STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Complaint case No. | : | 243 of 2017 |
Date of Institution | : | 22.03.2017 |
Date of Decision | : | 01.09.2017 |
Ms. Jasmeet Kaur daughter of Sh.Jaswant Singh, House No.1599, Sector-18-D, Chandigarh-160018.
……Complainant
V e r s u s
- M/s Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Registered Office at No.5, Dhanraj Chambers, 1st Floor, Satbari, New Delhi-110074, through its Chairman/Managing Director/Director/Authorized Signatory.
- M/s Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Corporate and Sales Office at SCO No.6 - 8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh 160009, through its Managing Director/Director/ Authorized Signatory.
….Opposite Parties No.1 and 2
- Housing Development Finance Corporation Limited, SCO No.153-155, Sector 8-C, Chandigarh-160008, through its Branch Head. (No claim is pressed against it)
Second address: HDFC Limited, Registered Office, Raman House, 169 Backbay Reclamation, Mumbai-400020
…..Proforma Opposite Party No.3
Argued by: Mr. Deepak Aggarwal, Advocate for the complainant.
Mr. Ramnik Gupta, Advocate for Opposite Parties No.1 & 2.
Ms.Anjali Moudgil,Advocate for Opposite Party No.3
Complaint under Section 17 of the Consumer Protection Act,
1986.
BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.
MR. DEV RAJ, MEMBER.
PER DEV RAJ, MEMBER
The facts, in brief, are that the complainant who was an employee of HDFC, Sector-8-C, Chandigarh, did not own any residential house, as such, she decided to purchase an independent house in or around Chandigarh. In the meantime, opposite parties No.1 and 2 made a number of assurances through various newspapers, media, marketing emails and telemarketing with regard to launching of their integrated residential township under the name and style of IREO RISE, Sector 99, SAS Nagar, Mohali, having various attractive salient features. It was further averred that the complainant visited the office of OPs No.1 & 2 at Chandigarh and met the sales team. Subsequently, the complainant vide application dated 30.5.2011 applied to OPs No.1 & 2 for allotment of a flat in the above said project and paid an amount of Rs.3.50 lacs, as booking amount which was received by OP No.2 at Chandigarh. OP No.2 issued welcome letter dated 30.5.2011(Annexure C-1) in respect of the said booking wherein details of flat were given. Thereafter, vide provisional allotment letter dated 31.5.2011 (Annexure C-2), the complainant was allotted flat bearing No.JCA-03-002, third floor, Tower Juniper Court-A, having super area of 1233 Sq. ft. in the said project. It was promised in the said letter that Buyer’s Agreement will be sent in due course. Thereafter Apartment Buyer’s Agreement dated 7.7.2011 (Annexure C-3) was executed between the complainant and OPs No.1 & 2. As per the said agreement, total sale consideration of the apartment was fixed at Rs.39,98,008/-, which included basic sale price of Rs. 38,37,718/-; IFMS charges to the tune of Rs.36,990/-, external development charges to the tune of Rs.1,23,300/-. Payment plan opted by the complainant was construction Linked attached with the Apartment Buyers Agreement and marked as Annexure C-4. It was further averred that according to Clause 13.3 of the above said Agreement, the opposite parties No.1 and 2 were liable to hand over physical possession of the apartment in question to the complainant within a period of 30 months i.e. on or before 6.01.2014, by providing all basic amenities, required for smooth habitation. It was further stipulated in the said Clause that only for the purpose of obtaining occupation certificate from the competent authorities, the opposite parties no.1 and 2 made themselves entitled to 180 days, meaning thereby that possession of the apartment was committed to be delivered by 6.01.2014 only but for obtaining the said certificate they were entitled to get 180 days further from the said committed date.
2. It was stated that in order to make payment towards the said apartment, the complainant raised loan from Proforma Opposite Party No.3 and vide letter dated 12.10.2011 (Annexure C-5) requested OPs No.1 & 2 to change the payment plan to subvention linked. OP No.2 vide letter dated 21.11.2011(Annexure C-6) informed the complainant that the allotment letter in her favour was under the subvention scheme, subject to approval of loan by OP No.3. Thereafter, Tripartite Agreement dated 24.02.2012 (Annexure C-7), under subvention plan, was executed between the parties, according to which, opposite parties no.1 and 2 were liable to pay interest on the amount paid towards the apartment, for a period of 24 months only, from the date of first disbursement of loan. However, thereafter, interest on the loan amount was to be paid by the complainant, which is being paid by her. It was further stated that the complainant is paying a huge amount of interest towards equal monthly installments to Proforma Opposite Party No.3. However, when complainant visited the site to see the construction work and development activities, she was shocked and surprised to see that it was not started. She brought the matter to the notice of OPs No.1 & 2, upon which it was assured that construction work will start very soon. Thereafter, vide letter dated 15.3.2012(Annexure C-8), OPs No.1 & 2 informed the complainant that construction at the site has taken place on 4.3.2012 and by early 2014, families will enjoy blissful and happy living experience. Believing the commitments made by opposite parties no.1 and 2, the complainant waited patiently and kept on making payment of installments. However, the possession of the flat was not offered by the stipulated date i.e. 6.1.2014.
3. It was further stated that by November,2014, the complainant paid an amount of Rs.38,65,743/- against Rs.39,98,008/- i.e. 95% of the sale consideration. However despite that, possession of the apartment was not delivered to the complainant. Thereafter, the complainant visited the site and office of opposite parties no.1 and 2 to know about the status of construction and she was assured that the Unit would be delivered shortly. Even letter dated 27.1.2015(Annexure C9) was sent by OPs No.1 & 2 assuring the complainant that they were reaching towards completion of construction of the unit shortly. On the other hand, opposite parties No.1 and 2 had been receiving amount towards cost of the flat without achieving the requisite stage of construction as per construction linked plan and also in the absence of development at the site. The fact regarding receiving payment of Rs.38,65,743/- by November,2014 is evident from the statement of account alongwith payment receipts attached at Annexure C-10(colly.).
4. It was further stated that visits made by the complainant in 2015, revealed that there were no approach roads to the site, the work at the site was stand still etc. Various amenities which are very essential for running a smooth life such as hospital, shopping complex, roads were not provided. Even necessary permissions/approvals in respect of the project, in question, have not been obtained by opposite parties no.1 and 2 from the competent authorities. Complainant alongwith other allottees also visited the office of the opposite parties no.1 and 2 and shared their concern. Pursuant to the said meeting, OPs No.1 & 2 vide letter dated 30.12.2015(Annexure C-11) assured that possession of the flat will be offered by the end of June,2016 but they failed to do so. Ultimately the complainant sent email dated 2.3.2017 (Annexure C-12) to OPs No.1 & 2 for taking recourse of legal remedy available to her. The complainant stated that one of the allottees obtained information from the GMADA which was supplied vide letter dated 18.10.2016(Annexure C-13) showing that till 18.10.2016, even partial completion certificate was not issued to OPs No.1 & 2 as they failed to submit the requisite documents. It was further stated that as per Clause 7.3 of the Agreement, OPs No.1 & 2 charge heavy interest @ 15% p.a. with quarterly rests, whereas, on the other hand, in case of default on their part in not abiding their commitment regarding delivery of possession, they very conveniently vide Clause 13.4 have made themselves liable to pay delayed compensation of meagre amount of Rs.7.50 per sq.ft. of the super area which comes to below 5% p.a. . In these circumstances, there will be no pressure upon the opposite parties no.1 and 2 to complete the construction since they will be more than happy to keep on paying paltry compensation of about 5% p.a. on the deposited amount, instead of completing the construction and providing the basic amenities.
5. Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties No.1 & 2 , the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking following directions to Opposite Parties No.1 & 2
- To hand over actual physical possession of flat No.002, Third Floor, Tower Juniper Court-A having super area of 1233 Sq. ft. IREO RISE, in the project, in question, alongwith all the basic amenities after obtaining necessary permissions and certificates from the Govt. Authorities and get registered conveyance & sale deed of apartment on payment of charges by complainant, directly to the Registering Authority.
- To pay interest @15% p.a. on the deposited amount of Rs.38,65,743/-. from 6.1.2014 i.e. the promised date of possession till actual delivery of possession of the flat.
- To pay compensation in the sum of Rs.5 lacs, for causing mental agony, physical harassment, deficiency in service, negligence and adopting unfair trade practice.
- To pay cost of litigation to the tune of Rs.one lac. to the complainant.
6. Upon notice, Opposite Parties entered appearance through their respective counsel and filed their separate replies.
OP No.1 & 2 in their joint reply took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration Clause No.34 in the Apartment Buyer’s Agreement dated 7.7.2011; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the complainant did not buy any goods; that the complainant did not hire any services of Opposite Parties No.1&2, as the parties did not enter into any contract for hiring the services; that the complainant booked the Apartment in question solely for the commercial purpose to earn profit, as complainant has substantial interest in the title of House No.1599, Sector-18-D, Chandigarh, where she is living since long; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the compensation claimed is beyond Section 14(1)(d) of the 1986 Act, as in the present claim, there is no allegation of negligence on the part of the Opposite Parties.
7. On merits, it was stated that the total cost of the apartment, as is evident from payment plan annexed with the Agreement was Rs.40,96,829/- inclusive of applicable service tax and revised service tax, as duly intimated to the complainant vide letter dated 12.4.2012, therefore, at present the total sale consideration of the apartment in question is Rs.41,00,782/- as is evident from the latest statement of accounts Annexure C-10 with the complaint. It was further stated that the complainant has made the payments towards consideration price of the Apartment in question in advance and the said allotment is still intact in
the name of the complainant. It was stated that payment of the consideration price of the apartment in question in advance by the complainant was the contractual obligation under the Agreement and it was her prerogative to make the said payment either from her own resources or by raising the housing loan from the financial institution. OP No.1 & 2 facilitated the complainant to raise the housing loan from OP No.3 by entering into a tripartite agreement and granting permission to them to mortgage and have borne a sum of Rs.2,36,497/- on account of payment of interest in advance under the subvention scheme as is evident from the FRIL calculation dated 20.8.2012 (Annexure-OP-9) as OP No.3 after deducting the aforesaid amount of interest had disbursed the remaining amount of installment to OPs No.1 & 2.
8. It was further stated that Clause No.13.3 cannot be read in isolation or in parts. Term and Condition No.13.3 has to be read alongwith terms and conditions No.13.4 & 13.5 in order to ascertain the real intention of the parties. It was further stated that according to clause No.13.3 of the Agreement, OPs No.1 & 2 were liable to hand over the physical possession of the apartment in question to the complainant within a period of 30 months from the date of signing of the Agreement or from the approval of the building plans, whichever is later and in the present case the building plans were approved on 18.1.2012 and that being so, the commencement of the possession period has to be reckoned from 18.1.2012. It was further stated that the grace period of 180 days as mentioned in term and condition No.13.3 is not distinct and separate from the period of 30 months since the said grace period also embraces within its domain the period for making of application for obtaining occupation certificate. It was further stated that the complainant has categorically and unambiguously agreed vide term and condition No.13.4 of the said Agreement to accept as liquidated damages from the OPs No.1 & 2 in the event of non-offering the possession even after the expiry of the grace period. Further the complainant vide term and condition No.30.5 of the said Agreement has agreed unequivocally that she would be having a right to terminate the said Agreement and to seek the refund if within 12 months from the date of expiry of the grace period, possession is not offered by the OPs and since present complaint relates to the relief of possession of the apartment in question, therefore the complainant is duly covered under term and condition No.13.4 of the Agreement, hence, she would be entitled for the liquidated damages as agreed under the said clause. It was further stated that all the amenities which are required for the occupation and living smoothly are in existence at site and accordingly the occupation certificate has been applied by the OPs with the authorities on 22.11.2016. All the roads of the project are complete and existing at site. OPs have possessed of all the necessary approvals and permissions to sell, develop and offer possession of the plot to its allottees, No Objection Certificates etc., copies of which are Annexure OP-10 to OP-23.
9. It was further stated that except sending email dated 2.3.2017 to create paper trail, the complainant had not visited the site to enquire about the construction or the possession of the apartment in question as she failed to spell out the dates of alleged visits. It was further stated that terms and conditions of the Agreement are binding upon the parties and no party can venture out of the same. It was further stated that the construction of the apartment in question is already complete and the same is ready for possession and accordingly the answering OPs have applied for the issuance of Occupation Certificate on 22.11.2016 and in this regard no condition is pending compliance and only the Authorities are to issue the said Certificate. It was further stated that other allegations made in the complaint are vague, false, frivolous and untenable. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
10. Opposite Party No.3 in its reply stated that the grievance of the complainant is directed only against OPs No.1 & 2, who have allegedly failed to deliver its commitments in terms of Agreement and the complainant is aggrieved of the delay in handing over of possession of the apartment. There is no allegation of deficiency in service against the answering OP. As regards the finance advanced by OP No.3, the rights of the parties are governed by the loan agreement (Annexure R-3/1) and the tripartite agreement C-7. In case of cancellation of the Unit or in the contingency of termination of the Apartment Buyer’s Agreement, OP No.3 has the first charge/right to seek apportionment of its dues.
11. The complainant, in support of the case, submitted her own affidavit, by way of evidence, alongwith which, a number of documents were attached.
12. Opposite Parties No.1 & 2, in support of their case, submitted the affidavit of Mr.Rajneesh, their Authorized Representative, by way of evidence, alongwith which, a number of documents were attached. Opposite Party No.3 submitted the affidavit of Sh.Nandan Singh Rawat, its Manager and authorized representative. 13. Complainant filed rejoinder to the reply filed by OPs No.1 & 2, reiterating the averments made in the complaint and controverting those made in the reply.
14. We have heard the Counsel for the parties, and have gone through the evidence, and record of the case, carefully.
15. 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 Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, 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 was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-
“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.”
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.”
Same is the ratio of recent judgment passed by a three Judges Bench of Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh & Others Vs. Emaar MGF Land Ltd. & Anr.’,III(2017) CPJ 270(NC).
In view of the above, the plea taken by the Opposite Parties No.1 & 2, 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.
16. The next question, that falls for consideration, is, as to whether, the complainant is investor and did not fall within the definition of a consumer, under Section 2 (1) (d)
(ii) of the Act, as alleged by opposite parties no.1 and 2. It may be stated here that there is nothing on the record, that the complainant is property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by her, 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 complainant has specifically stated in para no.2 of the complaint that she has purchased the said unit, for their residential purpose as she did not own any land or plot
Since, opposite parties no.1 and 2 have leveled allegations against the complainant for purchasing the Unit for commercial purpose, as such, the onus lays upon them, to prove it, which they failed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by the opposite parties no.1 and 2, mere bald assertion i.e. simply saying that the complainant being investor, 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 this, recently in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-
“In the case of the purchase of the houses 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.
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. 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 opposite parties no.1 and 2, in their written reply, therefore, being devoid of merit, is rejected.
17. 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 them. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”, meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only this, Provisional Allotment Letter dated 31.05.2011(Annexure C-2) letter dated 15.3.2012 (C-8) intimating that the construction has been started, letter dated 27.1.2015(C-9) regarding submitting of offer for upgradation of the Unit, as also payment receipts (at pages 112,113,116,117,118,120), were issued by opposite parties No.1 and 2 from their Chandigarh Office, as the same bore address of the Company as “SCO 6-7-8, Sector 9-D, Madhya Marg, 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 opposite parties in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
18. No doubt, in the written version, an objection was also taken by opposite parties No.1 & 2 that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.
In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to them, to file the complaint. The submission of Counsel for opposite parties No.1 & 2, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
19. Another objection raised by Counsel for opposite parties No.1 & 2 was that since the issues raised in the present complaint relate to the interpretation and scope of the specific clauses of the said Agreement and being contractual in nature, and no services were to be provided, as such, only the Civil Court has power to adjudicate the same, and this Commission did not have the jurisdiction. At the time of arguments also, it was also contended by the Counsel that the complainant is seeking directions from this Commission to re-write the agreed terms and conditions of the Agreement. As stated above, the complainant hired the services of opposite parties for purchasing the unit, in question, in the manner, referred to above. Opposite parties No.1 & 2 were to deliver possession of the unit, in question, in a time bound manner, referred to above, with complete basic amenities. By not completing the development and construction within the stipulated period, opposite parties No.1 & 2 violated the terms and conditions of the Agreement and were deficient in rendering service. Section 2 (1) (o) of the Act, defines service as under:-
“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”.
20. From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC) it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs Bishamber Dayal Goyal and Ors. Civil Appeal No.3122 of 2006, decided on 26.3.2014. Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act provides an alternative remedy. Even if, it is assumed that the complainant has a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by her, as she falls within the definition of consumer, as stated above. In this view of the matter, the objection raised by opposite parties No.1 & 2 in this regard, being devoid of merit, must fail, and the same stands rejected.
21. The next question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainant. As stated above, according to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of Opposite Parties No.1&2, they were liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions whichever is later (commitment period). Undoubtedly, the building plans relating to this project as is evident from letter dated 30.12.2015 (Annexure C-11) were approved on 18.01.2012. Since, Buyer’s Agreement was executed on 7.7.2011, computing 30 months from 18.01.2012, commitment period for handing over possession was up-to 17.07.2014. On account of force majeure circumstances, referred to in the Agreement, Opposite Parties No.1&2 were entitled to advantage of 180 days grace period after the expiry of commitment period, for unforeseen delays in obtaining the Occupation Certificate etc. from the Competent Authority. In the instant case, Opposite Parties No.1&2 applied for the Occupation Certificate vide application dated 22.11.2016 i.e. after expiry of 180 days grace period and the same is still awaited. In such circumstances, Opposite Parties No.1&2 are not entitled to benefit of grace period of 180 days. Opposite Parties No.1&2 have failed to place, on record, any cogent and convincing evidence, that construction of the Unit was delayed on account of force majeure circumstances and the same is going to be complete in the near future. Clause 13.4 of the Agreement envisages that in case of delay beyond the period, as referred to above, in handing over possession, the OPs shall be under obligation to pay penalty amount for the delayed period. Computing 30 months from the date of approval of building plans, on 18.1.2012, at the maximum possession was to be delivered to the complainant by 17.7.2014. Even if, it is accepted that the OPs are entitled to further 12 months of extended delay period, as per clause 13.5 of the Agreement, date of handing over of possession came to an end on 17.7.2015. Despite clearly admitting delay, the OPs No.1 & 2 did not pay the penalty amount to the complainant, which amounts to deficiency in service and is an act of unfair trade practice. It is, thus, an admitted fact that possession of the Apartment, in question, has not been offered, by the date of filing the instant complaint, or even till date, for want of completion of unit and basic amenities at the site despite the fact that the complainant had already paid an amount of Rs.38,65,743/- (Annexure C/10) . Vide letter dated 30.12.2015 (Annexure C-11) the OPs No.1 & 2 informed the complainant that all the amenities mentioned in the said letter shall be completed and made available for the residents by the time, OPs complete the hand over for all the apartments. It was further stated in this letter as under ;
“We anticipate to start offering of possession before the end of June,2016 and the handover shall be in a phase wise manner.”
Opposite Parties No.1 & 2 even failed to abide by their commitment to offer possession of the Apartment, in question, by the end of June,2016.
22. As stated above, Opposite Parties No.1&2 were duty bound to hand over possession by 17.7.2014 but they have failed to offer possession of the Unit, in question, even after delay of more than three years. The complainant cannot be made to wait indefinitely and delay in offering possession is certainly causing loss to the complainant, they having deposited a sum of Rs. 38,65,743/- (Annexure C/10) during the period 30.5.2011 to 7.11.2014. In the instant case, even extended delay period of one year, in terms of Clauses 13.3 and 13.4 expired on 17.07.2015 and still possession has not been offered. The Counsel for OP No.1 & 2 during arguments stated that possession was likely to be offered in a couple of months. When there is inordinate delay even beyond the extended delay period, OPs No.1&2, therefore, cannot be heard to say that time for offering possession was not the essence of the contract/agreement. By making a misleading statement, that possession of the unit, was to be delivered within the period as discussed above, and by not abiding by the commitment made despite around 95% payment by the complainant, they (Opposite Parties No.1&2) were not only deficient, in rendering service, but also indulged into unfair trade practice. Clearly there is delay in delivering possession.
23. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for delay in delivering physical possession of the unit beyond the time stipulated in the Agreement. It may be stated here that in case titled 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.
(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.”
24. No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, but it does not mean that even in the event of inordinate delay, that too without justified reasons, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.7.50 per sq. ft. of super area, which is much less than the bank rate for loan or fixed deposit. If the argument of Opposite Parties No.1&2 is to be accepted, it would lead to an 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 its other business venture, at nominal interest of 3 to 4 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.
25. Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the case, referred to above, award of interest @12% on the deposited amount for the period of delay i.e. w.e.f. 18.07.2014, till delivery of possession of the unit, would meet the ends of justice.
26. It is noted from Annexure OP-9 that while disbursing an amount of Rs.12,05,618/- to the complainant on 28.2.2012, discounted amount in the sum of Rs.2,36,497/- was received by HDFC which was apparently by way of an arrangement between OP No.1 & 2 and OP NO.3. OP No.1 & 2 got benefit of discounted rate of interest @ 9.30% against subvention rate of 10.75% for a period of two years from 28.2.2012 to 28.2.2014. For all intents and purposes, liability of complainant to repay was for a sum of Rs.12,05,618/- disbursed by OP No.3 on 28.2.2012. As admitted by Opposite Parties No.1 & 2 in paras 9 to 11 in their written statement, as per agreement regarding the subvention scheme, they have borne the interest for 2 years in advance against the disbursement of Ist instalment as demanded vide demand note dated 27.1.2012. OPs No.1 and 2 in the written statement have averred that the complainant did not pay the sum of Rs.2,36,497/- yet credit thereof was afforded to the complainant. As stated above, a sum of Rs.,2,36,497/- was part and parcel of Ist installment of loan in the sum of Rs.12,05,618/- disbursed by OP No.3 in favour of OP No.1 and 2 and, therefore, the complainant is entitled to credit thereof. Account statement (Annexure C-10 (colly) clearly shows that a sum of Rs.12,05,618/- was received from the complainant. As per stipulation in Tripartite Agreement, the builder (OPs No.1 & 2) assumed the liability of payments under the Loan Agreement as payable by the borrower to HDFC during the period of 24 months from the date of first disbursement by HDFC. This period of 24 months was upto 28.2.2014. If contention of OPs No.1 & 2 that a sum of Rs.2,36,497/- was paid by it is accepted, it would mean that they (OPs No.1 & 2) did not meet their liability under the tripartite agreement. The plea of OP No.1 & 2 in view of position stated above is not tenable and the same stands rejected.
27. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account of mental agony and physical harassment, and injury caused to her, by not delivering physical possession of the unit to her, by Opposite Parties No.1&2, by the promised date in the Agreement i.e. by 17.07.2014.
The Counsel for OP No.1 & 2 argued that in absence of any allegation by the complainant that she suffered loss, compensation under Section 14(1)(d) cannot be granted. Reliance placed on case titled as Godfrey Phillips India Ltd. Vs Ajay Kumar AIR 2008SC1828 is of no help to OPs No.1 & 2 for the reasons given hereinafter.
It may be stated here that the complainant in para 25 of her complainant made the following submission ;
“That the opposite parties collected the huge amount of Rs.38,65,743/- out of Rs.39,98,008/- from the complainant, by November,2014 (02 years and 03 months back) by making a false promise of delivery of possession of the flat by the stipulated date but they did not abide by their commitment. The complainant is in dire need of a house. The saddest part is that the buyers like the complainant, who had pooled in her lifelong savings to buy the flat got deeply burnt. Despite making payment of Rs.38,65,743/- out of Rs.39,98,008/- by November,2014, the complainant is sitting empty handed in the year March,2017 and has been left in lurch.”
The possession which was to be delivered by 17.7.2014, has still not been delivered and consequently the complainant has not been able to utilize the unit despite making payment of Rs.38,65,743/-. It clearly amounts not only to loss but delay beyond three years in such circumstances is a cause of mental agony and physical harassment.
The complainant purchased the unit with the hope to have a roof over her head but her hopes were dashed to the ground. The possession of unit, in question, has not been offered to the complainant, till date by Opposite Parties No.1&2, what to speak of delivery thereof. The complainant has, thus, undergone a lot of mental agony and physical harassment, on account of the acts of omission and commission of Opposite Parties No.1&2. However, compensation in the sum of Rs. 5.00 Lacs claimed by the complainant appears to be on the higher side. The complainant, in our considered opinion, has been adequately compensated by granting interest @12% per annum on the deposited amount for the delay period. In addition, she (complainant) will also get the benefit of escalation in the price of unit, in question because Opposite Parties No.1&2 have stated in their written statement that they are committed to offer possession of the apartment on the rate agreed to at the time of execution of agreement. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.
28. No other point, was urged, by the Counsel for the parties.
29. For the reasons, recorded above, the complaint is partly accepted with costs and Opposite Parties No.1 &2 are, held liable and directed as under:-
- To hand over physical possession of the unit, allotted in favour of the complainant, complete in all respects within a period of three months, from the date of receipt of a certified copy of this order, on payment of the amount, if any, legally due against them.
- To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.
- To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 18.07.2014 to 31.10.2017, within 45 days, 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 default till realization.
- To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant w.e.f. 01.11.2017, onwards (per month), till possession is delivered, 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.
- To pay compensation, in the sum of Rs.1,50,000/- on account of mental agony and physical harassment, caused to the complainant, and Rs.35,000/- as cost of litigation, to the complainant, within 45 days 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.
30. However, complaint against OP No.3 is dismissed.
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.
