Case: M/S. IMPERIA STRUCTURES LTD Vs. ANIL PATNI AND ANOTHER

2. A Housing Scheme called The ESFERA in Sector 13C, Gurgaon, Haryana (hereinafter referred to as the Project) was launched by the Appellant sometime in 2011 and all the original Complainants booked their respective apartments by paying the booking amounts and thereafter each of them executed Builder Buyer Agreement (hereinafter referred to as the Agreement) with the Appellant.3. The Respondents in the leading appeal (hereinafter referred to as the Respondents) booked Apartment No.1803 on the 18th Floor of Tower No. C having super built up area 153.34 Sq. meters (1650 Sq. feet approx.) @ Rs.36530.2 per Sq. meter (Rs.3395/- per Sq. foot). The basic price was thus Rs.56,01,750/- to which additional charges such as preferential location charges for corner park facing and for higher floor as well as charges for reserve parking, club membership and development were added; the aggregate price being Rs.76,43,000/-.4. Clauses 11.1 and 11.2 of the Agreement dated 30.11.2013 entered into by the Respondents dealt with delay due to reasons beyond the control of the Developer/Company and failure to deliver possession due to Government Rules, Orders, Notifications, etc. respectively. Clause 11.4 of the Agreement was:-11.4 FAILURE TO DELIVER POSSESSION: REMEDY TO THE COMPANYThe intending Allottee(s) agrees that in consequence of the Developer/Company abandoning the Scheme or becoming unable to give possession within three years from the date of execution of this Agreement to such extended periods as permitted under this Agreement, the Developer/Company shall be entitled to terminate this Agreement whereupon the Developer/Companys liability shall be limited to the refund of the amounts paid by the Intending Allottee(s) with simple interest @ 9% per annum for the period such amounts we relying with the Developer/Company and to pay no other compensation whatsoever. However, the Developer/Company may, at its sole option and discretion, decide not to terminate this Agreement in which event the Developer/Company agrees to pay only to the original Intending Allottee(s) and not to anyone else and only in cases other than those provided in Clauses 11.1, 11.2, 11.3 and Clause 41 and subject to the Intending Allottee(s) not being in default under any term of this Agreement, compensation @ Rs.5/- per sq. ft. equal to Rs.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 MAJUREThe 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 01.05.2016, the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as, the RERA Act) came into force.6. Over a period of time the Respondents had paid Rs.63,53,625/- out of the agreed sum of Rs.76,43,000/-. However, even after four years there were no signs of the Project getting completed. In the circumstances Consumer Case No.3011 of 2017 was preferred by the Respondents on 11.10.2017 before the Commission submitting, inter alia,:-11. That the complainants regularly visited the site but were surprised to see that the construction was never in progress. No one was present on the site to address the queries of the buyers/allotees/purchases including the present complainant. The O.P despite taking a substantial amount towards the consideration deliberately did not construct the towers in which house of the complainant was situated. The entire site seems to be an abandoned piece of land with semi constructed structure. Despite a delay of many months, the construction of the apartment has not been completed. It can hence be seen that the O.P is deficient in renderings services and after extracting most of the money from the buyers/allotees/purchases have deliberately stopped the construction of the houses.12. That it could be seen that the construction of the residential unit THE ESFERA in which the buyers/allotees/purchasers flats were booked many months back, with a promise by the O.P. to deliver the same within 42 months were never completed for the reasons best known to the O.P., which clearly shows the ulterior motive of the O.P. to extract money from the innocent buyers fraudulently and also demonstrates the unfair trade practices and restrictive trade practices under the ambit of consumer protection act 1986.16. That as per the clause 11.4 of the Buyers Agreement, it was agreed by the O.P. that in case of any delay, the O.P. shall pay to the buyers/allotees/purchasers, a compensation at the rate of Rs.5/- per sq. ft. per month for the period of the delay. It could be seen here that the O.P has incorporated the Clause 11.4 in the one sided buyers agreement and has offered to pay a meagre sum of Rs.5/- per square feet for every month of delay if we calculate the amount in terms of financial charges, it comes to approximate @ 1.4% per annum rate of interest. Even these charges are to be paid after 42 months of period that is taken by the O.P to construct the houses as per the buyers 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 Honble Commission. The present complaint has been assessed for a sum of Rs.1,16,94,579/- and requisite fee i.e. Rs.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 Rs.76,43,000/-Compensation claimed Rs.40,51,579/-32. In view of the above, it is, therefore, most respectfully prayed that this Honble Commission may kindly be pleaed to:a. Direct the O.P. to refund the entire amount collected form the complainants towards the consideration of the Flat along with interest @ 18% p.a. on the amount paid by them from the date of each deposit of the amount till it is actually returned to the complaints.b. Direct the O.P. to pay a sum of Rs.50,000/- (rupees fifty thousand only) to the complainants toward the cost of litigation.c. Any other order(s) as may be deemed fit and appropriate may also kindly be passed.The other nine Consumer Cases were also filed on the same day.7. On 17.11.2017, the Project was registered with Haryana Real Estate Regulatory Authority, Panchkula (hereinafter referred to as, Haryana Authority). The letter dated 17.11.2017 issued by Haryana Authority stated:-….. Your request for registration of Group Housing Colony being developed over an area of 60460 Sq. Mtrs. Situated in Sector-37-C, Village Gharoli Khurd and Basai, Gurugram, Haryana with regard to License No.64 of 2011 dated 16.07.2011 issued by the Director, town and Country Planning Department, Haryana, has been examined vis-àvis the provisions of the Real Estate (Regulation and Development) Act, 2016 and HRERA Rules, 2017 and accordingly a registration certificate is herewith issued with following terms and conditions:-(i) The Promoter shall comply with the provisions of the Act and the rules and regulations made there under;(ii) The Promoter shall deposit seventy percent of the amount to be realized from the allottees by the Promoter in a separate account to be maintained in a schedule bank to meet exclusively the cost of land and construction purpose as per provision of Section 4 (2) (L) (D);(iii) The registration shall be valid for a period commencing from 17.11.2017 to 31.12.2020;(iv) The Promoter shall offer to execute and register a conveyance deed in favour of the allotees or the association of the allottees, as the case may be, of the apartment, plot or building as the case may be, or on the common areas as per provision of section 17 of the Act;(v) The Promoter shall take all the pending approvals from various competent authorities on time;(vi) The Promoter shall pay all outstanding payment i.e. land cost, construction cost, ground rent, municipal or other local taxes, charges for water or electricity, 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 of any other law for the time being in force as applicable to the project. In case any deficiency in fee is found at later stage and the same shall be recoverable from the promoter/owner accordingly.(x) The promoter shall return the amount with interest in case, allotee wishes to withdraw from the project due to discontinuance of promoters business or promoter fails to give possession of the apartment/plot in accordance with terms and conditions of agreement for sale in terms of subsection(4) of Section-19. The promoter shall return the entire amount with interest as well as the compensation payable. The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus two percent. The promoter shall adhere the provisions of The Real Estate (Regulation and Development) Act, 2016 and its Rules 2017 issued by the State Government.(xi) The promoter shall adopt the model agreement for sale (Annexure-A) of the Haryana Real Estate (Regulation and Development) Rules, 2017 at the time of booking from the prospective allottees.(xii) The Promoter shall, upon receiving his Login Id and password under clause(a) of sub-section (1) or under sub-section 92) of section 5, as the case may be, create his web page on the website of theAuthority and enter all details of the proposed project as provided under sub-section (2) of section 4, including the followings:-a) Details of the registration granted by the authority;b) Quarterly up-to-date list of number and type of apartments for plots, as the case may be, booked;c) Quarterly up-to-date the list of number of garages/covered parking lot booked;d) Quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate;e) quarterly up-to-date status of the project; andf) such other information and documents as may be specified by the regulations made by the authority(xiii) The Promoter shall be responsible to make available to the allottees, the following information at the time of the booking and issue of allotment letter:-a) Sanctioned plans, layout, along with specifications, approved by the competent authority and other information as prescribed in Rule 14 of 2017 framed under the 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 shall be failure due to reasons beyond the control of the company including ForceMajeure events, delay due to compliance of new rules, regulations, orders or notifications made/issued by government or any other authorities with respect to construction at the project site.11. That the contents and averments made in Para 11 are wrong and denied. It is pertinent to mention here that the construction of the Tower in which the Unit of the Complainant was allotted is in full Swing and is nearing possession. The allegations levelled by the Complainant are concocted & baseless.9. In their replication, the Respondents submitted, inter alia,:-….. the buyers agreement was a fixed set of papers, which was asked to be signed by the complainant and no modification was entertained by the O.P. On request to change the one sided clauses, it was told that the buyers agreement has to be signed as it is and in case it is not acceptable than the allotment will stand cancelled and earnest money will be forfeited.10. Consumer Case No.3011 of 2017 was allowed by the Commission by its judgement and order dated 12.09.2018. It was observed:-10. It is pertinent to note that the Developer has not filed any evidence to support his contention that the delay occurred due to force majeure events. In fact demonetization, non-availability of contractual labour, delay in notifying approvals cannot be construed to be force majeure events from any angle.11. Learned Counsel for the Developer vehemently argued that the Complainants were offered alternative accommodation vide letter dated 03.04.2017 which was not accepted by them. The said letter is reproduced as hereunder:-Be that as it may, in view of your allegations of delay which we deny, we hereby offer that till we complete construction of your subject matter flat we shall arrange alternative accommodation/flat for you in Group Housing Colony named Takshila Heights situated at Sector-37C, Gurgaon on lease/rent with immediate effect. We will bear the rent of alternative accommodation/flat at Takshila Heights. However, you shall have to pay the common area maintenance charges and other user based charges like electricity, etc., which you would have done for your flat in Esfera as well. (Emphasis supplied).12. It is significant to mention that in the afore-noted letter there is an admission 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 Rs.50,000/- to be paid to each of the Complainants. The directions are to be complied withing 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 deposited by each of the Complainants with simple interest @ 9% per annum from the respective dates of deposits alongwith Rs.50,000/- towards costs. It was also directed that the amounts be deposited within four weeks, failing which the amounts would carry interest @ 12% per annum.12. The Appellant being aggrieved preferred the instant appeals on 14.03.2019. By way of Additional Documents, a copy of the letter dated 17.11.2017 was placed on record. An order passed by Haryana Authority, Gurugram on 17.01.2019 in a complaint preferred by one Himanshu Giri was also placed on record. The directions issued in said order were to the following effect:-27. After taking into consideration all the material facts as adduced and produced by both the parties, the authority exercising powers vested in it under section 37 of the Real Estate (Regulation and Development) Act, 2016 hereby issues the following directions to the respondent in the interest of justice and fair play:i. The respondent is directed to provide delay possession charges at the prescribed rate of 10.75% per annum for every month of delay w.e.f. 15.9.2016 as per the provisions of Section 18(1) of the Real Estate (Regulation and Development) Act, 2016.ii. The arrears of interest accrued so far shall be paid to the complainant within 90 days from the date of this order and thereafter monthly payment of interest till handing over the possession shall be paid before 10th of subsequent month.13. The appeal memo also did not make any reference to the fact that the Project had been registered under the RERA Act. In the leading appeal, following assertions were made in the list of dates and events:-The Appellant was unable to hand over the possession to the Respondents within the stipulate time as stipulated in Clause 10.1 due to reasons beyond control of the Appellant viz., due to severe shortage of contractual labourers and delay caused in obtaining statutory requisite permissions for carrying on the construction of said flats, failed to deliver possession of the subject flats to the Respondents within the prescribed time limit.One of the grounds raised in the appeal memo was as under:-C. Because the Honble Commission failed to appreciate that the Policy of Demonetization introduced by the Government of India constituted as an event of Force Majeure since 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 Demonitization 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.Refund of Rs.10,00,000/- to the Respondents, was made on 27.03.2019 i.e. even after filing of the leading appeal.

Court's reasoning:
18. At the outset, we must deal with two factual issues. It was concluded by the Commission that; (i) all the Complainants were Consumers within the meaning of the Act and that; (ii) there was delay on part of the Appellant in completing the construction within time. The stand taken by the Appellant at various stages, itself acknowledged that there was delay but the Appellant tried to rely on certain events as mentioned in ground (c) quoted hereinabove. In our view, the conclusions drawn by the National Commission in relation to these issues are absolutely correct and do not call for any interference.21. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.22. Before we consider whether the provisions of the RERA Act have made any change in the legal position stated in the preceding paragraph, we may note that an allottee 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. Vs. 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 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). The case of Himanshu Giri came under the latter category. The RERA Act thus definitely provides a remedy to an allottee who wishes to withdraw from the Project or claim return on his investment.26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called consumers within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee (2009) 9 SCC 221 , it was held by this Court:-The proceedings before the National Commission are although 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. vs. 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 mandate in Section 12(4) of the CP Act to the contrary is quite significant.Again, insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear. Further, Section 18 itself specifies that the remedy under said Section is without prejudice to any other remedy available. Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act.30. It is true that some special authorities are created under the RERA Act for the regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right without prejudice to any other remedy available, in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79.31. At this stage, we may profitably refer to the decision in Pioneer Urban Land and Infrastructure Limited and another vs. Union of India and another (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 period had expired well before the Project was registered under the provisions of the RERA Act. Merely because the registration under the RERA Act is valid till 31.12.2020 does not mean that the entitlement of the concerned allottees to maintain an action stands deferred. It is relevant to note that even for the purposes of Section 18, the period has to be reckoned in terms of the agreement and not the registration. Condition no. (x) of the letter dated 17.11.2017 also entitles an allottee in same fashion. Therefore, the entitlement of the Complainants must be considered in the light of the terms of the Builder Buyer Agreements and was rightly dealt with by the Commission.34. Lastly, it may be noted that the Consumer Protection Act, 2019 (hereinafter referred as, 2019 Act) was enacted by the Parliament to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effectively administration and settlement of the consumers dispute and for matters connected therewith or incidental thereto. Sections 2(7), 2(33), 2(37), and 2(42) define expressions Consumer, Product, Product Seller and Service respectively. Sections 85 and 86 deal with liability of Product Service Provider and Product Seller. Sections 100 and 107 of 2019 Act are to the following effect:-100. 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.107. (1) The Consumer Protection Act, 1986 is hereby repealed.(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it Is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.Section 100 of 2019 Act is akin to Section 3 of the CP Act and Section 107 saves all actions taken or purported to have been taken under the CP Act. It is significant that Section 100 is enacted with an intent to secure the remedies under 2019 Act dealing with protection of the interests of Consumers, even after the RERA Act was brought into force.Thus, the proceedings initiated by the complainants in the present cases and the resultant actions including the orders passed by the Commission are fully saved.