Chandigarh

StateCommission

CC/199/2016

Sushil Kumar - Complainant(s)

Versus

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

Abhishek S Bhaskar, Adv.

30 Aug 2016

ORDER

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

 

Complaint case No.	:	199 of 2016
Date of Institution	:	11.05.2016
Date of Decision	:	30.08.2016

 

1. Sushil Kumar
2. Mrs.Rama Gupta wife of Sushil Kumar, #55, GH-10, Sector 20, Panchkula, Haryana.

……Complainants

V e r s u s

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

….Opposite Party

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

 

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

                         MRS. PADMA PANDEY, MEMBER

 

Argued by:        Sh.Abhishek S. Bhaskar, Advocate for the complainants.

                         Ms.Ekta Jhanji, Advocate for the Opposite Party.

               

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

               

                The complainants have filed this consumer complaint seeking refund of an amount of Rs.52,92,806.55Ps. (alongwith interest), which they paid to the opposite party, to purchase an independent floor, in a project, launched by it known as ‘DLF Valley, Panchkula’. They have also sought compensation for suffering mental agony and physical harassment. Prayer was also made to make payment towards litigation expenses.

2.         As per facts on record, the complainants purchased one residential unit, measuring saleable area 1550 square feet, in the above project of the opposite party, for a total sale consideration of Rs.59,39,600.03Ps., which included basic sale price, external development charges, infrastructure development charges, maintenance security etc., as is evident from schedule of payments at page 167 of the file.  To purchase above said unit, the complainants paid an amount of Rs.4 lacs, as booking amount,  with the opposite party on 30.09.2010. Vide letter dated 03.12.2010 Annexure C-2, independent floor, bearing no.B1/79/GF was allotted to them, in the said project, with a promise that possession thereof, with complete construction in all respects, will be handed over within a period of 24 months, from the date of signing Buyer’s Agreement. Buyer’s Agreement was executed between the parties on 11.02.2011. As such, possession of the constructed unit was to be handed over to the complainants, on or before 10.02.2013.
3.         It is case of the complainants that to make payment towards sale consideration of the said unit, they raised loan of Rs.30 lacs,  from the Oriental Bank of Commerce, for the period of 180 months. It is averred by the complainants that by 13.11.2015, they had paid an amount of Rs.52,92,806.55Ps., including charges towards delayed payment. As per terms and conditions of the Buyer’s Agreement, the complainants have opted for construction linked payment plan. It is specifically averred that as the opposite party has failed to fulfil its promise, in handing over possession of the unit, within the stipulated time, the instant complaint was filed, seeking various reliefs, as mentioned above in opening part of this order. 
4.         Upon notice, reply was filed by the opposite party, wherein it was stated that at this stage, the complainants cannot back out from the contract. Further, it was stated that payments made were delayed, and not made as per fixed period, as such, the complainants are not entitled to say that possession should have been delivered to them, in time. It was stated that on account of delay in handing over possession of the unit, no loss is going to be caused to the complainants, because allotment made to them is cost escalation free. It was averred that the project is huge, it consists of 1153 residential plots and 1775 built-up units, of various sizes and configuration. The projects consists of seven number of schools sites, one crèche, one community centre, two nursing homes sites, besides religious building site and commercial sites. It was stated that qua some portion of the project, the opposite party had started delivering possession of the units to the purchasers. It was averred that the complaint filed by the complainants cannot be said to be within limitation. It is admitted that the office of the opposite party is situated at Chandigarh and that the Agreement was also executed between the parties at Chandigarh. It was also admitted that all the payments were made by the complainants at Chandigarh. It is asserted that the unit, in question, was purchased for future gain, as such, the  complainants would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act. It was stated that delay in handing over possession of the unit was caused on account of force majeure circumstances, beyond control of the opposite party. However, it is stated that construction at the site could not be completed, on account of stay granted on construction activities, by the Hon'ble Supreme Court of India, between 19.04.2012 upto 12.12.2012, which caused delay in handing over possession of the constructed unit to the complainants.

                Not only as above, other reasons for delay in starting construction work, at the site are, delay in sanction/revision of layout plans by the Competent Authorities;  delay in approval of service plans and various other approvals/sanctions etc. by the Competent Authorities. Many new objections were raised by the Govt. concerned, which resulted into delaying the process of construction. It was further stated that to get extension of time of one year, to handover possession, consent was sought from the complainants, vide letter dated 08.07.2013 and in the alternative an offer was given to them to get back the money deposited by them, alongwith simple interest @9% p.a. The complainants failed to avail remedy of refund and continued to make the payments. As such, at this stage, they cannot raise any grudge, qua delay caused in handing over the possession. It is pleaded that the opposite party is committed to deliver possession of the unit at the earliest after providing all the amenities.

5.         On merits, it was admitted that the unit, in question, was sold to the complainants. Amount so received, as mentioned in the complaint and further that possession could not be delivered in time, even as on today, was also not disputed. It is further said that the complainants cannot claim refund of the amount paid. It is a contractual obligation between the parties to be discharged, as such, this Commission has no jurisdiction to entertain the complaint and only the Civil Court has jurisdiction. It is stated that terms and conditions of the Agreement are binding upon the parties. Prayer was made, to dismiss the complaint, filed by the complainants.  
6.         The parties led evidence, in support of their cases by filing their affidavits to support their averments. Large number of documents were also placed on record, to strengthen their respective pleas.
7.         We have heard Counsel for the parties, and, have gone through evidence and record of all the cases, very minutely. 
8.         At the time of arguments, besides raising arguments, as reflected in the reply filed, an additional issue was raised by Counsel for the opposite party that in view of Section 8 of the Arbitration and Conciliation Act, 1996 [as amended vide the Arbitration and Conciliation (Amendment) Act, 2015], to settle disputes between the parties, the matter is required to be referred to an Arbitrator, as such, this Commission has no jurisdiction to entertain the same (complaint).
9.         Counsel for the complainants, by making reference to the facts mentioned in earlier part of this order, stated that it is a case of failed promise on the part of the opposite party i.e. after receipt of substantial amount of Rs.52,92,806.55Ps. out of the total sale consideration of Rs.59,39,600.03Ps., possession of the unit, in question, has not been delivered to the complainants, within the agreed period i.e. on or before 10.02.2013. The complainants had agreed even to extension of period of 12 months. During that extended period also, possession of the unit was not delivered. Even as on today, offer of possession of the unit has not been made to the complainants.
10.         To the contrary, it is argued by Counsel for 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. It is stated that reasons, referred to above, for delay in delivery of possession, were intimated to the complainants. Promise was made to hand over possession of the unit, within extended period of 12 months. To the said proposal, the complainants agreed and in furtherance to that, they also had deposited further amount, towards sale consideration of the unit, in question, which obviously means that they had given consent to extend the date of delivery of possession by 12 months. At this stage, it is not open to them, to claim the said relief. It is further stated that construction activities at the site were stopped on account of force majeure circumstances, which were beyond the control of the opposite party, as referred to above. It is averred that only the Civil Court has jurisdiction   to   entertain   the present   complaint.  It is stated that the complaint is barred by time. The   complainants   at   the best can   claim   penal   amount/compensation, as envisaged in Clause 15 of the Agreement, qua   delay   caused  to  deliver   possession   of   the unit.
11.         With great hesitation, it was said by Counsel for the opposite party that till today, permission to occupy the project site, where the unit is situated, has not been granted by the Competent Authority.  On facts, no serious dispute was raised.
12.         The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause No.55 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

                To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

13.         Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
14.         In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

15.         Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
16.         Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
17.         We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainants have spent their life savings to get a unit, for their residential purpose. Their hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite 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.
18.         The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainants have spent their entire  life earnings to purchase the flat, in the said project, launched by the opposite party. However, their hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the constructed unit, 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.
19.         Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

                In view of the above, an additional objection raised by Counsel for the opposite party, at the time of arguments that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

20.         The objection taken by the opposite party, to the effect that the complainants being investors, did not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, also deserves rejection. It may be stated here that there is nothing, on the record, that the complainants are the property dealers, and deal in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. On the other hand, in para no.1 of the complaint, supported by affidavit of complainant no.1, by way of evidence, it has been clearly averred that the complainants had purchased the unit, in question, for their personal use. Thus, in the absence of any cogent evidence, in support of the objection raised by  the  opposite party, mere bald assertion i.e. simply saying that the  complainants being investors, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainants, thus, fall within the definition of ‘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.  
21.         It may be stated here that the force majeure circumstances, which have been claimed by the opposite party, for not completing development and construction work, at the site are; delay in sanction of layout plans by the Competent Authorities;  delay in approval of service plans and various other approvals/ sanctions/ clearances etc. by the Competent Authorities; and also stay on construction on the land, in question,  granted by the Hon'ble Supreme Court of India, in the case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, which was finally vacated on 12.12.2012. However, the question arises, as to whether, the aforesaid circumstances, encountered by the opposite party, can be termed as force majeure circumstances, for non-development & construction work at the site and non-delivery of possession of the units, by the stipulated date; within the extended period of 12 months, or even as on today, or not.

                First coming to the plea taken by the opposite party regarding delay in sanction of final lay-out plans by the Authorities, it may be stated here that the said plea does not merit acceptance. It was bounden duty of the opposite party, to get approved the final layout plans, in respect of the project, in question before launching the project, and only, thereafter, accept booking amount from the customers. The complainants including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite party chose to accept booking, on the basis of provisional sanction of the layout plan, by the Competent Authorities, it is to blame to only itself, for the delay, and not the purchasers of units. The purchaser of a unit, who had nothing to do with the sanction of the layout plans, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the unit. Similar view was taken by the National Commission in a case titled as M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17^th Dec 2015. As such, the plea raised by the opposite party, in this regard, stands rejected.

                It is the duty of the builder, to obtain the requisite permissions or sanctions, in the first instance, and, thereafter, recover/accept the consideration money from the purchaser of the flats/plots. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken in getting such permissions could have been contemplated by the builder, before issuing the brochure. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/sanctions/licence to allot plot or to construct building/apartments, invites offers and collects money from the buyers. If the possession of unit, as also the construction of the building/apartment is delayed, because of such reasons, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances. It was also so said by the National Commission, in a case titled as Kamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC). In that case also, a similar plea regarding non-grant of various sanctions, approvals and certificates in respect of the DLF project, by the Government concerned, resulting into delay in delivery of possession of the unit, was raised by the Builder. However, the National Commission in that case, while brushing aside the said plea of the builder, observed and held as under:-

“The main questions which require consideration in the appeal are—

(i)  Can a builder give alluring advertisement promising delivery of possession of the constructed building/flat to the purchaser/ consumer within the stipulated time, and, subsequently, on his failure, turn around and contend that as governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan, were not given, the delay in construction should not be the ground for grant of compensation to the consumer? And,

(ii)   Secondly, whether the consumer should suffer by paying escalation cost due to such delay?

2. In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.

3. Secondly, in such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so, escalation cost is required to be borne by the builder.”

               The principle of law, laid down in the aforesaid case, is fully applicable to the present case. In this view of the matter, plea of the opposite party, to this effect, also stands rejected.

22.         So far as the plea that the delay was caused on account of stay by the Hon'ble Supreme Court of India, in a case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, is concerned, it may be stated here that the said stay was granted on 19.04.2012 and was vacated on 12.12.2012. The said stay order was not specific to the opposite party, as directions were issued to the Government only, not to undertake construction on the land in question. At the maximum taking a stay order, as an order to the opposite party/builder also, benefit of only about 08 months (stay granted on 19.04.2012 and vacated on 12.12.2012) can be given and not beyond that. It was not clarified by the opposite party, as to what stopped it to start construction and development work before 19.04.2012 and, thereafter, from 12.12.2012, the date when stay aforesaid was vacated, and complete the same. Even in extended period, the opposite party failed to fulfill its promise of delivery of possession of the unit, after complete construction. At the same time, as has been held above, if the opposite party did not take requisite approvals/sanctions, from the Competent Authorities, before launching the project, in question, it cannot take shelter under the force majeure clause, to defeat the claim of the complainants.
23.         The next question, that falls for consideration, is, as to whether, the instant consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainants hired the services of the opposite party, for purchasing the unit, in the manner, referred to above. According to Clause 11 (a) of the  Agreement, the opposite party was liable to deliver physical possession of the unit, within a period of 24 months months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in the brochure and necessary for living a smooth and comfortable life. 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”

                From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can also be availed of by them, as they fall within the definition of consumer. 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.

24.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.52,92,806.55Ps. deposited by them. It is an admitted fact that the opposite party is unable to deliver  possession of the unit, in question, for want of necessary permissions, complete construction work and basic amenities. Even as on today, firm date of delivery of possession of the unit, in question, could not be given to the complainants. The complainants, cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. The complainants had expectations to settle in the unit, after lapse of 24 months, from the date of execution of the Buyer’s Agreement. However, their hopes were not fulfilled when possession of the unit, in question, was not even offered to them, by the stipulated date. Compelled under the circumstances, they even agreed to extend the period, to get possession, by 12 months. As per information supplied by Counsel for the opposite party, even today construction of the unit is not complete and firm date to hand over possession is not in sight. Even permission to occupy the project site, where the unit is situated, has not been obtained from the Competent Authority. The opposite party has failed to perform its part of the Agreement. The act in not handing over possession in time, after extended period and even till date, is a material deficiency, in providing service on the part of the opposite party. The opposite party, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are, thus, entitled to get refund of amount deposited by them.

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

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

                There is no dispute that for making delayed payments, as per Clause 39 (a) of the Buyer’s Agreement, the opposite party was charging interest @15% P.A., for a delay of first 90 days, and, thereafter, penal interest @18% P.A. It is necessary to mention here that qua other cases, in respect of this very project, this Commission has granted interest to the consumers @15% p.a., on the deposited amount, from the respective dates of deposits and in case of non-compliance of that order, penal interest @18% p.a. was granted. In the present case also, we are inclined to do so. Even today, it is not clarified by the opposite party, as to within how much time, possession of the unit will be delivered. Rather, it was said that the certificate to occupy the land, where the unit, in question, is located has not been issued by the Competent Authority. In view of above facts, the complainants are entitled to get refund of the amount deposited by them, to the tune of Rs.52,92,806.55Ps. alongwith interest @15% p.a., from the respective dates of deposits, till realization.

26.         No doubt, a plea was also taken by the opposite party, that the complainants are only entitled to compensation, as provided in the Agreement, for the period of delay in delivery of possession of the unit, and as such, it is not open to them, to seek refund of the deposited amount. It may be stated here that since it has been held above that the complainants cannot be made to wait for an indefinite period, for delivery of possession of the unit, at the whims and fancies of the opposite party, as such, they have been held entitled to the refund of amount deposited alongwith interest and compensation. Had the complainants sought possession of the unit, in question, the matter would have been different. In this view of the matter, the plea taken by the opposite party, in this regard, is rejected. 
27.         It is also proved on record that the payment of installments was delayed by the complainants. If that is so, certainly they are not entitled to get same compensation for mental agony and physical harassment, which we are granting in other cases, qua this very project, in case of delay, in delivery of possession. Accordingly, it is held that the complainants are entitled to Rs.1 lac, as compensation, for mental agony and physical harassment, which in our considered opinion is fair and reasonable. 
28.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not.  It may be stated here that it has been frankly admitted by the opposite party, that even as on today, it is not in a position to offer possession of the flat, in question, for the reasons, referred to above. On the other hand, amount deposited was also not refunded to the complainants alongwith interest, till date. As such, there is continuing cause of action, in favour of the complainants to file a consumer complaint, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for  the opposite party, in this regard, being devoid of merit, must fail, and the same stands rejected.
29.         No other point, was urged, by Counsel for the parties.
30.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party is directed as under:-

 

1.   To refund an amount Rs.52,92,806.55Ps. to the complainants, alongwith interest @ 15% p.a. from the respective dates of deposits onwards.
2.   To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.
3.   To pay cost of litigation, to the tune of Rs.50,000/- to the complainants.
4.   The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite party, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, they shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @18% p.a. instead of interest @15% p.a. from the respective dates of deposits onwards, and interest @15% p.a, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

31.         However, it is made clear that, in case, the complainants have availed loan facility from any financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
32.         Certified copies of this order be sent to the parties, free of charge.
33.         The file be consigned to Record Room, after completion.

Pronounced.

30.08.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.