Chandigarh

StateCommission

CC/172/2016

Ashok Kumar Laroia - Complainant(s)

Versus

Godrej State Developers Pvt. Ltd. - Opp.Party(s)

Er. Sandeep Suri, Adv.

08 Aug 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                     UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	172 of 2016
Date of Institution	28.04.2016
Date of Decision	08.08.2016

 

 

1. Sh. Ashok Kumar Laroia S/o Sh. B. P. Laroia, House No.752, Sector 22-A, Chandigarh.
2. Indu Laroia W/o Sh. Ashok Kumar Laroia, House No.752, Sector 22-A, Chandigarh.

                                                       .…Complainants

Versus

 

1. Godrej State Developers Pvt. Ltd., Plot No.70, Industrial Area, Phase-1, Chandigarh 160002.
2. Godrej State Developers Pvt. Ltd., Godrej Bhavan, 4^th Floor, 4A, Home Street, Fort, Mumbai 400001.

…..Opposite Parties.

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

MR. DEV RAJ, MEMBER

              MRS. PADMA PANDEY, MEMBER.

 

Argued by:Sh. Ashok Kumar Laroia, complainant No.1 in person and on behalf of complainant No.2.

              Sh. Kunal Dawar, Advocate for the Opposite Parties. 

               

PER DEV RAJ, MEMBER

              In brief, the facts of the case, are that the complainants applied for allotment of office space in the project of the Opposite Parties, namely, Godrej Eternia, Industrial Area, Phase-1, Plot No.70, Chandigarh and they were allotted Flat No.W-3C on 3^rd Floor measuring super built area of 1440 sq. ft. and carpet area 930 sq. ft. alongwith privilege, easement of rights and benefits attached of all common area and facilities. Letter of intent dated 16.05.2011 (Annexure C-1) was also issued. Unit Buyer Agreement dated 06.12.2011 (Annexure C-2) was executed between the parties. The complainants deposited various amounts from time to time as per demand raised by the Opposite Parties and as such, they paid, in all, an amount of Rs.1,35,51,958/- to the Opposite Parties. As per Clause 8 of Letter of Intent, the unit was to be handed over in February 2012. It was further stated that vide letter dated 12.06.2015 (Annexure C-4), the Opposite Parties informed that they have received the occupation certificate. Further vide letter dated 28.07.2015 (Annexure C-5), the Opposite Parties asked the complainants for registration and possession of the said unit and raised a demand of Rs.35,14,372/-, which was duly paid. The complainants vide letters dated 8.8.2015, 20.8.2015, 3.11.2015 and 3.9.2015 pointed out to the Opposite Parties that the carpet area of the unit offered was 837 sq. ft., instead of 930 sq. ft. Subsequently, vide letter dated 22.12.2015 (Annexure C-6), the Opposite Parties offered possession of the said premises. It was further stated that due to delay of more than 3 years in handing over the possession, the Opposite Parties were liable to pay compensation @Rs.5/- per sq. ft. of the super area of the unit, in question, every month, for the delayed period. According to the complainants, as per layout plan (Annexure C-9) for the area provided by the Opposite Parties was 854 sq. ft. Thereafter, vide email dated 18.01.2016 (Annexure C-8), the Opposite Parties informed the complainants that the matter has been taken up internally by the Company. It was further stated that, thus, there was short fall of 76 sq. ft. of the carpet area, whereas the Opposite Parties charged the complainants on the basis of carpet area of 930 sq. ft. According to the complainants, the Opposite Parties charged an amount of Rs.10,51,053.40Ps extra from them on above account.

2.           It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as ‘1986 Act’), was filed, seeking directions to the Opposite Parties, to pay interest amounting to Rs.60,17,014/-; Rs.11,17,696/- charged in excess; Rs.5,00,000/- as compensation for mental harassment and Rs.50,000/- as legal charges.

3.           The Opposite Parties, in their written statement, took up preliminary objection, firstly that the complainants are not consumers and secondly, due to existence of arbitration clause in the Unit Buyer Agreement dated 06.12.2011, the matter be referred to the sole Arbitrator.

4.           On merits, it was stated that the total cost of the unit, in question, was Rs.1,40,53,575/-and admittedly, the complainants paid an amount of Rs.1,35,51,958/- to the Opposite Parties. It was further stated that the complainants were given additional discount of Rs.6,28,704/- at the time of making payment of the last installments. It was further stated that vide letter dated 03.09.2015, the complainants themselves admitted that they were willing to make full and final payment of Rs.28,51,958/-. It was further stated that the discount of Rs.21,38,511/- towards increase in super area of the unit from 1245 sq. ft. to 1440 sq. ft. was also given to the complainants. It was further stated that by mistake the carpet area was mentioned as 930 sq. ft. in the Agreement. It was further stated that the actual carpet area was approx. 854 sq. ft. and the Opposite Parties were ready and willing to refund the amount towards difference in the area. It was further stated that though in the Letter of Intent, the tentative completion date was mentioned as February 2012 subject to force majeure conditions but as per Clause 4.2 of the Agreement, the parties had agreed to a tentative completion date. It was further stated that it was expressly agreed that possession notice of the commercial unit was required to be handed over to the complainants within 36 months plus further grace period of 6 months, from the approval of the project by the Chandigarh Administration, subject to conditions detailed in Clause 4.2 of the Agreement. It was further stated that thus the tentative completion date was 28.02.2013. It was further stated that the Opposite Parties applied for grant of Occupation Certificate on 19.11.2013, which was received on 09.06.2015.  It was further stated that the possession was offered on 22.12.2015. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

5.           The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.

6.           The Opposite Parties, in support of their case, submitted the affidavit of Sh. Pradeep Bhatia, their DGM - Legal, by way of evidence, alongwith which, a number of documents were attached. 

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

8.           It is evident on record that Unit Buyer Agreement (Annexure C-2) was executed between the complainants and the Opposite Parties on 06.12.2011, wherein the Opposite Parties, while accepting the Expression of Interest of the complainants, sold Office space/Unit bearing No.W-3C on 3^rd Floor having super built up area of 1440 sq. ft. and carpet area of 930 sq. ft. in their Commercial Complex known as “Godrej Eternia” West Wing, the total sale consideration whereof was Rs.1,61,92,086/-, as depicted in the Agreement. While executing agreement, as is evident from Clause 2.1(v) of the Unit Buyer Agreement, an amount of Rs.21,38,511/- was offered as discount. Additionally discount @5% of the basic sale price viz. Rs.6,28,704/- at the time of final payment was also offered and adjusted. Since the Opposite Parties offered discount of Rs.21,38,511/-, increase in super area from 1245 sq. ft., as per letter of intent, to 1440 sq. ft. as per Unit Buyer Agreement, did not cause any prejudice to the complainants. As per Clause 4.2 of the said Agreement, possession of the unit, in question, was to be handed over within 36 months of “project Approval” by the Chandigarh Administration with a grace period of 6 months (Tentative Completion Date). It is also the admitted case of the parties that possession of the unit, in question, was delivered to the complainants on 22.12.2015 (Annexure C-6).

9.             The first objection raised by the Opposite Parties is that the complainants are not a consumers as they booked the office space, in question, solely for commercial purpose for the purpose of investment. It may be stated here that the complainants have specifically stated in their complaint that they applied for allotment of office space as they required the said office space for their personal use and earning their livelihood as the complainants were running their office from their home in Sector 22. Thus, the office space being nominal i.e. 854 sq. ft., it cannot be said that same was booked for making profits and not livelihood. By no stretch of imagination, in 854 sq. ft. space, commercial activity to earn huge profits can be undertaken. Such limited space is only sufficient for running an office, which would mean earning of livelihood. Further, the Opposite Parties, nowhere in their reply or at the time of arguments, showed that the complainants were involved in some commercial activity, which could be termed to be for earning huge profits. There is nothing on record that the complainants would engage number of persons, in their office, to earn huge profits. Recently, 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 by the Hon’ble National Commission as under:-

“Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

It may be stated here that in Laxmi Engineering Works Vs. P.S.G. Industrial Institutes, 1995 (2) CPC 2 (Supreme Couret), the Hon’ble Apex Court, in Paras 10 and 18, inter-alia, held as under:-

“The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood”.

 

“Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.”

 

In the case in hand, space booked by the complainants is having carpet area of 854 square feet. Such a limited space can apparently be used by the complainants to run a business therein, of their own, to earn their livelihood. The complainants have specifically averred in their complaint that they needed the said office space for their personal use and earning livelihood. The averment is supported by affidavits of the complainants. It is not a case where large number of persons are to be employed to earn huge profits.

10.           The complainants, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act 1986.  In the facts and circumstances of the case, in our considered opinion, the office space booked cannot be said to be for commercial purpose. In this view of the matter, this objection of the Opposite Parties, being devoid of merit, stands rejected.

11.         The next objection raised by the Opposite Parties is that in the face of existence of arbitration clause 19.1 in the Agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Parties, 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, noting down the ratio laid down in 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 the Opposite Parties, stands rejected.

12.           The first question, which falls for consideration, is, as to whether there was delay in offering possession of the unit, in question and if so, whether the complainants were entitled to compensation and to what extent. It may be stated here that as per Clause 4.2 of the Unit Buyer Agreement (Annexure R-3), possession of the unit, in question, was to be handed over within 36 months of “project Approval” by the Chandigarh Administration with a grace period of 6 months (“Tentative Completion Date”). It was further stipulated that upon the unit being ready for possession and occupation, the Developer was to issue the possession notice to the Buyer of the unit. As is evident from Clause I(ii) of the Agreement, approval of building plan for construction of commercial complex was granted vide Memo No.868208/SDO(B)Z-II/IND-70 dated 31.08.2009 by the Chandigarh Administration under Rule 5 of the Punjab Capital (Development & Regulation) Building Rules, 1952. It is also evident that as per Clause I(iii) of the Agreement,  Commencement Certificate was issued by the Estate Office, SDO Building, Chandigarh on 31.08.2009. Thus, computing 42 months i.e. (36 months + 6 months grace period), the Opposite Parties were to deliver possession of the unit, in question, to the complainants on 01.03.2013. The Estate Officer, U.T., Chandigarh vide Memo No.109920/SDO(B)/2015/IND-70 dated 09.06.2015 (Annexure R-5) granted permission for sewerage connection and occupation & use of said building up-to fifth floor with mumty and machine room at terrace and twin basement, subject to conditions mentioned therein. The possession of the unit was in fact offered by the Opposite Parties to the complainants on 28.07.2015. There was, thus, delay of 29 months when possession of the unit, in question, was offered. While offering possession vide letter dated 28.07.2015 (Annexure C-5), the Opposite Parties raised demand of Rs.35,14,372/- asking the complainants to make payment within 45 days from the date of the said letter. The Opposite Parties, have brought in evidence the complainants’ letter dated 03.09.2015 (Annexure R-7) wherein it was stated that the carpet area of the unit, in question, was 837 sq. ft. and not 930 sq. ft. Para 3 of the aforesaid letter, being relevant, is extracted hereunder:-

“However, keeping in view that last date is approaching fast for depositing Rs.28,51,958.00 as our full and final payment after you have offered us to adjust 5% of the Basic Sale Price, being delayed delivery of the unit, we are making payment under protest as per following details with a request to hand over the possession of the same so that we start the work at the earliest.”

 

The complainants deposited a sum of Rs.28,51,958/- as full and final payment as the Opposite Parties offered to adjust 5% of the basic sale price being delayed delivery of the unit and also stated that they were making payment under protest. The possession was finally taken over by the complainants as is evident from their declaration dated 22.12.2015 (Annexure R-8), which reads as under:-

“I/We hereby declare and confirm that we have taken physical verification and detailed inspection of the aforesaid Unit, and satisfied with the construction of Unit No.W-3C at Godrej Eternia. I/We have this day taken physical possession of the aforesaid unit in good condition.

 

I/We hereby further declare and confirm that we have checked the unit before taking physical vacant possession of the aforesaid unit after satisfying ourselves that specifications provided in the above unit are in terms with the Agreement and Sale deed.

 

I/We hereby further declare and confirm that we do not have any claim against Godrej Properties Ltd. with respect to the above said Unit, either with regard to the construction or specifications or quality of the construction/specification or with regard to any other matter concerning the above unit. We also declare and confirm that we have no financial claim on Godrej Properties Ltd., in terms of compensation and/or interest costs related to possession of the said unit.

 

I/We hereby further declare that we have received the full set of keys of the said unit, as mentioned in the Key Handover letter enclosed.

 

I/We hereby abide by this Declaration and also the Terms, Conditions and Obligations as mentioned in my/our Sale Deed to ensue a safe, secure and happy Offices is hereby considered to be a part of this Declaration.”

 

13.         As per Clause 4.3 of the Agreement, the Opposite Parties were to compensate the complainants for delay, @Rs.5/- per sq. ft. of the super area of the unit, in question, every month. As admitted by the Opposite Parties, in their written statement, the super area of the unit, in question, was 1440 sq. ft. and delay compensation for 28 months has been worked out in the sum of Rs.2,01,600/-. The Opposite Parties have further stated that discount @5% of the basic sale price in the sum of Rs.6,28,704/- at the time of final payment was offered to the complainants towards delayed delivery, which they accepted towards delay penalty. When the complainants accepted the discount given by the Opposite Parties, which was more than penalty amount of Rs.2,01,600/-, as per Clause 4.3 of the Agreement, the complainants are not entitled to any further compensation @Rs.5/- per sq. ft. of super area. Further when the complainants accepted the same and made the balance payment as full and final payment, their remarks that they were making the payment under protest, are contrary to the position stated by them in the first part of their letter. In the circumstances, the claim of the complainants to allow them interest for the delayed period is also not tenable.

14.         The next question, which falls for consideration, is, as to whether the Opposite Parties charged from the complainants, in excess of the carpet area of the unit, in question. The complainants have specifically averred that they were charged for carpet area of 930 sq. ft. as mentioned in the Agreement whereas they have been delivered possession of lesser area. As per joint site measurement of the unit (Annexure R-10), area is 854 sq. ft. only, meaning thereby that they (complainants) have been charged in excess for 76 sq. ft. area. The Opposite Parties have very fairly admitted, in Para 27 of their written statement, that the actual carpet area was approx. 854 sq. ft. and they (Opposite Parties) were ready and willing to pay the amount towards difference in the area. The last payment in the sum of Rs.28,51,958/- was made by the complainants on 03.09.2015. It, therefore, means that the complainants are entitled to refund of the excess amount charged by the Opposite Parties viz. Rs.11,17,696/-. The Counsel for the Opposite Parties submitted that they did not charge any interest on delayed payments and waived the same. In our opinion, grant of interest on the amount of Rs.11,17,696/- @12% per annum w.e.f. the date when the last payment was made i.e. 03.09.2015, would be adequate and justified in the facts and circumstances of the case.

15.         The next question, which falls for consideration, is, as to whether, the complainants are entitled to any compensation for mental agony, harassment, deficiency in rendering service and indulgence into unfair trade practice by the Opposite Parties. The complainants have claimed compensation in the sum of Rs.5 Lacs, which in the facts and circumstances of the case, is on the higher side. There was no escalation in the price of the unit. The Opposite Parties granted rebate in the sum of Rs.21,38,511/- when super area of the unit was increased from 1245 sq. ft. to 1440 sq. ft.. Additionally, the complainants were granted rebate in the sum of Rs.6,28,704/- though the compensation payable for the delayed period worked out to Rs.2,01,600/- only. The complainants shall also get the benefit of escalation in the price of the unit. Charging the amount for the carpet area, which was not in existence, amounted to unfair trade practice. While offering possession and raising demand, the Opposite Parties ought to have kept this in view and raised the final demand only on the basis of actual area to be delivered to the complainants. No doubt, the Opposite Parties have admitted that they are ready to refund the amount charged excess for 76 sq. ft. area but this has definitely caused harassment and mental agony to the complainants. Grant of compensation on this account to the complainants in the sum of Rs.1,50,000/- shall be adequate to meet the ends of justice.    

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

17.          For the reasons, recorded above, the complaint is partly accepted, with costs. The Opposite Parties are, jointly and severally, held liable and directed in the following manner:-

1. To refund the amount of Rs.11,17,696/- alongwith simple interest @12% per annum, to the complainants w.e.f. 03.09.2015, till realization, within 45 days, from the date of receipt of a certified copy of this order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @15% per annum, instead of 12% per annum, from the date of filing the complaint i.e. 28.04.2016 till actual payment;
2. To pay an amount of Rs.1,50,000/-  (Rupees One Lac Fifty Thousand only), to the complainants, as compensation for mental agony and physical harassment, deficiency in rendering service & unfair trade practice, within a period of 45 days months from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith interest @12% per annum from the date of filing the complaint i.e. 28.04.2016 till actual payment;
3. To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @12% per annum from the date of filing the complaint i.e. 28.04.2016 till actual payment.

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

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

Pronounced

August 08, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER