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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 347 OF 2014
1. SWARN TALWAR & 2 ORS.
W/o. Late Col. V.P. Talwar, C­1B­104, DLF Carlton
Estate, DLF Phase V,
Gurgaon ­ 122 001.
Haryana
...........Complainant(s)
Versus
1. UNITECH LTD.
(THROUGH ITS MANAGING DIRECTOR)REGD.
OFFICE: 6, COMMUNITY CENTER SAKET,
NEW DELHI ­ 110 017
...........Opp.Party(s)
CONSUMER CASE NO. 348 OF 2014
1. Shri SANJAY MEHROTRA & ANR.,
S/o Shri Bharat Lal Mehrotra, 1103, Embassy Haven 400/4,
15th Cross, 2nd Block, RT Nagar,
BANGALORE.
...........Complainant(s)
Versus
1. M/s UNITECH LTD.,
Through its Managing, Regd. Office: 6, Community Centre,
Saket,
NEW DELHI ­ 110017.
...........Opp.Party(s)
CONSUMER CASE NO. 349 OF 2014
1. MOHD. HAROON QURESHI & ANR.,
S/o Mohd. Swalaheen Qureshi, H2E­023, Westend Heights,
DLF Phase­5,
GURGAON ­ 122009.
...........Complainant(s)
Versus
1. M/s UNITECH LTD.,
Through its Managing, Regd. Office: 6, Community Centre,
Saket,
NEW DELHI ­ 110017.
...........Opp.Party(s)
CONSUMER CASE NO. 350 OF 2014
1. Shri DEEPAK JAIN,
S/o Rajender Kumar Jain, R/o 1428, Sector­C, Pocket­1,
Vasant Kunj,
NEW DELHI ­ 110070.
...........Complainant(s)
Versus
1. M/s UNITECH LTD.,
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Through Its Managing Director, Regd. Office : 6,
Community Center, Saket,
NEW DELHI ­ 110017.
...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER
HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Mr. Saurabh Jain, Advocate with
Complainant in person (CC 349/2014)
For the Opp.Party :
Mr. Sukumar Pattjoshi, Sr. Advocate with Mr. Mohinder J.S. Rupal,
Advocate
Dated : 14 Aug 2015
ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
1. The complainants booked between July 2006 to September, 2006, residential apartments with
the opposite party in its project known as Unitech Habitat, which it was seeking to develop and
construct on plot No.9, Sector PI­II (Alistonia Estate), Greater Noida and Allotment
Letters/Agreements in this regard were executed between the parties where under the opposite party
agreed to deliver possession of the flat to the complainants within six months of the
aforesaid Allotment Letter / Agreement, subject to force majeure
circumstances beyond the control of the opposite party. The opposite party, however, failed to offer
possession of the flats to the complainants within the time agreed between the parties. The grievance
of the complainants is that though they booked flats more than eight years ago, not only has the
opposite party failed to offer possession to them, the project by itself is nowhere near completion.
The complainants claim to have paid about 95% of the cost of the flat to the opposite party. Being
aggrieved the complainants are before this Commission seeking refund of the amount paid by them
along with interest at the rate of 18% per annum. They have also sought exemplary damages and cost
of litigation from the opposite party, besides rent for the period the possession was delayed.
2. The complaints have been resisted by the opposite party primarily on the grounds that (i) the
amount paid by the complainants being less than Rs.1,00,00,000/­ in each case, this Commission
lacks pecuniary jurisdiction to entertain the complaints, (ii) as per clause 4(c) of the allotment letter
the opposite party is required to pay only the holding charges calculated at Rs.5/­ per sq. ft. per
month of the super area for the period of delay in offering delivery of the flat beyond the agreed
period, (iii) the delay is attributable to a recession in the economy, affecting the availability of the
resources such as labour and raw materials, (iv) there was major disruption in the construction
activity of the opposite party due to massive agitation and strikes by farmers whose lands were
acquired by NOIDA, which resulted in slackening and availability of supply of raw material, (v)
there was acute shortage of labour, underground water and raw material besides delayed approval
from Greater Noida Authority and (vi) In terms of clause 4(e) of the allotment letter the opposite
party is entitled either to offer an alternative property or refund the amount paid by the complainant
with simple interest at the rate of 10% per annum without damages or other compensation. It is also
alleged that notification dated 14­09­2006 issued by Government of India imposed restrictions and
prohibitions on new projects or activities or on the extension or modernization of the existing projects
without prior environmental clearances and the procedure for obtaining such clearances led to delay
in construction schedule. It is also claimed that the Dharna by farmers who were agitated on account
of acquisition of their land, in front of the projects of various builders also halted the construction
work and there was default in payment of installments by several flat buyers, dues against whom
amounted to nearly Rs.57,00,00,000/­.
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3. In their rejoinder the complainants have denied the averments made in the reply of the opposite
party and have pointed out that the so called agitation of the farmers took place in Noida Extension,
whereas the project in dispute is located in Greater Noida. It is further stated in the rejoinder that
several builders including the opposite party itself had completed and delivered other projects in the
same locality which clearly shows that there was no impact of agitations at the project site. It is also
pointed out that the construction work has not started till date though the so called strikes and
agitations were over long ago.
4. The relevant clauses of the Allotment Letter/Agreement read as under:
“2c. Payment Plan:
The allottee(s) shall pay the balance amount of the consideration in accordance
with the Payment Plan annexed as Annexure ‘A’ hereto. In the event Allottee(s) fails to pay
the balance consideration or in the event of any delay in payment of any installment and/or
other charges, in accordance with the Payment Plan, the Allottee(s) shall be liable to pay
interest calculated from the due date of outstanding amount @18% per annum compounded
quarterly.
2g. Failure/Delay in Payment:
In the event Allottee(s) fails to pay any installment(s) with interest within 90 days
from due date, the Developer shall have the right to cancel the allotment and forfeit the entire
amount of Earnest/Registration Money deposited by the Allottee(s) and the Allottee(s) shall
be left with no right or lien on the said Apartment and the Developer shall be free to sell the
same. The amount paid, if any, over and above the Earnest/Registration money shall be
refunded by the Developer without interest after adjustment of interest accrued on the delayed
payment(s), if any, due from the Allottee(s).
4a. Possession:
i. That the possession of Apartment is proposed to be delivered by the Developer to the
Allottee(s) within 36 months of signing hereof subject to Force Majeure circumstances beyond
the control of the Developer and upon registration of Sub Lease Deed provided all amounts
due and payable by the Allottee(s) as provided herein have been paid to the Developer. It is,
however, understood between the Parties that various Towers comprised in the Complex shall
be ready and completed in phases and handed over, accordingly.
ii. The Developer shall be entitled to reasonable extension in delivery of the Possession of
Apartment in the event of any default or negligence attributable to the Allottee(s) fulfillment of
Terms & Conditions contained herein.
4c(ii) That the Developer would pay charges @Rs.5/­ per sq.ft. per month of Super Area for
the period of delay in offering the delivery of the said Apartment beyond the period indicated
in clause 4a(i) save and except as for reasons beyond the reasonable control of the Developer
and Force Majeure events. These charges would be adjusted at the time of Final Notice for
Possession.
4e. Default:
If for any reason the Developer is not in a position to offer the Apartment altogether,
the Developer shall offer the Allottee(s) an alternative property or refund the amount in full
with Simple Interest @10% per annum without any further liability to pay damages or any
other compensation on this account.
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8b. Force Majeure;
In case the completion of the Apartment is delayed for reasons of ‘Force Majeure’ or
circumstances beyond the control of the Developer or because of any notice or order of the
government, including slow down strike, civil commotion or by reason of war, enemy or
terrorist action or an act of God, delay in the grant of Completion/Possession Certificate by
the Government and/or any other public or competent authority or for any reason beyond the
control of the Developer, the Developer shall be entitled to a reasonable extension of time in
the agreed date for delivery of possession the Apartment.”
