Date of filing – 14.07.2014
Date of final hearing – 15.03.2018
The instant complaint under Section 17 (inadvertently mentioned under Section 15) of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is at the instance of a purchaser against the Developer/Builder on the allegation of deficiency in services on the part of them in respect of a flat and car parking space in a consumer dispute of housing construction.
In a nutshell, complainant’s case is that on 09.05.2007 he booked a flat being Apartment/Flat No.1803 on the 17th floor at Block-‘C’ measuring about 1910 sq. ft. in the Complex ‘The Gate Way’ together with proportionate share on a plot of land situated on Kona Express Way, Howrah for a consideration of Rs.52,51,000/- (out of which Rs.51,91,000/- for the flat, Rs.2,25,000/- for the car parking space and Rs.60,000/- for club membership) under the construction linked plan. Accordingly, on 31.05.2017 an Allotment Agreement was executed. The complainant has stated that he has paid the entire consideration amount of Rs.47,92,600/- (rather paid Rs.50,42,872/-) of the flat and car parking space and proportionate share of the land but inspite of the same, the OP did not complete the said complex and handed over the Completion Certificate thereby automatically execution of the Deed of Conveyance in respect of the said flat and car parking space was got delayed. The complainant has alleged that the OP was under obligation to complete the flat and hand over the possession of flat and car parking by 30.09.2010 but the same was done on 28.06.2013 by its letter dated 25.06.2013. The complainant has also alleged that at the time of booking of the flat, the OP assured of various types of amenities and facilities including club House, Play ground, Swimming Pool, Community Hall etc. but inspite of passing reasonable time, OP has failed to provide the same. The complainant has alleged that in this regard all his requests and persuasions including his letters went in vain. Hence, the complainant has lodged the complaint with prayer for several reliefs, viz. – (a) an order directing the OP to execute and register the Deed of Conveyance; (b) an order directing OP to pay Rs.3,15,115/- to him for delay in handing over possession by 33 months @ Rs.5/- per sq. ft. per month; (c) compensation of Rs.40,00,000/- for harassment and mental agony and (d) litigation cost of Rs.50,000/- etc.
The Opposite Party by filing a written version has stated that in view of the provision of Section 12A of West Bengal Building (Regulation and Promotion of Construction and Transfer by Promoters) Act, 1993 (in short, ‘Promoters Act, 1993’) this Commission has no jurisdiction to entertain the complaint. It has also been stated that as there was an Arbitration Clause in the Agreement, in accordance with Section 8 of the Arbitration and Reconciliation Act, 1996 this Commission has also no jurisdiction to adjudicate the complaint. It has further been stated that the complainant took physical possession of the flat on 28.06.2013 and signed a Possession Certificate without raising an objection whatsoever. The OP has also stated that they are ready and willing to fulfil all their obligations under the Agreement in terms thereof and are ready to execute Deed of Conveyance in respect of the flat and car parking space in favour of the complainant. The OP submits that as there was no deficiency in services on the part of them, the complaint should be dismissed.
On behalf of complainant, complainant himself has tendered evidence on affidavit. He has also given reply against the questionnaire set forth by OP.
On the other hand, on behalf of opposite party one Sri Rajiv Chatterjee, Senior Manager (Legal) being constituted Attorney has filed evidence on affidavit. He has also given reply against the questionnaires put forward by the complainant.
Both the parties have filed several documents in support of their respective cases. At the time of hearing, the parties have also filed brief notes of arguments.
Undisputedly, in order to purchase of a flat/apartment from opposite party in their complex being developed on a plot of land situated on Kona Express Way, Howrah complainant submitted an application and paid a sum of Rs.5,00,000/- by way of a cheque as booking money. Accordingly, on 14.05.2007 an allotment letter was issued by OP intimating the complainant about allotment of Flat No.1803 on 17th floor at Block-6 measuring about super built up area of 1910 sq. ft. at a total consideration of Rs.52,51,000/-. Thereafter, on 31.05.2007 an allotment agreement was executed by and between the parties.
It also remains undisputed that the complainant has paid the entire consideration amount as per terms of the agreement. In fact, complainant paid the entire consideration of Rs.50,42,872/- for the flat and car parking and proportionate share of land. As per terms of the Agreement, the OP was under obligation to complete the apartment/flat and handed over the possession of the flat and car parking space by 30.09.2010 but the same was done after a long delay of 33 months from the committed date, specifically on 28.06.2013.
