Chandigarh

StateCommission

CC/220/2016

Bijender Singh Sangwan - Complainant(s)

Versus

DLF Homes Panchkula Pvt. Ltd. - Opp.Party(s)

Sh. Naveen Sheokand, Adv.

01 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH

 

Complaint case No.	:	220 of 2016
Date of Institution	:	19.05.2016
Date of Decision	:	01.09.2016

 

Bijender Singh Sangwan son of Puran Singh Sangwan, resident of Flat No.302, Carnation Block, Amravati Enclave, Panchkula, Haryana.

……Complainant

V e r s u s

1. DLF Homes Panchkula Private Limited, SCO 190-191-192, Sector 8C, Chandigarh U.T., Pin-160009, through its Manager/ Authorized Signatory/Officer-in-Charge/Director Sales and Marketing.
2. DLF Homes Panchkula Private Limited, Registered Office DLF Gateway Tower, Second Floor, DLF City, Phase-III, Gurgaon-122002, Haryana, India, through its through its Manager/Authorized Signatory/Officer-in-Charge/Director Sales and Marketing.

Site Address:-

THE VALLEY, SECTOR 3, KALKA-PINJORE URBAN COMPLEX.

….Opposite Parties

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:                  JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                         MRS. PADMA PANDEY, MEMBER

 

Argued by:       Sh.Naveen Sheokhand, Advocate for the complainant.

                        Ms.Ekta Jhanji, Advocate for the Opposite Parties.

               

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

               

                The facts in brief are that the complainant purchased a flat bearing No.E-2/15-FF, with one car parking no.P-1F, measuring saleable area 1550 square feet (in short the unit), in the project of the opposite parties, known as “DLF Valley”, District Kalka, Panchkula, Haryana, in resale from the original allottees i.e. Sh.D.R. Yadav and Sh. Lokesh Yadav, for a total sale considerate of Rs.38,47,099.72Ps., which included External Development Charges, Preferential Location Charges etc. Transfer of the unit, in question, was acknowledged by the opposite parties, vide letter dated 29.03.2012. All the necessary documents like Independent Floor Buyer’s Agreement dated 09.12.2010 etc., were endorsed in favour of the complainant by the opposite parties. As per Clause 11 (a) of the Agreement, it was promised by the opposite parties that possession of the constructed unit will be delivered within a period of 24 months, from the date of execution of the same i.e. upto 08.12.2012, failing which, as per Clause 15 of the Agreement, they were liable to pay penalty @Rs.10/- per square feet, per month of the saleable area, for the period of delay.  When this complaint was filed in the year 2016, it is claimed by the complainant that he had already paid an amount of Rs.40,28,105.74Ps. It is grievance of the complainant that possession of the unit was not offered and delivered  by the stipulated date for want of construction. It was averred that when possession of the unit was not offered to the complainant, he approached the opposite parties with a request to complete the construction and deliver possession of the unit. The opposite parties issued an advertisement in a newspaper namely “Hindustan Times” on 13.01.2014, promising that possession of the units, will be handed over in the year 2014. Even thereafter, possession of the unit was not offered to the complainant.

2.         It was further stated that when possession of the unit was not offered till March 2016, the complainant visited the office of the opposite parties, whereupon, he was surprised to hear that letter of offer of possession had already been dispatched to him, on 03.02.2016, whereas, on the other hand, no such letter was ever sent to him by the opposite parties. A copy of the letter dated 03.02.2016, was received by the complainant, by hand, on 19.04.2016. Thereafter, he visited the site, and was surprised to see that still the construction was not complete. Structure of the unit was in worst condition. This fact was brought to the notice of the opposite parties, by the complainant, vide customer observation sheet dated 20.04.2016 Annexure C-4. It was further stated that instead of completing construction of the unit and also making payment towards delay compensation, the opposite parties vide letter dated 03.02.2016, which was received by hand, had offered  possession of unit. Not only this, in the said letter, an illegal demand of Rs.13,79,665.30 Ps. was made by them, with a condition to deposit the same, within one month, failing which the holding charges will be leviable. Not only this, even the area of unit was unilaterally increased, increased from 1550 square feet to 1751 square feet i.e. by 201 square feet, resulting into extra financial burden of Rs.4,42,200/- towards differential amount thereof. Even consent of the complainant was never sought, with regard to increase in the said area, as such, this was an illegal act on the part of the opposite parties, which is also in violation of Rules and Regulations. The opposite parties were requested to justify the demands raised by them, by writing a letter, but they failed to do so. It has not been clarified, as to under what circumstances, an amount of Rs.1,59,394/- was demanded under the heading ‘other charges’. Amount demanded towards electricity expenditure, water, sewerage, VAT etc. were also illegal, as the same was not mentioned in the Agreement. Even the amount of Rs.18,000/- under the heading ‘Advocate Fees’ for registration of conveyance deed was found mentioned in the said letter, which is at a very higher side. It was stated that, on the other hand, as per the payment plan, the complainant was required to pay balance amount of Rs.70,000/- plus registration charges only.
3.         It was stated that still the unit, in question, is not in a habitable condition. Construction of the unit is not complete. Construction and development work is still going on. Even construction quality is very poor. To say so, reliance has been placed on the photographs Annexure C-8 (colly.) of the unit. Basic amenities and facilities as promised are not available at the site. It was averred that even completion certificate, in respect of the project, in question, has not been obtained by the opposite parties, from the Competent Authorities. It was further stated that, on account of the aforesaid act and conduct of the opposite parties, the complainant is being forced to live in a rented accommodation, for which he is paying hefty amount towards rent, thereby causing additional financial loss. Rent deed dated 08.05.2015 to prove his stand, has been placed on record by the complainant as Annexure C-9. By stating as above, prayer has been made to direct the opposite parties to deliver possession of the unit, complete in all respects, after obtaining necessary certificates etc.; compensation for mental agony and physical harassment; penalty for the period of delay, in delivery of possession by way of interest on the deposited amount   etc.
4.         Upon notice, reply was filed by the opposite parties, wherein assertions made by the complainant were controverted. It was asserted that the unit, in question, was purchased for future gain, as such, the  complainant would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act. It was stated that since possession of the constructed unit has already been handed over to the complainant vide letter dated 03.02.2016, after obtaining occupation certificate, as such, the present complaint is not maintainable. The complainant failed to take possession of the unit. It is a contractual obligation between the parties to be discharged, as such, this Commission has no jurisdiction to entertain the complaint and only the Civil Court has jurisdiction. Territorial jurisdiction of this Commission is also disputed. It is stated that terms and conditions of the Agreement are binding upon the parties. Purchase of unit, by the complainant, in the manner, referred to above was not disputed. It was averred that the complainant being subsequent purchaser is not a consumer.
5.         It was stated that on account of delay in handing over possession of the unit, no loss is going to be caused to the complainant, because allotment made to him is cost escalation free. Further, it was stated that the complainant defaulted in making payment of installments, as such, he is not entitled to say that possession should have been delivered to him, in time. Further, it was agreed to between the parties, that the Company shall make endeavour to deliver possession of the flat, within a maximum period of 24 months, from the date of execution of the Agreement aforesaid, subject to force majeure conditions. However, it is stated that construction at the site could not be completed, on account of stay granted on construction activities, in the first instance by the Hon'ble Punjab and Haryana High Court for the period from 06.04.2010 to 23.07.2010 and, thereafter, by the Hon'ble Supreme Court of India, between 19.04.2012 upto 12.12.2012, which caused delay in handing over possession of the constructed unit to the complainant. It was further stated that to get extension of time of one year, to handover possession, consent was sought from the complainant and in the alternative it was open to him to get back the money deposited by him, alongwith simple interest @9% p.a. However, the said option was not exercised by the complainant. It is pleaded that construction of all the facilities/amenities are on the verge of completion and will be provided to the buyers, in coming days. It was stated that the complainant was bound to pay amount towards increased area, as it has been agreed to between the parties, at the time of execution of Buyer’s Agreement.  It was stated that as far as the demand made vide letter dated 03.02.2016, is concerned, the same being legal, the complainant is bound to pay the same. As far as the demand regarding payment of Advocate fee for registration of conveyance deed is concerned, the complainant is free to hire his own Advocate for the purpose, and he is not bound to pay the said fees, to the opposite parties. 
6.         On merits, it was admitted that the unit, in question, was sold to the complainant, in the manner, referred to above. Amount so received and further that possession could not be delivered in time i.e. by the stipulated date, for want of complete construction, was also not disputed. It is further stated that not only as above, other reasons for delay in starting construction work, at the site are, delay in sanction/revision of layout plans by the Competent Authorities;  delay in approval of service plans and various other approvals/sanctions etc. by the Competent Authorities. Prayer was made, to dismiss the complaint, filed by the complainant.  
7.         In the rejoinder filed, the complainant reiterated all the averments contained in the complaint, and repudiated those, contained in the written version of the opposite parties.
8.         The parties led evidence, in support of their case by filing their affidavits to support their averments. Large number of documents were also placed on record, to strengthen their respective pleas.
9.         We have heard Counsel for the parties, and, have gone through evidence and record of the case, very minutely. 
10.         The first question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.

