Chandigarh

StateCommission

CC/93/2016

Usha Kiran Ghangas - Complainant(s)

Versus

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

Narender Yadav

02 Jun 2016

ORDER

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

 

Complaint case No.	:	93 of 2016
Date of Institution	:	15.03.2016
Date of Decision	:	02.06.2016

 

Usha Kiran Ghangas wife of Late Sh.Prithi Singh Ghanghas, C/o Sh.Jasmer Singh, K-7/29 GF, DLF City, Phase-II, Gurgaon, Haryana.

……Complainant

V e r s u s

1. DLF Homes Panchkula Private Limited, SCO 190,191,192, Sector 8C, Chandigarh, U.T., Pin-160009, through its Manager/Authorized Signatory/Officer-in-Charge/Director Sales and Marketing.
2. DLF Homes Panchkula Private Limited, Registered Office DLF Gateway Tower, Second Floor, DLF City, Phase-III, Gurgaon-122002, Haryana, India, through its Manager/Authorized - Signatory/Officer-in-Charge/ Director   Sales and Marketing.

Site Address:-

The Valley, Sector 3, Kalka-Pinjore Urban Complex

 

….Opposite Parties

 

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

 

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

                         SH.DEV RAJ, MEMBER

                         MRS. PADMA PANDEY, MEMBER

 

Argued by:       Sh.Narender Yadav, Advocate for the complainant.

                        Ms.Ekta Jhanji, Advocate for the Opposite Parties.

             

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

             

              The complainant has filed this consumer complaint seeking refund of the amount paid by her towards purchase of a residential unit, to the opposite parties. It is the case of the complainant that copy of the brochure Annexure C-1, showing rosy pictures of the upcoming project, has been given to the prospective buyers, by the opposite parties. Allured by the facts given in the said brochure and appearing through media, the complainant booked a built-up flat, in the said project, on 16.02.2011. She was allotted flat, bearing no.C-2/1, Second Floor, measuring 1965 square feet saleable area, in a project known as “DLF Valley”, in Sector 3, Kalka- Pinjore Urban Complex, Panchkula, Haryana. Total price of the said unit, including External Development Changes, Infrastructure Development Charges etc. was fixed at Rs.71,78,145/- plus taxes payable as per law. Buyer’s Agreement was executed between the parties, on 18.08.2011. By that time, the opposite parties had already received an amount of Rs.21,68,524/-. As per Clause 11 (a) of the Agreement, possession of the unit was contemplated to be delivered within 24 months, from the date of execution of the same i.e. upto 17.08.2013. When this complaint was filed in the year 2016, the complainant had already paid an amount of Rs.63,43,959/-. Details of amount paid, is provided in para no.8 of the complaint. It is grievance of the complainant that within the given time, i.e. upto 17.08.2013, delivery of possession of the unit was not in sight. The opposite parties issued an advertisement in a newspaper namely “Hindustan Times” on 13.01.2014, much after the cutoff date, promising that possession of the units, will be handed over in the year 2014. Even thereafter, possession of the unit was not offered to the complainant. Again promise was made to deliver possession of the unit by 30.09.2015. Many queries raised by the complainant, through various letters/emails were not even replied by the opposite parties. It is also grievance of the complainant that whatever construction has been raised at the site, is of poor quality and many facilities as per promise made, has not yet been provided. By stating as above, prayer has been made to refund the amount paid alongwith interest and compensation.

2.        Upon notice, reply was filed by the opposite parties, wherein assertions made by the complainant were controverted. It was stated that on account of delay in handing over possession of the unit, no loss is going to be caused to the complainant, because allotment made to her is cost escalation free. Possession of the constructed unit will be handed over to the complainant at a price, which was fixed in the year 2011. Execution of the Agreement and promise to hand over possession within 24 months, from the date of execution of that Agreement were not controverted. 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 complainant. It was further stated that to get extension of time of one year, to handover possession, consent was sought from the purchasers and in the alternative it was open to them to get back the money deposited by them, alongwith simple interest @9% p.a.. However, the said option was not exercised by the complainant. It is stated that as on date, when reply was filed, construction of 258 independent floors is complete and another 1517 built-up units are near completion. Partial completion certificate has been received, qua construction of the units, referred to above. Other basic amenities are also available at the site. It is stated that when construction is not complete, on account of force majeure circumstances, the complainant is only entitled to get delayed compensation. Territorial jurisdiction of this Commission was also challenged, by stating that the project is not situated within the territory of this Commission. 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 also pleaded that time is not the essence of contract. Pecuniary jurisdiction of this Commission was also challenged, by stating that if the amount of refund sought for, alongwith interest, is calculated, the total value will exceed Rs.one crore. It is pleaded that construction of all the facilities/amenities are on the verge of completion and will be provided to the buyers, in coming days.
3.        On merits, it was admitted that the unit was sold to the complainant. Amount so received and further that possession could not be delivered in time, for want of complete construction, was also admitted. It is further stated that 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. It is further said that the complainant cannot claim refund of the amount paid, in the face of penal provisions to make payment for the period of delay in handing over the possession, by the opposite parties, to her, as per Clause 15 of the Agreement. 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 complainant.  
4.        In the rejoinder filed, the complainant reiterated all the averments contained in the complaint, and repudiated those, contained in the written version of the opposite parties.
5.        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.
6.        We have heard Counsel for the parties, and, have gone through evidence and record of all the cases, very minutely. 
7.        At the time of arguments, besides raising arguments, as reflected in the reply filed, an additional issue was raised by Counsel for the opposite parties 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).
8.        Counsel for the complainant, 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 parties i.e. after receipt of substantial amount of Rs.63,43,959/- (about 85% of the entire sale consideration), possession of the unit, in question, has not been delivered to the complainant, within the agreed period. The complainant 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, construction of the unit is not complete. By stating as above, it is argued that the said act of the opposite parties amounted to deficiency in providing service and also they indulged into unfair trade practice, by making false promise with a view to extract money from the poor customers. It is stated by him that it is a good case, where the complaint needs to be allowed in toto i.e. refund of the amount deposited alongwith interest (as prayed), from the respective dates of deposits, till realization, compensation and litigation costs.
9.        Above contentions were controverted by Counsel for the opposite parties. It is stated 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 complainant. Promise was made to hand over possession of the unit, within extended period of 12 months. To the said proposal, the complainant agreed and in furtherance to that, she also had deposited further amount, towards sale consideration of the unit, in question, which obviously means that she has given consent to extend the date of delivery of possession by 12 months. At this stage, it is not open to her, 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 parties, as referred to above. Parties are bound by terms and conditions of the Agreement and at this stage, when construction is near completion; it is not open to the complainant to seek refund of the amount paid. It is averred that only the Civil Court has   jurisdiction   to   entertain   the present   complaint.    The   complainant   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, as time was not essence of contract. On facts, no serious dispute was raised.
10.        After hearing arguments of Counsel for the parties, and on going through the evidence, on record, we are inclined to grant relief to the complainant, in terms of prayer made by her. The complainant is a widow and she applied for the constructed unit, with a hope that she will get shelter, over her head, but her hopes were shattered. It is not in dispute that the unit, in question, was allotted to the complainant on 23.02.2011. It is also not in dispute that as per payment plan, she continued to make payment of installments. When Buyer’s Agreement was signed between the parties, on 18.08.2011, she had already paid an amount of Rs.21,68,524/-. As per Clause 11 (a) of the Agreement, possession of the unit was to be delivered within 24 months, from the date of execution of that Agreement i.e. on or before 17.08.2013, subject to force majeure circumstances. In case of failure of the same, 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 upto 12.12.2012 i.e. for about 8 months. Even by that time, limit to provide possession to the complainant had not yet expired. It is also an admitted fact, that by making reference to above, fact of granting stay, which resulted into  delay in construction at the site, consent of the purchasers were sought to complete construction within further 12 months. Option was also given to the complainant, to seek refund of her amount deposited, alongwith simple interest @9% P.A. The complainant exercised former option and continued to make payment thereafter and by the time, the complaint was filed, she had paid an amount of Rs.63,43,959/- towards basic sale price and other charges. The extended period expired on 17.08.2014, even then, possession of the unit was not offered to the complainant. Construction of the unit, is not complete, even as on today. Reading of written statement makes it very clear, that still no firm date to hand over possession of the unit has been given. At the time of arguments, Counsel for the opposite parties very hesitantly disclosed that construction at the project site is not complete and even today, unit is not ready for delivery of possession.

              Above act of the opposite parties amounted to deficiency in providing service. They have also indulged into unfair trade practice, by making false promises to the complainant. As per the Agreement, construction of unit was to be completed by 17.08.2013 (24 months from 18.08.2011), or at the most within the extended period. Despite receiving huge amount of Rs.63,43,959/-, against Rs.71,78,145Ps., the construction is not complete even after a lapse of more than five years, from the date when Buyers’ Agreement was executed between the parties.

11.        It may be stated here that the force majeure circumstances, which have been claimed by the opposite parties, 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 parties, 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 parties 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 parties, 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 complainant including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite parties chose to accept booking, on the basis of provisional sanction of the layout plan, by the Competent Authorities, it is to blame to only themselves, 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 parties, in this regard, stands rejected.

              In our considered opinion, 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 parties, to this effect, also stands rejected.

12.        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 parties, 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 parties/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 parties, as to what stopped them 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 parties failed to fulfill their promise of delivery of possession of the unit, after complete construction. At the same time, as has been held above, if the opposite parties did not take requisite approvals/sanctions, from the Competent Authorities, before launching the project, in question, they cannot take shelter under the force majeure clause, to defeat the claim of the complainant.

              A similar plea, with regard to force majeure circumstances, was taken by the opposite parties, in another case, filed against them, by similar located allottees in the same project, titled as Mrs.Raj Rani and another Vs. DLF Homes Panchkula Pvt. Ltd. and another, consumer complaint no.252 of 2015. This Commission, vide order dated 22.03.2016 allowed the complaint, by holding as under:-

“The next question, which falls for consideration, is, as to whether the complainants are entitled to refund of the amount deposited by them with interest or not. Clauses 11(a) and 11(b) of Independent Floor Buyer’s Agreement dated 10.02.2011 (Annexure C-2), 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 Parties were to complete the construction of the floor, in question, within a period of 24 months from the date of execution of the Agreement dated 10.02.2011 i.e. by 09.02.2013. However, as admitted by the Opposite Parties, they failed to offer possession within the aforesaid stipulated period of 24 months and vide letter dated 05.06.2013 (Annexure R-3) informed the complainants that they (Opposite Parties) 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 Parties also informed the complainants 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 Parties also informed the complainants that if they did not agree to delay of 12 months, they (Opposite Parties) will cancel the allotment and refund the amount deposited with 9% interest. Admittedly, there was no stay as on 12.12.2012 on construction activity. As per own averment of the complainants, in Para 5 of the complaint, they agreed to extension of the period for further 12 months for offering possession of the independent floor, in question. In fact, stay on construction activities was in force for a period of 8 months only. However, the Opposite Parties failed to deliver possession of the floor, in question, complete in all respects, to the complainants within the extended period of 12 months, which expired on 10.02.2014. Till date, or till the date of filing the complaint, which was filed on 28.10.2015, possession has not been offered by the Opposite Parties to the complainants, what to talk of compensation, as envisaged under Clause 13 of the Independent Floor Buyer’s Agreement dated 10.02.2011. Nothing has been placed, on record, by the Opposite Parties, by way of documentary evidence, to the effect that they (Opposite Parties) ever offered possession of the floor, in question, to the complainants during the extended period of 12 months or thereafter or till the filing of the complaint. As conceded during arguments, the Opposite Parties will take another period of three months to offer possession. There is clear cut admission by the Opposite Parties that there was delay in offering possession and they even failed to deliver possession after seeking one year extension, which expired on 10.02.2014, and are not in a position to do so even today. While seeking extension, the Opposite Parties had offered the complainants either to extend the period or seek refund alongwith 9% interest. In the face of such apparent and clear deficiency and delay of more than two years in offering possession, even after the extended period of one year, which elapsed on 10.02.2014, objection taken by the Opposite Parties that the complainants did not make payment of installments in time, being afterthought and unsustainable, stands rejected. There is no specific averment in the written statement that as on date, as to what amount, is payable by the complainants as per Construction Linked Payment Plan. Though the Opposite Parties vide Annexure R-4 (Colly.) have placed copies of letters/reminders sent to the complainants regarding outstanding payment(s) but perusal of these annexures clearly reveal that the complainants made payment thereof, as is evident from the receipts placed on record, vide Annexure R-4 (Colly.). The complainants had made payments in the sum of Rs.51,91,736/- to the Opposite Parties, which was undoubtedly their hard earned money. Clearly they needed a residential unit and instead of seeking refund, as offered by the Opposite Parties, they agreed to extension of one year, which too expired on 10.02.2014. When the Opposite Parties themselves failed to deliver possession to the complainants even by the extended period and till date, they are liable to refund the entire amount paid by the complainants with interest. Further, when the Opposite Parties were ready to refund the deposited amount in June, 2013 (Annexure R-3) alongwith 9% interest, their objection to refund the deposited amount is not tenable. As regards reliance on Clause 14 of the Independent Floor Buyer’s Agreement dated 10.02.2011 by the Opposite Parties, it may be stated here that the instant complaint was filed on 28.10.2015 seeking refund of the deposited amount, itself amounts to giving notice for terminating the Agreement. As already stated above, possession was to be delivered by  09.02.2013 and the complainants very fairly, on the asking of the Opposite Parties, extended the same for one year i.e. up to 10.02.2014. Even the extended period expired on 10.02.2014 and still the Opposite Parties are not in a position to offer possession. The complainants are, thus, entitled to refund of Rs.51,91,736/- with simple interest @15% per annum. By not refunding the deposited amount, the Opposite Parties were deficient in rendering service.”

 

              Similar view was reiterated by this Commission, in another similar case, titled as Nisha Gupta Vs. DLF Homes Panchkula Pvt. Ltd. and ors., consumer complaint no.295 of 2015 decided on 18.04.2016 (alongwith 3 connected cases). In view of the above, no help, therefore can be drawn, by the opposite parties, from the pleas raised by them, for non-delivery of possession of the constructed unit, to the complainant.   

13.        The next  question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not?. According to Section 17 of the Act, a consumer complaint could be filed by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to her. In the instant case,  it is evident, that Agreement was executed at Chandigarh (at page 50 of the file).  Not only this, the provisional allotment letter dated 23.02.2011, in respect of the unit, in question, was issued by the Chandigarh Office of the opposite parties as the same bore the address as “DLF Homes Panchkula Private Limited, Shop No.101-102, DLF City Centre, IT Park, Kishangarh, Chandigarh, U.T.”. Since, as per the 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.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 
14.        The next question, that falls for consideration, is, as to whether, this Commission has pecuniary jurisdiction, to entertain and decide this complaint or not? It may be stated here, that the complainant has sought refund of the amount of Rs.63,43,959/- paid by her, towards price of the same, alongwith interest @18% p.a., from the respective dates of deposits, till realization; compensation to the tune of Rs.5 lacs, for mental agony  physical harassment and deficiency in rendering service; and cost of litigation, to the tune of Rs.70,000/-, aggregate value whereof [excluding the interest claimed] came to be around Rs.69,13,959/- and, as such, fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint, for the reasons given hereinafter.

              Now, the question, that arises for consideration, is, as to whether, interest @18% p.a., claimed by the complainant, on the amount of Rs.63,43,959/-, aforesaid, was required to be added, to the value of the reliefs claimed, or not, for determining the pecuniary Jurisdiction of this Commission.   In Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), a case decided by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, the facts were that the complainant filed a Consumer Complaint, before the State Consumer Disputes Redressal Commission, Haryana, claiming an amount of Rs.18,33,000/-, with interest @18% per annum, on this amount, from the date of claim, till realization. It also claimed suitable damages, on account of loss caused to it. The State Consumer Disputes Redressal Commission, vide order dated 08.08.2002, disposed of the complaint, with liberty reserved to the complainant, to approach the National Consumer Disputes Redressal Commission, holding that if interest @18% P.A. was allowed, on the amount of Rs.18,33,000/- it (amount) will exceed Rs.20 lacs (at that time the pecuniary Jurisdiction of the State Consumer Disputes Redressal Commission was upto Rs.20 lacs), for which it had no pecuniary Jurisdiction. Feeling aggrieved, the complainant/appellant filed the aforesaid appeal. The National Consumer Disputes Redressal Commission, in the aforesaid appeal, held as under:-

“Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs.18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

Accordingly, while accepting appeal, the order dated 8.8.2002 is set aside. On complaint being returned by the State Commission, the appellant is permitted to file it before the appropriate District Forum for being decided on merits in accordance with law. No order as to costs”.

15.        Not only this, a similar question regarding pecuniary Jurisdiction, came up for consideration before this Commission, in a case titled as Karnail Singh  and another Vs. M/s Emaar MGF Land Limited, Consumer Complaint No.05 of 2014 decided on 09.04.2014. In that case also, an objection was raised by the Opposite Parties (Emaar MGF Land Limited) that since the complainants,  had sought refund of amount of Rs.62,60,750/- alongwith interest @24% P.A., from the respective dates of deposits, alongwith compensation and litigation costs, as such, if the reliefs are clubbed together alongwith interest claimed, the aggregate value therefore fell above Rs.1 crore, and as such, this Commission had no pecuniary Jurisdiction to entertain the complaint. In that case, while rejecting said objection of the Opposite Parties, this Commission, by placing reliance on Shahbad Cooperative Sugar Mills Ltd.' case (supra),  came to the conclusion that it had pecuniary Jurisdiction to entertain the complaint, and ordered refund of the amount alongwith interest, compensation and litigation costs, vide order dated 09.04.2014. Appeal filed by the Opposite Parties (Emaar MGF Land Limited) against the order dated 09.04.2014, before the National Commission, was dismissed with punitive damages of Rs.5 lacs. Still feeling aggrieved, the Opposite Parties, filed Special Leave to Appeal (C) No.29392 of 2014, which was also dismissed by the Hon'ble Supreme Court of India, in limine, vide order dated 14.11.2014. In this manner, the findings given by this Commission in Karnail Singh and another's case (supra), by placing reliance on Shahbad Cooperative Sugar Mills Ltd.'s case (supra), to the effect that it has pecuniary Jurisdiction to entertain and decide the complaint, in the manner, referred to above, were upheld by the National Commission, and also the Hon'ble Supreme Court of India. Recently, in the case of Denis Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided On 08 Mar 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the submission of Counsel for the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.
16.        To defeat claim of the  complainant, another objection was raised by Counsel for the opposite parties, that the complainant is a speculator, as she has purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, she would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not.

              It may be stated here that there is nothing, on the record to show, that the complainant is 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 parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, 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,  Revision Petition No. 3861 of 2014, decided on 26.08.2015. The principle of law, laid down, in the aforesaid cases, 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. The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Counsel for the opposite parties, therefore, being devoid of merit, is rejected.  

17.        The next question, that falls for consideration, is, as to whether, time was essence of the contract or not. It may be stated here that the plea taken by the opposite parties, in this regard, is also devoid of merit, in view of Clauses 11 (a) and 15 of the Buyer’s Agreement, according to which, possession of the unit, in question, was to be delivered within a maximum period of 24 months, from the date of execution of the same, failing which they were liable to pay compensation/penalty @ Rs.10/- per square feet of the saleable area, per month, for the period of delay, in case they encountered force majeure circumstances. The time was, thus, unequivocally made the essence of contract. The plea taken by the opposite parties, in this regard, also stands rejected.
18.        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 complainant hired the services of the opposite parties, for purchasing the unit, in the manner, referred to above. According to Clause 11 (a) of the  Agreement, the opposite parties were 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 complainant has 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 her, as she falls within the definition of consumer. In this view of the matter, the objection of the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

19.        The next question, that falls for consideration, is, as to whether, the ground taken by the opposite parties, 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. It may be stated here that the objection raised by the opposite parties, in this regard, deserves rejection, in view of the judgments 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 and Praveen Kumar Arora and another Vs. Emaar MGF Land Limited, Consumer Complaint no.198 of 2015, decided on 04.04.2016, 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 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, and also in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite parties, stands rejected.

20.        The opposite parties are also guilty of adoption of unfair trade practice. It is on record that the complainant booked the unit, in question, in the project aforesaid, on 16.02.2011. She was allotted unit, vide letter dated  23.02.2011, on which date, she had paid an amount of Rs.4 lacs. Buyer’s Agreement was not put for signing in a reasonable time, say two  to three months. She continued to make payment and when Buyer’s Agreement was got signed, on 18.08.2011, she had already paid an amount of Rs.21,68,524/-. By not offering Buyer’s Agreement, for signing in a reasonable time, the opposite parties also committed unfair trade practice. The complainant is a widow. Her interest needs to be protected.
21.        The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.63,43,959/- deposited by her. It is an admitted fact that the opposite parties are unable to deliver  possession of the unit, in question, for want of 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 complainant. The complainant, cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. As stated above, the complainant being a widow, had expectations to settle in the unit, after lapse of 24 months, from the date of execution of the Buyer’s Agreement i.e. from 18.08.2011. However, her hopes were not fulfilled when possession of the unit, in question, was not even offered to her, by the stipulated date. Compelled under the circumstances, she even agreed to extend the period, to get possession, by 12 months. As per information supplied by Counsel for the opposite parties, even today construction of the unit is not complete and firm date to hand over possession is not in sight. The opposite parties have failed to perform their part of the Agreement. The act in not handing over possession in time, as per the Agreement, and also in extended period, is a material deficiency, in providing service on the part of the opposite parties. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the unit, in question. The  complainant is, thus, entitled to get refund of amount deposited by her.

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

22.        Whether the complainant is 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 parties were charging interest @15% P.A., for a delay of first 90 days, and, thereafter, penal interest @18% P.A. In view of above facts, the complainant is certainly entitled to get refund of the amount deposited by her, to the tune of Rs.63,43,959/- alongwith interest @15% P.A., from the respective dates of deposits, till realization. (Above rate of interest is less than the rate of interest charged by the Opposite Parties for delayed payment i.e. 18% P.A.)

23.        No doubt, a plea was also taken by the opposite parties, that the complainant is only entitled to compensation, for the period of delay in delivery of possession of the unit, and as such, it is not open to her, to seek refund of the deposited amount. It may be stated here that since it has been held above that the complainant cannot be made to wait for an indefinite period, for delivery of possession of the unit, at the whims and fancies of the opposite parties, as such, she has been held entitled to the refund of amount deposited alongwith interest and compensation. Had the complainant sought possession of the unit, in question, the matter would have been different. In those circumstances, it would have been held that the complainant is held entitled to only compensation, for the period of delay, besides delivery of possession; compensation for mental agony and physical harassment, as also litigation expense. In this view of the matter, the plea taken by the opposite parties, in this regard, is rejected. 
24.        No other point, was urged, by Counsel for the parties.  
25.        For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-
    1.   To refund an amount Rs.63,43,959/-, to the complainant, alongwith interest @ 15% P.A., from the respective dates of deposits onwards.
    2.   To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices of the real estate.
    3.   To pay cost of litigation, to the tune of Rs.50,000/- to the complainant.
    4.   The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite parties, 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.
26.        However, it is made clear that, in case, the complainant has 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 her (complainant).
27.        Certified copies of this order be sent to the parties, free of charge.
28.        The file be consigned to Record Room, after completion.

Pronounced.

02.06.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

[DEV RAJ]

MEMBER

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.