Chandigarh

StateCommission

CC/110/2015

Amit Rattan - Complainant(s)

Versus

M/s Puma Realtors Pvt. ltd. - Opp.Party(s)

S.S.Hira & Umesh Kumar, Adv.

04 Aug 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	110 of 2015
Date of Institution	:	02.06.2015
Date of Decision	:	04.08.2015

 

1. Amit Rattan S/o Sh. Darshan Kumar Rattan,
2. Anu Rishi W/o Sh. Amit Rattan,

Both R/o H.No.945, Sector 41-A, Chandigarh.

 

……Complainants.

Versus

1. M/s Puma Realtors Pvt. Ltd., Regd. Office at A-11, 1^st Floor, Neeti Bagh, New Delhi – 110049 through its Managing Director.
2. M/s Puma Realtors Pvt. Ltd., SCO No.6-8, 1^st and 2^nd Floor, Sector 9-D, Madhya Marg, Chandigarh – 160009 through its Vice President.

 

              ....Opposite Parties.

 

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

               

BEFORE:   JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

                 SH. DEV RAJ, MEMBER.

               

 

Argued by:

 

Sh. S. S. Hira, Advocate for the complainants.

Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

PER DEV RAJ, MEMBER

              The facts, in brief, are that the Opposite Parties launched a project namely IREO Hamlet for the allotment of unique neighborhood of 250 sq. yards villas and plots, situated in upcoming Sector 98, Mohali and issued Brochure (Annexure C-1). It was stated that on 5.5.2011, the Opposite Parties issued a provisional allotment letter (Annexure C-2) of plot No.190 admeasuring 250.59 sq. yards, in the said township, in favour of the original applicant namely Mr. Subhash Bansal R/o H.No.3017, Sector 21-C, Chandigarh and, as such, Buyer Agreement (Annexure C-3) was executed between the parties on 09.08.2011. It was further stated that the complainants purchased the said plot from Sh. Subhash Bansal and, entry in this regard was effected in the Buyer Agreement. It was further stated that the complainants also executed indemnity bond-cum-undertaking, in favour of the Opposite Parties, on 29.12.2011, and submitted an affidavit in this regard. It was further stated that transfer of allotment agreement to sell was executed between the original allottee and the complainants on 29.12.2011 at Chandigarh (Annexure C-7). It was further stated that the Opposite Parties issued letter dated 9.1.2012, vide which they assigned onward rights/obligations, with respect to plot No.190 to the complainants.

2.         It was further stated that the complainants got sanction dated 10.02.2014, from the Opposite Parties for mortgaging the said plot with ICICI Bank for payment of consideration amount of Rs.67,09,572/- and a Tripartite Agreement dated 10.02.2014 (Annexure C-10) was executed, according to which, loan of Rs.30,00,000/- was sanctioned, out of which, Rs.26,42,909/- had already been disbursed to the Opposite Parties. It was further stated that the complainants had also paid Rs.38,52,747/- from their own pocket. It was further stated that the complainants made payments to the Opposite Parties from time to time, vide receipts/cheques (Annexure C-11 colly.), as tabulated below:-

Sr. No.	Date	Cheque No.	Amount (Rs.)
	28.04.2011	192921	6,50,000.00
	23.05.2011	54660	2,89,713.00
	29.12.2011	894866	5,00,000.00
	29.12.2011	057321	6,14,837.00
	27.05.2013	894870	2,20,000.00
	27.05.2013	894872	1,00,000.00
	27.05.2013	061031	3,69,000.00
	27.05.2013	462632	3,67,000.00
	15.02.2014	365303	10,50,918.00
	05.08.2014	550110	10,50,918.00
	04.08.2014	061039	6,532.00
	16.08.2014	061040	21,018.00
	10.11.2014	146062	2,50,000.00
	11.11.2014	894879	3,49,403.00
	11.11.2014	894880	6,054.00
	05.02.2015	146063	96,844.00
	05.02.2015	194897	70,000.00
	05.02.2015	609658	5,41,073.00
	05.02.2015	146064	6,265.00

 

3.         It was further stated that till the filing of complaint, the complainants paid total amount of Rs.64,95,656/- to the Opposite Parties. It was further stated that as per Clause 11.1 of the Buyer Agreement dated 09.08.2011 (Annexure C-3), the Opposite Parties were bound to hand over possession of the said plot to the complainants within 24 months from the date of execution thereof plus grace period of six months, which period expired on 08.02.2014. It was further stated that the Opposite Parties were liable to pay Rs.50/- per sq. yard of the area of the said plot every month till the date fixed by the Company for handing over possession. It was further stated that further as per Clause 11.3 of the Buyer Agreement dated 09.08.2011 (Annexure C-3), if the Opposite Parties failed to hand over possession of the said plot beyond a period of 12 months (i.e. extended delay period), then the complainants were entitled to opt for termination of the allotment/buyer agreement and were entitled to refund of the actual paid up instalments made against the said plot. It was further stated that the said extended delay period also expired on 07.02.2015 but possession of the plot, in question, was not offered by the Opposite Parties. It was further stated that such refund was to be made by the Opposite Parties, within 90 days of the receipt of intimation to this effect from the allottee.

4.         It was further stated that the complainants approached the office of Opposite Party No.2 again and again, for getting the information regarding the status of the project and for possession of plot No.190, but the Opposite Parties failed to give any satisfactory reply in this regard. It was further stated that there was no appropriate development, at the site, and the basic amenities like water supply, overhead water tank, sewerage connection, sewerage treatment plant, electricity supply, boundary walls of project and internal roads were not there, which were promised as per the terms and conditions of the Buyer Agreement dated 09.08.2011 (Annexure C-3). It was further stated that there was also no approach road connected to the project with the other sectors, which were to connect Kharar-Landra-Banur road and Mohali.  It was further stated that keeping in view the aforesaid circumstances, the complainants moved an application dated 08.05.2015 for termination of the Buyer Agreement dated 09.08.2011 (Annexure C-3) vide email dated 08.05.2015, as well as through registered post dated 08.05.2015 (Annexure C-13 colly.) and requested for the refund of their amount with due interest.

5.         It was further stated that when the complainants sought cancellation of the Buyer Agreement, the Opposite Parties issued a notice of possession dated 06.05.2015 raising demand of Rs.3,13,237.66Ps, which was received by the complainants on 08.05.2015 by post. It was further stated that the complainants were entitled to get termination of Buyer Agreement as per clause 11.3 on 08.02.2015, because the committed period of 24 months plus grace period of 6 months and extended delay period of 12 months had already expired on 07.02.2015. The Opposite Parties, however, failed to refund the amount with interest.

6.            It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund the amount of Rs.64,95,656/- paid by them (complainants); Rs.2,00,472/- as payment of delay compensation charges @Rs.50/- per sq. yard per months from 09.02.2014 to 08.06.2015; Rs.21,52,766/- as interest on the principal amount @15% per annum till 08.06.2015; pay Rs.1,00,000/- as compensation for mental anguish and Rs.39,000/- as litigation expenses, totalling Rs.87,87,422/-.

7.         The Opposite Parties, were served and put in appearance on 08.07.2015. They filed their joint written statement on 21.07.2015. In the written statement, the Opposite Parties, took-up certain preliminary objections, to the effect that the complaint was liable to be dismissed, due to existence of arbitration clause No.33 in the Buyer Agreement dated 09.08.2011 (Annexure C-3); that the complainants were not consumers, as the present complaint related to the enforcement of agreement to sell/purchase of a residential plot i.e. immoveable property and hence, was not covered under the Act; that the complainants did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainants did not book the plot for their personal use, but for investment/commercial purposes; and that the allegations in the complaint being of contractual nature, were only triable by the Civil Court.

8.         On merits, it was admitted that the original allottee Sh. Subhash Bansal was not the owner of the plot and he had merely entered into the said Agreement with the Opposite Parties, to purchase the plot, in question, and he subsequently assigned all his rights in the said Agreement, in favour of the complainants vide nomination/transfer agreement dated 29.12.2011. It was further stated that after all the rights were duly assigned, in favour of the complainants, they stepped into the shoes of the original allottee. It was further stated that the complainants did not take possession of the said plot and get executed and registered the conveyance deed of plot No.190 in their favour. It was further stated that the complainants vide the aforesaid transfer/assignment documents agreed that the terms and conditions of the Buyer Agreement were binding upon them and they would comply with the same.

9.         It was further stated that the complainants till date have not paid the amounts mentioned in the notice of possession dated 06.05.2015. It was further stated that the cheques dated 05.02.2015 were, in fact, delivered by the complainants to the Opposite Parties only on 07.02.2015 after issuance of reminder dated 06.02.2015 against demand note dated 06.01.2015 and, as such, the complainants defaulted in making the due payments as per the agreed terms and conditions of the said Agreement. It was denied that the complainants ever approached the Opposite Parties or otherwise enquired about development of the project. It was further stated that the development work commenced at the site w.e.f. 01.05.2013 and stood carried on continuously in a phased manner at a good pace and resultantly, the notices of possession stood issued to the allottees including the complainants in May 2015.

10.       It was further stated that since the complainants lastly paid in February 2015 and by that time, the development at the site was nearly complete and offering the possession of the plots commenced in May 2015. It was further stated that it was only after developing the site as duly agreed as per the terms of Clause 21 of the Agreement that possession of the plots were offered to the allottees including the complainants. It was further stated that since the complainants never sought the refund of the amount, therefore, the question of refund of the deposited amount by the Opposite Parties did not arise. It was further stated that possession of the plot had already been offered to the complainants. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

11.       The complainants, in support of their case, submitted their joint affidavit, by way of evidence, alongwith which, a number of documents were attached.

12.       The Opposite Parties, in support of their case, submitted the affidavit of Sh. Rajneesh, their Authorised Representative, by way of evidence, alongwith which, a number of documents were attached.

13.       The complainants filed replication, wherein, they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.

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

15.       It is evident, on record, that one Subhash Bansal, applied for the allotment of a residential plot, in the project of the Opposite Parties. He was allotted Plot No.190 in “IREO Hamlet” admeasuring 250.59 Square Yards in Sector 98, S.A.S. Nagar, Mohali vide provisional allotment letter dated 5.5.2011 (Annexure C-2) and Buyer Agreement (Annexure C-3) was executed between Subhash Bansal and the Opposite Parties at Chandigarh on 09.08.2011. Subsequently, the complainants submitted an application dated 29.12.2011 to the Opposite Parties for provisional booking of a plot (Annexure C-4) and thereafter, the complainants purchased Plot No.190 from Sh. Subhash Bansal and Nomination/Transfer Agreement dated 29.12.2011 (Annexure C-8) was entered into between the complainants and Sh. Subhash Bansal. Finally vide letter dated 09.01.2012 (Annexure C-9), the Opposite Parties  informed the complainants that onward rights/obligations with respect to Plot No.190 were assigned in their favour in terms of Clause 14 of the Buyers Agreement. The complainants also obtained loan from ICICI Bank and a Tripartite Agreement was executed on 10.02.2014. Admittedly, against the basic sale price of Rs.62,64,750/- (External Development Charges @Rs.1,275.10Ps per Square Yard of plot area and Preferential Location Charges @Rs.500/- per Square Yard of plot area were also payable), the complainants till 06.01.2015 (as per Annexure OP-7) paid Rs.57,81,474/-.  Subsequently, the complainants made payments of Rs.96,844/-, Rs.70,000/-, Rs.5,41,073/- and Rs.6,265/- vide cheques bearing No.146063, 194897, 609658 and 146064 all dated 05.02.2015, copies whereof were placed on file at Pages 119 and 120 as Annexure C-11 Colly. Thus, the complainants, in all, deposited an amount of Rs.64,95,656/- with the Opposite Parties. As admitted by them (Opposite Parties). The development work started at the site only on 01.05.2013, and they (Opposite Parties) raised demands from time to time. Thus, after issuance of provisional allotment letter on 05.05.2011 (Annexure C-2) and execution of the Buyer Agreement at Chandigarh on 09.08.2011 (Annexure C-3), development work did not start for almost two years.

16.       The first objection, raised by the Opposite Parties, is as regards the existence of an arbitration clause 33 in the Buyer Agreement dated 09.08.2011. To this effect, the Opposite Parties also moved an application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 (as amended up to date) for referring the parties to resolve the matter through Arbitration in terms of Clause 33 of the Buyer Agreement dated 09.08.2011. In this context, the Counsel placed reliance on Auro Developers Vs. Mala Mukherjee, C.O. No.2828 of 2010, decided by Hon’ble Calcutta High Court on 23.12.2011, wherein the Calcultta High Court while relying upon the judgment of Hon’ble Supreme Court passed by seven Judges Bench in SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr., AIR 2006 SC 450, held, interalia, that “……..It would certainly include the Court as defined in section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum [See Fair Air Engineers (P) Ltd. & Anr. Vs. N. K. Modi, MANU/SC/0141/1997: 1996 (6) SCC 385]….” The Opposite Parties further placed reliance on judgments of Hon’ble Calcutta High Court in Indusind Bank Vs. Gadadhar Banerjee, C.O. No.223 of 2009 decided on 01.04.2010 and Sudarshan Vyapar Pvt. Ltd. & Anr. Vs. Madhusudan Guha & Anr., C.O. No.2648 of 2012 decided on 06.12.2012, that as the parties had agreed to resolve their disputes by the arbitration, the jurisdiction of a Civil Court was clearly ousted by reason of Section 5 of the Arbitration and Conciliation Act. The Opposite Parties also placed reliance on CDC Financial Services (Mauritius) Ltd. Vs. BPL Communications Ltd. and others, (2003) 12 SCC 140 and Shin-Etsu Chemical Co. Ltd. Vs. Aksh Optifibre Ltd. and another, (2005) 7 SCC 234, to contend that when there was an arbitration clause in the Agreement, then the parties were required to go in for arbitration as per the mandatory provisions of Section 8 of the Arbitration and Conciliation Act. The Opposite Parties also referred to K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad Vs. A. Bal Reddy and another, (2008) 7 SCC 166, and contended that jurisdiction of forums has to be decided first. Further, the Opposite Parties cited the case of Allahabad Bank Vs. Canara Bank & Ors., (2000) 4 SCC 406, to contend that the Hon’ble Supreme Court in Para 40 held that the provisions of the latter special law are to prevail over the former special law. The Counsel submitted that the judgment of  Hon’ble Supreme Court of India in Fair Air Engg. Pvt. Ltd. & another Vs. N.K.Modi (1996) 6 SCC 385, is not applicable as the Hon’ble Apex Court had discussed the applicability of Section 34 of the old Arbitration Act, 1940 and there was no occasion of discussing  the  scope  and  applicability of Sections 5 and 8 of the Arbitration and Conciliation Act 1996. He further submitted that under Section 34, there was no bar of jurisdiction of the Judicial Authority, but the discretion was vested with the Judicial Authority either to proceed with the matter before it, or to stay the matter and refer the dispute to be adjudicated by the arbitrator. He further submitted that in Para 11 it was held by the Hon’ble Apex Court that the Consumer Foras fall within the definition of Judicial Authorities. He further submitted that in National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr., I (2012) CPJ 1 (SC), since the Hon’ble Apex Court did not discuss the scope and applicability of Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, the same was not applicable in the instant case. He further submitted that under Section 5 of Arbitration and Conciliation Act, 1996, there is an absolute bar and Section 3 of the Consumer Protection Act, 1986 cannot be made applicable in view of the fact that Arbitration and Conciliation Act came into force in the year 1996 when the Consumer Protection Act, 1986 was already in existence. Therefore, the provisions of the Act, enacted later on would prevail.

17.       With a view to appreciate the controversy, in   its proper perspective, reference to Section 3 of the Act is made, 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.”

Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of an arbitration clause, in the document, aforesaid, would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act. In Fair Air Engg. Pvt. Ltd. & another Vs. N.K.Modi’s case (supra), the Hon’ble supreme Court of India held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. The Hon’ble Apex Court also held that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. The Hon’ble Apex court further held that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the CPC.  It may be stated here that the Hon’ble Supreme Court of India in its judgment in National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr.’s case (supra), held in Paras 27 to 31 as under:-

“27. The next question which needs consideration is whether the growers of seeds were not entitled to file complaint under the Consumer Act and the only remedy available to them for the alleged breach of the terms of agreement was to apply for arbitration. According to the learned Counsel for the appellant, if the growers had applied for arbitration then in terms of Section 8 of the Arbitration and Conciliation Act the dispute arising out of the arbitration clause had to be referred to an appropriate arbitrator and the District Consumer Forums were not entitled to entertain their complaint. This contention represents an extension of the main objection of the appellant that the only remedy available to the farmers and growers who claim to have suffered loss on account of use of defective seeds sold/supplied by the appellant was to file complaints with the concerned Seed Inspectors for taking action under Section(s) 19 and/or 21 of the Seeds Act.

28. The consideration of this issue needs to be prefaced with an observation that the grievance of a farmer/grower who has suffered financially due to loss or failure of crop on account of use of defective seeds sold/supplied by the appellant or by an authorised person is not remedied by prosecuting the seller/supplier of the seeds. Even if such person is found guilty and sentenced to imprisonment, the aggrieved farmer/grower does not get anything. Therefore, the so-called remedy available to an aggrieved farmer/grower to lodge a complaint with the concerned Seed Inspector for prosecution of the seller/supplier of the seed cannot but be treated as illusory and he cannot be denied relief under the Consumer Act on the ground of availability of an alternative remedy.

29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2-Judge Bench interpreted that section and held as under:

the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Mr. Suri, that the words ‘in derogation of the provisions of any other law for the time being in force’ would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.

It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.”

(Emphasis supplied)

30. In Skypak Couriers Limited v. Tata Chemicals Limited (supra), this Court observed:

“Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.

31. In Trans Mediterranean Airways v. Universal Exports (supra), it was observed:

“In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy.”

In view of the law settled by the Hon’ble Supreme Court of India in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr.’s case (supra), wherein the Hon’ble Apex Court, while discussing a number of judgments thread-bare, clearly held that “..The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996.” In DLF Limited Vs. Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 decided on 13.05.2013 by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, after discussing a number of cases, decided by the Hon’ble Supreme Court, it was held that mere existence of an arbitration clause in the Agreement did not oust the jurisdiction of the Consumer for a, from entertaining and deciding the consumer complaint. The National Commission took cognizance of the decision of the Apex Court in SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr., AIR 2006 SC 450, as is evident from Para 33 of its judgment, which reads as under:-

“33.    Faced with this, Ld. Counsel appearing for the Opposite Parties contended that in this case, the Hon’ble Supreme Court did not take into consideration the decision of the Seven Judges Bench in the S.B.P & Co.’s case. We do not find substance in this submission as well.  In Madhusudhan Reddy’s case (Supra) , Supreme Court after taking into consideration the background, objectives and reasons behind the enactment of C.P. Act, juxtapositioning the provisions of the C.P. Act and the Arbitration Act of 1996 (Section 3 of the C.P. Act and Section 8 of the Arbitration Act of 1996) held that the complaint filed by a consumer under the C.P. Act would be maintainable and the relief cannot be denied by invoking the jurisdiction of section 8 of the Arbitration Act of 1996.  We are bound to follow the law laid down by the Supreme Court.  The judgment is binding precedent.

By establishing the Consumer Disputes Redressal Forums, the Legislature has provided special remedy for the redressal of the grievances of “small consumers” who buy the goods or avail of services for their personal purpose. Persons who have bought the goods or availed of services for commercial purposes have been specifically excluded from the definition of ‘consumer’ except where the goods have been bought or services availed of by a small consumer for earning his livelihood by way of self- employment.  Remedy provided under the C.P. Act is a special remedy with the objective of redressal of the grievances of the affected consumers in an expeditious and non-expensive manner. If the small consumers are relegated to the Alternative Dispute Resolution (ADR) mechanism of arbitration, the remedy provided under the C.P. Act would become illusionary.  It would be neither expeditious nor in-expensive. It would defeat the very purpose of enactment of the C.P. Act.” 

 

In the instant case also, the complainants chose to file consumer complaint first and, as such, they cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. As regards the contention of the Opposite Parties that since there is an absolute bar under Section 5 of the Arbitration and Conciliation Act, 1996, the provisions of Section 3 of Act cannot be made applicable, it may be stated here that the Consumer Protection Act, 1986 is a beneficial legislation and in view of the law laid down by the National Commission in DLF Limited Vs. Mridul Estates (P) Ltd.’s case (supra) and National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr.’s case (supra), the contention of the Opposite Parties that there is an absolute bar, on the Consumer Fora to entertain the complaint, in our considered opinion, is not well based. As such, this Commission has the jurisdiction to entertain and try the complaint. In this view of the matter, this objection of the Opposite Parties, being devoid of merit, must fail, and the same stands rejected. Accordingly, the application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 for referring the parties to resolve the matter through Arbitration in terms of Clause 33 of the Buyers Agreement dated 09.08.2011, is dismissed.

18.         As regards the next objection of the Opposite Parties that the complainants, did not book the plot for their personal use but for investment/commercial purpose, and, as such, they were not consumers, it may be stated here that, in the absence of any cogent documentary evidence, brought, on record, by the Opposite Parties, to the effect, that the complainants purchased the property for investment/commercial purpose, the objection of the Opposite Parties, is not sustainable in the eyes of law. The same, therefore, stands rejected.

19.         The contention of the Opposite Parties that an Agreement for sale/purchase of a plot, cannot be treated as service and, therefore, the complainants are not consumers, is also not on sound footing. The Opposite Parties, as is evident from the contents of the Agreement, were to offer possession of the plot, in question, after developing the same. However, they failed to develop the same and offer possession within the time-limit laid down in the Agreement, which amounted to deficiency, in rendering service. The objection, being devoid of merit, is not sustainable and the same, is therefore, rejected.

20.          The next question, which falls for consideration, is, as to whether the complainants are entitled to refund of the amount deposited by them or not. Clauses 11.2 and 11.3 under heading “POSSESSION AND HOLDING CHARGES”, of Plot Buyer’s Agreement dated 09.08.2011 (Annexure C-3), being relevant, are extracted hereunder:-

11.2

Subject to Clause 11.1, if the Company fails to offer possession of the said Plot to the Allottee by the end of the Grace Period, it shall be liable to pay to the Allottee compensation calculated at the rate of Rs.50/- (Rupees Fifty only) per sq. yd. of the area of the said Plot (“Delay Compensation”) for every month of delay until the actual date fixed by the Company for handing over of possession of the said Plot to the Allottee. The Allottee shall be entitled to payment against such ‘Delay Compensation’ only after completion of all documentation including registration of the Conveyance Deed.

11.3

Subject to Clause 11.1, in the event of delay by the Company in handing over the possession of the said Plot beyond a period of 12 months from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot after adjusting the interest/penalty on delayed payments along with Delay Compensation for 12 months. Such refund shall be made by the Company within 90 days of receipt of intimation of this effect from the Allottee, without any interest thereon. For removal of doubt, it is clarified that Delay Compensation payable to the Allottee who is validly opting for termination, shall be limited to and calculated for the fixed period of 12 months only irrespective of the date on which the Allottee actually exercised the option for termination. This option of termination may be exercised by the Allottee only up till dispatch of the Notice of Possession by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever, monetary or otherwise shall lie against the company nor be raised otherwise or in any other manner by the Allottee.

21.         In the instant case, the Buyer Agreement was executed on 09.08.2011 and as per Clause 11.1 of the same (Agreement), the Company was supposed to handover possession of the plot, in question, to the complainants within a period of 24 months, from the date of execution thereof. Further as per Clause 11.2 of the Agreement, the complainants were entitled to compensation @Rs.50/- per sq. yard of the actual area of the said plot for every month of delay until the actual date fixed by the Company for handing over of possession of the said plot. As per Clause 11.3 aforesaid, in the event of delay by the Company in handing over possession of the said plot, beyond a period of 12 months, from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the complainants could opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot after adjusting the interest/penalty on delayed payments alongwith delayed compensation for 12 months. In the instant case, the extended period aforesaid of 12 months including grace period had already expired on 07.02.2015. It is evident from email dated 08.05.2015 (Annexure C-13) sent by the complainants to the Opposite Parties at 9:36 A.M., that since the possession of the plot was not offered to the complainants up-till 08.05.2015, the complainants were no more interested to purchase the said plot and, therefore, they opted for termination of the Buyer Agreement and requested the Opposite Parties for refund of all the payments made by them alongwith due interest. The relevant extract from email dated 08.05.2015 (Annexure C-13), is extracted hereunder:-

“According to Plot Buyer Agreement, clause 11.1, the company was supposed to handover the possession of the said Plot to the Allottee within a period of 24 months from the date of execution of Plot’s Buyer Agreement (i.e. “Commitment period”) which expired on date 08-Aug-2013. Even after the expiry of Commitment Period, company failed to give me the possession of the said plot with a Grace Period of 6 months which also got expired on 08-Feb-2014.

According to Clause 11.3 of the Plot’s Buyer Agreement, as the Company has not given me the Possession of the said Plot even beyond the period of 12 months from the end date of Grace Period, which also lapsed on date 07-Feb-2015, I am entitled to opt for the termination of the Allotment/Agreement and to get refund of the actual paid up installments made against the said plot after adjusting the interest/penalty on the delayed payments along with delay Compensation of 12 months.

As the possession of the plot has not been given to me till date 08-May-2015, and now I have made an alternate arrangement for my residence, so I am no more interested to purchase the above plot. Therefore, I opt to terminate the above said Plot Buyer Agreement for Property Number IH-Plot-00-190 at Sector 98, SAS Nagar, Mohali Punjab,  in IREO Hamlet Project and I request you to refund me all the payments made for the above mentioned plot along with due interest.

Pls let me know the formal procedure (if any) to get the above mentioned due from the company.”

It is also evident from the aforesaid email that hardcopy of the above correspondence was also sent through registered post to the Opposite Parties (Pages 123 to 127). Annexure C-14 is the notice of possession dated 06.05.2015 sent by the Opposite Parties to the complainants, which admittedly, was received by them (complainants) on 08.05.2015 at 1.50 pm. Thus, prior to receipt of notice of possession dated 08.05.2015 at 1.50 p.m., the complainants had already exercised their option of termination of the Buyer Agreement vide their email dated 08.05.2015 (Annexure C-13) sent by them (complainants) to the Opposite Parties on 08.05.2015 at 9:36 A.M. No doubt, the offer of possession is dated 06.05.2015 but the same, as admitted by the Opposite Parties in Para 1 of the preliminary objections of their written statement, was dispatched on 07.05.2015. This offer of possession was received by the complainants on 08.05.2015, but before receipt of the same, the complainants vide their email dated 08.05.2015 (Annexure C-13) opted for termination of the Agreement and sought refund. Since the option exercised by the complainants in terms of email dated 08.05.2015 (Annexure C-13), was in accordance with the terms and conditions of the Plot Buyer’s Agreement, the Opposite Parties were required to terminate the Buyer Agreement and refund the entire amount paid by the complainants, to them. The complainants are, thus, entitled, to the refund of the amount paid by them towards the price of the said plot, in terms of Clause 11.3 and 20.1 of Buyers Agreement dated 09.08.2011 alongwith interest @7.5% from the respective dates of deposits.

22.       The next question, which falls for consideration, is, as to whether, the complainants are entitled to any compensation or not. The complainants deposited their hard earned money in the hope that they would have a house to live in. As admitted by the Opposite Parties, development started in May, 2013 i.e. almost two years after the execution of Buyers Agreement on 09.08.2011. On account of non-delivery of possession of the plot, in question, by the Opposite Parties, to the complainants, complete in all respects, within the stipulated period or the extended delay period, and non-refunding of amount paid by the complainants when they opted for termination of the Plot Buyer’s Agreement, they (complainants) certainly suffered physical harassment and mental agony at the hands of the Opposite Parties, for which, they need to be suitably compensated. In our considered opinion, compensation in the sum of Rs.2,00,000/-, if granted, would be just and adequate, to meet the ends of justice.        

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

24.        For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Parties are jointly and severally, held liable and directed in the following manner:-

(i)   To refund the amount of Rs.64,95,656/-, alongwith interest @7.5% per annum, from the respective dates of deposits, within three months, from the date of receipt of a certified copy of this order.

(ii)  To pay an amount of Rs.2,00,000/-  (Rupees Two Lacs only), to the complainants, as compensation for mental agony and physical harassment, within a period of three months from the date of receipt of a certified copy of the order.

(iii) ICICI Bank Limited shall have the first charge, on the amount, to be refunded, to the complainants, by the Opposite Parties, to the extent, the same (amount) is due to it, against the complainants as it (ICICI Bank Limited) advanced loan in their (complainants) favour for part payment of the price of plot, in question, under the Tripartite Agreement dated 10.02.2014 (Annexure C-10).

(iv)  To pay cost of litigation, to the tune of Rs.15,000/-, to the complainants.

(v)   In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @10.5% per annum, instead of 7.5% per annum, from the respective dates of deposits, till realization and amount mentioned in Clause (ii) above, with interest @12% per annum from the date of default till realization, besides payment of costs, to the tune of Rs.15,000/-.

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

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

Pronounced

August 04, 2015.

Sd/-

[JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

 

 

Sd/-

[DEV RAJ]

MEMBER

 

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