Chandigarh

StateCommission

CC/930/2016

Rakesh Kumar - Complainant(s)

Versus

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

Deepak Aggarwal, Adv.

19 May 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint Case No.	:	930 of 2016
Date of Institution	:	16.12.2016
Date of Decision	:	19.05.2017

 

1. Mr.Rakesh Kumar son of Sh.Kamer Chand Gogna, aged 40 years, House No.99, Milk Colony, Dhanas, Chandigarh.

 

2. Mr.Raju Gogna son of Sh.M.L. Gogna, aged 44 years, House No.190, Milk Colony, Dhanas, Chandigarh.

……Complainants

Versus

1. M/s Omaxe Chandigarh Extension Developers Private Limited, Regional Office at SCO 139-140, Sector 8-C, Madhya Marg, Chandigarh-160008, through is Managing Director/Director/General Manager/Authorized Signatory.

 

2. M/s Omaxe Chandigarh Extension Developers Private Limited, 10, L.S.C. Kalkaji, New Delhi-110019 its Chairman/Managing Director/Director/ General Manager/Authorized Signatory.

 

              .... Opposite Parties

 

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. Deepak Aggarwal, Advocate for the complainants.

Sh. Ashim Aggarwal, Advocate for the opposite   parties.

 

PER DEV RAJ, MEMBER.

                 The facts in brief are that the complainants, being cousin brothers, decided to purchase a flat in the project of the opposite parties, under the name and style of “Omaxe Cassia”, Mullanpur, Punjab. It was stated that allured by the rosy pictures; provision of various lavish facilities/amenities promises, on 30.03.2011, the complainants moved an application (Annexure C-1), for purchase of a flat, measuring 1725 sq. ft., exclusively for their residential purpose and also paid Rs.8 lacs, as booking amount. The Opposite Parties assured that Agreement would be executed shortly and even in the absence of Agreement, further amount of Rs.6,17,381.34., was paid by the complainants to the opposite parties. It was further stated that despite receiving substantial amount, Agreement was not got executed, as a result whereof, the complainants wrote letter dated 29.10.2012 (Annexure C-4) to Opposite Party No.1, at Chandigarh, requesting it to issue signed copy of agreement and extend the date of demands for payment, as the opposite parties were not having necessary permissions from the competent authorities but to no avail. Ultimately, copy of Allotment letter/Agreement dated 04.09.2012 (Annexure C-5) was sent by the opposite parties to the complainants, allotting Flat No.783, 2^nd Floor, having built up area 1725 sq. ft. in the aforesaid project i.e. “Omaxe Cassia”, Mullanpur, LPA (GMADA), District SAS Nagar, Punjab. The total sale consideration of the flat was fixed at Rs.47,66,008.75Ps., which included basic sale price, IFMS, Power Backup Equipment Cost, Club cost etc. The payment plan was construction linked, as per which 95% of the amount was to be paid before offer of possession and the remaining 5% was to be paid on offer of possession. It was further stated that late execution of the Agreement was done by the opposite parties, that they are able to utilize the amount paid by the complainants without providing anything and are successful in dragging the date of delivery of possession.

2.              It was further stated that as per Clause 23 (b) of the Agreement, possession of the constructed unit, complete in all respects, was to be delivered within a period of 24 months from the date of signing thereof i.e. up-to 03.09.2014. However, the said period was extendable for six months, only in case of force majeure circumstance. It was further stated that by December 2012, the opposite parties did not start construction of the flats, whereas, on the other hand, they had already received about 42% of the total sale consideration. It was further stated that the complainants sent email dated 16.12.2012 (Annexure C-6) with a request to update the date of start of construction but to no avail. It was further stated that left with no alternative, the complainants sent reminders dated 18.12.2012, 19.12.2012, 20.12.2012, 21.12.2012 and 22.12.2012 (Annexures C-7 to C-11) respectively, to the opposite parties to start construction. It was further stated that ultimately, the opposite parties vide email dated 22.12.2012 (Annexure C-12) informed the complainants that construction started in the month of October 2012 and there project is tied-up with First Blue Home Finance and LICHFL.

