Chandigarh

StateCommission

CC/530/2017

Col. Pravesh Talwar - Complainant(s)

Versus

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

Ashim Aggarwal, Adv.

16 Feb 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Consumer Complaint	:	530  of 2017
Date of Institution	:	11.07.2017
Date of Decision	:	16.02.2018

 

 

1. Col. Pravesh Talwar S/o Sh. S.G.D.Talwar, Resident of House No.39, Sector 18, Panchkula – 134109.
2. Mrs. Seema Talwar W/o Col. Pravesh Talwar Resident of House No.39, Sector 18, Panchkula – 134109.

 

                                             .........Complainants.

V e r s u s

 

1. DLF Homes Panchkula Pvt. Ltd., SCO No.190-191-192, Sector 8-C, Chandigarh through its authorized representative.
2. DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
3. Mr. Rakesh Kerwell, Director, DLF Homes Panchkula Pvt. Ltd., SCO No.190-191-192, Sector 8-C, Chandigarh.
4. Mr. Manoj Talwar, Director, DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, Highway-8, Gurgaon.

 

..........Opposite Parties.

 

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

 

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

                SH. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER.

 

Argued by:

 

Sh. Ashim Aggarwal, Advocate for the complainants.

Sh. Arjun Sharma, Advocates for the Opposite Parties.

 

PER DEV RAJ, MEMBER

              During arguments, Sh. Arjun Sharma, Advocate, Counsel for the Opposite Parties, under his signatures and signatures of Ms. Ekta Jhanji, Advocate, placed on record, a table/chart showing detail of the property, date of Agreement, total price, amount received, DLI etc. and further the date when possession was offered/taken, which was taken on record.

2.         In brief, the facts are that since the complainants, who are husband and wife, were desirous of owning a residential accommodation for their family and occupation near Chandigarh, complainant No.1 purchased an independent floor No.DVF-D7/3-FF#217 having saleable area of 1450 sq. ft. on 03.04.2010 vide allotment letter (Exhibit C-1) in the project of the Opposite Parties, in the name and style of “DLF Valley, Panchkula” at Village Bhagwanpur, Tehsil & Distt. Kalka, Panchkula. The name of complainant No.2 was added as a joint allottee vide letter dated 08.01.2017 (Exhibit C-2). An Independent Floor Buyer’s Agreement was executed between the parties on 15.11.2010 (Exhibit C-3). The price payable for the unit, in question, was Rs.35,08,999.69 plus club charges etc. It was stated that buyer’s agreement is an outright unilateral document containing one-sided clauses, which were never shown to the complainants at the time of booking and were incorporated without any consultation with the complainants. It was further stated that the agreement was signed by the complainants under duress. It was further stated that the Opposite Parties deliberately delayed execution of agreement.

3.         As per Clause 11(a) of the Agreement, the Opposite Parties were to hand over possession of the said independent floor within 24 months from the date of execution of the Agreement i.e. by 14.11.2012. Possession of the unit was purportedly offered by the Opposite Parties vide letter dated 22.03.2017 (Exhibit C-24). As per statement of account, the complainants were required    to deposit the total balance amount of Rs.5,18,015.49 plus Rs.82,766/- towards welfare fund. Uptil 28.06.2017, the complainants paid an amount of Rs.38,92,488/-. They also paid the amount of Rs.82,766/- towards welfare fund. The complainants have challenged the demands qua increase in area by 125 sq. ft.,  VAT, Service Tax levied after 14.11.2012 etc. Compensation of Rs.6,40,669/- given by the Opposite Parties for the delayed period was also stated to be on the lesser side. It was stated that the complainants made payments under protest and without prejudice to their right to claim compensation. It was further stated that the Opposite Parties have failed to rectify the snags in the unit in May 2017 and deliver possession.

4.         Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Parties, to hand over physical possession of the unit, in question, complete in all respects after rectification of all snags and execute/register conveyance/sale deed in a time bound manner; withdraw letter dated 22.03.2017 offering possession; pay interest @18% p.a. from expiry of three years till date of handing over of possession; bear increase in service tax levied after 14.11.2012; award Rs.10,00,000/- as compensation for deficiency in service, unfair trade practice, mental harassment, loss & injury suffered by the complainants due to negligence of the Opposite Parties; award Rs.55,000/- towards litigation expenses and pass such further orders/directions, as may be necessitated in the matter and deemed appropriate under the circumstances of the case.

5.         The Opposite Parties, in their preliminary submissions in the written statement stated that the offer of possession was sent to the complainants on 22.03.2017 but the complainants themselves are neither taking possession nor have paid the due amount as raised in Final Statement of Account dated 22.03.2017 and, as such, they are liable to pay holding charges as well as delay interest on the due payments since 22.03.2017. It was further stated that the delay compensation of Rs.6,40,669/- has already been credited in final statement of account. It was further stated that the complainants had full knowledge about the executed terms of Agreement dated 15.11.2010. It was further stated that after receipt of occupation certificate on 12.01.2017, offer of possession was sent to the complainants on 22.03.2017. It was further stated that the complainants prayed for unfounded demands, which are not as per executed Agreement and the Opposite Parties also prayed to allow 31% cost escalation of construction as well as 47% of the land holding cost i.e. total 76% of the sale price. It was further stated that the complainants have filed the instant complaint in total disregard to the terms of Floor Buyer’s Agreement executed between the parties, which amounted to cancellation of the agreement. It was further stated that the project is cost escalation free and the complainants shall get the possession on the same price as committed by the Opposite Parties at the time of allotment on 03.04.2010 and all losses/cost escalation on many counts like building material cost, labor cost, land cost etc. has been borne by the Opposite Parties.It was further stated that construction of the project got delayed due to stay on construction, ordered by the High Court and thereafter by Hon’ble Supreme Court of India due to third party litigation involving acquisition proceedings of land of litigants therein, in the years 2010 and 2012 , and after dismissal of the said litigation by Hon’ble Supreme Court on 12.12.2012, the Opposite Parties vide letter dated 24.06.2013 offered an exit option to the complainants by accepting refund of entire amount paid till date with 9% interest but they refused to avail the said option and apart from opting to continue with the project, also consented to the extension of time.

6.         Indicating present status of the project, it was stated that occupation certificate(s) of 1775 units had already been received and offer of possession had been sent to 1698 customers. It was also stated that proper water connection and electricity supply was in place and housekeeping and maintenance services were being provided through leading multinational company, namely, Jones Lang Lasalle.

7.         In the preliminary objections, it was stated that the parties were bound by the terms and conditions mentioned in the Independent Floor Buyer’s Agreement; that the complainants have made baseless allegations of unfair trade practice, deficiency in service etc. with an ulterior motive to amend/modify/rewrite the concluded Agreement duly executed between parties, purely to invoke jurisdiction of this Commission; that this Commission cannot adjudicate upon the matter where the prima facie prayers are for modification of clauses of the Agreement; that the complainants are not consumers as the floor, in question, was purchased by them for investment purposes and earning profits. Another objection raised in the written statement is that as per Clause 55 in the Agreement, all disputes arising out of the Agreement are to be settled amicably, failing which, they shall be referred to the Arbitration. It was further stated that the Opposite Parties could not be made liable for delay caused due to force majeure conditions, which was on account of stay by Hon’ble Punjab & Haryana High Court and Hon’ble Supreme Court of India from 19.04.2012 to 12.12.2012 and delay in grant of approvals in layout plans and service plans. In Sub Para (g) of Para 11, it was further stated that approval regarding revision in layout plan and service plans sought on 11.3.2013 and 20.05.2013, was received on 06.09.2013 and 14.08.2014 respectively. The territorial jurisdiction of this Commission to entertain and try the complaint has also been challenged on the ground that the project, in dispute, is situated in Panchkula, which comes within the jurisdiction of Panchkula District. It was further stated that only Courts at Panchkula and Punjab & Haryana High Court have the territorial jurisdiction to entertain and try the instant complaint. It was also stated that when given the option to exit vide letter dated 24.06.2013, the complainants agreed to continue with allotment and delay and, as such, they (complainants) voluntarily waived of their right to raise any grievance.

8.         On merits, it was stated that the price of the unit as per Schedule of Payment (SOP) was Rs.35,08,999.69 plus service tax for 1450 sq. ft. It was further stated that due to increase in area to 1575 sq. ft, the price of the floor also stood increased to Rs.40,43,615.07 plus service tax. It was admitted that the complainants deposited a sum of Rs.38,92,488/- with the Opposite Parties. It was reiterated that an amount of Rs.6,40,669/- stood credited to the account of the complainants as EPR. It was denied that the Floor Buyer’s Agreement contained one-sided terms and conditions, sans any benefits to the complainants. It was also denied that the agreement was executed under duress as the Opposite Parties threatened to forfeit 15% of the total price. It was further stated that the agreement is executed only when 25% of the price is paid by the allottee(s). The complainants vide Clause 1 of Allottee’s representation in the Independent Floor Buyer’s Agreement acknowledged that the Opposite Parties have readily provided all information and clarification as required by the allottee.

9.         It was admitted that as per Clause 11(a) of the Agreement, possession of the allotted unit, was to be handed over to the complainants within 24 months from the signing of the Agreement subject to force majeure conditions or due to reasons beyond the control of Opposite Parties as mentioned in Clauses 11(b) and 11(c) of the Agreement. It was further stated that delivery of possession of the unit, in question, was delayed on account of force majeure conditions. It was further stated that alterations/modifications were made as per Clauses 9 and 10 of the Agreement. It was further stated that since increase in area was less than 10%, as such, demand qua the same was justified. It was further stated that demand qua VAT was as per Clause 3 (in fact Note No.2) appended to final statement of account. It was reiterated that possession of the unit, in question, was offered to the complainants on 22.03.2017. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

10.       The complainants, in support of their case, submitted their joint affidavit, by way of evidence, alongwith which, a number of documents were attached.

11.       The Opposite Parties, in support of their case, submitted the affidavit of Sh. Shiv Kumar, their Authorized Signatory, by way of evidence, alongwith which, a number of documents were attached. 

12.       We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

13.       It is evident that Independent Floor No.DVF-D7/3-FF#217 in DLF Valley, Panchkula was allotted to complainant No.1 vide allotment letter dated     03.04.2010 (Exhibit C-1) and Independent Floor Buyer’s Agreement was executed at Chandigarh on 15.11.2010 (Exhibit C-3). On 08.01.2017 (Exhibit C-2), the name of complainant No.2 was added as co-applicant in the property documents. The total price of the said independent floor, as depicted in the Agreement, was Rs.35,08,999.69, besides other charges, securities, deposits and taxes etc. as specified in the Application/ Agreement. In all, a sum of Rs.38,92,488/-, was paid to the Opposite Parties as admitted by them in their written statement and also in the Chart showing details of the property,  in  question,  placed  on  record,  under  the signatures of the Counsel for the Opposite Parties, at the time of arguments on 09.02.2018. The contention of the complainants that the Buyer’s Agreement contained one-sided clauses and they were made to sign the same under duress is without any basis. The agreement was signed on 15.11.2010 and if the same was signed under duress, immediately grievance to this effect should have been raised with the Opposite Parties but no evidence to support this contention has been placed on record. As regards delay in execution of buyer’s agreement, as is evident, the complainants made first payment of Rs.4 Lacs on 30.03.2010 and agreement was executed on 15.11.2010 i.e. after 7½ months. It is a fact duly borne on record that there was stay by the Hon’ble Punjab & Haryana High Court from 06.04.2010 to 23.07.2010 (Annexures R-5 & R-6), which acted as a force majeure condition. Not only this, after issuing allotment letter on 03.04.2010, in all fairness, the Opposite Parties could taken 3-4 months to execute the agreement. The plea regarding delayed execution of agreement is, therefore, not tenable.

14.       As per Clause 11(a) of the Agreement, the Opposite Parties were to complete the construction of the said independent floor within a period of 24 months from the date of execution of the said Agreement. It may be stated here that the Opposite Parties, in similar cases relating to this project, had given an exit option to the allottees in June 2013, in view of stay by Hon’ble Supreme Court, to seek refund alongwith 9% interest or to continue with the allotment by agreeing to extend one year period for delivery of possession. However, in the instant case, through the Opposite Parties have stated that they gave exit option to the complainants vide letter dated 24.06.2013 but no such document has been placed on record to show that any such offer was ever given to the allottee(s) in the year 2013. It is, however, on record, that there was stay by the Hon’ble Supreme Court of India from 19.04.2012 to 12.12.2012 (Annexures             R-7 & R-8), which in turn, delayed the completion of the project. The possession of the unit, in question, was offered by the Opposite Parties to the complainants on 22.03.2017 vide offer of possession letter (Annexure R-1 colly.) and the instant complaint has been filed on 11.07.2017. While offering possession, the Opposite Parties raised demand of Rs.5,18,015.49 plus Rs.82,766/- towards welfare fund. As admitted during arguments and as is clear from order dated 14.12.2017, the entire aforesaid payment including Contingent Deposit of Vat amount was paid by the complainants on 28.06.2017 (Exhibit C-25). On 14.12.2017 itself, Counsel for the Opposite Parties stated that after removing the snags within next 10 days, possession would be delivered to the complainants within a week thereafter, subject to the complainants submitting all the documents. During arguments, it was admitted by counsel for the parties that the requisite documents were submitted/signed on 17.12.2017 and possession of the unit, in question, was delivered to the complainants on 17.12.2017 itself. It was also admitted that the defects/snags in the construction of the unit, in question, stood rectified/removed on 08.02.2018.

15.         Since the Independent Floor Buyer’s Agreement, in the instant case, was executed between the parties on 15.11.2010 and period stipulated therein for handing over possession was to commence from the date of execution of the same (Agreement), the averment of the Opposite Parties that Hon’ble Punjab & Haryana High Court had restrained them from creating any third party rights, during the year 2010 (Annexures R-5 and R-6), is not relevant.

16.           The first question, that falls for consideration, is, 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. It has been prayed that hearing may be adjourned till decision on Section 8 application. However, perusal of file shows that no such application was ever filed by the opposite parties at any stage. It may be stated here that this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, 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 was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“26.      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.”

33.        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 plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, 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.

34.        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.

17.       Another objection raised by the Opposite Parties was that as per Clause 55 of the Agreement, the Courts at Panchkula alone and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It was also stated that since the property, in question, is situated in District Panchkula, a part of cause of action arose at Panchkula. It may be stated here that 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/her. Clearly, application for allotment of Unit (Annexure R-3) was made by the complainants at Chandigarh address of the Opposite Parties viz. Shop No.101-102, Ist Floor, DLF City Centre Mall, Rajiv Gandhi, I.T. Park, Kishangarh, Chandigarh. Independent Floor Buyer’s Agreement was also executed between the parties on 15.11.2010 at Chandigarh. Since, as per documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainants, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

18.         In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC), the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainants had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to them, to file the complaint. The submission of the Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

19.         The next objection raised by the Opposite Parties was that the complainants have made baseless allegations of unfair trade practice, deficiency in service etc. with an ulterior motive to amend/modify/rewrite the concluded Agreement duly executed between the parties, purely to invoke jurisdiction of this Commission. It was further stated that the complainants were virtually inviting this Commission to assume powers conferred under the Civil Court and, therefore, this Commission did not have the jurisdiction to consider the present complaint. It may be stated here, that the complainants hired the services of the Opposite Parties, for purchasing the flat, in question, in the manner, referred to above. 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 Independent Floor within a period of twenty four months, from the date of execution of the same (Agreement). 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”

