SAURABH SHARMA V. M3M INDIA PVT. LTD.

1. SAURABH SHARMA
S/o. Late Mr. Rajesh Sharma, R/o. 96, Samachar Apartments,
Mayur Vihar, Phase-I
2. SUMAN SHARMA
W/o. Late Mr. Rajesh Sharma, R/o. 96, Samachar Apartments,
Mayur Vihar, Phase-I
Versus

1. M3M INDIA PVT. LTD.
THROUGH ITS MD, PARAS TWIN TOWERS, TOWER B,
6TH FLOOR, GOLF COURSE ROAD, SECTOR-54,
GURUGRAM-122002, HARYANA

Case No: CONSUMER CASE NO. 2724 OF 2017

Date of Judgement: 04 October 2023

Judges:

FOR THE COMPLAINANT : MR OSAMA SUHAIL, ADVOCATE WITH
MS PUJA KESARWANI, ADVOCATE

FOR THE OPP. PARTY : MR JATIN SEHGAL, MR VIREN BANSAL AND
MR HARSHIT KAPOOR, ADVOCATES

Facts:
Complainant booked a flat with opposite party (builder) on 19.07.2011. Builder Buyer Agreement was signed on 17.01.2012. Possession was to be handed over by April 2015 as per agreement. Offer of possession was made on 06.04.2017 but flat was not ready for habitation. Complainant made final payment on 12.05.2017. Builder had made changes in layout plan reducing living/dining area by 192 sq ft and adding a 75 sq ft servant room without approval of complainant. Changes altered light and ventilation in rooms. Electricity and water supply connections were not provided in flat. Builder insisted on an indemnity bond before handing over possession which complainant protested

Court’s Opinions:
Reliance by builder on clauses in agreement allowing unilateral changes without consent is against principles laid down by Supreme Court that such one-sided agreements constitute an unfair trade practice. Changes made by builder without intimation/consent of allottee constitutes an unfair trade practice and deficiency in service. Compelling allottee to take possession without providing amenities like electricity/water and with changes in layout is also deficiency in service. Order in Narender Gupta case that requiring indemnity bond is illegal has been cited. BBA imposes onerous conditions on allottee which is an unfair trade practice

Arguments by Complainant:
Clauses of agreement relied upon by builder violate Supreme Court ruling and hence changes made and deficiencies constitute unfair trade practice. Failure to provide amenities like electricity and water render flat unfit for possession. Indemnity bond cannot be insisted upon. Interest, refund and compensation claimed for deficiency and harassment

Arguments by Opposite Party/Builder:
Complainant is not a consumer but investor. Dispute should be adjudicated by arbitrator. It adhered to contractual conditions under BBA. Marginal changes made in layout, extra area given. Project has other inhabiting families, so fit for possession. Compensation for delay provided and accepted by complainant

Referred Laws and Sections:
Download Court Copy: https://dreamlaw.in/wp-content/uploads/2023/12/download10.pdf

Full Text of Judgment: 

1. This consumer complaint under section 21(a)(i) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleges unfair trade practice and deficiency in service in delay in handing over possession of a flat booked in a project promoted and executed by the opposite party within the promised time and seeking refund of the amount deposited with compensation and other costs.
2. The complainant states that on 19.07.2011 he booked flat no. MM TW-C09/0701 on 7th Floor, Merlin Tower C09, Sector 67, Gurgaon, Haryana admeasuring 2660 sq ft for a sale consideration of Rs 2,00,09,940/-. A Builder Buyers Agreement (BBA) was signed on 17.01.2012. Rs 2,03,11,475/- has been paid by him towards sale consideration though opposite party admits receipt of Rs 2,02,75,940/-. As per clause 16.1 of the BBA, possession was to be handed over by April 2015. However, offer of possession was made by the opposite party on 06.04.2017 even though the flat was not ready or inhabitable. As complainant was entitled to a Timely Payment Rebate (TPR), a revised offer was made on 03.05.2017 on representation. Complainant made the final payment on 12.05.2017 but found that the opposite party had made drastic changes in the plans of the flat without intimation or
approval. The living and dining area was reduced from 548 sq ft to 356 sq ft (by 192 sq ft) and a servant room of 75 sq ft was incorporated though it was not the complainant’s requirement. Change in layout plans inter alia altered light and ventilation in the bedroom and kitchen and was unacceptable to the complainant as it was arbitrary and unjustifiable.
4. Complainant also contends that the opposite party failed to provide an exclusive approach road to the project as promised as per the BBA and the flat was itself uninhabitable and lacked electricity and water supply connection. A single approach road had been assessed to be a security risk by an agency whose report had been obtained by the complainant and which had not been challenged. An Indemnity Bond was insisted upon by the opposite party as a precondition to taking over possession which was protested by the complainant by email on 06.07.2017. Such a precondition has been held to be illegal in this Commission’s order in Narender Gupta Vs. DLF Ltd., CC No. 1036 of 2018 dated 20.01.2020. Financial loss on account of house building loan from ICICI Bank involving interest @10.5% and cost of rented accommodation is also claimed. Opposite party’s contention that he is not a ‘consumer’ as he has invested in several properties is denied.

8. On the issue of unilateral alteration of the layout of the apartment, it is stated that the super area of the flat has marginally changed from 2660 sq ft at the time of booking to 2668 sq ft at the time of offer and a servant room and a yard has been added. It is denied that sub- standard and inferior quality material of construction material had been used since the complainant made payments after inspections. The delay in possession is stated to be of only 9 months and 26 days as per the ABA for which compensation as delayed payment charges of Rs 1,97,432/- had been adjusted and accepted by the complainant. Since there were over 500 families inhabiting the project, the charge of uninhabitability is denied. Application for electricity has been made and water supply arrangement through overhead tanks is made.
9. Parties led their evidence and filed rejoinder, affidavit, and evidence as well as short synopsis of arguments. I have heard the learned counsel for the parties and carefully considered the material on record.

11. On merits, it is admitted by the opposite party that there was a change in the layout plans of the flat in question. Opposite party states that as per clauses 13.3 and 13.4 of the BBA it was entitled to make changes unilaterally without notice to the allottee. It is also admitted that the electricity has been applied for and water supply is through overhead tanks, though no connection is available. It is also admitted that there was delay of over 9 months in the offer of possession for which compensation had been adjusted in the consideration.
12. From the foregoing, it is apparent that the opposite party made changes in the layout plans of the apartment without consent of the complainant. The recourse to the provisions under the BBA cannot be accepted since the document has imposed onerous and unfair terms. It cannot be denied that a primary consideration for choosing a flat is the layout plan and the promise of amenities such as electricity and regular (treated) water supply. Admittedly, these two facilities are still absent.
13. The complainant has relied upon Geetu Gidwani Verma (supra) and Govindan Raghavan (supra) to argue that an agreement that is one-sided and imposes conditions that are biased in favour of the builder/opposite party is an unfair trade practice. A change in the layout of a flat without any inputs or intimation to the allottee/buyer certainly constitutes an unfair trade practice as substantial payments already stand made by the complainant/allottee. It is not denied by the opposite party that intimation regarding the alteration of plans was not provided to the complainant. It is rather asserted that the BBA entitled it to do so. It would also constitute a deficiency in service as it alters the quality of accommodation that persuaded the complainant to book the flat now stands altered permanently and results in a change in the spatial arrangement of the rooms. Therefore, both deficiency in service and unfair trade practice are writ large in the instant case.
14. In case of delay in handing over possession, the Hon’ble Supreme Court in Geetu Gidwani Verma (supra) has laid down that a buyer cannot be compelled to take possession of a flat when there is delay in delivery of possession by the builder and the buyer is entitled to refund along with compensation/interest for such delay. I am inclined to concur with this argument urged by the complainant considering the fact that the BBA has included clauses that have adversely affected the complainant in terms of the flat booked by him through unilateral and arbitrary actions of the opposite party. In view of the foregoing, the complaint is liable to succeed.
15. The claim of the complainant for compensation in the form of interest @ 24% p.a. has been considered. In Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, CA No. 6044 of 2019 decided on 07.04.2022 and in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, CA Nos. 4910-4941 of 2019 decided on 10.05.2019 the Hon’ble Supreme Court laid down that interest payable should be restitutionary and also compensatory and paid from the date of deposit. In Sushma Ashok Shiroor (supra) it was also held that interest of 9% is fair and just.
16. In the facts and circumstances of this case, for the aforesaid reasons, this complaint is allowed partially and disposed of with the following directions:

(iii) opposite party shall also pay the complainant litigation cost of Rs 50,000/-.

All pending IAs shall stand disposed of with this order.