Per Justice Sham Sunder , President This appeal is directed against the order dated 1.9.2011 , rendered by the District Consumer Disputes Redressal Forum-II, U.T. Chandigarh (hereinafter to be referred as the District Forum only), vide which it accepted the complaint and directed Opposite Parties No.1 & 2 (now appellants) in the following manner; “Opposite Parties No.1 & 2 are directed to refund the entire amount of Rs.10,42,000/- to the complainant, alongwith interest @ 15% per annum from the date of deposit, till the date of payment to the complainant, alongwith Rs.25,000/- towards costs of litigation, within one month from the date of receipt of the certified copy.” 2. The facts, in brief, are that the complainant applied for three bedroom residential flat with Opposite Parties No.1 & 2, and deposited a sum of Rs.10,42,000/- as earnest money alongwith the application form. The balance amount was to be deposited in installments, as per construction linked payment plan. The complainant, on becoming successful, in the draw of lots, was allotted 3 bedroom flat on Third Floor, Type-1, Pent House, Bearing No.3, in Block No.C-4 measuring 3000 sq. ft., vide allotment letter dated 28.09.2007 in the project of Opposite Parties, namely Parsvnath Prideasia at Rajiv Gandhi Chandigarh Technology Park, Chandigarh. It was stated that on the request of the complainant, Opposite Party No.1, changed the earlier allotted flat Unit C4-PH3 Category C Type-I with Flat Unit No.C-17-PH4 of Category C Type-I and confirmed the same through letter dated 23.11.2007. Thereafter, again on his request, Flat Unit No.C-17-PH4 of Category C Type-I was changed with two bedrooms flat unit NO.D-5-503 of Category D and the same was confirmed through letter dated 06.03.2008. The complainant also applied for sanction of loan from HDFC Ltd., Chandigarh, and sought permission from the Opposite Parties to mortgage the said Flat, which was granted by Opposite Party No.1. Accordingly a quadripartite agreement dated 12.04.2008, was executed amongst the Opposite Parties and the complainant, for sanction of loan. The complainant paid Rs.1,09,618/- towards process fee for sanction of loan to the HDFC Bank, but later on refused to avail of the loan on account of non-construction of the flats by the Opposite Parties, due to which, the bank deducted Rs.27500/- and refunded Rs.82000/- only. It was further stated that as per the flat buyer agreement dated 02.07.2008, executed amongst the parties, the construction of the flats was to be completed by Opposite Parties No.1 & 2 within 36 months from 6.10.2006. However, they failed to make any development, at the site, as was agreed, vide agreement dated 2.7.2008. As there was no development, at the site, and the Opposite Parties failed to start construction, the complainant applied for cancellation of flat and sought the refund of amount of Rs.10,42,000/- alongwith upto date interest and Rs.27500/- deducted by the HDFC Bank, but to no effect. Ultimately, a legal notice dated 15.03.2011 was served upon the Opposite Parties, but to no avail. It was further stated that the Opposite Parties deprived the complainant of his hard earned money, and did not perform their obligations, as per the agreement, executed amongst the parties. It was further stated that the aforesaid acts of the Opposite Parties , amounted to deficiency, in service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by him. 3. Opposite Parties No.1 & 2, in their written reply, admitted the factual matrix of the case. It was admitted that the request of the complainant to change the flat was accepted and another flat, with basic cost of Rs.1,18,15,000/- was allotted and flat buyer agreement R-1/2 dated 2.7.2008 was executed. A quadripartite agreement dated 12.4.2008 was also executed to facilitate the complainant for taking loan. It was also admitted that the amount of Rs.10,42,500/- was deposited by the complainant by way of part payment. It was stated that the Chandigarh Administration was desirous of developing residential, commercial and other related infrastructure facilities, as an integrated project, at Rajiv Gandhi Chandigarh Technological Park, in Chandigarh. It was further stated that immediately after signing the development agreement dated 6.10.2006, between the Opposite Parties, the Chandigarh Housing Board handed over 123.79 acres of land to Opposite Party No.1, which the said Board claimed to be unencumbered, though, in fact, it was not unencumbered. It was further stated that in January,2007, Opposite Party No.1 commenced erection of fencing around the said land, when the Haryana Government claimed ownership over a part of the same, as such it (Opposite Party No.1) was stopped from carrying on its activities. On 9.2.2007, the Chandigarh Housing Board informed Opposite Party No.1, that the dispute had been resolved. Believing the assurance given by the Chandigarh Housing Board, Opposite Party No.1 once again, commenced the erection of fencing. On 15.2.2007, Opposite Party No.1, was surprised when the Haryana Government again raised objections, stating that the dispute had not been resolved. It was further stated that the alternate and revised demarcated land which was offered to Opposite Party No.1, by the Chandigarh Housing Board included the land belonging to the Forest Department, on which there existed more than 200 full grown trees, and restrictions were imposed by the Forest Department, with regard to the felling of the same, and use of this land for the project. It was further stated that since possession of the entire unencumbered land of the project, was not handed over to Opposite Parties Nos.1 & 2, the construction could not be started, as it was an integrated project. It was further stated that the period of 36 months for the completion of project, was to commence, from the date, when possession of the entire unencumbered land of the project was to be handed over to Opposite Parties NOs.1 & 2, which stage never arrived at. It was further stated that, under these circumstances, Opposite Parties Nos.1 & 2, were not at fault in completing the construction. It was further stated that the Opposite Parties had not abandoned the project. Even, the dispute, has been referred to the arbitrators, and their decision is still awaited and, as such, the District Forum had no jurisdiction to entertain and decide the complaint. It was further stated that, under these circumstances, if the complainant wanted the refund of amount, already deposited, he could only be refunded the same, after forfeiture of 5% of the basic price of the flat. It was denied that Opposite Parties Nos. 1 & 2, were deficient, in rendering service, or indulged into unfair trade practice. 