 

              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 complainants have 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 them, as they fall within the definition of a ‘consumer’, as stated above. In the instant case, the complainants have sought relief on account of violation of terms and conditions of the Agreement by the Opposite Parties and their deficiency in rendering service by not delivering possession within the stipulated/extended period. It, therefore, cannot be said that the complainants are trying to rewrite/modify the terms of the Agreement. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

20.       To defeat claim of the complainants, the next objection raised by the Opposite Parties was that since the complainants had purchased the flat, in question, for earning profits i.e. for resale, as and when there was escalation in the prices of real estate, as such, they would not fall within the definition of ‘consumer’, as defined by Section 2 (1) (d) (ii) of the Act. It may be stated here that there is nothing, on record to show, that the complainants are property dealer(s), and are indulged in sale and purchase of property, on regular basis. In their complaint in Para 1, the complainants have specifically stated that they purchased the flat, in question, as they were desirous of owning a residential accommodation for their family use and occupation near Chandigarh. In the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Consumer Disputes Redressal Commission, New Delhi, 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. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs.  Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”

 

The complainants, thus, fall within the definition of ‘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.  

21.        The next question, that falls for consideration, is, as to whether, there is delay in offering/delivering possession of the flat, in question. Clauses 11(a) & 11(b) of Independent Floor Buyer’s Agreement dated 15.11.2010 read thus:-

“11(a) Schedule for possession of the said Independent Floor:-

 

The Company based on its present plans and estimates and subject to all just exceptions, endeavors to complete construction of the said Independent  Floor  within  a period of twenty four (24) months from the date of execution of the Agreement unless there shall be delay or failure due to Force majeure conditions and due to reasons mentioned in Clause 11(b) and 11(c) or due to failure of Allottee to pay in time the Total Price and other charges, taxes, deposits, securities etc and dues/payments or any failure on the part of the allottee to abide by all or any of the terms and conditions of this Agreement.

11(b) Delay due to reasons beyond the control of the company:-

If the possession of the Said Independent Floor is delayed due to Force Majeure conditions, then the company shall be entitled to extension of time for

delivery of possession of the said Independent Floor. The company during the continuance of the Force Majeure reserves the right to alter or vary the terms and conditions of the agreement or if the circumstances so warrant, the company may also suspend the development for such period as is considered expedient and the allottee shall have no right to raise any claim compensation of any nature whatsoever for or with regard to such suspension……..”

 

As stated above, according to Clause 11(a) of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, it was liable to deliver physical possession of unit, within a period of 24 months, from the date of execution of the same (Agreement). In the event of failure to deliver possession, as per Clause 15 of the Agreement, the complainants were entitled to get penal compensation @Rs.10/- per square feet, per month, of the saleable area, for the period of delay. 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 up-to 12.12.2012 i.e. for about 8 months. It is also admitted that above fact of granting stay resulted into delay in construction at the site.

22.       The Opposite Parties have specifically pleaded that there was stay by the Hon’ble Apex Court from 19.04.2012 up-to 12.12.2012 (Annexures R-7 & R-8), which in turn delayed the project. In view of this, the two years period stipulated in the Agreement and one year extended period on account of stay by the Hon’ble Apex Court, expired on 14.11.2013. No justification whatsoever for delay in offering possession beyond 14.11.2013 has been explained by the Opposite Parties. The argument of the Opposite Parties that delay in handing over possession of independent floor was attributable due to delay in receiving statutory approvals from the competent authorities, the same being absolutely beyond their control, is not tenable. The Independent Floor Buyer’s Agreement was executed on 15.11.2010 and before execution thereof, the Opposite Parties ought to have obtained all the approvals. If permissions/approvals for revision in layout plans and service plans were sought on 11.03.2013 and 20.05.2013, approvals for which were also received in due course of time, the initial time taken (more than two years) for seeking such approvals amounts to clear deficiency on the part of the Opposite Parties and in the absence of any justified reason for not doing so earlier, time consumed in obtaining such approvals would not amount to force majeure condition. The plea taken, therefore, is of no help to the Opposite Parties. Possession of the unit, in question, having been offered vide offer of possession letter dated 22.03.2017 (Exhibit C-24/Annexure R-1 colly.), clearly, there is inordinate delay (around 3 years 4 months) in offering possession of the unit, in question, to the complainants. Delay in offering possession to the complainants is an act of clear deficiency of the Opposite Parties.