5. The first question which arises for our consideration in these cases is as to whether this
Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. Section
11(1) of the Consumer Protection Act read with Section 21 of the Consumer Protection Act to the
extent it is relevant provides that this Commission shall have jurisdiction to entertain complaints
where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000/­.
The contention of the learned counsel for the opposite party is that interest claimed by the
complainants cannot be termed as compensation and if the interest component is excluded, the
pecuniary value of the complaint does not exceed Rs.1,00,00,000/­ except in one case. The learned
counsel for the complainants on the other hand contended that the interest which they have claimed
along with refund of the principal sum even if not so described specifically, is by way of
compensation only, since the opposite party has been deficient in rendering services to the
complainants by not delivering possession of the flats on or before the time agreed in this regard.
6. In our view, the interest claimed by the flat buyers in such a case does not represent only the
interest on the capital borrowed or contributed by them but also includes compensation on account of
appreciation in the land value and increase in the cost of construction in the meanwhile. As noted by
us in CC No.232 of 2014, Puneet Malhotra Vs. Parsvnath Developers Ltd. decided on 29­01­2015,
there has been steep appreciation in the market value of the land and cost of construction of the
residential flats in Greater Noida in last about 7­10 years and consequently the complainants cannot
hope to get a comparable flat at the same price which the opposite party had agreed to charge from
them. In fact it would be difficult to get a similar accommodation, even at the agreed price plus
simple interest thereon at the rate of 18% per annum. Therefore, the payment of interest to the flat
buyers in such a case is not only on account of loss of income by way of interest but also on account
of loss of the opportunity which the complainants had to acquire a residential flat at a particular price.
7. In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Hon’ble Supreme
Court inter alia observed and held as under:
“However, the power to and duty to award compensation does not mean that
irrespective of facts of the case compensation can be awarded in all matters at a uniform rate
of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense
for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury
and has to correlate with the amount of loss or injury. Thus the Forum or the Commission
must determine that there has been deficiency in service and/or misfeasance in public office
which has resulted in loss or injury. No hard and fast rule can be laid down, however a few
examples would be where an allotment is made, price is
received/paid but possession is not given within the period set out in the brochure...
…Along with recompensing the loss the Commission/Forum may also compensate for
harassment/injury both
mental and physical. Similarly, compensation can be given if after allotment is made there
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has been cancellation of scheme without any justifiable cause.
That compensation cannot be uniform and can best of illustrated by considering cases where
possession is being directed to be delivered and cases where only monies are directed to be
returned. In cases where possession is being directed to be delivered the compensation for
harassment will necessarily have to be less because in a way that party is being compensated
by increase in the value of the property he is getting. But in cases where monies are being
simply returned then the party is suffering a loss inasmuch as he had deposited the money in
the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of
the benefit of escalation of the price of that flat/plot. Therefore the compensation in such
cases would necessarily have to be higher.
It would, thus, be seen that the Hon’ble Supreme Court recognized that the interest to the flat
buyers in such cases is paid by way of compensation. Therefore, there is no reason why the interest
claimed by the complainants or at least part of it should not be taken into consideration for the
purpose of deciding the pecuniary jurisdiction of this Commission. If this is done, the aggregate
amount claimed in each of the complaints exceeds Rs.1,00,00,000/­ and, therefore, this Commission
does possess the requisite pecuniary jurisdiction.
8. As regards the plea that in terms of Clause (c) of the allotment letter the opposite party is
required to pay only the holding charges calculated at the rate of Rs.5/­ per sq.ft. per month of the
super area for the period the possession is delayed, such a contention was expressly rejected by us in
Puneet Malhotra (supra) holding that such clause applies only in a case where construction of the flat
is delayed but despite delay the buyer accepts the possession of the flat from the seller and
consequently the accounts have to be settled between the parties. We observed in this regard that the
buyer would have to pay the agreed holding charges to the seller and the seller to pay the agreed
compensation on account of delaying the construction of the flat. The said clause, however, does not
apply to a case where the buyer on account of delay on the part of the seller in constructing the flat is
left with no option but to seek refund of the amount which he had paid to the seller. We further held
that such a clause where the seller in case of default on the part of the buyer seeks to recover interest
from him at the rate of 24% per annum will amount to an unfair trade practice since it gives an unfair
advantage to the seller over the buyer. We also noted in this regard that enumeration of the unfair
trade practices in Section 2(r) of the Act is inclusive and not exhaustive.
This plea was also negatived by us in a batch of complaints CC No.427 of 2014, Satish Kumar
Pandey & Anr. Vs. Unitech Ltd. and connected matter, decided on 08­06­2015. All those complaints
were filed against none other than the opposite party in these matters, namely, Unitech Ltd..
9. Coming to the pleas that there was recession in the economy and a disruption due to agitation
by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey
(Supra) is relevant.
“Neither any new legislation was enacted nor an existing rule, regulation or order was
amended stopping suspending or delaying the construction of the complex in which
apartments were agreed to be sold to the complainants. There is no allegation of any
lock­out or strike by the labour at the site of the project. There is no allegation of any
slow­down having been resorted to by the labourers of the opposite party or the
contractors engaged by it at the site of the project. There was no civil commotion, war,
enemy action, terrorist action, earthquake or any act of God which could have delayed the
completion of the project within the time stipulated in the Buyers Agreement. It was
contended by the counsel for the OP that the expression ‘slow down’ would include
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economic slow­down or recession in the Real Estate sector. I, however, find no merit in
this contention. The word ‘slow down’ having been used alongwith the words lock­out
and strike, I has to be read ejusdem generis with the words lock­out and strike and
therefore, can mean only a slow down if resorted by the labourers engaged in
construction of the project.
As regards, alleged shortage of labour, I find that no material has been placed on
record by the OP that despite trying, it could not be get labourers to complete the
construction of the project within the time stipulated in the Buyers Agreement. It was
submitted by the learned counsel for the complainants that ordinarily big builders such as
the OP in these cases, are contracting/sub­contracting the construction work to the
contractors engaged by them, instead of employing their own labourers on a regular basis,
the purpose being to ensure that they are not saddled with the wage bill of those regular
labourers, in case the opposite party does not have adequate work for them. There is no
evidence of the OP having been invited tenders for appointment of contractors / sub­
contractors for executing the work at the site of those projects and no contractor/ sub­
contractor having come forward to execute the project on the ground that adequate labour
was not available in the market. Therefore, it cannot be accepted that the opposite party
could not have arranged adequate labour, either directly or through contractors/sub­
contractors, for timely completion of the project. As regards the alleged shortage of
water, bricks and sand in the market, I find that there is no evidence filed by the OP, to
prove that it was unable to procure water, sand and brick in adequate quantity. This is
also their case that the notification of the Government, being relied upon by the opposite
party, is an old notification, which was in force even at the time the opposite party
promised possession in 36 months. There is no evidence of the opposite party having
invited tenders for supply of bricks and water and there being no response to such
tenders. In fact, if the work is to be executed through contractors/sub­contractors, the
material such as bricks, sand and even water will be arranged by the contractor/sub­
contractor and not by the opposite party. As noted earlier, there is no evidence of the
opposite party having invited tenders after awarding the work of project in question to the
contractors/sub­contractors and there being no response to such tenders. Therefore, I find
no merit in the plea that the completion of the project was delayed due to non­availability
of water, sand and bricks in adequate quantity.
It is an undisputed proposition of law that ordinarily the parties are bound by the terms
and conditions of the contract voluntarily agreed by them and it is not for a Consumer
Forum or even a Court to revise the said terms.
However, a term of a contract, in my view will not be final and binding if it is shown that
the consent to the said term was not really voluntary but was given under a sort of
compulsion on account of the person giving consent being left with no other choice or if
the said term amounts to an unfair trade practice. It was submitted by the learned counsel
for the complainants that the term providing for payment of a nominal compensation such
as Rs.5/­ per square foot of the super area having become the order of the day in the
contracts designed by big builders, a person seeking to buy an apartment is left with no
option but to sign on the dotted lines since the rejection of such term by him would mean
cancellation of the allotment. He further submitted that a person seeking to acquire a
built up flat instead of purchasing a plot and then raising construction on it, therefore, is
not in a position to protest resist the inclusion of such a term in the Buyer’s Agreement,
and has to rely upon the reputation of the builder, particularly if he is a big builder such
as Unitech Ltd. He also submitted that the format of the Buyer’s Agreement is never
shown to the purchasers at the time of booking the apartment and if he refuses to sign the
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Buyer’s Agreement on the format provided by the builder, not only will he lose the
booking, even the booking amount/earnest money paid by him will be forfeited by the
builder. I find merit in the above referred submissions of the learned counsel. A person
who, for one reason or the other, either cannot or does not want to buy a plot and raise
construction of his own, has to necessarily go in for purchase of the built up flat. It is
only natural and logical for him to look for an apartment in a project being developed by
a big builder such as the opposite party in these complaints. Since the contracts of all the
big builders contain a term for payment of a specified sum as compensation in the event
of default on the part of the builder in handing over possession of the flat to the buyer and
the flat compensation offered by all big builders is almost a nominal compensation being
less than .25% of the estimated cost of construction per month, the flat buyer is left with
no option but to sign the Buyer’s Agreement in the format provided by the builder. No
sensible person will volunteer to accept compensation constituting about 2­3% of his
investment in case of delay on the part of the contractor, when he is made to pay 18%
compound interest if there is delay on his part in making payment.
It can hardly be disputed that a term of this nature is wholly one sided, unfair and
unreasonable. The builder charges compound interest @ 18% per annum in the event of
the delay on the part of the buyer in making payment to him but seeks to pay less than 3%
per annum of the capital investment, in case he does not honour his part of the contract by
defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer’s
Agreement also encourages the builder to divert the funds collected by him for one
project, to another project being undertaken by him. He thus, is able to finance a new
project at the cost of the buyers of the existing project and that too at a very low cost of
finance. If the builder is to take loan from Banks or Financial Institutions, it will have to
pay the interest which the Banks and Financial Institutions charge on term loan or cash
credit facilities etc. The interest being charged by the Banks and Financial Institutions
for financing projects of the builders is many times more than the nominal compensation
which the builder would pay to the flat buyers in the form of flat compensation. In fact,
the opposite party has not even claimed that the entire amount recovered by it from the
flat buyers was spent on this very project. This gives credence to the allegation of the
complainants that their money has been used elsewhere. Such a practice, in my view,
constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer
Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling
the product of the builder. Though, such a practice does not specifically fall under any of
the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the
unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are
inclusive and not exhaustive, as would be evident from the use of word “including”
before the words “any of the following practices”.
It would also be pertinent to note here that as pointed out by the complainants the agitation of
the farmers was on account of acquisition of land in Noida Extension and not on account of
acquisition of land on which the project in which the flats were to be constructed for the
complainants. As regards the alleged delay in obtaining environmental clearances there is no material
on record to show when the opposite party applied for such clearances, where they submitted all the
requisite documents etc. while applying for such clearances and how much was the time taken by the
concerned authorities in granting the said clearances. In the absence of such particulars, it would be
difficult for us to accept that development of the project was delayed on account of any notification
imposing restrictions on new projects. In any case, the opposite party has failed to produce before us
any notification imposing restriction or prohibition on development of the project in which the flats
were to be constructed for the complainants.
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10. In K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board, CA No.6730­6731 of
2012 decided on 19­09­2012, the complainant who was awarded interest by this Commission at the
rate of 12% per annum on the refund amount, felt aggrieved and approached the Hon’ble Supreme
Court for grant of a higher interest. Despite the respondent in the above referred matter being a
statutory body unlike the opposite party which is a private builder, the Hon’ble Supreme Court,
relying upon its earlier decision in Ghaziabad Development Authority Vs. Balbir Singh (supra) and
noticing that the complainant was suffering a loss inasmuch as she had deposited the money in the
hope of getting a flat but was being deprived to get the flat and thereby deprived of the benefit of
escalation of the price of the flat held, that the compensation would necessarily be higher. The
Hon’ble Supreme Court, therefore, granted interest to the complainant at the rate of 18% per annum
from the date of deposit till the date of realization along with further compensation quantified at
Rs.15,000/­ for deficiency in service and Rs.20,000/­ towards the cost of litigation.
