Imagine the excitement of buying your dream home, eagerly waiting for its completion and possession, only to face delay after delay, broken promises, and endless frustrations. In such cases, consumers may file a complaint seeking relief from the concerned authorities. The case of ‘Vahe Imperial Gardens’ is a classic example of a consumer complaint against a builder for delayed possession. One such case viz., Manmeet Kunwar and Trapta Chauhan and Ors., v/s. M/s. Vahe Projects Private Limited before the National Consumer Disputes Redressal Commission is summarized as follows:
The Consumer Complaint (CC) involves Complainants who had booked apartments in ‘Vahe Imperial Gardens,’ a project by the Opposite Party (OP), a builder in Bangalore. The complainants filed a CC against the OP seeking possession of their flats without delay, along with compensation for delay, promised amenities, illegal charges, and mental harassment.
The OP had promised possession of the flats within 24 months from the date of sanction of license and plan by the BBMP, Bangalore, with a grace period of three months. However, they failed to deliver possession despite taking almost the entire sale consideration from most of the complainants. They also failed to obtain the Occupation Certificate (OC) and kept misleading the complainants with progress reports that did not mention any delay or reasons for the delay. The builder had not provided the facilities and amenities promised in the Agreement and had charged illegal amounts for car parking and service tax. The Complainants were issued demand notices for payment regularly, even though the progress of construction was delayed or stopped.
Frustrated with the continuous delays, broken promises, and lack of amenities, the Complainants filed a consumer complaint seeking various reliefs before the Consumer Court.
The Complainants argued that the OP had violated the terms of the Construction Agreement by failing to deliver possession within the allotted time frame and not providing the promised amenities. The Complainants presented evidence of the BBMP notice that revealed incomplete and unfinished facilities along with the communication from the OP admitting the pending work and delay in possession. They sought relief in the form of possession of completed flats, compensation for the delay, amenities as per agreement, refund of illegal charges, and association formation under the Karnataka Apartment Owners Act, 1972.
The court found that the OP had failed to provide possession of the flats on time, although they had taken almost 100% of the sale consideration amount from most of the Complainants. The court also found that the OP had charged the complainants illegally for car parking and service tax. Furthermore, the facilities and amenities that were promised to the Complainants were not provided. The court held the OP is responsible for mental harassment and agony caused to the complainants and ordered them to compensate the Complainants for the same.
The National Consumer Disputes Redressal Commission (NCDRC) directed the opposite party to pay compensation to the Complainants in the present complaint as well as other similarly placed allottees of the project on whose behalf/for whose benefit the complaint has been filed, in the form of simple interest @ 6% per annum from the committed date of possession (18.09.2015 with grace period) till the date of possession and further that, OP shall charge maintenance charges only from the date of actual physical possession and refund excess charged, if any, with simple interest @ 9% from the date of payment till the date of refund.
In conclusion, this case highlights the importance of consumer protection laws in safeguarding the interests of homebuyers. The onus is now on developers to fulfill their promises and deliver projects within the agreed timelines. Failure to do so not only leads to financial losses but also causes mental harassment and agony to the buyers. The NCDRC’s order in the present case is a step towards protecting the consumers’ rights and upholding justice.
FULL TEXT OF THE ORDER OF NCDRC Delhi
1. The present Consumer Complaint (CC) has been filed by the Complainants against the opposite party as detailed above, inter aila praying for direction to the opposite party:-
i. to hand over possession of duly constructed/completed flats without any delay to all the complainants and other flat buyers with same interest with all permanent utilities and amenities as per agreement.
ii. to pay all the complainants/flat owners and other flat owners with same interest, compensation for the entire period of delay @12% p.a. on the amount deposited by the complainants with the OP till the time actual legal possession including the OC is provided.
iii. to provide to the complainants and other flat owners with same interest each of the facilities and amenities which were promised in the agreement.
iv. to pay to the complainants and other flat owners with same interest additional compensation @12% interest p.a. on the amount deposited for the delay in provision of the promised facilities and amenities OR in the alternative, in case of non-provision of the promised amenities and facilities, direct OP to pay to the complainants and other flat owners with same interest a sum of Rs.10,00,000/-each.
v. to refund to the complainants and other flat owners with same interest the sum charged illegally towards car parking along with 12% p.a. interest.
vi. to pay to the complainants and other flat owners with same interest a compensation of Rs.10,00,000/-each by way of compensation for mental harassment and agony, to be distributed equally among the complainants along with 12% interest.
vii. to refund to the complainants and other flat owners with same interest the amount charged on account of service tax along with 12% interest.
viii. to refund to the complainants and other flat buyers with same interest, the corpus fund illegally collected along with 12% interest.
ix. to form association under the Karnataka Apartment Owners Act, 1972 to the benefit of the complainants and other flat buyers with same interest.
x. award cost of the complaint to the complainants.
2. IA/16863/2018 seeking permission to proceed in representative capacity for the benefit of entire class of persons having same interest under 12 (1) (c) of the Consumer Protection Act, 1986, was allowed and public notice in terms of Section 13(6) of the Act, read with Order 1 Rule 8 of the Code of Civil Procedure was also ordered to be published in the newspapers. Notice was issued to the opposite party on 22.04.2019 giving them 30 days’ time to file their written statement.
3. It is averred/stated in the complaint that:-
i) That the complainants booked apartments in the project of the OP namely ‘Vahe Imperial Gardens’ situated in Bangalore by paying 20% booking amount of the total sale consideration. The Construction agreement was executed on 11.09.2013. As per the Agreement the flat was to be delivered by the builder to the buyer within a period of 24 months from the date of sanction of licence and plan by the BBMP, Bangalore, with three months’ grace period to complete the said construction. The license and plan was sanctioned by the BBMP on 18.06.2013. Therefore, 24 months’ time period including three months’ grace period expired on 18.09.2015. But the OP failed to hand over the possession, despite having taken 95% and in some cases upto 100% of the agreed sale consideration amount from most of the complainants. The OP has even failed to get the OC also.
ii) The OP regularly kept updating the complainants about the progress of construction by sending progress report to the complainants and never intimated them of any delay. The progress reports sent by the OP on various dates do not contain any intimation of delay or any reason for such delay. The construction agreement clearly shows that the payments were to be made by the buyers in stages and the payment was linked to the progress of construction, starting from completion of the foundation work till commencement of plastering work and final handover.
iii) The OP at regular intervals kept sending demand notices for payment and never delayed issuing any demand notice on the ground that the progress of construction was delayed or stopped. On the contrary in demand notices it was always mentioned that the construction of the project was under progress, giving the impression to the complainants that there was no delay and money was collected on a regular and timely basis by the OP and the buyers kept paying the money.
iv) Vide communication dated 31.01.2018, the OP informed the complainants that work on permanent BESCOM power was still in progress and that it was still not available. It was also admitted that the pending work in the project was still going on and that it will take some time to complete the pending work. This communication clearly shows that the possession of the flats were offered to the buyers in an incomplete and unfinished state. Even a notice was issued by the BBMP to the OP wherein it was stated that basic facilities in the high rise building like electricity, sewerage treatment plant, drinking water, lift facilities, and other civil works have not been completed. It was also stated in the BBMP notice that the building was not in a liveable condition and that the builder has broken all building approval rules and that the construction rules have also not been followed by the OP.
v) On 13.05.2017, the OP circulated a revised timeline for completion of pending work in the project. Numerous communications have been addressed by the complainants to the OP protesting about the delay in handing over the possession of the apartment and protesting the non-provision of promised amenities and facilities and also protested the fact that the possession was offered without a copy of OC.
vi) On 16.08.2018, Legal notice was issued on behalf the complainants seeking redressal of their grievances. Hence, the complainants have filed complaint before this Commission.
4. OP in their written statement/reply stated that :-
i. The complainants are not the consumers as defined under section 2(d) of the Consumer Protection Act, 1986.It is contended by the OP that the title of the said flats were transferred to the complainants vide sale deeds.It is also contended that subsequent to the execution of the sale deed in favour of the complainants the OP is no more connected to or owner of the flats so construed and thus the complainants do not come under the ambit of the act.
ii. It is contended by the OP that the complaint is barred by limitation and the complaint has been filed after 2 years from the date of execution of Sale Deed and no protest was raised by the complainants either at the time of execution of the sale deed or after the execution of sale deed within 2 years.
iii. It is further contended by the OP that the Construction agreement and the Sale Agreement executed by and between the complainants and the OP. There is no clause in the Agreements wherein the OP had promised to obtain OC with respect to Vahe Imperial Gardens. The OP has acted in view of the agreements executed by the OP and the agreement nowhere mentions that the OP is required to obtain the OC from BBMP. The complainants at later point of time cannot claim what was not agreed by and between the parties. The agreements executed were signed and drafted on one to one basis and the Consumers were made to sign the dotted pages that it can claim the clauses of the agreement to be biased in favour of the OP. It is further contended that the parties to the agreement had the option to disagree with the terms of the agreements but the complainants accepted the terms of the agreement, hence, the terms of the agreements are binding on the parties to the agreement.
iv. It is also contended by the OP that that complaint could not have been made on behalf of the allottees . There is no authority in favour of any specific individual and before allowing the application under Section 12(1) (c ) there can be no question of making the application on behalf of them. It is also contended that no documentation giving specific authority or even any other similar documentation of the said nature has been filed in the present complaint. The evident fact can even be corroborated from the perusal of the complaint itself. This is an extremely grave and important issue in relation to a representative action, and goes to the root of the matter, seeking to represent, make applications, amend prayers etc. on behalf of allottees, without even an authority on record, alone and by itself, requires the present application to be dismissed at the threshold. There is no commonality of interest amongst the complainants and other allottees of the project. The complainants do not have common grievance, hence, common relief cannot be granted.
v. It is contended by the OP that the complainants cease to be consumers after possession is delivered and thereafter there is no privity of contract that subsists between the parties.
5. Evidence by way of affidavit was filed by the complainants and affidavit of evidence was filed by the OP on -broadly on the lines of averments made in the complaint.
6. Heard counsels of both sides.
7. In the written arguments, the complainants pressed for three reliefs, (a) compensation for delay, (b) illegal levy of corpus fund/maintenance charges and refund of the same and (c) non-provision of promised amenities and facilities. It was contended that OC has not been obtained till date. Corpus fund/maintenance charges cannot be imposed till the builder obtains O.C.
8. OP on the other hand questioned the maintainability of the complaint as there is no privity of contract between the parties. The flats were constructed under Joint Development Agreement between the OP and owners of the land. It was contended by the OP that the relief sought are not class specific and are individual specific. All the complainants have taken possession, once the possession is taken by the allottee, the said person can no longer remain a consumer. The project is not covered under statutory provisions of RERA since project was executed prior to Act in place. It was not the duty of OP to obtain OC. The amenities which were promised as per agreement have been duly handed over by the OP. The complainants have approached the Commission two years after the execution of sale deed in their favour.
9. In the instant case, there was a delay in handing over the possession of flat with valid O.C. by the OPs. Hence, the complainants in the present circumstances have a legitimate right to claim fair delay compensation/interest from the OPs. During the oral arguments, it was stated that possession has been taken over by the complainants.
10. For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: –
i. The OPs shall pay compensation, to the complainants in the present complaint as well as other similarly placed allottees of the project on whose behalf/for whose benefit the complaint has been filed, in the form of simple interest @ 6% per annum from the committed date of possession (18.09.2015 with grace period) till the date of possession.
ii. OP shall charge maintenance charges only from the date of actual physical possession and refund excess charged, if any, with simple interest @9% from the date of payment till the date of refund.
iii. In case the complainants still feel that any of the promised amenities are lacking, they shall make a written request for joint inspection within 30 days of this order. In such a case, OP shall arrange joint inspection of authorised representatives of Complainants and OPs within 30 days of receipt of such request and take action as per results of such joint inspection report within 2 months of date of receipt of the report.
iv. Parties to bear their respective litigation costs.
v. The payment in terms of this order shall be paid within three months from today.
11. The pending IAs, if any, also stand disposed off.