Chandigarh

StateCommission

CC/190/2017

Mrs. Kamini Puri - Complainant(s)

Versus

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

S. M. Wadhera, Adv.

30 Jun 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	190 of 2017
Date of Institution	:	03.03.2017
Date of Decision	:	30.06.2017

 

1. Mrs. Kamini Puri W/o Sh.Vinod Kumar Puri
2. Puneet Kumar Puri S/o Sh.Vinod Kumar Puri
3. Vinod Kumar Puri S/o Late Sh.Chaman Lal Puri

All residents of flat No.2745-B, Sector-70, SAS Nagar, Mohali, Punjab.

 

……Complainants

V e r s u s

1. Puma Realtors Private Limited,  (an IREO Group Company),  SCO No.6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh-160009 (India).
2. The Managing Director, Puma Realtors Private Limited,  (an IREO Group Company),  SCO No.6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh  
3. Ms.Sunaina Minhas D/o Maj.Arbinder Singh, Authorized signatory of M/s Puma Realtors Private Limited,     SCO No.6-8, First and Second Floor, Sector 9-D,  Chandigarh
4. Nest Real Estate (P) Ltd. (formerly known as Satya Estates) SCO No.341-342, 2^nd floor, Sector-35-B, Chandigarh.

….. Opposite Parties.

Argued by: Mr. S.M.Wadhera, Advocate for the complainants.

                    Sh. Ramnik Gupta, Advocate for   Opposite Party No.1.

 

 

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

 

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

                   MR. DEV RAJ, MEMBER.

                   MRS. PADMA PANDEY, MEMBER

 

 

PER  DEV RAJ, MEMBER

               The facts, in brief, are that  Opposite Party No.1 floated a scheme known as “IREO HAMLET” for developing residential colony on a land measuring about 36.6 acres falling in Sector-98, SAS Nagar, Mohali. OP No.4 was appointed by OP NO.1 as its agent/property consultant to sell residential plots in the above said project and brokerage was to be paid by OP No.1. An employee of OP NO.4 contacted complainant No.3 for sale of the plot in the project. Subsequently, a meeting of complainant No.3 was arranged with the officials of OP No.1. On the assurance of time bound possession within the period of two years from the date of “Ireo Hamlet Plot Buyer’s Agreement’ the complainants, who are members of one family, agreed to purchase a residential plot bearing No.45 in the aforesaid project of OP No.1. After the receipt of communication dated 21.7.2011(Annexure C-1) from OP No.1, complainants executed IREO Hamlet Project-Plot Buyer’s Agreement on 26.7.2011(Annexure C-2) at Chandigarh with OP No.1 through its authorized signatory OP No.3. At the time of booking of the said plot, the complainants paid Rs.6,50,000/- against the booking amount of Rs.5,78,473/- and the excess amount of Rs.71,527/- paid by the complainants was duly admitted by OP No.1 in its communication dated 29.4.2011(Annexure C-3). Thereafter, the complainants paid Rs.2,17,710/-. The factum of total payment of Rs.8,67,710/- is duly admitted by OP No.1 in the demand notice dated 30.4.2013(Annexure C-4). Just after 22 days of the execution of the Agreement, OP No.1 demanded Rs.9,47,884/-  vide letter dated 18.8.2011. Complainant No.3 got suspicious about the genuineness of  OP No.1 and on visiting the site, found that there was no development. The matter was brought to the notice of OP No.1.  The concerned officer of OP No.1 informed complainant No.3 that due to great recession in the real estate business, OP No.1 was facing financial problem due to which it ( OP No.1) was unable to develop the land for the allotment of plots and asked the complainants to ignore the demand notice dated 18.8.2011 as OP No.1 was considering change in the earlier payment plan.  Complainants then received a communication dated 26.9.2011 regarding offer for change of payment plan linked with various stages of development of land in order to reach at the stage of complete development for developing residential colony at Sector-98, Mohali.  As complainant No.3 urgently required the developed residential plot for constructing house for living purpose because he was going to retire on 31.12.2011, so complainants did not give their consent for unilateral change in the terms and conditions of the Plot Buyer’s Agreement.  Vide letter dated 15.3.2012      (Annexure C-7), OP No.1 informed the complainants that ‘Larsen & Turbo’ were appointed as contractors for developing the project, in question, and hoped that the same will be completed in 2014. OP No.1 again issued a demand notice on 30.4.2013 for payment of  due installment. Complainant No.3 then visited the office OP No.1 and brought to its notice that he had purchased flat No.2745-B, Sector-70-B, Mohali as he required accommodation after his retirement. As OP No.1 failed to develop the land for carving out fully developed residential plots, complainants requested OP No.1 to refund the amount of Rs.8,67,710/- alongwith interest @ 12% p.a. However, despite repeated letters and requests made in that regard, OP No.1 failed to refund the deposited amount. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service and indulgence into unfair trade practice. Hence, this complaint seeking refund of Rs.8,67,710/- alongwith interest @ 12% p.a. from the date of deposit of amount till its refund, besides compensation for mental agony and physical harassment and litigation expenses.   

2.           At the time of admission of complaint, on 7.3.2017, Counsel for the complainants stated that it was not necessary to issue notice to OP No.4.  Accordingly no notice was ordered to be issued to OP No.4. On behalf of OP No.1 Sh.Ramnik Gupta accepted notice and stated that there was no post of Managing Director in the Company and as such there was no necessity to serve OP No.2 or file reply on its behalf. He further stated that OP No.3 was an employee of OP No.1 and had left her job. Thus, it was considered appropriate not to issue any notice to OPs 2 & 3.   

3.            Opposite Party No.1 in its written reply 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 Plot Buyer’s Agreement dated 26.7.2011; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential plot i.e. an immovable property and hence, was not covered under the Act; that the complainant did not hire any services of Opposite Party No.1, as the parties did not enter into any contract for hiring the services; that the complainant booked the plot in question solely for the commercial purpose to earn profit  ; that this Commission has no territorial jurisdiction on account of existence of Clause 36 (in fact, Clause 35) in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the  1986 Act. 

4.           On merits, it was stated that the complainants were provisionally allotted plot No.45 vide letter dated 29.4.2011( Annexure OP-34) as per terms and conditions set out in the Agreement.  OP No.1 never assured that the possession would be given within 2 years from the execution of Plot Buyer’s Agreement, on the contrary, term No.11 embodied in the Agreement was explained. It was further stated  that demand of 9,47,884/- was raised strictly in accordance with the agreed Payment Plan. It was denied that any authorized representative told the complainants that OP No.1 was facing financial problem due to which it was unable to develop the plot. It was stated that complainants did not make payment of due installments. It was further stated that OP No.1 solely for the benefit of allottees, offered the change of payment plan to all allottees including the complainants from time linked payment plan to development linked payment plan vide its letter dated 26.9.2011. The said plan was accepted by the complainants. It was denied that OP No.1 offered for change of the payment plan in order to cover up its alleged failure to develop or to avoid legal action against it.  As per term No.11 of the Agreement, possession was agreed to be handed over within a period of 24 months from the date of execution of the said Agreement and was further entitled for a period of six months as grace period and thereafter the complainants agreed to accept a delay compensation under the actual date fixed by OP No.1 for handing over of possession of the plot to the complainants. However, when the complainants did not make payment of the installments, OP No.1 issued final notice dated 12.7.2013 calling upon the complainants to make payment of the due installment  and also drawn their attention that the timely payment was the essence of the said Agreement and clause 19.1 empowers OP No.1 to cancel the allotment . It was further stated that in case of non-payment of due installments on or before 21 days from the date of issuance of the Final notice  dated 12.7.2013, OP No.1 shall be constrained to cancel the allotment. Ultimately OP No.1 after waiting sufficiently and having left with no other option cancelled the allotment and forfeited the earnest amount vide cancellation advice dated 23.1.2014. It was further stated that letters dated 19.8.2014 and 21.1.2015 of complainants were product of forgery and manipulation in order to create false evidence and the same were never received.  It was further stated that letter dated 15.3.2012(C-7) related to commencement of development work in IREO Rise Project and did not relate to IREO Hamlet Project which is plotted pocket. It was further stated that development as commenced w.e.f. 1.5.2013 was being done in phased manner at a very fast speed  and accordingly OP No.1 was able to offer possession of the plots to its allottees w.e.f. May,2015. It was further stated that since cancellation of the plot has not been challenged it has become final and as such the complainants have no right to challenge the development of the site.   It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

5.           The complainants, in support of their case, submitted  affidavit of Sh.Vinod Kumar Puri, complainant No.3, by way of evidence, alongwith which, a number of documents were attached.