11. The learned counsel for the opposite party has referred to the decision of the Hon’ble Supreme
Court in LIC & Anr. Vs. Smt. S. Sindhu (2006) (V) 258 where the Hon’ble Court inter alia observed
that the courts and tribunals cannot re­write contracts contrary to the terms of the contract to the
defaulting parties. In the above referred case, the policy was treated as a paid up policy on account of
default in payment of premium. As per the terms of the policy, the premium paid in such a policy was
to be refunded without interest. The Consumer Fora, despite the above referred policy condition,
directed payment of interest on the amount of the premium at the rate of 12% per annum. In the said
case case no deficiency on the part of the LIC in the services rendered to the insured was found. On
the other hand in the cases before us there has been gross deficiency on the part of the opposite party
in rendering services to the complainants who have paid about 95% of the cost of the flat and waited
for a number of years in the hope of getting roof over their head. Nowhere has the Hon’ble Supreme
Court held that even in such a case of gross deficiency in rendering services to the complainant
compensation in the form of interest cannot be awarded against the service provider. The learned
counsel for the opposite party has also referred to the decision of this Commission in Shahbad
Cooperative Sugar Mills Vs. National Insurance Co. Ltd., II(2003) CPJ 81 (NC) where it was held
that the interest cannot be added to the principal for the purpose of determining the pecuniary
jurisdiction. In the judgment relied upon by the learned counsel interest was not claimed as
compensation on account of deficiency in rendering services to the complainant. The aforesaid
judgment, therefore, would not apply to the cases before us.
The learned counsel has next referred to the decision of this Commission in Ramesh Kumar
Vs. Goyal Eye Institute & Ors., CC No.135 of 2011 decided on 30­03­2012 where this
Commission relying upon the decision of the Hon’ble Supreme Court in Tara Devi Vs. Sri Thakur
Radha Krishna Maharaj (1987) 4 SCC 69 and an earlier decision of this Commission in CC No.60 of
2011, Smt. Sujata Nath Vs. Popular Nursing Home & Ors. which was upheld by the Hon’ble
Supreme Court in CA No.8642 of 2011, directed return of a complaint where the complainant
claiming permanent disability on account of deficiency in the services rendered to him by the
opposite party during surgery of his eye had claimed compensation amounting to Rs.3,00,00,000/­.
This Commission found the claim to be highly exaggerated and fanciful. This judgment in our view
cannot be applied to the facts of the case before us where a reasonable interest of 18% per annum by
way of compensation or even a part of it would bring the complaint within the pecuniary jurisdiction
of this Commission.
The learned counsel for the opposite party has lastly referred to the decision of the Hon’ble
Supreme Court in Secretary, Bhubaneswar Development Authority Vs. Susanta Kumar Mishra, CA
605 of 2009 decided on 30­01­2009 where the Hon’ble Supreme Court observed as under:
“Further, any fora under the Consumer Protection Act, 1986 (‘Act’ for short) before
granting any relief to a complainant, should be satisfied that the complaint relates to any of
the matters specified in Section 2(c) of the Act and that the complainant has alleged and made
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out either unfair or restrictive trade practice by a trader or defects in the goods sold or any
deficiency in a service rendered or charging of excessive price for the goods sold or offering
of any goods hazardous to life and safety without displaying information regarding contents,
etc.. If none of these is alleged and made out, the complaint will have to be rejected.”
Since gross deficiency on the part of the opposite party in rendering services to the complainant is
clearly established on account of its not having completed the project even in about nine years from
the date the flats were sold to the complainants though it had agreed to deliver the possession to them
within a period of three years, the complaint is clearly maintainable.
12. As regards offer of alternative property obviously it has to be in the same locality or some other
locality suitable to the complainant should be on the same floor on which flat was sold to the
complainants, should be of almost identical size, should have identical specifications and should be
offered at the same price at which the flat in question was agreed to be sold. According to the
complainants, though the opposite party had offered to shift their flat to another tower they had
imposed a condition that the complainants will have to pay additional/increased cost towards the flat
which was not acceptable to them. The averments made in this regard in para 10 of the complaint
have not been specifically denied and this is not the case in the reply that another flat of the same size
and in the same project was offered to the complainants at the same price.
13. After the conclusion of the arguments the opposite party has filed an affidavit on 21­07­2015
stating therein that four flats are available in the Habitat Project of Greater Noida which can be
offered to the complainants. No other alternative accommodation is stated to be available with them.
The area and the floor of the aforesaid apartments have not been indicated in the affidavit. It is not
known whether the tower in which the aforesaid flats are situated have an identical or better location
than the tower in which the flats were agreed to be sold to the complainants. More importantly, there
is nothing in the affidavit to indicate the price which the complainants will have to pay for the
aforesaid flats. Therefore, the complainants in our opinion cannot be compelled to accept the
aforesaid alternative flats, after nine year of their having booked the flats with the opposite party. As
regards the refund of the principal amount along with interest at the rate of 10% per annum, such an
offer in our view would constitute an unfair trade practice considering that as per the agreement
between the parties the flat buyers were required to pay interest at the rate of 18% per annum
compounded quarterly in the event of default on their part in making payment to the opposite party. It
would also be pertinent to note here that this is not the case of the opposite party that the entire
money collected by them from the flat buyer in this project was invested by them in this very project.
The contention of the complainants during the course of arguments was that the opposite party has
been diverting the funds collected for one project to finance their other projects at the cost of the flat
buyers. It was also submitted on behalf of the complainants that if the opposite party were to raise
finance from the banks and financial institutions for developing the projects to which there funds
have been diverted or to complete the project in question it would have to pay more than 18% simple
interest. As observed by us in Satish Kumar Pandey & Anr. (Supra) such contracts would constitute
unfair trade practice on the part of the opposite party. Such a term in the agreement, therefore, is
liable to be ignored.
14. It is a matter of common knowledge that, there has been substantial appreciation in the land
value in Greater Noida, since 2006. This can be verified even from a comparison of the Circle rates
of land in Greater Noida in the year 2006, with the circle rates of land in 2015, which is an
information available in public domain. It can also not be disputed that there has been steep increase
in the cost of construction in last about nine years. Therefore, if the complainants have to purchase
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today the built up flats of the same size and specifications and in the same locality, the cost may not
be less than the price agreed to be paid by the complainants to the opposite party, and interest thereon
at the rate of 18% per annum. Moreover, the complainants are also entitled to suitable compensation
for the mental agony and harassment undergone by them in last about nine years, awaiting a roof
over their head, and making numerous calls and visits to the office of the opposite party. Therefore,
refund with simple interest at the rate of 18% per annum as a comprehensive all­inclusive
compensation is fully justified in these cases. In any case, if we award lesser interest, an
unscrupulous builder may, instead of completing the project for which money has been collected
from the flat­buyers, divert the funds to other projects / activities, since cost of borrowing for him
may be higher than what he is made to pay to the flat­buyer as interest. Therefore, we must
necessarily take a view, which will discourage any such misuse / diversion of funds by the builder.
15. For the reasons stated hereinabove, we direct the opposite party to refund the amount paid to it
by the complainants, along with compensation in the form of simple interest on that amount, at the
rate of 18% per annum from the date of deposit till the date of payment. The payment shall be made
within six weeks from today. In the facts and circumstances of the case there shall be no order as to
cost. The complaints stand disposed of. ......................J
V.K. JAIN
PRESIDING MEMBER
......................
DR. B.C. GUPTA
MEMBER
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