Chandigarh

StateCommission

CC/13/2023

JAWAHAR LAL - Complainant(s)

Versus

M/S OMAXE CHANDIGARH EXTENSION DEVELOPERS PRIVATE LIMITED - Opp.Party(s)

SAVINDER SINGH GILL

09 Jun 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Consumer Complaint No.	:	13 of 2023
Date of Institution	:	07.02.2023
Date of Decision	:	09.06.2023

 

Sh. Jawahar Lal S/o Late Sh. Tinchu Ram R/o Village-Khalai, Tehsil-Rohru, Sub Tehsil Tikkar, Shimla, Himachal Pradesh-171212.

….Complainant.

Versus

1]  M/s Omaxe Chandigarh Extension Developers Private Limited, having its office at India Trade Tower, First Floor, Baddi-Kurali Road, New Chandigarh, Mullanpur, District S.A.S. Nagar, Mohali, Punjab-140901, through its CEO-cum Director Sh. Bhupendra Singh and Directors Sh. Krishan Kumar Agarwal and Shalini Barathi.

2]  Bhupendra Singh, CEO-cum-Director of M/s Omaxe Chandigarh Extension Developers Private Limited, having its office at India Trade Tower, First Floor, Baddi-Kurali Road, New Chandigarh, Mullanpur, District S.A.S. Nagar, Mohali. Punjab-140901.

3]  Kamal Kishore Gupta, Director of M/s Omaxe Chandigarh Extension Developers Private Limited, having its office at India Trade Tower, First Floor, Baddi-Kurali Road, New Chandigarh, Mullanpur, District S.A.S. Nagar, Mohali, Punjab-140901.

4]  Shalini Barathi, Director of M/s Omaxe Chandigarh Extension Developers Private Limited, having its office at India Trade Tower, First Floor, Baddi-Kurali Road, New Chandigarh, Mullanpur, District S.A.S. Nagar, Mohali, Punjab-140901.

….Opposite Parties.

 

BEFORE:

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MR. RAJESH  K. ARYA, MEMBER

 

ARGUED BY:       

 

Sh. Savinder Singh Gill, Advocate for the complainant.

Sh. Arjun Sharma, Advocate for the opposite parties.

 

PER  RAJESH  K. ARYA, MEMBER

                   This complaint has been filed by the complainant, seeking possession of the unit purchased by him alongwith compensation for the period of delay etc., as he is aggrieved of delay and latches; deficiency in providing service, negligence and adoption of unfair trade practice on the part of opposite parties. It has been alleged by the complainant that despite the fact that he has made payment of substantial sale consideration, as referred to in the chart below, yet, the opposite parties have not offered possession of the unit for want of development and construction at the project site. Details with regard to the project in dispute; unit purchased by the complainant; payments made by him etc. are given below:-

 

Project	“The Lake”, Village Bharounjian, Mullanpur, New Chandigarh, District SAS Nagar, Mohali, Punjab
Booked on	08.08.2014
Apartment No.	703, 7th Floor, Tower Victoria-A
Area of the unit	1530  square feet
Total cost	Rs.60,26,248/-
Amount paid	Rs.54,60,784/- (08.08.2014 to 18.06.2021)
Allotment Letter/ Agreement	05.10.2016 (Ann.C-1)
Due date of possession	04.10.2020 [48  months i.e. 42  months plus 6 months grace period from the date of execution of agreement, as per clause 40 (a)  thereof])
Possession offered or not	Delivered during pendency of this complaint on 21.03.2023
Delay in years	2 years 5 months 17 days
Allottee	Original allottee

 

It has been stated that even the terms and conditions contained in the allotment letter/agreement are one-sided, highly favourable to the opposite parties. Every efforts made by the complainant in the matter, for delivery of possession of his unit, did not yield any result. Hence, this complaint.

2.           The opposite parties in their joint written statement, while admitting the factual matrix of the case with regard to sale of the unit in question to the complainant; payments made by him as mentioned in the complaint; execution of allotment letter/agreement etc. took various objections/pleas as under:-
   1. the complainant being investor did not fall within the definition of consumer;
   2. that the period of 48  months of delivery of possession as mentioned in the allotment letter/agreement is excluding of Saturdays, Sundays and Govt. Holidays;
   3. that as per clause 40 (a) of the allotment letter/agreement, it was clearly agreed to between the parties that the period of delivery of possession of the unit was subject to force majeure circumstances;
   4. that as per clause 40 (a) it was also clearly brought to the notice of the complainant that opposite party No.1 shall only try to complete the development/construction work within a period of 48  months as such time was not the essence of contract;
   5. the possession of the unit in question was offered to the complainant vide letter dated 20.10.2022 on receipt of occupation certificate dated 15.10.2022, yet, instead of taking over the same, he filed this complaint;
   6. that delay in offering possession of the unit took place because of the force majeure circumstances having been faced by the opposite parties due to COVID-19, as a result whereof the Government of India issued various advisories, giving relief to the builders by extending the dates for completion of the projects;
   7. that the present complaint can be decided only by the civil court and not by this Commission;
   8. that because the complainant is defaulter in making payment, as such, he is not entitled to any relief;
   9. that even otherwise, payment of compensation, if any, for delay in offering possession is to the extent of Rs.5/- per sq. feet, of built-up are of the unit, as per clause 40 (g)  of the allotment letter/agreement, which shall be adjustable at the time of execution of conveyance deed;
   10. that the parties are bound by terms and conditions of the allotment letter/agreement and the Courts have no power to amend the same;
   11. that in the face of existence of arbitration clause in the allotment letter/agreement, this Commission is having no jurisdiction to decide this complaint and only an arbitrator can adjudicate the same;
   12. that the complaint is bad for mis-joinder of opposite parties no.2 to 4 as parties to this complaint.

 

3.           While denying the rest of the averments made in the complaint, the opposite parties prayed for dismissal of the complaint with costs.
4.           In the rejoinder filed, the complainant reiterated all the averments contained in his complaint and controverted those contained in written reply of the opposite parties.
5.           The parties led evidence in support of their case and also filed written arguments.
6.           We have heard the Counsel for the parties and have gone through the evidence and record of the case including the written arguments very carefully.
7.           First, we will deal with the objection taken by the opposite parties to the effect that the complainant did not fall within the definition of ‘consumer’, it may be stated here that the opposite parties have failed to place on record any cogent and convincing documentary evidence in this regard, whereas, the onus was upon them to establish that the unit  in question has been purchased by the complainant to indulge in ‘purchase and sale of units’ i.e. for earning profits, as was also held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their  onus, especially, when the complainant is now in possession of the said unit , hence, we hold that the complainant is a consumer as defined under the Act, 2019. As such, objection taken in this regard stands rejected.
8.           As far as objection taken with regard to Arbitration is concerned, it may be stated here that this Commission has reiterated so many times that this issue has already been set at rest by the larger Bench of the Hon’ble National Commission in Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements/contracts between the buyer and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Civil appeal bearing No.23512-23513 of 2017 and  Review Petition (C) Nos.2629-2630 of 2018 filed by the builder, before the Hon’ble Supreme Court of India, also stood dismissed vide orders dated 13.02.2018 and 10.12.2018 respectively. As such, objection taken in this regard also stands rejected.
9.           It is not in dispute that an amount of Rs.54,60,784/- for the period from 08.08.2014 to 18.06.2021 stood paid by the complainant to the opposite parties towards purchase of the unit in question, possession whereof was to be delivered within total period of 48  months from the date of  execution of allotment letter i.e. by 04.10.2020. It is also an undisputed fact that possession of the unit in question was not offered by 04.10.2020 and was delivered during pendency of this complaint on 21.03.2023 i.e. after a delay of more than 2 years 5 months. To wriggle out of the situation for such a huge delay, the opposite parties have taken shelter under the force majeure circumstances as under:-
   1. that COVID-19 lockdown was announced on  15.03.2020 in the country;
   2. that the Government of India issued various advisories, giving relief to the builders by  extending the dates for completion of the ongoing projects; and
   3. that the competent authorities have extended the period for completion of the project in question.
10.           Under above circumstances, the moot question which falls for consideration is, as to whether, the opposite parties can claim any immunity for delay in offering possession of the unit in question, on the grounds mentioned above. It may be stated here that admittedly lockdown in the country was announced on 25.03.2020, which was lifted in April 2020. At the same time, we also cannot ignore the fact that the Government of India, Ministry of Housing and Urban Affairs, Housing Section, vide office memorandum dated 13.05.2020 (Annexure OP/7) had extended the registration and completion date or revised complete date or extended completion dates by 6 months due to outbreak of COVID-19, which was extendable up-to further 3 months i.e. total 9 months. Thus, in our considered opinion, the opposite parties are entitled to get immunity of these 9 months from the actual date of offering possession of the unit to the complainant i.e. possession should have been delivered to the complainant latest by 04.07.2021 (09 months from 04.10.2020). However, it is coming out from the record that even by the said date (04.07.2021) also, possession of the unit was not offered to the complainant and there has been delay in the matter and as stated above, it was delivered only on 21.03.2023 during pendency of this complaint. Thus, in our considered opinion, by not offering and delivering possession of the unit in question by the promised date or even within the extended period of 9 months due to COVID-19, referred to above, the opposite parties are deficient in providing service and guilty of adoption of unfair trade practice.  
11.           At this stage, it is also clarified that since the offer of possession letter dated 20.10.2022, Annexure OP/3 was conditional, as it had been clearly mentioned therein that  possession of the unit will be delivered only after receipt of the amount mentioned in the statement of account attached therewith, which amount has been disputed by the complainant, as the compensation amount was not adjusted therein, as such, the complainant was right in filing this complaint. In Union of India v. Bhim Sen Walaiti Ram, (1969) 3 SCC 146, a three-Judge Bench of the Hon’ble Supreme Court had held that, “acceptance of an offer may be either absolute or conditional. If the acceptance is conditional, offer can be withdrawn at any moment until absolute acceptance has taken place”. Therefore, no help can be drawn by the opposite parties from this conditional offer letter.
12.             Now, we will like to decide as to what amount of compensation should be granted to the complainant, for the period of delay in delivery of possession of the unit in question. On account of delay in actual delivery of possession of the unit to the complainant, he has suffered mental agony, hardships and financial loss. In the case titled as Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon’ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Though, Counsel for the opposite parties contended with vehemence that if at all eligible for delayed compensation, the complainant is entitled to get meager compensation @Rs.5/- per square feet of the built-up area of the unit as mentioned in the allotment letter and the same being a binding contract between the complainant cannot be modified by this Commission. It may be stated here that this Commission is not bound to rely on a harsh, oppressive and unconscionable clause contained in the allotment letter/agreement because it is well settled law that a court can strike down an unfair and unreasonable contract or an unfair and unreasonable clause in a contract entered into between the parties who are not equal in bargaining power. The consideration or object of an agreement is unlawful inter-alia if it is of such a nature that if permitted, it would defeat the provisions of any law or if the court regards it as immoral or opposed to public policy. If the object of some terms and conditions of agreement is unlawful, the same are deemed to be void. Our this view is supported by the judgment passed by the Hon'ble Supreme court in the case of Central Inland Water Transport Corporation Ltd. & Anr. Vs. Brojo Nath Ganguly & Ors. (1986) 3 SCC 156 wherein it has been clearly held that the courts can strike down the terms of a contract. The Hon'ble Court has held that "......this principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power...." The draft legislation provided by the Law Commission of India in its 199th Report which addresses the issue of 'Unfair  (Procedural & Substantive) Terms in Contract' has stated  that "A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties." The above view has been reiterated by the Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. vs. Gouvindan Raghavan Civil Appeal No.12238/2018 wherein in paragraph nos. 3.8, 6.3, 6.6 & 6.7, it has been clearly held that if the terms of contract are harsh, oppressive and unconscionable to one of the parties, such a contract cannot be relied upon and Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. In this view of the matter, contention raised by the opposite parties that the complainant, if at all eligible for delayed compensation, is entitled to get meager compensation @Rs.5/- per square feet of the built-up area of the unit in question is rejected. 
13.           In DLF Homes Panchkula Pvt. Ltd. Versus Himanshu Arora, Civil Appeal No. 11097 of 2018, decided on 19 November, 2018 under similar circumstances, the Hon’ble Supreme Court of India has upheld the order of the Hon’ble National Commission awarding interest @9% p.a. for the period of delay in delivery of possession of the units. Relevant part of the said order is reproduced hereunder:-

“……8. Having regard to the above submission, we indicated to the learned Counsel appearing on behalf of the flat purchasers that it would be appropriate if the interest as ordered by NCDRC at 9% per annum is made payable over the period which was determined by the Order of the SCDRC. There is no objection by the flat purchasers to the aforesaid modification being made. Even otherwise, we are of the view that such a modification would be required in the interests of justice since it was the appellants who had questioned the Order of the SCDRC before the NCDRC.

9. In the above facts and circumstances, we confirm the direction of the NCDRC that the appellants shall pay interest @ 9 per cent per annum. However, the period over which interest shall be payable will be in conformity with the Order passed by the SCDRC….”

Thereafter also, similar rate of interest i.e. 9% p.a. was granted by the Hon’ble Supreme Court in DLF Homes Panchkula (P) Ltd. Versus Sushila Devi, Civil Appeal Nos.2285-2330 of 2019, decided on 26 February, 2019,  by making reference to the earlier order passed by it in Himanshu Arora’s case (supra). In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022 also, the Hon’ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-

“……Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today..…..”

In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon’ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered.  As such, in the present case also, the complainant deserves just and fair compensation for the period of delay in delivery of possession to him by the opposite parties. In our considered opinion, if we grant interest @9% p.a. to the complainant on the entire amount deposited by him, from the due date of possession onwards till delivery of possession thereof, that will meet the ends of justice.

14.           At the time of arguments, it was also argued by counsel for the opposite parties that as per terms and conditions of the Allotment Letter/Agreement, when computing the period of delivery of possession of the unit, Sundays, Saturdays, Bank Holidays, etc. are to be ignored. It is significant to mention here that similar issue has been dealt with by this Commission in a case titled as Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016 and many other cases, thereafter and it was specifically held that when there is no convicing explanation of getting extension of 6 months’ period to deliver possession beyond the stipulated date or even after the extended period, referred to above, the benefit of exclusion of Saturdays, Sundays, Bank Holidays etc. cannot be given. However, even otherwise, in the present case, the opposite parties are being granted benefit of 6 months of grace period and also the immunity of 9 months, referred to above. In view of above, the plea of the opposite parties in this regard stands rejected.
15.           It is necessary to add here that the opposite parties also cannot wriggle out of their liability by saying that delay took place on account of the reason that the complainant defaulted in making remaining payment and that he is not entitled to any relief being defaulter; in view of principle of law laid down by the Hon’ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon’ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. In the instant case also, if the complainant after making payment of substantial amount, did not make remaining payment when he came to know about huge delay in completing the project, as such, he was right in not making further payments/holding some amount(s). Objection taken in this regard by the opposite parties also stands rejected.
16.           As far as objection taken by the opposite parties to the effect that the present complaint can only be decided by the civil court only, it may be stated here that this is a simple case of non delivery of possession of the unit in question to the complainant by the committed date or even after the expiry of extended period, referred to above, and, as such, it can very well be said that there is a denial  of service on the  part of the opposite parties. Our this view is supported by the principle of law laid down in Lucknow Development Authority Vs. M.K.Gupta, 1994 AIR 787, 1994 SCC (1) 243,  wherein the Hon’ble Supreme Court held that where the developer is at fault in not delivering possession of a property by the committed date, the act so amounts to denial of service, and consumer complaint is maintainable before the Consumer Fora. Furthermore, this objection of the opposite parties is also bereft of merit, in view of the judgment passed by the Hon’ble National Commission, titled as M/s. Karwa Developers & 3 Ors. Vs. Shree Vinayak Co-Operative Housing Society Ltd. & 3 Ors., First Appeal No. 980 of 2016, decided on 3^rd March, 2017, wherein, a similar plea of the builder was negated, while holding as under:-

“We also do not find any substance in the plea taken by the appellant that under clause 14(a) of the development agreement, the complainant was required to file a civil suit under the Specific Relief Act only, because they were asking for monetary relief.  The State Commission rightly stated that the relief sought in the complaint were on account of deficiencies committed by the OP Developers, vis-à-vis, the society.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the developers failed to develop the same, the society was well within its rights to file consumer complaint against the OP builder.”

17.           As far as objection taken to the effect that opposite parties no.2 to 4 have been wrongly impleaded in their personal capacity, it may be stated here that the complainant has placed on record the List of  Signatories/Directors, Annexure C-5 downloaded from the website of Registrar of Companies, which reveals that Sh. Bhupendra Singh, CEO, Sh. Kamal Kishore Gupta, Director and Ms. Shalini Barathi, Director are actively working in the company/Opposite Party No.1. In our considered opinion, the  Officers like CEO and Directors are holding such important positions in the Company (a juristic person), where they are directly involved with the decision-making process and will be jointly and severally liable alongwith the Company, for all its  acts done. Similar view was taken by the Hon’ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017. As such, objection taken in this regard stands rejected.
18.           For the reasons recorded above, this complaint is partly accepted, with costs and the opposite parties, jointly and severally, are directed as under:-
    1. To pay to the complainant, compensation by way of  interest @9% p.a. starting from 04.07.2021  till 20.03.2023, on the amount deposited by him, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry interest @12% p.a. from the date of default till this entire accumulated amount is paid to the complainant.
    2. To pay to the complainant, compensation to the tune of Rs.1,00,000/- for causing him mental agony and harassment and also for deficiency in providing service and adoption of unfair trade practice and cost of litigation to the tune of Rs.35,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @9% p.a. from the date of default till realization.
19.           Certified copies of this order be sent to the parties free of charge.
20.           File be consigned to Record Room after completion.

Pronounced.

09.06.2023.

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

 (RAJESH K. ARYA)

MEMBER

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