8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.

1&disp=inline&realat

NATIONALCONSUMERDISPUTESREDRESSALCOMMISSION
NEWDELHI

CONSUMERCASENO.347OF2014

1.SWARNTALWAR&2ORS.
W/o.LateCol.V.P.Talwar,C1B104,DLFCarlton
Estate,DLFPhaseV,
Gurgaon122001.
Haryana
...........Complainant(s)
Versus

1.UNITECHLTD.
(THROUGHITSMANAGINGDIRECTOR)REGD.
OFFICE:6,COMMUNITYCENTERSAKET,
NEWDELHI110017
...........Opp.Party(s)
CONSUMERCASENO.348OF2014

1.ShriSANJAYMEHROTRA&ANR.,
S/oShriBharatLalMehrotra,1103,EmbassyHaven400/4,
15thCross,2ndBlock,RTNagar,
BANGALORE.
...........Complainant(s)
Versus

1.M/sUNITECHLTD.,
ThroughitsManaging,Regd.Office:6,CommunityCentre,
Saket,
NEWDELHI110017.
...........Opp.Party(s)
CONSUMERCASENO.349OF2014

1.MOHD.HAROONQURESHI&ANR.,
S/oMohd.SwalaheenQureshi,H2E023,WestendHeights,
DLFPhase5,
GURGAON122009.
...........Complainant(s)
Versus

1.M/sUNITECHLTD.,
ThroughitsManaging,Regd.Office:6,CommunityCentre,
Saket,
NEWDELHI110017.
...........Opp.Party(s)
CONSUMERCASENO.350OF2014

1.ShriDEEPAKJAIN,
S/oRajenderKumarJain,R/o1428,SectorC,Pocket1,
VasantKunj,
NEWDELHI110070.
...........Complainant(s)
Versus

1.M/sUNITECHLTD.,
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

1/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

ThroughItsManagingDirector,Regd.Office:6,
CommunityCenter,Saket,
NEWDELHI110017.

...........Opp.Party(s)

BEFORE:

HON'BLEMR.JUSTICEV.K.JAIN,PRESIDINGMEMBER

HON'BLEDR.B.C.GUPTA,MEMBER
FortheComplainant: Mr.SaurabhJain,Advocatewith
Complainantinperson(CC349/2014)
FortheOpp.Party:
Mr.SukumarPattjoshi,Sr.AdvocatewithMr.MohinderJ.S.Rupal,
Advocate
Dated:14Aug2015
ORDER
JUSTICEV.K.JAIN,PRESIDINGMEMBER
1.ThecomplainantsbookedbetweenJuly2006toSeptember,2006,residentialapartmentswith
theoppositepartyinitsprojectknownasUnitechHabitat,whichitwasseekingtodevelopand
constructonplotNo.9,SectorPIII(AlistoniaEstate),GreaterNoidaandAllotment
Letters/Agreementsinthisregardwereexecutedbetweenthepartieswhereundertheoppositeparty
agreedtodeliverpossessionoftheflattothecomplainantswithinsixmonthsofthe
aforesaidAllotmentLetter/Agreement,subjecttoforcemajeure
circumstancesbeyondthecontroloftheoppositeparty.Theoppositeparty,however,failedtooffer
possessionoftheflatstothecomplainantswithinthetimeagreedbetweentheparties.Thegrievance
ofthecomplainantsisthatthoughtheybookedflatsmorethaneightyearsago,notonlyhasthe
oppositepartyfailedtoofferpossessiontothem,theprojectbyitselfisnowherenearcompletion.
Thecomplainantsclaimtohavepaidabout95%ofthecostoftheflattotheoppositeparty.Being
aggrievedthecomplainantsarebeforethisCommissionseekingrefundoftheamountpaidbythem
alongwithinterestattherateof18%perannum.Theyhavealsosoughtexemplarydamagesandcost
oflitigationfromtheoppositeparty,besidesrentfortheperiodthepossessionwasdelayed.
2.Thecomplaintshavebeenresistedbytheoppositepartyprimarilyonthegroundsthat(i)the
amountpaidbythecomplainantsbeinglessthanRs.1,00,00,000/ineachcase,thisCommission
lackspecuniaryjurisdictiontoentertainthecomplaints,(ii)asperclause4(c)oftheallotmentletter
theoppositepartyisrequiredtopayonlytheholdingchargescalculatedatRs.5/persq.ft.per
monthofthesuperareafortheperiodofdelayinofferingdeliveryoftheflatbeyondtheagreed
period,(iii)thedelayisattributabletoarecessionintheeconomy,affectingtheavailabilityofthe
resourcessuchaslabourandrawmaterials,(iv)therewasmajordisruptionintheconstruction
activityoftheoppositepartyduetomassiveagitationandstrikesbyfarmerswhoselandswere
acquiredbyNOIDA,whichresultedinslackeningandavailabilityofsupplyofrawmaterial,(v)
therewasacuteshortageoflabour,undergroundwaterandrawmaterialbesidesdelayedapproval
fromGreaterNoidaAuthorityand(vi)Intermsofclause4(e)oftheallotmentlettertheopposite
partyisentitledeithertoofferanalternativepropertyorrefundtheamountpaidbythecomplainant
withsimpleinterestattherateof10%perannumwithoutdamagesorothercompensation.Itisalso
allegedthatnotificationdated14092006issuedbyGovernmentofIndiaimposedrestrictionsand
prohibitionsonnewprojectsoractivitiesorontheextensionormodernizationoftheexistingprojects
withoutpriorenvironmentalclearancesandtheprocedureforobtainingsuchclearancesledtodelay
inconstructionschedule.ItisalsoclaimedthattheDharnabyfarmerswhowereagitatedonaccount
ofacquisitionoftheirland,infrontoftheprojectsofvariousbuildersalsohaltedtheconstruction
workandtherewasdefaultinpaymentofinstallmentsbyseveralflatbuyers,duesagainstwhom
amountedtonearlyRs.57,00,00,000/.
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