3.              It was further stated that thereafter, as per the demands raised by the opposite parties from time to time, the complainants, without any delay, paid Rs.44,37,229.33 against total sale consideration of Rs.47,66,008.75, as is evident from statement of accounts dated 22.10.2016 (Annexure C-13). However, possession of the flat was not offered by the stipulated date i.e. 03.09.2014. It was further stated that on the other hand, without completing construction of the flats, in question, and also without offering/delivering possession, the opposite parties started giving advertisements with regard to launching of their new projects, in the said mega township and also started investing the amount paid by the complainants and other allottees, in other new projects launched by them namely Ambrossia, The Lake Mullanpur, International Trade Tower etc., in the said mega township. It was further stated that in July 2015, i.e. after about ten months of the stipulated date, the complainants visited the site and were shocked to see that only two sample flats were constructed and completed just with a view to allure new purchasers. It was further stated that the basic amenities such as roads, lights etc. were not in existence at the site and only partial completed skeleton of the remaining flats was found standing at the site. It was further stated that despite the fact that possession date of the flat had already expired, the work was being carried out on a snail speed. It was further stated that the complainants wrote email dated 27.07.2015 (Annexure C-14), to the Opposite Parties raising all his concerns and thereafter also sent reminder email dated 30.10.2015 (Annexure C-16) with a request to apprise them the exact date of delivery of possession and also to pay delayed compensation, for the period of delay. It was further stated that vide email dated 03.11.2015 (Annexure   C-17, the Opposite Parties informed that possession of the flat would be delivered as per Agreement, whereas the said date had already expired by the said date.

4.              It was further stated that complainants vide email dated 05.11.2015 (Annexure C-18) informed the opposite parties that have not delayed in making payment even for a single day and vide said email, again request was made to give exact date of delivery of possession. It was further stated that surprisingly, vide email dated 17.11.2015 (Annexure C-19), it was assured by the opposite parties that possession of the flat would be tentatively delivered by beginning of the year 2016 i.e. January 2016 but it was not done. It was further stated that the complainants again vide email dated 29.11.2015 (Annexure C-20) requested the opposite parties to give exact date of delivery of possession and not a tentative date stating therein that they are in dire need of flat to shift therein. However, to the utter shock of the complainants, the opposite parties vide email dated 30.11.2015 (Annexure C-21) took a U-turn after sending email dated 17.11.2015 by informing the complainants that possession of the flat is expected to be delivered tentatively by mid of 2016 i.e. June 2016. On the other hand, vide email dated 17.11.2015, it had been informed that possession would be delivered by January 2016.  It was further stated that vide email dated 03.08.2016 (Annexure C-24) the complainants again requested the opposite parties to do the needful but to no avail. It was further stated that surprisingly, vide email dated 05.08.2016 (Annexure C-25), the opposite parties gave a new date of possession i.e. in the end of December 2016 and upon receipt of this email, the complainants visited the site and were shocked to see that still a lot of work was pending to be done in the flat as the promised basic amenities are still missing, which will take a long time to complete. It was further stated that the opposite parties collected huge amount of Rs.44,37,229.33 from the  complainants by making a false promise of delivery of possession by the stipulated date i.e. 03.09.2014 but they did not abide by their commitment.  It was further stated that the aforesaid acts and conduct of the opposite parties amounts to negligence, deficiency in rendering service and adoption of unfair trade practice on their part.

5.              When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as ‘1986 Act’), was filed, seeking directions to the Opposite Parties, to hand over actual physical possession of fully constructed flat, in question, alongwith all the basic amenities, after obtaining completion and occupation certificates and other necessary permissions from the Competent Authorities; get registered conveyance & sale deed of flat, on payment of charges by complainants, directly to the Registering Authority; refund the amount of service tax illegally deducted to the tune of Rs.1,31,826.14 alongwith interest from the respective dates of deposits; pay interest @15% p.a. on the deposited amount of Rs.44,37,229.33 from 03.09.2014 till actual delivery of possession of the unit; pay additional compensation for the period of delay @Rs.10/- per square feet per month; pay compensation of Rs.5 lacs, towards adopting unfair trade practice by executing Agreement after a period of delay of 16 months of booking, deficiency in service; negligence and adopting unfair trade in non offering of possession of the flat, in question, till date, causing mental agony and physical harassment to the complainants and pay cost of litigation to the tune of Rs.55,000/-.

6.              The Opposite Parties, in their written statement, took up certain preliminary objections to the effect that the complainants ought to be relegated to the alternative remedy of Arbitration due to existence of Arbitration Clause No.41 in the Agreement; that this Commission has got no territorial and pecuniary jurisdiction; that the complainants being investors would not fall within the definition of a “consumer” as defined under Section 2(1)(d) of the Act, as they had purchased the flat, 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.

7.              On merits, timely payments made by the complainants, as mentioned in the complaint, were not denied. It was stated that as per Clause 23(b) of the Allotment Letter/Agreement, beyond the period of 24 months, the opposite parties can get further six months to deliver possession of the flat. It was further stated that as per the terms and conditions of the said Allotment Letter/Agreement, when computing the above said period, Sundays, Saturdays, Bank Holidays, etc. are to be ignored. It was stated that query regarding service tax was duly clarified by the Opposite Parties vide email dated 02.08.2016 (Annexure C-23) and in the said reply, it was specifically mentioned that the judgment relied upon had no impact on the present case. It was further stated that as per settled law, in cases of sale or immovable property and construction, time is never regarded as the essence of the contract more so when penalty clause is there for any delays. It was further stated that the construction on the site is in full swing and possession will be handed over as soon as possible. It was denied that basic amenities as promised are missing or will take long time. It was further stated that the Opposite Parties are putting their full efforts to expedite the construction of unit allotted to the complainants. It was denied that the Opposite Parties are not in possession of necessary permissions. It was denied that stipulated date of possession was 03.09.2014.

8.              An application under Section 8 of the Arbitration and Conciliation Act, 1996, was also filed by the opposite parties, 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 17.02.2017, by observing that the applicability of arbitration process would be seen at the time of final arguments in the main case. 

9.              The complainants filed rejoinder, wherein, all the averments, contained in the complaint were reiterated, and repudiated the same, as contained in the written version of the Opposite Parties.

10.            The parties led evidence in support of their case.

11.            We have heard the Counsel for the parties and have gone through the evidence and record of the case, very carefully.

12.            It is evident on record that the complainants booked an independent floor in the project of the Opposite Parties vide application dated 30.03.2011 (Annexure C-1) by paying Rs.8 Lacs as booking amount. Thereafter, as per demand raised vide letter dated 01.08.2011 (Annexure C-2), the complainants paid Rs.6,17,381.34 on 20.08.2011.Subsequntly, vide letter dated 29.10.2012 (Annexure C-4), the complainants requested the Opposite Parties for extension of time for payment to be made till 03.11.2012 and also for issuance of original signed allotment letter. Vide Allotment Letter for Residential Independent Floor dated 04.09.2012 (Annexure C-5), the complainants were allotted an independent floor bearing No.783, 2^nd Floor, having super area admeasuring approx. 1725 sq. ft./160.26 sq. mt. in OMAXE CASSIA situated at Mullanpur LPA (GMADA), Distt. SAS Nagar. The allotment letter/terms and conditions were executed between the complainants and the Opposite Parties on 04.09.2012. It is also evident from Annexure-B (Part – III) (Page 66 of the file) that the complainants opted Plan A: Construction Linked Payment Plan and payment was to be made as per stages of construction. Thus, allotment letter/Agreement was issued after delay of around 16 months after making payment in the sum of Rs.8 Lacs and Rs.6,17,381.34 by the complainants in the year 2011. Admittedly, the complainants paid an amount of Rs.44,37,229.33 (including service tax) against the total sale consideration of Rs.47,66,008.75, as is evident from statement of account dated 22.10.2016 (Annexure C-13). As per Clause 23(b) of the Allotment Letter aforesaid, the Opposite Parties were to complete the development/construction of the Unit, in question, within 24 months or within an extended period of 6 months i.e. 30 months from the date of signing of the Allotment Letter.

13.            The first 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. 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.”

            In view of the above, the objection raised by the Opposite Parties, being devoid of merit, is rejected.

14.            The next question that falls for consideration, is, as to whether, the complainants are investors, or they have purchased the said flat for their residential purpose. In the first instance, it may be stated here that by way of filing this complaint, the complainants are seeking possession of the flat, in question. At the same time, there is nothing, on record, that the complainants are the property dealers, and deal in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. On the other hand, the complainants in their complaint, supported by their individual affidavits, by way of evidence, have clearly averred that the unit, in question, was purchased by them, for their residential purpose.  Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion i.e. simply saying that the complainants being investors, did not fall within the definition of a consumer, cannot be taken into consideration. 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. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”

 

Therefore, in view of law settled by the National Commission in the aforesaid cases, the complainants fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

15.            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 complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident from the record, that the allotment letter/agreement was executed between the parties at Chandigarh, as all its pages bear the stamp of Chandigarh Office of the opposite parties; Letter dated 29.10.2012 (Annexure C-4) requesting opposite party no.1 to extend the date of payment and also for issuance of allotment letter/agreement was addressed to and received by Chandigarh Office of the opposite parties; signed copy of allotment letter/agreement [Annexure C-3 (colly.)] was received by the opposite parties at Chandigarh; emails (Annexures C-12, C-14, C-16, C-18, C-22 and C-24) were sent  to the complainants by “Omaxe Limited, SCO 139-140, Sector 8-C, First Floor, Madhya Marg, Chandigarh”; and also admittedly, all the payments were received by opposite party no.1 at Chandigarh. Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

16.           Another objection taken by the opposite parties, with regard to pecuniary jurisdiction of the Commission, also deserves rejection. It may be stated here, that the complainants have sought possession of the flat, in question, price whereof is Rs.47,66,008.75 besides interest @15% p.a. on the deposited amount of Rs.44,37,229.33 from 03.09.2014 till actual delivery of possession of the unit; compensation to the tune of Rs.5 Lacs, for mental agony, physical harassment, deficiency in providing service and adoption of unfair trade practice; compensation for the period of delay @Rs.10/- per square feet per month and cost of litigation, to the tune of Rs.55,000/-, aggregate value whereof, fell above Rs.20 lacs and below Rs.1 crore. In no way, the value of relief claimed exceeds Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. In view of the above, the objection taken by the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

17.           The next question, which falls for consideration, is, as to whether there was delay in offering and if so, to what extent. Admittedly, the said unit was allotted to the complainants vide allotment letter dated 04.09.2012 (Annexure C-5). Clause 23(b) of  the Allotment Letter/Agreement reads thus:-

“23(b) The Company shall put its best efforts to complete the development/ construction of the Unit within 24 (Twenty Four) months from the date of signing of this Allotment Letter by the Allottee(s), or within an extended period of 6 (six) months, however construction within aforesaid 30 months is subject to force majeure conditions [as mentioned in sub-clause (c) & (d) hereunder] and subject to all Unit Allottees making timely payment or subject to any other reasons beyond the control of the Company. No claim by way of damages/compensation shall lie against the Company  in case of delay in handing over the possession on account of any of the aforesaid reasons and the Company shall be entitled to a reasonable extension of time for the delivery of possession of the said Unit to the Allottee(s). The aforesaid period of development shall 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.”

 

18.           It may be stated here that a similar issue came up for consideration before this Commission in case titled Dr. Divya Dhaiya 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 in Para 10 as under:-

“10.         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…...”

 

19.           It would be seen that it was specifically held that when there is no explanation of getting extension of six months period to deliver possession beyond the stipulated date, the benefit of exclusion of Sundays, Bank Holidays, enforced Govt. holidays etc. cannot be given to the Opposite Parties. Out of two benefits, only one can be made available to the Opposite Parties. This view was reiterated by this Commission in “Rajeev Shashtri Vs. M/s Omaxe Chandigarh Extension Developers Private Limited”, Complaint Case No.919 of 2016, decided on 05.05.2017, wherein it was observed as under:-

“Thus, computing 24 months period from the date of signing of the allotment letter i.e. 26.07.2012 (Annexure C-3), the possession was to be delivered by 25.07.2014. As per aforesaid clause, another extended period of six months subject to force majeure, was available to the Opposite Party to hand over possession. The Opposite Party has 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 and a period of around five months was on this account. Apparently, for seeking six months extension beyond 24 months, the Opposite Party owes 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. It is pertinent to note that the Opposite Party was to deliver possession within 24   months from the date of signing of the allotment letter or within an extended period of 6 months, subject to exclusion of Sundays, government holidays etc., and the said issue was already decided vide order dated 10.06.2016 passed by this Commission in Complaint Case No.311 of 2015 titled as Shellender Singh Vs. M/s. Omaxe Chandigarh Extension Developers Pvt. Ltd., wherein, it was decided that when no explanation for extension of six months period has been furnished, the Opposite Party at the most could be allowed one out of the two benefits i.e. either six months extension beyond 24 months or five months period on account of Sundays/Holidays etc. In view of the aforesaid order passed by this Commission, we are of the view that possession is to be delivered within 24 months + 6 months i.e. maximum period of 30 months from the date of signing the allotment letter and the said period of 30 months has been calculated from 26.07.2012, as such, the said period expired on 25.01.2015. So, it is clearly proved that possession of the said unit was to be delivered by the Opposite Party latest by 25.01.2015.”

 

20.           In the present case, the allotment letter/Agreement was issued on 04.09.2012. As per terms and conditions and position stated above, possession of the unit, in question, was to be delivered by 03.03.2015. However, it has not been done. There is no commitment on record that possession is ready even as on today. There is, thus, delay in offering possession beyond 03.03.2015, for which, no explanation or justified reasons have been given by the Opposite Parties.

21.           The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation for inordinate delay in offering possession of the unit, in question, to the complainants. As stated above, according to Clause 23(b) of the  Allotment Letter/Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite parties, they were liable to deliver physical possession of the flat, within a period of 24 months plus (+) 6 months grace period, total 30 months, from the date of issuance of Allotment Letter/Agreement. However, it is an admitted fact that possession of the flat, in question, has not been offered, by the date of filing the instant complaint, or even till date, despite the fact that Rs.44,37,229.33 against Rs.47,66,008.75,  has been paid by the complainants, for want of construction, development and basic amenities at the site. By making a misleading statement, that possession of the flat, will be delivered within the maximum period of 30 months from the date of Allotment Letter/Agreement i.e. latest by 03.03.2015, and not abiding by the commitment made by the opposite parties, they were not only deficient, in rendering service, but also indulged into unfair trade practice. The Hon’ble National Commission in the case of Shri Suman Nandi & Anr. Vs. M/s Unitech Limited & Anr., Complaint No.277 of 2013, decided on 17.12.2015, held in Para 16 as under:-

“16.       On perusal of the Buyer’s Agreement and the affidavits filed by the parties it is clear that the complainants had booked the subject apartments on the expressed promise extended by the opposite parties that subject to Force Majeure, the opposite parties would deliver the possession of the apartments complete in all respect within 30-36 months, as the case may be, of the execution of the Buyers Agreement and being influenced by the said promise the complainants entered into the contract. No doubt in the Buyer’s Agreement some scope for delay due to unavoidable circumstances was kept in mind for which clause 4.a. for compensating the complainants for delay was incorporated but it does not mean that the intention was that even in the event of inordinate delay in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.5/- per sq. ft. per month which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view clause 4.a. was meant for computing compensation in case of a minor delay in delivery of possession.   If the argument of the opposite party is to be accepted, it would lead to absurd situation and would give an unfair advantage to the unscrupulous builder who might utilize the consideration amount meant to finance the project by the buyer for his other business venture at nominal interest of 2-3 per cent as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.”

 

The National Commission granted 12% interest as compensation from the date of default in delivery of possession.

22.            Recently in 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 read 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.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

 

23.           Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the cases, referred to above, and position stated above, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay beyond the stipulated date in handing over of possession viz. 03.03.2015, till delivery of possession of the unit would meet the ends of justice.

24.           The next question, which needs determination, is with regard to grievance of the complainants qua delay in execution of allotment letter/agreement and as to whether complainants are entitled to compensation for such delay. The complainants, in Para 8 of their complaint, have relied upon this Commission judgment in case titled Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016, wherein in Para 21, it was held as under:-

“21.        As has been held above that by offering Allotment Letter/Agreement for signing after a period of 16 months, from the date of receiving substantial amount of Rs.35,10,580/-, the opposite parties have indulged into unfair trade practice. Interest could have been granted for those 16 months, on the amount deposited, however, we are not doing so, because we are going to award additional lump-sum amount for adoption of unfair trade practice, to the complainant, in this regard. As such, if compensation to the tune of Rs.1.50 lacs, on this count, is granted that would meet the ends of justice and will definitely put a naught on the opposite parties, for doing so, in future.”

 

 

25.           As is evident, in the aforesaid case relied upon by the complainants, there was substantial amount in the sum of Rs.35,10,580/-, which was paid by the complainant (Sudesh Rani) before offering allotment letter/agreement for signing after a period of 16 months.

26.           In the instant case, the complainants, before offering of allotment letter/agreement by the Opposite Parties, had deposited a sum of Rs.14,17,381.34. There is, thus, deficiency, on the part of the Opposite Parties in execution of allotment letter/agreement after a period of around 16 months. Therefore, the complainants are entitled to compensation on this count.

27.           It may be stated here that the complainants have claimed total compensation of Rs.5 Lacs for deficiency in service, indulgence into unfair trade practices, mental agony and physical harassment including unfair trade practices in execution of agreement after a delay of 16 months.

28.            On account of non-delivery of legal physical possession of the unit, in question, complete in all respects, by the Opposite Parties, to the complainants, till date, the complainants have certainly suffered immense physical harassment and mental agony, for which, they (complainants) need to be suitably compensated. In our considered opinion, consolidated compensation in the sum of Rs.2,60,000/- on this account and for delay in execution of the allotment letter/agreement would be just and adequate, to meet the ends of justice.         

29.            No other point, was urged, by Counsel for the parties.

30.            For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-

1. To hand over physical possession of the unit, in question, to the complainants, within a period of 02 months, from the date of receipt of certified copy of this order, complete in all respects,  after obtaining occupation and completion certificates, from the competent authorities, on receipt of legally due amount from them (complainants).
2. To execute and get registered the sale deed, in respect of the unit, in question, in favour of the complainants, 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 them to the Registering Authorities.
3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, from 04.03.2015 to 30.06.2017, 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., from the date of filing the complaint till realization.
4. To pay compensation by way of interest @12% p.a. on the deposited amount, w.e.f. 01.07.2017, onwards (per month), till delivery of possession, by the 10th 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.2,60,000/-, on account of mental agony, physical harassment, caused to the complainants, deficiency in providing service and for delay in execution of allotment letter/agreement, 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 the complaint till realization.
6. To pay cost of litigation, to the tune of Rs.40,000/-to the complainants, 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 the complaint till realization.

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

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

Pronounced.

19.05.2017.

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 (DEV RAJ)

MEMBER

 

 

 (PADMA PANDEY)

         MEMBER

Ad