Haryana

StateCommission

CC/110/2015

VINOD KUMARSURENDER KUMAR CHAHAL - Complainant(s)

Versus

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

NEERAJ GUPTA

26 Jul 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

         

                             Consumer Complaint No.     110 of 2015

                                      Date of Institution                  26.06.2015

                                       Date of Decision                             26.07.2016

 

 

 

 

 

 

 

 

1.      Surender Kumar Chahal s/o Sh. Lakhi Ram Chahal, age 52 years, resident of House No.1294, Urban Estate, Jind, Haryana.

2.      Shalender Singh son of Sh. Bharat Singh, resident of House No.2922, Ward No.14 & 15, Urban Estate, Jind, Haryana.

                                      Complainants

Versus

 

M/s IREO Fiveriver Private Limited, 305, 3^rd Floor, Kanchan House, Karampura Commercial Complex, New Delhi-110015 through its Managing Director.

 

2^nd Address:

 

S.C.O. No.6-8, 1^st and 2^nd Floor, Sector 9-D, Chandigarh.

                                      Opposite Party

 

 

 

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

                   Mr. B.M. Bedi, Judicial Member.

                   Mr. Diwan Singh Chauhan, Member.

                                                                                                               

 

For the parties:   Shri Neeraj Gupta, Advocate for the complainants

                             Shri Ramnik Gupta, Advocate for the opposite party

 

                                                   O R D E R

 

NAWAB SINGH J,

 

          Surender Kumar Chahal and Shalender Singh-complainants, have filed the instant complaint under Section 17 of the Consumer Protection Act, 1986 (for short ‘the Act, 1986) with the averments that they booked a residential plot No.R-80 Type-A, in a forthcoming project of M/s IREO Fiveriver Private Limited-Opposite Party (for short ‘the builder’) known as “IREO Fiveriver”. The complainants initially deposited Rs.8.00 lacs vide receipt Exhibit C-1. In all, the complainants paid Rs.20,04,720/- to the builder. A Plot Buyer’s Agreement (Exhibit C-3) was executed between the parties on June 24^th, 2011. The total sale consideration of the plot was Rs.80,18,880/- The possession of the plot was to be handed over to the complainants within 24 months from the execution of the agreement, that is, by June 23^rd, 2013. The builder neither handed over the possession of the plot nor responded to the complainants with regard to the progress of the project. The complainants requested for refund of the amount deposited, alongwith interest but the builder did not pay any heed to their request.

2.      The builder, in its written version, resisted the complaint on various grounds including its maintainability. The builder in preliminary objections 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 24^th, 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.  On merits, the builder admitted the payment of Rs.20,04,720/- made by the complainants. The builder also admitted the execution of ‘Plot Buyer’s Agreement’ (Exhibit C-3).  It is pleaded that the possession has got delayed due to force majeure circumstances because the builder was granted Forest Clearance on December 17^th, 2009, which was later revalidated and Wild Life Clearance was granted on October 30^th, 2009, Airport Clearance on February 26^th, 2010, Ground Water Board permission on August 19^th, 2011, License No.28, 55 and 74 were issued on March 23^rd, 2010, August 1^st, 2013 and August 1^st, 2013 respectively. It was submitted that environment clearance was given on April 15^th, 2014, No Objection Certificate (NOC) from Pollution Control Board on May 2^nd, 2014 but still NOC from National Wild Life Board was awaited.

3.      The complainant-Surender Kumar Chahal in evidence examined himself as CW1 and produced documents.  The builder examined Rajneesh-OPW1, authorized representative alongwith documents Exhibit OP-1 to OP-38.

4.      The following questions arise for consideration:-

(i)      Whether the complainants are ‘consumer’ 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?

5.      The first question, that falls for consideration is whether the complainants are ‘consumer’ or not?  Unless there is evidence on record to show that the complainants had booked more than one property/flat for the purpose of trading, a bald assertion by the builder that property/flat had been bought for the purpose of making profits is not sufficient to hold that the transaction was for “Commercial purpose.”  Except for a bald plea in the reply that the plot had been purchased by the complainants with a view to sell it on premium and make profits, Builder has not said even an additional word in this behalf, leave alone leading evidence to prove the assertion.  So, this plea of the builder is hereby rejected.

6.      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 24^th, 2011 or not? 

7.      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.

8.      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.”

9.      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.”

10.    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.”

11.    Upon reading of the Section 3 of the Consumer Act, it is clear 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.  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.”

12.    In another case 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      

13.    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 by 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 aforesaid contention advanced by learned counsel for the builder is rejected.   

14.    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.” 

15.    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 allotment/possession of the plot for awaiting clearances. Thus, delay/breach, if any, 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.  The complainants have paid Rs.20,04,720/- to the builder. The builder is a commercial organization and used the amount for promotion of its business.

16.    In view of above, the complaint is allowed. M/s IREO Fiveriver Private Limited-builder is directed to pay Rs.20,04,720/- (Rupees Twenty Lac Four Thousand Seven Hundred Twenty 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.          

  

Announced 26.07.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President