Chandigarh

StateCommission

CC/204/2015

Naman Belwal - Complainant(s)

Versus

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

Savinder Singh Gill, Adv.

09 Nov 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	204 of 2015
Date of Institution	:	03.09.2015
Date of Decision	:	09.11.2015

 

1. Naman Belwal,
2. Mauli Belwal, both residents of 190 B, Sector 12, Reliance Greens, Jamnagar, Gujarat. 

……Complainants.

Versus

DLF Homes Panchkula Pvt. Ltd., SCO No.190-191-192, Sector 8-C, Chandigarh through its Managing Director/Authorized Signatory.

              ....  Opposite Party.

 

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

 

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

                 SH. DEV RAJ, MEMBER.

                 MRS. PADMA PANDEY, MEMBER.

               

 

Argued by:

Sh. Savinder Singh Gill, Advocate for the complainants.

Ms. Ekta Jhanji, Advocate for the Opposite Party.

 

PER DEV RAJ, MEMBER

            The facts, in brief, are that the complainants were willing to own a residential plot, in Panchkula for their family and personal use and, as such, they applied for  a residential independent floor having saleable area of 1450 sq. ft. in DLF Valley, Panchkula by depositing Rs.4,00,000/- as booking amount on 26.03.2011 vide receipt (Annexure C-1). It was stated that the complainants further paid Rs.6,20,000/- and Rs.5,04,010.25 vide receipts dated 6.6.2011 and 4.8.2011. Their application was accepted. It was further stated that the complainants were provisionally allotted an independent floor D-8/12-SF and Independent Floor Buyer’s Agreement was executed between the parties on 03.02.2012. It was further stated that as per Clause 1.1 of the said Agreement, the total price of the floor was Rs.49,59,000.02 i.e. @Rs.2,976/- per sq. ft of saleable area plus EDC etc. It was further stated that, however, the total price was mentioned as Rs.50,31,550.02 and schedule of payments was also provided. It was further stated that the complainants further paid amounts of Rs.29,000/- and Rs.263/- vide receipts dated 31.03.2012 and 15.03.2012 (Annexures C-5 and 6).

2.         It was further stated that as per Clause 11(a) of the Agreement, the possession was to be delivered within 24 months from the date of execution of the Agreement i.e. by 03.02.2014. It was further stated that the complainants thereafter received a letter dated 8.7.2013 from the Opposite Party, informing that due to pendency of a case before the Hon’ble Supreme Court, the project was likely to be delayed by 12 months, and an option was given to them for continuing with allotment or refund of amount with 9% interest. It was further stated that the complainants opted for continuing with the allotment and further paid amounts of Rs.41,000/-, Rs.43,614.78 vide receipts dated 18.10.2013 and 29.10.2014 (Annexures C-7 and C-8). It was further stated that, thus, in all, the complainants paid a total amount of Rs.16,37,888.03 to the Opposite Party. It was further stated that the complainants waited patiently for possession of the floor, in question.

3.         It was further stated that as per Clause 11(a) of the Agreement, possession of the flat was to be delivered within 24 months, from the date of its execution, and as per letter dated 8.7.2013, further 12 months were sought by the Opposite Party, to which the complainants agreed. It was further stated that the complainants applied for a loan facility twice hoping that possession would be delivered on time and bore additional expenses of Rs.2,809/- each for availing the said loan but had to cancel it after the Opposite Party being noncommittal of the possession date. It was further stated that the period of 24 months and further 12 months expired on 03.02.2015. It was further stated that complainant No.2, under the impression of shifting near to Chandigarh for higher education of children and thinking that possession would be delivered this year, left her job. It was further stated that the complainants sought refund of the deposited amount alongwith interest @18% per annum vide emails (Annexure C-11). It was further stated that the Opposite Party failed to offer possession to the complainants till date and still there was no likelihood of handing over the same as the construction is yet to start.

4.            It was further stated that the aforesaid acts, on the part of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Party, to refund the entire amount of Rs.16,37,888.03 alongwith interest @18% P.A. from the respective dates of deposits till realization; pay Rs.3,50,000/- as compensation  for deficiency in service, unfair trade practice and mental harassment and Rs.50,000/- as cost of litigation expenses.   

5.         The Opposite Party was served, and put in appearance on 22.09.2015. It filed its written statement on 08.10.2015. The Opposite Party took up certain preliminary objections that the complainants were not consumers as defined under Section 2(1)(d) of the Act and that this Commission was having no jurisdiction to entertain the complaint due to the existence of Arbitration clause No.34 in the application of allotment and Clause 55 in the Buyer’s Agreement. On merits, it was admitted that the complainants were allotted an independent floor No.D8/12-SF measuring 1450 sq. feet through application form for allotment dated 05.03.2011 and they opted for the installment payment plan. It was also admitted that Independent Floor Buyer’s Agreement was executed between the complainants and the Opposite Party on 3.2.2012, and at the time of booking of the said floor, the complainants paid Rs.4 lacs by way of cheque No.233474 on 05.03.2011. It was stated that the total price of the said independent floor was Rs.50,31,500/- which was also mentioned in the schedule of payment sent to the complainants. It was further stated that the complainants had opted for two years installment payment plan and as per the same, the complainants had deposited Rs.16,38,270/- with the Opposite Party till 31.03.2015. 

6.         It was admitted that as per the terms and conditions of the Agreement under Clause 11(a), the Opposite Party was bound to complete the construction of the said independent floor within a period of 24 moths (2 years) from the date of execution thereof. It was further admitted that the independent floor buyer’s agreement was executed on 3.2.2012 and possession was to be given to the complainants within 2 years. However, the Hon’ble Supreme Court vide order dated 19.04.2012 passed in SLP No.21786-88 of 2010 had stayed the construction of the said project at DLF Valley Panchkula from 19.04.2012 to 12.12.2012. It was further stated that there was delay in construction because of stay of construction activities at the project by the Hon’ble Supreme Court, which was vacated on 12.12.2012. It was further stated that after the vacation of stay, the construction work again resumed and, therefore, delay in handing over possession was due to force majeure conditions. It was further stated that the Opposite Party could not be held liable for delay or failure due to force majeure conditions. It was, however, admitted that letter dated 08.07.2013 was sent to the complainants, informing them the reason for delay in construction and an option for refund or extension in time was given to them by the Opposite Party. It was further stated that vide the aforesaid letter, the complainants were also made aware of Clause 18 of the application for allotment, as per which, in case    of delay in completion of construction, the Company was to pay compensation @Rs.10/- per sq. ft.          per  month of the  saleable  area  of  the  floor  to    the  complainants.  It  was  further  stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

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

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

9.         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. 

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

11.       It is evident that the complainants, applied for an independent residential floor measuring 1450 sq. ft, in the project of the Opposite Party in the year 2011 vide application (Annexure R-1) and Floor No.D8/12-SF in DLF Valley, Panchkula was provisionally allotted to them, for which, Independent  Floor Buyer’s Agreement was executed on 3.2.2012 at Chandigarh (Annexure C-3). The total price payable for the said independent floor, as depicted in the Agreement, was Rs.53,19,600/- and the complainants paid an amount of Rs.16,38,270/- till 31.03.2015 as admitted by the Opposite Party in Para 7 of the preliminary objections of its reply. It is also evident on  record  that  the complainants opted for 2 Years

Construction Linked Payment Plan. It is also not disputed that as per Clause 11(a) of the Independent Floor Buyer’s Agreement, which was executed on 03.02.2012, possession of the unit, after complete construction was to be delivered to the complainants within 24 months. In case of failure of the same, as per Clause 15 of the Buyer’s Agreement, the complainants were entitled to get penal compensation @Rs.10/- per square feet, per month, for the period of delay. It is also evident from record that 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. The Opposite Party by making reference to the above mentioned fact, wrote a letter dated 08.07.2013 (Annexure C-12) (Page 296) to the complainants, seeking their consent to extend period, to complete construction by 12 months or they (complainants) could seek refund of the amount with @9% interest.

12.       The first objection of the Opposite Party that   the complainants are not consumers under Section 2(1)(d) of the Act is not on sound footing. There is nothing on record, to show that the complainants were indulging in sale and purchase of the property, on regular basis, to earn huge profits. Otherwise also, the mere fact that it was a residential unit, is sufficient to prove that the same was to be used by the complainants, for their residential purpose. Above objection needs to be rejected, in view of ratio of the judgment of the National Consumer Disputes Redressal Commission, New Delhi (in short the National Commission), in the case of Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, wherein it was held that the buyer(s) of a residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. View expressed by the National Commission, in the above case, was also expressed and relied upon by this Commission, in a similar case titled as Guninder Jeet Salh Vs. M/s Emaar MGF Land Limited and another, consumer complaint No.113 of 2015 decided on 23.09.2015. It is not the case of the Opposite Party that the complainants booked/purchased the floor, in question, for carrying on some commercial activity or they booked/purchased more than one floor in the same project of the Opposite Party. Moreover, the complainants, in the opening Para of the complaint, stated that they were willing to own a residential unit for their family and personal use. As such, this objection being devoid of merit, is not sustainable and the same is rejected.

13.       The next question, which falls for consideration is as to whether this Commission has the jurisdiction to decide dispute between the parties in the face of existence of an Arbitration Clause, in the Buyer’s Agreement. Similar question fell for determination, before this Commission, in a case titled as Sh. Dharampal Gupta Vs. Emaar MGF Land Limited and another, consumer complaint No.147 of 2015 decided on 13.10.2015, wherein, heavy reliance was placed by the Opposite Parties therein, upon ratio of Sudarshan Vyapar Pvt. Ltd. and another  Vs. Madhusudan Guha and another (2013) 1 CALLT 546 (Calcutta HC) and M/s S.B.P. and Co. Vs. M/s Patel Engineering Limited and another, AIR 2006 SC 450 to support above argument. In Sh. Dharampal Gupta’s case (supra), further reliance was placed on a judgment rendered by the State Consumer Disputes Redressal Commission, Punjab, at Chandigarh, titled as Raj Kumar Singal Vs. M/s Puma Realtors Private Limited and another, Miscellaneous Application Nos.1226 and 1227 of 2014, in Consumer Complaint No.60 of 2014. However, by noting ratio of the judgments mentioned above and on making reference to the ratio of judgments of the Hon’ble Supreme Court of India, in Fair Air Engineers Pvt. Ltd. & Anr. Vs. N.K. Modi, III (1996) CPJ 1 (SC) = (1996 (6) SCC 385, National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr., I (2012) CPJ 1 (SC), it was firmly held that remedy provided under Section 3 of the 1986 Act is in addition to and not in derogation of the provisions of any other law. It was specifically observed that ratio of judgment passed in M/s S.B.P. and Co.’s case (supra), will not debar a Consumer Fora from entertaining a complaint, even in cases where an alternative remedy of Arbitration is provided. Similar view was taken by the National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013. Vide that judgment many Revision-Petitions were decided. Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/Opposite Party challenged that order in the Hon’ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), the Hon’ble Supreme Court of India, by making reference to the ratio of  judgment in the case M/s S.B.P. and Co.’s case (supra),  observed that the judgment has no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction  can be exercised by a Consumer  Fora or not. In the above judgment, the Supreme Court had not interpreted the provisions of 1986 Act in the light of the provisions contained in 1996 Act. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act is mandatory, cannot lead to an inference that the Consumer Fora is bound to make reference to the Arbitral Tribunal. The ratio of judgment of Sh.Dharampal Gupta’s case (supra) wherein the issue regarding Arbitration Clause was dealt with and clarified by this Commission, while placing reliance on various judgments, in the manner, referred therein, is fully applicable to the facts of the present case. In view of the above, it is held that the submission of Counsel for Opposite Party, that the consumer complaint was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer’s Agreement, being devoid of merit, stands rejected.

14.         The next question which falls for consideration, is, as to whether this Commission has the pecuniary jurisdiction to entertain and decide the complaint? Perusal of the reliefs claimed by the complainants, in their complaint, reveals that they have claimed refund of Rs.16,37,888.03 alongwith interest @18% per annum from the respective dates of deposits till actual payment plus Rs.3,50,000/- as compensation plus Rs.50,000/- as litigation expenses. The sum total of the relief sought by the complainants, even if we exclude the interest @18% per annum, came to be Rs.20,37,888.03, which exceeds the outer pecuniary limit of Rs.20 Lacs of the District Forum and comes within the pecuniary jurisdiction of this Commission, which ranges from Rs.20 Lacs upto Rs.1 Crore. Therefore, this objection of the Opposite Party, being devoid of any substance, stands rejected.

15.          The next question, which falls for consideration, is, as to whether the complainants are entitled to refund of the amount deposited by them with interest or not. Clause 11(a) of Independent Floor Buyer’s Agreement dated 3.2.2012 (Annexure C-3), is extracted hereunder:-

“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 constructions 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.”

 

No doubt, as per the afore-extracted clause, the Opposite Party was to complete the construction of the floor, in question, within a period of 24 months from the date of execution of the Agreement dated 3.2.2012 i.e. by 3.2.2014. However, as admitted by the Opposite Party itself, it failed to offer possession within the aforesaid stipulated period of 24 months and vide letter dated 08.07.2013 (Page 296) informed the complainants that it (Opposite Party) would endeavor to complete the project subject to the delay of 12 months, which occurred due to stoppage of the work because of stay on construction activities. In this letter, the Opposite Party also informed the complainants that the Hon’ble Supreme Court dismissed the SLP No.21786-88/2010 vide its order dated 12.12.2012 and the earlier order dated 19.04.2012 passed by it (Supreme Court) not to undertake further construction  at the project land stood vacated. Admittedly, there was no stay as on 12.12.2012 on construction activity. As per own averment of the complainants, in Para 4 of the complaint, they (complainants) agreed to extension of the period for further 12 months for offering possession of the independent floor, in question. However, the Opposite Party even after vacation of stay by the Hon’ble Supreme Court, failed to deliver possession of the floor, in question, complete in all respects, to the complainants within the extended period of 12 months, which expired on 3.2.2015. Till date, or till the date of filing the complaint, which was filed on 03.09.2015, the possession had not been offered by the Opposite Party to the complainants, what to talk of compensation, as envisaged under Clause 13 of the Independent Floor Buyer’s Agreement dated 3.2.2012. The complainants vide their email dated 27.8.2014 (Page 122) requested the Opposite Party to update them regarding progress status to enable them to arrange finances. Counsel for the complainants vehemently stated that there was no progress in the construction, as was evident from the fact that even demand for installment, which was to be raised by the Opposite Party on laying of foundation upto plinth level was still not raised. Nothing has been placed, on record, by the Opposite Party, by way of documentary evidence, to the effect that it (Opposite Party) ever offered possession of the floor, in question, to the complainants during the extended period of 12 months or thereafter or till the filing of the complaint. The complainants had made payments in the sum of Rs.16,37,888.03 (major part thereof in the year 2011) to the Opposite Party, which was undoubtedly their hard earned money. To make payment against price of the unit, they had raised loan from a bank, which was subsequently cancelled on getting no confirmed date of delivery of possession. Their hope to get possession of the unit, in question, was shattered. Completion of construction    of the unit, in the near future, is not in sight. There has been no default or delay by the complainants in making payment of installments due. In the reply filed by the Opposite Party, no firm           date  to  hand  over  possession  of  the  unit  has been given. 

16.         Above act of the Opposite Party amounted to deficiency in providing service. It has also indulged into unfair trade practice, by making false promises to the complainants. As per the Buyer’s Agreement, construction of unit was to be completed by 03.02.2014 (24 months from 03.02.2012). However, it was not done. The complainants were eager to get a living unit. Keeping that in mind, they even agreed to extension of 12 months, to complete the construction, in terms of letter dated 08.07.2013 (Annexure C-12, Page 296), written by the Opposite Party. Though there was stay on construction activities for a period of around 8 months only, Opposite Party despite extension of time of one year did not make any attempt to complete the construction and hand over possession of the unit to the complainants even by that date i.e. by 03.02.2015. The present complaint was filed in the month of September 2015. Even on the date, when arguments were heard, qua completion of construction of the unit, in question, no firm date was given by the Opposite Party. Above facts entitled the complainants to seek refund of Rs.16,37,888.03Ps. By not refunding this amount, the Opposite Party was deficient in rendering service.

17.         The next question, which falls for consideration, is, as to whether the complainants are entitled to compensation, for mental agony and physical harassment caused to them, at the hands of the Opposite Party, as also escalation in prices, or not. It is not disputed that the complainants belong to a middle class family. They 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 03.02.2012. They even applied for loan but had to cancel the same when no firm date of completion was indicated by the Opposite Party. Their hopes were not fulfilled when possession of the unit, in question, was not offered to them, by the stipulated date, and even by the extended period of 12 months. No firm date to handover possession is in sight. The act in not handing over possession in time, as per the Buyer’s Agreement, and also extended period against letter dated 08.07.2013, is a material deficiency, in providing service on the part of the Opposite Party. Thus, the complainants are certainly entitled to be compensated for mental agony and physical harassment suffered by them, as also escalation in prices. In our considered opinion, compensation in the sum of Rs.1,00,000/-, if granted,  would be just and adequate, to meet the ends of justice.           

18.         The next question, which falls for consideration, is, as to whether the complainants are entitled to interest on the amount deposited alongwith interest, 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 Party was charging interest @15% P.A., for a delay of first 90 days, and, thereafter, penal interest @18% P.A. In view of above facts, the complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.16,37,888.03Ps., alongwith interest @15% P.A., from the respective dates of deposits, till realization. 

19.         No other point, was urged, by the Counsel for the parties.

20.          For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Party is directed, as under:-

(i)   To refund an amount Rs.16,37,888.03Ps., to the complainants.

(ii)  To pay simple interest @ 15% P.A., to the complainants, from respective dates, on the amount aforesaid (total Rs.16,37,888.03Ps.), when deposited with them. (Above rate of interest is less than the rate of interest charged by the Opposite Party for delayed payment i.e. 18% P.A.)

(iii)  To pay compensation, in the sum of Rs.1,00,000/- (Rupees One lac only) for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.

(iv)  To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants.

(v)         To pay the entire ordered amount, in Clauses (i), (iii) and (iv), including simple interest @ 15% P.A., as mentioned in Clause (ii) above, within a period of three months, from the date of receipt of a certified copy of this order, failing which it shall be liable to pay to the complainants, penal simple interest @ 18% P.A.; qua the entire amount assessed, from the date of default till realization, i.e. on Clauses (i), (iii) and (iv).

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

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

Pronounced.

November 09, 2015.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

 [DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER

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