2/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

3.Intheirrejoinderthecomplainantshavedeniedtheavermentsmadeinthereplyoftheopposite
partyandhavepointedoutthatthesocalledagitationofthefarmerstookplaceinNoidaExtension,
whereastheprojectindisputeislocatedinGreaterNoida.Itisfurtherstatedintherejoinderthat
severalbuildersincludingtheoppositepartyitselfhadcompletedanddeliveredotherprojectsinthe
samelocalitywhichclearlyshowsthattherewasnoimpactofagitationsattheprojectsite.Itisalso
pointedoutthattheconstructionworkhasnotstartedtilldatethoughthesocalledstrikesand
agitationswereoverlongago.
4.TherelevantclausesoftheAllotmentLetter/Agreementreadasunder:
2c.PaymentPlan:
Theallottee(s)shallpaythebalanceamountoftheconsiderationinaccordance
withthePaymentPlanannexedasAnnexureAhereto.IntheeventAllottee(s)failstopay
thebalanceconsiderationorintheeventofanydelayinpaymentofanyinstallmentand/or
othercharges,inaccordancewiththePaymentPlan,theAllottee(s)shallbeliabletopay
interestcalculatedfromtheduedateofoutstandingamount@18%perannumcompounded
quarterly.
2g.Failure/DelayinPayment:
IntheeventAllottee(s)failstopayanyinstallment(s)withinterestwithin90days
fromduedate,theDevelopershallhavetherighttocanceltheallotmentandforfeittheentire
amountofEarnest/RegistrationMoneydepositedbytheAllottee(s)andtheAllottee(s)shall
beleftwithnorightorlienonthesaidApartmentandtheDevelopershallbefreetosellthe
same.Theamountpaid,ifany,overandabovetheEarnest/Registrationmoneyshallbe
refundedbytheDeveloperwithoutinterestafteradjustmentofinterestaccruedonthedelayed
payment(s),ifany,duefromtheAllottee(s).
4a.Possession:
i. ThatthepossessionofApartmentisproposedtobedeliveredbytheDevelopertothe
Allottee(s)within36monthsofsigninghereofsubjecttoForceMajeurecircumstancesbeyond
thecontroloftheDeveloperanduponregistrationofSubLeaseDeedprovidedallamounts
dueandpayablebytheAllottee(s)asprovidedhereinhavebeenpaidtotheDeveloper.Itis,
however,understoodbetweenthePartiesthatvariousTowerscomprisedintheComplexshall
bereadyandcompletedinphasesandhandedover,accordingly.
ii. TheDevelopershallbeentitledtoreasonableextensionindeliveryofthePossessionof
ApartmentintheeventofanydefaultornegligenceattributabletotheAllottee(s)fulfillmentof
Terms&Conditionscontainedherein.
4c(ii)ThattheDeveloperwouldpaycharges@Rs.5/persq.ft.permonthofSuperAreafor
theperiodofdelayinofferingthedeliveryofthesaidApartmentbeyondtheperiodindicated
inclause4a(i)saveandexceptasforreasonsbeyondthereasonablecontroloftheDeveloper
andForceMajeureevents.ThesechargeswouldbeadjustedatthetimeofFinalNoticefor
Possession.
4e.Default:
IfforanyreasontheDeveloperisnotinapositiontooffertheApartmentaltogether,
theDevelopershalloffertheAllottee(s)analternativepropertyorrefundtheamountinfull
withSimpleInterest@10%perannumwithoutanyfurtherliabilitytopaydamagesorany
othercompensationonthisaccount.
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

3/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

8b.ForceMajeure
IncasethecompletionoftheApartmentisdelayedforreasonsofForceMajeureor
circumstancesbeyondthecontroloftheDeveloperorbecauseofanynoticeororderofthe
government,includingslowdownstrike,civilcommotionorbyreasonofwar,enemyor
terroristactionoranactofGod,delayinthegrantofCompletion/PossessionCertificateby
theGovernmentand/oranyotherpublicorcompetentauthorityorforanyreasonbeyondthe
controloftheDeveloper,theDevelopershallbeentitledtoareasonableextensionoftimein
theagreeddatefordeliveryofpossessiontheApartment.

5.Thefirstquestionwhicharisesforourconsiderationinthesecasesisastowhetherthis
Commissionpossessestherequisitepecuniaryjurisdictiontoentertainthesecomplaints.Section
11(1)oftheConsumerProtectionActreadwithSection21oftheConsumerProtectionActtothe
extentitisrelevantprovidesthatthisCommissionshallhavejurisdictiontoentertaincomplaints
wherethevalueofthegoodsorservicesandcompensationifanyclaimedexceedsRs.1,00,00,000/.
Thecontentionofthelearnedcounselfortheoppositepartyisthatinterestclaimedbythe
complainantscannotbetermedascompensationandiftheinterestcomponentisexcluded,the
pecuniaryvalueofthecomplaintdoesnotexceedRs.1,00,00,000/exceptinonecase.Thelearned
counselforthecomplainantsontheotherhandcontendedthattheinterestwhichtheyhaveclaimed
alongwithrefundoftheprincipalsumevenifnotsodescribedspecifically,isbywayof
compensationonly,sincetheoppositepartyhasbeendeficientinrenderingservicestothe
complainantsbynotdeliveringpossessionoftheflatsonorbeforethetimeagreedinthisregard.
6.Inourview,theinterestclaimedbytheflatbuyersinsuchacasedoesnotrepresentonlythe
interestonthecapitalborrowedorcontributedbythembutalsoincludescompensationonaccountof
appreciationinthelandvalueandincreaseinthecostofconstructioninthemeanwhile.Asnotedby
usinCCNo.232of2014,PuneetMalhotraVs.ParsvnathDevelopersLtd.decidedon29012015,
therehasbeensteepappreciationinthemarketvalueofthelandandcostofconstructionofthe
residentialflatsinGreaterNoidainlastabout710yearsandconsequentlythecomplainantscannot
hopetogetacomparableflatatthesamepricewhichtheoppositepartyhadagreedtochargefrom
them.Infactitwouldbedifficulttogetasimilaraccommodation,evenattheagreedpriceplus
simpleinterestthereonattherateof18%perannum.Therefore,thepaymentofinteresttotheflat
buyersinsuchacaseisnotonlyonaccountoflossofincomebywayofinterestbutalsoonaccount
oflossoftheopportunitywhichthecomplainantshadtoacquirearesidentialflatataparticularprice.
7.InGhaziabadDevelopmentAuthorityVs.BalbirSingh(2004)5SCC65,theHonbleSupreme
Courtinteraliaobservedandheldasunder:
However,thepowertoanddutytoawardcompensationdoesnotmeanthat
irrespectiveoffactsofthecasecompensationcanbeawardedinallmattersatauniformrate
of18%perannum.Asseenabovewhatisbeingawardediscompensationi.e.arecompense
forthelossorinjury.Itthereforenecessarilyhastobebasedonafindingoflossorinjury
andhastocorrelatewiththeamountoflossorinjury.ThustheForumortheCommission
mustdeterminethattherehasbeendeficiencyinserviceand/ormisfeasanceinpublicoffice
whichhasresultedinlossorinjury.Nohardandfastrulecanbelaiddown,howeverafew
exampleswouldbewhereanallotmentismade,priceis
received/paidbutpossessionisnotgivenwithintheperiodsetoutinthebrochure...
AlongwithrecompensingthelosstheCommission/Forummayalsocompensatefor
harassment/injuryboth
mentalandphysical.Similarly,compensationcanbegivenifafterallotmentismadethere
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

4/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

hasbeencancellationofschemewithoutanyjustifiablecause.
Thatcompensationcannotbeuniformandcanbestofillustratedbyconsideringcaseswhere
possessionisbeingdirectedtobedeliveredandcaseswhereonlymoniesaredirectedtobe
returned.Incaseswherepossessionisbeingdirectedtobedeliveredthecompensationfor
harassmentwillnecessarilyhavetobelessbecauseinawaythatpartyisbeingcompensated
byincreaseinthevalueofthepropertyheisgetting.Butincaseswheremoniesarebeing
simplyreturnedthenthepartyissufferingalossinasmuchashehaddepositedthemoneyin
thehopeofgettingaflat/plot.Heisbeingdeprivedofthatflat/plot.Hehasbeendeprivedof
thebenefitofescalationofthepriceofthatflat/plot.Thereforethecompensationinsuch
caseswouldnecessarilyhavetobehigher.

Itwould,thus,beseenthattheHonbleSupremeCourtrecognizedthattheinteresttotheflat
buyersinsuchcasesispaidbywayofcompensation.Therefore,thereisnoreasonwhytheinterest
claimedbythecomplainantsoratleastpartofitshouldnotbetakenintoconsiderationforthe
purposeofdecidingthepecuniaryjurisdictionofthisCommission.Ifthisisdone,theaggregate
amountclaimedineachofthecomplaintsexceedsRs.1,00,00,000/and,therefore,thisCommission
doespossesstherequisitepecuniaryjurisdiction.
8.AsregardsthepleathatintermsofClause(c)oftheallotmentlettertheoppositepartyis
requiredtopayonlytheholdingchargescalculatedattherateofRs.5/persq.ft.permonthofthe
superareafortheperiodthepossessionisdelayed,suchacontentionwasexpresslyrejectedbyusin
PuneetMalhotra(supra)holdingthatsuchclauseappliesonlyinacasewhereconstructionoftheflat
isdelayedbutdespitedelaythebuyeracceptsthepossessionoftheflatfromthesellerand
consequentlytheaccountshavetobesettledbetweentheparties.Weobservedinthisregardthatthe
buyerwouldhavetopaytheagreedholdingchargestothesellerandthesellertopaytheagreed
compensationonaccountofdelayingtheconstructionoftheflat.Thesaidclause,however,doesnot
applytoacasewherethebuyeronaccountofdelayonthepartofthesellerinconstructingtheflatis
leftwithnooptionbuttoseekrefundoftheamountwhichhehadpaidtotheseller.Wefurtherheld
thatsuchaclausewherethesellerincaseofdefaultonthepartofthebuyerseekstorecoverinterest
fromhimattherateof24%perannumwillamounttoanunfairtradepracticesinceitgivesanunfair
advantagetotheselleroverthebuyer.Wealsonotedinthisregardthatenumerationoftheunfair
tradepracticesinSection2(r)oftheActisinclusiveandnotexhaustive.
ThispleawasalsonegativedbyusinabatchofcomplaintsCCNo.427of2014,SatishKumar
Pandey&Anr.Vs.UnitechLtd.andconnectedmatter,decidedon08062015.Allthosecomplaints
werefiledagainstnoneotherthantheoppositepartyinthesematters,namely,UnitechLtd..
9.Comingtothepleasthattherewasrecessionintheeconomyandadisruptionduetoagitation
byfarmersandacuteshortageoflabour,etc.,thefollowingviewtakenbyusInSatishKumarPandey
(Supra)isrelevant.

Neitheranynewlegislationwasenactednoranexistingrule,regulationororderwas
amendedstoppingsuspendingordelayingtheconstructionofthecomplexinwhich
apartmentswereagreedtobesoldtothecomplainants.Thereisnoallegationofany
lockoutorstrikebythelabouratthesiteoftheproject.Thereisnoallegationofany
slowdownhavingbeenresortedtobythelabourersoftheoppositepartyorthe
contractorsengagedbyitatthesiteoftheproject.Therewasnocivilcommotion,war,
enemyaction,terroristaction,earthquakeoranyactofGodwhichcouldhavedelayedthe
completionoftheprojectwithinthetimestipulatedintheBuyersAgreement.Itwas
contendedbythecounselfortheOPthattheexpressionslowdownwouldinclude
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

5/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

economicslowdownorrecessionintheRealEstatesector.I,however,findnomeritin
thiscontention.Thewordslowdownhavingbeenusedalongwiththewordslockout
andstrike,Ihastobereadejusdemgeneriswiththewordslockoutandstrikeand
therefore,canmeanonlyaslowdownifresortedbythelabourersengagedin
constructionoftheproject.
Asregards,allegedshortageoflabour,Ifindthatnomaterialhasbeenplacedon
recordbytheOPthatdespitetrying,itcouldnotbegetlabourerstocompletethe
constructionoftheprojectwithinthetimestipulatedintheBuyersAgreement.Itwas
submittedbythelearnedcounselforthecomplainantsthatordinarilybigbuilderssuchas
theOPinthesecases,arecontracting/subcontractingtheconstructionworktothe
contractorsengagedbythem,insteadofemployingtheirownlabourersonaregularbasis,
thepurposebeingtoensurethattheyarenotsaddledwiththewagebillofthoseregular
labourers,incasetheoppositepartydoesnothaveadequateworkforthem.Thereisno
evidenceoftheOPhavingbeeninvitedtendersforappointmentofcontractors/sub
contractorsforexecutingtheworkatthesiteofthoseprojectsandnocontractor/sub
contractorhavingcomeforwardtoexecutetheprojectonthegroundthatadequatelabour
wasnotavailableinthemarket.Therefore,itcannotbeacceptedthattheoppositeparty
couldnothavearrangedadequatelabour,eitherdirectlyorthroughcontractors/sub
contractors,fortimelycompletionoftheproject.Asregardstheallegedshortageof
water,bricksandsandinthemarket,IfindthatthereisnoevidencefiledbytheOP,to
provethatitwasunabletoprocurewater,sandandbrickinadequatequantity.Thisis
alsotheircasethatthenotificationoftheGovernment,beingrelieduponbytheopposite
party,isanoldnotification,whichwasinforceevenatthetimetheoppositeparty
promisedpossessionin36months.Thereisnoevidenceoftheoppositepartyhaving
invitedtendersforsupplyofbricksandwaterandtherebeingnoresponsetosuch
tenders.Infact,iftheworkistobeexecutedthroughcontractors/subcontractors,the
materialsuchasbricks,sandandevenwaterwillbearrangedbythecontractor/sub
contractorandnotbytheoppositeparty.Asnotedearlier,thereisnoevidenceofthe
oppositepartyhavinginvitedtendersafterawardingtheworkofprojectinquestiontothe
contractors/subcontractorsandtherebeingnoresponsetosuchtenders.Therefore,Ifind
nomeritinthepleathatthecompletionoftheprojectwasdelayedduetononavailability
ofwater,sandandbricksinadequatequantity.

Itisanundisputedpropositionoflawthatordinarilythepartiesareboundbytheterms
andconditionsofthecontractvoluntarilyagreedbythemanditisnotforaConsumer
ForumorevenaCourttorevisethesaidterms.
However,atermofacontract,inmyviewwillnotbefinalandbindingifitisshownthat
theconsenttothesaidtermwasnotreallyvoluntarybutwasgivenunderasortof
compulsiononaccountofthepersongivingconsentbeingleftwithnootherchoiceorif
thesaidtermamountstoanunfairtradepractice.Itwassubmittedbythelearnedcounsel
forthecomplainantsthatthetermprovidingforpaymentofanominalcompensationsuch
asRs.5/persquarefootofthesuperareahavingbecometheorderofthedayinthe
contractsdesignedbybigbuilders,apersonseekingtobuyanapartmentisleftwithno
optionbuttosignonthedottedlinessincetherejectionofsuchtermbyhimwouldmean
cancellationoftheallotment.Hefurthersubmittedthatapersonseekingtoacquirea
builtupflatinsteadofpurchasingaplotandthenraisingconstructiononit,therefore,is
notinapositiontoprotestresisttheinclusionofsuchatermintheBuyersAgreement,
andhastorelyuponthereputationofthebuilder,particularlyifheisabigbuildersuch
asUnitechLtd.HealsosubmittedthattheformatoftheBuyersAgreementisnever
showntothepurchasersatthetimeofbookingtheapartmentandifherefusestosignthe
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

