Chandigarh

StateCommission

CC/646/2016

Pardeep Sheoran - Complainant(s)

Versus

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

Vijay Pal, Adv.

09 Feb 2017

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	646 of 2016
Date of Institution	:	28.09.2016
Date of Decision	:	09.02.2017

 

Pardeep Sheoran son of Late Sh.Sajjan Singh, resident of Flat No.202, GH-27, Mansa Devi Complex, Sector 5, Panchkula, now residing at Flat No.202, Block A, Rail Vihar, Mansa Devi Complex, Sector 4, Panchkula.

……Complainant

V e r s u s

M/s Omaxe Chandigarh Extension Developers Private Limited, SCO No.139-140, First Floor, Sector 8-C, Madhya Marg, Chandigarh-160008, through its Managing Director/Principal Officer/Authorized Officer.

2^nd Address:- 10 L.S.C., Kalkaji, New Delhi-110019.

              .... Opposite Party

Complaint under Section 17 of the Consumer Protection Act, 1986.

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:       Sh.Vijay Pal, Advocate for the complainant

      Sh.Ashim Aggarwal, Advocate for the opposite party.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                To purchase a plot measuring 300 square yards, in a project launched by the opposite party,  known as ‘Omaxe New Chandigarh’ at Mullanpur, Punjab, the complainant moved an application, on making payment of Rs.8,90,000/-, vide cheque dated 14.12.2010. He was provisionally allotted plot no.558N, measuring 301 square yards, in the said project. Final allotment letter was issued on 03.05.2012, showing basic sale price of the plot as Rs.48,64,689.81ps. which included maintenance security, club charges etc. By the beginning of 2012, the total amount of Rs.46,82,670/- was paid by the complainant in the following manner:-

14.12.2010	890000	Through cheque
14.12.2010	325000	Through cheque
25.06.2011	350000	Cash
25.06.2011	400000	Through cheque
29.06.2011	156120	Cash
04.01.2012	250000	Cash
04.01.2012	150000	Through cheque
04.01.2012	150000	Through cheque
11.01.2012	50000	Through cheque
11.01.2012	124350	Cash
11.01.2012	100000	Through cheque
11.01.2012	200000	Through cheque
11.01.2012	300000	Through cheque
11.01.2012	500000	Through cheque
11.01.2012	190000	Through cheque
11.01.2012	450000	Through cheque

 

Receipts have been placed on record as Annexure C-1 colly. Allotment letter dated 02.05.2012 and letter containing terms and conditions for allotment dated 03.05.2012 are placed on record as Annexures C-3 and C-4 respectively.

                It is case of the complainant that as per as per Clause 24 (a) of the said Allotment Letter/Agreement, the opposite party undertook to complete the development work within 18 months, with extended period of six months, from the date of signing of the said Allotment Letter/Agreement. Possession of the plot was to be delivered on or before 02.05.2014. However, the said promise was not fulfilled. The complainant approached the opposite party, many a time, to get possession of the plot, however, he failed to get any satisfactory reply. Ultimately, he sent a legal notice on 10.08.2016, requesting for delivery of possession and registration of sale deed in his favour. He also demanded payment of interest, on the deposited amount; compensation, to the tune of Rs.10 lacs, towards causing him mental and physical harassment and Rs.50,000/- as litigation expenses. When nothing was done, present complaint was filed.

2.         Notice in this complaint was ordered to be issued on 30.09.2016, for 20.10.2016, upon which, reply was filed by the opposite party on 06.12.2016, raising many preliminary objections like as per Clause 44 (c) of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide disputes between the parties, because as per above said provision, the matter needs to be referred to an arbitrator for adjudication. It was further averred that the complainant did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as he being investor had purchased the plot, in question, for commercial purpose i.e. for selling the same, as and when there was escalation in the prices of real estate, to gain huge profits. Pecuniary jurisdiction of this Commission was challenged. Territorial jurisdiction of this Commission was also challenged, by stating that no cause of action, whatsoever, has accrued within the territorial jurisdiction of this Commission.
3.         Factual matrix of the case was not controverted. Price of the plot mentioned in the complaint and payments made by the complainant is not disputed. It was not specifically denied that there was delay in issuance of final Allotment Letter/Agreement, after receipt of huge amount. There is no dispute qua total sale consideration of the plot. It was only stated that an amount of Rs.97,647.12ps. already stood adjusted, in the account of the complainant. It is necessary to mention here that no positive date was given to handover possession of the developed plot. It was also stated that as per Clause 24 (a) of the Agreement, it was agreed between the parties, that the Company only proposes to make best efforts to complete the development work and deliver possession of the plot, in question, within a maximum period of 24 months (18 plus (+) 6 months), from the date of signing of the Allotment Letter/Agreement, excluding Saturdays, Sundays etc., as such, time was not the essence of contract. It was averred that since the plot in question, is an immovable property, as such, in that event also, time is not to be regarded as essence of the contract. It was stated that the opposite party is making earnest efforts to expedite development in the area, where plot of the complainant is located. Prayer was made to dismiss the complaint.
4.         On 06.12.2016, an application under Section 8 of the Arbitration and Conciliation Act, 1996, was also filed by the opposite party, stating that this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitration for adjudication. The said application was disposed of vide order dated 08.12.2016, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case.     
5.         In the rejoinder filed, the complainant reiterated all the averments, contained in the complaint and controverted those, contained in written version of the opposite party.
6.         The parties led evidence in support of their case.
7.         Counsel for the parties raised arguments, in tune of the facts narrated above.
8.         We have heard Counsel for the parties, and have gone through the evidence and record of the case, very carefully.
9.         Before making any reference to the merits of the case, we will like to decide an objection raised by the opposite party that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. 

                It may be stated here, that the complainant has sought possession of the plot, in question, price whereof is Rs.48,64,689.81ps. (as is evident from the document Annexure-B (Part-II) at page 45 of the file); interest @18% on the deposited amount for the period of delay in delivery of possession; compensation to the tune of Rs.10 lacs, for mental agony and physical harassment alongwith interest @18% p.a.; including cost of litigation, aggregate value whereof fell above Rs.20 lacs and below Rs.1 crore. In no way, the aggregate value of the relief claimed, exceeds Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection taken by the opposite party, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

10.         The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.

                According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, the Allotment Letter/Agreement was executed between the parties at Chandigarh, as it bears the stamp of Chandigarh office of the opposite party. Besides as above, it is also evident from the payments receipts placed on record (at pages 11 to13 and 15 to 20) that substantial amount towards  the said plot was received by the opposite party at Chandigarh. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.          The next question, that falls for consideration, is, as to whether, the complainant fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here that the mere bald objection of the opposite party that the complainant had purchased the plot, by way of investment, to gain huge profits, by selling the same, as and when there was escalation in prices, does not carry any weight and is liable to be rejected. Nothing contrary has been proved by the opposite party, by placing on record, any document, to strengthen its plea. Even otherwise, the mere fact that it was a residential plot, which was allotted, in favour of the complainant, was sufficient to prove that it was to be used for the purpose of residence, by the complainant. Furthermore, still the complainant is seeking possession of the plot, in question. Even in the legal notice dated 10.08.2016, sent to the opposite party, request for delivery of possession of plot and execution of sale deed, alongwith other relief was made by the complainant. On the other hand, there is nothing on the record, that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis. Under similar circumstances, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite party, mere bald assertion to that effect, cannot be taken into consideration. The complainant, thus, falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party, therefore, being devoid of merit, is rejected.  
12.         It has vehemently been contended before us, by Counsel for the complainant that by accepting the booking amount of Rs.8.90 lacs, on 14.12.2010 and thereafter issuing provisional allotment letter after about a year i.e. on 12.12.2011 and final allotment letter on 03.05.2012, the opposite party has indulged into unfair trade practice, and, as such, it needs to be burdened with heavy costs, for the said delay.

                The same question, came up before this Commission in a case titled as Ankur Gupta Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.309 of 2016 decided on 22.11.2016, wherein also there was a delay in issuance of Allotment Letter/Agreement, by the opposite parties, after accepting booking amount. While dealing with above said contention, it was observed by this Commission, as under:-

“In the first instance, we will deal with an argument, raised by Counsel for the complainant that by offering Agreement for signing after many months of the allotment and receiving huge amount, the opposite parties have indulged into unfair trade practice. It is on record that the complainant purchased the built-up unit by moving an application on 14.03.2011. He paid an amount of Rs.8 lacs, towards booking amount. Thereafter, in terms of letter dated 01.08.2011 Annexure C-2 sent by the opposite parties, an amount of Rs.9,18,951.85Ps., towards price of the said unit, which also includes Rs.23,068.98Ps., towards service tax, was paid by him.  After draw of lots, flat was allotted to him on 23.12.2011. It is positive case of the complainant that Agreement was offered for signing on 18.09.2012; he signed and gave it to the opposite parties, on the same day. However, thereafter, to gain time, it was wrongly shown to have been executed on 26.03.2013. To the contrary it is case of the opposite parties that Agreement was signed on the date mentioned above. To support above said contention, no evidence whatsoever, has been placed on record by the opposite parties. As such, it can safely be said that Agreement was got signed belatedly on 26.03.2013 i.e. after a period of about 15 months, from the date of allotment, in the month of March 2011. The said act would amount to unfair trade practice on the part of the opposite parties. It was also so said by this Commission in Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016.”

 

                It was found as a matter of fact that by issuing Allotment Letter/Agreement after 15 months, from the date of accepting booking amount, the opposite parties have indulged into unfair trade practice. In the present case also, it is apparent on record that the final Allotment Letter/Agreement was delayed by more than one year. By doing so, the opposite party has indulged into unfair trade practice. After acceptance of booking amount, it was required of the opposite party to issue allotment letter/agreement, within a reasonable time, say two or three months. It was also earlier so said by this Commission, in a case titled as Usha Kiran Ghangas Vs DLF Homes Panchkula Private Limited, Complaint Case No.93 of 2016, decided on 02.06.2016. Relevant portion of the said case, reads thus:-

“The opposite parties are also guilty of adoption of unfair trade practice. It is on record that the complainant booked the unit, in question, in the project aforesaid, on 16.02.2011. She was allotted unit, vide letter dated  23.02.2011, on which date, she had paid an amount of Rs.4 lacs. Buyer’s Agreement was not put for signing in a reasonable time, say two  to three months. She continued to make payment and when Buyer’s Agreement was got signed, on 18.08.2011, she had already paid an amount of Rs.21,68,524/-. By not offering Buyer’s Agreement, for signing in a reasonable time, the opposite parties also committed unfair trade practice. The complainant is a widow. Her interest needs to be protected”.

 

                As such, by not offering Allotment Letter/Agreement, for signing in a reasonable time, but after a delay of about a year of accepting booking amount, the opposite party committed unfair trade practice and is also deficient in providing service. In view of above default committed, we are of the considered opinion that compensation to the extent of Rs.50,000/-, if granted to the complainant, shall meet the ends of justice.

13.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to delivery of possession of the plot purchased by him. As stated above, according to Clause 24 (a) of the  Allotment Letter/Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite party, it was liable to deliver physical possession of the plot, within a period of 18 months plus (+) 6 months grace period, total 24 months, from the date of issuance of Allotment Letter/Agreement. However, it is an admitted fact that possession of the plot, in question, has not been offered, by the date of filing the instant complaint, or even till date, despite the fact that Rs.46,82,670/- out of total sale consideration of Rs.48,64,689.81ps. has been paid by the complainant, for want of development and basic amenities at the site. At the time of arguments, this Commission asked Counsel for the opposite party, as to within how much time, possession of the developed plot, is likely to be delivered to the complainant. However, he failed to make any commitment, on behalf of the opposite party. Above fact shows that still there is no development in the area, where plot, in question, is located. By making a misleading statement, that possession of the developed plot, will be delivered within the maximum period of 24 months from the date of Allotment Letter/Agreement i.e. latest by 02.05.2014, and not abiding by the commitment made by the opposite party, it was not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant is certainly entitled to delivery of physical possession of the plot, in question.

                In view of above, the opposite party  is also liable to pay compensation to the complainant, for causing mental agony, physical harassment and deficiency in providing service.

14.         Further contention raised by Counsel for the opposite party that as per Clause 24 (a) of the Agreement, beyond the period of 18 months, the opposite party can get further six months to deliver possession of the plot and while computing the above said period, Sundays, Saturdays, Bank Holidays, etc. are to be ignored, came up for consideration before this Commission in Ankur Gupta`s case (supra) and when dealing this issue, it was observed by this Commission, as under:-

“We feel that the contention raised is liable to be rejected. In Clause 23(b) of the Agreement, it is stated that possession will be delivered within 24 months, from the date of allotment letter, with six months extension. It is further stated that when computing the said period all Saturdays, Sundays and Bank Holidays will be excluded. A similar issue came up for consideration before this Commission qua another project of the opposite parties, in the case of Dr.Divya Dahiya Vs. M/s Omaxe Chandigarh Extension Developers Private Limited and another, Consumer Complaint No.57 of 2016, decided on 15.07.2016, wherein, it was observed as under:-

“The first question, which falls for consideration, is, as to whether there was delay in offering possession of the plot, in question, and if so, to what extent. The allotment letter for independent floor in Row-Housing Project “Silver Birch” in the project of the Opposite Parties (Annexure C-4) was issued to the complainant on 30.08.2011. As per Clause 31(a) of the allotment letter, the Opposite Parties were to complete the development of the unit within 24 months or within an extended period of six months from the date of start of construction, subject to force majeure conditions. Since allotment letter is dated 30.08.2011, by computing 24 months plus 6 months period, the Opposite Parties were bound to deliver possession of the plot, in question, by 01.03.2014. The Opposite Parties have stated that period was to be computed by excluding Sundays, Bank Holidays, enforced Govt. holidays and the days of cessation of work at site in compliance of order of any Judicial/concerned State Legislative Body. Apparently, for seeking six months extension beyond 24 months or beyond six months extended period, the Opposite Parties owe an explanation, if the delay was on account of force majure conditions but nothing by way of cogent evidence to this effect has been placed on record. Thus, when no explanation for extension of six months period has been furnished, the Opposite Parties at the most could be allowed one out of the two benefits i.e. either six months extension beyond 24 months or period on account of Sundays/Holidays etc. This Commission in Consumer Complaint No.153 of 2015 titled ‘Mr. Madan Lal Taneja and another Vs. M/s Omaxe Chandigarh Extension Developers P. Ltd.’ decided on 03.11.2015, facts of which were almost identical, held that Opposite Parties were to hand over possession within 30 months from the date of start of construction. Thus, the possession of the unit, in question, was to be delivered by 01.03.2014.”

 

                Similar view has also been reiterated by this Commission, in number of cases, thereafter. It was specifically held that when there is no explanation of getting extension of 6 months’ period to deliver possession beyond the stipulated date, the benefit of exclusion of Saturdays, Sundays, Bank Holidays etc. cannot be given. Out of the two benefits, only one can be made available to the opposite party. In the present case, Allotment Letter/Agreement was executed on 03.05.2012. As per admitted terms and conditions, possession of the plot was to be delivered by 02.05.2014. In a very draconian manner, in the Agreement, in Clause 24(a), it has been stated that in case of delay, no claim by way of damages/compensation will be provided to the purchaser of plot(s). It would mean that the opposite party can delay and hand over possession after unlimited period. Such a situation cannot be appreciated and this would mean to again indulging into unfair trade practice.

15.         What relief can be granted to a consumer, in case of delay, in offering possession of plot purchased, came up for consideration before this Commission in Ankur Gupta`s case (supra), wherein dealing with similar issue, it was observed as under:-

“What relief can be granted to a consumer, in case of delay, in offering possession, came up for consideration before the Hon’ble National Commission, in a case titled as Parsvnath Exotica Ghaziabad Resident's Association Vs. Parsvnath Buildwell Pvt. Ltd. & Anr., consumer complaint no.45/2015, decided by the Hon’ble National Commission, on 06.05.2016, wherein, it was argued by the project proponent that at the maximum, as provided in the Agreement, the consumer will be entitled to claim penalty for delayed compensation @Rs.5/- per square feet, per month. Noting that in case of delay in making payment, the project proponent was charging heavy penal interest, instead of penal amount, the interest on the deposited amount, for the period of delay was granted, by holding as under:-

“Though, the Agreement between the developer and the flat buyers provides for payment of compensation in case of delay @ Rs.5/- per square feet of the super area per month, such clauses have been found to be unfair trade practice and have been consistently rejected by this Commission in several decision, including  Consumer Complaint No. 427 of 2014 Satish Kumar Pandey & Ors. Vs. Unitech Ltd. and connected matters decided on 08.6.2015.  Therefore, the aforesaid clauses cannot be taken into consideration, while determining the compensation payable to the members of the complainant association for the aforesaid delay in completion of construction.”

Not only this, in another case, titled as Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)     xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.”

Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the cases, referred to above, if interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, is awarded, that would meet the ends of justice.”

                Taking note of above said proposition of law, in the present case also, ends of justice would meet, if interest is granted for delayed period, to the complainant whereof 02.05.2014.

16.         As stated above, since as per Clause 24 (a) of the  Allotment Letter/Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite party, it was liable to deliver physical possession of the plot, within a period of 18 months plus (+) 6 months grace period, total 24 months, from the date of issuance of Allotment Letter/Agreement, as such, there is no substance in the arguments raised by Counsel for the opposite party that time was not the essence of contract, as it was agreed that the opposite party will make only best efforts to deliver possession in the aforesaid period. Non-mentioning of exact date of delivery of possession of the unit(s) in the Agreement, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof. It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

 

                In view of above, the plea of the opposite party in this regard also stands rejected.

17.         Another objection taken by the opposite party that since the plot, in question, falls under the category of immovable property, as such, in that event also, time is not to be considered as essence of the contract, is also bereft of merit, in view of ratio of judgment titled as Saradamani Kandappan vs S. Rajalakshmi & Ors., Civil Appeal Nos. 7254-7256  of 2002 &                                      and  Contempt Petition (C) No. 28-29 of 2009, decided on 4^th  July, 2011, wherein the Hon`ble Supreme Court held as under:-

“A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S. Vidyanadam and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed:

"It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.

In the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .........We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation.

Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."

(emphasis supplied) Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.”

18.         An objection was also raised, by making reference to Clause No.44 (c) of the Allotment Letter, that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. We feel that the argument raised is liable to be rejected.

                This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

“25.        The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), 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.”

27.    It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

28.      Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

29.       In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

30.   Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

31.        Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

32.        We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

35.   In  view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

                As such, the plea taken by the opposite party, in this regard, being devoid of merit, is rejected.

19.         No other point, was urged, by Counsel for the parties.
20.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite party is directed, as under:-
    1. To hand over physical possession of the developed plot, in question, to the complainant, within a period of 04 months, from the date of receipt of certified copy of this order, complete in all respects,  after obtaining necessary occupation/partial/completion certificates, from the competent authorities, on receipt of legally due amount from him (complainant).
    2. To execute and get registered the sale deed, in respect of the plot, in question, in favour of the complainant, within two months, from the date of handing over possession, as indicated in Clause (i) above, on payment of registration and stamp duty charges, by him to the Registering Authorities.
    3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 02.05.2014 (promised date) to 31.01.2017, within two months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.
    4. To pay compensation by way of interest @12% p.a. on the deposited amount, w.e.f. 01.02.2017, onwards (per month), till delivery of possession, by the 10^th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till payment is made.
    5. To pay compensation, in the sum of Rs.50,000/-, for adopting unfair trade practice, by not getting the Allotment Letter/Agreement signed within a reasonable period, after receiving substantial amount, as indicated above, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing this complaint till realization.
    6. To pay compensation, in the sum of Rs.02 lacs, on account of mental agony, physical harassment, caused to the complainant and deficiency in providing service, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing this complaint till realization.
    7. To pay cost of litigation, to the tune of Rs.50,000/-  to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing this complaint till realization.
21.         Certified Copies of this order be sent to the parties, free of charge.
22.         The file be consigned to Record Room, after completion.

Pronounced.

09.02.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.