Chandigarh

StateCommission

CC/23/2018

Kanta Narang - Complainant(s)

Versus

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

Sandeep Khunger, Adv.

10 Sep 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Consumer Complaint	:	23 of 2018
Date of Institution	:	15.01.2018
Date of Decision	:	10.09.2018

 

 

1. Kanta Narang wife of Shri Roshan Lal Narang;
2. Roshan Lal Narang son of Shri Mohan Lal Narang;

Complainant Nos.1 and 2 both are residents of College Road, Abohar – 152116.

                                             .........Complainants.

                                  Versus

 

DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192,
Sector 8-C, Chandigarh, U.T., Pin - 160009 through Shri Gurbir Singh Madan, its Director;

2^nd Address:- DLF Homes Panchkula Pvt. Ltd., having its Regd. Office: DLF Gateway Tower,  Second Floor, DLF City, Phase-III, Gurugram – 122002, through its Director/Authorized Signatory.

..........Opposite Party.

Argued by:

 

Sh. Sandeep Khunger, Advocate for the complainants.

Sh. Parveen Jain, Advocate for the Opposite Party alongwith Sh. Shiv Kumar, Advisor (Legal).

 

Consumer Complaint	:	150 of 2018
Date of Institution	:	06.04.2018
Date of Decision	:	10.09.2018

 

Shri Bhagwan Kaushik S/o Sh. Bhim Sain Kaushik R/o House No.492, First Floor, Sector – 12, Panchkula.

 

                                             .........Complainant.

                                  Versus

1. DLF Homes Panchkula Private Limited through its Managing Director/Director, SCO No.190-191-192, Sector 8-C, Chandigarh.
2. DLF Homes Panchkula Pvt. Ltd. having its registered office at 12^th Floor, DLF Gateway Tower, DLF City, Phase-III, National Highway 8, Gurgaon, Haryana through its Manager/Authorized Signatory/Office-in-charge/Director Sales & Marketing.
3. DLF Homes Panchkula Pvt. Ltd. through its Managing Director/Director, SCO No.101-102, DLF City Centre, I.T. Park, Kishangarh, Chandigarh.

 

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

 

Argued by:

 

Sh. Ammish Goel, Advocate for the complainant.

Sh. Parveen Jain, Advocate for the Opposite Parties alongwith Sh. Shiv Kumar, Advisor (Legal).

 

 

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

 

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

                MRS. PADMA PANDEY, MEMBER.

 

PER PADMA PANDEY, MEMBER

            By this order, we propose to dispose of the aforesaid two consumer complaints bearing Nos.23 and  150 of 2018.

2.           At the time of arguments, Counsel for the Opposite Parties placed on record a detailed chart duly signed, showing in each case 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.

3.         Arguments were heard in common. At the time of arguments on 07.08.2018, we were of the opinion that the facts and issues in law, involved in the above complaints, by and large, were the same, and therefore, the same could be disposed of, by passing one consolidated order.

4.         Under above circumstances, to dictate order, facts are being taken from consumer complaint bearing No.23 of 2018, titled as ‘Kanta Narang & Anr. Vs. DLF Homes Panchkula Pvt. Ltd.’

5.         In brief, the facts are that the complainants were allotted an independent flat bearing No.D-1/3-FF, measuring 1550 sq. ft., in the project of the Opposite Party, known as DLF Valley and an Independent Floor Buyers Agreement (Annexure C-1) was entered into between the parties on 04.02.2011. The total price of the unit was fixed at Rs.42,34,599.72.

6.         As per Clause 11(a) of the Agreement, the possession of the flat was to be delivered within 24 months from the date of execution of the said Agreement, failing which, the opposite party was liable to pay Rs.10/- per sq. ft. per month on account of delay in possession. It was further stated that possession was not offered to the complainants on or before 03.02.2013. It was further stated that vide letter dated 28.02.2017 (Annexure C-2), which the complainants received on 25.05.2017, the opposite party offered possession of the unit, in question, and unilaterally raised a demand of Rs.5,00,000/- on account of change in the area and PLC where as at the spot, there is no change in the floor area except some area in the balconies. 

7.         It was further stated that the complainants, vide letter dated 07.06.2016 (Annexure C-3), put their grievance to the opposite party that they have deposited the full agreed amount and not only Rs.15,70,602.46 and as depicted in the statement of account, the opposite party gave credit of only an amount of Rs.1,81,890.73. Thereafter, vide letter dated 22.07.2017 (Annexure C-6), the complainants raised issue of grant of rebate keeping in view the deposit of Rs.10,00,000/- before the demand. It was further stated that the opposite party vide letter dated 08.08.2017 (Annexure C-7) informed that it received the amount towards VAT in excess and accordingly, it had credited Rs.(-)16,827/- in the    account of the complainants. It was further stated that the complainants visited the apartment on 27.10.2017 and found numerous deficiencies in it, such as, certain tiles were broken, skirting of entrance door was also broken, and certain portions of the wall were broken. They pointed out as many as 23 defects in the flat to the opposite party and submitted customer observation form dated 27.10.2017 (Annexure C-9). It was further stated that neither the opposite party obtained necessary permissions nor obtained completion certificate.  It was further stated that by not handing over possession of the unit, in question, within the stipulated period, the opposite party has not only caused monitory loss to the complainants but has also caused mental agony and pain to them.

8.         Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the opposite party, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the opposite party, to hand over physical and legal possession of the unit, in question, complete in all respects; pay interest @18% p.a. for delay in delivery of possession from 03.02.2013 till date of delivery of possession; pay compensation of Rs.5,00,000/- on account of mental agony and physical harassment besides Rs.55,000/- as cost of litigation.

9.         The Opposite Party, in its preliminary submissions in the written statement stated that offer of possession was sent to the complainants on 28.02.2017 but the complainants were not taking possession. It was further stated that the complainants filed the instant complaint in total disregard to the terms of Floor Buyer’s Agreement executed between the parties. It was further stated that exit option was offered by the Opposite Party vide letter dated 21.05.2013 when construction was stayed by the Court. It was further stated that complainants are backing out from the executed contract. It was further stated that the complainants had full knowledge about the terms of Agreement dated 04.02.2011 executed between the parties. It was further stated that after receipt of occupation certificate on 02.05.2016, offer of possession was sent to the complainants on 28.02.2017. It was further stated that the complainants prayed for unfounded demands which were not as per executed terms of the Agreement. It was further stated that the project was cost escalation free, as the complainants shall get possession of the floor on the same price as committed at the time of allotment of the floor through allotment letter dated 03.04.2010. It was further stated that all the losses/cost, escalation on  many  count  like  building  material  cost, labor cost, land cost etc. have been borne by the Opposite Party. 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 Party vide letter dated 21.05.2013 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.

10.       It was stated that occupation certificates have been received for all 1775 floors and offer of possession to 1707 customers has been sent. It was further stated that out of 1775 allottees, 1000 allottees have already taken possession and 200 allottees have already got their conveyance deeds executed. It was further 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.

11.       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  consumer as the floor, in question, was purchased by them for investment purposes and earning profits. An objection was also raised that this Commission did not have the territorial jurisdiction to entertain and try the present complaint in as much as the parties agreed to exclude the jurisdiction of all other Courts except the Courts at Panchkula and High Court of Punjab & Haryana. Further, an objection was also raised in the written statement 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 Party 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 06.04.2010 to 23.07.2010 and 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 of the preliminary objections, 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. It was also stated that when given the option to exit vide letter dated 21.05.2013, the complainants agreed to continue with allotment and delay and, as such, they (complainants) voluntarily waived of their right to raise any grievance.

12.       On merits, while admitting the factum of allotment of the unit, in question, to the complainants and execution of the Independent Floor Buyer’s Agreement on 04.02.2011, it was stated that the price of the property as per Schedule of Payment (SOP) is Rs.48,08,889.04 plus service tax for 1550 sq. ft. It was denied that the price of the unit, in question, was Rs.42,34,599.72. It was further stated that due to increase in the area, the total price of the property was Rs.54,00,881.233 plus service tax for an area of 1750 sq. ft. It was further stated that there was DLI of Rs.74,348.87 (in fact Rs.31,551.21 in offer of possession letter) levied against the account of the complainants for delay.

13.       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 date of signing of the Agreement subject to force majeure conditions or due to reasons beyond the control of Opposite Party as mentioned in Clauses 11(b) and 11(c) of the Agreement. It was further stated that there was stay on construction in furtherance to the direction passed by Hon’ble Supreme Court vide order dated 19.04.2012 in SLP No.21786-88/2010, which got vacated only on 12.12.2012. It was reiterated that offer of possession letter dated 28.02.2017 was sent to the complainants and the demand raised was in accordance with the terms and conditions of the Agreement. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

14.       The complainants filed rejoinder, wherein they reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Party.

15.       The complainants, in support of their case, submitted affidavit of complainant No.2, by way of evidence, alongwith which, a number of documents were attached.

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

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

18.       It is evident that vide allotment letter dated 03.04.2010 (at Page 231 of the written statement), the complainants were allotted Independent Floor No.DVF-D1/3-FF-217 in DLF Valley, Panchkula and Independent Floor Buyer’s Agreement was executed between them and the Opposite Party on 04.02.2011 (Annexure C-1). The total price of the said independent floor, as depicted in the Agreement, was Rs.42,34,599.72, besides other charges, securities, deposits and taxes etc. as specified in the Application/Agreement. In all, a sum of Rs.41,89,000.35 has actually been paid to the Opposite Party, as mentioned in the Chart showing details of the property, in question, placed on record, under the signatures of the Counsel for the Opposite Party(ies), at the time of arguments on 07.08.2018. As per Clause 11(a) of the Agreement, the Opposite Party was 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 is also on record that vide letter dated 20.05.2013 (Annexure R-3 at page 95 of the written statement), the Opposite Party sought further time of 12 months, in addition to 24 months, to complete the construction work. Vide aforesaid letter, option was also given to the complainants to seek refund alongwith 9% interest. It is a fact duly borne on record that there was stay by the Hon’ble Supreme Court of India from 19.04.2012 to 12.12.2012 (Annexures R-8 & R-9), which in turn, delayed the completion of the project. The Opposite Party has claimed that this being a force majeure condition, it is entitled to benefit of delay of one year. The possession of the unit, in question, was offered by the Opposite Party to the complainants on 28.02.2017 vide offer of possession letter (Annexure C-2/R-2 colly.), and the instant complaint has been filed on 15.01.2018. The complainants have alleged that they received the aforesaid offer of possession letter dated 28.02.2017 on 25.05.2017. The Opposite Party has not specifically denied this averment in its written statement. Similar averment has been made by the complainants in the rejoinder. The factum of receiving the possession letter    by the complainants on 25.05.2017 stands                                                                                                                    corroborated from the contents of letter dated 07.06.2017 (Annexure C-3) and 22.07.2017 (Annexure C-6). As such, the contention of the complainants that they received possession letter dated 28.02.2017 on 25.05.2017 is accepted.

19.        The Independent Floor Buyer’s Agreement, in the instant case, was executed between the parties on 04.02.2011 and period stipulated therein for handing over possession was to commence from the date of execution of the same (Agreement), as such, the averment of the Opposite Party that Hon’ble Punjab & Haryana High Court had restrained it from creating any third party rights, during the year 2010 (06.04.2010 to 23.07.2010) (Annexures R-6 & R-7), is not relevant.

20.           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 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.”

            Same is the ratio of judgment of a three Judges Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017.

            Against the aforesaid order passed by the larger Bench of the Hon'ble National Consumer Disputes Redressal Commission, New Delhi, M/s Emaar MGF Land Limited filed Civil Appeal No.(s) 23512-23513 of 2017 in Hon’ble Supreme Court of India, which were also dismissed.

            In  view of the above, the plea taken by the Opposite Party, 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.

21.       In regard to other preliminary objections raised by the Opposite Party, in its written statement, as referred to in Para 11 above, the following questions fall for consideration:-

(i)           Whether 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 may be stated here that this issue has already been dealt with in detail by this Commission in case titled “Kapil Kumar Khosla & Ors. Vs. DLF Homes Panchkula Private Limited & Ors.’, 2017 (3) CPJ 8, wherein in Para 21 and 22, this Commission held as under:-

“21. ……..It was stated that since the project of the Opposite Parties is situated in District Panchkula and possession of the floor was to be delivered in Panchkula, a part of cause of action arose at Panchkula. According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. Clearly, application for allotment of Unit (Page 80 of written statement) was made by the complainants at Chandigarh address viz. Shop No.101-102, Ist Floor, DLF City Centre Mall, Rajiv Gandhi, I.T. Park, Kishangarh, Chandigarh. Independent Floor Buyer's Agreement (Annexure C-2) was also executed between the parties on 03.02.2011 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., v. 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 Fora. 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 v. 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.

22. In Cosmos Infra Engineering India Ltd. v. Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others v. 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 the complainants, 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.”

              In the instant case also, application for allotment of Unit (Annexure R-4) was made by the complainants at Chandigarh address of the Opposite Party viz. Shop No.101-102, Ist Floor, DLF City Centre Mall, Rajiv Gandhi, I.T. Park, Kishangarh, Chandigarh and as admitted, Independent Floor Buyer’s Agreement was also executed between the parties on 04.02.2011 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. The objection raised by the Opposite Party, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

(ii)         The next objection raised by the Opposite Party is 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 and further 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. This issue has also been dealt with by this Commission in Kapil Kumar Khosla & Ors. Vs. DLF Homes Panchkula Private Limited & Ors.’s case (supra), in Paras 23 and 24, which read thus:-

“23.  …….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 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"

 

24. 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. v. 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 v. 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, as stated above, 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 are seeking relief on account of violation of terms and conditions of the Agreement by the Opposite Parties and their deficiency in rendering service. 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.”

 

            The objection, taken by the Opposite Party, in its written reply, therefore, being devoid of merit, is rejected.  

(iii)       Another objection raised by the Opposite Party is that since the complainants 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. Qua this issue, this Commission in Kapil Kumar Khosla & Ors. Vs. DLF Homes Panchkula Private Limited & Ors.’s case (supra), in Para 25 held as under:-

“25.  ……….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 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. Rather, the complainants in their complaint, have clearly stated that they purchased the flat, in question, solely for residential purposes. Otherwise also, in a case titled as Kavita Ahuja v. 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 v. Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as "Aashish Oberai v. Emaar MGF Land Limited", Consumer Case No. 70 of 2015, decided on 14 Sept. 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. v. 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.”

 

            The complainants has specifically averred in Para 1 of their complaint that they wanted to have a place to reside in a peaceful atmosphere in the evening of their life and accordingly, they purchased the flat, in question. Their averment gets fortified from the fact that they sought possession of the unit, in question.

            In view of above, the complainants fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act and, as such, the objection raised by the Opposite Party, in its written reply, being devoid of merit, is rejected.  

(iv)       It was argued by the Counsel for the Opposite Party that the complainants, when given the option to seek refund with 9% simple interest, agreed to continue with allotment and also agreed to delay and, as such, they waived of their right to raise any grievance. While dealing with this issue, this Commission in Kapil Kumar Khosla & Ors. Vs. DLF Homes Panchkula Private Limited & Ors.’s case (supra), held in Para 26 as under:-

“26……..This plea of the Opposite Parties is not well based. While seeking option vide letter dated 05.06.2013, the complainants were informed of delay and extension of one year was sought. One year extended period expired on 02.02.2014 whereas the possession was offered on 15.11.2016. Had the Opposite Parties handed over possession before the stipulated period of two years in the Agreement plus one year extended period i.e. by 02.02.2014, position would have been different and in that situation, it would have been accepted that the complainants had waived of their right to raise grievance. The plea being devoid of merit is not tenable.”

            In this instant case also, exit option was given to the complainants vide letter dated 20.05.2013 but possession was not delivered even within the extended one year period. Therefore, in the light of observation made by this Commission, as extracted above, the objection raised is not tenable.

22.        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 04.02.2011 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 Party, 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.

23.       The Opposite Party has specifically pleaded that there was stay by the Hon’ble Apex Court from 19.04.2012 up-to 12.12.2012, 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 03.02.2014. No justification whatsoever for delay in offering possession beyond 03.02.2014 has been explained by the Opposite Party. The argument of the Opposite Party 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 its control, is not tenable. The Independent Floor Buyer’s Agreement was executed on 04.02.2011 and before execution thereof, the Opposite Party 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 Party 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 Party. Possession of the unit, in question, having been offered vide offer of possession letter dated 28.02.2017 (received by the complainants on 25.05.2017) clearly, there is inordinate delay (around 3 years 3 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 Party.

24.       It may be stated here that while offering possession vide letter dated 28.02.2017, the Opposite Party raised a demand of Rs.16,62,665.46 i.e. (Rs.15,70,602.46 + Rs.91,963.00), which included contingent deposit of Vat of Rs.25,463/-. As stated during arguments, the complainants have not deposited any amount towards the aforesaid demand and the requisite documents have also not been executed or submitted by the complainants to the Opposite Party. Consequently, possession of the unit, in question, has not been delivered to them (complainants) till date by the Opposite Party.

25.       It may be stated here that in the offer of possession letter dated 28.02.2017, the Opposite Party had raised demand of Rs.25,463/- on account of Contingent deposit of vat. Thereafter, vide letter dated 08.08.2017 (Annexure C-7), the Opposite Party credited an amount of Rs.16,827/-, in the account of the complainants, which they received in excess towards contingent deposit of Vat.

26.       It may be stated here that the complainants have challenged the demand raised on account of increase in the area 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 demands raised, including that of increase in area, 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.

27.         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 Party 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 04.02.2011 i.e. by 03.02.2014. There is, thus, inordinate delay of around 3 years 3 months, even beyond the extended period. As already stated above, possession of the unit, in question, was offered by the Opposite Party on 28.02.2017 (received by the complainants on 25.05.2017). Clearly there is delay in offering possession on account of which, the complainants deserves 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.

 

              No doubt, in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant 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.  

28.       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. 04.02.2014 up-to + 2 months from the date of offer of possession. The possession having been offered on 28.02.2017 (received by the complainants on 25.05.2017), the complainants shall be entitled to compensation up-to plus 2 months from 25.05.2017 i.e. 24.07.2017 (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 Party 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 is delivered.

29.       It was stated and agreed by Sh. Parveen Jain, Advocate, Counsel for the opposite party 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. It was also agreed that Advocate Charges, if any, shall not be payable by the complainants.

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 Party, 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.1,25,000/- on account of mental agony and physical harassment suffered by the complainants would serve the ends of justice.

31.       In the connected complaint bearing No.150 of 2018, the possession of the unit, in question, has been delivered to the complainant, as per detail given in the following table:-

Date of independent Floor Buyer’s Agreement.	Due date for possession after 2 years plus 1 year extended period	Date on which possession offered	Whether amount deposited after offer of possession.	Whether documents submitted after offer of possession	Date on which possession delivered.
01.02.2011	31.01.2014	10.10.2016	Yes on 6.4.2017 (Annexure C-27)	Yes	22.05.2017 (Annexure C-28)

 

32.       In aforesaid complaint, amounts towards the demand raised vide offer of possession letters have been deposited by the complainant with the Opposite Parties. The requisite documents have also been submitted by the complainant. Admittedly, possession of the unit, in question, has been delivered by the Opposite Parties to the complainant on 22.05.2017.

33.       Therefore, in the aforesaid complaint viz.150 of 2018, the complainant is held entitled to compensation @12% p.a. interest on the deposited amount for the delay period, after expiry of 3 years as mentioned in the agreement, up-to + 2 months from the date of offer of possession i.e. up-to 09.12.2016.

34.        In this case, grant of compensation in the sum of Rs.1,25,000/- would serve the ends of justice.

35.       No other point, was urged/pressed, by the Counsel for the parties, in all the cases.

36.      For the reasons recorded above, both the complaints bearing Nos.23 and 150 of 2018 are partly accepted, with costs, in the following manner:-

Consumer Complaints bearing No:

 

23 of 2018

 

 

37.       In this complaint, possession of the unit, in question, was offered to the complainants on 28.02.2017 (received by the complainants on 25.05.2017). Neither the amount towards the demand raised vide offer of possession letter has been deposited nor the requisite documents have been submitted by the complainants. Admittedly, possession of the unit, in question, has not yet been delivered to the complainants. The Opposite Party shall hand over possession within 30 days after removing the snags, if any, after deposit of amount and submission of documents by the complainants.

            The Opposite Party, in this case, is directed as under:-

	(i)	To hand over physical possession of  the unit, allotted in favour of the complainants, complete in all respects, to the complainants, after removing the snags, if any, within a period of 30 days, from the date balance payment, is made and documents, are submitted.
	(ii)	Execute and get registered the sale deed in respect of the unit, in question, within one month from the date of handing over of possession to the complainants. The stamp duty, registration charges and incidental expenses, if any, shall be borne by the complainants.
	(iii)	To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, with effect from 04.02.2014 up-till 24.07.2017, [w.e.f. 04.02.2014 in respect of deposits made up-to 04.02.2014 and from respective dates of deposits in respect of amount(s) paid after 04.02.2014],  within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till realization.             Further for failure of Opposite Party 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 for each month, till possession is delivered, shall be payable by 10th of the following month and failure shall entail penal interest @15% p.a. instead of 12% p.a. till payment is made.
	(iv)	Pay compensation in the sum of Rs.1,25,000/- on account of mental agony, physical harassment and deficiency in service and litigation costs  of Rs.35,000/-, 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.
Consumer Complaint bearing No: 150 of 2018.

 

38.       In this case, possession of the unit, in question, stands delivered to the complainant on 22.05.2017.

            The Opposite Parties, in this case, 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 one month 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 complainant.
(ii)	To pay compensation, by way of interest @12% p.a., on the deposited amount(s), to the complainant, with effect from 01.02.2014 up-till 09.12.2016 [w.e.f. 01.02.2014 in respect of deposits made up-to 01.02.2014 and from respective dates of deposits in respect of amount(s) paid after 01.02.2014], within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till realization.             Since the possession stands delivered, the compensation amount shall be calculated for the period of delay as per direction (ii) above and shall be paid to the complainant within 45 days from the date of receipt of certified copy of this order, failing which, the amount so calculated/arrived at, shall start getting 9% interest, after expiry of 45 days, till payment is made.
(iii)	Pay compensation in the sum of Rs.1,25,000/-, on account of mental agony, physical harassment and deficiency in service and Rs.35,000/-, as litigation costs, to the complainant, 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.

39.       As agreed between the parties, the Advocate Charges shall not be charged by the Opposite Parties. The actual expenditure for registration of Sale Deed(s) besides Stamp duty and Registration charges, shall, however, be borne by the complainant(s).

40.       Certified copy of this order, be placed on the file of consumer complaint bearing Nos.150 of 2018.

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

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

Pronounced.

10.09.2018

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

(PADMA PANDEY)

MEMBER

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