Haryana

Panchkula

CC/208/2015

LT.COL NANAK SINGH. - Complainant(s)

Versus

IREO FIVERIVER PVT.LTD. - Opp.Party(s)

VAIBHAV NARANG

19 May 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,PANCHKULA.                                                                            

Consumer Complaint No	:	208 of 2015
Date of Institution	:	30.09.2015
Date of Decision	:	19.05.2016

 

Lt.Col.Nanak Singh Reen son of Shri Man Singh resident of House No.3274, Sector 21D Chandigarh, U.T.                                                                                                                               ….Complainant.

Versus

 

1.       Ireo Fiveriver Private Lim limited 305, 3^rd Floor, Kanchan House, Karampura Commercial Complex, New Delhi- 110015, through its MD.

2.       Ireo Fiveriver Private Limited, S.C.O. 6-8 1^st/2^nd Floor, Sector 9-D,Madhya Marg, Chandigarh-160009 through its MD/Authorised Signatory.

                                                                        ….Opposite Parties

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

Before:                 Mr.Dharam Pal, President.

Mrs.Anita Kapoor, Member.

                             Mr.S.P.Attri, Member.

 

For the Parties:     Mr.Subhash Chand, Adv., for the complainant. 

                             Mr.Ramnik Gupta, Adv., for the OPs.

 

ORDER

(Dharam Pal, President)

1.                          The complainant has filed the present complaint against the Ops with the averments that he booked a plot measuring 250.59 sq.yds   and paid Rs.6,25,000/- as booking amount on 15.09.2010 vide cheque No.279186 drawn on HDFC Bank. The total payable amount of the plot was Rs.75,11,426/- (as the basic price of the plot was Rs.62,64,750/-, Rs.10,27,409/- was to be charged as EDC, Rs.1,31,560/- was to be charged as IDC and Rs.87,707/- as interest free maintenance of security was to be charged separately). On 26.03.2011 the Ops provisionally allotted a plot Type A & R95. After that the complainant made the payment of Rs.9,41,187.05 vide receipt dated 09.05.2011. The Ops changed the allotted flat of the complainant from R95 to R92. On 24.06.2011 a plot buyer’s agreement was executed between the parties containing all the details and terms and conditions. As per Clause No.11.1 of the agreement the possession was to be delivered within 24 months from the date of execution of the agreement with 6 months additional as grace period.  The plot was allotted on 24.06.2011 but the Ops have not offered the possession even after lapsing of grace period of 6 months in December, 2013 and also not communicated anything to the complainant.  The complainant visited the Ops but they did not provide correct information even after receiving of substantial amount of Rs.15,66,187.50/- and they also did not develop the site till 2015. On 16.03.2015 the complainant came to know that the Ops did not have approvals from Environment and National Board of Wild Life On 21.04.2015, the Ops demanded a sum of Rs.13,65,311/- contrary to the expectations of the complainant as he through many requests had prayed for the refund of the amount. He made another representation dated 18.05.2015 and clarified to the Ops that he is no longer interested in the plot and further requested for refund of the deposited amount with interest. The Ops intimated the complainant that due to stay by the Hon’ble Supreme Court  of India construction could not be started. Said SLP has already been dismissed on 12.12.2012 but the Ops in order to make more money looted the complainant and similarly situated persons who have spent money on the plot to construct their residential houses. The Ops did not refund the amount alogwith interest despite sending many requests and serving of legal notice upon them. This act of the OPs amounts to deficiency in service, unfair trade practice and malpractice on their part. In evidence, the complainant ha tendered affidavit and documents Annexure C-A, Annexure C1 to Annexure C14.

2.                          The Ops appeared before this Forum and filed joint reply by taking some preliminary objections & submitted that the present complaint is not maintainable and the present dispute should have been resolved through Arbitration as per clause 34 of the Plot Buyer’s Agreement dated 24.06.2011.  As per Section 5 of the Arbitration and Conciliation Act, 1996, the jurisdiction of the courts/judicial authorities is barred.   The complainant has not brought any goods and also not hired any services from the Ops, therefore, he does not fall within the ambit of consumer. The Ops are developing their own land and are not service provider to anyone. It is only after the opposite parties to complete the development of the site that the conveyance deed of the plot is executed. Till then the complainant only have the prospective right to purchase the plot in accordance with the agreement to sell, i.e. the said agreement. In fact, no part of the agreement obligates the Ops to provide any service as defined in CP Act.  The entire money payable under the said agreement completely relates to the advance payment of sale consideration for the contingent sale and transfer of a plot and no part of it is attributable to any service.  The complainant has not booked the flat for his bonafide personal use rather the same is for investment/commercial purposes. In the month of April, 2012, the complainant entered into an agreement to sell dated 28.04.2012 with one Sh.B.B.Bansal whereby he had agreed to sell the plot in question for total sale consideration of Rs.23,17,957/- out of Rs.7,51,770/- was the premium amount constituting the profit sought to be made by the complainant and Rs.15,66,187/- was the actual amount paid by the Ops.  The complainant was paid Rs.1,00,000/- by said B.B.Bansal as earnest money and he was served with a legal notice dated 10.05.2012 on the ground that due to concealment of operation of stay order dated 19.04.2012 granted by Hon’ble Supreme Court the earnest money was liable to be refunded. The complainant refunded the alleged earnest money which shows that the said plot was purchased for the purpose of investment/commercial only.  The nature of the agreement is a contractual, therefore, the matter should have been raised before Civil Court.  The complainant is acting under dishonest intentions and has concealed the clauses No.11.2, 11.3 and 11.4 from this Forum. The Clause no.11 has to be read in its entirety and not selectively in order to ascertain the real intentions of the parties.  The Ops had made it clear to the complainant that at the time of execution of said agreement that the period for handing over the possession as mentioned in the said agreement is tentative only and the same is subject to force majeure circumstances defined under Clause 11 & 23 of the agreement. The complainant was fully aware about the possession clause and after reading and understanding the same signed the agreement. The development and the construction work at site could not be commenced till 13.04.2015 on account of unforeseen events and circumstances/imposition of fresh conditions by Government authorities after the execution of said agreement and due to various reasons beyond the control of Ops.  The delays relate to obtaining of approval of the revised layout plan and it also occurred due to obtaining the other permissions such as environment clearance from the State environment Impact Assessment Authority, Haryana and grant of LOI and grant of additional license of two parcels of land admeasuring 10.594 acres and 18.343 acres coupled with the fact that the Ops were also directed to mandatorily obtain approval from Irrigation Department, Haryana and NOC from the Standing Committee  of the National Board for Wildlife after the execution of the said Agreement  which were not part of the terms and conditions of the license granted by State of Haryana.   With the recommendation of the clearance by the NBWL the Ops finally able to commence the development at site only n 14.03.2015, therefore, they raised the demand note dated 21.04.2015 as revised vide letter dated 04.05.2015.  The complainant was requested through reminders to pay the due installment but till date he did not make the same despite the fact that he was contractually and legally bound to pay the same. The said agreement is bi-laterial in nature and the Ops perceived and planned to carry out the development of the site with the funds to be received as per the agreed payment plan and non-payment of the same has effected the development of the site in a smooth manner.  The Ops could not be able to start the work due to force majeure circumstances which were beyond their control and delaying a project in a highly competitive market, can only be counterproductive, and would give no advantage to a serious development like the Ops.   The Ops have not received anything from the complainant beyond the initial 20 % of the basic sale price for the last 4 years.  The provisional allotment was made vide letter dated 26.03.2011 and raising of the demand for the installment due on allotment, next installment which became due payable within 3 months of the allotment was raised vide demand note dated 30.05.2011 but the Ops having found that some of the allottees, including the complainant were still running in default as they had not paid the earlier installment which was demanded vide letter dated 26.03.2011 and  they vide letter dated 29.06.2011 out of its own offered for the change of payment plan from Time Linked Payment Plan to the Development Linked Plan and withdrawn the demand of the payable which was payable within 3 months of the allotment.  The said demand has been raised in accordance with the development linked payment plan on commencement of development work at site and the same is contractually payable by the complainant in terms of the said agreement.  The complainant had booked the flat for short term investment only and because no demands were being raised by the opposite parties and as his purpose of booking the plot had crashed due to declining real estate market but he kept waiting for its rise since no further payment was to be made by him to the Ops but when they sent demand note dated 21.04.2015/04.04.2015 the complainant by misinterpreting the terms of the said agreement sought the refund vide letter dated 18.05.2015.  The development work at the site is not only eye wash as they have spent huge amount on the same.  The loss on account of development has been absorbed and borne by the Ops itself and nothing has been passed onto or recovered from the complainant.  The Ops have always acted and conducted for the welfare of the allotees and besides changing the payment plan to Development linked payment plan of their own by postponing the time linked payment of the due installments till the development commences, it has also issued and circulated the monetary benefit scheme vide letters dated 03.08.2015 and 21.10.2015 to all allotees including the complainant irrespective whether any of them is running in default. Clause 11.3 of the agreement is not applicable as there is no delay in handing over the possession because as per force majeure circumstances, the period of delivery of possession shall stand extended automatically to the extent of the delay caused due to it and the complainant will not be entitled to any compensation.  Other pleas made by the complainant have been controverted and prayer for the dismissal of the complaint has been made. In evidence the Ops have tendered affidavit and documents Annexure RA, Annexure R1 to Annexure R16.

3.                          We have heard the learned counsel for the parties and have also perused the record and have also considered the written arguments submitted by the counsel for the Ops.

4.                          After going through the material available on the case file it is clear that complainant had booked a plot measuring 250.59.sq yds. and also paid a sum of Rs.6,25,000/- as booking amount with the Ops as is evident to  through Annexure C1. Annexure C2 & Annexure C3 reveals that the complainant was allotted Plot Type A Plot No.R95 at Ireo Fiveriver, Sector 3,4 & 4A Pinjore Kalka Urban Complex, District Panchkula and the said allotment was provisional. The complainant had deposited Rs.9,41,187.50 with the Ops vide receipt Annexure C4.  The Ops renumbered the plot from R95 to R92 due to revision in the layout plan as shown in Annexure C5. Plot Buyer’s Agreement has been placed on the case file as Annexure C6. The complainant requested for refund of the deposited amount from the Ops through letters dated 18.05.2015 and 01.06.2015 (Annexure C9 & Annexure C12).   As per clause 11.1 mentioned in Plot Buyer’s Agreement the Ops had to handover the possession of the said plot to the allottee within a period of 24 months from the date of execution of the agreement with grace period of six months. Clause 11.2 of the said documents depicts that if the company fails to offer possession within prescribed time including grace period  then it will be liable to pay compensation calculated @ Rs.50/- per sq.yard of the area of the said plot and the allottee would be entitled for the said compensation only after completion of all documental including registration and conveyance deed. The grievance of the complainant is that he had purchased the plot on 15.09.2010 but after lapsing of stipulated period the Ops did not handover the possession of the same.  On the other hand, the Ops have come with the plea that the delay was not intentional rather the period mentioned in the agreement for handing over the possession was tentative only and the same was subject to force majeure circumstances as mentioned in Clauses 11 & 23 of the agreement. 

5.                          The admission on the part of the Ops that the environment clearance has been granted on 15.04.2014 and the pollution certificate was granted by the Haryana State pollution Control Board on 02.05.2014 and the development and the construction work at site could not be completed till 13.04.2015 as mentioned in Annexure C10 is enough to reach at the conclusion that the Ops have indulged in unfair trade practice. The Ops have not disclosed all the clear facts and picture of the complainant at the time of booking of the plot or launching of the scheme. The Opposite Parties started booking of the residential plots, and duping the innocent customers of their hard earned money, much earlier to the grant of approval to them from concerned department. It is a settled law, that the builder could not start the booking of residential plots, and obtain money from the innocent consumers, before actually the licence/clearances and all the permissions and sanctions had been granted to them, by the Competent Authorities. It is the duty of the builder, to obtain the requisite permissions or sanctions, such as sanction of construction etc., in the first instance, and, thereafter, recover the consideration money from the purchasers of the flats/buildings. If the bookings are made and the booking amount is collected, before obtaining the necessary sanctions, permissions, licences and without getting the necessary approvals, the same amounted to indulgence into unfair trade practice, on the part of the builder. Since the Opposite Parties failed to do so therefore it was their bounden duty to refund the amount, paid by the complainants. It is quite embarrassing on the part of the Ops to have collected the amount from the complainant before obtaining all the necessary permission from the concerned authorities permitting it to raise constructions/development works.  As per statutory approvals are concerned, the same were to be obtained by the Ops and the complainant cannot be held responsible for any delay in granting of such approvals.  It is also an unfair trade practice in misleading the complainant on having taken the necessary permission when they had not taken till then.  On this point reliance can be taken from judgment passed by Hon’ble State Consumer Dispute Redressal Commission, UT, Chandigarh in complaint case no.242 of 2015 decided on  12.01.2016 titled as  Satish Kumar Versus Chandigarh Royale City Promoters Pvt. Ltd

6.                          The another objection of the Ops that the complainant is not the consumer as he has been investor for commercial gain. The mere fact that it was a residential plot is sufficient to prove that the same was to be used by the complainant for his residence. It may be stated here that there is nothing on record to show that the complainant is the property dealer and indulges in the sale and purchase of the property on regular basis. In the absence of any cogent evidence in support of the objections raised by the Ops mere bald assertions to that effect cannot be taken into consideration. Even otherwise also in a case titled as Kavita Ahuja Vs. Shipra Estate Limited & Jai Krishna Estate Developers Pvt. Ltd. Consumer Complaint No.137 of 2010 decided by Hon’ble National Commission on 12.02.2015 it was held that the buyer (s) of the residential unit (s) would be termed as consumer (s) unless, it is proved that he/she had booked the same for commercial purposes. The principle of law laid down in Kavita Ahuja Vs. Shipra Estate Limited & Jai Krishna Estate Developers Pvt. (supra) is fully applicable to the present complaint. Under these circumstances, no stretch of imagination it can be said that the plot in question was purchased by the complainant by way of investment with a view to earn profit in future. The complainant, thus fall within the definition of consumer as defined under Section 2 (1) (d) of the Act.  Such an objection taken by the Ops in its written reply, therefore, being devoid of merit is rejected.

7.                          Another plea taken by the counsel for the Ops that the matter should have been referred to the Arbitrator for redressal has not enough force to satisfy this Forum. The Ops cannot take the shelter of this by saying that the matter should have been sent to the arbitrator for redressal. On this point reliance can be taken from case laws titled as   Narender Kumar Yadav Vs. DLF Homes Panchkula decided by Hon’ble State Commission Union Territory, Chandigarh on 13.01.2016 in consumer Complaint No.224/2015. In this complaint, it has been held that

With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Act is made, 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.”

Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of an arbitration clause, in the application form/Agreement, would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act.  Similar principle of law, was laid down, in Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385  and  C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233. Not only this, recently also, a similar view was taken by the National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013. Vide that judgment many Revision-Petitions were decided. Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/ Opposite Party challenged that order in the Hon’ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), the Hon’ble Supreme Court of India, while dealing with various judgments, including Magma Leasing and Finance Limited and another Vs. Potluri Madhavilata and another (2009) 10 SCC 103 (the one reliance on which has been placed by the opposite parties in present case also)  observed that the same (judgments) have no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction  can be exercised by a Consumer Fora or not. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act, is mandatory, cannot lead to an inference that the Consumer Fora is bound to refer to the Arbitral Tribunal. In this view of the matter, this objection of the Opposite Parties, being devoid of merit, must fail, and the same stands rejected

8.                          The next question, that falls for consideration, is, as to whether, time was the essence of contract or not and as to within which period, delivery of possession of the plot, in question, was to be given.  It may be stated here, that, in the instant case, as stated above, as per Clause 11.1 of the Plot Buyer's Agreement dated 24.06.2011, Annexure C-6, the Opposite Parties were to hand over physical possession of the residential plot, in favour of the  complainant, within a period of 2 years, and not later than 2-1/2 years i.e. (24 months + 6 months grace period) from the date of execution of the same (Plot Buyer's Agreement). It was further mentioned in Clause 11.1 of the said Agreement, that, in case, the Opposite Party,  failed to deliver possession of the plot, in question, within the stipulated period, it was liable to pay penalty/compensation, to the allottee, @Rs.50/- (Rupees Fifty only), per square yard, per month, for the period of delay. Thus, the Opposite Party was to deliver possession of the plot, in question, to the complainant, latest by 23.12.2013. The time was, thus, unequivocally made the essence of contract. The submission of the Counsel for the Opposite Party, thus, being devoid of merit, must fail, and the same stands rejected. On this point reliance can be taken from case law decided on 29.05.2015 by Hon’ble  State Commission, U.T. Chandigarh titled as Sh. Nitin Aggarwal Vs. Emaar MGF Land Limited in Consumer Complaint No. 42 of 2015.

9.                          For the reasons recorded above, we find merit in the complaint and the same is hereby allowed.  The Ops are directed as under:-

(i)      To refund the amount of Rs.15,66,187.50/- to the complainant alongwith interest @ 12 % from the date of receipt till realisation.

 

(ii)     To make payment of an amount of Rs1,00,000/- lac to the complainants as compensation for harassment, mental agony, unfair trade practice and deficiency in service.

 

(iii)    To make the payment of Rs.10,000/- for litigation expenses.

This order shall be complied with by the ops within one month from the date of receipt of the certified copy of this order. A copy of this order be supplied to both the parties free of costs.  File be consigned to records after due compliance.

Announced           (S.P.Attri)             (Anita Kapoor)          (Dharam Pal)

19.05.2016           Member                 Member                      President

 

Note: Each and every page of this order has been duly signed by me.

 

 

 

                                                Dharam Pal,                                                                                                        President