Chandigarh

StateCommission

CC/226/2016

Sarbjit Singh - Complainant(s)

Versus

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

Sandeep Bhardwaj, adv.

14 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	226 of 2016
Date of Institution	:	23.05.2016
Date of Decision	:	14.09.2016

 

Sarbjit Singh son of Sh.Achhra Singh

Correspondence Address:-  R/o VPO Gowara, Tehsil Malerkotla, District Sangrur, Punjab.

……Complainant

V e r s u s

M/s Puma Realtors Pvt. Ltd., a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Corporate Office at SCO No.6-8, 1^st and 2^nd Floors, Sector 9-D, Madhya Marg, Chandigarh-160009, through its Managing Director/ 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.Sandeep Bhardwaj, Advocate for the complainant.

                  Sh.Ramnik Gupta, Advocate for the opposite party.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT           

                The complainant vide application dated 19.02.2011, applied to the opposite party, for purchase of a residential plot, in its project, namely IREO Hamlet, Sector 98, Mohali, Punjab. Alongwith the application form, an amount of Rs.6,50,000/-, was deposited by the complainant, as booking amount. Vide provisional allotment letter dated 29.04.2011, the complainant was allotted residential plot bearing no.207, measuring 246.97 square yards, in the said project @Rs.23,000/- per square yard. To make payment, the complainant was offered time linked payment plan. 95% of the total sale consideration was to be paid within 18 months from the date of booking and remaining 5% of the sale consideration plus (+) other charges were to be paid on delivery of possession of the plot, in question. Plot Buyer’s Agreement (in short the Agreement) Annexure C-2 was executed between the parties, on 26.07.2011. Total sale consideration of the plot was fixed at Rs.60,81,660/-, which included External Development Charges, Preferential Location Charges (PLC), Interest Free Maintenance Security (IFMS) etc.

2.         It was stated that as per Clause 11.1 of the Agreement, after development, physical possession of the plot was to be delivered to the complainant within 24 months, with grace period of 6 months i.e. not later than 30 months, from the date of execution of above Agreement i.e. on or before 25.01.2014. Without getting any consent of the complainant, payment plan was changed from time linked to development linked. The complainant continued to make payments, as and when demanded by the opposite party. However, possession of the plot was not delivered to the complainant, by the stipulated date. By the end of February 2015, the complainant had paid an amount of Rs.57,97,845/-, towards price of the plot.
3.         It is case of the complainant that during the intervening period, he visited the project site and was astonished to see that development work was going on at a snail's speed. He continued to make payment, even after 25.01.2014, under threat given by the opposite party, that in case payment is not made, the plot allotted will be cancelled. Many a time, he visited the office of the opposite party to know the exact date of offer and delivery of possession of the plot, but he was put off, by giving one excuse or the other.
4.         It is further case of the complainant that without making necessary development at the site and obtaining necessary approvals from the Competent Authorities, possession letter was issued by the opposite party on 04.05.2015. After receipt of above offer letter, the complainant again visited the site and was surprised to see that there was no approach road to the project in question. Plots were not marked. Boundary wall was not constructed. Internal roads were not ready. Electricity, water and other facilities were not available. Sewerage Treatment Plant was not installed at the spot. Other basic amenities were also missing. It was specifically stated by him that qua Sector 98, layout plan was approved by the Chief Town Planner, PUDA, only on 15.05.2013, subject to compliance of many conditions, most of which were incomplete. Completion certificate was not available. To say so, reliance was placed upon information received by a similar situated allottee, by invoking the provisions of Right to Information Act, 2005, vide letters dated 26.02.2015 Annexure C-6 and 03.03.2015 Annexure C-7.
5.         Details of deficiencies found qua the project, in question, is given in para no.14 to 19 of this complaint. It was further stated that as per information dated 02.09.2014, before issuance of offer of possession letter, completion certificate was not obtained by the opposite party from the Competent Authority. It was specifically alleged that offer of possession made vide letter dated 04.05.2015 was only a paper possession and infact development at the spot was not complete.  
6.         It was further stated that the aforesaid acts of the opposite party, amounted to deficiency, in providing service, as also indulgence into unfair trade practice. When grievance of the complainant was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the opposite party, to refund the amount paid, alongwith interest from the respective dates of deposits till realization; compensation for mental agony and physical harassment; and cost of litigation.
7.         Upon notice, reply was filed by the opposite party, wherein, it was pleaded that in the face of existence of arbitration Clause No.33 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 plot, 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 since possession of the plot, in question, has already been offered to the complainant vide letter dated 04.05.2015, as such, the complainant cannot file complaint seeking refund of the amount deposited. It was further pleaded that the consumer complaint was not maintainable, as the matter relates to an agreement of sale/purchase of a plot i.e. of immoveable property. It was further pleaded that consumer complaint was not maintainable, and only a Civil Court, could adjudicate the dispute, in question. It was further pleaded that there was no promise to provide any service, as alleged. Territorial jurisdiction of this Commission was disputed. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits.
8.         On merits, it is admitted that the complainant had purchased the plot, in question, from the opposite party. It  was stated that possession of the plot was to be delivered within 30 months, from the date of execution of the Agreement, plus 12 months more, against payment of delayed penalty amount, i.e. after 42 months, subject to completion of all the obligations by the complainant, contained in the terms and conditions of the same (Agreement). It was further stated that development work at the site, commenced on 01.05.2013, and demand was raised as per the payment schedule agreed by the complainant. It was further stated that development work was complete; all the basic amenities had been provided at the site and also necessary permissions/ sanctions were obtained by the opposite party, as a result whereof, it had offered possession of unit to the complainant. It was averred in para nos.13-18 that the RTI Information provided by the Authorities concerned is misleading and wrong. It was further averred that the Authorities concerned who had supplied the RTI Information were required to obtain consent of the opposite party. It was further stated, that neither there was any deficiency, in rendering service, on the part of the opposite party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
9.         In the rejoinder filed, the complainant reiterated all the averments contained in the complaint and repudiated those, contained in written version of the opposite party.
10.         The parties led evidence, in support of their case.
11.         We have heard Counsel for the parties, and, have gone through the evidence and record of the cases, carefully. 
12.         The first question that falls for consideration, is, as to whether, the plot, in question, was purchased by the complainant, for his personal use, or he was a speculator, as alleged by the opposite party. No doubt, to defeat claim of the complainant, an objection was raised by the opposite party, to the effect that the complainant being investor, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing on the record to show that the complainant is the property dealer and is indulged in sale and purchase of property, on regular basis. On the other hand, it has been clearly averred by the complainant, in first para of his complaint that the plot, in question, was purchased by him, for his residential purpose. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite party, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, 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. 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.  
13.         The next question, that falls for consideration, is, as to whether, there is a contract to sell a plot only, to the complainant and no service was 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 the stand taken by the opposite party, needs rejection, in view of Clause  21.2 of the Agreement, which reads thus:-

“The Company shall carry out the internal development within the IREO Hamlet project, which inter alia includes laying of roads, water lines, sewer lines, electrical lines etc. However, it is understood that external linkages for these services beyond the periphery of the IREO Hamlet project, such as water lines, sewer lines, storm water drains, roads, electricity, horticulture and other such integral services are to be provided by the State Government and/or the local authorities.”

14.         Perusal of contents of the afore-extracted Clause, clearly goes to reveal that it was specifically stated that the Company shall carry out internal development within the project, which included laying of roads, water lines, sewer lines, electrical lines etc., however, external development thereof, will be the responsibility of State Government. Above Clause leaves no doubt that possession of fully developed plot, over which construction can be raised, was a promise made by the opposite party, to the complainant. Not only as above, IREO project is a part of Mega Housing Project. If it is so, it cannot be said that piece of land will be sold to a consumer, without making any development. The said Mega Housing Project is covered under the provisions of Punjab Apartment and Property Regulation Act 1995. Thus, since, it was bounden duty of the opposite party/builder/developer to provide basic facilities and infrastructure to make the plot habitable, as such, it cannot be said that only a  plot was to be delivered to the complainant, without any amenities/facilities. Under similar circumstances, in Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  the National Commission, held as under:-

“In the light of the above pronouncement of this Court the High Court was perfectly justified in holding that the activities of the appellant-company in the present case involving offer of plots for sale to its customers/members with an assurance of development of infrastructure/ amenities, lay-out approvals etc. was a ‘service’ within the meaning of clause (o) of Section 2(1) of the Act and would, therefore, be amenable to the jurisdiction of the fora established under the statute. Having regard to the nature of the transaction between the appellant-company and its customers which involved much more than a simple transfer of a piece of immovable property it is clear that the same constituted ‘service’ within the meaning of the Act. It was not a case where the appellant-company was selling the given property with all 7 Page 8 advantages and/or disadvantages on “as is where is” basis, as was the position in U.T. Chandigarh Administration and Anr. v. Amarjeet Singh and Ors. (2009) 4 SCC 660. It is a case where a clear cut assurance was made to the purchasers as to the nature and the extent of development that would be carried out by the appellant company as a part of the package under which sale of fully developed plots with assured facilities was to be made in favour of the purchasers for valuable consideration. To the extent the transfer of the site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant-company had indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers like the respondents”.

                Besides this, 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.

15.         Another objection raised by Counsel for the opposite party was that the complainant filed this complaint to rewrite the concluded Agreement, purely to invoke jurisdiction of this Commission. It was further stated that the parties were bound by the terms and conditions mentioned in the Agreement. In other words, it is stated that the complainant is virtually inviting this Commission to assume powers conferred under the Civil Court. Whereas, this Commission did not have the jurisdiction to adjudicate the present complaint.  It may be stated here, that the complainant hired the services of the opposite party, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite party, it was to deliver physical possession of the unit, within a maximum period of 30 months, as explained above, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 21.2. 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”

16.         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. case (supra), 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, as stated above, 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.
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 him. In the instant case, it is evident from the record, that the Agreement was executed between the parties at Chandigarh. Not only this, even the provisional allotment letter dated 29.04.2011 Annexure C-1 was also sent by the opposite party from its Chandigarh Office, as the same bore address of the Company as “SCO 6-8, First and Second Floors, Sector 9-D, 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. 

                No doubt, in the written version, an objection was also taken by the opposite party, that as per Clause 35 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.

18.         The next question, which falls for consideration, is, as to whether the development and the basic amenities were complete at the site before offering possession to the complainant by the opposite party vide letter dated 04.05.2015.  It may be stated here that there is nothing, on the record, that complete development, in respect of the plot, in question, and amenities at the site as promised, as per the Agreement dated 26.07.2011, were available at the site, when offer of possession was made to the complainant on 04.05.2015. Had the amenities and development at the site was complete, then certainly the opposite party, being in possession of the best evidence, having engaged a number of engineers/architects, would have placed, on record, their reports, to prove that factum. Though the Counsel for the opposite party pleaded that the basic amenities such as water lines, sewer lines, etc., were provided at the site at the relevant, but it failed to produce any cogent and convincing evidence to that effect. As such, the contention raised by Counsel for the opposite party that all the basic amenities were provided and the development work was complete before offering possession of the plot to the complainant, being devoid of merit, is rejected.
19.         Not only as above, it has also been proved on record from the documents placed on record by the opposite party itself, that even mandatory permissions/sanctions have been obtained by the opposite party only after offer of possession i.e. after 04.05.2015, and some of them are still pending, as is evident from the position indicated hereinafter. Layout plan was got revised on 15.05.2013 vide Annexure OP-20; NOC was granted by the PSPCL on 08.07.2015 vide Annexure OP-21; Final Inspection Report regarding electrical installations was given by the Chief Electrical Inspector, Punjab Electrical Inspectorate on 07.08.2015 vide Annexure OP-22; Consent to operate outlet for discharge of effluent was given by the Punjab Pollution Control Board, Patiala, only on 05.01.2016 vide Annexure OP-23; even the Bank Guarantee given for the purpose of pending internal electrical works of 11 KV and LT Lines of the project of the opposite party for Sectors 86,98 and 99 for the period of five years starting from 22.03.2016 to 21.03.2021 is dated 22.03.2016 (Annexure OP-24). Even, approval of service plans was granted by the Competent Authority i.e. Greater Mohali Area Development Authority (GMADA) on 18.05.2015 vide letter Annexure OP-19. Relevant contents of letter dated 18.05.2015, say that “…….Therefore, the arrangements for suitable provision for drinking water supply and safe disposal of sullage/storm discharge and solid waste management shall be made by promoter at his level separately and he shall obtain all necessary approvals from the concerned Authorities as per law in this regard independently. The construction work shall commence only after obtaining approvals as per law from the concerned Authorities……” Besides, number of other conditions were also required to be complied with by the promoter. The opposite party has not stated whether it complied with the aforesaid conditions or not. Thus, the contents of letter dated 18.05.2015 issued after about 14 days of offer letter dated 04.05.2015, make it abundantly clear that the opposite party was not in a position to deliver possession of the plot, in question, as still it was required to provide drinking water supply; safe disposal of sullage/storm discharge and sold waste etc. It was clearly mentioned in the said letter that construction work shall commence only after obtaining approvals from the concerned Authorities. This letter dated 18.05.2015, leaves nothing for the opposite party to prove that offer made vide letter dated 04.05.2015 to the complainant was genuine. It has also been candidly admitted by the opposite party that they had applied to the Competent Authority for partial completion certificate vide letter dated 29.06.2015 Annexure OP-39. At the same time, nothing has been placed on record to prove that the said partial completion certificate has been issued by the Competent Authority till date. It was obligatory on part of the opposite party to handover possession to the complainant complete in all respects after obtaining completion certificate but it miserably failed to do so. The case of the complainant supported by the RTI Information placed on record, issued by the Competent Authorities and also candid admission of the opposite party to the effect that various permissions/sanctions have been obtained by it after 04.05.2015 (offer date) and also some of permissions/sanctions are still pending, is sufficient to prove that development and basic amenities were not complete by the time, offer of possession was made to the complainant, by it (opposite party). As per established law, if the project proponent sells the project without obtaining necessary permissions or clear title of the acquired land, it would amount to adopting unfair trade practice. It was so said by the Hon’ble National Commission in Atul Maheshwari and ors. Vs. Yamuna Expressway Industrial Development Authority, II (2016) CPJ 623 (NC). Relevant portion of the said judgment reads thus:-

”OP should not have announced the scheme, until or unless they got clear title of the acquired land”.

20.         Not only this, under similar circumstances, in a case titled as Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.756 of 2016, decided on 30.03.2016, the Hon’ble National Commission, upheld the findings given by this Commission, to the effect that the project cannot be even marketed before getting approval/sanction from the competent authorities, to launch the project. Relevant portion of the said Revision-Petition reads thus:-

“ We are unable to persuade ourselves to agree with the ld. counsel.  While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-

If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.

6.    We are in complete agreement with the view taken by the State Commission.  As noted above, the petitioners happen to be body corporate.  Before offering the farmhouses in the said project as Agent of Respondent No. 2, they must be aware about the status of the sanction for launch of the project.  Therefore, it is beyond one’s comprehension that the present Petitioner was not aware about the actual state of affairs for which only the developer could be held responsible.

7.    We do not find any jurisdictional error in the order passed by the Ld. State Commission warranting our interference in revisional jurisdiction.  The revision petition fails and is dismissed accordingly.”

21.         Besides as above, it is very significant to mention here that in First Appeal No.704 of 2016 titled as Puma Realtors Pvt. Ltd. Vs. Ashok Kumar and another, filed by the Builder/opposite party, against the order dated 26.04.2016 passed by this Commission, in Consumer Complaint No.15 of 2016, which relates to a similar project, wherein also offer of possession was made to the complainant on 23.11.2015, the National Commission, when deciding an application of the opposite party to get interim stay, has held the same as paper possession,  by observing as under:-

“As regards the question of balance of convenience and equities between the parties, based on the merits of the Appeal, we feel that, for the present, it would suffice to extract the findings of the State Commission in Consumer Complaint no. 309/2015 by which order the Complaint No.15/2016 was also disposed of. The findings which succinctly reflecting the ground realities are as under:- 

 ““Even the final NOC to the Opposite Party No. 1 for 85.25 Acres residential township in Sectors 86, 98 and 99 in Village Sambhalkhi, SAS Nagar, Mohali was accorded by Punjab State Power Corporation Ltd. on 8.7.2015 (Annexure OP 14), after offer of possession on 04.5.2015.  Further from perusal of information obtained under RTI dated 03.7.2015, Annexure C-7 by one Sh. P. Saini(at Page 79 of the file), it is established that the Promoter was to complete the development work of the Project before offering possession of the plot and as per the notification issued by the Government bearing No. 4966 dated 02.09.2014,  the letters had been issued to all the Promoters of MEGA Projects  for getting completion certificates of their MEGA Projects. Further as per information obtained under RTI Act, 2005 by the said Paramjit Singh Saini, dated 15.06.2015 (at page 92 of the file) vertical road sector dividing 97-88 and road dividing sector 86-98 are yet to be constructed and this would be done only after acquisition of the land. Further as per RTI information dated 30.06.2015 (at page 95 of the file) sewerage and storm water drainage are constructed/laid down by GMADA on Sector dividing road in the new sectors being established. Further, Opposite party No.1 has itself, placed on record copy of application dated 29.06.2015 (Annexure OP -30), which clearly shows that it (Opposite Party No.1) applied for partial completion certificate for Sectors 86,98 and 99, SAS Mohali only on 29.06.2015 that too after offer of possession of the plot, in question to the complainant on 04.05.2015. Opposite Party No. 1 has averred that it was exempted under PAPRA, except provision of Section 32 thereof, vide notification dated 14.08.2008 and was not required to obtain completion certificate and it applied for partial completion certificate only for the benefit of the complainant. It may be stated here that as per Govt. Notification No.4966 dated 02.09.2014, all the promoters of Mega Projects were required to get a completion certificate. In the instant case, possession was offered on 04.05.2015 but Opposite party No. 1 applied for partial completion certificate on 29.06.2015. It is, thus, abundantly clear from the evidence on record that neither amenities were complete nor approvals obtained, when possession was offered.”

It is manifest that on the date of offer by the Appellants to the Complainants to take possession on 23.11.2015, development of the Sector in question (98) was not complete.  Under these circumstances, it was felt that having deposited a huge amount of ₹28,41,868/-  from time to time since the year 2011, with the assurance from the Appellants that the possession of a developed plot shall be delivered within a total period of 42 months (including the grace period of 6 months), it would be unjust to the Complainants not to even  get back their Principal amount, they had deposited with the Appellants, and continue to suffer on account of payment of  interest on the funds raised for depositing the afore-stated amount”

22.         In view of above, it is held that the act of the opposite party, in offering paper possession of the unit, in question, vide letter 04.05.2015, in the absence of development work; basic amenities at the site; non-obtaining of necessary permissions including completion certificate, amounted to deficiency in providing service and also adoption of unfair trade practice. It is therefore held that the offer of possession made by the opposite party is nothing but a paper possession, which is not sustainable, in the eyes of law.
23.         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.”

24.         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.
25.         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.”

26.         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.
27.         Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
28.         We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
29.         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.
30.         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.

31.         Further, to deny claim of the complainant, it was also argued by Counsel for the opposite party that as per Clause 11.3 of the Agreement, the complainant could have opted for termination of the Agreement, only after the lapse of 42 months aforesaid, from the date of execution of the same (Agreement) i.e. 24 months plus (+) 6 months plus (+) 12 months, till the notice of possession is dispatched, whereas, on the other hand, possession has been offered to him, as such, the option to terminate the same by the complainant has been irrevocably lapsed.  It may be stated here that perusal of provisions of Agreement, makes it very clear that as per Clause 11.1, handing over possession of the plot is subject to force majeure circumstances. Clause 11.2 stipulates that the stipulation contained therein is subject to the provisions of Clause 11.1. It is not open to the builder to get 12 months, on payment of delayed compensation, as a matter of right. It has to be shown, whether there was any circumstance, which didn't allow providing of infrastructure at the site. No such circumstance has been added to claim above period of 12 months. Further, there is nothing on record to show that at the end of 30 months period, to get further period of 12 months, any attempt was made, to make offer of payment of delayed compensation, as envisaged in Clause 11.2 of the Agreement. Even in the notice of offer of possession, which has been held to be paper one, it is not even mentioned that payment of delayed compensation will be made to the complainant, on completion of documentation, including registration of the conveyance deed. The above said stipulation qua payment of delayed compensation amount, after registration of conveyance deed, appears to be draconian. It is totally one sided. As such, it could be termed as unfair trade practice, on the part of the opposite party. Furthermore, in the present case, admittedly, possession of the plot was offered after the lapse of 42 months i.e. 24 months plus (+) 6 months plus (+) 12 months, as such, the above arguments need to be rejected.

            Otherwise also, as has been held in large number of cases by this Commission, the payment of paltry amount of compensation, virtually would amount to no compensation for the loss caused to a consumer. The amount offered is not even equal to simple interest being offered by the Banks, against saving bank account. On account of inaction, on the part of the opposite party, in not fulfilling its obligation under the contract, the very purpose of Agreement has failed and it is open to the complainant to claim refund of his amount, with interest.  The argument raised by Counsel for the opposite party, in this regard, being devoid of merit, is rejected.   

32.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to the refund of amount of Rs.66,30,754/-, deposited by him, towards the price of said plot. It may be stated here, that it has been proved on record that the opposite party has failed to discharge its part of the contract in not offering possession of the plot, in question, within the stipulated time for want of development and basic amenities at the site. Possession, for the first time was offered on 04.05.2015  i.e. after a delay of about 15 months, that too, was paper possession, as held above. Thus, this was a material deficiency, in rendering service, on the part of the opposite party. In these circumstances, mere offer of paper possession of plot, vide letter dated 04.05.2015, will not disentitle the complainant, to claim refund of amount deposited by him.

                Even otherwise, if it is assumed for the sake of arguments (though not proved) that had possession of the plot in question, offered to the complainant, vide letter dated 04.05.2015 i.e. after a delay of about 15 months was genuine, even then the complainant was not bound to accept the same. It is well settled law that non-delivery of possession of the property sold by a builder, by the stipulated date, is a material violation of the terms and conditions of the Agreement. It is not case of the opposite party that the said delay occurred, on account of force majeure circumstances, met by it, on account of some stay or any other legal and valid reason. No plausible reason has been assigned by the opposite party, as to why it failed to deliver possession of the unit, by the stipulated date. Admittedly, construction work started at the site only on 01.05.2013 i.e. after about two years from the date of execution of the Agreement. Delay could only be condoned, under the terms and conditions of the Agreement, if there exists any plausible reason. Under similar circumstances, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon'ble National Commission, held 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”.

The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.

33.         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, in question, by the stipulated date, as mentioned in the Agreement, and that too when the offer was made, there was no development at the site, as also basic amenities were not in existence, the complainant was at liberty, not to accept the offer made and on the other hand, was right in seeking refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint. The opposite party, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the plot, in question. In our considered opinion, the complainant is entitled to the refund of amount of Rs.66,30,754/-, deposited by him, towards price of the said plot, because he was  caused financial loss.  
34.         Hard-earned money, deposited by the complainant, towards the plot, in question, was utilized by the opposite party, for a number of years. The opposite party by neither delivering actual physical possession of the plot, in question, complete in all respects, by the stipulated date or even till date, nor refunding the amount to the complainant, was not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant, is, thus, entitled to the refund of Rs.66,30,754/-, alongwith interest @12% compounded quarterly, from the respective dates of deposits.

                In view of above facts of the case, the opposite party is also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.

35.         No other point, was urged, by the Counsel for the parties.
36.         For the reasons recorded above, the complaint is partly accepted with costs.  The opposite party is held liable and directed as under:-
    1. To refund the amount of Rs.66,30,754/-, to the complainant, alongwith interest @12% compounded quarterly,  from the respective dates of deposits, onwards.
    2. To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainant,
    3.  To pay cost of litigation, to the tune of Rs.50,000/- to the complainant.
    4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite party, to the complainant, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, it (opposite party) shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @15% compounded quarterly,  instead of @12% and interest @12% compounded quarterly, on the amount mentioned at sr.no. (ii) and (iii), from the date of filing of this complaint, till realization.
37.         However, it is made clear, that in case, the complainant, has availed loan facility from any banking/financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
38.         Certified copies of this order be sent to the parties, free of charge.
39.         The file be consigned to Record Room, after completion.

Pronounced.

14.09.2016

 

Sd/-

(JUSTICE JASBIR SINGH (RETD.)

PRESIDENT

 

 

Sd/-

 (DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

Rg.