the radius of 10 km from Okhla Bird Sanctuary.
• In the event of delay, the allottes are entitled to compensation of ₹ 5/- per sq.feet of super area per month for any delay in handing over possession.
• In view of the provisions RERA, the Commission has no jurisdiction to entertain this complaint.
• As per clause 37 of the agreement the opposite party is entitled to forfeit 15% of the cost of the unit as cancellation charges since the complainant in his complaint has prayed for the cancellation of the allotment made to him.
• They have not abandoned the project and want to deliver the possession to the complainant after completing the construction which is in progress.
• The opposite party has already committed July 2021 to RERA authorities for completing the construction and therefore they will be in a position to deliver the flat to the complainant on or before that date.

The Commission considered the entire case and considered the judgments relied on by both the parties.

The Commission found that the writ petitions filed before the High Court were decided on 21.10.2011.  Some farmers filed special leave petition before the Supreme Court against the order passed by Allahabad High Court.  The Supreme Court decided the above said petitions on 14.05.2015. 

The Commission analyzed the orders of the National Green Tribunal.  The Commission found that the said order consists an reference to its earlier order whereby NOIDA was directed to stop the construction work going on within  a radius of 10 kms from Okhla Bird Sanctuary, without prior environmental clearance  or in contravention of the same.    The said order applied to 49 projects out of which 15 has been completed already and 7 has not yet begun the construction.  This order is not applicable to the opposite party since there is no case against the opposite party that they started construction without environmental clearance.  The National Green Tribunal did not stay further construction of the projects where requisite environmental clearance has been obtained and only completion certificate was withheld till clearance from the National Board for Wild Life.

The objection by the opposite party on jurisdiction of Commission to entertain the complaint, the Commission held that this question has been decided in ‘Ajay Nagpal v. Today Homes & Infrastructure Private Limited and connected matters’ decided on 15.04.2019.

Regarding to the contention of the opposite party that they are entitled to forfeit  15% of the cost of the Unit for cancellation of the provisional allotment of the flat as per clause 37 of the agreement, the Commission held that this clause would apply if the complainant cancel the provisional allotment on his own reasons.   In this case it is not so.  The complainant is compelled to cancel the provisional allotment of the flat on account of the failure of the opposite party to deliver the flat within the schedule time and 6 months grace period available to the opposite party.  If the complainant cancelled the allotment before this period, i.e., December 2016 then the opposite party is entitled for forfeiture of 15% of the cost of the Unit.  Since the opposite party has failed in delivery the flat within the stipulated period, clause 37 of the agreement has no application to him.

The construction of the house is not complete till date of the order and there is no certainty as to when the construction would be completed by the opposite party after obtaining the required Occupancy certificate.

The complainant did not accept to get the flat on or before July 2021, the date assured by the opposite party to RERA.  The complainant has no more trust on the opposite party that he would deliver the flat and he wanted the refund of ₹ 1.08 crores paid by him to the opposite party with interest.  The complainant is ready to restrict his claim to the refund of entire principal amount along with the compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.

The Commission held that the complainant is entitled to claim a refund of ₹ 1.08 crores paid by the complainant to the opposite party.  The Commission directed the opposite party to refund the sum of ₹ 1.08 crores along with the compensation in the form of interest @ 10% per annum from the date of each payment till the date of refund to the complainant within a period of 3 months from the date of order.  The Commission also directed the opposite party to pay a sum of ₹ 25,000/- to the opposite party towards the cost.