Chandigarh

StateCommission

CC/490/2016

Manpreet Singh - Complainant(s)

Versus

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

Devinder Singh Soundh, Adv.

02 Mar 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	490 of 2016
Date of Institution	:	22.08.2016
Date of Decision	:	02.03.2017

 

Manpreet Singh son of S. Gurmeet Singh resident of Thanedar House New Model Town, VPO Sahnewal, Distt. Ludhiana, Punjab.

2^nd Address: Presently residing at House No.2365, Ground Floor, S.C.L. Society, Sector-70, Mohali.

……Complainant

V e r s u s

M/s Puma Realtors Private Limited through its Managing Director, SCO No.6-7-8, 1^st and Second Floor, Sector 9-D, Madhya Marg, Chandigarh.

….. 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. Devinder Singh Soundh, Advocate for the complainant.

                  Sh. Ramnik Gupta, Advocate for the Opposite Party.

 

PER MR. DEV RAJ, MEMBER

             The facts, in brief, are that the complainant purchased Unit No.CCC-03-003 in the project of the Opposite Party i.e. Ireo Rise, Mid Rise, Third Floor, Cassia Court, Block-C, Sector-99, Mohali, measuring approx. 1511 sq. ft. from one Surinder Pal Singh, to whom the said flat was allotted by the Opposite Party on 26.12.2011 vide allotment letter (Annexure C-3). An agreement to sell was also executed between the complainant and the original allottee on 15.09.2014 (Annexure C-1). 

2.          As per clause 13.3 of Apartment Buyer’s Agreement, which was executed between Sh. Surinder Pal Singh and the Opposite Party on 01.03.2012, physical possession of the unit, in question, was to be handed over by the Opposite Party within a period of 30 months from the date of execution of the Agreement i.e. by 26.06.2016 (in fact 31.08.2014). The complainant made payments of Rs.46,62,780/- towards consideration of the unit, in question i.e. 95% of the total consideration amount of Rs.50 Lacs including basic price and other charges, as per receipts (Annexure C-5 colly.), by taking loan of Rs.40,00,000/- from HDFC Limited @9.70% p.a. interest and by selling jewellery, gold ornaments and even withdrawing all his life long savings.

3.          It was further stated that for the delayed period in offering possession, the Opposite Party was liable to pay penalty @Rs.7.50 per sq. ft. per month. The complainant visited the site in January 2014 but was shocked to see that there was no progress in the project. He again visited the site in October 2014 but still there was no development. Again on visiting the site in the year 2015, the complainant found no development at the site. The complainant approached the Opposite Party a number of times to know about the status of delivery of possession of the flat but every time, the Opposite Party failed to give any positive response. It was stated that the Opposite Party has not applied for regular electricity connection with the government. It was further stated that even various amenities like solar water heating for kitchen, multipurpose hall, swimming pool, fully equipped Gym, badminton and basket ball courts, kids play area, jogging tracks, visitors car parking, intercom facility and CCTV camera, which were promised in the Agreement, have not been started at the project site. It was further stated that external development of the area where the flat, in question, is situated, had also not been completed by 2016.

4.          It was further stated that the complainant put his grievance before the Opposite Party vide notice dated 04.04.2016 (Annexure C-6), which was duly replied by the Opposite Party vide letter dated 26.04.2016 (Annexure C-7) but the Opposite Party could not satisfy the query regarding handing over possession of the flat. It was further stated that the complainant is residing in a rented accommodation and is paying rent @Rs.14,000/- per month, as per Bank Statement (Annexure C-8).  It was further stated that the aforesaid acts of the Opposite Party amounted to deficiency, in rendering service and indulgence into unfair trade practice.

5.          Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of Opposite Party, the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Party to hand over physical possession of the flat, in question, complete in all respects, with all amenities as stipulated at the time of execution of the Agreement, within three months; pay rent @Rs.14,000/- per month for the time stipulated to hand over the physical possession; pay penalty as per clause 13.7 of the Agreement; pay interest @15% p.a. on the deposited amount from the respective dates of deposits; pay Rs.5,00,000/- as compensation on account of mental agony and physical harassment and Rs.50,000/- as cost of litigation.

6.          The Opposite Party, in its written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration Clause No.34 in the Apartment Buyer’s Agreement dated 01.03.2012; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the allegations being of contractual nature were triable in a Civil Court and that the complainant did not hire any services of the Opposite Party, as the parties did not enter into any contract for hiring the services and there is no agreement for payment of any amount towards consideration of hiring of the alleged services of the Opposite Party. It was stated that neither the complainant had paid, nor had agreed to pay any amount towards hiring of the alleged services and whatever amount was paid or was agreed to be paid by the complainant was towards the payment of the consideration price of the apartment in advance only to the Opposite Party. Further objections were raised that the complainant did not book the apartment for his personal use but for investment/commercial purpose; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the  1986 Act. 

7.          On merits, it was denied that Agreement to sell dated 15.09.2014 was executed with the pre-consent of the Opposite Party. It was further denied that Apartment Buyers Agreement was dated 26.12.2011. It was stated that the Apartment Buyers Agreement was executed between the Opposite Party and the original allottee on 01.03.2012. It was further stated that as per Clause 13.3 of the Agreement, the period to offer possession was to be reckoned only from the date of execution of the said Agreement, which was 01.03.2012. It was further stated that the Opposite Party was also entitled to additional period of 180 days after the expiry of stipulated period of 30 months due to unforeseen delay in obtaining the occupation certificate from the competent authority. It was further stated that as agreed between the parties, in case of failure of Opposite Party to deliver possession within aforesaid period of 36 months, the complainant was entitled to the liquidated damage @Rs.7.50 per sq. ft. per month from 37^th month till possession of the apartment is actually offered.  It was further stated that since the complainant has forgone and waived of his rights to claim compensation for delay in offering possession, he would be entitled only for the possession of the apartment, in question. It was specifically denied that there was no development at the site in the year 2015. It was further stated that the Opposite Party had already applied for grant of occupation certificate on 11.08.2016 vide application dated 11.08.2016 (Annexure OP-9). 

8.         It was further stated that Opposite Party vide application dated 26.11.2013 applied for approval of electrical layout plan and grant of NOC to the PSPCL after submitting requisite details and PSPCL duly granted NOC dated 08.07.2015. It was further stated that the Chief Electrical Inspector to Govt. of Punjab approved the electrical installations laid in the project for commission of the same vide its NOC dated 07.08.2015. It was further stated that Opposite Party duly applied online vide RID No.15250 dated 27.08.2015 for the release of electric connection for the IREO Rise Project and PSPCL duly granted feasibility clearance dated 20.11.2015 for release of load/connection on the project. It was further stated that the Opposite Party requested GMADA to comply with and deposit amount of Rs.37,19,763/- with PSPCL being already paid by Opposite Party as part of EDC to GMADA vide letter dated 29.3.2016 and also deposited Bank Guarantee dated 22.3.2015 for Rs.3,24,10,301/- plus Rs.2.97 Lacs towards Advance Consumption Deposit on 12.4.2016 in compliance to demand notice dated 28.12.2015. It was further stated that all formalities have been duly complied with and no dues remain to be paid or deposited on the part of the Opposite Party towards energization of the electrical connection by PSPCL. It was further stated that the Opposite Party has already constructed underground water tanks duly connected with the approved bore well, which have further been connected to the overhead tanks of each tower with pumping system to supply the water for domestic use. It was further stated that the Opposite Party has already constructed and installed underground STP for the disposal of the sewage, temporary electric connection already commissioned and commissioning of permanent power line was under process. It was stated that all facilities, as agreed under the Agreement, shall be provided at the time of offering possession. It was further stated that the external development could not be undertaken by the Opposite Party as the same was to be developed by the competent authority for which, the Opposite Party has already deposited requisite EDC with the said authority. It was further stated that the main entrance of the Ireo rise project abuts the already laid 100 ft. wide sector road as laid by the competent authorities.

9.          It was further stated that the original allottee breached the agreed payment schedule with impunity as was clearly evident from delayed interest invoice letter dated 09.04.2013,  demand note dated 14.08.2013, reminder No.2 dated 05.10.2013, demand note dated 15.10.2013, final notice dated 26.10.2013, reminder No.2 dated 26.10.2013, demand note dated 17.12.2013, final notice dated 28.12.2013, reminder no.1 dated 17.01.2014 and lastly vide letter dated 25.09.2014 addressed to HDFC Bank regarding transfer/assignment of said Agreement in favour of the complainant alongwith interest calculation sheet. It was further stated that inordinate delay in making the payments certainly put an impact on the completion of construction of the apartment, in question. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

10.        The complainant filed rejoinder, wherein he reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Party.

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

12.        The Opposite Party, in support of its case, submitted the affidavit of Sh. Rohit Tanwar, its Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

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

14.        It is evident, on record, that vide provisional allotment letter dated 26.12.2011, one Sh. Surinder Pal Singh was allotted residential apartment No.003,  Third Floor, Tower-Cassia Court-C in Group Housing Project known as ‘Ireo rise” situated in Sector-99, SAS Nagar Mohali, Punjab, having tentative super area of 1511 sq. ft. (140.38 sq. mtrs.) together with 01 no. parking space, forming indivisible part thereof and Apartment Buyer’s Agreement was executed between Sh. Surinder Pal Singh and the Opposite Party on 01.03.2012. The complainant purchased the unit, in question, from the previous allottee as per the Agreement to Sell dated 15.09.2014 and the rights in the unit were transferred/assigned in favour of the complainant vide letter dated 29.10.2014 (Annexure OP-7). The basic sale price of the unit was Rs.46,52,780/- besides External Development Charges (EDC) of Rs.1,51,100/- and IFMS charges in the sum of Rs.45,330/-. Thus, the total sale consideration of the unit, in question, including service tax was Rs.49,69,019.00 i.e. (Rs.48,49,210.00 as total consideration + Rs.1,19,809.00 as service tax), which was to be regulated as per Payment Plan, Annexure IV (at Page 127 of the file). It is evident from Annexure C-5 that out of payment in the sum of Rs.46,84,340.58, except Rs.5,11,805.00 paid by the complainant, the remaining amount viz. Rs.41,72,535.58 was paid by the original allottee. Perusal of Agreement to Sell reveals that complainant agreed to purchase the unit for a sum of Rs.50 Lacs which meant that against the amount of Rs.41,72,535.58, paid by the previous allottee, the complainant purchased the unit by paying premium of more than Rs.8 Lacs. As per Clause 13.3 of the Agreement, possession of the unit was to be delivered within 30 months from the date of execution of the Agreement or approval of the building plans, whichever is later. Since the building plans were approved on 18.01.2012, the commitment period, in the instant case, after computing 30 months from the date of execution of the Agreement i.e.01.03.2012, comes to 31.08.2014. The rights in the unit were assigned in favour of complainant on 29.10.2014; therefore, his averment that there was no development when he visited the site in January 2014, is without any basis. Admittedly even after lapse of more than 2½ years when the rights in the apartment were assigned in favour of the complainant, and despite lapse of 5 years from the date when the Agreement with original allottee was executed on 01.03.2012, possession has not been offered/delivered to the complainant by the Opposite Party.

             As regards deficiency in promised amenities viz. solar water heating for kitchen, multipurpose hall, swimming pool, fully equipped Gym, badminton and basket ball courts, kids play area, jogging tracks, visitors car parking, intercom facility and CCTV camera, the Opposite Party has categorically stated in its written statement that these facilities/amenities shall be completed before handing over of possession.

15.        It was argued by Counsel for the Opposite Party that in the face of existence of arbitration clause No.34 in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.        To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

27.                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

28.      Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

29.       In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

30.     Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

31.        Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

32.        We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

35.     In  view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

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

16.        To defeat claim of the complainant, the next objection raised by the Opposite Party was that since the complainant had purchased the unit, in question, for investment/commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on record to show, that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. 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. The fact that the complainant raised loan from HDFC Limited for making part payment towards price of the unit and is seeking possession, establishes his bonafide that he purchased the unit, for his residence. It may be stated here that in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., Consumer Complaint No.137 of 2010, decided on 12.02.2015, 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. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the flat, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs  Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

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

 

The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Party, in the written reply, therefore, being devoid of merit, is rejected.  

17.        Another objection raised by Counsel for the Opposite Party was that since the complainant did not buy goods and did not hire any services, and was seeking enforcement of the Agreement in respect of immovable property, therefore, only a Civil Court can decide the complaint, and consumer complaint was not maintainable. It was further stated that there is no agreement for payment of any amount towards consideration of hiring of the alleged services of the Opposite Party. It was stated that neither the complainant had paid, nor had agreed to pay any amount towards hiring of the alleged services and whatever amount was paid or was agreed to be paid by the complainant was towards the payment of the consideration price of the apartment in advance only to the Opposite Party. It may be stated that in Annexure-IV Payment Plan annexed with the Buyer’s Agreement, a sum of Rs.1,19,809/- was towards service tax. The payment receipts indicate that the complainant paid service tax accordingly. Clearly the complainant hired the services of the Opposite Party, for purchasing the unit, in question, in the manner, referred to above. According to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was to hand over possession of the apartment, in question, within a period of thirty months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions, whichever is later (commitment period).  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”

 

 

 

18.        From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act provides an alternative remedy. Even if, it is assumed that the complainant has 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 of the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

19.        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 her. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”, meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only this, the provisional allotment letter dated 26.12.2011 (Annexure C-3), receipts (Annexure C-5 colly.), letter dated 29.10.2014 (Annexure OP-7) and letter dated 26.04.2016 (Annexure C-7) were issued by the Opposite Party from its Chandigarh office. Since, as per Clause 33 of the Agreement and 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.

20.        No doubt, in the written version, an objection was also taken by the Opposite Party, that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh alone, shall have the exclusive 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.

21.        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   him, to file the complaint, under the provisions of the Act. The submission of Counsel for the Opposite Party, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

22.        The next question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainant and whether the complainant is entitled to delivery of possession of the apartment. As stated above, according to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment  of   the   preconditions   whichever   is   later (commitment period). The building plans were approved on 18.01.2012 and Apartment Buyer’s Agreement, in the instant case, was executed thereafter on 01.03.2012. therefore, computing 30 months from 01.03.2012, commitment period for handing over possession was up-to 31.08.2014. No doubt as per terms of agreement, the Opposite Party was entitled to 180 days grace period for obtaining occupation certificate. In the instant case, the Opposite Party applied for the Occupation Certificate vide application dated 11.08.2016 (Annexure OP-9) i.e. after expiry of 180 days grace period and much after,      almost two years from the committed date viz. 31.08.2014, and the same is still awaited. It is an admitted fact that possession of the unit, in question, has not been offered to the complainant, even after expiry of extended delay period of 12 months, or by the date of filing the instant complaint, or even till date, for want of basic amenities at the site despite the fact that 95% of the sale consideration i.e. Rs.46,62,780/- stood paid by the complainant. The complainant, in order to know the tentative date of handing over the possession of his flat, vide letter dated 04.04.2016 (Annexure C-6) wrote to the Opposite Party as under;-

“I have purchased flat number CCC-03-003 in Ireo rise, Sector 99, SAS Nagar (Mohali) – Punjab being developed by your company.

You are already aware that there is a substantial delay in handing over possession of flat in the said project and due to this, my dreams of moving into my own house has been delayed. The delay has resulted in additional financial burden on me as I am forced to pay EMI of my housing loan alongwith rental of my already existing house.

I have been given to understand that some of the consumers who have been allotted flats in the same project are also facing similar troubles and have approached competent government authorities to intervene in order to get respite.

I am still interested in taking possession of my flat and do not have intentions of getting into litigation.

You are requested to let me know the tentative date of handing over the possession of my flat and compensate me by sharing my financial burden which has been caused by this delay.

I am hoping for an amicable solution from your side.”

 

23.        The Opposite Party, in response to the above letter, reverted back to the complainant vide letter dated 26.04.2016 (Annexure C-7), informing as under:-

“We are in receipt of your letter dated 04-Apr-2016 regarding your allotment of Apartment No.CCC-03-003, Ireo Rise, Mohali, Punjab.

We would like to apprise you that the finishing work of apartments is going on in full progress at site and we are targeting to apply for the occupation certificate for phase-1 of Ireo rise by June 2016. We would also like to share with you that the contract of construction of the club at Ireo rise has also been awarded.

We are cognizant to the fact that it has taken us much longer than anticipated. However, delaying a project is never a favourable situation for a developer and we would like to assure you that every effort is being made to ensure that your apartment is handed over to you soon. The delay compensation shall be payable as per the terms of our contract.

We once again assure you delivery of a quality product that you shall feel justified in the trust you have reposed.

Assuring you of our best services always.”

 

24.        The Opposite Party even failed to abide by its aforesaid commitment. The complainant cannot be made to wait indefinitely. No doubt, the Opposite Party has admitted in its written statement that it has applied for occupation certificate and possession, complete in all respects, of the apartment, in question, shall be handed over in near future, yet, it failed to place, on record, any cogent and convincing evidence, with regard to date by which construction of the unit is going to be complete. The Opposite Party was duty bound to hand over possession within 30 months i.e. by 31.08.2014. The Opposite Party has not yet received the occupation certificate. Counsel for the Opposite Party could not give any firm date, by which, the Opposite Party would be handing over possession. Clearly there is delay in delivering possession. By making a misleading  statement, that possession of the unit, was to be delivered within the maximum period of 30 months from the date of execution of the Agreement, and by not abiding by the commitment made, despite payment of around 95% payment by the complainant, it (Opposite Party) was not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant is certainly entitled to physical possession of the unit, in question.

25.             The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for delay in delivering physical possession of the unit beyond the time stipulated in the Agreement. It may be stated here that in case titled Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

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

26.        As per Clause 13.4 of the Agreement, for failure of the Opposite Party to offer possession by the end of grace period, the Opposite Party was liable to pay to the complainant compensation calculated @Rs.7.50 per sq. Ft. of the super area for every month of delay.

27.        As already stated in the preceding paras, the commitment period in offering possession of the unit, in question, expired on 31.08.2014. The complainant purchased the unit, in question, from the previous allottee as per the Agreement to Sell dated 15.09.2014 and the rights in the unit were transferred/assigned in favour of the complainant on 29.10.2014 (Annexure     OP-7). It was argued by the Counsel for the Opposite Party that in terms of affidavit dated 13.10.2014 submitted by the complainant, he waived of his right to receive any compensation for delay in handing over possession or any rebate under a scheme or otherwise or any other discount, by whatever name called, from the beneficiary and to this extent the Apartment Buyer’s Agreement stood modified. It may be stated here that the complainant stepped into the shoes of original allottee. The modification sought to be made by the Opposite Party is apparently unconscionable and unreasonable. At best, the complainant can be said to have waived of his right from the due date of possession till the date he submitted the aforesaid undertaking/affidavit. In all fairness, in our opinion, such an undertaking did not mean that the complainant was not entitled to compensation for the period of delay even after the date of undertaking i.e. 13.10.2014.

28.        No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, but it does not mean that even in the event of inordinate delay, that too without justified reasons, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.7.50 per sq. ft. of super area, which is much less than the bank rate for loan or fixed deposit. If the argument of the Opposite Party is to be accepted, it would lead to absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer, for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates. This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.

29.        Keeping in view the principle of law laid down by the Hon'ble National Commission, in the case, referred to above, this Commission has been awarding interest @12% on the deposited amount beyond the committed period. However, in the instant case, commitment period/date i.e. 31.08.2014 was already over, when the complainant purchased the unit in October, 2014 from the original allottee, he being well aware of the development, is not entitled to the same compensation. Compensation @10% p.a. interest on the deposited amount from the date of undertaking i.e. 13.10.2014 till the date of actual handing over of possession, would, therefore, meet the ends of justice.

30.             The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to him, by not delivering physical possession of the unit to her, by the Opposite Party, by the promised date in the Agreement i.e. by 31.08.2014. The complainant purchased the unit, with the hope to have a roof over his head alongwith with his family members, and he also raised loan of Rs.40 Lacs from HDFC Limited, for making part payment of sale consideration of unit, in question, but his hopes were dashed to the ground. Even the possession of unit, in question, has not been offered to the complainant, till date by the Opposite Party, what to speak of delivery thereof. The complainant, thus, underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Party. The compensation in the sum of Rs.5 Lacs claimed by the complainant is on the higher side. The price of the unit is escalation free. For delay in delivering possession beyond  13.10.2014, by granting interest @10% per annum on the deposited amount till delivery of possession, the complainant, in our considered opinion, has been adequately compensated. In addition, he (complainant) will also get the benefit of escalation in the price of unit, in question. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-. The complainant is also held entitled for costs of litigation in the sum of Rs.35,000/-.

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

32.         For the reasons, recorded above, the complaint is partly accepted with costs. The Opposite Party is, held liable and directed as under:-

1. To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, to the complainant, within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against him.
2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.
3. To pay compensation, by way of interest @10% p.a., on the deposited amount, to the complainant, from 13.10.2014 to 28.02.2017, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @13% p.a., instead of 10% p.a., from the date of default till realization.
4. To pay compensation by way of interest @10% p.a. on the deposited amount, due to the complainant w.e.f. 01.03.2017, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @13% p.a., instead of 10% p.a., from the date of default, till payment is made.
5. To pay compensation, in the sum of Rs.1,50,000/- (Rupees One Lac Fifty Thousand Only) on account of mental agony and physical harassment, caused to the complainant, and Rs.35,000/- as cost of litigation, to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @10% p.a., from the date of filing the complaint till realization.

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

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

Pronounced.

02.03.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER

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