STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Silver City Housing & Infrastructure Ltd., H.No.89, Sector 8-A, Chandigarh through its M.D. Sh. Rajat Kakar.

……Appellant           

V E R S U S

1.    Sh. J. P. Singh Kapur son of Late Sh. Gurdial Singh Kapur.

2.    Smt. Santosh Kapur wife of Sh. J. P. Singh Kapur.

Both residents of House No.741, Sector 8-B, Chandigarh.

              ....Respondents.

Appeal U/s 15 of Consumer Protection Act, 1986

BEFORE:  MR. JUSTICE SHAM SUNDER, PRESIDENT.

                MRS. NEENA SANDHU, MEMBER.

                SH.JAGROOP SINGH MAHAL, MEMBER

Argued by: Sh.Sandeep Bhardwaj, Advocate for the appellant

                 Sh.Vishal Aggarwal, Advocate for the respondents. 

PER MR. JUSTICE SHAM SUNDER, PRESIDENT

1.         This appeal is directed against the order dated 08.06.2011, rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter to be called as the District Forum only), vide which it accepted  the complaint and directed the OP(now appellant) as under:-

“i)       to refund an amount of Rs.15,20,500/-  to          the complainants along with interest 9% per              annum from the date of respective deposits           till actual payment.

ii)          to pay a sum of Rs.7,000/- to the complainants as costs of litigation. 

This order be complied with by the OP within     30 days from the date of receipt of its certified copy, failing which OP shall be liable to refund Rs.15,20,500/-  to the complainants along with penal interest @18% p.a. from the date of respective deposits till its realization besides payment of Rs.7,000/- as costs of litigation”.

2.             The facts, in brief, are that the complainants (now respondents), agreed to purchase an apartment, bearing No.204B, IInd Floor, Cat.A-2, Block-A-V measuring 1641.54 Sq. ft. approximately, including car parking area measuring 112 Sq. ft. in ‘Silver City Themes’ for a consideration of Rs.18,50,000/-, plus Rs.50,000/-,  as cost of the car parking area, from the OP. An agreement dated 24.01.2006 (Annexure C-1), was executed, between the parties, in this regard. The sale consideration was to be paid, in five installments. The last installment was to be paid on 31.07.2007. It was stated that the complainants, paid a sum of Rs.15,20,500/-, as per the payment schedule. The possession was to be delivered, soon after the payment of last installment on 31.07.2007. When the complainants, visited the site, they found that the construction work was not in progress, and, as such, there was no sign of completion of the project, in the near future. The complainants, then approached the representative of the OP, who assured that the project, would be completed with a slight delay. The complainants were further assured, that the balance payment would be asked for, only on completion of the project. Believing the assurances, given by the representative of the OP, the complainants, waited for sufficient time. It was further stated that, again when they visited the site, they found that there were no signs of completion of the project, in the near future. Thus, the complainants asked the OP, to refund the amount, with interest, but to no avail. It was further stated that the aforesaid acts of the OP, amounted to deficiency, in rendering service, and indulgence into unfair trade practice.

3.             When the grievance of the complainants, was not redressed, left with no alternative, they filed a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only).

4.             In its reply, the OP, admitted that the complainants had agreed to purchase an apartment, mentioned in the complaint, from the OP, including car parking area. It was also admitted, that an agreement dated 24.01.2006, was executed between the parties.  It was stated that the construction work could not be completed, in time, on account of the stay of annexure A-6 dated 17.01.2006, vide which the guidelines were laid down by the Punjab Pollution Control Board, for setting up the residential colonies by the promoters, having been granted by the Hon’ble High Court, on 30.1.2007, in Civil Writ Petition No.18632 of 2005, titled as ‘Dharam Chand and another Vs. State of Punjab and others’. It was further stated that, the said stay was later on vacated vide order dated 01.05.2008, by the Hon’ble High Court. It was further stated that, thereafter, the Punjab Pollution Control Board, vide letter No.MHL/NOC/2008/F-83 dated 19.09.2008, issued ‘No Objection Certificate’. It was further stated that, thereafter, the construction work of the project was started.  It was further stated that the construction activity was in full swing, at the site. It was further stated that the construction work could not be completed, on account of the circumstances, beyond the control of the OP, and, as such, they were entitled to extension of time, according to Clause 23 of the agreement annexure C-1. It was, however, admitted, that a sum of Rs.15,20,500/-, towards the part price of apartment, was deposited by the complainants.  It was further stated that, since the complainants, stopped making payment of the remaining installments, and, as such, they were not entitled to possession or refund of amount. It was further stated that the complainants, did not fall within the definition of consumer, as they agreed to purchase the apartment, in question, for commercial purpose. It was further stated that the complainants, did not approach the District Forum with clean hands, as they failed to mention, that another agreement dated 01.11.2008, with regard to the change of number of the apartment, and the extension of time for delivery of possession, was executed, between the parties. It was further stated that, as the complainants, did not approach the District Forum, with cleans hands, they were liable to be thrown out, at the threshold, on this ground alone, but it (District Forum) failed to do so. It was further stated, that neither there was any deficiency, in rendering service, on the part of the OP, nor it indulged into unfair trade practice. The remaining allegations, were denied, being wrong.

5.             The parties led evidence, in support of their case.

6.             After hearing the Counsel for the parties, and, on going through the evidence and record, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

7.             The Counsel for the appellant, at the very outset, submitted that the apartment was agreed, to be purchased by the complainants, with a view to get handsome returns and generate profits, and, as such, they did not fall within the definition of consumer. The submission of the Counsel for the appellant, in this regard, does not appear to be correct. In para no.4 of the complaint, the complainants, stated that the respondent projected that the housing project was an excellent opportunity for investment, as well as for residence and convinced the complainants, for investing their hard earned money. In para no.7 of the complaint, the complainants also stated, that they invested the money, on the assurance of the OP. From these averments, made, in the complaint, it could not be said that the apartment agreed to be purchased, by the complainants, was for commercial purpose, with a view to generate profits. The complainants are not property dealers. There is no evidence, on record, that they agreed to purchase the apartment for sale thereof, to earn profit. There is also no evidence, on record, that the complainants intended to run some commercial activity, in the apartment, with a view to earn profit. The complainants, in our opinion, agreed to purchase the apartment, for the purpose of their own residence, or with an intention to provide residence to their children. If an apartment is agreed to be purchased by the complainants, for their own residence, or with an intention to provide accommodation for residence, to their wards, it could not be said that such an activity, falls within the definition of commercial activity. Admittedly, it was a housing project, in which the complainants, agreed to purchase an apartment. If a person agrees to purchase an apartment, in a residential project, the only inference, which can be drawn, is that, it is for the purpose of his residence or residence of his parents or wards. In para no.4 and 7 of the complaint, the complainants only elucidated the assurances, which were given by the representative of the OP. Under these circumstances, it cannot be said, by any stretch of imagination, that the complainants, agreed to purchase the apartment, for sale thereof or for running commercial activity therein, to generate profit. The complainants fall within definition of consumer. The submission of the Counsel for the appellant, being devoid of merit, must fail, and the same stands rejected.

8.             It was next submitted by the Counsel for the appellant, that the complainants, did not approach the District Forum, with clean hands, in as much as, they concealed the factum of execution of agreement dated 01.11.2008. It is, no doubt, true that Annexure R-4, an agreement dated 01.11.2008, was executed between the parties, wherein, the apartment number was changed and the date of delivery of possession, was fixed as 30.11.2009. This agreement, no doubt, was not mentioned by the complainants, in the complaint, yet, it is to be determined, as to whether, non-mention of such a fact, in the complaint, amounts to concealment of a material fact, going to the very root of the case or not. In the written reply, the OP/respondent, made a mention, that the supplementary agreement dated 01.11.2008, was executed, between the parties. Since, the parties joined issue, and led evidence by way of affidavits and, as such, non-mention of the fact, indicated above, by the complainants, in the complaint, did not matter much. Non-mention of such a fact, by the complainants, in the complaint, in the context of the facts and circumstances of the instant case, also did not go to the root of the same (case). Under these circumstances, the complainants, could not be thrown out, at the very threshold of the case. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected.

9.             It was next submitted the Counsel for the appellant, that the Consumer Fora, U.T., Chandigarh, had no territorial jurisdiction, to entertain and decide the complaint. He further submitted that the property, in question, is situated in SAS Nagar (Mohali), Punjab. It may be stated here, that in para 27 of the complaint, it was in clear-cut terms, mentioned by the complainants, that the registered office of the OP, was at Chandigarh. It was further stated, in this paragraph, by the complainants, that the installments, towards the part price of the apartment, were paid at Chandigarh, and the Managing Director of the OP, was residing at Chandigarh. Sh.J.P.Singh Kapur, complainant no.1, in his evidence, by way of affidavit, also testified, in this regard. No doubt, in reply to para.27 of the complaint, it was stated by the OP, that the averments, contained in this para, were wrong and denied. No evidence, in this regard, was produced by the OP. Since, the installments towards part price of the apartment, were paid at Chandigarh, and the registered office of the OP, is at Chandigarh, cause of action to file the complaint arose at Chandigarh. The District Fora, U.T., Chandigarh, thus, had the territorial Jurisdiction, to entertain and decide the complaint. The submission of the Counsel for the appellant, in this regard, being devoid of merit, is rejected.

10.           It was next submitted by the Counsel for the appellant, that since the complainants, stopped making payment of the remaining installments, towards the price of the apartment, they committed breach of the terms and conditions of the agreement annexures C-1 and R-4, and, thus, were not entitled to the refund of amount with interest. Annexure C-1, copy of the agreement dated 24.01.2006, was initially executed, between the parties. The total cost of the apartment was Rs.18,50,000/-, and cost of the car parking area was Rs.50,000/-. Out of Rs.19,00,000/-, the complainants, deposited Rs.15,20,500/- i.e. 80% of the cost. It means that substantial amount was deposited, by the complainants, out of the sale consideration of the apartment. They stopped making further payment of installments, when they found there was no progress, in construction, at the spot. According to  C-1 agreement dated 24.01.2006, 5^th  installment of 5%, was to be paid on 31.07.2007, when the possession of apartment, was to be delivered to the complainants. By 31.07.2007, not even a brick had been laid, at the spot, what to speak of raising construction. According to the agreement dated 01.11.2008, Annexure R-4, executed between the parties, vide which the number of the apartment was changed and the total cost was mentioned as Rs.19,70,000/-, the 5th  installment of 5% ,which was the final installment, was to be paid on 30.11.2009, at the time of delivery of possession. The OP did not adhere to the time schedule. Even till the institution of the complaint, on 03.11.2010, no progress in construction of the project, had been achieved. Under these circumstances, it is to be determined, as to whether, the complainants, were liable to make payment of further installments. In our considered opinion, since there was no progress, in construction, at the site, the complainants were not liable, to make payment of further installments. . In Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), no development work was carried out, at the site. Thus, the payment of further installments was stopped by the complainant. It was, under these circumstances, held that the builder could not be allowed to take shelter, under the agreement clause, to usurp the money deposited by the complainant. It was further held that the builder cannot forfeit the entire money, paid by the complainant, on account of his own fault, in not carrying out the development work. Ultimately, the Hon’ble National Commission, ordered the refund of amount with interest. The observations made in Prasad Homes Private Limited`s case (supra), are fully applicable to the facts of the instant case. Under these circumstances, it could not be said that the complainants were at fault. On the other hand, the OP, was at fault in not raising the construction. The complainants, could not wait indefinitely, just at the whims and fancies of the builder. Neither the complainants have been handed over the possession of the apartment, even after more than 5 years of the execution of the original agreement nor the OP adhered to the time schedule of delivery of possession, as per the second agreement R-4, nor the refund of amount was made to them. Under these circumstances, the complainants were entitled to the refund of amount. The District Forum, was, thus, right, in holding so. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected.

11.           It was next submitted by the Counsel for the appellant, that the construction could not be undertaken, due the circumstances beyond the control of the OP. He took shelter under Clause 23 of the agreement C-1 and Clause 22 of the agreement  annexure R-4, which are identical, in terms,  in support of his contention, and which read as under:-

“The allottees agree that sale of Apartment/dwelling unit is subject of force majeure clause which interalia include delays on account of non availability of steel and/or other building materials, or water supply or electric power or slow down strike or due to a dispute with construction agency employed by the company/promoter civil commotion, militant action or by reasons beyond the control of the company/promoter and in any of the aforesaid events the company/promoter shall be entitled to a reasonable corresponding extension of the time of the delivery of possession of the said Apartment/dwelling unit on account of force majeure circumstances. The company/promoter as a result of such contingency arising reserves the right to alter or vary the term and conditions of allotment or if the circumstances beyond the control of the company/promoter so warrant the company/promoter may suspend the scheme for such period as it may consider expedient and no compensation of any nature whatever can be claimed by the allottee for the period of delay/suspension of scheme. Inconsequence of the company/promoter abandoning the scheme the company/promoter liability shall be limited to the refund of the amount paid by the allottee without any interest or compensation whatsoever.”

12.               The High Court of Punjab & Haryana in Civil Writ Petition No.18632 of 2005 titled as ‘Dharam Chand and another Vs. State of Punjab and others’, vide order dated 30.01.2007, stayed the letter dated 17.01.2006  (Annexure R-6), vide which the Punjab Pollution Control Board laid down the guidelines for setting up colonies by the Promoters. Vide order dated 01.05.2008 Annexure R-10, the order dated 30.01.2007, was vacated. There is nothing, on record, that from 24.01.2006, when C-1 agreement, was executed between the parties, upto 29.01.2007, no objection was obtained from the Punjab Pollution Control Board and the construction activity, was undertaken, by the OP, though there was no stay, during this period. The stay, as stated above, was vacated on 01.05.2008. There is also, no document, on record, to show that from 02.05.2008, until the filing of the complaint, any construction was carried out, by the OP, at the site. Even if, the period of stay aforesaid, is excluded, the OP, was required to undertake the construction of the project, before the stay was granted and after the same was vacated. When there was no progress in construction, even after the vacation of stay, left with no alternative, the complainants had to ask for the refund of amount. The circumstances, before 30.01.2007 and after 01.05.2008, were not beyond the control of the OP, as a result whereof the construction activity could not be undertaken. Even the permission for raising construction, vide letter dated 03.01.2006  Annexure R-3 by Nagar Council Dera Bassi, Patiala, was given subject to fulfillment of certain conditions. It is not known, as to whether, those conditions were fulfilled by the OP, or not. R-11 Annexure dated 19.09.2008 is the “No Objection Certificate” which was granted by the Punjab Pollution Control Board, Patiala. Even in Annexure R-14, addressed to the complainants, it was stated that the possession would be delivered, by the last quarter of 2010. As stated above, the complaint was filed on 03.11.2010 and by that time, the possession of apartment, had not been delivered to the complainants. It is evident from annexure R-8 dated 02.04.2007, that “No Objection Certificate” from Pollution angle, was refused to the OP. It was clearly mentioned, in this document, that on 22.02.2007, at the time of site visit, it was found that the construction was started by the Promoter without obtaining the no objection certificate. It means that at the time of the original agreement annexure C-1 dated 24.01.2006, was executed between the parties, “No Objection Certificate” from the Punjab Pollution Control Board had not been obtained by the OP. In case Kamal Sood Vs. DLF Universal Ltd.’ reported as  III(2007) CPJ-7 (NC),   it  was held that a builder should not collect money, from the prospective buyers, without obtaining the required permissions, such as zoning plan, layout plan, and schematic building plan. It is the duty of the builder, to obtain the requisite permissions or sanctions, such as sanction for construction etc., in the first instance, and, thereafter, recover the consideration money from the purchasers of the flats/building. The ratio of law, laid down in the aforesaid case, is squarely applicable to the facts and circumstances of the instant case. As stated above, from 24.01.2006, when the agreement annexure C-1 was executed, between the parties, upto 29.01.2007, and from 02.05.2008 onwards, there was no legal hitch, in the way of the OP, to raise construction. The OP, therefore, could not take shelter under the force majeure Clauses 23 of the agreement C-1 and 22 of the agreement annexure  R-4. Under these circumstances, it could not be said, that the construction activity could not be undertaken, wholly on account of the circumstances, beyond the control of the OP.      The District Forum, was, thus, right, in holding that the complainants were entitled to the  refund of amount deposited by them. The District Forum, was also right, in holding that refusal on the part of the OP, to refund the amount, amounted to deficiency in service. The District Forum was also right, in holding that the OP, by not obtaining “No Objection Certificate” from the Punjab Pollution Control Board, Patiala, before collecting money, from the complainants, and the other prospective buyers, indulged into unfair trade practice. The findings of the District Forum, in this regard, being correct, are affirmed.

13.           The next question, that arises for consideration, is, as to whether, for the period, during which, the stay order granted by the Punjab & Haryana High Court, was operative, and the construction activity could not be undertaken, interest could be granted to the complainants or not. Since, the Hon’ble High Court, granted stay of operation of Annexure R-6 dated 17.01.2006,  on 30.01.2007, and vacated the same on 01.05.2008, no liability of interest, could be fastened upon the OP, for that period. It was, on account of the circumstances, beyond the control of the OP, to raise construction, during this period. Under these circumstances, it is held that the complainants, shall only be entitled to interest @9% per annum, from the respective dates of deposits, upto 29.01.2007 and then from 02.05.2008, till the realization of amount. The order of the District Forum, deserves to be modified to this extent.

14.           For the reasons, recorded above, the appeal is partly  accepted with costs quantified at Rs.5000/- and the impugned order is modified, in the following manner:-

i)     The respondent/OP, shall be liable to  refund    the amount of Rs.15,20,500/-,to the       complainants, alongwith interest @ 9% per    annum, from the respective dates of deposits,     till realization (excluding the period, from       30.01.2007 to 01.05.2008, during which the      stay        granted by the        Punjab & Haryana High Court remained operative).

ii)    The remaining directions given and reliefs granted, by the District Forum, subject to the      aforesaid modification, shall remain unaltered.

15.         Certified Copies of this order be sent to the parties, free of charge.

16.         The file be consigned to Record Room, after completion

Pronounced.

October 12, 2011

Sd/-

 [JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

 [NEENA SANDHU]

MEMBER

Sd/-

 [JAGROOP SINGH MAHAL]

 MEMBER

Rg