Chandigarh

StateCommission

CC/339/2016

Sandeep Goyal - Complainant(s)

Versus

M/s Puma Realtors Private Limited - Opp.Party(s)

Savinder Singh Gill, Adv.

07 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	339 of 2016
Date of Institution	:	08.07.2016
Date of Decision	:	07.10.2016

 

Sandeep Goyal son of Sh.Rajinder Goyal, resident of House No.3263, Sector 21-D, Chandigarh.

……Complainant

V e r s u s

M/s Puma Realtors Private Limited, SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh, through its Managing Director/ Authorized Signatory.

…..Opposite Party

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

 

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

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by:Sh.Savinder Singh Gill, Advocate for the complainant.

                 Sh.Ramnik Gupta, Advocate for the opposite party.

         

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The facts in brief are that vide allotment letter dated 02.11.2010, one Sh.Sunil Goyal, purchased an apartment bearing no.002, Ground Floor, Tower F, in a project launched by the opposite party, known as ‘Gardenia Block’. Tentative super area of the unit was fixed at 1813 square feet. Buyer’s Agreement was entered into between the opposite party and Sunil Goyal, on 26.05.2011. It is case of the complainant that as per terms and conditions of the Agreement, possession of the built-up unit was to be handed over to the original owner of the unit, within 30 months from the date of execution of that Agreement, with further grace period of six months, which was available to the opposite party. The following chart is given qua payments made by the original allottee and the complainant:-

 

S.No.	Date	Amount (in Rs.)
	30.10.2010	471380.00
	06.12.2011	757612.00
	18.07.2012	605599.00
	16.02.2013	608415.00
	08.06.2013	608410.00
	12.10.2013	6084.00
	12.10.2013	143059.00
	12.10.2013	609012.00
	30.12.2013	442782.00
	01.07.2014	652962.89
	02.07.2014	61113.00
	27.09.2014	619400.00

 

2.         It is further case of the complainant that possession of the unit was not offered within the stipulated time. It was delayed and in a very arbitrary manner, even no attempt was made to pay penalty for delayed period. When despite efforts made, neither penalty amount was paid nor possession of the unit was offered, the complainant sought refund of amount paid with interest.  
3.         It is positive case of the complainant that possession of the apartment was to be delivered by 25.05.2014. It is on record that the unit, in question, was purchased by the complainant from the original allottee on 02.07.2014.

                By stating as above, prayer has been made for refund of amount of Rs.55,85,828.89Ps., with interest @18% p.a., from the respective dates of deposits. Besides as above, compensation for mental agony and physical harassment and litigation expenses were also claimed. 

4.         Upon notice, reply was filed by the opposite party, wherein, it was pleaded 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. It was further pleaded that since the unit, in question, was purchased by the complainant for commercial purpose i.e. for investment purpose, as such, he did not fall within the definition of consumer. It was averred that the consumer complaint was not maintainable, as the matter relates with regard to dispute of contractual nature and an agreement to sell/purchase of an apartment only, an immovable property. It was stated that no services were to be provided by the opposite party to the complainant. It was further stated that, in this view of the matter, consumer complaint was not maintainable and only a Civil Court could adjudicate the dispute, in question. Territorial jurisdiction of this Commission was also disputed. It was stated that, as per Clause 13.3 of the Agreement,  it was agreed between the parties, that the Company only proposes to deliver possession of the unit, in question, within a period of 30 months, from the date of Agreement or from the date of approval of building plan, as such, time was not the essence of contract. It is specifically stated that the complainant is not entitled to any compensation, as he had purchased the unit, in question, from the original allottee, only on 02.07.2014. By making reference to the Transfer Agreement dated 02.07.2014 entered into between the parties, supported by affidavit of the original allottee of the same date, it was stated that original allottee had already received premium, as such no compensation is payable to the complainant.
5.         On merits, initial sale of unit to Sh.Sunil Goyal was admitted. It is specifically stated that the unit was purchased by the complainant, in resale, on making payment of Rs.42,49,279/- plus premium paid to the original allottee of Rs.83,266/- vide Agreement dated 02.07.2014. It was further stated that in terms of documents Annexure OP-6 and OP-7 it is not open to the complainant to claim any penalty amount towards delay in handing over possession of the unit. It was specifically stated that when unit was purchased on 02.07.2014, the period to hand over possession i.e. 30 months were virtually over. As such, at this stage, it is not open to the complainant to say that possession of the unit was delayed.  At the time of arguments, it was specifically stated that the building plans qua the project, in question, was approved on 18.01.2012 and the period of 36 months will expire on 17.01.2015 and if period of 12 months is added on payment of delayed penalty, possession could have been delivered on 16.01.2016.  It was averred that the opposite party has already applied for occupation certificate in respect of the unit, in question. It was further stated that payments were delayed by the complainant as well as original allottee. The remaining averments were denied, being wrong.
6.         To the reply filed, rejoinder was filed by the complainant, reiterating all the averments contained in the complaint and repudiating those contained in written version of the opposite party.
7.         The parties led evidence, in support of their case.
8.         We have heard Counsel for the parties and have gone through the record of the case very carefully.
9.         The first question that falls for consideration is as to whether, the complainant is an investor and did not fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, as alleged by the opposite party or not. It may be stated here that there is nothing on the record, that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. It is specifically stated in para no.1 of the complaint that the complainant has purchased the said unit, for his personal use. Thus, in the absence of any cogent evidence, in support of the objection raised by the  opposite party, 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.  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.”

 

 

                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  the opposite party, in its written reply, therefore, being devoid of merit, is rejected. 

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

                According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, 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, perusal of almost all the receipts placed on record, reveal that the same were issued by the opposite party from its 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 the opposite party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.         No doubt, in the written version, an objection was also taken by the opposite party, 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 the complainant, to file the complaint. The submission of Counsel for the opposite party, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

12.         The next question, that falls for consideration, is, as to whether, there is a contract to sell an apartment only, to the complainant and no services were to be provided as alleged, by the opposite party to him (complainant), as such, he would not fall within the definition of consumer. It may be stated here that it is not the case of the opposite party that it sold the unit, in question, in an open auction, on “as is where is basis”. The builder/opposite party is bound to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by the allottees. In Haryana State Agricultural Marketing Board vs. Bishamber Dayal Goyal and Ors., Civil Appeal No.3122 of 2006, decided on 26.03.2014, the Hon’ble Supreme Court, while placing reliance on Municipal Corporation, Chandigarh & Ors. vs. Shantikunj Investment (P) Ltd. & Ors., (2006) 4 SCC 109, held that though it was not a condition precedent but there is an obligation on the part of the Administration to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by allottees. In view of above facts, the plea taken by the opposite party, in this regard, stands rejected.
13.         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.

                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.”

                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.”

14.         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.
15.         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.”

16.         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.
17.         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.
18.         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. 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.
19.         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. In the present case, the complainant has spent his entire  life earnings to purchase the unit, in the said project, launched by the opposite party, in the manner explained above. He is now running behind the opposite party to get his amount, legally due to be paid to him, as it failed to deliver possession of the unit, even till date. 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.
20.         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.”

                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.

21.         Another objection raised by Counsel for the opposite party was that the issues raised in the present complaint being of contractual nature, as such only the Civil Court has power to adjudicate the same, and this Commission did not have the jurisdiction to adjudicate the present complaint.  It was also argued 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 the opposite party, for purchasing the unit, in question, in the manner, referred to above. The opposite party was 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, the opposite party violated the terms and conditions of the Agreement and was 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”.

 

22.         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. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). 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 him, as he falls within the definition of consumer, as stated above. In this view of the matter, the objection raised by the opposite party in this regard, being devoid of merit, must fail, and the same stands rejected.
23.         Since, it has already been held that the opposite party was bound to deliver possession of the unit, within a period of 30 months from the date of execution of Agreement or from the date of approval of building plan, with grace period of six months followed by extended delayed period of 12 months, on payment of delayed compensation, as such, time was certainly the essence of contract. In view of above, there is no substance in the arguments raised by Counsel for the opposite party that time was not the essence of contract

                At the same time, it is also submitted that the opposite party cannot evade its liability, merely by saying that since the word proposed/tentative was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof.  It was so said by the Hon'ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

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

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

24.         By filing this complaint, the complainant has prayed for refund of an amount of Rs.55,85,828.89Ps., with interest, alongwith compensation and litigation expenses. It is apparent on record that when the unit was purchased on 02.07.2014, the complainant had paid an amount of Rs.43,32,545/-, which included premium paid i.e. an amount of Rs.83,266/-. It is also an admitted case that even by now, possession of the built-up unit has not been offered by the opposite party to the complainant. It is only stated that application to get occupation certificate is pending with the competent Authority and after getting the said certificate, possession of the unit will be offered to the complainant. As stated above, as per Clause 13.3 of the Buyer’s Agreement dated 26.05.2011 possession needs to be handed over to the purchaser within 30 months from the date of execution of the Agreement or approval of building plans. Commitment to deliver possession is subject to force majeure circumstances. The opposite party is further entitled to get six months more, to get occupation certificate etc. Clause 13.4 of the Agreement envisages that in case of delay beyond the period, as referred to above, in handing over possession, the opposite party shall be under an obligation to pay penalty amount for the delayed period. Perusal of record reveals that the building plan qua the project, in question, was approved on 18.01.2012, as such, at the maximum possession was to be delivered to the complainant by 17.01.2015 (i.e. within 36 months). Even if we presume that the opposite party is entitled to further 12 months of extended delay period as per Clause 13.5 of the Agreement, date of handing over possession would come to an end on 16.01.2016. Admittedly, possession of the unit has not been made till date. Probably, the project is not complete. As per averment made by Counsel for the opposite party, occupation certificate is pending with the Competent Authority for approval and after getting the same, possession will be delivered within a reasonable time. Under above circumstances, prayer of the complainant to claim refund of the amount aforesaid, cannot be negated. It may be stated that non-delivery of possession of the unit, in question, by the stipulated date, is a material violation of the terms and conditions of the Agreement, on the part of the opposite party. 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:-

“I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

25.         Not only this, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon'ble National Commission, ordered refund to the complainant, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the Complainant was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

 

                In view of the above, it is held that since there was a material violation on the part of the opposite party, in not handing over possession of the unit by the stipulated date or even till date, the complainant was at liberty to seek refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.

26.         Now it is to be seen, as to whether, the complainant is entitled to interest, on the amount paid from the date of respective deposits. It is on record that initially, the apartment in question was allotted to one Sh.Sunil Goyal, from whom, the complainant has purchased it on 02.07.2014. Thereafter, it appears that some more amount was paid by the complainant towards price of the apartment, to the opposite party. In all, the complainant is claiming refund of an amount of Rs.55,85,828.89Ps., alongwith interest. In such circumstances, from which date, interest can be awarded, this issue came up for consideration, before this Commission in Darbara Singh  and ors. Vs. Emaar MGF Land Limited, and Ors., Complaint case No. 147 of 2016, decided on 22.08.2016 (connected case). In that case, this Commission while granting interest to the complainant, from the date of endorsement of the unit (as he was subsequent purchaser of the unit), on the amounts actually paid by him, held as under:-

“No doubt, Plot Buyer’s Agreement was executed between the original allottee and the Opposite Parties on 20.06.2007, the complainant is a subsequent allottee and she made all the payments on 14.03.2011 and the Plot Buyer’s Agreement was endorsed in favour of the complainant on 14.03.2011. Counsel for the Opposite Parties has vehemently argued that as per the Agreement, three years stipulated period for handing over of possession of the unit stood expired in June, 2010 and whereas the complainant purchased the same in March, 2011 and all the payments were made by the complainant at the time of endorsement in March, 2011 only and, therefore, she is entitled to interest on the deposited amount from the date she purchased the unit, in question, in March, 2011. Moreover, it is very clear that the relevant transfer formalities of the unit, in question, took place in the year 2011 much after the original expected date of possession i.e. June, 2010, whereby, the complainant is very well aware of the delay caused in handing over of the possession and yet chose to get the unit endorsed in her favour in March, 2011.”

 

27.         Similar view was reiterated by this Commission, in Lt.Col. Dalvinder Singh, Vs. Puma Realtors Pvt. Ltd., and another, Complaint case No. 230 of 2016, decided on 02.09.2016. In the present case also, right to get interest will accrue to the complainant from the date, when he has purchased the unit, in dispute, and paid amount to the original allottee, followed by remaining amount paid by him, thereafter, to the opposite party. Whatever interest was due or may have accrued in favour of the original allottee (Sunil Goyal), he decided not to claim it, when he had sold the unit to the complainant, on receipt of amount paid to him i.e. Rs.42,49,279/- and premium amount of Rs.83,266/-. Benefit of amount paid whereof 30.10.2010 upto the date of purchase of the unit by the complainant, qua interest cannot be extended in his favour.  If we order so, it would amount to undue enrichment granted to the complainant. Under these circumstances, it is held that the amount paid by the complainant to the original allottee plus amount paid thereafter to the opposite party, shall be refunded to the complainant with interest, in the manner held above.
28.         Counsel for the opposite party vehemently contended that in view of document Annexures OP-6 and OP-7 compensation/interest cannot be allowed in favour of the complainant. It is further contended that when the unit was purchased by the complainant, period to hand over possession was virtually over, except 12 months period, which can be counted by the opposite party, against payment of penalty. Delay in delivery of possession of the unit was known to the complainant and he cannot agitate that for non-delivery of possession, he is entitled to get compensation/interest.

                We have seen the documents Annexure OP-6 and OP-7 dated 02.07.2014 respectively, wherein it is specifically stated that transferee/complainant forego and waived his right for payment of  compensation for delay in handing over possession or to get any rebate under the claim or any discount from the opposite party. The said undertaking cannot be interpreted to say that in case of claiming possession, the consumer will not be entitled to get delayed possession penalty. Contents of the said undertaking cannot be interpreted to deny right of the complainant to get interest on the amount paid, in case of seeking refund. In the present case, original allottee started making payment whereof 2010. He made payment of amount of Rs.42,49,279/- by the time, it was purchased by the complainant, on 02.07.2014. Thereafter, the complainant also made some payments. The entire amount remained with the opposite party for a long period and it might have used it to earn profit. Under these circumstances, in view of earlier findings given, it is held that in case of refund, interest is payable. We reject the arguments raised by Counsel for the opposite party that interest is not payable to the complainant, if refund of the amount deposited is ordered.

29.         It is to be further seen, as to what rate of interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.55,85,828.89Ps. was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite party, for its own benefit. The opposite party was charging heavy rate of interest @15% per annum with quarterly rest, as per Clause 7.3 of the Agreement, for the period of delay in making payment of installments by the complainant.  It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon’ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), 2014 (2014) 6 SCC 335). In view of above, the complainant is certainly entitled to get refund of the amount deposited by him, alongwith interest @12% compounded quarterly. Since the unit, in question, was endorsed in favour of the complainant on 02.07.2014, the complainant shall be entitled to get interest at the aforesaid rate w.e.f. 02.07.2014 (i.e. the date on which onward rights/obligations with respect to the unit, in question, were assigned to the complainant), on the amounts/installments deposited before 02.07.2014 and interest at the same rate from the respective dates of deposits on the amounts/installments paid after 02.07.2014.

                In view of aforesaid position, the opposite party is also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, in not offering possession of the unit, even as on today, as a result whereof, he has to seek refund of deposited amount.

30.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite party is directed as under:-
    1. To refund the amount of Rs.55,85,828.89Ps., received from the complainant in the manner explained above, to him (complainant), alongwith interest @12% compounded  quarterly w.e.f. 02.07.2014 on the amounts/installments deposited before 02.07.2014 and from the respective dates of deposits on the amounts/ installments paid after 02.07.2014.
    2. To pay an amount of Rs.2.50 lacs, to the complainant, as compensation for mental agony, physical harassment, deficiency in rendering service and unfair trade practices.
    3. To pay cost of litigation, to the tune of Rs.50,000/- to the complainant.
    4.  The amounts awarded in sr.nos(i) to (iii) shall be paid by the opposite party to the complainant, within a period of 02 months, from the date of receipt of a certified copy of this order, failing which, the amount mentioned at Clause (i), shall carry penal interest @15% compounded quarterly instead of 12%, w.e.f. 02.07.2014 on the amounts/installments deposited before 02.07.2014 and from the respective dates of deposits on the amounts/installments paid after 02.07.2014 and amounts mentioned in Clauses (ii) and (iii), shall carry interest @12% compounded quarterly from the date of filing the complaint till realization.
    5. However, it is made clear that, in case, the complainant has availed loan facility from any financial institution(s), such an institution shall have the first charge on the amount payable, to the extent, the same is due against the complainant.
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.

07.10.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

 

Rg.