4. Opposite Party NO.3, in its separate written reply, admitted the factual matrix of the case. It was stated that, as per the flat buyer agreement, Opposite Party No.3, was only to provide the land to Opposite Parties Nos. 1 & 2. It was further stated that the whole project was to be constructed by the Developers, as per schedule, mentioned in the agreement, and, in the event of non- performance of their part of the obligation, they were liable to refund the amount, alongwith interest etc. It was further stated that the developers Opposite Parties NOs.1 & 2, were to pay the bid price of Rs.821.21 crores in six quarterly instalments, from the date of signing of the development agreement dated 6.10.2006, against which they deposited only Rs.516.53 crores and the balance bid price is due to be deposited. The developer had failed to carry out the development of the project as per the terms and conditions of the development agreement and had stopped all activities at the project site including stoppage of payment of the bid price. It was further stated that on asking, the developers to pay the balance bid price, they raised certain issues for which arbitration proceedings are going on. It was further stated that the developer was solely responsible, for constructing the residential units, within the stipulated period, and delivering possession of the flat, to the complainant. It was admitted that the construction was to be completed within 36 months from 6.10.2006, the date, when the development agreement was executed between the Opposite Parties. It was further stated that, in view of the Escrow agreement executed between the Opposite Parties, in case of refund to the buyers, the liability of the Chandigarh Housing Board was to the extent of 30% only, but till date the refund case of the complainant was not received by it from the developer. It was denied that Opposite Party NO.3, was deficient, in rendering service, or it indulged into unfair trade practice. The remaining averments, were denied, being wrong. 5. The parties led evidence, in support of their case. 6. After hearing the Counsel for the parties , and, on going through the evidence and record of the case, the District Forum, passed the order, in the manner, referred to, in the opening para of the instant order. 7. Feeling aggrieved, the instant appeal was filed by the appellants/Opposite Parties No.1 & 2. 8. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 9. The Counsel for the appellants/Opposite Parties No.1 & 2, submitted that, till date the Chandigarh Housing Board, has not handed over the possession of the entire unencumbered land, required for the project, in question. He further submitted that it was, under these circumstances, that the construction of the project could not be undertaken and possession of the flat could not be delivered, as it was an integrated project. He further submitted that the appellants have not abandoned the project. He further submitted that the complainant was only entitled to the refund of amount, after deduction of 5% of the basic price, in view of the provisions of clause 5(a) of the flat buyer agreement. He further submitted that the interest was awarded by the District Forum, at a rate higher than the one provided in the flat buyer agreement. He further submitted that the order of the District Forum, being illegal, is liable to be set aside. 10. The Counsel for the complainant/respondent submitted that the impugned order is legal and valid. 11. The first question, that arises for consideration, is, as to within which period the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainant applied for the allotment of a flat. There is no denying the fact that the complainant, in all, paid Rs.10,42,00/- , towards earnest money of the flat, as admitted by the Opposite Parties. The execution of the flat buyer agreement amongst the complainant and the Opposite Parties, is also admitted. Clause 9(a) of the flat buyer agreement, annexure C11, which is relevant, for answering the question, posed at the outset of this paragraph, reads as under ; “Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.” 12. The plain reading of Clause 9(a) of the flat buyer agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the development agreement dated 06.10.2006 annexure R1/1. The time could be extended, in terms of the development agreement dated 6.10.2006, subject to force majeure, and the circumstances, beyond the control of the developer. Opposite Parties Nos.1 & 2 admitted, in their written reply that, in the first instance, possession of the entire project land, which was claimed to be unencumbered by respondent No.2, was handed over to them. When the fencing was being done, the Haryana Govt., raised dispute, with regard to the ownership of a portion of the land. It is further the case of Opposite Parties Nos. 1 & 2 that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to them, the same was discovered to be that of the Forest Department. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land, was disputed, that did not mean that the construction of the residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the developer, that delay was caused, in the construction of residential units . The developer also could not take shelter of force majeure clause. No document was produced by Opposite Parties Nos.1 & 2, that any restriction was imposed by any Court or Authority upon them, as a result whereof, they could not raise construction of residential units, in time. Even, it was not proved, that there was delay, in the grant of environmental clearance. Opposite Parties Nos.1 & 2, without first confirming the clear title of the land, over which the project was to be developed, started booking the flats, and allotting the same, to the prospective buyers, by fleecing them of huge amounts and making misleading statement that the construction of residential units will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Parties Nos.1 & 2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009. 13. The next question, that arises for consideration, is, as to whether the complainant was entitled to the refund of the amount, deposited by him with interest or not ? Clause 9(d) of the flat buyer agreement which is relevant, to answer this question, reads as under; “9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.” 14. The complainant deposited the amount, in the hope of getting possession of the flat, within a period of 36 months from 10.6.2006, but he found that even by the year 2011, not even a single brick, had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainant could not wait for an indefinite period. The only option with the complainant, in such circumstances, was to ask for the refund of amount with interest, but the Opposite Parties failed to do so. The plain reading of Clause 9(d) extracted above, reveals that if the developer, for whatever the reasons may be, fails to deliver the residential unit, to the buyer, the developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable, on the date of refund. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount, with interest, as provided under Clause9(d) of the agreement, referred to above. The complainant was, thus, entitled to the refund of amount of Rs.10,42,000/- with interest, at the SBI term deposit rate, as per Clause 9(d) of the flat buyer agreement annexure C11,referred to above, from the date of deposit till realization. The District Forum was, thus, wrong in granting interest @ 15% p.a. 15. Coming to the submission of the Counsel for appellants, that since there was breach of Clause 5(a) of the flat buyer agreement annexure C11, by the complainant, he was entitled to the refund of amount deposited by him, only after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument advanced by the Counsel for the appellants, is misconceived. Clause 5(a) of the aforesaid flat buyer agreement, reads as under ; “5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.” 16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, was the essence of the agreement, and if the payment was not made, within the stipulated period, or the buyer committed breach of any of the terms and conditions of the agreement, the agreement was liable to be cancelled, and the amount was to be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in making the payment , or violation of any other term and condition of the agreement aforesaid, on the part of the complainant, or not ? It was proved, as also admitted by the OPs, that earnest money of Rs.10,42,000/- was paid by the complainant. Since there was no progress in the development of project, and even till date, not even a single brick has been laid at the spot, no obligation was cast upon the complainant to pay the remaining instalments of price of the flat. There was, thus, no breach of the terms and conditions of the agreement, referred to above, on the part of the complainant. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainant was, thus, entitled to the refund of the entire amount, deposited by him, with interest, as indicated above. The District Forum was also right, in holding so. The findings of the District Forum, in this regard, are affirmed. The submission of the Counsel for the appellants, in this regard, being without merit, must fail, and the same stands rejected. 17. Although, the dispute interse the OPs i.e. Parsvnath Developers Ltd. and the Chandigarh Housing Board, as per clause 18 of the Escrow Agreement dated 1.06.2007, executed amongst them, and the State Bank of India has already been referred to the Arbitrators, yet the jurisdiction of the Consumer Fora was not barred. With a view to resolve the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986 is made, which reads as under ; “3.Act not in derogation of any other law.— The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.” Section 3 of the Act is worded, in widest terms, and leaves no manner of doubt that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being in force. The mere fact that the other remedy of resorting to the arbitration proceedings, as per the agreement annexure R1/3, has been availed of by the Opposite Parties, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385. The submission of the Counsel for the appellants, being devoid of merit is rejected. 18. For the reasons, recorded above, the appeal is partly accepted, with no order as to costs, with the following modification ; (i) Appellants/opposite parties No.1 & 2 shall refund the amount of Rs.10,42,000/- to respondent No.1/complainant with interest at the SBI term deposit rate, as applicable on the date of refund, and not at the rate of 15% P.A., awarded by the District Forum, from the date of deposit till realization, (ii) the remaining reliefs, granted by the District Forum, shall remain unaltered. 19. Certified Copies of this order be sent to the parties, free of charge. 20. The file be consigned to the Record Room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | |
