Chandigarh

StateCommission

CC/15/2023

NISHANT SAINI AND ANOTHER - Complainant(s)

Versus

GREATER MOHALI AREA DEVELOPMENT AUTHORITY - Opp.Party(s)

RANJINDER SINGH SIDHU & D K SIHAG

05 Jun 2023

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	15 of 2023
Date of Institution	:	20.02.2023
Date of Decision	:	05.06.2023

 

1. Nishant Saini aged 36 Years son of Sh. Rakesh Saini
2. Shikha aged 33 Years wife of Sh. Nishant Saini son of Sh. Rakesh Saini

Both residents of House No.2687, Timber Market, Ambala Cantt, District Ambala, Haryana-133001, now working and posted at State Bank of India, Local Head Office, Sector-17A, Chandigarh-160017

•  

Versus

1. Greater Mohali Area Development Authority, PUDA Bhawan, Sector 62, SAS Nagar, Punjab through its Chief Administrator. Email.www.gmada.gov.in
2. Greater Mohali Area Development Authority, PUDA Bhawan, Sector 62, SAS Nagar, Punjab through its Estate Officer (IT-City), Mohali, Punjab. Email.www.gmada.gov.in

….Opposite parties

 

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                   MR.RAJESH K. ARYA, MEMBER

 

Present:-- Sh.Ranjinder Singh Sidhu, Advocate for the complainants.

                Sh.Shekhar Verma, Advocate for the opposite parties.     

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   Facts in brief are that vide Letter of Intent (LOI) dated 11.11.2016, Annexure C-3, a residential plot measuring 256.66 square yards was allotted to one Pardeep Kumar son of Som Nath. The said Pardeep Kumar, transferred his rights qua the said plot in favour of the complainants. The opposite parties on receipt of transfer charges of Rs.1,51,800/- from the complainants,  reissued the LOI, Annexure C-4, in their favour on 10.05.2017 with the same terms and conditions as were contained in Annexure C-3. However, the allotment letter dated 19.06.2020, Annexure C-7 in respect of residential plot no.1087/Corner, Sector 83, Alpha Block B, measuring 262.50 square yards was issued to the complainants and as per the complainants its possession was delivered on the same day i.e. 19.06.2020.

2.   The instant complaint has been filed by the complainants on the ground that as per original LOI dated 11.11.2016, Annexure C-3, possession of the plot in question was to be delivered within a period of one year i.e. 10.11.2017 but possession thereof has been delivered on 19.06.2020 and conveyance deed Annexure C-10 has been executed on 18.12.2020. The complainants are claiming compensation for delay in delivery of possession for 2 years 7 months and 9 days. Apart from it, the complainants are also claiming compensation for not providing the basic amenities at the project site such as green areas, non development of market, improper electricity supply and also non supply of tertiary treated water. Following reliefs have been claimed by the complainants in this complaint:-

1. To pay interest @ 18% per annum as per terms and conditions of Letter of intent on amount i.e. Rs.63,27,354/- deposited with the OPs by the Complainants for the delayed period only as per Clause 5 (I) and 10 of Letter of Intent issued by the opposite parties for the period i.e. 951 days delayed period;
2. Direction may kindly be issued to the OPs to develop the basic amenities/Infrastructure as promised by the Development Authority;
3. To pay compensation to the tune of Rs.25.00 lakh to the Complainants on account of mental agony and harassment;
4. To pay the cost of Rs.1.00 lakh for dragging the Complainants to unnecessary litigation to file the present complaint before this Hon'ble Commission;

 

3.           The instant complaint has been contested by the opposite parties interalia on the grounds that:-
   1. the complainants are not consumers;
   2. this Commission is not vested with pecuniary jurisdiction to entertain this complaint;
   3. this complaint is beyond limitation;
   4. once possession has been taken over by the complainants and   sale deed has been executed, they ceased to be consumer as the opposite parties have discharged their liability.
4.           However, it has been admitted that the plot in question was in the first instance allotted to Pardeep Kumar, which was transferred to the complainants, on receipt of transfer fee as referred to above, by the opposite parties. It has been added that delay in delivery of possession of the plot took place on account of force majeure circumstances having been faced by the opposite parties like environment clearance was delayed by the competent Authorities and also due to COVID-19, which are implicit in every contract and delay caused on account of these reasons cannot be attributed to the opposite parties.  It is the case of the opposite parties that possession of plot was offered to the complainants after completing all the development activities and basic amenities at the project site. 
5.           The complainants filed rejoinder wherein, they reiterated all the averments contained in the complaint and controverted those contained in the written reply of  the opposite parties.
6.           This Commission has afforded adequate opportunities to the contesting parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, the parties have adduced evidence by way of affidavits and also produced numerous documents including written arguments.
7.           We have heard the contesting parties and have also gone through the entire record of the case, including the rejoinder as well as written arguments aforesaid, very carefully.
8.           Counsel for the complainants submitted that this Commission has pecuniary jurisdiction to entertain this complaint; the complaint filed is within limitation; and that since possession was to be delivered in November 2017, whereas, on the other hand, it has been delivered on 19.06.2020 as such the complainants are entitled for delayed compensation for the said period. He further submitted that the complainants are also entitled to get interest @18% p.a. because as per clause 5 of the LOI, Annexure C-3, the opposite parties are charging interest @18% p.a. and the same is deemed as agreed rate of interest. He further submitted that the project is not habitable because there are no green areas, market has not been developed; electricity supply is improper and there is no supply of tertiary treated water in the project in question.
9.           On the other hand, counsel for the opposite parties submitted that the complainants are not consumers; this Commission is not vested with pecuniary jurisdiction to decide this complaint; the complaint is beyond limitation; time was not the essence of contract under the provisions of section 17 of the  Contract Act.
10.            First we will deal with the objection taken by opposite parties to the effect that the complainants are investors and did not fall within the definition of ‘consumer’ as defined under the Act, 2019. It may be stated here that since objection taken by  the opposite parties in this regard is not supported by any documentary evidence, as such the onus shifts to them to establish that the complainants have purchased the plot in question to indulge in ‘purchase and sale of units’ as was held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31, but since they failed to discharge their onus, hence we hold that the complainants are consumers as defined under the Act, 2019, especially, when they are admittedly in possession of the said plot and conveyance deed has also been registered. In this view of the matter, objection taken in this regard stands rejected. 
11.           Now we will deal with the objection taken by the opposite parties with regard to pecuniary jurisdiction. It may be stated here that in exercise of powers conferred by provisos to sub-section (1) of Section 34, sub-clause (i) of clause (a) of sub-section (1) of section 47 and sub-clause (i) of clause (a) of sub-section (1) of section 58 read with sub-clauses (o), (x) and (zc) of sub-section (2) of section 101 of the Consumer Protection Act, 2019, the Central Government has notified the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021, to the effect that the State Commission shall have jurisdiction to entertain the complaints where the value of the goods or services paid as consideration exceeds fifty lacs but does not exceed rupees two crore. In the present case, if total sale consideration of the plot in question i.e. Rs.63,27,354/- over and above transfer fee of Rs.1,51,800/- received by the opposite parties is  taken into consideration it fell above Rs.50 lacs and below Rs.2 crores. In this view of the matter this Commission has got pecuniary Jurisdiction to entertain and decide this complaint. Objection taken in this regard stands rejected.
12.           As far as objection taken by the opposite parties to the effect that the complainants being subsequent purchasers did not fall under the definition of consumer, it may be stated here that in the present case, there is no dispute that the complainants had purchased the plot, in resale, from the original owner-Pardeep Kumar. Admittedly, the sale transaction was endorsed by the opposite parties in favour of the complainants, on receipt of transfer fee of Rs.1,51,800/-. It is well settled law that once the property is transferred/endorsed in the name of the buyer from the original owner, he/she (buyer) is vested with all the rights and interests, accrued in favour of his/her predecessor(s), as he/she stepped into her/his shoes. As such, the said objection also did not merit acceptance, in view of principle of law laid down by the Hon’ble Supreme Court of India in M/s Laureate Buildwell Pvt. Ltd. vs Charanjeet Singh,  2021 225 AIC 195, wherein it has been held that the rights of the subsequent buyer are equal to that of the original allottee. Relevant part of the said order is reproduced hereunder:-  

“…….31. In view of these considerations, this court is of the opinion that the per se bar to the relief of interest on refund, enunciated by the decision in Raje Ram (supra) which was applied in Wg. Commander Arifur Rehman (supra) cannot be considered good law. The nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent. However, it cannot be said that a subsequent purchaser who steps into the shoes of an original allottee of a housing project in which the builder has not honoured its commitment to deliver the flat within a stipulated time, cannot expect any – even reasonable time, for the performance of the builder’s obligation. Such a conclusion would be arbitrary, given that there may be a large number- possibly thousands of flat buyers, waiting for their promised flats or residences; they surely would be entitled to all reliefs under the Act. In such case, a purchaser who no doubt enters the picture later surely belongs to the same class. Further, the purchaser agrees to buy the flat with a reasonable expectation that delivery of possession would be in accordance within the bounds of the delayed timeline that he has knowledge of, at the time of purchase of the flat. Therefore, in the event the purchaser claims refund, on an assessment that he too can (like the original allottee) no longer wait, and face intolerable burdens, the equities would have to be moulded. It would no doubt be fair to assume that the purchaser had knowledge of the delay. However, to attribute knowledge that such delay would continue indefinitely, based on an a priori assumption, would not be justified. The equities, in the opinion of this court, can properly be moulded by directing refund of the principal amounts, with interest @ 9% per annum from the date the builder acquired knowledge of the transfer, or acknowledged it.

 

In this view of the matter, objection taken by the opposite parties stands rejected.

13.           It is not in dispute that the plot in question stood transferred by the opposite parties from Pardeep Kumar original allottee, in the name of the complainants, by way of issuance of LOI dated 10.05.2017, Annexure C-4, on receipt of transfer fee. It was made clear in the said LOI dated 10.05.2017 that the complainants shall abide by the terms and conditions of the original LOI. It is also not in dispute that the entire sale consideration of the plot in question has been received by the opposite parties; possession of the said plot has been delivered to the complainants on 19.06.2020 and sale deed has been got executed on 18.12.2020. It is significant to mention here that as per clause 15 of the LOI, the opposite parties have committed that possession of the plot will be handed over within a period of one year from the date of issuance of the said LOI. Since, in the present case, LOI was issued in favour of the complainants on 10.05.2017, as such, the opposite parties were under obligation to deliver possession of the plot in question latest by 09.05.2018, whereas, on the other hand, admittedly, as stated above, it was delivered to  the complainants on 19.06.2020 i.e. after a delay of  2 years 1 month and 10 days. During arguments, when we asked Counsel for the opposite parties, as to what was the reason for such an inordinate delay in delivery of possession of the plot to the complainants, he tried to wriggle out of the situation, by stating that it was only on account of following force majeure circumstances, which were beyond the control of the opposite parties:-
    1. that the State Level Environment Impact Assessment Authority caused delay in issuing the Amended Environmental Clearance; and
    2. that allotment letters of plots could not be issued immediately due to outbreak of COVID-19 and imposition of Lockdown;

 

We have considered these contentions and are of the considered view that the same does not merit acceptance for the reasons stated hereinafter. It may be stated here that the opposite parties have failed to clarify this Commission, as to why they received huge amount, referred to above, in respect of the plot in question, knowing fully well that necessary clearances have not been given by the competent Authorities. In our considered opinion, the opposite parties should have obtained all the approvals/clearances before booking the said plot. If the opposite parties chose to accept booking without obtaining statutory approvals/clearances or amended clearances, they are to blame to themselves only. The purchaser of the plots, who had nothing to do with grant of statutory approvals/clearances, cannot be penalized by postponing the possession. Our this view is supported by the observations made by the Hon’ble National Commission in M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17 Dec 2015. Relevant part of the said order reads as under:-

 

 

“…..As far as final sanction of layout by HUDA is concerned, in my view, the petitioner cannot penalize the complainants/respondents for the delay in the aforesaid sanction since delay cannot be attributed to any act or omission on the part of the complainants/respondents.  In fact, in my opinion, the petitioner should not even have accepted the booking without final sanction of the layout by HUDA.  If the petitioner chose to accept booking on the basis of provisional sanction of the layout by HUDA, it is to blame to only itself for the delay, if any, on the part of the HUDA in issuing the final sanction of the layout.  The purchaser of the plot, who had nothing to do with the sanction of the layout by HUDA cannot be penalized, by postponing the possession or registration of the plot and therefore any escalation in the registration charges on account of delay in final sanction of layout by HUDA must necessarily be borne by the builder and not by the allottee of the plot…..”

 

It has thus been proved by the admission of the opposite parties only that money had been collected from the prospective buyers, without obtaining statutory approvals/clearances. Collecting money from the perspective buyers and selling the plots/units in the  project, without obtaining the required approvals/clearances is an unfair trade practice on the part of the project proponent. It was so said by the Hon’ble National Commission, in a case titled as M/s Ittina Properties Pvt. Ltd. & 3 Ors. Vs. Vidya Raghupathi & Anr., First Appeal No. 1787 of 2016, decided on 31 May 2018. Relevant part of the said order reads as under:-

“…………….This Commission in Brig. (Retd.) Kamal Sood Vs. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.

It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.09.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency…………”

 

14.           As far as plea taken regarding COVID 19 is concerned, it may be stated here that the said pandemic which took place in the year 2020 being a subsequent event, has no relation whatsoever with the possession of the plot, which was to delivered as far as back on 09.05.2018. It is therefore held that the opposite parties were deficient in providing service and were negligent on this count and in no way can claim immunity, under the garb of force majeure circumstances, referred to above.
15.           The opposite parties also cannot evade their liability on the ground that  time was not the essence of contract, especially, in the face of clause 15 of the LOI which reveals that it has been committed by them that physical possession of the plot shall be handed over within a period of one year, which in the present case was to expire on 09.05.2018 itself. In this view of the matter plea taken by the opposite parties in this regard stands rejected.
16.           As far as plea taken by the complainants regarding non –supply of basic amenities like green parks, proper electricity supply and also connection for treated water etc. is concerned, it may be stated here that though at the time of arguments, counsel for the opposite parties has contended that all the  basic amenities have been provided at the project site, yet, he failed to  provide any documentary  evidence in that regard. In our considered opinion, once the complainants have taken specific objection qua non providing of the said facilities, the opposite parties were under obligation to prove to the contrary, which they miserably failed to do so. Under these circumstances, if directions are given to the opposite parties to provide the said amenities/facilities in a time bound manner, that will meet the ends of justice. It is therefore held that the opposite parties shall  provide all the basic amenities like green parks, proper electricity supply and also connection for treated water, if not yet provided, within a period of 30 days from the date of receipt of a certified copy of this order.
17.           Now the question that falls for consideration is, as to what amount of compensation, the complainants are entitled to get, for the period of delay in delivery of possession of their plot for the period from 09.05.2018 to 19.06.2020. It is also matter of common parlance that for purchasing the unit/plot, the purchasers take loans from their family members, relatives and friends or financial institutions. In some cases, the purchasers live on rent in the absence of timely delivery of possession. On account of delay in actual delivery of possession within the stipulated period (in the present case by 09.05.2018), the complainants suffered mental agony, hardships and financial loss. In DLF Homes Panchkula Pvt. Ltd. Versus Himanshu Arora, Civil Appeal No. 11097 of 2018, decided on 19 November, 2018 under similar circumstances, the Hon’ble Supreme Court of India has upheld the order of the Hon’ble National Commission awarding interest @9% p.a. for the period of delay in delivery of possession of the units. Relevant part of the said order is reproduced hereunder:-

“……8. Having regard to the above submission, we indicated to the learned Counsel appearing on behalf of the flat purchasers that it would be appropriate if the interest as ordered by NCDRC at 9% per annum is made payable over the period which was determined by the Order of the SCDRC. There is no objection by the flat purchasers to the aforesaid modification being made. Even otherwise, we are of the view that such a modification would be required in the interests of justice since it was the appellants who had questioned the Order of the SCDRC before the NCDRC.

9. In the above facts and circumstances, we confirm the direction of the NCDRC that the appellants shall pay interest @ 9 per cent per annum. However, the period over which interest shall be payable will be in conformity with the Order passed by the SCDRC….”

Thereafter also, similar rate of interest i.e. 9% p.a. was granted by the Hon’ble Supreme Court in DLF Homes Panchkula (P) Ltd. Versus Sushila Devi, Civil Appeal Nos.2285-2330 of 2019, decided on 26 February, 2019,  by making reference to the earlier order passed by it in Himanshu Arora’s case (supra).

                   In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022 also, the Hon’ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-

“……Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today.  The Opposite Party Developer shall also pay cost of ₹25,000/- to the Complainants in each case.   Since we have awarded delay compensation till the date of offer of possession instead of actual physical possession of the Flat, the Opposite Party Developer shall not be entitled for any delay interest from the date of offer of possession till the date of payment made by the Complainant for taking physical possession of the Flat.…..”

 

In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon’ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered.  As such, in the present case also, the complainants deserve just and fair compensation for the period of delay in delivery of possession to them by the opposite parties. In our considered opinion, if we grant interest @9% p.a. to the complainants on the entire amount deposited by them, from the due date of possession onwards till  delivery of possession thereof, that will meet the ends of justice.

18.           Now we will deal with the objection taken by the opposite parties to the effect that this complaint is beyond limitation, it may be stated here that since it is an admitted fact that possession of the plot in question was delivered to the complainants on 19.06.2020 and its sale deed stood executed on 18.12.2020, as such, if the period of two years are taken from the said dates, after excluding the period from 15.03.2020 to 28.02.2022 plus 90 days,  in view of order passed by the Hon’ble Supreme Court of India in Suo Moto Writ Petition (Civil) No. 3 of 2020,  due to COVID 19, this complaint having been filed on 20.02.2023 in no way can be said to be barred by limitation. As such, objection taken by the opposite parties in this regard stands rejected.
19.           As far as the contention raised by counsel for the opposite  parties that since possession of the plot in question stood delivered on 19.06.2020 and also sale deed stood executed on 18.12.2020 as such, they have discharged their liability and now the complainants ceased to be consumers, it may be stated here that the said contention is devoid of merit, in view of principle of law laid down by the Hon’ble Supreme Court in the case of Debashis Sinha v/s M/s R.N.R Enterprise, Civil Appeal No.3343 OF 2020 February 9, 2023, wherein it was held that the mere fact that possession has been taken over by the consumer cannot forfeits his/her right to claim the services etc.  promised by the project proponent.
20.           For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties jointly and severally, are directed:-
    1. To pay compensation to the complainants,  by way of interest @9% p.a. on the entire amount received in respect of the plot in question, for delay in delivery of possession of the plot in question, starting from 09.05.2018 to 18.06.2020, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry penal interest @12% p.a. from the date of default till this entire amount is paid to the complainants.
    2. To pay Rs.75,000/-, towards compensation for causing mental agony and harassment and also cost of litigation to the tune of Rs.35,000/- to the complainants within a period of 30 days, from the date of receipt of a certified copy of this order failing which the said amount shall carry interest @9% p.a. from the date of default till realization.

 

21.           Certified Copies of this order be sent to the parties, free of charge.
22.           The file be consigned to Record Room, after completion.

 

Pronounced

05.06.2023

 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(RAJESH K. ARYA)

MEMBER

 

Rg.