Chandigarh

StateCommission

CC/264/2015

Vivek Vermani - Complainant(s)

Versus

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

Neeraj Sobti, Adv.

22 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	264 of 2015
Date of Institution	:	05.11.2015
Date of Decision	:	22.04.2016

 

1.    Vivek Vermani S/o Sh. S. M. Vermani R/o House No.69 Green Avenue, Amritsar, Punjab.

2.    Seema Vermani W/o Sh. Vivek Vermani R/o House No.69 Green Avenue, Amritsar, Punjab.

……Complainants.

Versus

1. M/s Puma Realtors Pvt. Ltd., An IREO Group Company through its Managing Director/Chairman, Corporate Office at SCO No.6-8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh – 190009.

2.M/s Puma Realtors Pvt. Ltd., An IREO Group Company       through its Managing Director/Chairman, Registered Office at No.5, Dhanraj Chambers, 1^st Floor, Satbari, New Delhi –    110074.

….Opposite Parties.

3. Housing Development Finance Corporation Limited (HDFC)       having its Branch Office at S.C.O. 153-154 & 155, Sector 8-     C, Madhya Marg, Chandigarh through its Branch Manager.

 

….Performa Opposite Party.

 

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

 

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

                    SH. DEV RAJ, MEMBER.

                  

Argued by:

 

Sh. Neeraj Sobti,  Advocate  for  the complainants.

Sh. Ramnik Gupta, Advocate for Opposite Parties No.1&2.

Ms. Rupali Shekhar Verma, Advocate for Opposite Party No.3.

 

 

 

PER DEV RAJ, MEMBER

              The facts, in brief, are that in the year 2011, on the assurance of Opposite Parties No.1 & 2, the complainants jointly applied for allotment of a residential plot in their project, namely, IREO Hamlet and paid a sum of Rs.6,50,000/- as the booking amount. The complainants were allotted Plot No.224 measuring 250.59 sq. yards in the said project in Sector 98, SAS Nagar, Mohali vide provisional allotment letter dated 29.04.2011 (Annexure C-1) alongwith details of plot. The complainants got the said plot financed from Opposite Party No.3 vide tripartite agreement (Annexure C-2). On 28.05.2011, the complainants   paid  a sum  of  Rs.2,14,537/- to Opposite Parties No.1              & 2 towards part price of the plot, in question. Plot Buyer’s Agreement was executed between the complainant and Opposite Parties No.1 & 2 at Chandigarh on 15.07.2011. As per the details given in Para 5 of the complaint, the complainants paid the total amount of Rs.60,22,683.58Ps to Opposite Parties No.1 & 2 up to 08.04.2015. Opposite Party No.3 financed/paid an amount of Rs.37,90,000/- to Opposite Parties No.1 & 2 on behalf of the complainants and rest of the payment of Rs.22,32,684/- was paid by the complainants directly from their own sources.

2.           It was further stated that as per Clause 21.2 of General Clauses of the Plot Buyer’s Agreement, Opposite Parties No.1 & 2 were to develop the said project by laying roads, water lines, sewer lines, electrical lines etc.. Further, as per Clause 11 of the Agreement, possession of the plot, in question, was to be handed over within 24 months with further grace period of 6 months but not later than 30 months from the date of execution of the Agreement i.e. latest by 14.01.2014. As per Clause 11.2, if Opposite Parties No.1 & 2  failed to offer possession of the plot, in question, by the end of grace period, they were to pay compensation calculated @Rs.50/- per sq. yard of the area of the plot for every month of delay until the possession was handed over. Further as per Clause 11.3 of the Agreement, if Opposite Parties No.1 & 2 failed to give possession beyond a period of 12 months from the end of the grace period i.e. up to 14.1.2015, then the complainants were entitled to terminate the agreement and seek refund of the amount paid by them.

3.           It was further stated that in the month of April 2015, Opposite Parties No.1 & 2 issued notice of possession dated 21.4.2015 to the complainants (Annexure C-6). The complainants were shocked to receive letter from Opposite Parties No.1 & 2, whereby the complainants were informed that the project/plot of the complainants was not complete in all respects. Opposite Parties No.1 & 2 themselves admitted in the said letter that the basic amenities like roads and sewerage were not complete/developed at the site. After receipt of letter dated 29.06.2015, the complainants in the month of July, 2015, visited the spot and were shocked to see that development at the site was not complete as promised by Opposite Parties No.1 & 2. The complainants immediately approached Opposite Party No.1 and inquired about the non-completion/incomplete development of the project and agitated issuance of notice of possession dated 21.04.2015. Being aggrieved, the complainants sought refund of the amount paid by them to Opposite Parties No.1 & 2. It was further stated that Opposite Parties No.1 & 2 cleverly and intentionally issued notice of possession to the complainants knowing well that development of the plot was not complete in all respects as promised under Clause 21.2 of the Agreement and have tried to take advantage of Clause No.113 of the Agreement, to usurp the money of the complainants. 

4.           Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of Opposite Parties No.1 & 2, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) claiming refund of Rs.60,22,683.58Ps alongwith interest @12% per annum from the dates of actual payments; out of the aforesaid amount, the amount due to Opposite Party No.3 as per loan account be ordered to be paid to Opposite Party No.3; pay compensation in terms of Clause 11.2 of the Plot Buyer’s Agreement @Rs.50/- per sq. yd. w.e.f. 14.1.2014; pay compensation to the tune of Rs.4,00,000/- towards mental torture and harassment; Rs.55,000/- towards Counsel fee and Rs.30,000/- towards litigation charges/cost.

5.           Opposite Parties No.1 & 2, in their 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.33 in the Plot Buyer’s Agreement dated 15.07.2011; that the complainants were not consumers as the present complaint related to the enforcement of agreement to sell/purchase of a residential plot i.e. an immoveable property and hence was not covered under the Act; that the complainants

 

did not hire any services of Opposite Parties No.1 & 2, as the parties did not enter into any contract for hiring the services; that the complainants did not book the plot for their personal use but for investment/commercial purpose and that the allegations in the complaint being of contractual nature, were only triable by the Civil Court.

6.           On merits, it was stated that the complainants, after having satisfied in all aspects, applied for booking of a plot and paid a sum of Rs.6,50,000/- towards booking amount. It was further stated that bare perusal of the Agreement showed that the complainants examined all the documents with respect to the title, approvals, sanctions, layout plan etc. and authority of the Opposite Parties and after satisfying themselves about all aspects of the project, they exercised their own discretion to apply for the plot, in question. It was further stated that the complainant vide recital No. ‘K’ of the said Agreement himself represented that he was not influenced by any kind of sales brochures, advertisements, representations, warranties etc. and he had relied upon his own independent investigations while deciding to purchase the plot, in question. It was denied that the complainants were assured that the possession would be handed over within a period of 30 months from the date of execution of the Agreement. It was further stated that the Opposite Parties offered change of payment plan from Time Linked Payment Plan                                to Development Linked Payment Plan, which the complainants duly accepted. It was further stated that the complainants did not adhere to the said payment plan. It was admitted that possession of the plot, in question, was offered vide notice of possession dated 21.04.2015 (Annexure C-6), as was dispatched on 22.05.2015. It was denied that in July 2015, the development was not complete. It was further stated that in terms of Clause 11.3 of the Agreement, right to seek   refund   was   accrued   in   favour   of   the   complainants after expiry of period of 42 months on 14.01.2015 and the said option could have been exercised before dispatch of notice of possession, which was dispatched on 22.5.2015. It was further stated that as per Clause 21.2 of the Agreement, it was agreed that internal development of the project within the periphery of the Hamlet Project to the extent mentioned in the said clause, would be developed by the answering Opposite Parties and the external development would be developed by the State Authorities. It was further stated that development work commenced at the site w.e.f. 1.5.2013 and stood carried on continuously in a phased manner at a good pace till April, 2015. It was further stated that the answering Opposite Parties started offering possession of the plots to its allottees w.e.f. 4.5.2015. It was further stated that had there been no development, various notices of possession could not have been issued in May 2015. It was further stated that now the answering Opposite Parties have completed the laying of blacktopping work of the internal roads. It was further stated that now the answering Opposite Parties have already installed and made operational the STP at the site. It was further stated that as per the report of Local Commissioner dated 24.10.2015, the project is fully developed and all the basic amenities are available at the site. It was further stated that development at the site is a plotted development all the lines including but not limited to sewer lines, electrical lines, water lines, rain harvesting lines have been laid underground and are not visible from the surface of the earth. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.1 & 2, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

 

7.           Opposite Party No.3 – HDFC Limited, in its written statement, stated that the grievance of the complainants is only against Opposite Party No.1, who allegedly  failed to deliver its commitments in terms of Apartment Buyer’s Agreement (In fact Plot Buyer’s Agreement). It was further stated that the complainants are aggrieved of the delay in handing over of possession of the apartment (In fact plot). It was further stated that as regards the finance advanced by Opposite Party No.3, the rights of the parties to the present lis are governed by the Tripartite Agreement (Annexure C-8). It was further stated that in terms of the Tripartite Agreement or in contingency of termination of the developer buyer agreement, Opposite Party No.3 has the first charge/right to seek apportionment of its dues.  It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.3, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

8.           The complainants filed replications, wherein, they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written versions of Opposite Parties No.1 & 2 and Opposite Party No.3.

9.           The complainants, in support of their case, submitted affidavit of Sh. Vivek Vermani (complainant No.1), by way of evidence, alongwith which, a number of documents were attached.

