Chandigarh
StateCommission
CC/836/2016
Sh.Abhishek Raghuvanshi - Complainant(s)
Versus
DLF Homes Panchkula Pvt. Ltd. - Opp.Party(s)
Ashim Aggarwal, Adv.
31 Mar 2017
ORDER
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Consumer Complaint | : | 836 of 2016 |
Date of Institution | : | 22.11.2016 |
Date of Decision | : | 31.03.2017 |
Sh. Abhishek Raghuvanshi S/o Maj. Gen. (Retd.), M. P. Singh R/o House No.240-A, Sector 2, Panchkula 134112.
.........Complainant.
Versus
- DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192, Sector-8 C, Chandigarh through its authorized representative.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
..........Opposite Parties.
Argued by:
Sh. Ashim Aggarwal, Advocate for the complainant.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Consumer Complaint | : | 837 of 2016 |
Date of Institution | : | 22.11.2016 |
Date of Decision | : | 31.03.2017 |
- Maj. Gen. (Retd.) M. P. Singh S/o Late Shri Jang Bahadur Singh R/o House No.240A, Sector 2, Panchkula 134112.
- Ms. Smriti Kanwar D/o Maj. Gen. (Retd.) M. P. Singh R/o House No.240A, Sector 2, Panchkula 134112.
.........Complainants.
Versus
- DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192, Sector-8 C, Chandigarh through its authorized representative.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
..........Opposite Parties.
Argued by:
Sh. Ashim Aggarwal, Advocate for the complainants.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Consumer Complaint | : | 838 of 2016 |
Date of Institution | : | 22.11.2016 |
Date of Decision | : | 31.03.2017 |
Ms. Smriti Kanwar D/o Maj. Gen. (Retd.) M. P. Singh R/o House No.240A, Sector 2, Panchkula 134112.
.........Complainant.
Versus
- DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192, Sector-8 C, Chandigarh through its authorized representative.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
..........Opposite Parties.
Argued by:
Sh. Ashim Aggarwal, Advocate for the complainant.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Consumer Complaint | : | 674 of 2016 |
Date of Institution | : | 04.10.2016 |
Date of Decision | : | 31.03.2017 |
- Lt. Gen. Rajinder Singh S/o Shri Dalip Singh R/o Flat No.1, Brahamputra Apartments, Sector 29, Arun Vihar, Noida – 201301.
- Mrs. Usha Singh w/o Lt. Gen. Rajinder Singh R/o Flat No.1, Brahamputra Apartments, Sector 29, Arun Vihar, Noida – 201301.
.........Complainants.
Versus
- DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192, Sector-8 C, Chandigarh through its authorized representative.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
..........Opposite Parties.
Argued by:
Sh. Ashim Aggarwal, Advocate for the complainants.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Consumer Complaint | : | 790 of 2016 |
Date of Institution | : | 11.11.2016 |
Date of Decision | : | 31.03.2017 |
- Mrs. Saveena Goel W/o Shri Rakesh Goel R/o House No.148/11, Tarana Hill, Mandi – 175001, Himachal Pradesh, India.
- Mr. Rakesh Goel S/o Sh. Suresh Kumar Goel R/o House No.148/11, Tarana Hill, Mandi – 175001, Himachal Pradesh, India.
.........Complainants.
Versus
- DLF Homes Panchkula Pvt. Ltd., SCO 190-191-192, Sector-8 C, Chandigarh through its authorized representative.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office at 12th Floor, DLF City, Phase-III, National Highway-8, Gurgaon through its Managing Director.
..........Opposite Parties.
Argued by:
Sh. Ashim Aggarwal, Advocate for the complainants.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Consumer Complaint | : | 978 of 2016 |
Date of Institution | : | 29.12.2016 |
Date of Decision | : | 31.03.2017 |
- Seema Goyal W/o Sanjay Kumar Bansal,
- Sanjay Kumar Bansal S/o Ram Kumar Bansal,
Both R/o Flat No.401, Xynthia Tower, Bollywood HT, Peer Muchalla, Zirakpur, The Dera Bassi, S.A.S. Nagar, Mohali.
.........Complainants.
Versus
- DLF Homes Panchkula Private Limited, SCO 190-191-192, Sector-8 C, Chandigarh – UT., Pin – 160009 through its Manager/Authorised Signatory/Office-in-charge/Director Sales & Marketing.
- DLF Homes Panchkula Pvt. Ltd., Regd. Office DLF Gateway Tower, Second Floor, DLF City, Phase-III, Gurgaon – 122002, Haryana India through its Manager/Authorised Signatory/Office-in-charge/Director Sales & Marketing.
..........Opposite Parties.
Argued by:
Sh. Narender Yadav, Advocate for the complainants.
Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.
Complaints under Section 17 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.
SH. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
PER DEV RAJ, MEMBER
By this order, we propose to dispose of the aforesaid 6 consumer complaints bearing Nos.836, 837, 838, 674, 790 and 978 all of 2016.
2. At the time of arguments, on 09.03.2017, we were of the opinion that the facts involved and issues in law, in the above bunch of complaints, by and large, are the same, and therefore, the aforesaid 6 complaints can be disposed of, by passing one consolidated order.
3. Under above circumstances, to dictate order, facts are being taken from consumer complaint bearing No.836 of 2016, titled as ‘Sh. Abhishek Raghuvanshi. Vs. DLF Homes Panchkula Pvt. Ltd. & Anr.’.
4. During arguments, Ms. Ekta Jhanji, Advocate, Counsel for the Opposite Parties placed on record a chart under her signatures, showing in each case, detail of property, its price, date of agreement, amount received, DLI if any, whether occupation certificate received, the date on which possession was offered etc., which was taken on record. It was also stated by the Counsel for the Opposite Parties that facts given in the chart were correct as per their record.
5. In brief, the facts are that initially Independent Fllor No.DVF-D2/24-GF#217 was allotted to one Sh. Jarnail Singh vide allotment letter dated 10.03.2010 (Annexure C-1) in the project of the Opposite Parties, in the name and style of “DLF Valley, Panchkula” at Village Bhagwanpur, Tehsil & Distt. Kalka, Panchkula. Independent Floor Buyer’s Agreement was executed between Sh. Jarnail Singh and the Opposite Parties on 14.12.2010 i.e. after expiry of nine months from the date of allotment, at Chandigarh office of the Opposite Parties i.e. Opposite Party No.1. Since the complainant was desirous of owning a residential accommodation for his own/family use, he purchased the said independent floor from Sh. Jarnail Singh on 13.03.2013 and all rights in the property were transferred in favour of the complainant vide letter dated 13.03.2013 (Annexure C-3). Uptil 13th March, 2013, the original allotee had paid an amount of Rs.24,38,906.08 to the Opposite Parties. The saleable area of the floor, in question, was 1550 sq. ft. and the price payable for the said floor was Rs.40,79,600/- plus service tax of Rs.75,570/- as per the Agreement.
6. It was further stated that as per Clause 11(a) of the Agreement, the Opposite Parties were to hand over possession of the said independent floor within 24 months from the date of execution of the Agreement i.e. by 14.12.2012 or the Opposite Parties could take maximum three years from the date of allotment as per recent judgment passed by Hon’ble National Consumer Disputes Redressal Commission. It was further stated that accounts statement/customer ledger as on 26.09.2016 (Exhibit C-5) provided by the Opposite Parties showed that an amount of Rs.45,14,995.81 has been credited to the complainant’s account and nothing is due as on date and in fact, there is credit balance of Rs.63,327.33. It was further stated that the complainant made excess payment to the Opposite Parties. It was further stated that on 10.10.2016, the Opposite Parties debited amount towards 10th installment even though as per payment plan, same was payable only on offer of possession, which has not been offered. It was stated that the Opposite Parties did not pay to the complainant the default amount on account of delayed possession as contemplated under Clause 15 of the Agreement. It was further stated that the Opposite Parties be subjected to heavy interest in view of deliberate delay on their part as the penalty under Clause 15 has been unilaterally fixed and hardly comes to 4% p.a. of the total amount paid whereas even the fixed deposit rate is more than 9% p.a. and the Opposite Parties were charging at least 18% p.a. for delayed payments.
7. It was further stated that the informal enquires revealed that possession would be handed over by the Opposite Parties in November 2016. It was further stated that the complainant wrote a letter dated 21.07.2016 (Exhibit C-6) to the Opposite Parties demanding date of possession as also final amounts to be paid etc. but no response was received from the Opposite Parties. It was further stated that the complainant has also been burdened with the service tax, which in view of decision rendered by a Division Bench of Hon’ble High Court of Delhi in Writ Petition of 2011 titled ‘Suresh Kumar Bansal Vs. Union of India & Ors. as well as National Consumer Disputes Redressal Commission, New Delhi in Consumer Case No.222 of 2014, cannot be levied on consumer. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service, and indulgence into unfair trade practice.
8. Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Parties, to hand over the physical possession of unit, in question, complete in all respects, after obtaining requisite permissions/approvals like completion and occupation certificates etc., execute and register sale deed in respect of the allotted floor in time bound manner; pay delay compensation interest @18% p.a. from expiry of three years from the date of allotment of the independent floor till date of handing over of physical possession; reverse the charges debited towards 10th installment till the date the same is actually due and to grant advance payment rebate @12.5% from the date of advances till the date payment is actually due; refund the service tax illegally charged; award Rs.10,00,000/- as compensation for deficiency in service, unfair trade practice, mental harassment, loss & injury suffered by the complainants due to negligence of the Opposite Parties; award Rs.55,000/- towards litigation expenses; restrain the Opposite Parties from cancelling, alienating, altering, changing or creating third party interest in the unit, in question; furnish complete accounts as also intimate the balance payments to be made on possession and pass such further orders/directions, as may be necessitated in the matter and deemed appropriate under the circumstances of the case.
9. The Opposite Parties, in their preliminary submissions in the written statement stated that the complainant is a subsequent purchaser and had purchased the said floor on 13.03.2013 from the original allottee, namely, Sh. Jarnail Singh. It was further stated that the disputed floor was allotted to the original allottee on 10.03.2010 and subsequently Floor Buyer’s Agreement was executed by the original allottee on 14.12.2010. It was further stated that the complainant filed the instant complaint in total disregard to the terms of Floor Buyer’s Agreement executed between the parties, which amounted to default/breach of its terms and conditions. It was further stated that the complainant is backing out from the executed contract. It was further stated that the complainant had full knowledge about the executed terms of Agreement dated 14.12.2010. It was further stated that occupation certificate was applied on 24.05.2016, which was received on 19.07.2016. It was further stated that the offer of possession has already been sent to the complainant vide letter dated 15.11.2016 (Annexure R/1 colly). It was further stated that the complainant prayed for unfounded demands, which were not as per executed terms of the Agreement and, thus, the Opposite Parties pray to allow 31% cost escalation of the construction as well 47% of the land holding cost, totaling 76% of the sale price. It was further stated that the project was cost escalation free as the complainant shall get the possession of the floor on the same price as committed by the Opposite Parties at the time of allotment of the floor through allotment letter dated 10.03.2010. 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.
10. As regards present status of the project, it was stated that occupation certificate(s) of 1669 units had already been received. It was reiterated that occupancy certificate of the floor, in dispute, had already been received on 19.07.2016 and offer of possession letter dated 15.11.2016 already sent to the complainant. It was also stated that proper water connection and electricity supply was in place and housekeeping and maintenance services were being provided through leading multinational company namely Jones Lang Lasalle. Further, the value of the property as per Schedule of Payment (SOP) was Rs.45,48,739.26 plus service tax, as applicable. It was further stated that the area of the floor was increased to 1751 sq. ft. from 1550 sq. ft., therefore, the price of the floor stood revised to Rs.49,94,404.43 plus service tax. It was further stated that the increase in price was due to increase in area after final measurement of the floor.
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 complainant has 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 complainant is not a consumer as the floor, in question, was booked by him for investment purposes and earning profits. Another objection raised in the written statement is that as per Clause 55 in the Agreement, all disputes arising out of the Agreement are to be settled amicably, failing which, they shall be referred to the Arbitration. It was further stated that the Opposite Parties could not be made liable for delay caused due to force majeure conditions, which was on account of stay by Hon’ble Punjab & Haryana High Court and Hon’ble Supreme Court of India from 19.04.2012 to 12.12.2012 and delay in grant of approvals in layout plans and service plans. In Sub Para (g) of Para 11 of preliminary objections, it was 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. Apart from above objections, in Paras 19-21 of the written statement, on merits, though the Opposite Parties admitted that the office of the Opposite Parties is situated in Chandigarh and the Agreement was also executed between the parties at Chandigarh, however, the territorial jurisdiction of this Commission to entertain and try the complaint has been challenged on the ground that the project, in dispute, is situated in Panchkula, which comes within the jurisdiction of Panchkula District. It was further stated that only Courts at Panchkula and Punjab & Haryana High Court have the territorial jurisdiction to entertain and try the instant complaint.
12. The Opposite Parties also moved miscellaneous applications under Section 8 of Arbitration and Conciliation Act, 1996 in the following consumer complaints, for referring the matter to the sole arbitration:-
Sr. No. | Complaint Case No. | Miscellaneous Application No.
|
836/2016 | 48/2017 | |
837/2016 | 43/2017 | |
838/2016 | 47/2017 | |
790/2016 | 30/2017 | |
978/2016 | 212/2017 |
The aforesaid applications were disposed of by this Commission by holding that the applicability of the arbitration process would be seen at the time of final arguments in the main case.
13. On merits, reiterating the submissions, as stated above, it was admitted that as per Clause 11(a) of the Agreement, possession of the allotted unit, was to be handed over to the complainants within 24 months from the signing of the Agreement subject to force majeure conditions or due to reasons beyond the control of Opposite Parties as mentioned in Clauses 11(b) and 11(c) of the Agreement. It was further stated that delivery of possession of the unit, in question, was delayed on account of force majeure conditions. It was further stated that SLP No.21786-88/2010 was filed, wherein the Hon’ble Apex Court stayed the construction activities at the project vide order dated 19.04.2012, which was vacated on 12.12.2012 only. It was further stated that after 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 complainant is in default of payments of Rs.5,764.60 on account of delay of 33 days. It was again reiterated that after receiving occupancy certificate for the floor, in question, on 19.07.2016, offer of possession letter dated 15.11.2016 was sent to the complainant. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
14. The complainant, in support of his case, submitted his affidavit, by way of evidence, alongwith which, a number of documents were attached.
15. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Shiv Kumar, their Authorized Signatory, by way of evidence, alongwith which, a number of documents were attached.
16. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
17. The complainants in consumer complaints bearing nos.836, 837 & 838 all of 2016 have moved miscellaneous applications bearing Nos.220, 224 & 223 all of 2017 respectively, for placing on record additional documents i.e. copies of detailed observation reports, photographs and copies of letters dated 04.02.2017,14.02.2017 & 13.02.2017, as (Exhibits C-7 to C-9), (C-10 to C-12) and (C-9 to C-11) respectively, to contend that the units, in question, are nowhere near completion. The Opposite Parties filed replies to the aforesaid applications, stating that the complainants did not make any payment towards demand raised vide offer of possession letters and further submitted snag list in February 2017 and due to large number of cases in which possession is to be given to the allottees, it takes time to remove the alleged snags. In our opinion, since the aforesaid documents are necessary for just decision of these cases, therefore, no harm would be caused to the Opposite Parties, if these documents are taken on record. Accordingly, all the miscellaneous applications bearing No.220, 224 & 223 all of 2017 are allowed and the respective documents are taken on record.
18. As is evident, in the instant case, initially, Sh. Jarnail Singh was allotted Independent Floor No.DVF-D2/24-GF in DLF Valley, Panchkula by the Opposite Parties vide allotment letter dated 10.03.2010 (Exhibit C-1) and Independent Floor Buyer’s Agreement was executed between him and the Opposite Parties on 14.12.2010 (Exhibit C-2) at Chandigarh. The said floor was purchased by the complainant from Sh. Jarnail Singh on 13.03.2013 as is evident from document (at page 108 of the file). The total price of the said independent floor, as depicted in the Agreement, was Rs.40,02,100/-, besides other charges, securities, deposits and taxes etc. as specified in the Application/Agreement. The complainant, in all, actually paid a sum of Rs.41,36,294.86 as admitted 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 09.03.2017. As per Clause 11(a) of the Agreement, the Opposite Parties were to complete the construction of the said independent floor within a period of 24 months from the date of execution of the said Agreement. It may be stated here that the Opposite Parties, in similar cases relating to this project, had given an exit option to the complainant(s) in June 2013, in view of stay by Hon’ble Supreme Court, to seek refund alongwith 9% interest or to continue with the allotment by agreeing to extend one year period for delivery of possession. However, in the instant case, no such document has been placed on record to show that any such offer was ever given to the allottee in the year 2013. It is, however, on record, that there was stay by the Hon’ble Supreme Court of India from 19.04.2012 to 12.12.2012, which in turn, delayed the completion of the project. The Opposite Parties have claimed that this being a force majeure condition, they are entitled to benefit of delay of one year. The unit, in question was transferred in the name of the complainant on 13.02.2013. The possession of the unit, in question, has been offered by the Opposite Parties to the complainant on 15.11.2016 vide offer of possession letter (Annexure R-1 colly) just a week before filing of the instant complaint filed on 22.11.2016. Admittedly, against the demand raised vide offer of possession letter dated 15.11.2016, the complainant has not paid any amount to the Opposite Parties. It is on record that on receipt of possession letter, the complainant pointed out deficiencies/snags in the unit vide Customer Observation Sheet dated 03.02.2017 (Exhbit C-7). He also sent detailed letter dated 04.02.2017 (Exhibit C-9) to the Opposite Parties. The Opposite Parties are duty bound to remove the snags and inform the complainant to take possession.
19. The Opposite Parties, in preliminary submissions, have prayed to allow them 31% cost escalation of construction as well as 47% of the land holding cost, totaling 76% of the sale price. There is a clear and specific stipulation in Clause 1.2 of the Agreement that price of the unit is escalation free. The Opposite Parties failed to complete construction and deliver possession within stipulated period and extended one year period. Since the Opposite Parties failed to deliver possession within the stipulated period of two years and one year extended period, due to force majeure conditions, they themselves are responsible for delay and deficiency in service and their prayer for allowing them escalation cost amounts to seeking amendment of the terms and conditions of the Agreement. The plea, being devoid of merit, must fail, and the same stands rejected.
20. Since the Independent Floor Buyer’s Agreement, in the instant case, was executed between the parties on 14.12.2010 and period stipulated therein for handing over possession was to commence from the date of execution of the same (Agreement), the averment of the Opposite Parties that Hon’ble Punjab & Haryana High Court had restrained them from creating any third party rights, during the year 2010 (06.04.2010 to 23.07.2010, (Annexures R-5 and R-6), is not relevant.
21. Further, it was the case of the complainant that they are not liable to pay service tax. The Opposite Parties, in their written statement, have specifically stated that the service tax demanded is payable as per terms of the Agreement.
22. A specific allegation as regards delay in execution of the Agreement has been made by the complainants in Para 3 of their complaint. It was stated that the unit was allotted on 10.03.2010, and Independent Floor Buyer’s Agreement was executed on 14.12.2010 after a gap of around 9 months from the date of allotment. It was argued that delay in execution of the Agreement was an act of unfair trade practice by the Opposite Parties, and, therefore, the complainant is entitled to compensation from the date of allotment till Agreement was executed. It may be stated here that the Opposite Parties, in cases pertaining to this project, as also in the instant case, have been pleading that there being stay by the Hon’ble Punjab and Haryana High Court during the year 2010, it acted as a force majeure and delayed the project. Since the Agreement was executed in December 2010, they (Opposite Parties) are not entitled to any benefit out of this delay. In the face of arguments of the Counsel for the complainants, such stay for about four months by the Hon’ble High Court (Annexures R-5 and R-6) shall act as force majeure condition. It may also be stated here that it is not immediately after booking of the unit that Buyer’s Agreement is executed and the process, in all fairness, is likely to take 3-4 months. The complainant is, therefore, not entitled to any compensation for delay in execution of Agreement. Similar objection has also been raised in other connected complaint cases, except CC No.978/2016. In view of observations made above, the complainants in these complaints are also not entitled to any compensation for alleged delay in execution of agreement.
23. 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. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-
“25. The next 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.
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.”
27. 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.”
28. 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.
29. 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.”
30. 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.
31. 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.
32. We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.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 party. 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.
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.”
35. 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.”
In view of the above, the objection raised by Counsel for the Opposite Parties, being devoid of merit, is rejected.
24. Another objection raised by the Opposite Parties was that as per Clause 55 of the Agreement, the Courts at Panchkula alone and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction and that the parties unequivocally agreed to exclude the jurisdiction of all other Courts except the Courts at Panchkula. 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. It may be stated here that according to Section 17 of the Act, a consumer complaint can be filed, by the complainant(s), before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arises. Clearly, Independent Floor Buyer’s Agreement (Annexure C-2) was executed between the parties on 14.12.2010 at Chandigarh. Not only this, copy of allotment letter dated 10.03.2010 (Annexure C-1) and the offer of possession letter dated 15.11.2016 (Annexure R-1 colly.) bear the Chandigarh addresses of the Opposite Parties i.e. DLF Homes Panchkula Pvt. Ltd., Shop No.101-102, DLF City Centre, IT Park, Kishangarh, Chandigarh, Pin-160101 and DLF Homes Panchkula Private Limited, SCO 190-191-192, Sector 8-C, Chandigarh, PIN-160009, at the top. Since, as per documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.
25. In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant 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 him, to file the complaint. The submission of Counsel for Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
26. The next objection raised by Counsel for Opposite Parties was that the complainant has made baseless allegations of unfair trade practice, deficiency in service etc. with an ulterior motive to amend/modify/ rewrite the concluded Agreement duly executed between the parties, purely to invoke jurisdiction of this Commission. It was further stated that the complainant were virtually inviting this Commission to assume powers conferred under the Civil Court and, therefore, this Commission did not have the jurisdiction to consider the present complaint. It may be stated here, that the complainant 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”
27. 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, as stated above, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainant has the remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by him, as he falls within the definition of a ‘consumer’, as stated above. In the instant case, the complainant is 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 complainant is 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.
28. To defeat claim of the complainant, the next objection raised by the Opposite Parties was that since the complainant had purchased the flat, in question, for earning profits i.e. for resale, as and when there was escalation in the prices of real estate, as such, he would not fall within the definition of ‘consumer, as defined by Section 2 (1) (d) (ii) of the Act. It may be stated here that there is nothing, on record to show, that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. Further, it has been specifically stated in Para 1 of the complaint that since complainant was desirous of owning a residential accommodation for himself and his family, he purchased the independent floor in the project of the Opposite Parties from the original allottee. In the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Consumer Disputes Redressal Commission, New Delhi, that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs. Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-
“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”
The complainant, thus, falls 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.
29. 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 14.12.2010 [Exhibit C-2] read thus:-
“11(a) Schedule for possession of the said Independent Floor:-
The Company based on its present plans and estimates and subject to all just exceptions, endeavors to complete construction of the said Independent Floor within a period of twenty four (24) months from the date of execution of the Agreement unless there shall be delay or failure due to Force majeure conditions and due to reasons mentioned in Clause 11(b) and 11(c) or due to failure of Allottee to pay in time the Total Price and other charges, taxes, deposits, securities etc and dues/payments or any failure on the part of the allottee to abide by all or any of the terms and conditions of this Agreement.
11(b) Delay due to reasons beyond the control of the company:-
If the possession of the Said Independent Floor is delayed due to Force Majeure conditions, then the company shall be entitled to extension of time for delivery of possession of the said Independent Floor. The company during the continuance of the Force Majeure reserves the right to alter or vary the terms and conditions of the agreement or if the circumstances so warrant, the company may also suspend the development for such period as is considered expedient and the allottee shall have no right to raise any claim compensation of any nature whatsoever for or with regard to such suspension.”
As stated above, according to Clause 11(a) of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were 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 complainant was 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.
30. Though in similar cases of this project, the Opposite Parties have been taking benefit of one year on account of stay by Hon’ble Apex court from April 2012 to December 2012 but in the instant case, no exit option is available on record. The Opposite Parties have specifically pleaded that there was stay by the Hon’ble Apex court, 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 in December 2013 on 13.12.2015. No justification whatsoever for delay in offering possession beyond 13.12.2013 has been explained by the Opposite Parties. As admitted by the Counsel for the opposite parties, at the time of arguments, the complainant has made payments in the sum of Rs.41,36,294.86. As stated in the written statement, permission for occupation of the unit, in question, was received on 19.07.2016 (Annexure R-1). By making a misleading statement, that possession of the unit, was to be delivered within maximum period of 24 months from the date of execution of the Agreement and within further extended period of 12 months i.e. latest by 13.12.2013, and by not abiding by the commitment, made by the Opposite Parties, they were not only deficient, in rendering service, but also indulged into unfair trade practice. The argument of the Opposite Parties that delay in handing over possession of independent floor was attributable due to delay in receiving statutory approvals from the competent authorities, the same being absolutely beyond its control, is not tenable. The Independent Floor Buyer’s Agreement was executed on 14.12.2010 and before execution thereof, the Opposite Parties ought to have obtained all the approvals. If permissions/approvals for revision in layout plans and service plans were sought on 11.03.2013 and 20.05.2013, approvals for which were also received in due course of time, the initial time taken (more than two years) for seeking such approvals amounts to clear deficiency on the part of the Opposite Parties and in the absence of any justified reason for not doing so earlier, time consumed in obtaining such approvals would not amount to force majeure condition. The plea taken, therefore, is of no help to the Opposite Parties. Clearly, there is inordinate delay of around 3 years 11 months beyond initial stipulated period of two years and 2 years 11 months from one year extended period in offering possession of the unit, in question to the complainant. Delay in offering possession to the complainant is an act of clear deficiency of Opposite Parties. The complainant has pointed out certain deficiencies/snags in the unit. Opposite Parties are also deficient in offering the unit in an incomplete fashion. As already stated above, they are bound to remove the same (snags) without delay.
31. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit, in question, within the stipulated period of 24 months and extended period of 12 months on account of force majeure conditions. As stated above, in the instant case, the Opposite Parties did not deliver possession within 24 months as stipulated in Independent Floor Buyer’s Agreement and thereafter within extended period of 12 months, from execution of the Agreement on 14.12.2010 i.e. by 13.12.2013. There is, thus, delay of around 2 Years 11 Months, even beyond the extended period. Possession of the unit, in question, was offered by the Opposite Parties on 15.11.2016. The 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, held in Para 16 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.
32. Recently 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.
(3) No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”
33. 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 complainant 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.
34. 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, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, would meet the ends of justice. The possession having been offered on 15.11.2016, the complainant shall be entitled to compensation up-to plus 2 months from 15.11.2016 i.e. up-to 14.01.2017 (30 days for making payment + 30 days grace period). The complainant is, thus, held entitled to compensation by way of interest @12% on the deposited amount for the delay period as above. Further, if after making payment/completion of documents, possession is not offered by the Opposite Parties, for delay beyond 30 days, complainant shall be further entitled to compensation by way of interest @12% on the deposited amount.
35. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account of mental agony and physical harassment, and injury caused to him, for inordinate delay in delivering physical possession of the unit to him, by the Opposite Parties, by the promised date in the Agreement or latest by 13.12.2013 i.e. within the extended period. Admittedly, the possession of unit, in question, has been offered to the complainant on 15.11.2016. The compensation in the sum of Rs.10 Lacs, claimed by the complainant is on the higher side. The complainant has been adequately compensated by granting 12% interest for the delay period. The price of the unit, in question, is escalation free. The complainant shall also get the benefit of escalation in price of the unit. Grant of compensation on account of mental agony and physical harassment, caused to the complainant, due to the acts of omission and commission of the Opposite Parties, in the sum of Rs.1,50,000/- in this case would serve the ends of justice. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.
36. Similarly, in following two complaints, particulars of which are indicated in Table-I below, the possession of the unit(s) was offered by the Opposite Parties on the dates indicated against the respective complaints:-
TABLE – I
Sr. No. | Complaint No. | Date of independent Floor Buyer’s Agreement.
| Due date for possession after 2 years plus 1 year extended period
| Date on which possession offered. | Compensation, if any, credited. (Rs.) | DLI if any (Rs.) |
1. | 837/2016 | 19.11.2010 | 18.11.2013 | 29.10.2016 | - | - |
2. | 838/2016 | 27.12.2010 | 26.12.2013 | 26.10.2016 | - | - |
37. Therefore, in the aforesaid two complaints, the complainants are entitled to compensation by way of grant of 12% interest, for the delayed period, up-to the date of offer of possession plus 2 months (30 days for making payment + 30 days grace period), as under:-
Sr. No. | Complaint No. | Date of offer of possession | Date up-to which entitled to compensation |
1. | 837/2016 | 29.10.2016 | 28.12.2016 |
2. | 838/2016 | 26.10.2016 | 25.12.2016 |
If after deposit of amount minus contingent deposit of vat, possession after removing the snags is not delivered, for delay beyond 30 days, the complainants shall be further entitled to compensation by way of interest @12% p.a. on the deposited amount.
38. As per offer of possession letters placed, on record, six months’ time was given to the complainant(s) to complete the formalities and make the payment.
39. Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates, Counsel for the Opposite Parties, on instructions, stated that in case, any allottee is eager to get possession, he/she will complete formalities and deposit the amount before the period of six months and as and when amount is deposited and necessary documents are submitted, within 3 weeks thereafter, possession will be handed over, to the complainant(s). It was further stated that contingent Vat deposit will not be insisted upon at this stage, subject to furnishing of an affidavit by the allottee(s) to make the payment as and when demanded by the Government. In cases relating to this project, earlier the Opposite Parties, at the time of offering possession, were also raising demand on account of stamp duty and registration charges but now while offering possession, no demand on account of stamp duty and registration charges has been raised.
40. In one consumer complaints bearing No.674 of 2016, particulars of which are given in Table-II hereunder, it is apparent from document (Appendix B), placed on record during arguments, that possession of the unit, in question, stands delivered to the complainants on 30.01.2017, after deposit of the entire amount including stamp-duty and registration charges on 26.02.2016 towards demands raised vide offer of possession letter dated 03.02.2016. Further, vide letter dated 16.02.2016 (Exhibit C-6 colly.), the complainants duly supplied the requisite documents to the Opposite Parties i.e. Undertaking/Indemnity bonds as per format duly stamped and notified, photocopy of passport as proof of address, photocopy of PAN Card as identity proof and 4 copies each of photographs. This letter also bears a note stating that additional documents i.e. Pan Card and Passport photocopies of Ms. Usha Rani (complainant) were handed over to the Opposite Parties on 27.02.2016 While admitting above, it was also admitted by the Counsel for the parties during arguments that sale-deed of the unit, in question, has not been executed till date.
TABLE – II
Complaint No. | Date of independent Floor Buyer’s Agreement.
| Due date for possession after 2 years plus 1 year extended period | Date on which possession offered. | Date on which possession taken | Compensation, if any, credited. (Rs.) | DLI if any (Rs.) |
674/2016 | 18.01.2011 | 17.01.2014 | 03.02.2016 | 30.01.2017 | Rs.4,42,269.00 | - |
41. Clearly, the complainants deposited the amount towards demand raised by the Opposite Parties vide offer of possession letter dated 03.02.2016, including stamp-duty and registration charges well within 30 days. Despite depositing the entire amount, possession was handed over on 30.01.2017. The complainants are, therefore, entitled to compensation @12% p.a. interest for the delay period up-to the actual date of handing over of possession i.e. 30.01.2017. In the event of failure of the Opposite Parties to get registered the sale deed in respect of the unit within period of one month, the Opposite Parties shall be liable to pay interest @12% p.a. to the complainants on the amount deposited by them towards stamp-duty and registration charges.
42. The complainants in the complaints indicated in Tables I & II above, are also entitled to compensation for mental agony, harassment and deficiency in rendering service, in the sum of Rs.1,50,000/- in each case.
43. In two consumer complaint bearing No.790 and 978 both of 2016, particulars of which are indicated in Table-III below, the complainants have sought refund of the deposited amounts:-
TABLE – III
Sr. No. | Description/Details | Complaint Case No. | |
|
| 790/2016 | 978/2016 |
1. | Amount deposited. (Rs.) | Rs.51,79,611.00 | Rs.26,01,816.00 |
2. | Date of Agreement. | 10.02.2012 | 06.01.2011 |
3. | Due date for offering possession. | 09.02.2015 | 05.01.2014 |
4. | Whether possession offered | On 05.10.2016 | On 26.10.2016 |
5. | Delay in offer of possession | 1 Year 7 Months | 2 Years 11 Months |
6. | Whether first allottee | Yes | yes |
7. | DLI | Rs.310.00 | Rs.5,48,213.17 |
44. In the Chart submitted by the Counsel for the Opposite Parties, during arguments, receipt of the amount(s) as shown against the Column ‘Amount deposited (Rs.)’ at Sr. No.1 in the table, has been admitted.
45. It may be stated here that in complaint case No.790 of 2016, the complainants had sought possession of the unit, in question, but during the pendency of the said complaint, they (complainants) moved Miscellaneous Application bearing No.221 of 2016, wherein they, instead of possession, sought refund of the deposited amount alongwith interest @18% p.a. from the respective dates of deposits besides Rs.10 Lacs as compensation and Rs.55,000/- towards litigation expenses. The said application was allowed vide order dated 09.03.2017 and this Commission, accordingly, considered the prayer of complainants for refund of the amount paid.
46. As is evident from record of the above complaints, the Independent Floor Buyer’s Agreements were executed on 10.02.2012 and 06.01.2011 respectively. As per Clause 11(a) of the Agreement, the Company was to endeavor to complete construction of the independent floor within a period of 24 months from the date of execution of the agreement unless there was delay or failure due to reasons mentioned in Clauses 11(b) and 11(c) or due to failure of the allottee to pay in time the total price and other charges, taxes and cesses, 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 the Agreement. Clause 12 of the Agreement stipulated that company upon obtaining certificate of occupation and use from the Governmental Authority, shall offer in writing, possession of the independent floor to the allottee in terms of the Agreement to be taken within 30 days from the date of issue of such notice and the Company shall give possession provided the allottee is not in default of any terms and conditions of the Agreement and has complied with all provisions, formalities, documentation etc., as may be prescribed by the Company in this regard. In these cases, 24 months period plus the extended period of 12 months from the date of execution of the agreements expired on 09.02.2015 and 05.01.2014 respectively. There has been inordinate delay in offering possession. No reason or circumstances, which were beyond the control of the Opposite Parties for such delay beyond initial period of two years and one year extended period, have been explained. There is, thus, inordinate delay in offering possession of the allotted unit. 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, in the light of law settled by Hon’ble National Commission in such cases, held that the complainant is entitled to refund of the amount deposited with the Opposite Party. Relevant Paras of the aforesaid judgment read thus:-
“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”.
The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.
It was clearly stated by the National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. Recently in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015 decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder while holding as under:-
“I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant cannot be compelled to accept the offer of possession at this belated stage and, therefore, is entitled to refund the entire amount paid by him alongwith reasonable compensation, in the form of interest.”
Therefore, the complainants, in these complaint cases are held entitled to refund of the amount alongwith interest @13% per annum from the dates of respective deposits.
47. In these cases, the complainants are also held entitled to compensation for mental agony, physical harassment and deficiency in rendering service. In complaint case bearing No.790 of 2016, the complainants, are held entitled to compensation of Rs.1,75,000/-. However, in complaint case No.978 of 2016, it may be stated here that the total price of the unit, in question, was Rs.53,07,504.53 plus service tax. However, the complainants, as admitted by them in Para 7 of their complaint, have paid the total amount of Rs.26,01,816/- to the Opposite Parties, the last amount of Rs.14,60,000/- being paid on 26.12.2013. The complainants did not pay any amount thereafter, meaning thereby that the complainants only paid 50% of the total consideration of the unit, in question. Perusal of offer of possession letter dated 26.10.2016 (Annexure R-1) shows that an amount of Rs.27,46,301.82 plus Rs.91,963.00 is still due against the complainants and only an amount of Rs.26,05,026.71 stood paid. Further, there is DLI in the sum of Rs.5,48,213.17 on account of delay in payment of installments, which certainly has a bearing on completion of the project. In these circumstances, grant of compensation in the sum of Rs.50,000/- would meet the ends of justice.
48. No other point, was urged, by the Counsel for the parties, in all the cases.
49. For the reasons recorded above, all the complaints bearing Nos.836, 837, 838, 674, 790 and 978 all of 2016 are partly accepted, with costs, in the following manner:-
Consumer Complaints bearing No:
836, 837 and 838 all of 2016. |
In these three cases, the Opposite Parties have offered possession in October 2016 and November 2016, asking the complainants to deposit the amount(s) within six months. As already discussed in Para 39 above, in case, any allottee is eager to get possession, he/she will complete formalities and deposit the amount before the period of six months, and pay the amount towards demand raised, except the demands towards, contingent VAT deposit and Advocate charges and Stamp duty, if any, and as and when, amount is deposited and necessary documents are submitted, possession will be handed over to complainant(s), by the Opposite Parties within 3 weeks. The Opposite Parties, in each of these cases, are, jointly and severally, directed as under:-
(i) | To hand over physical possession of the unit(s), allotted in favour of the complainant(s), complete in all respects, after removing the snags pointed out, to the complainant(s), within a period of 30 days, from the date balance payment is made/documents are completed by the complainant(s). |
(ii) | Execute and get registered the sale deed in respect of the unit(s), in question, within one month from the date of handing over of possession to the complainant(s). The stamp duty, registration charges and incidental expenses, if any, shall be borne by the complainant(s). |
(iii) | To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant(s), with effect from 14.12.2014, 19.11.2013 & 26.12.2013 respectively up-till two months from the date of offer of possession i.e. up-to 14.01.2017, 28.12.2016 & 25.12.2016 respectively, 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. In case, the Opposite Parties fail to deliver possession within 30 days from the date of making payment 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.1,50,000/-, in each case, on account of mental agony, physical harassment and deficiency in service and Rs.35,000/- as litigation costs, in each case, to the complainant(s), 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(s) till realization. |
In all these complaints, 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).
As agreed, the amount of contingent Vat deposit will not be insisted upon at this stage, subject to furnishing an affidavit by the allottee to make the payment as and when demanded by the Government. The amount of contingent vat, shall be payable by the complainant(s) as and when the same becomes payable by the Opposite Parties to the Government. The complainant(s) shall deposit contingent vat within three weeks from the date the same is paid by Opposite Parties to the Government and the complainant(s) are informed of this fact. Delay beyond three weeks from the receipt of notice shall attract simple interest @12% per annum.
Consumer Complaint bearing No:
674 of 2016. |
In this case, possession of the unit, in question, stands handed over to the complainants on 30.01.2017.
The Opposite Parties (DLF Homes Panchkula Pvt. Ltd.), 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 incidental expenses, if any, shall be borne by the complainants. In the event of failure of the Opposite Parties to get registered the sale deed in respect of the unit within the stipulated period of one month, the Opposite Parties shall be liable to pay interest @12% p.a. to the complainants on the amount deposited by them towards stamp-duty and registration charges, till execution of sale deed. |
(ii) | To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, with effect from 18.01.2014 till 30.01.2017 within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amounts shall carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till realization. [Since compensation in the sum of Rs.4,42,269/-, on account of delay in possession has been credited in Final Statement of Account, the same shall be deducted from the compensation amount by way of interest @12% for delay period]
|
(iii) | Pay compensation in the sum of Rs.1,50,000/- on account of mental agony, physical harassment and deficiency in service and Rs.35,000/-, as litigation costs, to the complainants, within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @12% p.a., from the date of filing the complaint till realization. |
Consumer Complaints bearing No:
790 and 978 both of 2016. |
The Opposite Parties, in each of these cases, are jointly and severally, held liable and directed as under:-
- To refund the amounts of Rs.51,79,611/- (in CC/790/2016) and Rs.26,01,816/-(in CC/978/2016) alongwith simple interest @13% per annum, to the complainant(s), from the respective dates of deposits, till realization, within 45 days, from the date of receipt of a certified copy of this order, failing which, the Opposite Parties shall pay the aforesaid amounts alongwith simple interest @15% per annum, instead of 13% per annum, from the date of default till actual payment;
(ii) To pay an amount of Rs.1,75,000/- (in CC/790/2016) and Rs.50,000/- (in CC/978/2016) as compensation for mental agony, physical harassment & deficiency in service and Rs.35,000/- as litigation costs, to the complainant(s), in each case, within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @13% per annum from the date of filing the complaint(s) till actual payment.
50. However, it is made clear that in case, the complainant(s) have availed loan facility from any financial institution(s), such an institution shall have the first charge on the amount payable, to the extent, the same is due against the complainant(s).
51. Certified copy of this order, be placed on the file of consumer complaints bearing Nos.837, 838, 674, 790 and 978 all of 2016.
52. Certified copies of this order be sent to the parties, free of charge.
53. The file be consigned to Record Room, after completion.
Pronounced.
31.03.2017
[JUSTICE JASBIR SINGH (RETD.)]
PRESIDENT
(DEV RAJ)
MEMBER
(PADMA PANDEY)
MEMBER
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