Haryana

Panchkula

CC/248/2015

VIRENDER SINGH - Complainant(s)

Versus

M/S IREO FIVERIVER PVT.LTD. - Opp.Party(s)

SIKENDER BAKSHI.

19 May 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PANCHKULA.                                                                            

Consumer Complaint No	:	248 of 2015
Date of Institution	:	05.11.2015
Date of Decision	:	19.05.2016

 

Shri Virender Singh s/o Rama Nand resident of # 268 Himsikha Colony, Pinjore, District Panchkula, Haryana.                                                                                                                                   ….Complainant.

 

Versus

 

 

1^st Address

          M/s IREO Fiveriver Private Limited, S.C.O. 6-8 1^st and 2^nd Floor, Sector 9-D, Chandigarh.

2^nd Address

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

         

                                                                        ….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:     Complainant in person. 

                             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 they are engaged in the business of construction and development of residential and commercial property but they failed to deliver the possession of the plot by 20^th July, 2013 despite receiving Rs.13,22,800/- qua the said plot as sale consideration. They even failed to develop the said plot by laying roads, water lines, sewer lines, electrical lines in term of Clause 22 of Plot Buyer’s Agreement  dated 20.07.2011.  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 complainant was allured into purchasing/booking a residential plot in the colony named IREO Fiveriver to be developed by Ops under the impression that they will provide facilities such as outdoor/indoor sports, community clubhouse, swimming pool, herbs garden, fitness park, swing garden, special picnic zones and dog walking tracks etc. but in reality no such facilities are in existence. Vide allotment letter dated 26.03.2011 Plot No. R-104 measuring 250.59  Sq.Yards  under time linked payment plan @ Rs.20,000/-  per square yard was allotted to Ms.Priti Misra and she had paid Rs.5,50,000/- as booking amount vide  cheque No.967066 dated 11.08.2010. Further amount of Rs.7,03,000/-towards basic sale price was deposited by the allottee vide cheque No.617459 dated 16.05.2011 duly endorsed to the complainant at the back side of the receipt. Plot Buyer Agreement was executed between Ms.Priti Misra and OPs duly endorsed to the complainant. The total sale consideration of the plot i.e. Rs.65,09,075.25/- was required to be paid by the allottee towards the said plot. Due to some personal reasons, Ms. Priti Misra sold her plot which was purchased by the complainant for his personal use after paying a sum of Rs.12,53,000/- and also paid a sum of Rs.62,500/- and Rs.7300/- to the Ops vide cheque No.190533 dated 26.07.2011 and 190537 dated 01.08.2011 respectively.  Vide letter dated 10.08.2011 the complainant was declared original allottee in place of earlier allottee in terms of Clause 14 of the Plot Buyer’s Agreement.  In the month of April, 2015 the Ops demanded a sum of Rs.11,66,000/- for commencing of development work at site. On this, he visited the site but it was found that there was no proper development at site. At the time of purchase of the plot, the complainant was assured that the time would be the essence of the contract and the possession would be delivered well within time but the Ops failed to adhere to the promise.  The Ops have misled the complainant as they failed to obtain various approvals for commencing the development work at site on time such as environment clearance, NOC from Pollution Control Board, NOC of Irrigation Department and Wild Life Clearance etc.  Feeling aggrieved with the acts and conducts of the Ops earlier the complainant had filed a complaint before Hon’ble State Commission but vide order dated 01.10.2015 the complainant was given liberty to file the complaint before this Hon’ble Forum on account of pecuniary jurisdiction.  The Ops did not refund the amount alogwith interest. This act of the OPs amounts to deficiency in service, unfair trade practice and malpractice on their part. In evidence, the complainant has tendered affidavit and documents Annexure C-A, Annexure C1 to Annexure C10.

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 bought 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. 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 on 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 25 % of the basic sale price for the last 4 years.  The complainant had never approached the Ops for booking of the said plot while the complainant being an investor for commercial gains has purchased the allotment rights of the plot from open market and got assigned the allotment rights of the original allottee namely Ms.Priti Mishra who was also an investor and has sold her allotment rights to the complainant. The Ops have never represented that the colony would have 5 star facilities. The complainant had purchased the said plot after making full enquiries, perusing of various records, approved lay out and capability and competence of the Ops and thereafter he applied for assignment/transfer of the allotment of plot of the original allottee in his favour. 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 because when the development work starts at site then demand note dated 21.04.2015 followed by revised demand letter dated 04.05.2015 for payment of Rs.11,66,721.98 was sent but on failure on the part of the complainant reminders dated 22.05.2015 and 17.06.2015 followed by final notice dated 09.07.2015 were sent to him but the complainant did not make the payment. Since the next installment was due within three months of the commencement of the development, therefore, the Ops also sent demand note dated 17.08.2015 but to no avail.  The complainant was fully aware about the possession clause and the parties are bound by the agreed terms and conditions of the said agreement and no party can venture out of it.  The complainant had chosen to remain invested since 2011 as no installment was payable but no sooner did the Ops demanded the agreed installments on the commencement of development, the complainant filed the present false and frivolous complaint.  The development work at the site is not 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 R40.

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 purchased a plot measuring 250.59.sq yds from first allottee Ms.Priti Mishra and also paid a sum of Rs.12,53,000/- to her. It is also not disputed that he had paid Rs.62,500/- and Rs.7300/- to the Ops therefore,  vide letter dated 10.08.2011 onward rights/obligations were assigned to the complainant as transferee of the original allottee. 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 purchased the allotment rights of the plot from  open market and got assigned the allotment rights of the original allottee namely Ms.Priti Mishra who was also an investor. 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 20.07.2011, Annexure C-8, the Opposite Party was 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 20.01.2014. 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.13,22,800/- 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