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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member, Dr. B.C. Gupta, Member
Perin Hills Bazun Dittia & Anr. —Complainants
versus
M/s. Emaar Hills Township Pvt. Ltd. & Anr. —Opp.Parties
Consumer Case No.355 of 2014
Decided on 9.3.2016
For the Complainants:Mr. Anish Virmani, Advocate
For the Opp.Parties No.1:Mr. Atul Sharma, Advocate & Ms. Isha J. Kumar, Advocate
For the Opp.Parties No.2:Mr. Aditya Narain, Mr. Arnav Narain & Mr. Siddharth Matai, Advocates
IMPORTANT POINT
Date on which refund is demanded by flat buyer for first time will be date from which period of limitation has to be computed.
Headnote:(A) Consumer Protection Act, 1986—Section 24-A—Real estate—Agreement for purchase of flat—Failure of Developer to abide by commitment—Buyer has recurrent cause of action for filing complaint for non-delivery of possession of flat—Consumer books residential flat for purpose of having a shelter over his head and not for purpose of taking refund at later date with or without interest—If builder performs all his contractual obligations under sale agreement, buyer in such a case would have no right to claim refund and will be entitled only to possession of flat as per terms and conditions agreed between parties—It is only in a case where builder fails to perform his contractual obligations and deliver possession of flat to buyer that he would have a cause of action to seek refund of money—Date on which refund is demanded by flat buyer for first time will be date from which period of limitation prescribed in Section 24A has to be computed unless builder has even before flat buyer asking for refund, expressed his inability or unwillingness to complete construction and deliver possession to him. (Para 5)
(B) Consumer Protection Act, 1986—Section 21—Contract Act, 1872—Section 56—Real estate—Agreement for purchase of flat—Even in case where builder is unable to complete construction on account of reasons beyond his control, purchaser should be entitled to at least take refund of principal amount, paid by him to builder, he not in any manner being responsible for act which prevents builder from completing construction—In such a case, contract should be treated as frustrated in terms of Section 56 of Contract Act since it is not known, whether builder will at all and if so when be allowed to resume construction—If contract is treated as frustrated, buyer will be entitled to refund of his money. (Para 12)
Result: Complaint allowed.
V.K. Jain, Presiding Member—Pursuant to a Memorandum of Understanding dated 06.11.2002, a collaboration agreement dated 19.08.2003 and a supplementary agreement dated 19.08.2005 between Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) and Emaar Properties, PGSC, Dubai, a Special Purpose Vehicle, namely Emaar Hills Township Pvt. Ltd. (Opposite Party No. 1) was formed, with equity participation to the extent of 26% from APIIC and 74% from Emaar PGSC. Andhra Pradesh Industrial Infrastructure Corporation Ltd. transferred certain land to opposite party no. 1 by way of a conveyance deed dated 28.12.2005. Opposite party no. 1 entered into development agreement dated 03.12.2006 with opposite party no. 2 namely Emaar MGF Land Ltd., for development of the said land and construction of flat thereon.
The complainant agreed to purchase a residential flat in the aforesaid project from the opposite parties for a total sale consideration of Rs. 1,91,85,362/-, which was later reduced to Rs. 19021426/-. An allotment letter dated 30.07.2008 was issued to the complainants. The complainants entered into a sale agreement for purchase of the said flat alongwith a construction agreement for construction of the said flat. As per the terms of the construction agreement, the construction was to be completed and possession of the flat was to be delivered to the complainants within 36 months from the date of the agreement. The builder however, had a grace period of six months for this purpose, meaning thereby that after completing the construction, possession of the flat was to be delivered to the complainants latest by 31.10.2011.
2. The case of the complainant is that on visiting the project site, they found that there has been almost no development in the area and opposite party no. 2 will not be able to complete the construction of the flat sold to them. The complainants are therefore, before this Commission seeking refund of the amount of Rs. 1,52,21,426/- which they paid to the opposite parties alongwith interest on that amount @ 24% per annum. They have also sought compensation quantified at Rs.1 Crore from the opposite parties.
3. In its written version, opposite party no. 1 has inter-alia averred that the complainants are not its consumers as no consideration was paid by them to it. The entire consideration, according to opposite party no. 1 was paid to opposite party no. 2, which was to construct and deliver the flats to the complainants. It has also taken a preliminary objection that having been filed more than two years from the date of accrual of cause of action, the complaint is barred by limitation. It is also claimed in the reply that due to the embargo created by G.O. No. 9279 dated 08.10.2010 of the Government of Andhra Pradesh, registration of documents in respect of the property in question has been prohibited and vide status quo order passed by the Civil Court in OS No. 655/2010, the construction activity of the flat in question has been stalled.
4. In its reply, opposite party no. 2 has admitted the agreement with the complainants as well as the receipt of consideration from them. Opposite party no. 2 also has placed reliance upon the order passed by the Civil Court in OS No.655/2010 directing status quo with respect to the subject property and the G.O. issued by Government of Andhra Pradesh on 08.10.2010, to justify its inability to complete the construction of the flat.
5. The first question which arises for our consideration in this case is as to whether the complaint is barred by limitation or not. Section 24A of the Consumer Protection Act provides a limitation of two years from the date of accrual of the cause of action in filing a complaint before a Consumer Forum. Admittedly, the possession of the flat was to be delivered to the complainants by 31.10.2011. It was held by the Hon’ble Supreme Court in Meerut Development Authority Vs. M.K. Gupta, IV (2012) CPJ 12 that a buyer has a recurrent cause of action for