                According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident from the record, that the Agreement was executed between the allottee(s) and the opposite parties at Chandigarh. Not only this, even the alleged offer of possession letter dated 03.02.2016 Annexure C-5 was also issued by the Chandigarh Office of the opposite parties as the same bore the address of the Company as “SCO 190-191-192, Sector 8-C, Chandigarh”. Even the receipt of payment of Rs.4 lacs, Annexure C-6 was issued by the Chandigarh Office of the opposite parties Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.         The objection taken by the opposite parties, to the effect that the complainant being investor, did not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, also deserves rejection. It may be stated here that there is nothing, on the record, that the complainant is the property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. At the same time, it was clearly stated by the complainant, in para no.26 of his complaint, supported by his evidence, by way of affidavit, that he has been living in a rented accommodation, in the absence of delivery  of possession of the unit, to him. Thus, in the absence of any cogent evidence, in support of the objection raised by  the opposite parties, mere bald assertion i.e. simply saying that the complainant being investor, did not fall within the definition of a consumers, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainant, thus, falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by  the opposite parties, in their written reply, therefore, being devoid of merit, is rejected.  
12.         Another objection was raised by Counsel for the opposite parties, that since the complainant is a subsequent purchaser, as such, he is not a consumer. It is not in dispute, that the complainant had purchased the unit, in resale, from the original owners, as referred to above. The sale transaction was endorsed by the opposite parties, in favour of the complainant. No new conditions were imposed, at the time of transfer of the said unit, in the name of the complainant, and the conditions already imposed vide the original Agreement, were kept intact. It is well settled law that once the property is transferred/endorsed, in the name of the buyer from the original owner, he/she (buyer), is vested with all the rights and interests, accrued in favour of his/her predecessor(s), as he/she stepped into her/his shoes. It was also so said by the National Consumer Commission, New Delhi in case Vatika Limited   Vs Mr. Rajneesh Aggarwal, Revision Petition No. 525 of 2013, decided on 22.07.2014, wherein the complainant was the fourth subsequent allottee. In that case, the National Commission, held as under:-  

“So far as the case of Raje Ram is concerned, the facts of the present case are totally different. In the present case, the respondent/complainant had purchased the apartment in question from the first transferee on 29.4.2006 when the construction had not been completed and   purchase/transfer of the apartment was duly approved by the petitioner company after charging Rs.65,840/- as transfer charges. In the circumstances, the petitioner company could not deny its role as a service provider to the respondent/complainant and has to be held liable for any deficiency in service with reference to the terms and conditions of the agreement which was made equally applicable to the complainant also consequent upon the approval of the assignment by the petitioner company on 30.4.2006 on payment of the transfer charges to the petitioner company. For the reasons stated above, we do not find any merit in the revision petition and the same is dismissed accordingly but with no order as to costs.”

                The principle of law laid down in the aforesaid case, decided by the National Commission is fully applicable to the present case. In view of the above, the argument raised by Counsel for the opposite parties, being devoid of merit, is rejected.

13.         Another objection raised by Counsel for the opposite parties was that the complainant filed this complaint to amend/modify/rewrite the concluded Agreement, purely to invoke jurisdiction of this Commission. It was further stated that the parties were bound by the terms and conditions mentioned in the Agreement. It was further stated that the complainant was virtually inviting this Commission to assume powers conferred under the Civil Court. Whereas, this Commission did not have the jurisdiction to adjudicate the present complaint. It may be stated here, that the complainant hired the services of the opposite parties, for purchasing the unit, in question, in the manner, referred to above, with complete basic amenities, as provided in the brochure and necessary for living a smooth and comfortable life. According to Clause 11(a) of the  Agreement,  subject to force majeure conditions and reasons, beyond the control of the opposite parties, they were to complete construction of the said unit within a period of 24 months, from the date of execution of the same (Agreement). By not completing the development and construction within a period of 24 months and even in the extended period of 12 months, the opposite parties violated the terms and conditions and were deficient in rendering service. Section 2 (1) (o) of the Act, defines ‘service’ as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

14.         From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainant has the remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by him, as he falls within the definition of a consumer. In this view of the matter, the objection of the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
15.         As stated above, according to Clause 11 (a) of the Agreement, possession of the unit was to be delivered within 24 months, from the date of execution of that Agreement i.e. on or before 08.12.2012, subject to force majeure circumstances. It is true that in some litigation, the Hon'ble Supreme Court of India stayed construction at the project site and order passed remained in force from 19.04.2012 upto 12.12.2012 i.e. for about 8 months. It is also an admitted fact, that by making reference to above fact of granting stay, which resulted into delay in construction at the site, consent of the purchasers were sought to complete construction within further 12 months. Option was also given to the complainant, to seek refund of his amount deposited, alongwith simple interest @9% P.A. The complainant exercised former option and continued to make payment thereafter and by the time, the complaint was filed, he had paid almost the entire sale consideration, towards the said unit. The extended period expired on 08.12.2013, even by that date, possession of the unit was not offered to the complainant. This act of the opposite parties amounted to deficiency in providing service. They have also indulged into unfair trade practice, by making false promises to the complainant. As per the Agreement, construction of unit was to be completed by 08.12.2012 (24 months from 09.12.2012), or at the most within the extended period of 12 months i.e. by 08.12.2013. Despite receiving almost the entire sale consideration, the basic amenities have not been provided at the project, even after a lapse of more than about five years, from the date when Buyers’ Agreement was executed between the parties.

                It may be stated here that the force majeure circumstances, which have been claimed by the opposite parties, for not completing development and construction work, at the site by the stipulated date are; delay in sanction of layout plans by the Competent Authorities;  delay in approval of service plans and various other approvals/sanctions/ clearances etc. by the Competent Authorities; and also stay on construction on the land, in question,  granted by the Hon'ble Supreme Court of India, in the case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, which was finally vacated on 12.12.2012. However, the question arises, as to whether, the aforesaid circumstances, encountered by the opposite parties, can be termed as force majeure circumstances, for non-development & construction work at the site and non-delivery of actual physical possession of the units, by the stipulated date and further within the extended period of 12 months, or not.

                First coming to the plea taken by the opposite parties regarding delay in sanction of final lay-out plans by the Authorities, it may be stated here that the said plea does not merit acceptance. It was bounden duty of the opposite parties, to get approved the final layout plans, in respect of the project, in question before launching the project, and only, thereafter, accept booking amount from the customers. The complainant including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite parties chose to accept booking, on the basis of provisional sanction of the layout plan, by the Competent Authorities, they are to blame to only themselves, for the delay, and not the purchasers of units. The purchaser of a unit, who had nothing to do with the sanction of the layout plans, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the unit. Similar view was taken by the National Commission in a case titled as M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17^th Dec 2015. As such, the plea raised by the opposite parties, in this regard, stands rejected.

                In our considered opinion, it is the duty of the builder, to obtain the requisite permissions or sanctions, in the first instance, and, thereafter, recover/accept the consideration money from the purchaser of the flats/plots. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken in getting such permissions could have been contemplated by the builder, before issuing the brochure. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/ sanctions/licence to allot plot or to construct building/ apartments, invites offers and collects money from the buyers. If the possession of unit, as also the construction of the building/apartment is delayed, because of such reasons, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances. In Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.756 of 2016, decided on 30.03.2016, the Hon’ble National Commission, upheld the findings given by this Commission, to the effect that the project cannot be even marketed before getting approval/sanction from the competent authorities, to launch the project. Relevant portion of the said Revision-Petition reads thus:-

“ We are unable to persuade ourselves to agree with the ld. counsel.  While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-

If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.

6.    We are in complete agreement with the view taken by the State Commission.  As noted above, the petitioners happen to be body corporate.  Before offering the farmhouses in the said project as Agent of Respondent No. 2, they must be aware about the status of the sanction for launch of the project.  Therefore, it is beyond one’s comprehension that the present Petitioner was not aware about the actual state of affairs for which only the developer could be held responsible.

7.    We do not find any jurisdictional error in the order passed by the Ld. State Commission warranting our interference in revisional jurisdiction.  The revision petition fails and is dismissed accordingly.”

                The principle of law, laid down in the aforesaid case, is fully applicable to the present case. In this view of the matter, plea of the opposite parties, to this effect, also stands rejected.

16.         So far as the plea that the delay was caused on account of stay by the Hon'ble Supreme Court of India, in a case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, is concerned, it may be stated here that the said stay was granted on 19.04.2012 and was vacated on 12.12.2012. The said stay order was not specific to the opposite parties, directions were issued to the Government only, not to undertake construction on the land in question. At the maximum taking a stay order, as an order to the opposite parties/builder also, benefit of only about 08 months (stay granted on 19.04.2012 and vacated on 12.12.2012) can be given and not beyond that. It was not clarified by the opposite parties, as to what stopped them to start construction and development work before 19.04.2012 and, thereafter, from 12.12.2012, the date when stay aforesaid was vacated, and complete the same. Even in extended period, the opposite parties failed to fulfill their promise of delivery of possession of the unit, after complete construction. At the same time, as has been held above, if the opposite parties did not take requisite approvals/sanctions, from the Competent Authorities, before launching the project, in question, they cannot take shelter under the force majeure clause, to defeat the claim of the complainant.

                So far as the shelter taken by the opposite parties under the stay order dated 06.04.2010, granted by the Hon’ble Punjab and Haryana High Court is concerned, it may be stated here that the said order came into force for the period from 06.04.2010 to 23.07.2010. Since in the present case, Buyer’s Agreement was executed only on 09.12.2010 i.e. after about more than four months from 23.07.2010, as such, no help can be drawn from the opposite parties, from the stay granted on construction for the period from 06.04.2010 to 23.07.2010.

                In view of the above, no help, therefore can be drawn, by the opposite parties, from the pleas raised by them, for non-delivery of possession of the constructed unit, to the complainant, by the stipulated date or within the extended period i.e. latest by 08.12.2013. 

17.         Besides raising arguments, as reflected in the reply filed, an additional issue was raised by Counsel for the opposite parties that in view of Section 8 of the Arbitration and Conciliation Act, 1996 [as amended vide the Arbitration and Conciliation (Amendment) Act, 2015], to settle disputes between the parties, the matter is required to be referred to an Arbitrator, as such, this Commission has no jurisdiction to entertain the same (complaint).
18.         First we will deal with the objection taken by Counsel for the opposite parties, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

                To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), 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.”

                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

19.         Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
20.         In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

21.         Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
22.         Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
23.         We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.2000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite parties. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
24.         The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the flat, in the said project, launched by the opposite parties. However, his hopes were shattered, when despite making almost the entire sale consideration, he failed to get actual physical possession of the unit, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
25.         Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

                In view of the above, the plea taken by the opposite parties, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

26.         The next question that falls for consideration, is, as to what remaining amount, the complainant is required to pay to the opposite parties, before taking over actual physical possession of the unit, in question. It may be stated here that the total sale consideration of the unit, in question, was fixed at Rs.38,47,099.72Ps. plus service tax to the tune of Rs.85,154/- i.e. totaling to Rs.39,32,253.72Ps.  As per customer ledger Annexure C-12, by March 2016, the total credit amount in the account of the complainant maintained by the opposite parties is shown as Rs.40,28,105.74Ps.

                The opposite parties while offering possession vide letter dated 03.02.2016, raised demand of Rs.13,79,665.30ps., to be paid by the complainant within 30 days. Out of the amount of Rs.13,79,665.30ps., raised by the opposite parties, the complainant has disputed the demand of Rs.8,12,214/-, details whereof are given in para 16 of the complaint, terming the same to be not justified. The same reads thus: -

 

Particulars	Amount
Change in area and PLC/Increase area Allotted Area 1550 Sq. ft. Final area as per builder 1751 sq. ft.	Rs.4,42,200/-
Other charges (Rs.91.03 per sq. ft.)	Rs.1,59,394/-
Electricity, Sewerage and water charges A) proportionate cost of electricity expenditure @Rs.58.05 per sq. ft.	Rs.1,01,646/-
B) Electrical Meter and Connection charges to individual floor/unit	Rs.30,497/-
Contingent deposit of VAT @Rs.14.55 per sq. ft.	Rs.25,477/-
Club charges	Rs.15,000/-
Club security deposit	Rs.20,000/-
Advocate charges	Rs.18,000/-
Total payable	Rs.8,12,214/-

 

27.         First coming to the demand of Rs.4,42,200/-, made by the opposite parties, towards increase in area of the unit and PLC thereof. It may be stated here that as per Clause 10 of the Agreement, it was agreed to between the parties that in case of any alteration, modification, resulting in increase/decrease more than 15% in the saleable area, any time prior to the grant of occupation certificate, the Company was to intimate in writing to the allottee, the proposed changes thereof and the resultant change, if any, in the total price of the floor to be paid by the allottee. However, admittedly, in the instant case, increase in the area is to the extent of 13% of the saleable area. As such, the increase in area being less than 15%, prior consent of the complainant was not required, in view of provision in Clause 10 of the Agreement. Once, it has been admitted by the complainant, by way of Clause 10 of the Agreement, that the Company was free to increase/decrease area of the unit upto 15%, he cannot wriggle out of the same, at later stage. It is not case of the complainant that the area of the unit was increased to more than 15% and at the same time, his consent was not taken for the same, and as such, he was deprived of the final decision to be taken by him, in the matter.  It is also not the case of the complainant that, in actual, the area of the unit, has not been increased but on the other hand, the opposite parties wanted to usurp the money from him, on false ground of increase in area of the unit. Therefore, the demand raised by the opposite parties towards increase in area of the unit and PLC, to the tune of Rs.4,42,200/-, is legal and tenable.
28.         The other demands are on account of other charges  to the tune of Rs.1,59,394/-; electricity and water charges @Rs.58.05 per sq. ft. to the tune of Rs.1,01,646/-; electrical meter and connection charges to the floor in the sum of Rs.30,497/- per unit; club charges in the sum of Rs.15,000/-; club security deposit in the sum of Rs.20,000/- and IBMS and CAM Charges including service tax to the tune of Rs.92,662/-. Counsel for the opposite parties vehemently argued that all these charges are in accordance with terms and conditions of the Agreement only. It may be stated here that at internal page 7 of the Agreement (at page 101 of the paper book), it was stipulated that the total price was to be calculated on the basis of saleable area of the floor in question, which did not include other amounts, charges, security amount etc., which are payable by the allottee, as and when demanded by the Company in accordance with the terms of the application/agreement, for instance:-

1. “IBMS.
2. Additional IDC/EDC, wealth tax, government rates, tax on land, fees or levies of all and any kind of whatever name called on the said project, and
3. Maintenance charges, additional PLC, property tax, municipal tax on the said independent floor, and 
4. Charges for any additional parking space(s) other than the parking space(s) which will be charged at the then prevailing rate and will be offered subject to availability, and
5. Stamp duty, registration and incidental charges as well as expenses for execution of the Agreement and conveyance deed (which are to be borne and paid by the allottee); and
6. Taxes; and
7. Club charges;
8. Power back up charges, as applicable; and
9. The proportionate cost of installation of equipments for procuring and supplying electricity, cost for electric and water meter as well as charges for water and electricity connection/consumption; and
10. Any other charges that may be payable by the allottee as per the other terms of the Agreement and such other charges as may be demanded by the Company”. 

                Besides, as per Clause 1.11 of the Buyer’s Agreement, the complainant agreed that in addition to total price, he shall be liable to pay all taxes as stipulated therein.

29.         It is, thus, evident from the demand raised that major part is on account of increase in area of the unit including PLC, which the complainant is bound to pay in view of stipulation in Clauses 1.10 and 10 of the Agreement. Besides, this another major amount demanded is towards registration and stamp duty charges, to the tune of Rs.3,04,828/-, which the complainant has not disputed. Thus, in view of above, the demand raised  aforesaid, vide letter dated 03.02.2016, except contingent deposit of VAT @Rs.14.55 per sq. ft.  in the sum of Rs.25,477/- and Advocate charges in the sum of Rs.18,000/-, is in accordance with terms and conditions of the Agreement. In our considered opinion, the demand raised by the opposite parties, in respect of contingent deposit of VAT @Rs.14.55 per sq. ft.  in the sum of Rs.25,477/- and Advocate charges in the sum of Rs.18,000/-, is arbitrary, for the reasons given hereinafter.

                First coming to the demand in respect of contingent deposit of VAT aforesaid, it may be stated here that the same is required to be paid by the complainant, if demanded by the Government concerned, at the appropriate time. The opposite parties cannot make demand for the said amount, in advance. 

                Now coming to the demand made in respect of Advocate charges in the sum of Rs.18,000/-, neither the opposite parties can force the complainant to get the services of their Advocate nor the complainant is bound for the same. At the same time the opposite parties also did not press the same. It is therefore held that the complainant shall bear the actual expenses, on his own, which may be incurred, at the time of registration of the unit, in question. 

                It is therefore held that out of the demanded amount of Rs.14,72,327.30Ps. i.e (Rs.13,79,665.30Ps. plus (+) Rs.92,662/-),  vide letter dated 03.02.2016, the complainant is not required to pay contingent deposit of VAT @Rs.14.55 per sq. ft.  in the sum of Rs.25,477/- and also Advocate fees in the sum of Rs.18,000/-. Rest of the amount, as depicted in the letter dated 03.02.2016, is required to be paid by the complainant, at the time of delivery of possession of the unit, in question.

30.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to delivery of possession of the unit, in question. It is an admitted fact that the opposite parties failed to deliver  actual possession of the unit, in question, by the stipulated date, for want of construction and basic amenities at the site. Almost the entire sale consideration has been paid by the complainant towards the unit, except the demand raised vide letter dated 03.02.2016, referred to above. The complainant had expectations to settle in the unit, after lapse of 24 months, from the date of execution of the Buyer’s Agreement. However, his hopes were not fulfilled when actual physical possession of the unit, in question, was not even offered to him, by the stipulated date. Compelled under the circumstances, he even agreed to extend the period, to get possession by 12 months, but even by that time, possession was not offered and was ultimately offered in February 2016. The act in not handing over possession in time and even after the expiry of extended period but after a long delay, is a material deficiency, in providing service on the part of the opposite parties. The complainant is, thus, entitled to get possession of the unit, purchased by him.

                In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him.

31.         It is also proved on record that the payment of installments was delayed by the complainant. If that is so, certainly he is not entitled to get same compensation for mental agony and physical harassment, which we are granting in other cases, qua this very project, in case of delay, in delivery of possession. Accordingly, it is held that the complainant is entitled to Rs.1 lac, as compensation, for mental agony and physical harassment, which in our considered opinion is fair and reasonable. 
32.         At the same time, it is also held that since the complainant has challenged the letter dated 03.02.2016, by way of filing the present complaint on 19.05.2016, as such, in no way, it can be said that the complaint being premature is not maintainable.
33.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-

1. To hand over actual physical possession of the unit, in question, complete in all respects, as per the terms and conditions of the Agreement, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, on payment of the amount by him (complainant) raised vide letter dated 03.02.2016, except contingent deposit of VAT @Rs.14.55 per sq. ft.  in the sum of Rs.25,477/- and Advocate fees/charges to the tune of Rs.18,000/-.
2. To execute and get registered the sale deed, in respect of the unit, in question, within 01 (one) month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc., by the complainant, as mentioned in letter dated 03.02.2016.
3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 09.12.2013 (promised date in view of the extension of 12 months after the stipulated date as per Agreement i.e. from 08.12.2012) to 31.08.2016, within 2 months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.
4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant  w.e.f. 01.09.2016, onwards (per month), by the 10^th of the following month, till delivery of actual physical possession of the unit, failing which, the same shall also carry penal interest @15 % p.a., instead of 12% p.a.,  from the date of default, till the payment is actually made.
5. To pay compensation, in the sum of Rs.1 lac, on account of mental agony and physical harassment, caused to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.
6. To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

34.         Certified copies of this order be sent to the parties, free of charge.
35.         The file be consigned to Record Room, after completion.

Pronounced.

01.09.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.