However, it is evident that the construction of the building has not yet been completed for which the OP could not obtain Completion Certificate from the Howrah Municipal Corporation and as such could not execute the Deed of Conveyance in favour of the complainant as per terms of the Agreement. In this regard, the reply given by the witness of OP is relevant. In Question No.16, on behalf of complainant it was asked – “....... do you have obtained the final occupancy certificate from the Howrah Municipal Corporation in respect of Tower/Block 6 and also the entire project, ‘‘The Gate Way’’ to which it was replied – “we have obtained partial occupancy certificate for all the towers and the cluster-I of the project is completed in all respect and the final occupancy certificate will be obtained upon completion of the project”. This clearly signifies that the OP could not yet obtain the Completion Certificate from the local authority and thereby failed to execute the Deed of Conveyance in favour of the complainant. In other words, the factual matrix makes it abundantly clear that the OP failed to keep their promise in completion of construction and delivery of possession within the time frame.
Needless to say, the parties are bound by the terms of the agreement. Both the parties have signed the agreement with open eyes evaluating its pros and cons and therefore, nothing can be added or detracted from the terms and conditions of the contract. Therefore, the agreement between the parties towers above the rest. In AIR 1996 SC 2508 (Bharti Knitting Co. – Vs. DHL Worldwide Express Courier Division of Airfreight Ltd.) the Hon’ble Supreme Court has observed thus –
“In an appropriate case where there is acute dispute of facts necessarily the Tribunal has to refer the parties to original Civil Court establish under the CPC or appropriate State Law to have the claims decided between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract”.
It is well settled that after accepting the consideration amount as per agreement, the developer is under obligation to – (a) deliver possession, (b) execute and register the Sale Deed and (c) obtain completion certificate/occupancy certificate from the authority concerned. Even when the record was taken up for final hearing, the OP has failed to produce any document as to obtaining Completion Certificate from the local authority as to completion of the building.
These clearly demonstrate that OP was deficient in rendering services to the complainant although they have received the entire consideration amount.
In this backdrop, let us see Clause 5c (ii) of the Agreement relating to compensation for delay in possession runs thus-
“That subject to the payment of all dues and save as stipulated herein, the developer would pay compensation charges @ Rs.5/- per sq. ft. per month for the period of delay in offering the delivery of the said apartment beyond the period indicated in above in Article 5a(i). These charges would be adjusted at the time of final notice of possession. The developer will not be under any other liability to pay damages or any other compensation to the allottee(s)”.
Considering the above, the claim of the complainant for a direction upon OP to pay Rs.3,15,115/- to him for delay in handing over possession by 33 months @ Rs.5/- per sq. ft. per month (i.e. Rs.9,550/- x 33 months) appears to be justified one.
The complainant has articulated that the OP has not taken positive steps to provide amenities and facilities in several aspects like – Club House, Swimming Pool, Community Hall, Play ground, etc. However, before filing the petition of complaint, the complainant did not seek any permission for filing the complaint in a representative manner in accordance with Section 12(1)(c) of the Act. For appreciation of the situation, it would be worthwhile to reproduce the provisions of Section 12(1)(c) of the Act which provides -:-
“Manner in which complaint shall be made.
- A complaint in relation any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by –
- .......
- ........
- One or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of or for the benefit of, all consumers so interested”.
Admittedly, 409 persons intended to purchase the flats from the opposite party and the complainant alone has filed this complaint. This indicates that other flat owners are either satisfied with the construction made by the developer or not interested to lodge complaint. In any case, perusal of prayer clause would show that the relief has not been claimed for other similarly placed persons. The interpretation and scope of Section 12(1)(c) of the Act was the subject matter of adjudication before Three-Member Bench of the Hon’ble National Consumer Commission reported in I (2017) CPJ 1 (Ambrish Kumar Shukla & 21 Ors. – vs. – Ferrous Infrastructure Pvt. Ltd.). While dealing with the scope of Section 12(1)(c) of the Act, the Hon’ble Commission has observed thus –
“The primary object behind permitting a class action such as a complaint under Section 12(1)(c) of the Consumer Protection Act being to facilitate the decision of a consumer dispute in which a large number of consumers are interested, without recourse to each of them filing an individual complaint, it is necessary that such a complaint is filed on behalf or for the benefit of all the persons having such a community of interest. A complaint on behalf of only some of them, therefore, will not be maintainable. If for instance, 100 flat buyers/plot buyers in a project have a common grievance against the Builder/Developer and a complaint under Section 12(1)(c) of the Consumer Protection Act is filed on behalf of or for the benefit of say 10 of them, the primary purpose behind permitting a class action will not be achieved, since the remaining 90 agreed persons will be compelled either to file individual complaint or to file complaints on behalf of or for the benefit of the different group of purchasers in the same project. This, in our view, could not have the legislative intent. The term ‘persons interested’ and ‘persons having the same interest’ used in Section 12(1)(c) means the persons having a common grievance against the same service provider. The use of the words ‘all consumers so interested’ and ‘on behalf of or for the benefit of all consumers so interested’, in Section 12(1)(c) leaves no doubt that such a complaint must necessarily be filed on behalf of or for the benefit of all the persons having a common grievance, seeking common relief and consequently having community of interest against the said service provider”.
The materials on record indicate that the complainant has not filed any application for leave of the Commission to file the complaint in a representative capacity in accordance with the provisions of 13(6) of the Act. It should be noted here that the out of 409 flat owners, only complainant himself has lodged the complaint for himself.
Under the garb of Section 12(1)(c) or Section 13(b) of the Act which are primarily meant for common services, e.g. deficiency in maintaining common areas or common facilities, complaint regarding goods are not maintainable before this Commission particularly, when the flats were booked for different amount on different dates under different terms and conditions. If complaint pertaining to deficiency in goods pertaining to many complaints is allowed in one complaint, it will create serious problem as observed by a Larger Bench of Hon’ble National Consumer Commission in the case of Ambrish Kumar Shukla & 21 Ors. (supra).
Considering the above proposition of law, the claim of complainant for common services and facilities in this manner is not entitled to succeed.
Mr. Shuvasish Sengupta, Ld. Advocate for the OP with the assistance of Mr. P.R. Baksi, Ld. Advocate has submitted that in view of the provisions of Section 12A of the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 this Commission has no jurisdiction to entertain the complaint. In order to fortify his submission, he has placed two decisions of Hon’ble Calcutta High Court reported in 2006 (1) CHN 401 [N.C. Ghosh & Anr. – Vs. – Biswajit Lahiri] and 2012 (1) CHN 272 [Rita Das – Vs. – Jayashri Ghosh]. When I have drawn the attention of the Ld. Advocate for the OP regarding the subsequent decision reported in 2016 (3) CHN (Cal) 464 [Md. Akbar Kamal – Vs. – Tabraiz Alam Siddiqui], the Ld. Advocate for OP left the matter for consideration of the Commission.
For proper understanding of the situation, it would be worthwhile to reproduce the provisions of Section 12A of Promoters Act, 1993 which provides –
“12A(1). No Civil Court shall have any jurisdiction to entertain or decide any question relating to matters arising under any provisions of this Act or the rules made thereunder .
- Every order passed by the authorised officer which is subject to appeal or revision, every order passed by the authority referred to in sub-Section (1) of Section 5 and every order passed by the officer referred to in Section 6 which is subject to revision, and every order passed by the State Government in revision, shall be final and shall not be questioned in any Court of law”.
The statement of objects and reasons and the scheme of the Act make it quite clear that the main objective is to provide for better protection of the interests of the consumer. To achieve that purpose, a cheaper, easier, expeditious and effective redressal mechanism is provided in the Act, by establishing quasi-judicial Forums at the District, State and National level with wide range of powers vested in them. The rigors of the Indian Evidence Act, 1872 and the Civil Procedure Code are not applicable to the proceedings before these quasi-judicial bodies. Therefore, having due regard to the scheme and purpose sought to be achieved, viz. better protection of interest of the consumers, the provisions of the Act have to be given purposive, broad and positive construction, more so, when Section 3 of the Act provides that remedy under the Act is in addition to and not in derogation of any other provisions of law.
In a landmark decision reported in AIR 2003 SC 1043 [State of Karnataka – Vs. – Vishwabarathi House Building Co-op Society & Ors.] the Hon’ble Supreme Court speaking on the jurisdiction of the Consumer Fora held that the provisions of the Act are required to be interpreted as broadly as possible and the Fora under the Act have jurisdiction to entertain a complaint despite the fact that other Fora/Courts would also have jurisdiction to adjudicate upon the lis. The Hon’ble Supreme Court proceeded to observe that the jurisdiction of the Consumer Forum should not and would not be curtailed unless there is an express provision prohibiting the Consumer Forum to take up the matter which falls within the jurisdiction of Civil Court or any other Forum established under some enactment. The Hon’ble Court had gone to the extent of saying that if two different Fora have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the power of the Consumer Forum to adjudicate upon the dispute could not be negated.
