Chandigarh

StateCommission

CC/179/2016

Shri Praveen Arora - Complainant(s)

Versus

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

Sh. Arjun Grover, Adv.

01 Aug 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                     UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	179 of 2016
Date of Institution	03.05.2016
Date of Decision	01.08.2016

 

 

Shri Praveen Arora son of Sohan Lal Arora, R/o #1149, Sector 15, Panchkula.

                                                       .…Complainant

Versus

 

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

                                                …. Opposite Party.

 

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

MR. DEV RAJ, MEMBER

              MRS. PADMA PANDEY, MEMBER.

 

Argued by:Sh. Arjun Grover, Advocate for the complainant.

              Ms. Ekta Jhanji, Advocate for the Opposite Party.

               

PER DEV RAJ, MEMBER

              In brief, the facts of the case, are that the complainant entered into an Independent Floor Buyer’s Agreement (Annexure C-1) on 02.02.2011 with the Opposite Party, for a residential independent            floor having saleable area of 1860 sq. ft. in  DLF             Valley, District Kalka, Panchkula and opted for construction based plan for making payment of  the said floor, which was Rs.64,22,579.75. He deposited an amount of Rs.4 Lacs as booking amount and was allotted independent floor bearing No.D2/2-SF and Independent Floor Buyer’s Agreement was executed on 02.02.2011 (annexure C-1). It was further stated that as per Clause 8 of the said Agreement, time was the essence of the contract. It was further stated that as per Clause 11(a) of the Agreement, possession was to be delivered within 24 months from the date of execution of the Agreement i.e. by 02.02.2013. It was further stated that the complainant obtained housing loan from LIC Housing Finance Ltd. for making part payment of the floor, in question. It was further stated that the complainant opted for construction linked plan and the Opposite Party raised demands from time to time on completion of particular stage of construction vide demand letters dated 14.2.2011 and 15.11.2013 (Annexure C-3 colly.). It was further stated that the complainant also paid demand of interest on delayed payment raised vide letter dated 15.1.2014 (Annexure C-4), to the tune of Rs.1315/-. It was further stated that the complainant, in all, paid an amount of Rs.50,95,652.04Ps to the Opposite Party, as per Customer Ledger (Annexure C-5).

2.           It was further stated that possession of the floor, in question, was to be delivered within a period of 24 months from the date of execution of the Agreement but the Opposite Party has failed to offer the same and still there is no likelihood of getting the possession as the construction of the project is yet to be completed.

3.           It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, 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, seeking directions to the Opposite Party, to refund Rs.50,95,652.04Ps alongwith interest @18% per annum, from respective dates of deposits; pay Rs.5,00,000/- as compensation for physical harassment and mental agony and Rs.50,000/- as litigation expenses.

4.           The Opposite Party in its written statement took up certain preliminary objections, to the effect, that the complainant, being investor, had purchased the flat, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, it would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act; that the parties were bound by the terms and conditions mentioned in the Independent Floor Buyer’s Agreement and the dispute being of contractual nature, could not be considered under the C. P. Act. Apart from above objections, the Counsel for the Opposite Party, during arguments, also took an objection as regards referring the matter to the Arbitrator as there exists an Arbitration Clause 55 in the Independent Floor Buyer’s Agreement. 

5.           On merits, it was admitted that the complainant had booked Flat No.DVF-D-2/2-SF and Buyer’s Agreement was executed on 02.02.2011. It was further admitted that as per clause 11(a) of the Agreement, the possession of the allotted unit, was to be handed over to the complainant within 24 months from the signing of the Agreement subject to force majeure conditions or due to reasons beyond the control of the Opposite Party. It was further stated that the complainant was informed as regards the stay granted by the Hon’ble Supreme Court on the construction activity at the project site. It was further stated that an exit offer vide letter dated 05.06.2013 (Annexure R-7) was given to the complainant, which clearly portrait the exit plan, to carry on with the project and give Opposite Party another year to complete the project or to get the refund of the amount deposited till date with 9% interest. However, the complainant showed interest in the project. It was further stated that the construction of the project is in full swing and at the verge of completion and all the facilities promised in the brochure would be completed and provided to the buyers in coming days. It was further stated that possession of the property shall be offered to the complainant in a very short period of time.  It was further stated that the Opposite Party has already completed construction of 771 independent floors on 257 plots and another 1020 built up units are near completion. It was further stated that out of 1791 built up units, occupation certificate(s) for 771 (257 plots) units has been received and as on date, possession of 140 units have been offered to the owners. It was further stated that proper water connection and electricity supply is in place and full housekeeping and maintenance services are being provided through leading multinational company namely Jones Lang Lasalle (JLL). It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

6.           The complainant filed replication, wherein, it reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Party.

7.           The complainant, in support of his case, submitted his own affidavit, by way of evidence, alongwith which, a number of documents were attached.

8.           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. 

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

10.         It is evident that the complainant was allotted Independent Floor No.DVF-D-2/2-SF in DLF Valley, Panchkula by the Oppostie Party and Independent Floor Buyer’s Agreement was executed at Chandigarh on 02.02.2011 (Annexure C-1). The total price for the said independent floor, as depicted in the Agreement, was Rs.64,22,579.75Ps and the complainant paid an amount of Rs.50,95,652.04Ps to the Opposite Party as is evident from Customer Ledger (Annexure C-5, at    Page 90 of the complaint file). As per Clause 11(a)          of the Agreement, the Opposite Party was to            complete the construction of the said independent        floor within a period of 24 months from the date of execution of the said Agreement. It is also             admitted by the Opposite Party in Para 6 of its written statement that vide letter dated 05.06.2013 (Annexure R-7), the Opposite Party sought further time of 12 months, in addition to 24 months, to complete the construction  work. The complainant was also given the       

option to seek refund alongwith 9% interest vide letter dated 05.06.2013 (Annexure R-7). However, the complainant agreed to a further period of 12 months in handing over of possession.

11.         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 Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Party, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even 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 jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, 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 andNational Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.” 

          In view of the above, and also in the face of ratio of judgments, referred to above, the argument raised by Counsel for the Opposite Party, stands rejected.

12.         To defeat claim of the complainant, the next objection raised by the Opposite Party was that the complainant, being investor, had purchased the flat, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainant is a property   dealer, and is indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the Opposite Party, 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 Commission 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 flat, 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. 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 Party, in its written reply, therefore, being devoid of merit, is rejected.  

13.         Another objection raised by Counsel for the Opposite Party was that the complainant filed this complaint to amend/modify/rewrite the concluded Agreement duly executed between the complainant and the Opposite Party, purely to invoke jurisdiction of this Commission. It was further stated that the complainant was 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 Party, for purchasing the flat, in question, in the manner, referred to above. According to Clause 11(a) of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was 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”

14.         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 a 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 this view of the matter, the objection of the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

15.         The next question, which falls for consideration, is, as to whether there was delay in offering possession, on account of which, the complainant is entitled to refund of the amount deposited by him with interest or not. Clauses 11(a) and 11(b) of Independent Floor Buyer’s Agreement dated 02.02.2011, being relevant, are 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 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.”

 

No doubt, as per the afore-extracted clauses, 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 02.02.2011 i.e. by 01.02.2013. However, as admitted by the Opposite Party, it failed to offer possession within the aforesaid stipulated period of 24 months and vide letter dated 05.06.2013 (Annexure R-7) informed the complainant 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 complainant that 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. The Opposite Party also informed the complainant that in case the complainant did not agree to delay of 12 months, it (Opposite Party) would cancel the allotment and refund the amount deposited with 9% interest. Admittedly, there was no stay as on 12.12.2012 on construction activity. In fact, stay on construction activities was in force for a period of 8 months only. However, the Opposite Party failed to deliver possession of the floor, in question, complete in all respects, to the complainant even within the extended period of 12 months, which expired on 02.02.2014. Even during the course of arguments, Counsel for the Opposite Party conceded that till date, possession of the unit, in question, has not been delivered to the complainant and the same will be delivered shortly. 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 complainant during the extended period of 12 months or thereafter or till the filing of the complaint, what to talk of compensation, as envisaged under Clause 13 of the Independent Floor Buyer’s Agreement dated 02.02.2011. There is clear cut admission by the Opposite Party that there was delay in offering possession and it even failed to deliver possession after seeking one year extension, which expired on 02.02.2014. The argument of the Opposite Party that delay in handing over possession of independent floor was attributable due to delay in receiving statutory approvals from the competent authorities, the same being absolutely beyond its control, is not tenable. The Independent Floor Buyer’s Agreement was executed on 02.02.2011 and before execution thereof, the Opposite Party ought to have obtained all the approvals. If permissions for revision in layout plans and service plans were sought on 11.03.2013 and 20.05.2013, approval for which was also received in due course of time, the initial time taken for seeking such approvals amounts to clear deficiency on the part of the Opposite Party and in the absence of any justified reason for not doing so earlier, would not amount to force majeure condition. The plea taken, therefore, is of no help to the Opposite Party. The total price of the unit was Rs.64,22,579.75Ps and the complainant had made payments in the sum of Rs.50,95,652.04Ps  to the Opposite Party, uptil 11.10.2014 (Annexure C-5), which was undoubtedly his hard earned money. Clearly the complainant needed a residential unit and instead of seeking refund, as offered by the Opposite Party vide letter dated 5.6.2013 (Annexure R-7), he agreed to extension of one year, which too expired on 02.02.2014. When the Opposite Party itself failed to deliver possession to the complainant even by the extended period and till date, the argument put forth by it that complainant waived off his right by not opting for exit policy, is not tenable. The complainant had agreed to one year extension and when there is delay of more than 2 years even beyond the extended period, the Opposite Party is liable to refund the entire amount paid by the complainant with interest. Further, when the Opposite Party was ready to refund the deposited amount in June, 2013 (Annexure R-7) alongwith 9% interest, its objection to refund the deposited amount is not tenable. As already stated above, possession was to be delivered by 01.02.2013 and the complainant very fairly, on the asking of the Opposite Party, extended the same for one year i.e. up to 02.02.2014. Even the extended period expired on 02.02.2014 and still the Opposite Party is not in a position to offer possession. 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 Parsvnath Exotica Ghaziabad Resident's Association Vs. Parsvnath Buildwell Pvt. Ltd. & Anr., 2016 (2) CPR 764, compensation in the form of simple interest @12% per annum with effect from the date of each payment till refund is made alongwith compensation of Rs.3 Lacs and litigation cost were awarded. Thus, in view of law laid down in aforesaid judgments, the complainant is entitled to refund of Rs.50,95,652.04Ps.

16.         It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.50,95,652.04Ps was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the Opposite Party, for its own benefit. There is no dispute that for making delayed payments, the Opposite Party was charging heavy rate of interest, for the period of delay in making payment of installments.  It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon’ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20^th, 2014. In view of above, the complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.50,95,652.04Ps  alongwith interest @15% simple interest from the respective dates of deposits till realization. (As per clause 39(a) of the Buyer’s Agreement, the Opposite Party was charging interest @15% P.A., for a delay of 90 days and, thereafter, penal interest @18% P.A.).

17.         The next question, which falls for consideration, is, as to whether, the complainant is entitled to any compensation or not. The complainant deposited his hard earned money, in the hope that he will have a house to live in. As admitted by the Opposite Party, the construction at the site which was stayed by the Hon’ble Supreme Court of India vide order dated 19.04.2012, was vacated on 12.12.2012. The stay, thus, operated only for eight months but the Opposite Party failed to deliver possession to the complainant even after the lapse of extended period of 12 months, on 02.02.2014. Admittedly, possession has not been delivered by the Opposite Party till date meaning thereby that there has been further delay of more than two years. On account of non-delivery of possession of the floor, in question, by the Opposite Party, to the complainant, complete in all respects, within the stipulated period or the extended period, or even till the filing of the complaint, the fact that possession is not  ready even as on date, and by not refunding the amount to him (complainant), the complainant has certainly suffered physical harassment and mental agony on account of the acts of omission and commission of the Opposite Party, for which, he needs to be suitably compensated. In our considered opinion, compensation in the sum of Rs.3,00,000/-, if granted, would be just and adequate, to meet the ends of justice.           

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

19.          For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Party is held liable and directed in the following manner:-

(i)    To refund the amount of Rs.50,95,652.04Ps alongwith simple interest @15% per annum, to the complainant, from the respective dates of deposits, till realization, within two months, from the date of receipt of a certified copy of this order, failing which, the Opposite Party shall pay the aforesaid amount alongwith simple interest @18% per annum, instead of 15% per annum, from the date of default till actual payment;

 (ii)  To pay an amount of Rs.3,00,000/-  (Rupees Three Lacs only), to the complainant, as compensation for mental agony and physical harassment, within a period of two months from the date of receipt of a certified copy of the order, failing which, the Opposite Party shall pay the aforesaid amount alongwith interest @15% per annum from the date of default till actual payment;

(iii)  To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant within a period of two months from the date of receipt of a certified copy of the order, failing which, the Opposite Party shall pay the aforesaid amount alongwith simple interest @15% per annum from the date of default till actual payment.

20.         However, it is made clear that in case, the complainant has 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.

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

August 01, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER