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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
MR. N.P. KAUSHIK, MEMBER (JUDICIAL) & MRS. SALMA NOOR, MEMBER
SANDEEP LOHIA, ASHWINI KUMAR LOHIA, JITESH KUMAR LOHIA – Appellant
Versus
PARSVNATH DEVELOPERS LTD – Respondent
Complaint Case Nos. 34, 35, 36 of 2010
Decided On : 20-12-2014
The main legal point established is the developer's liability for breach of contract and unfair trade practice in failing to deliver possession within the agreed timeframe despite receiving payments.
Headnote:
Breach of Contract - Real Estate - Clause 10(a), Clause 10(c) of Flat Buyer Agreement - The court discussed the breach of contract by the developer, the impact of the recession on the construction pace, and the provisions of Clause 10(a) and Clause 10(c) of the Flat Buyer Agreement. The court found the developer guilty of breach of contract and unfair trade practice, and directed refund of principal amount with interest, payment of compensation for delay, and costs of litigation to the complainants.
Fact of the Case:
The complainants booked flats with the developer and paid a significant amount, but the developer failed to deliver possession within the agreed timeframe. The developer cited the recession as the reason for the delay.
Finding of the Court:
The court found the developer guilty of breach of contract and unfair trade practice due to failure in delivering possession within the agreed timeframe despite receiving payments.
Issues: Breach of contract, impact of recession on construction pace, applicability of Clause 10(a) and Clause 10(c) of the Flat Buyer Agreement.
Ratio Decidendi: The court held that the developer's plea of recession and construction pace being affected was devoid of merit. It found the developer in breach of contract and misuse of the buyers' money, leading to unfair trade practice.
Final Decision: The court directed the developer to refund the principal amount with interest, pay compensation for delay, and cover the costs of litigation to the complainants.
ORDER :
MR. N.P. KAUSHIK, MEMBER (JUDICIAL)
1. This order shall dispose of CC Nos.34/10, 35/10 and 36/10.
2. Facts of these complaints and the law point involved therein are the same. All these three complaints are, therefore, disposed of by way of this common judgment.
3. In the case of Complaint No. 34/10 Sh. Sandeep Lohia v. M/s. Parsvnath Developers Ltd., the complainant, submitted that he booked flat with the M/s. Parsvnath Developers Ltd. (in short ‘OP’) in his project named Parsvnath Privilege, Greater NOIDA, (U.P). Flat Buyer Agreement was entered into between the parties on 1.5.2006. The complainant paid an amount or Rs. 12,95,253.75 by way of cheque in two instalments in favour of the OP. Amount of Rs. 10 lakh was paid by way of cheque dated 30.4.2006. Amount of Rs. 2,95,253.75 was paid by way of cheque dated 23.5.2007. Thus in all an amount of Rs. 12,95,253.75 was paid. It amounted to 25% of the total value of the flat.
4. Provisional allotment letter dated 23rd February, 2007 was issued. Flat bearing No. T-1502 in Parsvnath Privilage, Greater NOIDA, (U.P) was allotted. OP assured that the possession of the Flat would be delivered within a period of 36 months as per terms and conditions contained in the Flat Buyer Agreement. Not satisfied with this, the OP allured the complainant to execute another Flat Buyer Agreement dated 13.11.2008. OP also wrote letter dated 9.12.2008. He gave revised payment plan for a change to ‘part down payment plan’. Grievance of the complainant is that even after expiry of 3 years, there was no progress at the site.
5. The OP had been demanding money from time-to-time. Complainant sent Legal Notice on 22nd September, 2009. OP sent the reply, on 3.11.2009. In its reply, the OP referred to Clause 10(a) of the Flat Buyer Agreement which is reproduced below:
“10(a) Construction of the Flat is likely to be completed within a period of thirty six (36) months of commencement of construction of the particular Block in which the Flat is located on receipt of all requisite approvals including sanction of building plans, environmental clearances, etc. subject to force majeure and restraints/restrictions from any Courts/authorities non-availability of building materials and any circumstances beyond the control of the Developer and subject to timely payments by the Buyer. No claim by way of damages/compensation shall lie against the Developer in the case of delay in handing over possession on account of the said reasons.”
6. OP did not provide any information relating to the progress of the construction of flat. Aggrieved against the conduct of the OP, complainant filed the present complaint.
7. In its written version, the OP submitted that assuming he failed to handover the possession of the flat, the complainant was entitled to recover damages by filing a Civil Suit. Next submission of the OP is that the case requires and a detailed evidence which cannot be recorded by this Commission. The OP has relied upon Clause 10(a) of the Flat Buyer Agreement which is reproduced above.
8. OP contended that 25% of total value of the flat stood paid by the complainant. OP stated that in the last quarter of the year 2008, recession gripped the Indian Economy. It hit the real estate sector adversely. As a result of this, the pace of construction slowed down. Now, the construction is going on. OP relied upon the Clause 10(c) of the Flat Buyer Agreement which is reproduced below:
“10(c) In case of delay in construction of the Flat beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under Clause 10(a), the Developer shall pay to the Buyer compensation @ Rs. 53.82 (Rupees fifty three and paise eighty two only) per sq.meter or @ Rs. 5 (Rupees five only) per sq.ft. of the super area of the Flat per month for the period of dely. Likewise, if the buyer fails to settle the final account of the Flat within 30 days from the date of issue of the final call notice, the Buyer shall be liable to pa