6/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

BuyersAgreementontheformatprovidedbythebuilder,notonlywillhelosethe
booking,eventhebookingamount/earnestmoneypaidbyhimwillbeforfeitedbythe
builder.Ifindmeritintheabovereferredsubmissionsofthelearnedcounsel.Aperson
who,foronereasonortheother,eithercannotordoesnotwanttobuyaplotandraise
constructionofhisown,hastonecessarilygoinforpurchaseofthebuiltupflat.Itis
onlynaturalandlogicalforhimtolookforanapartmentinaprojectbeingdevelopedby
abigbuildersuchastheoppositepartyinthesecomplaints.Sincethecontractsofallthe
bigbuilderscontainatermforpaymentofaspecifiedsumascompensationintheevent
ofdefaultonthepartofthebuilderinhandingoverpossessionoftheflattothebuyerand
theflatcompensationofferedbyallbigbuildersisalmostanominalcompensationbeing
lessthan.25%oftheestimatedcostofconstructionpermonth,theflatbuyerisleftwith
nooptionbuttosigntheBuyersAgreementintheformatprovidedbythebuilder.No
sensiblepersonwillvolunteertoacceptcompensationconstitutingabout23%ofhis
investmentincaseofdelayonthepartofthecontractor,whenheismadetopay18%
compoundinterestifthereisdelayonhispartinmakingpayment.
Itcanhardlybedisputedthatatermofthisnatureiswhollyonesided,unfairand
unreasonable.Thebuilderchargescompoundinterest@18%perannumintheeventof
thedelayonthepartofthebuyerinmakingpaymenttohimbutseekstopaylessthan3%
perannumofthecapitalinvestment,incasehedoesnothonourhispartofthecontractby
defaultingingivingtimelypossessionoftheflattothebuyer.SuchatermintheBuyers
Agreementalsoencouragesthebuildertodivertthefundscollectedbyhimforone
project,toanotherprojectbeingundertakenbyhim.Hethus,isabletofinanceanew
projectatthecostofthebuyersoftheexistingprojectandthattooataverylowcostof
finance.IfthebuilderistotakeloanfromBanksorFinancialInstitutions,itwillhaveto
paytheinterestwhichtheBanksandFinancialInstitutionschargeontermloanorcash
creditfacilitiesetc.TheinterestbeingchargedbytheBanksandFinancialInstitutions
forfinancingprojectsofthebuildersismanytimesmorethanthenominalcompensation
whichthebuilderwouldpaytotheflatbuyersintheformofflatcompensation.Infact,
theoppositepartyhasnotevenclaimedthattheentireamountrecoveredbyitfromthe
flatbuyerswasspentonthisveryproject.Thisgivescredencetotheallegationofthe
complainantsthattheirmoneyhasbeenusedelsewhere.Suchapractice,inmyview,
constitutesunfairtradepracticewithinthemeaningofSection2(r)oftheConsumer
ProtectionAct,1986sinceitadoptsunfairmethodsorpracticeforthepurposeofselling
theproductofthebuilder.Though,suchapracticedoesnotspecificallyfallunderanyof
theClausesofSection2(r)(1)oftheActthatwouldbeimmaterialconsideringthatthe
unfairtrades,methodsandpracticesenumeratedinSection2(r)(1)oftheActare
inclusiveandnotexhaustive,aswouldbeevidentfromtheuseofwordincluding
beforethewordsanyofthefollowingpractices.

Itwouldalsobepertinenttonoteherethataspointedoutbythecomplainantstheagitationof
thefarmerswasonaccountofacquisitionoflandinNoidaExtensionandnotonaccountof
acquisitionoflandonwhichtheprojectinwhichtheflatsweretobeconstructedforthe
complainants.Asregardstheallegeddelayinobtainingenvironmentalclearancesthereisnomaterial
onrecordtoshowwhentheoppositepartyappliedforsuchclearances,wheretheysubmittedallthe
requisitedocumentsetc.whileapplyingforsuchclearancesandhowmuchwasthetimetakenbythe
concernedauthoritiesingrantingthesaidclearances.Intheabsenceofsuchparticulars,itwouldbe
difficultforustoacceptthatdevelopmentoftheprojectwasdelayedonaccountofanynotification
imposingrestrictionsonnewprojects.Inanycase,theoppositepartyhasfailedtoproducebeforeus
anynotificationimposingrestrictionorprohibitionondevelopmentoftheprojectinwhichtheflats
weretobeconstructedforthecomplainants.
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