6.           Opposite Party No.1, in support of its case, submitted the affidavit of Mr.Rohit Tanwar, its Authorized Representative, by way of evidence, alongwith which, a number of documents were attached. 

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

8.         It is evident, on record, that Plot No.45 in the residential project “IREO Hamlet” admeasuring 251.51 sq. yard, Sector 98, SAS Nagar, Mohali, was allotted to the complainants, basic Sale Price whereof was Rs.23,000/- per sq. yard besides External Development Charges (EDC) @Rs.1,275.10 per sq. yard,  and IFMS charges @Rs.350/- per sq. yard. Admittedly, Plot Buyer’s Agreement was executed between the complainants and Opposite Party No.1 on 26.07.2011 (Annexure C-2) at Chandigarh. The payment against the aforesaid plot was to be regulated as per payment plan, Annexure I (at Page 56 of the file). Against the total price of the plot including EDC  and IFMS, the complainants made payment in the sum of Rs.8,67,710/- only. Thereafter, Time Linked Payment Plan was changed to ‘Developmet Linked Payment Plan’ vide letter dated 26.9.2011 (C-6) which was accepted by the complainants. Even as per changed payment plan,  next installment which was to be paid within 3 months of allotment was not paid by them (complainants) and they defaulted in making payment of this installment and  also instalments which were payable thereafter despite reminders and notices by OP NO.1. Finally OP NO.1 cancelled the allotment of the complainant vide letter dated 23.1.2014 (Annexure OP-19).  As per the cancellation letter, the complainant paid Rs.8,67,710/- and earnest money in the sum of Rs.9,15,814.56  was forfeitable and as such no amount was refundable to the complainant. 

9.             It was argued by Counsel for Opposite Party No.1 that in the face of existence of arbitration clause No.33 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 Opposite Party No.1, being devoid of merit, is rejected.

10.        To defeat claim of the complainants, the next objection raised by Opposite Party No.1 was that since the complainants had purchased the plot, in question, for investment/commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, they 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 complainants are property dealers, and are indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by Opposite Party No.1, mere bald assertion to that effect, cannot be taken into consideration. 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 plot, in question, was purchased by the complainants, 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 had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. 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 complainants, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Opposite Party No.1, in the written reply, therefore, being devoid of merit, is rejected.  

11.         Another objection raised by Opposite Party No.1 was that since the complainants did not buy goods and did not hire any services, and were 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 Opposite Party No.1. It was stated that neither the complainants 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 complainants was towards the payment of the consideration price of the plot in advance only to Opposite Party No.1. It may be stated here, that the complainants hired the services of Opposite Party No.1, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11.1 of the Agreement, subject to force majeure conditions and reasons, beyond the control of Opposite Party No.1, it was to deliver physical possession of the unit, within a period of 42 months i.e. (24 months + 6 months grace period + 12 months extended delay period), from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 21.2. 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”

12.         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 complainants have a remedy to file a suit, for specific performance, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of consumer, as stated above. In this view of the matter, the objection of Opposite Party No.1, in this regard, being devoid of merit, must fail, and the same stands rejected.

13.         The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, the Plot Buyer’s Agreement was executed at Chandigarh. Not only this, Demand Notes, reminders (Annexures C-3 to C-5) and letter dated 26.9.2011 (Annexure C-6) offering change of payment plan were  issued by Opposite Party No.1 from its Chandigarh office. Since, as per documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.

14.         No doubt, in the written version, an objection was also taken by Opposite Party No.1, that as per Clause 35 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 complainants, 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.

15.         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 complainants had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to   them, to file the complaint, under the provisions of the Act. The submission of Opposite Party No.1, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

16.         The next question which falls for consideration, is, as to whether the complainants are entitled to refund of the amount paid by them to OP No.1. It may be stated here that after paying a sum of Rs.8,67,710/-, which was paid at the time of booking/allotment, no further payment was made by the complainant,. The complainants were to make payment as per the following payment schedule given in Annexure-I forming part of the Plot Buyer’s Agreement, which reads as under ;

PAYMENT PLAN On Booking                             :Rs.578473/- (10% of BSP) With Allotment                         :Rs.289237/- (5% of BSP) Within 3 months of Allotment :   Rs.947885/- (15% of BSP+                                                25% of  PLC,EDC)   Within 6 months of Allotment :   Rs.947885/- (15% of BSP+                                                25% of  PLC,EDC)   Within 9 months of Allotment :   Rs.947885/- (15% of BSP+                                                25% of  PLC,EDC)   Within 12 months of Allotment :   Rs.947885/- (15% of BSP+                                                25% of  PLC,EDC)   Within 15 months of Allotment :   Rs.578473/- (10% of BSP)   Within 18 months of Allotment :   Rs.622488/- (10% of BSP+                                                 50% of  IFMS & 100%  Additional                                                            Facilities Charges.   On Possession                        :   Rs.333251/- (5% of BSP+                                                  50% of IFMS)

The aforesaid payment plan was changed to ‘Development Linked Payment Plan’ vide letter dated 26.9.2011 (Annexure C-6) which was agreed and accepted by the complainants. As per changed Payment Plan, there was no change in the first three payments, and payments thereafter were to commence on start of development as indicated in schedule-I of Development Linked Payment Plan(Page 64 of the file).

17.         The installment which was payable within 3 months of allotment, was payable by 30.7.2011.  Demand note for remitting the same was also issued by OP No.1 vide letter dated 3.7.2011(Annexure OP-7). Another installment in the sum of Rs.9,47,884.60 fell due which was payable by 27.5.2013, intimation of which was sent to the complainants vide letter dated 30.4.2013 (Annexure C-4/OP-10). Reminders dated 3.8.2011 (OP-8), 18.8.2011(OP-9), 31.5.2011(OP-11) and 21.6.2013(OP-12) were also sent to the complainants. OP NO.1 vide letter dated 12.7.2013(Annexure OP-14) sent final notice for remitting a sum of Rs.18,95,768.70 within 21 days from the date of issuance of the letter i.e. by 2.8.2013. The complainants were also informed that delay in remitting the outstanding amount was attracting interest @ 15% p.a. and in case the payment was not remitted, it shall be constrained to cancel allotment in terms of Clause 19.1 of the Plot Buyer’s Agreement. Last and final opportunity vide letter dated 5.11.2013 (Annexure OP-17) was again afforded. Finally vide letter dated 23.1.2014(Annexure OP-19), the allotment was cancelled and the entire amount of                       Rs.8,67,710/- was forfeited, the same being less than Rs.9,15,814.56 (earnest money).

18.           The case of the complainants is that OP No.1 was requested vide letters dated 19.8.2014 and 21.1.2015 to refund the amount deposited by them as OP No.1 failed to develop the residential site and to deliver possession of the fully developed residential plot.  OP No.1 in its written statement has denied receipt of these letters.  As is evident from the facts stated above, the complainants defaulted in making payment of intallments which have a bearing on the development of the project.  Had the complainants made payments as per schedule and OP No.1 failed to give possession within the period stipulated in the Agreement, the position would have been different. In the instant case, after making initial payment of Rs.8,67,710/- no further payment was made and in such a situation, when the complainants were in default of remitting the installments, they cannot be heard to say that OP No.1 failed to develop the site.  The possession was to be handed over by OP No.1 only after receiving payment from the complainants.  The relevant clause in the Plot Buyer’s Agreement regarding earnest money reads as under ;

           “6.EARNEST MONEY

           The Company and the Allottee hereby agree that 15%    of the Sale Consideration of the said Plot shall be             deemed to constitute the “Earnest Money”

OP No.1 has forfeited the entire amount paid by the complainants in terms of the aforesaid clause.

19.          When despite final notice and opportunity afforded to the complainants, they failed to remit the balance payment, undoubtedly, OP NO.1 could forfeit the earnest money.  No doubt, as per provision in the Plot Buyer’s Agreement, earnest money is 15%. In similar circumstances when there was default by the complainant in remitting the installments, Hon’ble National Commission in case titled Shri Harjinder S. Kang Vs. M/s Emaar MGF Land Ltd., Consumer Complaint No.482 of 2014 decided on 04.07.2016, in Paras 13 and 14, held as under :-

“13.   The case of the opposite party is that as per Clause 2(f) of the Buyers’ Agreement, extracted hereinabove, 15% of the total sale price constitutes the Earnest Money which they were entitled to forfeit.  However, it has been held by this Commission in DLF Ltd., Vs. BhagwantiNarula, Revision Petition No.3860 of 2014, decided on 06.1.2015, that an amount exceeding 10% of the total price of the property cannot be forfeited as Earnest Money unless the opposite party can show that it has suffered loss to the extent of the amount actually forfeited by it.  Applying the principle laid down in the above referred decision of this Commission, the opposite party could have forfeited only a sum of Rs.12,77,475/- from the amount paid to it by the complainant.  The balance amount of Rs.71,97,275/- (84,74,750/- - 12,77,475/-) was required to be refunded to the complainant, which the opposite party has failed to do.

14.   In the event of the failure of the allottee to make the timely payment of the sale consideration, the agreement could be terminated after a delay of more than thirty days from the due date.  In the present case, the default on the part of the complainant occurred for the first time on 26.4.2013 since the instalment payable on that date was not paid in full.  Therefore, the agreement could have been terminated on 26.5.2013.  The opposite party however, failed to do so and continued to utilize the entire amount, which the complainant had paid to it from time to time.  The opposite party therefore, must compensate the complainant by paying compensation by way of interest on the balance amount of Rs.71,97,275/- with effect from 26.5.2013.”

In view of the above, out of the deposited amount of Rs.8,67,710/-, OP No.1 could forfeit a sum of Rs.6,10,543/- i.e. 10% of total sale consideration of Rs.61,05,430/-  and balance amount of Rs.2,57,167/- was refundable to the complainants. Once  on account of non-payment by the complainants, the Agreement stood rescinded by them (complainants) and allotment cancelled, OP No.1 after forfeiting 10% of the sale consideration, was required to refund the balance amount to them but it failed to do so and was thus deficient in rendering service. It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335).

20.         The complainants are, thus, held entitled to refund of an amount of Rs.2,57,167/- alongwith interest @ 10% p.a. with effect from the date of cancellation i.e. 23.1.2014.

21.        In the instant case, since no post of Managing Director existed, as stated by Counsel for OP No.1, so no order is passed against Opposite Party No.2. Since OP No.3  was only an employee of Opposite Party No.1,  and as stated by  Counsel for OP No.1, she has left her job, therefore, liability of any kind cannot be fastened on her.  OP No.4 was only property consultant and as stated by Counsel for the complainants, no notice was ordered to be issued. As such, complaint against OP Nos.2,3 & 4   is liable to be dismissed.

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

23.             For the reasons, recorded above, this complaint is partly accepted, with costs against Opposite Party No.1 only. Opposite Party No.1 is held liable and directed as under:-

(i)    To refund the amount of Rs.2,57,167/- to the complainants alongwith interest @ 10% p.a. with effect from  23.1.2014

(ii)   To pay cost of litigation, to the tune of Rs.20,000/- to the complainants.

(iii)  The payment of awarded amounts mentioned at sr.nos.(i) and (ii), shall be made by Opposite Party No.1, to the complainants, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, it (Opposite Party No.1) shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @12% p.a. instead of @10% p.a., from 23.01.2014 and interest @10% p.a., on the amount mentioned at sr.no. (ii), from the date of filing of this complaint, till realization.

24.        The complaint against Opposite Parties No.2,3 & 4 is dismissed with no order as to cost.

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.

30.06.2017                                                 Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

[DEV RAJ]

MEMBER

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

Js/rb