Chandigarh

StateCommission

CC/234/2016

Dr. Anoop Singh & anr. - Complainant(s)

Versus

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

Sh. Karan Nehra, Adv.

02 Sep 2016

ORDER

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

 

Complaint case No.	:	234 of 2016
Date of Institution	:	26.05.2016
Date of Decision	:	02.09.2016

 

1. Dr.Anoop Singh son of Ch.Inder Singh.
2. Dr.Sunita Sheokhand wife of Dr.Anoop Singh.

Both residents of House No.08/27, New Campus, CCS HAV, Hissar, Haryana.

……Complainants

V e r s u s

1. DLF Homes Panchkula Private Limited, SCO 190-91-92, Sector 8C, Chandigarh, through its Authorized Signatory.
2. DLF Homes Panchkula Private Limited, through its Managing Director, having is Registered Office at 12^th Floor, DLF Gateway Tower, DLF City, Phase-3, 104-8 Gurgaon, Haryana
3. Mahinder Singh son of Suraj Bhan, Authorized Signatory of DLF Homes Panchkula Pvt. Ltd. Company, Chandigarh Technology Park, Plot No.2, Tower-D, Ground Floor, Chandigarh.
4. HPS Bhullar son of Joginder Singh Bhullar, Authorized Signatory of DLF Homes Panchkula Pvt. Ltd. Company, Chandigarh Technology Park, Plot No.2, Tower-D, Ground Floor, Chandigarh.

….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.Karan Nehra, Advocate for the complainants.

                        Ms.Ekta Jhanji, Advocate for the Opposite Parties.

               

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

               

                The facts in brief are that allured by the advertisements and promotions made by the opposite parties, with regard to the salient features of their project, launched by them, under the name and style of “DLF Valley”, District Kalka, Panchkula, Haryana, the complainants vide application dated 06.03.2010, booked an independent floor measuring 1550 square feet, in the same (project), on making payment of Rs.4 lacs, towards booking amount. By September 2010, they had paid an amount of Rs.12,82,545/- to the opposite parties. Vide Independent Floor Buyers Agreement dated 31.01.2011, the complainants were allotted independent floor, bearing no.E-3/11, Ground Floor, Parking-GF, measuring 1550 square feet saleable area, in the said project. Total price of the unit, including External Development Charges, Preferential Location Charges etc. was fixed at Rs.42,34,599.72Ps. It was stated that from time to time, the complainants had already paid an amount of Rs.42,77,183.48Ps. It was further stated that at the time of booking of the said unit, it was assured by the opposite parties that possession of the unit, complete in all respects, will be handed over within a period of 24 months, from the date of booking. However, later on, at the time of execution of the Buyer’s Agreement and that too after a delay of about more than 10 months, it was found against Clause 11 (a) therein, that possession of the unit will be delivered within a period of 24 months, from the date of execution of the same i.e. upto 30.01.2013 and not from the date of booking, which act amounted to unfair trade practice. It is grievance of the complainants that not only as above, even heavy  rate of delayed payment interest, has wrongly been charged by the opposite parties. 

2.         It is grievance of the complainants 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 complainants, they approached the opposite parties with a request to complete the construction and deliver possession of the unit and also to make payment of compensation, for the period of delay. However, to the utter surprise of the complainants instead of completing construction of the unit and also making payment towards delay compensation, the opposite parties vide letter dated 14.01.2016, Annexure C-6,  issued offer of possession, wherein an illegal demand of Rs.14,44,888.07 Ps. was made by them. Not only this, even the area of unit was unilaterally increased, from 1550 square feet to 1751 square feet, resulting into extra financial burden towards payment of differential amount thereof. It was stated that the opposite parties reduced carpet area of the unit by approx. 60 square feet and on the other hand had increased the common area, which is of no use to the complainants. It was averred that rather there was decrease in inner area of the unit, allotted to the complainants. The complainants requested the opposite parties to justify their stand of increasing the area aforesaid, but they failed to give any reply.
3.         It was stated that still the unit, in question, is not in a habitable condition. Construction of the unit is not complete. Paintwork, flooring, fixing of toilets and other works are still pending in the unit. Basic amenities and facilities as promised are not available at the site. Connectivity of internal roads is not made to the main road. To say so, reliance has been placed on the photographs Annexure C-9 (colly.) of the site and unit. It was further stated that, as such, offer of possession made by the opposite parties, is just an eye wash, which has been issued by them, with a view to escape from their liability. It was further stated that vide letter dated 12.02.2016 Annexure C-10, the complainants requested the opposite parties, to withdraw the offer of possession aforesaid and reissue the same, after completing the construction and also to make the payment of penalty/ compensation, for the period of delay, but to no avail. By stating as above, prayer has been made to refund the amount paid alongwith interest; compensation and litigation expenses. Alternative prayer was also made by the complainants to deliver possession of the unit; compensation in the shape of interest on the deposited amount, for the period of delay; compensation for mental agony and physical harassment and also cost of litigation.
4.         Upon notice, reply was filed by the opposite parties, wherein assertions made by the complainants were controverted. It is asserted that the unit, in question, was purchased for future gain, as such, the  complainants would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act. It was further stated that since possession of the constructed unit has already been offered to the complainants vide letter dated 14.01.2016, after obtaining occupation certificate, as such, the present complaint is premature. 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. It is stated that terms and conditions of the Agreement are binding upon the parties. It was averred that the complainants being subsequent purchasers are not consumers.
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 complainants, because allotment made to them is cost escalation free. Further, it was stated that since the complainants defaulted in making payment of installments, as such,  they are not entitled to say that possession should have been delivered to them, in time. Execution of the Agreement and promise to hand over possession of the unit within 24 months, from the date of execution of that Agreement were not controverted. However, it is stated that construction at the site could not be completed, on account of stay granted on construction activities, 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 complainants. It was further stated that to get extension of time of one year, to handover possession, consent was sought from the complainants and in the alternative it was open to them to get back the money deposited by them, alongwith simple interest @9% p.a. However, the said option was not exercised by the complainants. 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 complainants were 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.
6.         On merits, it was admitted that the unit, in question, was sold to the complainants. Amount so received and further that possession could not be delivered in time, for want of complete construction, was also admitted. 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. It is further said that the complainants cannot claim refund of the amount paid. Prayer was made, to dismiss the complaint, filed by the complainants.  
7.         In the rejoinder filed, the complainants 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 cases 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 all the cases, very minutely. 
10.         At the time of arguments, Counsel for the complainants pressed for making refund of the amount deposited alongwith interest, compensation and litigation.
11.         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).
12.         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.”

13.         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.
14.         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.”

15.         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.
16.         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.
17.         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 complainants have spent their life savings to get a unit, for their residential purpose. Their 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.4000/-). 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.
18.         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 complainants have spent their entire  life earnings to purchase the flat, in the said project, launched by the opposite parties. However, their hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the unit, in question, in a developed project, by the stipulated date or even by the extended period, as committed by the opposite parties. 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.
19.         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.

20.         The objection taken by the opposite parties, to the effect that the complainants being investors, 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 complainants are the property dealers, and deal in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by them, 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 complainants, in para no.1 of their complaint, supported by their evidence, by way of respective affidavits, that they had purchased the said unit, for their residence purpose. 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 complainants being investors, did not fall within the definition of a consumer, 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  complainants, thus, fall 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.  
21.         Another objection was raised by Counsel for the opposite parties, that since the complainants are subsequent purchasers, as such, they are not consumers. It may be stated here that the complainants are the first allottees and not subsequent purchasers. Perusal of application form Annexure R-4 placed on record by the opposite parties, clearly goes to show that the same was moved by the complainants, for purchase of the unit, in question, whereupon, they were allotted the same, vide Buyer’s Agreement, referred to above. Not even a single document has been produced on record by the opposite parties, to prove that the complainants are subsequent purchases of the unit, in question. As such, the objection taken by the opposite parties, in this regard, being devoid of merit, is rejected.
22.         Another objection raised by Counsel for the Opposite Parties was that the complainants 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 complainants were 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 complainants 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. Agreement. 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”

23.         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. 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.
24.         As per 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 30.01.2013, subject to force majeure circumstances. In case of failure of the same, 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 upto 12.12.2012 i.e. for about 8 months. Even by that time, limit to provide possession to the complainants had not yet expired. 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 complainants, to seek refund of their amount deposited, alongwith simple interest @9% P.A. The complainants exercised former option and continued to make payment thereafter and by the time, the complaint was filed, they had paid almost the entire sale consideration, towards the said unit. The extended period expired on 30.01.2014, even by that date, possession of the unit was not offered to the complainants. 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 complainants. As per the Agreement, construction of unit was to be completed by 30.01.2013 (24 months from 31.01.2011), or at the most within the extended period of 12 months i.e. by 30.01.2014. Despite receiving almost the entire sale consideration, the basic amenities have not been provided at the project, even after a lapse of 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 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 within the extended period of 12 months.

                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 complainants 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. Under similar circumstances, in a case titled as 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.

25.         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 complainants.

                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 complainants, by the stipulated date or within the extended period i.e. latest by 30.01.2013. 

26.         The next question that falls for consideration, is, even if, it is assumed that offer of possession made to the complainants, vide letter dated 14.01.2016 (which event was to happen in January 2013 or by extended period i.e. 30.01.2014) i.e. after of delay of more than about three years, is genuine, whether, the complainants were bound to accept the same. It may be stated here that non-delivery of possession of the unit, in question, by the stipulated date (in the present case 30.01.2014 on account of extended period), is a material violation of the terms and conditions of the Agreement. Under similar circumstances, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon'ble National Commission, held as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the Complainant was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

 

27.         In view of the above, it is held that since there was a material violation on the part of the opposite parties, in not handing over possession by the stipulated date, as mentioned in the Agreement, or by the extended period of 12 months i.e. latest by 30.01.2014, the complainants were at liberty, not to accept the offer made after a long delay, and on the other hand, were right in seeking refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.
28.         The opposite parties are also guilty of adoption of unfair trade practice. It is on record that the complainants booked the unit, in question, in the project aforesaid, on 06.03.2010. By September 2010, they had already made substantial payment of Rs.12,82,545/-. Buyer’s Agreement was not put for signing in a reasonable time, say two to three months. They continued to make payment and Buyer’s Agreement was ultimately got signed, on 31.01.2011. By not offering Buyer’s Agreement, for signing in a reasonable time, the opposite parties also committed unfair trade practice.
29.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.43,04,729.38Ps. (as is evident from Annexure C-8) deposited by them. It is an admitted fact that the opposite parties were unable to deliver actual physical possession of the unit, in question, for want of complete construction work and basic amenities by the stipulated date or within the extended period i.e. latest by 30.01.2014. The opposite parties are still saying that construction of all the facilities/amenities are on the verge of completion and will be provided to the buyers, in coming days. The complainants, cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit, complete in all respects. The complainants had expectations to settle in the unit, after lapse of 24 months, from the date of execution of the Buyer’s Agreement i.e. from 31.01.2011. However, their hopes were not fulfilled when possession of the unit, in question, was not even offered to them, by the stipulated date. Compelled under the circumstances, they even agreed to extend the period, to get possession, by 12 months. Thus, the opposite parties have failed to perform their part of the Agreement. The act in not handing over actual physical possession in time, as per the Agreement, and also in extended period is a material deficiency, in providing service on the part of the opposite parties. At the same time, it has been held above that the complainants are not bound to accept the possession, so offered by the opposite parties, after a long delay of about two years. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The  complainants are, thus, entitled to get refund of amount deposited by them.

                In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

30.         Whether the complainants are entitled to interest on the amount deposited, if so, at what rate?

                There is no dispute that for making delayed payments, as per Clause 39 (a) of the Buyer’s Agreement, the opposite parties were charging interest @15% P.A., for a delay of first 90 days, and, thereafter, penal interest @18% P.A. It is necessary to mention here that qua other cases, of this very project, this Commission has granted interest to the consumers @15% p.a., on the deposited amount, from the respective dates of deposits and in case of non-compliance of that order, penal interest @18% p.a. was granted. In the present case also, we are inclined to do so. In view of above facts, the complainants are entitled to get refund of the amount deposited by them, to the tune of Rs.43,04,729.38Ps. alongwith interest @15% p.a., from the respective dates of deposits, till realization.

31.         It is also proved on record that the payment of installments was delayed by the complainants. No doubt, delayed payments were received by the opposite parties with penal interest as per terms and conditions of the Agreement, which would amount to condoning the said delay, even then the complainants are 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 complainants are entitled to Rs.1 lac, as compensation, for mental agony and physical harassment, which in our considered opinion is fair and reasonable. 
32.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-
    1.   To refund an amount Rs.43,04,729.38Ps. to the complainants, alongwith interest @ 15% P.A., from the respective dates of deposits onwards.
    2.   To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.
    3.   To pay cost of litigation, to the tune of Rs.50,000/- to the complainants.
    4.   The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite parties, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, they shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @18% p.a. instead of interest @15% p.a. from the respective dates of deposits onwards, and interest @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
33.         However, it is made clear that, in case, the complainants have availed loan facility from any financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
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.

02.09.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.