7/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

10.InK.A.NagmaniVs.HousingCommissioner,KarnatakaHousingBoard,CANo.67306731of
2012decidedon19092012,thecomplainantwhowasawardedinterestbythisCommissionatthe
rateof12%perannumontherefundamount,feltaggrievedandapproachedtheHonbleSupreme
Courtforgrantofahigherinterest.Despitetherespondentintheabovereferredmatterbeinga
statutorybodyunliketheoppositepartywhichisaprivatebuilder,theHonbleSupremeCourt,
relyinguponitsearlierdecisioninGhaziabadDevelopmentAuthorityVs.BalbirSingh(supra)and
noticingthatthecomplainantwassufferingalossinasmuchasshehaddepositedthemoneyinthe
hopeofgettingaflatbutwasbeingdeprivedtogettheflatandtherebydeprivedofthebenefitof
escalationofthepriceoftheflatheld,thatthecompensationwouldnecessarilybehigher.The
HonbleSupremeCourt,therefore,grantedinteresttothecomplainantattherateof18%perannum
fromthedateofdeposittillthedateofrealizationalongwithfurthercompensationquantifiedat
Rs.15,000/fordeficiencyinserviceandRs.20,000/towardsthecostoflitigation.
11.ThelearnedcounselfortheoppositepartyhasreferredtothedecisionoftheHonbleSupreme
CourtinLIC&Anr.Vs.Smt.S.Sindhu(2006)(V)258wheretheHonbleCourtinteraliaobserved
thatthecourtsandtribunalscannotrewritecontractscontrarytothetermsofthecontracttothe
defaultingparties.Intheabovereferredcase,thepolicywastreatedasapaiduppolicyonaccountof
defaultinpaymentofpremium.Asperthetermsofthepolicy,thepremiumpaidinsuchapolicywas
toberefundedwithoutinterest.TheConsumerFora,despitetheabovereferredpolicycondition,
directedpaymentofinterestontheamountofthepremiumattherateof12%perannum.Inthesaid
casecasenodeficiencyonthepartoftheLICintheservicesrenderedtotheinsuredwasfound.On
theotherhandinthecasesbeforeustherehasbeengrossdeficiencyonthepartoftheoppositeparty
inrenderingservicestothecomplainantswhohavepaidabout95%ofthecostoftheflatandwaited
foranumberofyearsinthehopeofgettingroofovertheirhead.NowherehastheHonbleSupreme
Courtheldthateveninsuchacaseofgrossdeficiencyinrenderingservicestothecomplainant
compensationintheformofinterestcannotbeawardedagainsttheserviceprovider.Thelearned
counselfortheoppositepartyhasalsoreferredtothedecisionofthisCommissioninShahbad
CooperativeSugarMillsVs.NationalInsuranceCo.Ltd.,II(2003)CPJ81(NC)whereitwasheld
thattheinterestcannotbeaddedtotheprincipalforthepurposeofdeterminingthepecuniary
jurisdiction.Inthejudgmentrelieduponbythelearnedcounselinterestwasnotclaimedas
compensationonaccountofdeficiencyinrenderingservicestothecomplainant.Theaforesaid
judgment,therefore,wouldnotapplytothecasesbeforeus.
ThelearnedcounselhasnextreferredtothedecisionofthisCommissioninRameshKumar
Vs.GoyalEyeInstitute&Ors.,CCNo.135of2011decidedon30032012wherethis
CommissionrelyinguponthedecisionoftheHonbleSupremeCourtinTaraDeviVs.SriThakur
RadhaKrishnaMaharaj(1987)4SCC69andanearlierdecisionofthisCommissioninCCNo.60of
2011,Smt.SujataNathVs.PopularNursingHome&Ors.whichwasupheldbytheHonble
SupremeCourtinCANo.8642of2011,directedreturnofacomplaintwherethecomplainant
claimingpermanentdisabilityonaccountofdeficiencyintheservicesrenderedtohimbythe
oppositepartyduringsurgeryofhiseyehadclaimedcompensationamountingtoRs.3,00,00,000/.
ThisCommissionfoundtheclaimtobehighlyexaggeratedandfanciful.Thisjudgmentinourview
cannotbeappliedtothefactsofthecasebeforeuswhereareasonableinterestof18%perannumby
wayofcompensationorevenapartofitwouldbringthecomplaintwithinthepecuniaryjurisdiction
ofthisCommission.
ThelearnedcounselfortheoppositepartyhaslastlyreferredtothedecisionoftheHonble
SupremeCourtinSecretary,BhubaneswarDevelopmentAuthorityVs.SusantaKumarMishra,CA
605of2009decidedon30012009wheretheHonbleSupremeCourtobservedasunder:
Further,anyforaundertheConsumerProtectionAct,1986(Actforshort)before
grantinganyrelieftoacomplainant,shouldbesatisfiedthatthecomplaintrelatestoanyof
themattersspecifiedinSection2(c)oftheActandthatthecomplainanthasallegedandmade
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

8/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

outeitherunfairorrestrictivetradepracticebyatraderordefectsinthegoodssoldorany
deficiencyinaservicerenderedorchargingofexcessivepriceforthegoodssoldoroffering
ofanygoodshazardoustolifeandsafetywithoutdisplayinginformationregardingcontents,
etc..Ifnoneoftheseisallegedandmadeout,thecomplaintwillhavetoberejected.

Sincegrossdeficiencyonthepartoftheoppositepartyinrenderingservicestothecomplainantis
clearlyestablishedonaccountofitsnothavingcompletedtheprojecteveninaboutnineyearsfrom
thedatetheflatsweresoldtothecomplainantsthoughithadagreedtodeliverthepossessiontothem
withinaperiodofthreeyears,thecomplaintisclearlymaintainable.

12.Asregardsofferofalternativepropertyobviouslyithastobeinthesamelocalityorsomeother
localitysuitabletothecomplainantshouldbeonthesameflooronwhichflatwassoldtothe
complainants,shouldbeofalmostidenticalsize,shouldhaveidenticalspecificationsandshouldbe
offeredatthesamepriceatwhichtheflatinquestionwasagreedtobesold.Accordingtothe
complainants,thoughtheoppositepartyhadofferedtoshifttheirflattoanothertowertheyhad
imposedaconditionthatthecomplainantswillhavetopayadditional/increasedcosttowardstheflat
whichwasnotacceptabletothem.Theavermentsmadeinthisregardinpara10ofthecomplaint
havenotbeenspecificallydeniedandthisisnotthecaseinthereplythatanotherflatofthesamesize
andinthesameprojectwasofferedtothecomplainantsatthesameprice.

13.Aftertheconclusionoftheargumentstheoppositepartyhasfiledanaffidaviton21072015
statingthereinthatfourflatsareavailableintheHabitatProjectofGreaterNoidawhichcanbe
offeredtothecomplainants.Nootheralternativeaccommodationisstatedtobeavailablewiththem.
Theareaandtheflooroftheaforesaidapartmentshavenotbeenindicatedintheaffidavit.Itisnot
knownwhetherthetowerinwhichtheaforesaidflatsaresituatedhaveanidenticalorbetterlocation
thanthetowerinwhichtheflatswereagreedtobesoldtothecomplainants.Moreimportantly,there
isnothingintheaffidavittoindicatethepricewhichthecomplainantswillhavetopayforthe
aforesaidflats.Therefore,thecomplainantsinouropinioncannotbecompelledtoacceptthe
aforesaidalternativeflats,afternineyearoftheirhavingbookedtheflatswiththeoppositeparty.As
regardstherefundoftheprincipalamountalongwithinterestattherateof10%perannum,suchan
offerinourviewwouldconstituteanunfairtradepracticeconsideringthataspertheagreement
betweenthepartiestheflatbuyerswererequiredtopayinterestattherateof18%perannum
compoundedquarterlyintheeventofdefaultontheirpartinmakingpaymenttotheoppositeparty.It
wouldalsobepertinenttonoteherethatthisisnotthecaseoftheoppositepartythattheentire
moneycollectedbythemfromtheflatbuyerinthisprojectwasinvestedbytheminthisveryproject.
Thecontentionofthecomplainantsduringthecourseofargumentswasthattheoppositepartyhas
beendivertingthefundscollectedforoneprojecttofinancetheirotherprojectsatthecostoftheflat
buyers.Itwasalsosubmittedonbehalfofthecomplainantsthatiftheoppositepartyweretoraise
financefromthebanksandfinancialinstitutionsfordevelopingtheprojectstowhichtherefunds
havebeendivertedortocompletetheprojectinquestionitwouldhavetopaymorethan18%simple
interest.AsobservedbyusinSatishKumarPandey&Anr.(Supra)suchcontractswouldconstitute
unfairtradepracticeonthepartoftheoppositeparty.Suchatermintheagreement,therefore,is
liabletobeignored.
14.Itisamatterofcommonknowledgethat,therehasbeensubstantialappreciationintheland
valueinGreaterNoida,since2006.ThiscanbeverifiedevenfromacomparisonoftheCirclerates
oflandinGreaterNoidaintheyear2006,withthecircleratesoflandin2015,whichisan
informationavailableinpublicdomain.Itcanalsonotbedisputedthattherehasbeensteepincrease
inthecostofconstructioninlastaboutnineyears.Therefore,ifthecomplainantshavetopurchase
https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f_

9/10

8/16/2015 https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realat

todaythebuiltupflatsofthesamesizeandspecificationsandinthesamelocality,thecostmaynot
belessthanthepriceagreedtobepaidbythecomplainantstotheoppositeparty,andinterestthereon
attherateof18%perannum.Moreover,thecomplainantsarealsoentitledtosuitablecompensation
forthementalagonyandharassmentundergonebytheminlastaboutnineyears,awaitingaroof
overtheirhead,andmakingnumerouscallsandvisitstotheofficeoftheoppositeparty.Therefore,
refundwithsimpleinterestattherateof18%perannumasacomprehensiveallinclusive
compensationisfullyjustifiedinthesecases.Inanycase,ifweawardlesserinterest,an
unscrupulousbuildermay,insteadofcompletingtheprojectforwhichmoneyhasbeencollected
fromtheflatbuyers,divertthefundstootherprojects/activities,sincecostofborrowingforhim
maybehigherthanwhatheismadetopaytotheflatbuyerasinterest.Therefore,wemust
necessarilytakeaview,whichwilldiscourageanysuchmisuse/diversionoffundsbythebuilder.
15.Forthereasonsstatedhereinabove,wedirecttheoppositepartytorefundtheamountpaidtoit
bythecomplainants,alongwithcompensationintheformofsimpleinterestonthatamount,atthe
rateof18%perannumfromthedateofdeposittillthedateofpayment.Thepaymentshallbemade
withinsixweeksfromtoday.Inthefactsandcircumstancesofthecasethereshallbenoorderasto
cost.Thecomplaintsstanddisposedof.

......................J
V.K.JAIN
PRESIDINGMEMBER
......................
DR.B.C.GUPTA
MEMBER

https://mailattachment.googleusercontent.com/attachment/u/0/?ui=2&ik=d26a15e8f0&view=att&th=14f3479b0579ed06&attid=0.1&disp=inline&realattid=f

10/10