Chandigarh

StateCommission

CC/660/2016

Darshan Malik - Complainant(s)

Versus

DLF Universal Limited - Opp.Party(s)

Narender Yadav, Vineet Yadav, Adv.

28 Dec 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	660 of 2016
Date of Institution	:	03.10.2016
Date of Decision	:	28.12.2016

 

1. Darshan Malik S/o Late Sh. Ram Dayal Malik,
2. Veena Malik W/o Darshan Malik,

Both R/o H.No.1185/First Floor, Sector 18-C, Chandigarh-160018.

…… Complainants.

Versus

1. DLF Universal Ltd., (earlier known as DLF India Limited) having its Registered Office at Shopping Mall, 3^rd Floor, Arjun Marg, DLF City, Phase-I, Gurgaon-122002, Haryana, through its Chairman/Managing Direcor/Director/Authorized Signatory.
2. DLF Universal Ltd., (earlier known as DLF India Limited), SCO No.190-191-192, Sector 8-C, Chandigarh – 160009 through its Chairman/Managing Director/Director/Authorised Signatory.

 

....Opposite Parties.

 

 

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

 

 

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

                   MR. DEV RAJ, MEMBER.

                   MRS. PADMA PANDEY, MEMBER.

 

Argued by:- Sh. Narender Yadav, Advocate for the complainants.

Ms. Ekta Jhanji and Sh. Parveen Jain, Advocates for the Opposite Parties.

 

 

 

PER DEV RAJ, MEMBER            

             The facts in brief are that the complainants booked a flat in the project of the Opposite Parties i.e. “Hyde Park” situated at Mullanpur, New Chandigarh on 22.08.2012 and paid Rs.6 Lacs. They were allotted independent floor bearing No.R2-E 807 (Ground Floor), measuring 1881 sq. ft., at the total price of Rs.79,24,960/- and payment was to be regulated by construction linked payment plan. An Independent Floor Buyer’s Agreement was executed between the complainants and the Opposite Parties on 09.10.2013 (Annexure C-3). The complainants, in all, paid an amount of Rs.82,65,849/- to the Opposite Parties. As per clause 11(a) of the Agreement, possession of the unit, in question, was to be delivered within 30 months from the date of booking i.e.22.08.2012 but the Opposite Parties failed to do so within the stipulated period.

2.          It was further stated that the Opposite Parties vide letter dated 15.02.2016 (Annexure C-5) offered physical possession of the unit, in question, while admitting the fact of receipt of the occupation certificate. The complainants were asked to deposit an amount of Rs.23,21,579.37 within one month, failing which, the complainants were liable to pay holding charges @Rs.10 per sq. feet per month in terms of Clause 13 of the Agreement. The complainants have challenged the demand raised on account of other charges; main power supply, power back-up; escalation charges + service tax; contingent deposit of vat; club charges + service tax; club security deposit; deed writer charges; parking charges and interest bearing maintenance security and CAM charges, totaling Rs.10,60,317/-. 

3.          It was further stated that the Opposite Parties did not pay compensation as per Clause 14 of the  Agreement, @Rs.10/- per sq. ft. for the delay in handing over the possession, which is around more than one and half year. It was further stated that the Opposite Parties were supposed to give possession on 22.02.2015. It was further stated that the Opposite Parties did not provide the facilities/amenities, as detailed in Para 23 of the complaint. It was further stated that the Opposite Parties gave false promises and assurances with the motive to cheat and extract money on various illegal grounds from the complainants. 

4.          It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency in providing service and adoption of unfair trade practice. Hence, this consumer complaint was filed by the complainants, seeking directions to the Opposite Parties to hand over physical and legal possession of the unit, in question, complete in all respects after obtaining all due permissions and certificates including the completion certificate; pay interest calculated @15% per annum on the deposited amount from the date of delay in handing over the possession till possession is handed over; withdraw illegal demand/additional charges of Rs.10,60,317/- plus consequential taxes & interest levied; provide all basic and promised facilities within specified time; refund Rs.1,00,000/- charged as parking fee;  pay Rs.5 Lacs as compensation for causing financial risk, hardship, mental agony, harassment and emotional disturbance and Rs.70,000/- as litigation expenses.

5.         The Opposite Parties in their written statement under the caption ‘PRELIMINARY SUBMISSIONS’ stated that the possession of the floor, in question, has already been offered on 15.02.2016 to the complainants, who are defaulters as they have neither taken possession nor cleared the final statement of account since 15.02.2016. It was further stated that the complainants have also been in default in paying holding/maintenance charges and are seeking amendment in executed application dated 14.08.2012 and Floor Buyer’s Agreement dated 09.10.2013. It was further stated that the complainants, by paying installments, despite the alleged delay in possession, have consented to the delay in possession and, therefore, now are alleging delay to be not proper, both in law and equity. It was further stated that the Opposite Parties got the partial completion certificate from the competent authority on 10.09.2014 and on receipt of occupation certificate, possession was offered to the complainants.

6.          The Opposite Parties also took up certain preliminary objections to the effect that the complainants filed purported complaint to evade holding and other charges; that in the face of arbitration clause contained in the Agreement, dispute, if any, was required to be referred to an Arbitrator and, as such, the consumer complaint was not maintainable; that the parties are bound by the terms and conditions mentioned in the Agreement, that since the proceedings before the Consumer Fora are summary, in nature, this Commission is not competent to adjudicate this complaint and that this Commission does not have the pecuniary jurisdiction to entertain and try the complaint.

7.          On merits, it was admitted that unit bearing No.R2-E807-GF was allotted to the complainants and as on 15.02.2016, the complainants have paid an amount of Rs.82,96,953/- to the Opposite Parties. It was further stated that demands raised as per Final Statement of Account were as per the terms and conditions such as Clauses 1.12 and 1.16 of the Agreement executed between the parties. It was further stated that parking charges of Rs.1,00,000/- have been demanded on the basis of terms and conditions of the application, in particular Clause 18. It was further stated that the Opposite Parties only endeavored to offer possession of the unit, in question, within 30 months from the date of execution of the application. It was further stated that possession was delayed on account of force majeure conditions, which were entirely beyond the control of the Opposite Parties. It was further stated that the Opposite Parties have already completed construction of 351 independent floors on 86 plots and another 1517 built up units are near completion. It was further stated that out of 1775 built up units, occupation certificates for 351 (86 plots) units have been received and as on date, possession of 86 units had 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 at this stage, the complainants are backing out from the executed contract, by not adhering to the terms and conditions of the Agreement. It was further stated that the Opposite Parties were neither deficient, in rendering service nor they indulged into any unfair trade practice. The remaining averments, made in the complaint, were denied.

8.          The complainants, in support of their case, submitted their separate affidavits, by way of evidence alongwith which, a number of documents were annexed. However, the complainants did not file any rejoinder to the reply filed by the Opposite Parties.

9.          The Opposite Parties, in support of their case, submitted joint affidavit of Sh. Shiv Kumar and Sh. Vinod Kumar, authorized signatories, by way of evidence, alongwith which, a number of documents were annexed. 

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

11.        Admittedly, initially Independent Floor No.R2-E-807 (Ground Floor) with parking space No.P-GF, measuring 1881 Sq. ft. in the project of the Opposite Parties, was allotted in favour of the complainants. Independent Floor Buyer’s Agreement was executed between the parties on 09.10.2013 at Chandigarh.  As per the Agreement, total price, including Preferential Location Charges and External Development Charges, was Rs.79,24,960/-. In addition to total price and other charges mentioned in the application/agreement, the applicant was to pay amounts towards the club facility alongwith other charges, taxes and cesses, security deposits etc., IBMS, maintenance charges, cost for providing power backup, charges paid/payable by the Company to PSPCL, proportionate share of cost incurred for construction/ installation of sub-station and stamp duty, registration charges etc. in terms of Clauses 1.2, 1.4, 1.6, 1.9, 1.12, 1.13, 1.16, 10 and 18 etc. The payment was to be regulated by construction linked payment plan. As per Clause 11(a) of the Independent Floor Buyer’s Agreement, possession was to be delivered within 30 months from the date of application. The date of application being 22.08.2012, 30 months period expired on 21.02.2015. Thus, possession offered vide letter dated 15.02.2016 (Annexure C-5/R-4) was delayed by one year, beyond the stipulated period. The Opposite Parties while offering possession, informed the complainants that final area of the independent floor was 1900 sq. ft. (increase of 19 sq. ft.) and as per Final Statement of Account as on 15.02.2016 annexed with possession letter, the Opposite Parties had received an amount of Rs.82,96,953.00 from the complainants and still an amount of Rs.23,21,579.37 remained to be paid by the complainants to them, besides Rs.1,05,051/- payable to ‘Hyde Park Residential Welfare Society’.

12.        During pendency of complaint, this Commission on 05.10.2016, ordered that the complainants would deposit the amount claimed, other than stamp duty & registration charges i.e. Rs.8,13,115.00, Contingent deposit of VAT i.e. Rs.1,23,804.00 and half of the amount claimed towards escalation i.e. Rs.1,18,500.00 within 15 days from the date of passing of the said order, with the Opposite Parties and the Opposite Parties were directed to hand over possession of the unit, in question, to the complainants, complete in all respects, after making necessary correction, within 15 days thereafter. The matter was adjourned to 10.11.2016. 

13.        On 10.11.2016, the complainants through their counsel, undertook to make payment of Rs.1,05,051/- within three days and upon their doing so, the Opposite Parties also undertook to deliver possession of the unit, in question, to the complainants within seven days thereafter. It is evident on record that after making payment of the aforesaid amount of Rs.1,05,051/-, the complainants took the actual physical possession of the unit, in question, having saleable area of 1900 sq. ft., on 16.11.2016 vide document placed, on record, alongwith joint affidavit of the complainants placed on record during arguments, on 12.12.2016, which we mark as Annexure ‘X’. As per this document, possession of the unit, in question, has been considered after clearance of final payments.  Thus, the complainants, in all, have paid an amount of Rs.96,68,164.37 to the Opposite Parties.

14.        The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in Consumer Complaint No.339 of 2016 titled ‘Sandeep Goyal Vs. M/s Puma Realtors Private Limited’ decided on 07.10.2016. Paras 13 to 20 of the said order, inter-alia, being relevant, are extracted hereunder:-

“13.        The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

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

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

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

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

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

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

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

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

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

15.        In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

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

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

16.        Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

17.        We will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

18.       We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

19.      The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. In the present case, the complainant has spent his entire  life earnings to purchase the unit, in the said project, launched by the opposite party, in the manner explained above. He is now running behind the opposite party to get his amount, legally due to be paid to him, as it failed to deliver possession of the unit, even till date. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

20.       Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

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

                In view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

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

16.        Another objection raised by Counsel for the Opposite Parties was that since the complainants sought enforcement of the Agreement, only a Civil Court can decide the complaint, and as such, consumer complaint was not maintainable. It may be stated here, that the complainants hired the services of the Opposite Parties, 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 Parties, they were to  hand over possession of the unit, in question, within a period of thirty months, from the date of Application. 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”

17.        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 complainants have the remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of consumer, as stated above. 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.

18.        The objection taken by the Counsel for the Opposite Parties with regard to pecuniary jurisdiction of this Commission also deserves rejection. It may be stated here that as per Independent Floor Buyer’s Agreement dated 09.10.2013 (Annexure C-3), the total basic sale price of the unit was Rs.79,24,960/- plus taxes/other charges. The complainants have sought interest @15% per annum on the deposited amount from the date of delay in handing over the possession till possession is handed over; compensation to the tune of Rs.5 Lacs for mental agony and physical harassment besides cost of litigation to the tune of Rs.70,000/-. No doubt, the Opposite Parties relying upon the ratio of judgment in case titled AMBRISH KUMAR SHUKLA & 21 ORS. Vs. FERROUS INFRASTRUCTURE PVT. LTD., Consumer Case No.97 of 2016, decided on 07.10.2016, argued that by adding interest, in the manner referred to above, to other reliefs, this Commission would not have pecuniary jurisdiction to entertain and try the instant complaint. It may be stated here that to clarify the position, a similar question fell for determination before this Commission in Surjit Singh Thadwal Vs. M/s Emaar MGF Land Pvt. Ltd. & Anr., Complaint Case No.484 of 2016, decided by this Commission on 15.12.2016, wherein while negating the said plea, it was held as under:-

“13.        Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.

14.        In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer :

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. 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.”

15.       It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

                As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

                In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

 “12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

 (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

 (2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

 (3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and

 (ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.”

16.         In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.`s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.”

 

             In view of above, this objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.

19.        The next question, which falls for consideration, is, whether a sum of Rs.1,00,000/- on account of parking charges is payable by the complainants. It may be stated here that perusal of Annexure relating to Payment Plan (Page 127 of written statement) clearly indicates that parking charges in the sum of Rs.1,00,000/- are payable by the complainants. The complainants had already paid a sum of Rs.95,000/- as is evident from statement of account annexed with offer of possession letter dated 15.02.2016. Therefore, the grievance of the complainants is after thought and is not sustainable. 

20.        As regards complainant’s allegation, in Para 22 of the complaint, qua very poor construction quality and lack of promised services/amenities/facilities to be provided, no cogent evidence by way of report of an Engineer/Architect has been brought on record. The Opposite Parties, in their written statement in Paras 21-22, have denied the allegation regarding use of poor quality material in construction. In reply, it has also been stated by the Opposite Parties that proper water connection and electricity is in place and full house keeping and maintenance services are being provided through leading multinational company, namely, Jones Lang Lasalle and tie-ups with International Companies to maintain the project are being done, which clearly project their clear intention as the Opposite Parties are bound by the terms mentioned in the Agreement. This point was also not pressed during arguments.

21.        The next question, which falls for consideration, is, as to whether there was delay in offering possession of the unit, in question, beyond the period stipulated in the Independent Floor Buyer’s Agreement. As is evident from record, the complainants submitted application dated 22.08.2012 for allotment. The unit was allotted on 31.08.2012 and Independent Floor Buyer’s Agreement was executed between the parties on 09.10.2013. As per Clause 11(a) of the Agreement, the Company was to endeavor to complete construction of the independent floor within a period of 30 months from the date of the application unless there was delay or failure due to reasons mentioned in Clauses 11(b) and 11(c) or due to failure of the allottee to pay in time the total price and other charges, taxes and cesses, 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 the Agreement. Clause 12 of the Agreement stipulated that company upon obtaining certificate of occupation and use from the Governmental Authority, shall offer in writing, possession of the independent floor to the allottee in terms of the Agreement to be taken within 30 days from the date of issue of such notice and the Company shall give possession provided the allottee is not in default of any terms and conditions of the Agreement and has complied with all provisions, formalities, documentation etc., as may be prescribed by the Company in this regard. In the instant case, 30 months period from the date of application expired on 21.02.2015. The possession of the unit, in question, was offered vide letter dated 15.02.2016 (Annexure C-5), meaning thereby that there was clear delay of complete one year in offering possession. No reason or circumstances, which were beyond the control of the Opposite Parties for such delay, have been explained.

22.        While offering possession vide letter of possession dated 15.02.2016, the Opposite Parties raised demand on account of the following:-

 

1.(a)	Basic Sale Price	Rs.3,63,200.37
	PLC (Preferential Location Charges)	Rs.16,458.75
	EDC (External Development Charges)	Rs.11,092.25
	Parking Charges	Rs.5,000.00
(b)	Change in Area & PLC	Rs.77,425/-
	Service Tax	Rs.18,902.00
(c)	Delayed interest, if any.	0.00
II.	Other charges vide clause no.1.12 of the Floor Buyer’s Agreement @Rs.159.83 per sq. ft.	Rs.3,03,677.00
	Service Tax @14.50%	Rs.44,033.00
III.	Main Power Supply, Power Back-Up, Electricity, Sewer & Water Connection Changes etc. as per relevant clauses of the Floor Buyer’s Agreement Proportionate cost of expenditure @Rs.88.92 per sq. ft.	Rs.1,68,948.00
	Service Tax @14.50%	Rs.24,497.00
IV.	Escalation charges, as applicable (Refer clause no.1.2 of the Floor Buyer’s Agreement)	2,36,962.00
	Service Tax (as applicable)	Rs.8,590.00
V.	Contingent Deposit for VAT @Rs.65.16 per sq. ft.	Rs.1,23,804.00
VI.a)	Club Charges (50% of membership Fees)	Rs.75,000.00
	Add:- Service Tax @14.50%	Rs.10,875.00
b)	Club Security Deposit	Rs.20,000.00
VII.	Stamp Duty, Registration Charges & Others	Rs.8,13,115.00
	Balance Payable by  Uma shanker Trivedi in favour of DLF Universal Limited	Rs.23,21,579.37
IX.	Interest Bearing maintenance Security & CAM Charges.
(a)	Interest Bearing Maintenance Security (IBMS) @Rs.50/- per sq. ft.	Rs.95,000.00
(b)	1 Quarter Advance CAM @Rs.1.54 per sq. ft. per month.	Rs.8,778.00
	Add:- Service Tax @14.50%	Rs.1,273.00
	Balance Payable by Uma Shanker Trivedi in favour of Hyde Park Residents Welfare Society.	Rs.1,05,051.00

 

23.        Out of above demand, the complainants have challenged the demand in the sum of Rs.10,60,317/- vide Para 12 of their complaint, stating that the same is illegal and arbitrary. It may be stated here that the total price of the unit in the sum of Rs.79,24,960.00 was exclusive of taxes and other charges as is evident from the provisions for the same in various clauses of the Agreement such as Clauses 1.2, 1.4, 1.6, 1.9, 1.12, 1.13, 1.16, 10, 18 etc. It is noted that the major amount in the demand so raised, is on account of stamp duty and registration charges in the sum of Rs.8,13,115/- which obviously has to be in addition to the price of the unit, in question. A sum of Rs.3,63,200.37 is on account of balance basic sale price, Rs.77,425/- on account of increase in area. The demand on account of parking charges, as discussed in Para 18 above, is in accordance with the terms of the Agreement. In so far as demand in the sum of Rs.2,36,962/- is concerned, the Opposite Parties have a right to charge the same as there exists a specific provision in Clause 1.2 of the Agreement. Demand on account of escalation charges has to be with reference to escalation during the period of 30 months, in which the Opposite Parties were duty bound to deliver possession. In the instant case, possession was offered 12 months after the due date. No detail/evidence, as to how the escalation charges have been worked out and whether the same are for a period of 30 months or for a period of 42 months, when possession was actually delivered, has been placed on record.  In all fairness, the Opposite Parties ought to have given detail, calculation and basis for the same to justify correctness of amount claimed. The complainants, in terms of this Commission zimini order dated 05.10.2016, have already paid 50% of the escalation charges i.e. Rs.1,18,000/-. In our opinion, in the absence of necessary details and evidence, as to how the escalation charges have been worked out and delay of 12 months in delivering possession, the complainants shall be liable to pay escalation charges for a period of 30 months only i.e. Rs.2,36,962.00 × 30 months ÷ 42 months = Rs.1,69,259.00. Since the complainants have already paid a sum of Rs.1,18,000/- during the pendency of the complaint, they shall further pay a sum of Rs.51,259/- to the Opposite Parties.

24.        During arguments, the Counsel for the parties were in agreement that stamp duty and registration charges, shall be payable at the time of execution of the sale deed of the unit, in question, after possession is handed over; charges on account of advocate fee etc. would not be payable by the complainants, but incidental expenses, which may be incurred at the time of registration of sale deed, shall be borne by the complainants. In regard to contingent deposit of VAT, it was agreed that same shall be payable by the complainants as and when the same is paid by the Opposite Parties to the Government.

25.        Admittedly, possession of the unit, in question, has been taken over by the complainants on 16.11.2016 (Annexure – X) in accordance with the orders passed by this Commission and out of the total demand of Rs.24,26,630.37, the complainants have made payment of Rs.13,71,211.37 and only an amount of Rs.10,55,881/- remains to be paid by them on following counts:-

Stamp Duty, Registration Charges	Rs.8,13,115.00
Contingent Deposit for VAT	Rs.1,23,804.00
Half of the amount towards Escalation charges.	Rs.1,18,962.00
Total Balance Payable:	Rs.10,55,881.00

 

In this complaint, as agreed between the parties, the Advocate Charges shall not be charged by the Opposite Parties. The actual expenditure for registration of Sale Deed besides Stamp duty and Registration charges, shall, however, be borne by the complainants. The demand of contingent vat, shall be payable as and when the same becomes payable by the Opposite Parties to the Government and notice is sent to the complainants. On receipt of notice for payment of contingent vat, the complainants shall make the payment thereof within three weeks, failing which, they (complainants) shall be liable to pay interest @12% p.a. till payment is not made. As stated above, the complainants shall pay a sum of Rs.51,259/- to the Opposite Parties towards escalation. The other components, for which the demands were raised in the possession letter and payments of which have already been made by the complainants, in our opinion, are in accordance with the terms and conditions of the Agreement. 

26.         The question, which now arises is, as to whether, the complainants are entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit, in question, within the stipulated period of 30 months i.e. 21.02.2015 from the date of the application i.e. 22.08.2012. As stated above, in the instant case, the Opposite Parties offered possession vide letter dated 15.02.2016 after delay of one year. No doubt, in   the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainants for delay, 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 complainants 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 14 were meant for computing compensation, in case of a minor delay in delivery of possession.  If the argument of the Opposite Parties 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 percent, 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.

27.        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.”

28.        Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the case, referred to above, and position stated above, in the facts and circumstances of the case, grant of compensation in the form of simple interest @10% p.a. on the deposited amount for the period of delay, would serve the ends of justice.

29.        As stated by the Counsel during arguments, possession of the unit, in question, has been delivered to the complainants on 16.11.2016. The possession of the unit, in question, was offered vide letter dated 15.02.2016. The payment against the demand raised was not made by the complainants immediately. The complainants made payment only on the orders passed by this Commission during the pendency of the complaint. There is, thus, delay on the part of the complainants in making payment towards the demand raised, in the absence of which, the Opposite Parties rightly did not deliver the possession. The complainants, instead of making payment immediately or within reasonable period of 30 days, made the payment belatedly. Since, the demand(s) raised, by and large, have been held to be justified, the delay in making payment beyond 30 days from the date of offer of possession is clearly on the part of complainants. The Opposite Parties, after payment by the complainants, as per directions of this Commission, immediately delivered the possession. Thus, complainants are entitled to compensation from 22.02.2015 (due date for possession) till 15.04.2016 (30 days for making payment + 30 days as grace period), after offer of possession on 15.02.2016.  Therefore, in all fairness, the complainants are held entitled to interest @10% for the delayed period i.e. from 22.02.2015 till 15.04.2016. However, the Opposite Parties would not be entitled to levy holding charges till 16.11.2016 when possession was actually delivered.

30.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to them, for delay in delivering physical possession of the unit to them, by the Opposite Parties, by the promised date in the Agreement i.e. by 21.02.2015. The complainants purchased the unit, with the hope that they will have a house to live in. As already held above, the possession of unit, in question, so offered vide letter dated 15.02.2016 has been delayed by complete one year. The compensation in the sum of Rs.5 Lacs claimed by the complainants  is  on  the  higher  side.  The complainants have been adequately compensated by granting 10% interest for the delay period. It is also evident from the possession letter that there was delayed interest in the sum of Rs.5,05,233.22, which was clearly on account of delay in remitting installments by the complainants. Delay in remitting installments has a bearing on the completion of the project. Under these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainants, due to the acts of omission and commission of the Opposite Parties, if granted, to the tune of Rs.1,25,000/- shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.1,25,000/-.

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

32.        For the reasons recorded above, the complaint is partly accepted, with costs, and the Opposite Parties, are, jointly and severally, directed as under:-

 

(i)	Execute and get registered the sale deed in respect of the unit, in question, within 45 days from the date of receipt of copy of this order. The stamp duty, registration charges and incidental expenses, as discussed in Para 25 of the order, shall be borne by the complainants.
(ii)	To pay compensation, by way of interest @10% p.a., on the deposited amount, to the complainants, from 22.02.2015 till 15.04.2016 i.e. (30 days for making payment from 15.02.2016 + 30 days as grace period), within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @13% p.a., instead of 10% p.a., from the date of default, till realization.
(iii)	Pay compensation in the sum of Rs.1,25,000/- on account of mental agony, physical harassment and deficiency in service, and Rs.35,000/- as litigation costs, to the complainants, within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @10% p.a., from the date of filing the complaint till realization.

 

 

33.        The complainants shall pay a sum of Rs.51,259/- towards escalation to the Opposite Parties within a period of 4 weeks from the date of receipt of copy of this order and failure to do so, shall entail interest @10% p.a. from the date of default, till payment. 

 

34.        Certified copies of this order be sent to the parties, free of charge.

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

Pronounced.

28.12.2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

(DEV RAJ)

MEMBER

 

 

(PADMA PANDEY)

         MEMBER

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