10.         Opposite Parties No.1 & 2, in support of their case, submitted the affidavits of Sh. Rajneesh, their Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

11.         Opposite Party No.3, in support of its case, submitted the affidavit of Sh. Nandan Singh Rawat, its Deputy Manager and authorized representative, by way of evidence, alongwith which, a number of documents were attached.

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

13.         It is evident, on record, that complainant No.1 vide provisional allotment letter dated 29.4.2011 (Annexure C-1) was allotted plot No.224 in the residential project “IREO Hamlet” admeasuring 250.59 sq. yards, Sector 98, SAS Nagar, Mohali, the basic sale price whereof was Rs.23,000/- per sq. yard i.e. Rs.57,63,570/- besides External Development Charges (EDC) @Rs.1,275.10 per sq. yard and Preferential Location Charges (PLC) @Rs.500/- per sq. yard of the plot area. Admittedly, Plot Buyer’s Agreement was executed between the complainants and Opposite Parties No.1 & 2 on 15.07.2011 (Annexure C-4). The payment against the aforesaid plot was to be regulated as per Payment Plan (Annexure-I) (at Page 51 of the file). Against the total price of the plot, in question, the complainants made payment in the sum of Rs.60,22,683.58Ps. The complainants have admitted that Opposite Party No.3 financed/paid an amount of Rs.37,90,000/- to Opposite Parties No.1 & 2 on their behalf, and Tripartite Agreement dated 16.5.2013 (Annexure C-2) was also executed. It is also evident that Opposite Parties No.1 & 2 offered change of payment plan from Time Linked Payment Plan to the Development Linked Payment Plan vide letter dated 26.09.2011 and the complainants did not raise any objection, to the same. As admitted by Opposite Parties No.1 & 2, the development work started at the site only on 01.05.2013, almost two years after the execution of Plot Buyer’s Agreement dated 15.07.2011 (Annexure C-4).  

14.         The first 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 Arbitration and conciliation Act 1996 Act (in short 1996 Act), this Commission has jurisdiction to entertain the consumer complaint or not. It may be stated here that under similar circumstances, in a case titled as Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, this Commission elaborately dealt with this objection noting down the background in which 1986 Act was enacted; the United Nations Draft Guidelines to protect the interest of consumers by passing Resolution No.39/248, to which our country is signatory; objectives of those guidelines; the fact that qua consumers, 1986 Act is a special legislation; the judgment of Hon’ble Supreme Court of India in Fair Air Engineers (P) Ltd. v. N.K. Modi (1996) 6 SCC 385, Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305. In Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha’s case (supra), it was specifically observed that where two different redressal agencies/Acts have jurisdiction to entertain the dispute, with regard to the same subject, the jurisdiction of the Consumer Fora would not be barred. In Abha Arora Vs. Puma Realtors Pvt. Ltd. and another’s case (supra), this Commission in Para 19 held as under:-

“19. It was specifically observed that even in those cases, where two different redressal Agencies/Acts, have jurisdiction to entertain the dispute, with regard to the same subject, the jurisdiction of the Consumer Fora would not be barred. Taking note of a weak position, in which a consumer is set against multinational companies and other big producers, it was said by the Hon’ble Supreme Court of India in a case titled as United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),that, where there is any ambiguity in understanding the meaning of provision of law, or where two interpretations are possible, one beneficial to the consumer should be accepted. The same view was reiterated in LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC).”

This Commission after dealing with the unamended/amended provisions of Section 8 of 1996 Act and Section 3 of 1986 Act, and in view of law laid down in judgments of Hon’ble Supreme Court of India in case titled National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy  &  anr., I (2012) CPJ 1 (SC) and Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, Civil Appeal No.20923 of 2013 and judgments of National Commission in DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013; Shri Satish Kumar Pandey and another Vs. M/s Unitech Limited’s & Ors., Consumer Complaint No.427 of 2014 decided on 8.6.2015 and Mahindra Holidays & Resorts India Ltd. Vs. Adnan Samoon Rassiawala & 6 Ors., First Appeal No. 127 of 2016, decided on 18.03.2016, came to the conclusion that as held by the Hon’ble Supreme Court of India and also by the National Commission in a large number of cases, Section 3 of 1986 Act provides for an additional remedy available to a consumer and the said remedy is also not in derogation to any other Act. Further the remedy under the 1986 Act is cost effective and much speedier than the proceedings before the Arbitrator. Referring the matter to the Arbitrator would defeat the very purpose of General Assembly Resolution No.39/248 and the provisions of 1986 Act and in view of above, the plea raised by Counsel for Opposite Party No.1 (in that case), was rejected. The ratio of the aforesaid judgments is squarely applicable to the facts of the instant case. Further this Commission in case titled ‘Sukhjinder Singh Vs. M/s IREO Fiveriver Pvt. Ltd.’, Complaint Case No.278 of 2015 decided on 18.04.2016, held as under:-

“Not only as above, execution of judgment/decree passed by the Consumer Foras is very easy and less time consuming. Invariably, in all the judgments passed, between one to three months’ time, is granted to the judgment debtors(s) to discharge liability. If it is not so done, and the order is not stayed in the meantime by the Higher Fora, two options are available with the complainant/decree holder. Section 25 of 1986 Act provides the procedure to enforce orders by the Consumer Foras. In Sector 25 (3), it is provided that where any amount is due from any person, under an order passed by any Consumer Fora, the concerned Consumer Fora, on an application moved by the decree holder, may issue a certificate to the Collector of the District, to recover the said amount, by way of land revenue, in  terms of Section 72 of the Punjab Land Revenue Act, 1887. The said provision is also very stringent. The Collector is supposed to attach the holding of the judgment debtors to take the said property under his own management and control. The Collector is further supposed to manage the said property and raise all rents and profits accruing therefrom to the exclusion of the defaulter, until the decree is satisfied. The above procedure will consume at the maximum four to six months, for realization of the amount awarded. Further option is also available to a complainant/decree holder, to move an application under Section 27 of 1986 Act, which provides that where a trader or a person against whom, a complaint was made, fails or omits to comply with the order passed by the Consumer Fora, such party would entail award of punishment of imprisonment for a term, which shall not be less than one month, but may extend to three years, or with fine, which shall not be less than Rs.2,000/-, and may be extended upto Rs.10,000/-, or both. This provision is very effective, as and when application is moved under Section 27 of 1986 Act, for fear of imprisonment, it is seen that immediately the judgment debtor(s) make an attempt to comply with the order passed by the Consumer Foras. Whereas, to the contrary Section 36 of 1996 Act, provides that award shall be enforced, in accordance with the provisions of the Code of Civil Procedure 1908, in the same manner, as if it was a decree of a Court. Such a procedure is very costly and time consuming. Executing a decree would virtually mean fighting one more litigation, in a Court, to get enforcement of the award. If such a procedure is adopted, it will defeat the very purpose and spirit of 1986 Act. Accordingly, in this view of the matter and also in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite party, stands rejected.”   

 

In view of position stated above, the plea of Opposite Parties No.1 & 2 is not sustainable and the same is rejected.

15.         To defeat claim of the complainants, the next objection raised by Opposite Parties No.1 & 2 was that since the complainants had purchased the plot, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, as such, they would not fall within the definition of consumers, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on the 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 Parties No.1 & 2, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as  Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 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,  Revision Petition No. 3861 of 2014, decided on 26.08.2015.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 Parties No.1 & 2, in their written reply, therefore, being devoid of merit, is rejected.  

 

16.         Another objection was raised by Counsel for Opposite Parties No.1 & 2 that since the complainants sought enforcement of the Agreement, in respect of the immoveable property, only a Civil Court can decide the complaint, and as such, consumer complaint was not maintainable. It may be stated here, that the complainants hired the services of Opposite Parties No.1 & 2, 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 Parties No.1 & 2, they were to deliver physical possession of the unit, within a period of 30 months, 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”

 

17.         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, as stated above, 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 Parties No.1 & 2, in this regard, being devoid of merit, must fail, and the same stands rejected.

18.         The next question, which falls for consideration, is, as to whether the development and the basic amenities were complete at the site before offering possession vide letter dated 21.04.2015 or not. The Counsel for the complainants submitted that possession of the plot, in question, vide letter dated 21.04.2015/22.05.2015 was not complete, valid and legal possession.     

19.         The complainants have specifically challenged the offer of possession by way of filing the instant complaint for not obtaining necessary approvals from the Competent Authorities by the Opposite Parties and lack of development and basic amenities at the site. When we look into inter se communication between the parties, it becomes apparently clear that there was a promise to make development and then hand over possession of the plot, to the complainants. From letter dated 29.06.2015 of Opposite Parties No.1 & 2 (Annexure C-7), which was issued after offer of possession, Opposite Parties No.1 & 2 admitted that the following amenities were yet to be completed:-

Ø Internal roads not complete as it could be damaged on account of movement of trucks carrying heavy construction material.

Ø We are in process of completing the balance blacktopping work also.

Ø The work of roads would be taken up after considerable number of houses are constructed by the allottees.

Ø Only temporary electricity connection would be made available.

Ø External roads, networks and infrastructure are the responsibility of Government and the opposite parties are following up with the Government to do so.

Ø Sewerage treatment plant has not been constructed and will be taken when there is adequate habitation.

Ø For construction purpose water can be purchased from any authorised vendor permitted by Panchayat, Irrigation department, GMADA etc. 

Ø Features like swings etc. shall be provided in due course of time.

Thus, the averment of the complainants in Para 8 of their complaint that vide the aforesaid letter dated 29.06.2015, Opposite Parties No.1 & 2 admitted that the basic amenities like roads and sewerage were not complete/developed at the site, stands corroborated. Subsequently, the complainants filed the instant complaint on 05.11.2015 pointing out deficiency on the part of Opposite Parties No.1 & 2 and unfair trade practice, seeking refund of Rs.60,22,683.58Ps alongwith interest @12% per annum.

20.         Though it is evident from Memo No.5001 dated 7.8.2015 (Annexure OP-18), which is letter from the Chief Electrical Inspector to Govt. Punjab, Patiala wherein it was stated that inspection of subject cited electrical installation was carried out by the Electrical Inspector and the same was found to be conforming to the relevant provisions of Central Electricity Authority (Measure relating to safety and Electric Supply) Regulations, 2010 and the installations were approved for commissioning but clearly, this approval was accorded after offer of possession vide letter dated 21.4.2015 delivered to the complainants on 22.05.2015.

21.         Even the final NOC to Opposite Parties No.1 & 2 for 85.25 Acres residential township in Sectors 86, 98 and 99 in Village Sambhalkhi, SAS Nagar, Mohali was accorded by Punjab State Power Corporation Limited on 8.7.2015 (Annexure OP-17), after offer of possession dated 21.04.2015 on 22.5.2015. In case titled Jarnail Singh Sandhu Vs. M/s PUMA Realtors Pvt. Ltd. & Anr., Consumer Complaint No.255 of 2015 decided by this Commission on 20.04.2016, this Commission observed in Para 26, interalia, as under:-

“………Further, the Opposite Parties have themselves, placed on record copy of application dated 29.06.2015 (Annexure OP-33), which clearly shows that they (Opposite Parties) applied for partial completion certificate for Sectors 86, 98 and 99, SAS Mohali only on 29.06.2015 that too after offer of possession of the plot, in question, to the complainant on 12.05.2015. The Opposite Parties have averred that they were exempted under PAPRA, except provisions of Section 32 thereof, vide notification dated 14.8.2008 and were not required to obtain completion certificate and they applied for partial completion certificate only for the benefit of the complainants. It may be stated here that as per Govt. Notification No.4966 dated 02.09.2014, all the promoters of Mega Projects were required to get a completion certificate. In the instant case, possession was offered on 12.05.2015 but the Opposite Parties applied for partial completion certificate on 29.06.2015. Irrespective of the fact whether completion certificate was required to be obtained or not, it is abundantly clear from the evidence on record that amenities were not complete when possession was offered.”

22.         This Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd.  and  another’s  case  (supra),  in  Para  36  held that  basic facilities like roads, sewerage, drinking water, electricity, street lights, drainage etc. were to be provided by the Opposite Parties to the complainant. In the case in hand, there is also nothing, on record, that complete development, in respect of the plot, in question, and amenities at the site as promised, as per the Plot Buyer’s Agreement dated 15.07.2011, Annexure C-3, were available at the site. Had the amenities been completed at the site, then certainly Opposite Parties No.1 & 2, being in possession of the best evidence, having engaged a number of engineers/architects, would have placed, on record, their reports, to prove that factum. Though the Counsel for Opposite Parties No.1 & 2 pleaded that the basic amenities such as water lines, sewer lines, etc., were required to be provided underground and the same have been provided, but they failed to produce any cogent and convincing evidence to the effect that all other amenities at the site, where the plot, in question, was located, were complete and necessary approvals had been obtained before they (Opposite Parties No.1 & 2) offered possession vide their letter dated 21.4.2015. Even if the contention of Opposite Parties No.1 & 2 that certain underground amenities have been provided is accepted, the fact that certain amenities and approvals were complete/obtained after offer of possession, clearly proves their deficiency, as is evident from the position indicated hereinafter. It is evident from letter dated 14.5.2013 (Annexure OP-12) that the validity of NOC from Pollution Angle by Punjab Pollution Control Board was for one year from the date of its issue or till the complete development of residential colony, whichever is earlier. The same was extended vide letter dated 9.12.2014 (Annexure OP-13) up-to 13.5.2015. Opposite Parties No.1 & 2 have not placed any document, on record, that they had NOC from Pollution angle beyond 13.5.2015. They had apparently no NOC, when notice of possession dated 21.04.2015, was dispatched to the complainants on 22.05.2015. The same was extended subsequently vide letter dated 29.06.2015 (Annexure OP-14). Final NOC was granted by PSPCL on 08.07.2015 (Annexure OP-17) after notice of possession dated 21.04.2015/22.05.2015. Perusal of Annexure OP-18, which is memo dated 07.08.2015 from Punjab Electrical Inspectorate, reveals that installations were approved for commissioning only on 07.08.2015. Even letter dated 18.05.2015 (Annexure OP-16) from Greater Mohali Area Development Authority (GMADA), informed the Opposite Parties that “…….Therefore, the arrangements for suitable provision for drinking water supply and safe disposal of sullage/storm discharge and solid waste management shall be made by promoter at his level separately and he shall obtain all necessary approvals from the concerned Authorities as per law in this regard independently. The construction work shall commence only after obtaining approvals as per law from the concerned Authorities……” Besides, number of other conditions were also required to be complied with by the promoter. The Opposite Parties have not stated whether they complied with the aforesaid conditions.

