Chandigarh

StateCommission

CC/250/2019

Abhishek Garg - Complainant(s)

Versus

m/s Omaxe Chandigarh Extension Developers Pvt. Ltd. - Opp.Party(s)

Parveen Gupta Adv.

05 May 2021

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	250 of 2019
Date of Institution	:	13.11.2019
Date of Decision	:	05.05.2021

 

Abhishek Garg s/o Sh.Ajay Garg, Opp. AS Modren School, Ward No.15, Peer Khana RD Khanna, Distt. Ludhiana (Punjab)-141401.

……Complainant

V e r s u s

 

1. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd. (Through the Officer Incharge/Authorized Representative) Zonal Office Indian Trade Tower, 1^st Floor, Madhya Marg Extn. Road, New Chandigarh (Near Mullanpur) Distt. SAS Nagar (Mohali) 140901.
2. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd. (Through its Managing Director), Corporate Off: 10-Local Shopping Complex, Kalkaji, New Delhi-110019.

…..Opposite parties

 

BEFORE:             JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                             MRS. PADMA PANDEY, MEMBER

                             MR. RAJESH K. ARYA, MEMBER

 

Present through video conferencing:

                      Sh.Parveen Gupta, Advocate for the complainant

Sh.Gazi Mohd.Umair, Advocate for the opposite parties

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                  

                   The complainant has filed this complaint seeking directions to the opposite parties to refund the amount of Rs.9,93,600/- received by them towards plot measuring 115 square yards, located in their project named ‘Omaxe Chandigarh Extension-V’, New Chandigarh, Mullanpur, District SAS Nagar, Punjab; alongwith interest, compensation and litigation expenses. It is the case of the complainant that despite the fact that the said plot was purchased by him, in resale, on 01.02.2017, from one Mrs.Ritu Gupta, yet, till the date of filing this complaint, neither allotment letter/agreement has been executed between the parties nor development work at the project site has been completed nor possession thereof has been delivered to him, which was otherwise promised to be delivered by June 2017. Hence this complaint.  

2.           The claim of the complainant has been contested by the opposite parties on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration this Commission has no jurisdiction to entertain this consumer complaint; that the complainant being investor did not fall within the definition of “consumer” as the plot in question was purchased for commercial purposes; that this Commission did not vest with pecuniary and territorial jurisdiction to entertain and decide this complaint; that all permissions/approvals were shown to the original allottee at the time of booking of the plot in question; that since the original allottee did not make timely payments as such number of reminders were sent to her but to no avail; that the complainant after getting transfer of the plot in question in his favour, never contacted the opposite  parties for making remaining payment; that had the original allottee or the complainant made the remaining payment for which demands were raised by the opposite parties, allotment letter/agreement would have been executed and possession was to be delivered thereafter only; that this complaint is bad for non-joinder and mis-joinder of parties because there is no Managing Director in the company and also the original allottee has not been made party to the same (consumer complaint); that this complaint filed is barred by limitation; that complicated questions of fact and law are involved in this complaint; and that this Commission is not competent to decide this complaint under summary proceedings and as such, it needs to be relegated to the Civil Court.
3.           On merits, purchase of the plot in question by the complainant, in resale, from Mrs.Ritu Gupta, on 01.02.2017 and receipt of amount of Rs.9,93,600/- against total sale consideration of Rs.37.91 lacs i.e. more than 25% has not been disputed by the opposite parties. Remaining averments have been denied being wrong. Prayer has been made to dismiss the complaint with costs.
4.           The contesting parties led evidence in support of their case.
5.           We have heard the contesting parties and have gone through the entire record of this case, including the written arguments filed by the contesting parties, very carefully.
6.           First of all, coming to the objection raised with regard to jurisdiction of this Commission with regard to settlement of this case through an Arbitrator, in the face of existence of arbitration clause contained in the allotment letter/agreement, it may be stated here that though we did not find any such clause in any of the document placed on record by the parties and also it is an admitted fact that allotment letter/agreement has not been executed between the parties, even then it is submitted that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as 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 between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by the opposite parties in this regard, stands rejected.
7.           Now coming to the objection taken to the effect that the complainant did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties, to establish that the complainant has purchased the plot in question, in the manner explained above, to indulge in ‘purchase and sale of units/plots’ as was 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, hence we hold that the complainant is a consumer as defined under the Act. Mere fact that the complainant is living in a house at Khanna or in any other house, is not a ground to shove him out of purview of consumer. Objection taken in this regard as such stands rejected.
8.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant case, record reveals that number of letters/documents have been placed on record, which have been issued by  the opposite parties mentioning the address of the  company thereon as SCO No.139-140, Sector 8-C, Madhya Marg, Chandigarh, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Office at Chandigarh and personally work for gain thereat:-

1. Payment receipts dated 20.01.2015, Annexure C-1, 19.06.2015, Annexure C-2 and 03.09.2016, Annexure C-3.
2. Demand letter dated 23.06.2015, Annexure C-4
3. Demand letter dated 27.10.2016, Annexure C-5 and
4. Payment receipt dated 01.02.2017, Annexure C-6

 

Thus, it is held that this Commission at Chandigarh has got territorial jurisdiction to entertain and decide this complaint. Objection taken in this regard stands rejected.

9.           Now coming to the objection taken regarding pecuniary jurisdiction, it may be stated here that this complaint has been filed under the Consumer Protection Act, 1986, under which, for determining pecuniary jurisdiction, this Commission is required to take into consideration the value of the goods and compensation claimed if any. In this complaint, if the total value of the plot in question i.e. Rs.37.91 lacs and compensation claimed are clubbed together, the same exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide this complaint. Objection taken in this regard stands rejected.
10.           There is no dispute with regard to purchase of the plot in question, in the aforesaid project of the opposite parties, by the complainant, in resale, in the manner, stated above. There is also no dispute with regard to the fact that despite the fact that the plot in question had been booked as far as back in 2015, yet, neither allotment letter/agreement has been executed either with the original allottee or with the complainant by the opposite parties nor possession thereof has been delivered till the date of filing of this complaint or even thereafter.
11.           However, to wriggle out of the situation, it has been stated by the opposite parties that because the complainant failed to make remaining payment, as such, neither allotment letter/agreement has been executed nor possession thereof has been delivered to him.

                   On the other hand, counsel for the complainant contended with vehemence that the opposite parties failed to offer possession of the plot in question for want of development activities and also since allotment letter/agreement had not been executed between the parties despite the fact that already more than 25% of the total sale consideration stood received by the company, as such, the complainant was not obliged to make remaining payment under those circumstances.

12.           It is significant to mention here that at the time of preliminary hearing in this consumer complaint on 18.11.2019 also, Counsel for the complainant has leveled the same allegations as have been leveled by him during arguments, as such, when this Commission went through the record and found that neither allotment letter/agreement has been got executed nor any document was there, wherefrom it could reveal that possession of the plot in question has been offered to the complainant, therefore, the opposite parties were directed to produce on record the following documents; duly authenticated, to apprise as to whether, the Company was competent to launch the project and sell units/plots therein to the general public including the complainant or not:-

1. “Registration Certificate of the project with the competent authority.
2. Copy of requisite Licence issued by the Competent Authority under Punjab Apartment and Property Regulation Act 1995.
3. Change of Land Use (CLU) pertaining to the project in question.
4. Letter of Intent (LOI).
5. Copy of approved site plan of the project.
6. Completion Certificate of the project.
7. Latest photographs of the site/unit in dispute.
8. Current list of Managing Director/Director(s) of the Company.
9. Detail of Bank Accounts of the Company.
10. List of properties both moveable and immoveable of the company and its Managing Director/Director(s) which can be attached in execution of the decree. ”

 

However, it is significant to mention here that despite the fact that various opportunities were available with the opposite parties to place on record the aforesaid documents, yet, they failed to furnish the same for the reasons best known to them. It  may be stated here that it was only the opposite parties which could have proved their case, as it is settled law that burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/developer, who was to develop the project. It was so said by the Hon’ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. It is very strange that in the present case, not even an iota of evidence has been placed on record by the opposite parties to prove as to at what stage, construction and development work has reached at the project site or that the same is at completion stage. Not even a single word has been mentioned in the reply filed by the opposite parties, about the progress of development work at the project site. In case, the development/construction activities are being undertaken and are about to complete, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, had been undertaken and completed at the site or not or about to complete, but the opposite parties failed to do so.

13.           Not only as above, deficiency in providing service and adoption of unfair trade practice on the part of the opposite parties is writ large, as despite receiving huge amount of Rs.9,93,600/- which was equal to more than 25% of the basic sale price of the plot in question, they failed to execute allotment letter/agreement. Whereas, on the other hand, once the opposite  parties, in the first instance, had already received substantial amount which was equal to 25% of the total sale consideration from the complainant, in the manner stated above, it was required of them to execute agreement under law within a reasonable period say two to three months from the date of booking; raise demands in accordance with the stage of development at the project site; complete the development work; obtain completion certificate from the competent authorities; and then deliver possession of the plot in dispute to the complainant. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demands from the original allottee by way of sending letters. Thus, this act of the opposite parties was not only unfair but illegal, which also contravenes Section 6 (1) of the PAPR Act,  which lays a duty on the opposite  parties to execute the agreement for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -

“6. Contents of agreement of sale:- (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906) ;

Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots.

(2) xxxxxxxxxxxxxxxx……………...

(3) xxxxxxxxxxxxxxxxx……………….”

The opposite parties were legally bound under law to execute the agreement and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but in this case, the said provision has been violated. This act of the opposite parties needs to be deprecated.

14.           From the peculiar circumstances of this case, it has been proved that the opposite parties made false representations, which were materially incorrect and were made in such a way that the complainant, to whom it was made, at the time of purchase of the plot in resale and also to the original allottee, were entitled to rely upon it and they may act in reliance on it. The complainant is thereby involved in disadvantageous transaction with the opposite parties and suffered financial loss, mental agony and physical harassment. All the facts established that from the very inception there was intent to induce the original allottee and thereafter to the complainant, to enter into the deal with intent to deceive them, which act amounts to grave deficiency in providing service, negligence and adoption of unfair trade practice on their part. The complainant was thus caused mental agony, harassment and financial loss at the hands of the opposite parties, as he was deprived of his house and also the amount paid towards the said plot was utilized by the company without providing him anything.
15.            It is significant to mention here that the plot in question had been booked as far as back in 2015 and was purchased by the complainant in resale, in the year 2017. Now it is May 2021 and still the complainant is empty handed. Under these circumstances, we are of the considered opinion that we cannot make the complainant to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or when there is no agreement, within a reasonable period of two to three years from the date of booking, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also  in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. In the present case also, since there has been an inordinate delay in the matter, which is still a continuing one, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest @12% p.a. from the respective dates of deposits (in the present case from the date of endorsement) in view of decision rendered by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment and also by the Hon’ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019  and Anil Kumar Jain & Anr  Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23^rd Dec 2019, wherein interest @12% p.a. was awarded to the complainant, on the amounts to be refunded to them from the respective dates of deposits; that will meet the ends of justice.
16.           At the same time, it is also held that if the complainant did not make remaining payment towards price of the said plot, he cannot be termed as defaulter, in view of the 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 residential units by the stipulated date or within reasonable period, it cannot expect the allottee(s) to go on paying installments to it. Similar view has 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. Even otherwise, in the present case, not even a single letter has been placed on record by the opposite parties, that they even asked the complainant to come for allotment of plot; execution of agreement and taking over of possession of the plot in question. If the opposite parties failed to do so, they cannot seek any benefit on a bald ground that the complainant did not come forward in the matter. At the same time, it is also held that if there was any default on the part of the original allottee, in making payment at the relevant time, when the complainant had not entered into the transaction, he (complainant) cannot be held responsible for the same. As such, plea taken by the opposite parties in this regard, to defeat the genuine claim of the complainant, stands rejected.  
17.           As far as objection taken by the opposite parties to the effect that because complicated questions of fact and law are involved in this case as such, this Commission is not competent to decide the same under summary proceedings is concerned, it may be stated here that this is a simple case of non execution of agreement/allotment letter within a specific period provided under Section 6 of the PAPR Act; non completion of development work at the project site; non obtaining of necessary approvals/sanctions before launching the project in question; and non delivery of possession of the plot within a reasonable period from the date of booking or from the date of purchase of the plot in resale, thereby causing financial loss, mental agony and harassment to the complainant. As such, it can very well be said that there is a denial of service to the complainant on the part of the opposite parties, for which he was at liberty to avail remedy by way of filing this consumer complaint. Our this view is supported by the principle of law laid down in Lucknow Development Authority Vs. M.K.Gupta, Civil Appeal No.6237 of 1990, decided on 5.11.1993, wherein the Hon’ble Supreme Court held that where the developer is at fault in not delivering possession of an immovable property, the act so amounts to denial of service and consumer complaint is maintainable before the Consumer Fora. In this view of the matter, this Commission is competent to decide this issue and as such, this complaint cannot be relegated to the civil court. Objection taken in this regard therefore stands rejected. 
18.           Since, it is an admitted fact that possession of plot in question has not been delivered to the complainant by the date, this complaint has been filed or even thereafter, as such, there is a continuing cause of action in his favour to file this complaint in view of law laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal   Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC),  wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action in favour of the allottee/buyer. Objection raised in this regard, as such, stands rejected.
19.           As far as objection taken with regard to misjoinder of necessary party is concerned, it may be stated here that the opposite parties were given opportunity during pendency of this complaint, to place on record names of the Managing Director/Directors of the company alongwith other necessary documents, which they failed to do so. Had there been no Managing Director in the company, they could have furnished an affidavit of responsible Officer of the company to that effect  and on the other hand, could have easily provided the list of active Directors of the company but that was also not done. Under these circumstances, bald objection taken in this regard has no value in the eyes of law and is accordingly rejected. 
20.           Now coming to the objection taken by the opposite parties to the effect that this complaint is bad for non-joinder of Mrs.Ritu Gupta as necessary party, it may be stated here that once she had sold the plot in question to the complainant and the opposite parties had accepted the said transfer, she has no relation/right therein and as such, was not required to be impleaded in any capacity in this consumer complaint.  Therefore, such an objection taken by the opposite parties being devoid of merit stands rejected.
21.           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 refund the entire amount received in respect of the plot in question to the complainant, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, starting from the dates when the same were actually made by him i.e. from 01.02.2017 onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the entire amount received in respect of the plot in question, shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/- to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.

22.           Certified copies of this order be sent to the parties, free of charge
23.           The file be consigned to Record Room, after completion.

Pronounced.

05.05.2021

Sd/-

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

 

Sd/-

(RAJESH K. ARYA)

 MEMBER

 

 

Rg.