23.       As already stated in Para 13 of the judgment,  the entire payment including Contingent Deposit of Vat amount was made by the complainants on 28.06.2017. Admittedly, the possession of the unit, in question, was delivered to the complainants on 17.12.2017 after signing/submission of the requisite documents. As stated during arguments, the defects/snags in the construction of the unit, in question, stood rectified/removed on 08.02.2018.

24.       It may be stated here that apart from increase in area of the unit, in question, the complainants have also challenged the other demands raised in the offer of possession letter. In the instant case, the increase in the area is less than 15%, for which, no consent was required. Otherwise also, the issue qua legality of other demands raised, has already been settled by this Commission in Consumer Complaint bearing No.32 of 2017 titled Kavita Devi Vs. M/s DLF Homes Panchkula Pvt. Ltd. decided on 17.05.2017 alongwith which, 12 connected complaints were also decided. Except the demand on account of contingent deposit of vat, this Commission held the other demands raised to be legal and valid. The view held in Kavita Devi’s case (supra) qua demands raised holds good in this case also.

25.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit, in question, within the stipulated period of 24 months and extended period of 12 months on account of force majeure conditions. As stated above, in the instant case, the Opposite Parties did not deliver possession within 24 months as stipulated in Independent Floor Buyer’s Agreement and thereafter within extended period of 12 months, from execution of the Agreement on 15.11.2010 i.e. by 14.11.2013. There is, thus, inordinate delay of around 3 years 4 months, even beyond the extended period. As already stated above, possession of the unit, in question, was offered by the Opposite Parties on 22.03.2017. Clearly there is delay in offering possession on account of which, the complainants deserve to be compensated. It may be stated here that two Judges Bench of Hon’ble National Commission in the case of Shri Suman Nandi & Anr. Vs. M/s Unitech Limited & Anr., Complaint No.277 of 2013, decided on 17.12.2015, where there was delay in delivering possession, in Para 16 held as under:-

“16.       On perusal of the Buyer’s Agreement and the affidavits filed by the parties it is clear that the complainants had booked the subject apartments on the expressed promise extended by the opposite parties that subject to Force Majeure, the opposite parties would deliver the possession of the apartments complete in all respect within 30-36 months, as the case may be, of the execution of the Buyers Agreement and being influenced by the said promise the complainants entered into the contract. No doubt in the Buyer’s Agreement some scope for delay due to unavoidable circumstances was kept in mind for which clause 4.a. for compensating the complainants for delay was incorporated but it does not mean that the intention was that even in the event of inordinate delay in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.5/- per sq. ft. per month which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view clause 4.a. was meant for computing compensation in case of a minor delay in delivery of possession.   If the argument of the opposite party is to be accepted, it would lead to absurd situation and would give an unfair advantage to the unscrupulous builder who might utilize the consideration amount meant to finance the project by the buyer for his other business venture at nominal interest of 2-3 per cent as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.”

 

The National Commission granted 12% interest as compensation from the date of default in delivery of possession.

            Also in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order read thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated  in  the  Buyers  Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

 

26.         No doubt, in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainants for delay, but it does not mean that the intention was that even in the event of inordinate delay, in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.10/- per sq. ft. per month, which is much less than the bank rate for loan or fixed deposit.  Therefore, in our considered view, Clauses 11(a) and 15 were meant for computing compensation, in case of a minor delay in delivery of possession.  

27.       Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the cases, referred to above, and position stated above, the complainants are entitled to grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay, beyond two years plus one year extended period i.e. w.e.f. 15.11.2013 up-to + 2 months from the date of offer of possession. The possession having been offered on 22.03.2017, the complainants shall be entitled to compensation up-to plus 2 months from 22.03.2017 i.e. 21.05.2017 (30 days for making payment + 30 days grace period). The complainants are, thus, held entitled to compensation by granting interest @12% on the deposited amount for the delay period as above. In the event of failure of the Opposite Parties to deliver possession within 30 days after deposit of due payment and submission of documents by the complainants, for delay beyond 30 days, the complainants shall be further entitled to interest @12% p.a. on the deposited amount till possession was delivered.

28.       In this complaint, a sum of Rs.6,40,669/-, credit for which has been given on account of delay compensation, shall be deducted from the compensation amount arrived at by way of interest @12% for delay period.

29.       It was stated and agreed by Counsel for the Opposite Parties that the stamp duty and registration charges would be payable by the complainants at the time of execution of sale deed. Besides, incidental expenses for execution of sale deed shall also be borne by the complainants. As regards the amount of contingent Vat deposit, the complainants have already deposited the same.

30.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to them, for inordinate delay in delivering physical possession of the unit to them, by the Opposite Parties, by the date promised in the Agreement and within one year extended period. The complainants have been compensated by granting 12% interest for the delay period as stated above. The price of the unit, in question, is escalation free. The complainants shall also get the benefit of escalation in price of the unit. Grant of compensation in the sum of Rs.1,50,000/- on account of mental agony and physical harassment suffered by the complainants would serve the ends of justice.

31.       No other point, was urged/pressed, by the Counsel for the parties.

32.      For the reasons recorded above, the complaint is partly accepted with costs. The Opposite Parties are, jointly and severally, held liable and directed as under:-

(i)	Execute and get registered the sale deed in respect of the unit, in question, within two months from the date of receipt of certified copy of the order. The stamp duty, registration charges and incidental expenses, if any, shall be borne by the complainants.
(ii)	To pay compensation, by way of interest @12% p.a., on the deposited amount(s), to the complainants, with effect from 15.11.2013 till 21.05.2017 [w.e.f. 15.11.2013 in respect of deposits made up-to 15.11.2013 and from respective dates of deposits in respect of amount(s) paid after 15.11.2013] within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount(s) shall carry penal interest @15% p.a., instead of 12% p.a., from the date of default i.e. after expiry of 45 days period,  till realization.             Further for failure of Opposite Parties to deliver possession within 30 days from the date of making payment/ submission of documents by the complainants, for such delay, beyond 30 days, compensation by way of interest @12% p.a. on the deposited amount, till the date possession was delivered, shall be payable within 45 days from the date of receipt of certified copy of this order and failure shall entail penal interest @15% p.a., instead of 12% p.a., till payment is made.
(iii)	Pay compensation in the sum of Rs.1,50,000/- on account of mental agony, physical harassment and deficiency in service and Rs.35,000/- as litigation costs, to the complainants, within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @12% p.a., from the date of filing the complaint till realization.

 

33.       Since the Opposite Parties have credited an amount of Rs.6,40,669/- on account of delay compensation, the same (Rs.6,40,669/-) shall be reduced from the compensation amount arrived at by way of interest @12% p.a. for the delay period, payable to the complainants.

34.       As agreed between the parties, the Advocate Charges shall not be charged by the Opposite Parties and the actual expenditure for registration of Sale Deed besides Stamp duty and Registration charges, shall, however, be borne by the complainants.

35.       Certified copies of this order be sent to the parties, free of charge.

36.       The file be consigned to Record Room, after completion.

Pronounced.

16.02.2018

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

(DEV RAJ)

MEMBER

 

 

 

(PADMA PANDEY)

MEMBER

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