Chandigarh

StateCommission

CC/174/2015

Sushila Devi - Complainant(s)

Versus

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

Gaurav Bhardwaj,Adv.

26 Oct 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	174 of 2015
Date of Institution	:	14.08.2015
Date of Decision	:	26.10.2015

 

1. Sushila Devi wife of Sh.Mohinder Singh Malik, resident of House No.45, Sector 10, Panchkula.
2. Mohinder Singh Malik son of Bhagwan Singh, resident of House No.45, Sector 10, Panchkula.

……Complainants

V e r s u s

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

….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.Gaurav Bhardwaj, Advocate for the complainants.

                    Sh.Avinit Avasthi, Advocate for the Opposite Party.

 

JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

               

                The complainants purchased an independent floor, measuring 1550 square feet, in DLF Valley, Panchkula, by depositing an amount of Rs.4 lacs, with the Opposite Party, on 30.09.2010. Booking in respect of unit No.E-2/9, Second Floor, DLF Valley, Panchkula, was confirmed vide letter dated 09.11.2010 Annexure C-1. With the said letter, two years construction linked payment plan was also sent to the complainants. The complainants continued to make payments, as per schedule and when the Independent Floor Buyer’s Agreement (in short the Buyer’s Agreement) was executed on 14.01.2011, they had already deposited an amount of about Rs.14 lacs, with the Opposite Party. Total price of the unit, including External Development Charges and Infrastructure Development Charges, maintenance security and penal interest, was fixed at Rs.45,44,599.78Ps. It is so evident on perusal of Schedule of Payments (Annexure-III), at page 58 of the file. Apart from above amount, the complainants were also required to pay an amount of Rs.1,06,408/- towards service tax.

2.        As per Clause 11 (a) of the Buyer’s Agreement, possession of the unit was contemplated to be delivered within 24 months, from the date of execution of the same. The complainants continued to make payment, on different dates. Receipts have been placed on record, as Annexures C-8 to C-14. The complainants received a letter dated 05.06.2013 Annexure C-15 from the Opposite Party, intimating them that on account of some stay granted by the Hon'ble Supreme Court of India, construction activities at the project site had stopped. The case has finally been decided on 12.12.2012 and limitation imposed upon, not to raise construction, stands vacated. It was further intimated that an effort would be made to complete the construction activities at the project, with delay of 12 months. In the alternative, an option was given to them, to get refund of their amount deposited, with simple interest @9% P.A.

It is on record that after receipt of above letter, the complainants paid an amount of about more than Rs.8½ lacs to the Opposite Party. Above act would mean that the complainants had agreed to extend period of construction by 12 months. Receipts of payment have been placed on record, as Annexures C-15 to C-19.

3.        It is specific case of the complainants, that to make payment towards price of the unit, they had raised loan of about Rs.14 lacs, from a bank. By the end of September 2013, the complainants had paid an amount of Rs.39,74,310.62Ps., to the Opposite Party (almost 85% of the total sale consideration). The complainants continued to wait for delivery of possession of the unit. Period of three years (24 months as per the Buyer’s Agreement and extended 12 months on issuance of letter dated 05.06.2013), to hand over possession, expired on 13.01.2014. Many requests were made by the complainants, to the Opposite Party, to hand over possession of the unit, in question, however, they failed to get any positive response. It is case of the complainants that balance 15% amount, towards price of the unit was to be paid at the time of delivery of possession thereof. They noticed in the month of August 2015 that there was no development in sight, the complainants were compelled to file this complaint alleging deficiency in providing service and adoption of unfair trade practice, on the part of the Opposite Party. Refund of the amount deposited alongwith interest @18% P.A., was claimed. Over and above, compensation of Rs.10 lacs, for deficiency in providing service, adoption of unfair trade practice, mental agony and physical harassment, as also litigation cost to the tune of Rs.55,000/- were also claimed. 
4.        Upon notice, reply was filed by the Opposite Party, wherein assertions made by the complainants were controverted. It was alleged that the complainants being speculators, had purchased the unit, in question,  for resale, as and when there is escalation in prices of the real estate, in future, to earn profit, as such, they did not fall within the definition of ‘consumer’, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986 (in short the  Act). It was stated that terms and conditions of the Buyer’s Agreement are binding upon the parties and on account of Arbitration Clause contained in the Buyer's Agreement, this Commission has no Jurisdiction to entertain and decide the complaint, and let the matter be placed before an Arbitrator for adjudication. It was further 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. It was further said that the complainants 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 Party, to them, as per Clause 15 of the Buyer’s Agreement.
5.         Both the parties led evidence, in support of their case 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 the case, very minutely. 
7.       Sh.Gaurav Bhardwaj, Advocate, Counsel for the complainants, by making reference to facts mentioned in the earlier part of this order, stated that it is a case of failed promise on part of the Opposite Party i.e. after receipt of substantial amount (about 85% of the entire sale consideration), possession of the unit, in question, has not been delivered to the complainants, within the stipulated date. It is stated that the above act amounted to deficiency in providing service and further by not giving any firm date of possession, even now, the Opposite Party has also indulged into unfair trade practice. It is stated by him that it is a good case, where the complaint needs to be allowed in toto.
8.       The above contentions have been opposed by Sh.Avinit Avasthi, Advocate, Counsel for the Opposite Party. It is stated that in terms of preliminary objections taken in the written reply, the complaint deserves to be dismissed. Possession could not be delivered, in time, because construction activities were stopped on account of an order passed by the Hon'ble Supreme Court of India, mentioned above. For that reason, the construction activities at the project site remained stayed for about 8 months. In response to letter dated 05.06.2013, the complainants deposited further amount, which obviously means that they had given consent to extend the date of possession by 12 months. It is further stated that the complainants are not the consumers, as defined under Section 2 (1) (d) of the Act. Investment was made by them, in the unit, for future gains. It was also submitted that in the face of existence of an Arbitration Clause in the Buyer’s Agreement, to settle dispute between the parties, this Commission has got no Jurisdiction to entertain and decide the complaint. It is averred that time was not essence of the contract. The complainants at the best can claim penal amount, as envisaged in Clause 15 of the Buyer’s Agreement, qua delay caused to deliver possession of the unit.
9.       After hearing arguments of Counsel for the parties, and on going through the evidence, on record, we are inclined to grant relief to the complainants, in terms of prayer made by them, with some modification.
10.       It is not in dispute that the unit was allotted to the complainants, vide letter dated 09.11.2010. By that time, they had already paid an amount of Rs.4 lacs, to the Opposite Party. After receipt of above letter, the complainants continued to make payments. When Buyer’s Agreement was executed on 14.01.2011, they had already paid an amount of about Rs.14 lacs. In terms of the Buyer’s Agreement also, the complainants continued to make further payments. By the end of August 2015, they had paid an amount equal to 85% of the entire sale consideration towards the said unit.
11.       It is also not in dispute that as per Clause 11 (a) of the Buyer’s Agreement, possession of the unit, after complete construction was to be delivered to the complainants within 24 months. In case of failure of the same, as per Clause 15 of the Buyer’s Agreement, they were entitled to get penal compensation @Rs.10/- per square feet, per month, for the period of delay. It is an admitted fact 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. The Opposite Party by making reference to the above mentioned fact, wrote a letter dated 05.06.2013 Annexure C-15 seeking consent of the complainants to extend period, to complete construction by 12 months. Option was also given to the complainants, to seek refund of their amount deposited, alongwith simple interest @9% P.A. The complainants exercised former option and after receipt of above letter, paid an amount of about more than Rs.8 ½ lacs by the month of August 2015, meaning thereby that the complainants were interested in getting delivery of possession of the unit, in question. 
12.       It appears that the complainants belong to a moderate family. Complainant No.2 had retired from service, in the year 2004. They had four children. To make payment against price of the unit, they had raised loan, to the extent of Rs.14 lacs, from a bank, on payment of interest @10.75%. They had repaid the said amount to the bank. Above fact is coming out from the document Annexure C-26. Their hope to get possession of the unit, in question, was shattered. Completion of construction of the unit, in the near future, is not expected. In the reply filed by the Opposite Party, no firm date to hand over possession of the unit has been given. At the time of arguments, Counsel for the Opposite Party very hesitantly disclosed that construction at the project site is not complete. Even today, no firm date of completion of construction of the said unit can be given.  
13.       Above act of the Opposite Party amounted to deficiency in providing service. It has also indulged into unfair trade practice, by making false promises to the complainants. As per the Buyer’s Agreement, construction of unit was to be completed by 13.01.2013 (24 months from 14.01.2011). However, it was not done. The complainants were eager to get a living unit. Keeping that in mind, they even agreed to extend 12 months, to complete the construction, in terms of letter dated 05.06.2013 Annexure C-15, written by the Opposite Party. In view of the extended time, possession was to be delivered by 13.01.2014. No attempt was made to complete the construction and hand over possession of the unit to the complainants even by that date. The present complaint was filed in the month of August 2015. Even on the date, when arguments were heard, qua completion of construction of the unit, in question, no firm date was given by the Opposite Party. Above facts entitled the complainants to seek refund of their amount deposited.
14.       Contention of Counsel for the Opposite Party that the complainants are not consumers; they have spent in the unit, to gain profits, in future deserve to be rejected, out-rightly.

As disclosed at the time of arguments, complainant No.2 retired from service, in the year 2004. They have four children. They raised loan from a bank to purchase the unit, in question. It may be, to settle one of their children, in the said property, the complainants had purchased the said unit. There is nothing on record, to show that the complainants were indulging in sale and purchase of the property, on regular basis, to earn huge profits. Otherwise also, the mere fact that it was a residential unit, is sufficient to prove that the same was to be used by the complainants, for their residential purpose. Above objection needs to be rejected, in view of ratio of the judgment of the National Consumer Disputes Redressal Commission, New Delhi (in short the National Commission), in the case of Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, wherein it was held that the buyer(s) of a residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. View expressed by the National Commission, in the above case, was also expressed and relied upon by this Commission, in a similar case titled as Guninder Jeet Salh Vs. M/s Emaar MGF Land Limited and another, consumer complaint No.113 of 2015 decided on 23.09.2015.

15.       Further contention was raised by Counsel for the Opposite Party that in the face of existence of an Arbitration Clause, in the Buyer’s Agreement, this Commission has no Jurisdiction to decide dispute, between the parties. To say so, reliance has been placed on the ratio of judgment titled as Sudarshan Vyapar Pvt. Ltd. and another's  Vs. Madhusudan Guha and another (2013) 1 CALLT 546 (Calcutta HC) and M/s S.B.P. and Co. Vs. M/s Patel Engineering Limited and another, AIR 2006 SC 450.

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

16.       Another objection raised by Counsel for the Opposite Party that time was not essence of the contract is also devoid of merit, in view of Clauses 11 (a) and 15 of the Buyer’s Agreement, according to which, possession of the plot, in question, was to be delivered within a maximum period of 24 months, from the date of execution of the same, failing which it was liable to pay compensation/penalty @ Rs.10/- per square feet of the saleable area, per month, for the period of delay. The time was, thus, unequivocally made the essence of contract. The plea of Counsel for the Opposite Party in this regard also stands rejected.
17.       Whether the complainants are entitled to compensation, for mental agony and physical harassment caused to them, at the hands of the Opposite Party, as also escalation in prices, or not.

It is not disputed that the complainants belong to a middle class family. They have raised loan to purchase the unit, in question, from a bank. They had expectations to settle in the unit, after lapse of 24 months, from the date of execution of the Buyer’s Agreement i.e. from 14.01.2011. However, their hopes were not fulfilled when possession of the unit, in question, was not offered to them, by the stipulated date. Compelled under the circumstances, they even agreed to extend the period, to get possession, by 12 months, against letter dated 05.06.2013. 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. The Opposite Party has failed to perform its part of the Buyer’s Agreement. The act in not handing over possession in time, as per the Buyer’s Agreement, and also extended against letter dated 05.06.2013, is a material deficiency, in providing service on the part of the Opposite Party. Thus, the complainants are certainly entitled to be compensated for mental agony and physical harassment suffered by them, as also escalation in prices.

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

There is no dispute that for making delayed payments, as per Clause 39 (a) of the Buyer’s Agreement, the Opposite Party was charging interest @15% P.A., for a delay of first 90 days, and, thereafter, penal interest @18% P.A. In view of above facts, the complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.39,74,310.62Ps., alongwith interest @15% P.A., from the respective dates of deposits, till realization. 

19.       No other point, was urged, by Counsel for the parties.
20.       For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Party is directed, as under:-
    1.   To refund an amount Rs.39,74,310.62Ps., to the complainants.
    2.   To pay simple interest @ 15% P.A., to the complainants, from respective dates, on the amount aforesaid (total Rs.39,74,310.62Ps.), when deposited with them. (Above rate of interest is less than the rate of interest charged by the Opposite Party for delayed payment i.e. 18% P.A.)
    3.   To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.
    4.   To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants.
    5.           To pay the entire ordered amount, in Clauses (i), (iii) and (iv), including simple interest @ 15% P.A., as mentioned in Clause (ii) above, within a period of three months, from the date of receipt of a certified copy of this order, failing which it shall be liable to pay to the complainants, penal simple interest @ 18% P.A.; qua the entire amount assessed, from the date of default till realization, i.e. on Clauses (i), (iii) and (iv).
21.           Certified copies of this order be sent to the parties, free of charge.
22.       The file be consigned to Record Room, after completion.

Pronounced.

26.10.2015

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.