2019 (6) TMI 357 - Commission - Indian Laws

Commission rules for refund and compensation after delay in possession of residential unit

CHANDAN GUPTA Versus M/s SUPERTECH LTD.

The Commission ruled in favor of the complainant, who sought a refund and compensation due to delay in possession of a residential unit. The opposite ... Refund of amount already paid - grievance of the complainant is that the possession of the allotted unit has not been` offered to him and even the construction is not complete despite he having paid ₹ 1,08,16,881/- to the opposite party - it was contended by the learned counsel for the OP that since the prayer made in the complaint is for cancellation of the allotment, clause 37 of the agreement between the parties comes into force and therefore, the OP is entitled to forfeit 15% of the cost of the unit as cancellation charges. HELD THAT:- The aforesaid clause would apply to a case where the allottee, for his own reasons, seeks cancellation of the allotment and does not apply to a case where he is forced to seek cancellation of the allotment and refund of the amount paid by him to the developer on account of the failure of the developer to deliver possession of the house within the time period committed by him in this regard. Had the complainant sought cancellation of the allotment before December 2016, by which the possession was to be delivered to him even after giving benefit of the grace period to the OP, there could have been some merit in the contention. But, he having filed the complaint after expiry of the aforesaid timeline, clause 37 of the agreement would have no application. The possession of the house, as per the agreement, ought to have been delivered by December 2016, even after giving benefit of the grace period to the OP. The construction of the house is not complete till date and there is no certainty as to when the construction would be complete and the OP would be in a position to offer possession of the allotted flat after obtaining the requisite Occupancy Certificate. The learned counsel for the OP states that they have already committed July 2021 to RERA Authority for completing the construction and therefore, they will be in a position to deliver possession on or before that time. The opposite party shall refund the entire principal amount of ₹ 1,08,16,881/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund - Complaint disposed off. Issues Involved:1. Delay in possession of the residential unit.2. Alleged reasons for delay including legal and environmental factors.3. Jurisdiction of the Commission in light of RERA.4. Applicability of cancellation charges.5. Entitlement of the complainant to refund and compensation.Detailed Analysis:1. Delay in Possession of the Residential Unit:The complainant booked a residential flat in the 'ORB Towers' project, which was to be developed by the opposite party in Sector 74 of Noida. According to the allotment letter dated 10.12.2014, possession was to be delivered within 30 months, by June 2016 or at the latest by December 2016, including a grace period. However, the possession was not offered, and the construction was incomplete despite the complainant having paid Rs. 1,08,16,881/-. The complainant sought a refund along with compensation.2. Alleged Reasons for Delay Including Legal and Environmental Factors:The opposite party contested the complaint, citing several reasons for the delay:- Legal challenges: Writ petitions by farmers challenging land acquisition, leading to delays in construction.- Environmental restrictions: Orders by the National Green Tribunal (NGT) stopping ground water extraction and construction within a 10 km radius of the Okhla Bird Sanctuary.The Commission referred to previous decisions, particularly in the case of Pradeep Kumar Verma, where similar pleas were rejected. The NGT orders were found to apply only to projects without proper environmental clearance. The opposite party failed to prove that their project was affected by these orders or that they had obtained the necessary clearances before starting construction.3. Jurisdiction of the Commission in Light of RERA:The opposite party argued that the Real Estate (Regulation and Development) Act (RERA) provisions should apply, thus questioning the Commission's jurisdiction. However, this issue was settled by a previous decision of the Commission, affirming its jurisdiction to entertain consumer complaints despite the existence of RERA.4. Applicability of Cancellation Charges:The opposite party contended that clause 37 of the agreement allowed them to forfeit 15% of the unit cost as cancellation charges. The Commission clarified that this clause applied only when the allottee sought cancellation for personal reasons. In this case, the complainant was forced to seek cancellation due to the opposite party's failure to deliver possession on time. Therefore, clause 37 was deemed inapplicable.5. Entitlement of the Complainant to Refund and Compensation:The opposite party argued that since they had not abandoned the project and intended to complete it, the complainant should wait until possession could be offered. The Commission rejected this argument, noting the indefinite delay and the complainant's unwillingness to wait further. The complainant restricted his claim to a refund of the principal amount along with compensation in the form of simple interest at 10% per annum from the date of each payment till the refund date.Conclusion:The Commission ordered the opposite party to:1. Refund the entire principal amount of Rs. 1,08,16,881/- to the complainant along with compensation in the form of simple interest at 10% per annum from the date of each payment till the date of refund.2. Pay Rs. 25,000/- as the cost of litigation to the complainant.3. Make the payment within three months from the date of the order.