Chandigarh

StateCommission

CC/137/2016

Atul Gupta - Complainant(s)

Versus

DLF Homes Panchkula - Opp.Party(s)

Sh. Savinder Singh Gill, Adv.

02 Aug 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                     UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	137 of 2016
Date of Institution	11.04.2016
Date of Decision	02.08.2016

 

 

Atul Gupta s/o Sh. Sohan Lal Gupta r/o #997, B-2, Ward No.9, Vishvkarma Colony, Pinjore, Distt. Panchkula, currently residing in 1973 SHERWOOD, DR SE MARIETTA, Georgia, through his Power of attorney holder, Sh. Suraj Gupta s/o Sh. Sohan Lal Gupta r/o #997, B-2, Ward No.9, Vishvkarma Colony, Pinjore, Distt. Panchkula.

                                                       .…Complainant

Versus

 

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

…..Opposite Party.

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

MR. DEV RAJ, MEMBER

              MRS. PADMA PANDEY, MEMBER.

 

Argued by:

 

Sh. Savinder Singh Gill, Advocate for the complainant.

Ms. Ekta Jhanji, Advocate for the Opposite Party.

               

PER DEV RAJ, MEMBER

              In brief, the facts of the case, are that in order to own a residential independent floor in Panchkula for his family and personal use, the complainant booked a residential independent floor (hereinafter to be referred as the unit) with the Opposite Party, having saleable area of 1550 sq. ft. in DLF Valley, Panchkula and paid Rs.4,00,000/- as the booking amount vide receipt dated 18.3.2011 (Annexure C-1). He was allotted unit no.DVF-D4/10-SF in the   said project by the Opposite Party for a total consideration of Rs.53,19,600/-, vide allotment letter dated 21.03.2011 (Annexure C-2). The complainant opted for 2 Years Construction Linked Plan. An Independent Floor Buyer’s Agreement was executed between the complainant and the Opposite Party on 02.01.2012 (Annexure C-6). It was further stated that the complainant also took housing loan to the tune of Rs.36,50,000/- from Dewan Housing Finance Corporation Limited. @11% floating for the period of 240 months (Annexures C-4 & C-5). As per  the statement of account/ledger for the said unit, the complainant, in all, paid an amount of Rs.52,54,007/- to the Opposite Party till 05.02.2016. It was further stated that as per Clause 11(a) of the Agreement, possession of the unit was to be given by the Opposite Party within 24 months (i.e. 2 years) from the date of execution of the said Agreement. It was further stated that the period of 24 months expired on 02.01.2014 but the possession of the allotted unit has not been offered by the Opposite Party till date. It was further stated that the construction is still going on and the Opposite Party is still non-committal on the possession date.  

2.           It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Party, to refund Rs.52,54,007/-  alongwith interest @18% per annum, from respective dates of deposits; pay Rs.5,00,000/- as compensation for physical harassment and mental agony and Rs.1,00,000/- as litigation expenses.

3.           The Opposite Party in its written statement took up certain preliminary objections, to the effect, that the complainant, being investor, had purchased the flat, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act; that the parties were bound by the terms and conditions mentioned in the Independent Floor Buyer’s Agreement dated 02.01.2012 (Annexure C-6) and the dispute being of contractual nature, could not be considered under the 1986 Act. Apart from above objections, the Counsel for the Opposite Party, during arguments, also took an objection as regards referring the matter to the Arbitrator as there exists an Arbitration Clause 55 in the Independent Floor Buyer’s Agreement dated 02.01.2012 (Annexure C-6). 

4.           On merits, it was admitted that the complainant purchased the unit, in question, from the Opposite Party, total value whereof was Rs.53,19,100.00. Execution of Buyer’s Agreement between the complainant and the Opposite Party was also admitted. It was also admitted that the complainant, till date, had paid an amount of Rs.52,54,007/-  to the Opposite Party. It was stated that there is a DLI of Rs.23,965.80 levied against the account of the complainant on account of delay of 799 days, which he has not paid. It was further admitted that as per clause 11(a) of the Agreement, the possession of the allotted unit, was to be handed over to the complainant within 24 months from the signing of the Agreement subject to force majeure conditions or due to reasons beyond the control of the Opposite Party. It was further stated that the complainant was informed as regards the stay granted by the Hon’ble Supreme Court on the construction activity at the project site. It was further stated that an exit offer vide letter dated 08.07.2013 (Annexure R-11) was given to the complainant, which clearly portrait the exit plan, to carry on with the project and gave the Opposite Party another year to complete the project or to get the refund of the amount deposited till date with 9% interest. However, the complainant showed interest in the project. It was further stated that Opposite Party has already completed construction of 771 independent floors on 257 plots and another 1020 built up units are near completion. It was further stated that out of 1791 built up units, occupation certificate for 771 (257 plots) units have been received and as on date, possession of 140 units have been offered to the owners. It was further stated that proper water connection and electricity supply is in place and full housekeeping and maintenance services are being provided through leading multinational company namely Jones Lang Lasalle (JLL). It was further stated that the Opposite Party has almost completed the construction and the possession is being delivered. It was further stated that occupation certificate of the said unit has already been issued by the competent authority vide letter dated 7.1.2016 and possession shall soon be offered to the complainant. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

5.           The complainant filed rejoinder, wherein, he reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Party.

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

7.           The Opposite Party, in support of its case, submitted the affidavit of Sh. Shiv Kumar, its Authorized Signatory, by way of evidence, alongwith which, a number of documents were attached. 

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

9.           It is evident that the complainant was allotted unit no.DVF-D4/10-SF in DLF Valley, Panchkula by the Opposite Party and Independent Floor Buyer’s Agreement was executed at Chandigarh on 02.01.2012 (Annexure C-6). The total price for the said independent floor, as depicted in the Agreement, was Rs.53,19,100/-  and the complainant paid an amount of Rs.52,54,007/-  to the Opposite Party, as per Statement of Customer Ledger (Annexure C-7), as also admitted by the Opposite Party. It is also evident that the complainant obtained home loan of Rs.36,50,000/- from DHFL as depicted in Statement of Account as on 01.04.2015 (Annexure C-5), out of which an amount of Rs.28,07,922/- was disbursed by the said Bank. Further as per Clause 11(a) of the Agreement, the Opposite Party was to complete the construction of the said independent floor within a period of 24 months from the date of execution of the said Agreement. It is also admitted by the Opposite Party in Para 8 of the preliminary objections of its written statement that vide letter dated 08.07.2013 (Annexure R-11), the Opposite Party sought further time of 12 months, in addition to 24 months, to complete the construction work. The complainant was also given the option to seek refund alongwith 9% interest letter dated 08.07.2013 (Annexure R-11). However, the complainant agreed to a further period of 12 months in handing over of possession.

10.         During arguments, Counsel for the Opposite Party raised objection 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 Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Party, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

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

 

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

11.         To defeat claim of the complainant, the next objection raised by the Opposite Party was that the complainant, being investor, had purchased the flat, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainant is a property   dealer, and is indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the Opposite Party, mere bald assertion to that effect, cannot be taken into consideration. The fact that complainant raised loan of Rs.36,50,000/- @11% floating for 240 months, for making payment towards part price of the apartment, coupled with the fact that he is seeking possession indicate that he purchased the apartment, in question, for his residence. The complainant has categorically averred in his complaint that he required this unit for his family and personal use. Otherwise also, in a case titled as  Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. ., 2016 (1) CPJ 31, it was held that the buyer(s) of the  residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs  Nirmala Devi Gupta, 2016 (2) CPJ 316. The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the 1986 Act. Such an objection, taken by the Opposite Party, in its written reply, therefore, being devoid of merit, is rejected.  

12.         Another objection was raised by the Opposite Party that the complainant filed this complaint to amend/modify/rewrite the concluded Agreement duly executed between the allottee and the Opposite         Party, purely to invoke jurisdiction of this Commission. It was further stated that the complainant was virtually inviting this Commission to assume powers conferred under the Civil Court and, therefore, this Commission did not have the jurisdiction to consider the present complaint. It may be stated here, that the complainant hired the services of the Opposite Party for purchasing the unit, in question, in the manner, referred to above. According to Clause 11(a) of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was to complete construction of the said Independent Floor within a period of twenty four months, from the date of execution of the same (Agreement). Section 2 (1) (o) of the Act, defines ‘service’ as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

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

14.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to delivery of possession of the unit. Clauses 11(a) and 11(b) of Independent Floor Buyer’s Agreement dated 02.01.2012 (Annexure C-6), being relevant, are extracted hereunder:-

“11(a) Schedule for possession of the said Independent Floor:-

The Company based on its present plans and estimates and subject to all just exceptions, endeavors to complete construction of the said Independent Floor within a period of twenty four (24) months from the date of execution of the Agreement unless there shall be delay or failure due to Force majeure conditions and due to reasons mentioned in Clause 11(b) and 11(c) or due to failure of Allottee to pay in time the Total Price and other charges, taxes, deposits, securities etc and dues/payments or any failure on the part of the allottee to abide by all or any of the terms and conditions of this Agreement.

11(b) Delay due to reasons beyond the control of the company:-

If the possession of the Said Independent Floor is delayed due to Force Majeure conditions, then the company shall be entitled to extension of time for delivery of possession of the said Independent Floor. The company during the continuance of the Force Majeure reserves the right to alter or vary the terms and conditions of the agreement or if the circumstances so warrant, the company may also suspend the development for such period as is considered expedient and the allottee shall have no right to raise any claim compensation of any nature whatsoever for or with regard to such suspension.”

As stated above, according to Clause 11(a) of the  Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was liable to deliver physical possession of unit, within a period of 24 months, from the date of execution of the same (Agreement).

In the event of failure to deliver possession, as per Clause 15 of the Agreement, the complainant was entitled to get penal compensation @Rs.10/- per square feet, per month, of the saleable area, for the period of delay. It is true that in some litigation, the Hon’ble Supreme Court of India stayed construction at the project site and order passed remained in force from 19.04.2012 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 complainant was sought, vide letter dated 08.07.2013 (Annexure R-11), to complete construction within further 12 months. Option was also given to the complainant, to seek refund of his amount deposited, alongwith simple interest @9% P.A. The complainant exercised former option and continued to make payment(s) thereafter and by the time, the complaint was filed, he had paid an amount of Rs.52,54,007/- (more than 90% of the sale consideration), towards basic sale price and other charges. Reading of written statement makes it very clear, that still no firm date to hand over possession of the unit has been given. Taking into account 12 months extension, Opposite Party was required to deliver possession on or before 02.01.2015, but not later than that. However, it is an admitted fact that possession of the unit, in question, has not been offered, even by the date of filing the instant complaint, or even till date, despite the fact that more than 90% of the sale consideration has been paid by the complainant, apparently for want of completion of amenities at the site. No doubt, the Opposite Party averred in its written version, that possession of unit, is expected to be delivered to the complainant, shortly, yet, it failed to place, on record, any cogent and convincing evidence, that construction of the unit is going to be complete in the near future and also that development in area is in progress. By making a misleading statement, that possession of the unit, was to be delivered within the maximum period of 24 months from the date of execution of the Agreement and within further extended period of 12 months i.e. latest by 02.01.2015, and by not abiding by the commitment, made by the Opposite Party, it was not only deficient, in rendering service, but also indulged into unfair trade practice. The argument of the Opposite Party that delay in handing over possession of independent floor was attributable due to delay in receiving statutory approvals from the competent authorities, the same being absolutely beyond its control, is not tenable.  The Independent Floor Buyer’s Agreement was executed on 02.01.2012 and before execution thereof, the Opposite Party ought to have obtained all the approvals. If permissions/approvals for revision in layout plans and service plans were sought on 11.03.2013 and 20.05.2013, approval for which was also received in due course of time, the initial time taken for seeking such approvals amounts to clear deficiency on the part of the Opposite Party and in the absence of any justified reason for not doing so earlier, time consumed in obtaining such approvals would not amount to force majeure condition. The plea taken, therefore, is of no help to the Opposite Party. The complainant is certainly entitled to physical possession of the unit, in question.

15.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit in question within the stipulated period of 24 months and extended period of 12 months on account of force majeure conditions. As stated above, in the instant case, the Opposite Party has not delivered possession within 24 months as stipulated in Independent Floor Buyer’s Agreement and thereafter within extended period of 12 months, from execution of the Agreement on 02.01.2012 i.e. by 01.01.2015. No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, was incorporated but it does not mean that the intention was that even in the event of inordinate delay, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.10/- per sq. ft. per month, which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view, Clauses 11(a) and 15 were meant for computing compensation, in case of a minor delay in delivery of possession.  If the argument of the Opposite Party is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act. Recently in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the case, referred to above, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, would meet the ends of justice.

16.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to him, for inordinate delay in delivering physical possession of the unit to him, by the Opposite Party, by the promised date in the Agreement or latest by 01.01.2015 i.e. within the extended period. The complainant purchased the unit, with the hope that he will have a house to live in. The possession of unit, in question, has not been offered to the complainant, till date, what to speak of delivery thereof. The complainant, thus, underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Party. The compensation in the sum of Rs.5 Lacs claimed by the complainant is on the higher side. The complainant has been adequately compensated by granting 12% interest for the delay period. The price of the unit, in question, is escalation free. The complainant shall also get the benefit of escalation in price. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, due to the acts of omission and commission of the Opposite Party, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.

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

18.         For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Party is held liable and directed as under:-

1. To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, to the complainant, within a period of three months, from the date of receipt of a certified copy of this order, on payment of the amount, legally due against him.
2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty, by the complainant.
3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 02.01.2015 (promised date in view of the extension sought vide letter dated 08.07.2013 i.e. 12 months after the stipulated date as per Agreement), till 31.07.2016, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., from the date of default, till realization.
4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant  w.e.f. 01.08.2016, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @15 % p.a., instead of 12% p.a.,  from the date of default, till payment is made.
5. To pay compensation, in the sum of Rs.1,50,000/- (Rupees One Lac Fifty Thousand Only), on account of mental agony and physical harassment, caused to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.
6. To pay cost of litigation, to the tune of Rs.50,000/- to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

19.         Certified Copies of this order be sent to the parties, free of charge.

20.         The file be consigned to Record Room, after completion.

Pronounced

August 02, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER