STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                             Consumer Complaint No.     130 of 2015

                                      Date of Institution                   28.07.2015

                                       Date of Decision                              17.08.2016

1.      Surinder Kumar Singla s/o Sh. Kapur Chand

2.      Deepak Garg s/o Sh. Pawan Kumar

          Residents of House No.90-A, Sector-9, Panchkula.

                                      Complainants

Versus

1.      M/s IREO Fiveriver Private Limited, through its Director/Managinr Director, Site Office at Sector 4 and 4-A, Pinjore Kalka Urban Complex, Village Bhagwan Pur Islam Nagar, near DLF Colony Tehsil Kalka, District Panchkula.

2.      M/s IREO Fiveriver Private Limited through its Director/Manager Director, S.C.O. 6-8, 1^st/2^nd Floor, Sector 9-D, Madhya Marg, Chandigarh, 160009.

                                      Opposite Parties

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. B.M. Bedi, Judicial Member.

                             Mr. Diwan Singh Chauhan, Member.

Argued by:           Shri S.K. Sharma, Advocate for complainants.

                             Shri Ramnik Gupta, Advocate for the Opposite Parties.

                                                   O R D E R

NAWAB SINGH J.

                   Surinder Kumar Singla  and Deepak Garg-complainants, booked a residential plot measuring 370 square yards, in a project of M/s IREO Fiveriver Private Limited-Opposite Parties (for short ‘the builder’) known as “IREO Fiveriver”, vide application Exhibit C-1. The basic sale price of the plot was Rs.92,69,000/- besides External Development Charges (EDC) and Infrastructure Development Charges (IDC). A Plot Buyer’s Agreement (Exhibit C-5) was executed between the parties on June 23^rd, 2011. The price of the plot was to be paid as per Payment Plan. The possession of the plot was to be handed over to the complainants within 24 months from the execution of the agreement with further grace period of six months, that is, by December 23^rd, 2013. The complainants paid Rs.23,17,250/- but the builder did not hand over possession of the plot. The complainants requested for refund of the amount deposited, alongwith interest but the builder did not pay any heed to his request. Hence, complaint under Section 17 of the Consumer Protection Act, 1986 (for short ‘the Act, 1986) has been filed before this Commission.

2.                The builder-Opposite Parties by filing written version contested the complaint taking plea with respect to its maintainability. In the preliminary objections it is averred that the complainants are not “Consumer” within the meaning of Section 2(1)(d) of the Consumer Act;  vide Clause-34 of the Buyer’s Agreement, dated June 23^rd, 2011, it was resolved between the parties that all their disputes, differences or disagreements arising out of, in connection with or in relation to the Agreement, shall be decided by Arbitration in accordance with the provisions of the Arbitration & Conciliation Act, 1996 (for short, ‘Arbitration Act, 1996’) and in view thereof, no Court or Commission or Tribunal, except the Arbitral Tribunal, has jurisdiction to entertain any dispute arising out of the transaction in question; the complainants have not hired any services from the builder.

3.                On merits, the builder admitted the payment of Rs.23,17,250/- and the execution of ‘Plot Buyer’s Agreement’ (Exhibit C-5).  It is pleaded that the possession has got delayed due to force majeure circumstances because the builder was issued letter of intent on dated December 31^st, 2009; licence was received and lay out plan was approved on March 23^rd, 2010 and the Irrigation Department issued NOC on March 20^th, 2013. Besides, the Hon’ble Supreme Court in SLP No.21786-21788 of 2010 granted stay with respect to the land which was acquired vide notification dated September 26^th, 2007 and the said stay order was vacated on December 12^th, 2012. NOC was granted by the National Board for Wild Life (NBWL) on April 24^th, 2015.   

4.                The complainant-Surinder Kumar Singla, in evidence examined himself as CW1 and produced documents.  The builder tendered affidavit of Rohit Tanwar, the authorised representative alongwith documents Exhibit OP-1 to OP-44.

5.                The following questions arise for consideration:-

(i)      Whether the complainants are consumers or not?

(ii)      Whether the present complaint is to be referred to Arbitration in view of Clause-34 of the Buyer’s Agreement, dated June 24^th, 2011?

(iii)     Whether the builder defaulted in delivering the possession of the plot to the complainants or not?

6.                The first question, that falls for consideration is whether the complainants are ‘consumer’ or not?  Learned counsel for the opposite parties-builder has argued that as per Section 2(1)(d)(i) of the Act, 1986; the consumer must necessarily be a person who buys any goods. As per the Sales of Goods Act, the Goods mentioned in the Act necessarily means and include only the moveable property. So, the complainants cannot be termed as consumer.

7.                The contention raised is not tenable. The Act, 1986 was enacted with a view to providing better protection to the consumers. As is apparent, the word consumer denotes a person who buys the goods or avails the services, yet the Act includes within its ambit the user of goods or services as well. Section 2(d) (i) and (ii) of the Act defines the term ‘consumer’ which is set out as under:-

Section 2(d) “consumer” means any person who—

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2. hires o avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes and beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first mentioned person but not include a person who avails of such services for any commercial purpose,.

8.                Section 2 (c) defines as under:-

(C) "Complaint" means any allegation in writing made by a complain­ant that— 

(i)       xxx

(ii)      xxx

(iii)     the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;

9.                Section 2 (o) denotes regarding service, which reads as under:-

(o)     "service" means service of any description which is made avail­able to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

10.              A plain reading of the aforesaid Section makes it clear that the consumer is a person who either buys the goods or avails or hires the services and also a person who is user of such goods or services but such use is made with the approval of the first mentioned person. The services include housing construction also. Needless to say, goods or services for commercial purpose or for resale have been excluded from the purview of the Act. Now what emerges from the provision is that a person is consumer either of goods or of services.

11.              The next question is as to whether the matter is to be referred to the Arbitration per clause 34 of the Buyer’s Agreement, dated June 23^rd, 2011 or not? 

12.              Learned counsel for the builder has contended that after enactment of the Arbitration and Conciliation (Amendment) Act, 2015 in Section 8 of the Arbitration Act, it is mandatory for this Commission to refer the parties to arbitration.

13.              Section 8 of the Arbitration Act, 1996 is reproduced as under:-

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

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

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

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

14.              After amendment of the Section in the year 2015, Section 8 reads as under:-

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

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

15.              Section 3 of the Consumer Act is relevant to adjudicate the point at issue. So, it is necessary to reproduce the provisions of Section 3 of the Consumer Act:-

“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.”

16.              A reading of Section 3 of the Consumer Act, referred to above, clearly shows that it provides additional remedy and existence of arbitration clause in the agreement to settle disputes between the parties, is not a bar to entertain a complaint filed by the consumer, alleging deficiency in service in providing services etc.  It is a remedy in addition to and not in derogation to any other remedy available to an individual. 

17.              Hon’ble Supreme Court in Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294 held as under:-

                   “Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.”

18.              In Trans Mediterranean Airways v. Universal Exports 2011(4) R.C.R.(Civil) 472 (SC), Hon’ble Supreme Court held as under:

                   “In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy.     

19.              No doubt these authorities were rendered prior to the amendment of Section 8 of the Arbitration Act, 1996 but even then the spirit of Section 8 of Arbitration (Amendment) Act, 2015 and Section 3 of the Consumer Act is the same, that is, the remedy is in addition to and not in derogation to any other remedy available.  In a recent judgment Lt. Col. Anil Raj and Another Versus M/s Unitech Limited and another, C.C. No.346 of 2013, decided on May 02^nd, 2016, Hon’ble Mr. Justice D.K. Jain, President, National Consumer Disputes Redressal Commission, New Delhi after considering the amendment in Section 8 of the Arbitration (Amendment) Act, 2015 held that in spite of the recent amendments in the Arbitration Act that the protection provided to the consumers under this Act is in addition to the remedies available under any other statute, including the consentient arbitration under the Arbitration Act.  It was held that the complaint filed by a consumer before the Consumer Fora would be maintainable despite there being an arbitration clause in the agreement to refer the dispute to the Arbitrator.  Hence, the contention raised by learned counsel for the builder is rejected.   

20.              Coming now to the question that the builder defaulted in delivering the possession of the plot to the complainants or not, Clause 11.1 of the agreement is relevant, which is reproduced as hereunder:-

                   “11.   POSSESSION AND HOLDING CHARGES

11.1  Subject to Force Majeure as defined herein, and further subject to the Allottee having complied with all its obligations under the terms and conditions of the Agreement and not being in default of any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges, and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Plot to the Allottee within a period of 24 (Twenty Four) months from the date of execution of this Agreement (“Commitment Period”). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 6 (Six) months (“Grace Period”), after the expiry of the said Commitment Period.” 

21.              It is not disputed that the builder floated the project and they were bound to obtain all the permissions before they invite applications from public. The builder cannot raise plea that for want of certain clearances, the possession of the plot could not be delivered. When the builder invited the applications and collected huge amount from the public, they cannot delay the possession of the plot for awaiting clearances. Thus, the breach of the agreement was on the part of the builder. The builder has not even remotely alleged any default on the part of complainants.  It is clearly made out that the builder was at fault in non-performance of the services agreed. The builder could not deny the refund of the deposited amount sought by the complainants.  Indisputably, the complainants have paid Rs.23,17,250/- to the builder. The builder is a commercial organization and used the amount for promotion of its business.

22.              In view of the above, the complaint is allowed. M/s IREO Fiveriver Private Limited-builder is directed to pay Rs.23,17,250/- (Rupees twenty three lacs, seventeen thousands, two hundred and fifty only) to the complainants, alongwith interest at the rate of 12% per annum from the date of its respective deposits till the date of realization; Rs.25,000/- as compensation for rendering deficient services and Rs.10,000/- towards litigation expenses. The entire amount be paid by the builder within a period of 45 days, from the date of receipt of the order, otherwise, it will carry interest at the rate of 18% per annum, till realization and it calls for pointed notice that under Section 27 of the Act, if the builder fails or omits to comply with this order, it shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine or with both.          

CL