23.         In Abha Arora Vs. Puma Realtors Pvt. Ltd. and another’s case (supra), it was held that amenities were not complete. In Abha Arora’s case (supra), this Commission in Para 47 noted with concern, a very serious deficiency committed by the Opposite Parties, in providing service to the complainants, which is extracted hereunder:-

“As per admitted facts on record, External Development Charges (EDC) @Rs.1275.10 per square yard, are payable by the complainant to the opposite parties. Service tax is also payable by the complainant. As per record, EDC and service tax amount was paid in steps, by the complainant to the opposite parties. As per law and otherwise also, it is expected that the said amount might have been deposited by the opposite parties with the Government/Local Authorities, to provide necessary external infrastructure needed for enjoyment of the plots/units purchased by the consumers. As has been discussed in earlier part of this order, 30 months period was available without penalty, with the opposite parties to press with the Government, on payment of EDC, for providing necessary external infrastructure. Very conveniently, in Clause 21.2 it was provided by the opposite parties that they shall carry out only internal development, within the boundary of the project, which includes laying of roads, water lines, sewer lines, electric lines etc. However, the external linkages for those services, beyond the periphery of the project, is to be provided by the State Government or the Local Authorities. Even if it is presumed, only for the sake of arguments, as on today, the opposite parties may have laid down water lines, sewer lines, storm water drains, roads, electricity, horticulture etc., within the project, admittedly, those lines are not connected with the main lines, to be provided by the State Government or the Local Authorities. For a proper use of plots/units purchased, it is necessary that those lines are connected with the main lines, so that there is no hindrance in enjoying the property purchased.

       There is nothing on record to show that after depositing of EDC, as collected by the opposite parties from the consumers, the said amount was deposited with the Government, in time, and further the matter was taken up with the Government, to provide external infrastructure connecting the project with the main sewerage lines etc. The opposite parties had 30 months of time, which this Commission feels, was sufficient for the State Government or the Local Authorities to complete external infrastructure. It is bounden duty of the real estate developer/opposite parties to ensure that the external infrastructure is complete by the time, possession is to be delivered. If the Local Authorities were not acting, despite receipt of EDC, it was duty of the real estate developer, to take legal recourse. In the present case, it was not done so.  The opposite parties cannot wash of their hands by simply stating that external infrastructure will be provided by the State Government/Local Authorities. If the external infrastructure is not provided, where will the purchasers go? How their grievance will be redressed. If the requisite infrastructure is not available, the developed colonies will turn into slums, within few years. Such a development cannot be termed as regulated development. By not making any efforts, in taking up matter with the State Government/Local Authorities, to ensure that external infrastructure is provided within the stipulated period, the opposite parties have committed deficiency in providing service.”

 

Thus, Opposite Parties No.1 & 2 cannot wash off their responsibility for non-development of external infrastructure on the ground that the same was the obligation of the State Government. When they (Opposite Parties No.1 & 2) have received External Development Charges, they were duty bound to ensure by pursuing with the State Government that external infrastructure was complete by the time possession was offered. It was obligatory on part of Opposite Parties No.1 & 2 to handover possession to the complainants complete in all respects but they miserably failed to do so. Clearly development and amenities were not complete when possession was offered vide notice of possession dated 21.4.2015 dispatched on 22.05.2015.

 

24.         The next question which falls for consideration, is, whether the complainants are entitled to refund of the entire amount deposited by them. It may be stated here that offer of possession sent vide letter dated 21.4.2015/22.5.2015 is a mere paper possession. A similar question arose in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another’s case (supra) wherein this Commission in Paras 44 to 46 held as under:-

“44. Whether the complainant is entitled to refund of the entire amount deposited by her. It may be stated here that offer sent vide letter dated 21.05.2015, has been held to be a mere paper possession and as on date, the opposite parties are not in a position to deliver possession of the plot, in question. Under these circumstances, it is justifiable for the complainant to say no to the same. It was so said by the National Consumer Disputes Redressal Commission, New Delhi in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC). In the above case, possession was not delivered in time. Complaint was filed for refund of amount paid. The State Commission partly allowed it. The builder was allowed to forfeit 10% of the deposited amount, on the ground that the complainant himself rescinded the contract by asking refund of the amount, as possession of the unit had already been offered to him. The remaining amount was allowed to be returned with interest. The complainant in that case was also awarded litigation cost etc. The builder namely Emaar MGF Land Limited went in appeal, which was dismissed, wherein it was specifically observed by the National Commission, that when the promoter/builder has violated material condition in not handing over possession, in time, it is not obligatory for the purchaser to accept possession after that date. The principle of law laid in the aforesaid case, is fully applicable to the instant case. On account of that, the complainant is entitled to get refund of amount deposited by her. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to her, as also escalation in prices.

45.  It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.65,56,513/- was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest, for the period of delay in making payment of instalments.  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). In view of above, the complainant is certainly entitled to get refund of the amount deposited by her, to the tune of Rs.65,56,513/- alongwith interest compounded quarterly @12% from the respective dates of deposits (less than the rate of interest charged by the opposite parties, in case of delayed payment), till realization.

46.  Further, to deny the claim of the complainant(s), it was also argued by Senior Counsel for the opposite parties/ builder that as per Clause 11.3 of the Agreement, they (complainants) could have opted for termination of the Agreement, only after the lapse of 42 months aforesaid, from the date of execution of the same (Agreement) i.e. 24 months plus (+) 6 months plus (+) 12 months, till the notice of possession is dispatched, whereas, on the other hand, in all the cases, possession has been offered, as such, the option to terminate the same (Agreement) by them (complainants) has been irrevocably lapsed.  Further, in some cases, since offer of possession has been made to the allottees, within the period of 42 months, from the date of execution of the Agreement, as such, they were barred to opt termination of the Agreement, as per Clause 11.3.

              Before discussing effect of aforesaid arguments, it is necessary to note down the provisions of Clauses 11.1 and 11.2 of the Agreement dated 19.08.2011. The provisions read thus:-

“11.1 - Subject to Force Majeure, as defined herein, and further subject to the Allottee having complied with all its obligations under the terms and conditions of this Agreement, and not being in default of any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges, and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Plot to the Allottee within a period of 24 (Twenty Four) months from the date of execution of this Agreement (“Commitment Period”). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 6 (Six) months (“Grace Period”), after the expiry of the said Commitment Period.

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

              Perusal of aforesaid provisions, makes it very clear that as per Clause 11.1, handing over possession of the plot is subject to force majeure circumstances. Clause 11.2 stipulates that the stipulation contained therein is subject to the provisions of Clause 11.1. It is not open to the builder to get 12 months, on payment of delayed compensation, as a matter of right. It has to be shown, whether there was any circumstance, which didn‘t allow providing of infrastructure at the site. No such circumstance has been added to claim above period of 12 months. Further, there is nothing on record to show that at the end of 30 months period, to get further period of 12 months, any attempt was made, to make offer of payment of delayed compensation, as envisaged in Clause 11.2 of the Agreement. Even in the notice of offer of possession, which has been held to be paper one, it is not even mentioned that payment of delayed compensation will be made to the complainant, on completion of documentation, including registration of the conveyance deed. The above said stipulation qua payment of delayed compensation amount, after registration of conveyance deed, appears to be draconian. It is totally one sided. As such, it could be termed as unfair trade practice, on the part of the opposite parties. Furthermore, in the present case, admittedly, possession of the plot was offered after the lapse of 42 months i.e. 24 months plus (+) 6 months plus (+) 12 months, as such, the above arguments need to be rejected.

 

       Otherwise also, as has been held in large number of cases, the payment of paltry amount of compensation, virtually would amount to no compensation for the loss caused to a consumer. The amount offered is not even equal to simple interest being offered by the Banks, against saving bank account. On account of inaction, on the part of the opposite parties, in not fulfilling their obligation under the contract, the very purpose of Agreement has failed and it is open to the complainant to claim refund of her amount, with interest, notwithstanding anything contained in Clause 11.3 of the Agreement.  The argument raised by Senior Counsel for the opposite parties, in this regard, being devoid of merit, is rejected.”   

25.         Since the Plot Buyer’s Agreement was executed on 15.07.2011, 30 months period including 6 months grace period expired on 15.01.2014. Even 12 months extended period, in terms of Clause 11.3 of the Agreement expired on 15.01.2015. The possession was offered vide notice of possession dated 21.04.2015 which was delivered to the complainants on 22.05.2015, even beyond the extended period i.e. after lapse of around 45 months of execution of Agreement. Finding the possession, so offered, to be a paper possession, the complainants filed the instant complaint on 05.11.2015.

26.         It was clearly stated by the National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill ‘s case (supra), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. In Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd. and other’s case (supra), the agreement between the flat buyers and the developers, M/s. Unitech ltd. for payment of compensation on account of delay in completion of the construction of the apartment was fixed at the rate of Rs.5 per sq. ft. per month of the Super Area. In the aforesaid case, it was contended on behalf of the developers that the complainants were entitled only to the agreed quantum of compensation for the period the project was delayed. Rejecting the said contention, the National Commission in Para 12, inte-ralia, held as under:-

“12……..The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation, which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r)(1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r)(1) of the Act are inclusive and not exhaustive, as would be evident from the use of word “including” before the words “any of the following practices”

27.         In the present case also, Opposite Parties No.1 & 2 committed breach of their obligation, in not offering possession of the plot, in question, within 30 months from 15.07.2011 i.e. date of signing of Buyer’s Agreement and even after expiry of extended delay period of 12 months, on 15.1.2015. As a matter of fact, possession of the plot was offered only on 21.04.2015 (dispatched on 22.05.2015), that too without basic amenities. A perusal of Clause 11.3 of the Plot Buyer’s Agreement clearly provides that “……..from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt for termination of the Allotment/ Agreement and refund of the actual paid up installment(s) made against the said Plot….”. When Opposite Parties No.1 & 2 are charging interest for any delay in making payment of installments, their plea that the complainants cannot invoke provisions of Clause 11.3 of the Agreement is not justified being unreasonable. It, therefore, means that the complainants are entitled to refund of amount/installments paid by them. In our opinion, Clause 11.1 cannot have overriding effect over Clause 11.3 of the Agreement. Thus, in our considered opinion, the complainants are entitled to refund of the deposited amount and by not refunding the same, Opposite Parties No.1 & 2 were deficient in rendering service. Thus, since Opposite Parties No.1 & 2 failed to handover legal and valid possession of the plot, in question, with complete development and all basic amenities, to the complainants, even after expiry of 45 months from the execution of Plot Buyer’s Agreement, in view of law laid down in Emaar MGF Land Limited and another Vs. Dilshad Gill ‘s case (supra), the complainants were entitled to seek refund.

28.         From the aforesaid discussion, it is evidently clear that neither Opposite Parties No.1 & 2 have completed the development and basic amenities nor did they have all the necessary sanctions/approvals from the Competent Authorities up-till 22.05.2015 when notice of possession dated 21.4.2015 was delivered to them (complainants). Thus, the contention of the complainants that possession offered was not a valid and legal possession is corroborated from the evidence on record. It is, therefore, held that Opposite Parties No.1 & 2 were not only deficient, in rendering service but also indulged into unfair trade practice, by offering a paper possession to the complainants, before completing the basic amenities as also without obtaining the necessary sanctions/approvals.

29.         It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.60,22,683.58Ps was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by Opposite Parties No.1 & 2, for their own benefit. Opposite Parties were charging heavy rate of interest, for the period of delay in making payment of installments by the complainants.  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 20^th, 2014 (2014) 6 SCC 335). In view of above, the complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.60,22,683.58Ps alongwith interest @12% per annum from the respective dates of deposits (less than the rate of interest charged by Opposite Parties No.1 & 2, in case of delayed payment), till realization. (In other compliant cases against PUMA Realtors Pvt. Ltd., this Commission has been granting refund alongwith interest compounded quarterly @12%, but since in this complaint, the complainants have claimed interest @12%, interest compounded quarterly is not being granted.)

30.         In view of aforesaid position, Opposite Parties No.1 & 2 are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to her, as also escalation in prices.

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

32.          For the reasons, recorded above, this complaint is partly accepted, with costs against Opposite Parties No.1 & 2 only. Opposite Parties No.1 & 2 are, jointly and severally, held liable and directed in the following manner:-

(i)   To refund the amount of Rs.60,22,683.58Ps, to   the complainants, alongwith interest @12% per annum, from the respective dates of deposits, within a period of 45 days, from the date of receipt of a certified copy of this order.

(ii)   To pay an amount of Rs.3,00,000/- (Rupees              Three Lacs only), to the complainants, as compensation for mental agony, physical harassment, deficiency in rendering service and unfair trade practices, within a period of 45  days from the date of receipt of a certified copy of the order.

(iii) Opposite Party No.3 i.e. Housing Development Finance Corporation Limited (HDFC) shall have the first charge, on the amount to be refunded, to the complainants, by the Opposite Parties, to the extent, the amount is due to it, against the complainants as it (HDFC) advanced loan in their (complainants) favour for part payment of the price of plot, in question.

(iv)  To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants within a period of 45 days from the date of receipt of a certified copy of the order.

(v)   In case, the payment of amounts, mentioned in Clause (i), is not made, within the stipulated period, then Opposite Parties No.1 & 2, shall be liable to pay the amount mentioned in Clause (i) above, with interest @15% per annum, from the respective dates of deposits, till realization and amount mentioned in Clause (ii) and (iv) above, with interest @12% per annum from the date of filing the complaint till realization.

33.         However, the complaint is dismissed against Opposite Party No.3, with no order as to costs.

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

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

Pronounced

April 22, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER