Builder directed to pay interest at the same rate he levied on delayed payment


                                                   Consumer Complaint No.CC/13/198

Mrs. Shruti Kirti Laddha,

Mr.Kirti Shivchandra Laddha,

Both R/at: 15, Staff Quarters, 2nd Floor, Institute of Chemical Technology, Matunga (E), Mumbai 400 019. …..                                                                                               Complainant(s)


M/s. G.A. Builders (RNA Corpn. Group Company),

Through its Group Chairman,

Mr.Anil Aggarwal


Managing Director Mr. Anubhav Aggarwal,

Having their office at: RNA Corporation Park, Next to Collector’s Office, Kalanagar, Bandra (E), Mumbai 400 051. ………………….Opponent(s)


BEFORE: Hon’ble Mr. Justice A.P. Bhangale, President Hon’ble Mr. Narendra Kawde, Member

For the Complainant: Advocate Mr.Vinay Rathi.

For the Opponent: None.


ORDER Per Hon’ble Mr.Narendra Kawde – Member:

(1) Allegations levelled by filing this consumer complaint against the opponent builder developer for failure to deliver vacant and peaceful possession of flat no.1102 on 11th floor, in the project named RNA Sagar, situated at Plot No.57, behind Apna Bazar, Pantnagar, Ghatkopar (East), Mumbai, agreed to have been sold to the complainants for total consideration of Rs.47,15,880/- even though complainants have paid substantial mount of Rs.38,04,488.15. Aggrieved thereby consumer complaint has been filed praying for directions to CC/13/198 2/7 handover legal possession of the Flat and also claimed compensation of Rs.10,00,000/- for mental and physical harassment with costs of Rs.1,00,000/-.


(2) It is not in dispute that the complainants have booked flat bearing no.1102 in the project developed by opponent by paying booking amount of Rs.5,00,000/- on 24/12/2009 by cheque bearing no.605889. Subsequently the complainants have paid amount of Rs.17,84,488/- by way of cheque payments which is not in dispute. Thus, the total amount paid by cheque is Rs.22,84,488/- as against the agreed consideration of Rs.47,15,880/-. It is the contention of complainants that amount of Rs.15,20,000/- was paid in cash on 24/12/2009 at the time of issuing the allotment letter. However, opponent did not issue receipt for cash payment alleged to have been paid. According to the complainants even though substantive amount against the agreed consideration is paid and they are willing to pay the balance consideration, yet, for the reasons best known to them, opponents have failed to deliver the possession.


(3) Opponents by filing written version tried to defend themselves on the ground that this being a redevelopment project with the co-operative society, the dispute cropped up pertaining to the use of Floor Space Index (‘F.S.I.’ in short) at the behest of co-operative housing society the matter was referred to arbitration and it was decided by the Arbitrator to restrict use of F.S.I. to 2.4 instead of 2.5 as was originally planned. Since it is redevelopment project first preference is for those old occupiers and only surplus flats constructed would have been available for sale. In view of the restrictions for use of F.S.I., construction was limited only to 11th floor instead of 16th floor as originally planned. In view of this CC/13/198 3/7 changed condition opponents are unable to accommodate the complainants to allot flat no.1102 as it was not available for sale. Opponents have always shown their willingness to refund the amount of Rs.22,84,488.15 together with interest @9% per annum under the provisions of Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act (45 of 1963) (hereinafter referred to as ‘MOFA’ in short). However, the complainants have refused to accept the refund and continued to litigate. According to Opponents cost of flat was agreed to Rs.31,95,880/- and not Rs.47,15,880/- as presumed by the complainants. Opponents stoutly denied receipt of cash amount of Rs.15,20,000/- as alleged by the complainants. In view of the developments narrated above the allotment was cancelled and accordingly, complainants were repeatedly informed by e-mails, by letters to take refund of the amount paid as narrated supra.


(4) Heard Advocate Mr.Vinay Rathi for the complainant. None appeared for the opponent. We have perused the record and documents relied upon by the parties


(5) It is not in dispute that amount of Rs.22,84,488.15 has been received by the opponents. Complainants did not demonstrate the proof of cash payment of Rs.15,20,000/-. The booking form duly signed by the complainants and opponents on 24/12/2009 indicates allotment of flat 1102 with 610 sq.ft. area on 11th floor, RNA Sagar, and also it shows payment schedule attached thereto. However, total agreed consideration is not mentioned therein. It is the contention of the opponents that the total consideration was Rs.31,95,880/-. Even if it is presumed to be correct, in that CC/13/198 4/7 case even substantial amount of Rs.22,84,488.15 was accepted by the opponent in a staggering mode after booking of the flat on 24/12/2009, knowing fully that there are restrictions for use of FSI and the flat in question cannot be allotted to the complainants after accommodating the original flat owners in the redeveloped project. According to the opponents themselves, arbitration Petition 326 of 2011 before the Hon’ble Bombay High Court and the order passed therein on 05/05/2011, restricted use of the F.S.I. Even thereafter also the opposite party continued to accept the balance payment by cheques. Even though complainants have paid substantial amount, opponent failed to execute registered agreement under the provisions of Section 4 of MOFA. Non-compliance of statutory obligation to execute registered Sale Deed, per se, amounts to deficiency of service on the part of the opponents. Since it was within the knowledge of the opponent that issue pertaining to use of F.S.I. was raised and referred to arbitration, at this point of time opponents ought to have made known these developments and their inability to fulfil the obligation to allot flat to the complainants.


(6) According to the opponents construction upto 11th floor was permitted with certain modifications. However, there is no approved modified development plan available on record. By their own admission construction could be done upto 11th floors, it would have been possible to accommodate allotment of flat bearing no.1102 as per booking since it was located on 11th floor. There is no reason to cancel the allotment without following the due procedure and moreover, after having accepted substantial amount of more than 80% of the agreed consideration of Rs.31,95,880/-. In case the CC/13/198 5/7 said flat was not available alternate flat ought to have been made available by accepting the balance consideration for which the complainants were ready and willing. Despite submissions on various counts disputing the claim we do not find opponents have made alternative offer of availability of flat of same size to the complainants.

(7) Failure of opponent builder to execute registered agreement and handover vacant and peaceful possession of the flat by accepting balance consideration amounts not only to glaring deficiency of service but it is unfair trade practice as well on their part and therefore, they are liable for their failure as such. At the time of arguments neither Advocate nor opponent were present and therefore, Commission could not obtain present status of the project, i.e. as to how many floors are constructed, how many flats are available etc. There is no record to substantiate that the project has been completed upto 11th floor or otherwise. Accepting the huge sum and mis-utilizing for the long period without appropriating such receipted amount for the project for which it was meant is also a serious issue nothing short of unfair trade practice. Non-fulfillment of contractual and statutory obligations on the part of the opponent is undoubtedly deficiency of service and unfair trade practice under the provisions of Section 2(1)(g) and 2(1)(r) of Consumer Protection Act, 1986.


(8) In view of the observations aforesaid, the contractual relations still subsists between the complainants and opponent builder as consumer and service provider under the provisions of Consumer Protection Act, 1986. It is only belatedly, that the opponents tried to refund the amount with interest @9% per annum without valid and justifiable CC/13/198 6/7 reason as the documents do not demonstrate as to how the flat booked on 11th floor and use of F.S.I. was permitted upto 11th floor could not be allotted to the complainants. There is no justification on the part of the opponent for their failure to fulfil the contractual and statutory obligation under the provisions of MOFA by handing over vacant and peaceful possession of the flat in question by accepting the balance consideration of Rs.9,11,391.85/- or to offer alternative flat of the same size in the vicinity in case it is imfeasible to fulfil the obligations.

(9) On perusal of the demand notice dated 21st April, 2010 the opponents have claimed interest @21% per annum for default payment. Therefore, the refund of amount, if any, as claimed shall carry the same rate of default interest as demanded by the opponents with a view to maintain balance of equity.


(10) In view of the above, we hold the opponents have resorted to unfair trade practice and indulged in deficiency of service and therefore, complaint is allowed against the opponents with following directions:




(I ) Consumer complaint is allowed with costs quantified to Rs.30,000/- (Rupees Thirty Thousand only) payable jointly and severally by the opponents to the complainants.


(ii) The opponents are directed to handover jointly and severally vacant and peaceful possession of Flat bearing No.1102 on 11th floor, in the building RNA Sagar, Building No.1 at Ghatkopar East, Mumbai or CC/13/198 7/7 alternative flat of same size of 610 sq.ft in the same project or in the vicinity by accepting balance consideration of Rs.9,11,391.85/- (Rupees Nine Lacs Eleven Thousand Three Hundred Ninety One and Paise Eighty Five Only) from the complainants within a period of 45 days from the date of this order.

(iii) Complainants to pay Rs.9,11,391.85 (Rupees Nine Lacs Eleven Thousand Three Hundred Ninety One and paise Eighty Five only) to the opponents within 60 days from today. In case Opponents refuse to accept the amount, the complainants are at liberty to deposit the amount with State Commission within eight days from refusal, if any. OR Alternatively at the option of the complainants to refund the amount of Rs.22,84,488/- (Rupees Twenty Two Lacs Eighty Four Thousand Four Hundred Eighty Eight only) together with default interest @21% per annum from the date of each such deposit within a period of 45 days from the date of this order. Non-compliance shall enhance the rate of interest @24% per annum on the amount to be paid till realization.

(iv) One set of complaint compilation be retained for our record and rest of the sets be returned to the complainant.

 Pronounced on 26th September, 2016.
[Justice A.P.Bhangale] President                          [Narendra Kawde] Member

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