The OP Company has also taken a stand that in view of Arbitration Clause in the Agreement, this Commission has no jurisdiction to entertain the complaint in view of provision of Section 8 of Arbitration and Conciliation Act. The relevant portion of Article – 13 relates to Arbitration is set out below –
“ ........ That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
However disputes or difference arising out of and/or in connection with and/or in relation to this transaction/agreement, which cannot be amicable settled, shall be finally decided and resolved by an Arbitrator appointed by developer in accordance with the provisions of the Arbitration & Conciliation Act, 1996, Arbitration as aforesaid shall be domestic arbitration under the applicable laws......”.
Basing upon that clause, the Ld. Advocate for the OP has submitted that the dispute cannot be entertained by this Commission and it should be referred to the Arbitrator in accordance with terms and conditions of the Agreement.
In the case of DLF Ltd. –Vs. – Mridul Estate Pvt. Ltd. reported in III (2013) CPJ 439 the Larger Bench of Hon’ble National Consumer Commission considering several decisions of Hon’ble Supreme Court reported in – (1) the case of SBP & Co (supra), (2) National Seeds Corporation Ltd. – Vs. – M. Madhusudan Reddy & Anr., I (2012) CPJ 1 (SC), (3) Lucknow Development Authority – Vs. – M.K. Gupta, III (1993) CPJ 7 (SC), (4) Skypay Couriers Ltd. – Vs. – Tata Chemicals and several other judgements has observed that the Consumer Fora constituted under the C.P. Act are not bound to refer the dispute raised in the complaint on an application filed under Section 8 of the 1996 Act seeking reference of the dispute to an Arbitral Tribunal in terms of valid arbitration clause in the agreement entered into between the parties. The OP in CC/188/2010 preferred an appeal in the Hon’ble Supreme Court and the Hon’ble Supreme Court in the case of Rosedale Developers Pvt. Ltd. – vs. – Aghore Bhattacharya reported in (2015) 1 WBLR (SC) 385 has held that the National Commission did not commit any error by holding that the remedy of arbitration available to the complainant does not bar the jurisdiction of the Consumer Fora and the Consumer Fora are not under an obligation to refer the matter to the Arbitral Tribunal.
After amendment to Section 8 of Arbitration Act, 2015 a bunch of applications filed by the developers/builders and in disposing of the same by the Larger Bench of the Hon’ble National Commission in a decision reported in III (2017) CPJ 270 (Aftab Singh – Vs. – EMAAR MGF Land Ltd. & Anr.) has observed that in the context of consumer jurisprudence, the Hon’ble Supreme Court has not disturbed the earlier opinion regarding the arbitrality of consumer disputes rendered in the pre-amendment era rather it has affirmed the protection granted to the consumers from private resolution. After a detailed discussion with reference to several judgement of the Hon’ble Supreme Court including the decision reported in (2016) 10 SCC 386 (A. Ayyasamy – Vs. – A. Paramasivam & Ors.) the Hon’ble National Commission has arrived at the conclusion that in light of overall architecture of the Consumer Act and Court - evolved jurisprudence, amended Sub Section (1) of Section 8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to arbitration in terms of the arbitration agreement. Consequently, the Hon’ble National Commission reject the arguments on behalf of the builder and hold up that an arbitration clause between the complainant and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the 1996 Act.
Therefore, on evaluation on materials of record, it is quite clear that the complainant being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP on consideration and despite payment of entire consideration amount, OP has failed to render services in accordance with the agreement dated 31.05.2007 and thereby deficient within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act.
In view of the above, the complainant is entitled to some reliefs. In my view, an order directing the OP to execute and register the Deed of Conveyance after obtaining Completion Certificate, to pay compensation of Rs.3,15,115/- - Rs.1,71,900/- already paid at the time of possession = Rs.1,43,215/- and litigation cost to the extent of Rs.10,000/- will meet the ends of justice.
For the reasons aforesaid, I dispose of the complaint with the following directions:
- The Opposite party shall obtain Completion Certificate and then to execute the Sale Deed in respect of the property as per terms of the agreement dated 31.05.2007 in favour of the complainant positively by 31.07.2018 otherwise the Opposite Party shall go on paying simple interest @ Rs.5/- per sq. ft. per month from 01.08.2018 till the date of obtaining Completion Certificate and execution of Deed of Conveyance.
- The Opposite Party is also directed to pay the balance amount of Rs.1,43,215/- to the complainant as compensation in the form of interest as per terms of the Agreement within 30 days from date otherwise the amount shall carry interest @ 8% p.a. from date till its realisation.
- The Opposite Party is further directed to pay a sum of Rs.10,000/- to the complainant as cost of litigation, which is also to be paid within 30 days otherwise the said amount shall also carry interest @ 8% p.a. from date till its recovery.
