Chandigarh

StateCommission

CC/194/2017

Rupinder Singh - Complainant(s)

Versus

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

Neeraj Sobti

31 Jul 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

Complaint Case No.	194 of 2017
Date of Institution	03.03.2017
Date of Decision	31.07.2017

 

Rupinder Singh S/o Sadar Sadhu Singh, resident of Ward No.8, Tehsil Budhlada, District Mansa  (Punjab). Presently resident of House No.240, Urban Estate, Phase-1, Patiala (Punjab).

…..Complainant

V e r s u s

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-160009.
2. M/s Puma Realtors Pvt. Ltd., An IREO Group Company, through its Managing Director/Chairman, Registered Office at No.5, Dhanraj Chambers, 1st Floor, Satbari, New Delhi-110074.

 …..Opposite Parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

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

               SH. DEV RAJ, MEMBER.

               SMT. PADMA PANDEY, MEMBER.

 

Argued by:Sh. NeerajSobti, Advocate for the complainant.

                 Sh. Ramnik  Gupta, Advocate  for  the Opposite Parties.

                         

PER DEV RAJ, MEMBER

The facts in brief are thaton assurances of the Opposite Parties through variousnewspapers, marketing emails and telemarketing regarding launching of their integrated residential project under the name and style of ‘IREO HAMLET’, Sector-98, SAS Nagar, Mohali, the complainant met the representative of the Opposite Parties,forthe purchase of a residential plot in the said project, exclusively, for himself and his family members. It was stated that Opposite Parties No.1 & 2assured that development activity had started in full swing and possession of the plot, would be handed over, within a maximum period of six months, from the date of execution of the Plot Buyer’s Agreement. The complainant applied for allotment of a residential plot and paid a sum of Rs.6,50,000/- (Annexure C-1) and he was allotted plot No.111, measuring 250.59 sq. yds.approximatelyin Sector 98, S.A.S.  Nagar Mohali and therefore,the complainant made payment of a sum of Rs.3,13,238/- towards part price of the plot. The provisionalallotment letter was issued on 07.06.2011 (Annexure C-2) and Plot Buyer’s Agreement was executed on 10.08.2011. The Basic Sale Price of the plot was Rs.62,64,750/-, besides External Development Charges@ Rs.1,275.10/- per  sq. yard and  also costs, charges and fees whichin allconstituted the sale consideration. The complainant opted for ‘Time Linked Payment Plan’ Annexure A-1 attached with the Plot Buyer’s Agreement, which was changed to ‘Time linked to Development Linked Payment Plan” vide letter dated 26.09.2011 (Annexure C-5). Thereafter, as  per  demands raised by the Opposite Parties, the complainant made payment of a sum of Rs.9,97,000/- and Rs.10,20,000/-on 01.11.2011 and 19.02.2014(Annexures  C-6 & C-7) respectively, and in this manner upto February 2014, the complainant paid a sum of Rs.29,80,238/-. It was further stated that Opposite Parties were to deliver possession upto 42 months i.e. 09.02.2015 from the date of Buyer’s Agreement i.e. 10.08.2011, however, the complainant stopped making further instalments, as development of the project was slow and even, there was no possibility of completion of the project in near future. The complainant sought refund of the  amount already paid, but the Opposite Parties lingered on the  matter on one pretext or the other and ultimately the Opposite Parties cancelled the plot of the complainant vide their cancellation letter dated 05.01.2015 (Annexure C-9). It was  further stated that  the cancellation was bad in law as the Opposite Parties were deducting a total sum of Rs.13,27,937/-, on account of earnest money and towards  interest  and  brokerage to which, they were not legally entitled to and as per settled law could forfeit 10% of the total sale consideration i.e. Rs.6,26,475/- and not  Rs.13,27,937/-.

2.           It was further stated that the Opposite Parties even failed to refund a sum of Rs.16,52,301/- illegally calculated as per  their own calculation and were using the hard earned money of the  complainant, for their own use/purpose illegally. It was further stated that the aforesaid acts of theOpposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice.

3.           When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to  the Opposite Parties, to refund an amount of Rs.23,53,763/- alongwith interest @18% w.e.f. 05.01.2015, thedate of letter of cancellation till the actual date of realization; to pay compensation to the tune of Rs.2,00,000/- towards  mental torture and harassment; and cost of litigation, to the tune of Rs.1 lac.

4.            The Opposite Parties, 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 10.08.2011; that 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 complainant did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainant did not book the plot for his 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. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits. Apart from above objections, a specific objection with regard to the territorial jurisdiction of the Commission on account of existence of Clause 35 in the Agreement has been raised stating that the Courts at Mohali and the Punjab & Haryana High Court at Chandigarh alone had the jurisdiction.

5.           On merits, it wasclarified that besides basic sale price of Rs.25,000/- per sq. yard,, the complainant also agreed to pay the EDC at the rate of Rs.1275.10 per sq. yard and IFMS at the rate of Rs.350/- per sq. yard apart from the liability to pay stamp duty and registration charges on the conveyance deed as per the agreement.  It was further submitted that change of payment plan was duly accepted by the complainant vide letter dated 26.09.2011. It was further stated that the complainant wilfully and deliberately delayed in making the payment as per the entries made in the statement of account as he failed to pay the due instalment demanded vide demand note dated 05.03.2014. It was further stated that development at the site commenced w.e.f. 01.05.2013 and was carried on at a good pace. It was further stated that instalment demanded vide demand note dated 10.08.2011 was paid after receipt of various reminders and notices only on 31.10.2011, against which receipt dated 01.11.2011 was issued. It was further stated that the next instalment demanded vide demand note dated 30.04.2013 was paid only on 19.02.2014 after various reminders and notices. It was further stated that the next due instalment demanded vide demand note dated 05.03.2014 was never paid by the complainant till date, which led to cancellation of allotment of the plot, in question. It was further stated that as per the agreed terms and conditions of the agreement, the refundable amount was to be paid to the complainant only on resale of the said plot and the said plot could not be sold by the Opposite Parties till date despite their diligent efforts. It was further stated that the complainant cannot be allowed to retrace his steps back and to withdraw his admissions made vide his letter dated 14.09.2015 wherein he requested the Opposite Parties to pay the refundable amount as per termination/cancellation advice dated 05.01.2015. It was further stated that the complainant cannot be allowed to raise any objection against deduction of 15% of the sale consideration, to the extent of Rs.9,87,641/- towards earnest money and Rs.2,09,236/- towards brokerage. It was further stated that the assertion of the complainant that the Opposite Parties could deduct only 10% of the sale consideration price was against the agreed terms and conditions. It was further stated, that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

6.           The parties led evidence, in support of their cases.

7.           In the rejoinder filed, the complainant reiterated all the averments, contained in the complaint and controverted those, contained in written version of the Opposite Parties.

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

9.           It is evident, on record, that vide provisional allotment letter dated 07.06.2011 (Annexure C-2), the complainant was allotted a Plot bearing no.111, in the residential project “IREO Hamlet” admeasuring 250.59 sq. yard, Sector 98, SAS Nagar, Mohali, the basic sale price whereof was Rs.25,000/- per sq. yard besides External Development Charges (EDC) @Rs.1,275.10 per sq. yardand IFMS charges @Rs.350/- per sq. yard. Admittedly, Plot Buyer’s Agreement was executed between the complainant and the Opposite Parties on 10.08.2011 (Annexure C-4) at Chandigarh. The payment against the aforesaid plot was to be regulated as per payment plan, Annexure-I(at Page 43 of the file). Against the total price of the plot including External Development Charges, IFMS Charges, the complainant made payment in the sum of Rs.29,80,238/-. As admitted by the Opposite Parties, the development work started at the site only on 01.05.2013, almost twenty one months after the execution of Plot Buyer’s Agreement dated 10.08.2011. Admittedly, possession of the unit was not offered to the complainant uptil 05.01.2015, on which date, for non-remittance of Rs.10,18,257.48 by the complainant, the allotment was cancelled vide letter dated 05.01.2015 (Annexure C-9) and out of aforesaid amount of Rs.29,80,238/- paid by the complainant, the Opposite Parties forfeited Rs.9,87,641.60, Rs.1,31,059/- & Rs.2,09,236/- on account of earnest money, interest & brokerage respectively and the balance refundable was shown as Rs.16,52,301.40.

10.         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 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, 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 was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act.Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“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.”

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. HiraLal, 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.”

             Same is the ratio of recent judgment passed by Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh Vs. Emaar MGF Land Ltd. &Anr.’, in Consumer Complaint No.701 of 2015, with IA/247/2016, IA/505/2017, IA/7294/2015, IA/9570/2015 & IA/11813/2016.

             In  view of the above, the plea taken by the Opposite Parties, 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.

11.         The next question that falls for consideration, is, as to whether, the plot, in question, was purchased by the complainant, for his personal use, or he was speculator, as alleged by the opposite parties. No doubt, to defeat claim of the complainant, an objection was raised by the opposite parties, to the effect that the complainant, being an investor, had purchased the plot, in question, for earning profits, as and when there was escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainant is a property dealer and is indulged in sale and purchase of property, on regular basis. On the other hand, it has been clearly averred by the complainant, in para no.1 of his complaint that the plot, in question, was purchased by him exclusively for himself and his family members by constructing house thereon. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as  Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Commission 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 complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs. Nirmala Devi Gupta, 2016 (2) CPJ 316. The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in its written reply, therefore, being devoid of merit, is rejected.  

12.         The next question, that falls for consideration, is, as to whether, there is a contract to sell a plot only and no service was to be provided as alleged, by the Opposite Parties, to him (complainant) and, as such, he would not fall within the definition of ‘consumer’. It may be stated here that the stand taken by the Opposite Parties, needs rejection, in view of Haryana State Agricultural Marketing Board vs. BishamberDayalGoyal and Ors., Civil Appeal No.3122 of 2006, decided on 26.03.2014 (AIR 2014 S.C. 1766), wherein the Hon’ble Supreme Court, while placing reliance on Municipal Corporation, Chandigarh &Ors. vs. Shantikunj Investment (P) Ltd. &Ors., (2006) 4 SCC 109, held that though it was not a condition precedent but there is an obligation on the part of the Administration to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by allottees. Thus, since, it was bounden duty of the Opposite Parties to provide basic facilities and infrastructure to make the plot habitable, as such, it cannot be said that only a plot was to be delivered to the complainant, without any amenities/facilities. Under similar circumstance, in Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  the National Commission, held as under:-

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

In view of above facts, the plea taken by the Opposite Parties, in this regard, stands rejected.

13.         Another objection raised by the Opposite Parties was that since the complainant sought enforcement of the Agreement, only a Civil Court has the jurisdiction, and as such, consumer complaint was not maintainable. It may be stated here, that the complainant hired the services of the Opposite Parties, for purchasing the plot, in question, in the manner, referred to above. According to Clauses11.1 and 11.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were to  hand over possession of the plot, in question, 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). Section 2 (1) (o) of 1986 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”

 

               From the afore-extracted Section 2(1)(o) of 1986 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.’s case (supra),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of 1986 Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. BishambarDayalGoyal&Ors.’s case (supra). Counsel for the Opposite Parties, in this regard, referred to Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 711. The Hon’ble Supreme Court in Narne Construction P. Ltd. etc. etc. Vs. Union of India and ors. Etc.’s case (supra) and Haryana Agricultural Marketing Board Vs. BishambarDayalGoyal&Ors.’s case (supra), had clearly held that the nature of transaction is covered by the expression ‘service’. In Bangalore Development Authority Vs. Syndicate Bank’s case (supra), it was the specific case of the Opposite Parties that the scheme was on ‘no profit no loss basis’, there was escalation in the price of houses by ten times and the delay had occurred on account of contractor’s fault. By no stretch of imagination, the allotment in the present case, can be said to be on ‘no profit no loss basis’. As such, Bangalore Development Authority Vs. Syndicate Bank’s case (supra), being distinguishable on facts, is of no help to the Opposite Parties. Not only this, as stated above, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainant has remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of 1986 Act, can be availed of by him, as he falls within the definition of a consumer, as stated above. In this view of the matter, the objection of the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

14.         The next objection raised by the Opposite Parties is that existence of Clause 35 in the Buyers Agreement, bars the territorial jurisdiction of this Commission, to entertain and try the complaint. It may be stated here that according to Section 17 of the Act, a consumer complaint could be filed by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case,  it is evident, that receipt dated 07.06.2011 (Annexure C-1), provisional allotment letter dated 07.06.2011 (Annexure C-2), Annexure – A, details of plot & payment plan (at Page 11 of the complaint)and receipt dated 06.07.2011 (Annexure C-3) were issued from the Chandigarh address of the Opposite Parties i.e.. SCO Nos.6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh. Thus, since a part of cause of action, arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. A similar question arose, before the National Commission, in Smt. Shanti Vs. M/s. Ansal Housing & Construction Ltd., First Appeal No.142 of 2001 decided by the National Commission on 11.04.2002, wherein the National Commission held as under:-

   “This appeal is directed  against  the  order dated  9.4.2001  of the Delhi Consumer Disputes Redressal Commission  non suiting the appellant on a preliminary issue holding that  Delhi State Consumer Dispute  Redressal Commission will have no jurisdiction  to entertain the complaint.

    What led the State Commission to pass this order was clause 24 of the agreement for allotment of residential flat to the appellant.   It is stated that ‘any dispute arising out of this agreement shall be subject to jurisdiction of Lucknow Courts only”.  State Commission   also   relied   on   the   decision of   the Supreme Court in the case of  A.B.C. Laminart Pvt. Ltd. &Anr. Vs. A.P. Agencies, Salem - AIR 1989 SC 1239 to hold that only the courts in Lucknow  would have jurisdiction.

        We do not think State Commission examined the whole issue in a pragmatic manner.  Complainant is a consumer and raised a consumer dispute under the Consumer protection Act, 1986. To help  and assist a consumer   and to achieve the objects of the Act, Section 11 of the Act was amended.   This  Section relates to  the jurisdiction of the District Forum.  Now  acomplaint could be filed against the opposite party  not only at the place where  he actually or voluntarily reside or personally works for  gain  but also where he carries on business or has branch office.  The words “carries  on business or has a branch office” were added by the amending Act of 1993.   Jurisdiction of a District Forum is exclusively covered  by Section 11 of the Act.  For this we do not have to refer any provisions of the Code of Civil Procedure. Any provision  of the agreement which oust the jurisdiction of a District Forum   even from a place where the opposite  party has a branch office  cannot  be held to be  valid or binding.  Moreover, the clause  on which the complainant was non-suited   refers to the jurisdiction  of Lucknow Courts.  District Forum is  not a court as understood in the Code of Civil Procedure.   That clause in the agreement  will have no  meaning as far as jurisdiction of the District Forum where the opposite party has even branch office is concerned. 

        National Commission has already taken a view on this aspect of the matter.  Accordingly the impugned order of the State Commission is set aside and the matter is remanded to the State Commission to decide the complaint in accordance with law. Party shall appear before the State Commission on 8.7.2002 for further directions.  This appeal is disposed of as above.”

It may be stated here that, for determining the territorial jurisdiction, to entertain and decide the complaint, the Consumer Foras are bound by the provisions of Section 11 of the Act.  In Associated Road Carriers Ltd., Vs. KamlenderKashyap&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, as the Foras are not the Courts.  It was further held, in the said case, that there is a difference between Section 11 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. Further, in Ethiopian Airlines Vs Ganesh NarainSaboo, IV (2011) CPJ 43 (SC)=VII (2011) SLT 371,  the principle  of law, laid down was   that the restriction of jurisdiction to a particular Court, need not be given any importance in the   circumstances of the case.  In Cosmos Infra Engineering  India  Ltd. Vs Sameer Saksena& another I (2013) CPJ31 (NC) and  Radiant InfosystemPvt. 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 of 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 of 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 Section 11 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to the instant case.  At the same time, it is also held in the face of case Ethiopian Airlines Vs Ganesh NarainSaboo’s (supra),decided by the Supreme Court of India, the judgment titled as M/s Taneja Developers and Infrastructure Limited Vs. Gurpreet Singh and another, First Appeal No.33 of 2014, decided on 25.02.2016, by the National Commission, reliance whereupon has been placed by Counsel for the opposite parties, to support his contention, that this Commission has no territorial jurisdiction, shall not hold the field.In these circumstances, such a Clause contained in the Agreement, therefore, could not   exclude the jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to the complainant, to file the complaint. The objection taken by the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

15.         The next question, which falls for consideration, is, as to whether the Opposite Parties were justified in cancelling the allotment of the plot, in question, or not and whether the Opposite Parties were deficient in rendering service by not refunding the amount after cancellation. The Plot Buyer’s Agreement was executed on 10.08.2011, 30 months period including 6 months grace period expired on 09.02.2014. Even 12 months extended period, in terms of Clause 11.3 of the Agreement expired on 09.02.2015.When the complainant did not remit the installments due, his allotment was cancelled vide letter dated 05.01.2015 (Annexure C-9/OP-3). It is evident from the cancellation letter dated 05.01.2015 that the complainant was in default in remitting  installment(s) in the sum of Rs.10,18,257.48, demand for which was raised vide demand note dated 01.04.2014. Besides the amount of installment(s) due, delayed interest thereon was also due. As is apparent from contents of Annexure C-9/OP-3, demand for payment of the installment was sent by the Opposite Parties on 01.04.2014 and subsequently, reminders dated 05.04.2014 & 26.04.2014, final notice dated 17.05.2014 and last & final opportunity letter dated 13.06.2014 were also sent to the complainant for making payment. There was thus, breach of the terms and conditions of the Agreement, on the part of the complainant. When the complainant failed to make payment in accordance with the demand notices, despite adequate opportunity afforded to him, his allotment was cancelled vide letter dated 05.01.2015. While cancelling the allotment, out of Rs.29,80,238/- paid by the complainant, the Opposite Parties offered refund of Rs.16,52,301.40 only, after forfeiting Rs.9,87,641.60, Rs.1,31,059/- & Rs.2,09,236/- on account of earnest money, interest & brokerage paid respectively. In view of default in making payments and cancellation of the allotment by the Opposite Parties way back in January 2015, the plea of the complainant that there was no development is not relevant.

16.         After cancellation of the plot, in question, the complainant vide his letter dated 14.09.2015 (Annexure OP-6), placed on record by the Opposite Parties, sought refund of the amount, in terms of cancellation letter plus interest at the market rate. The said letter dated 14.09.2015 reads thus:-

“As per your letter no.CRM/IREO/Hamlet-III/Cancellation/dated- 5.1.15, I had approached at your office last month for the refund of amount. You had promised for this upto 31.08.2015. But upto now eight &half months have been passed & I did not get the cheque.

So, it is requested to give me cheque for the amount (refundable as per the cancellation letter), plus interest at the market rate.”

17.         The Opposite Parties, while acknowledging the aforesaid letter dated 14.09.2015 of the complainant, vide their letter dated 30.09.2015 (Annexure OP-7) wrote to the complainant as under:-

“We refer to your letter dated 14-Sep-2015.

We are in receipt of your letter dated regarding cancellation of your allotment of plot No.111, Ireo Hamlet, Mohali, Punjab.

Please note that in accordance with the terms and conditions of the Plot Buyer’s Agreement dated 10-Aug-2011 more specifically Clause 19.3 thereof, the payment towards the amount refundable shall be after resale of the Plot.

We have already initiated the process for resale of the said Plot and the refundable amount of Rs.16,52,301.40 shall be paid you accordingly.”

18.          The Counsel for the Opposite Parties argued that the complainant had himself requested for refund of amount, which was due after cancellation of allotment vide his letter dated 14.09.2015 (Annexure OP-6), extracted above and now he can not claim refund after deduction/forfeiture of 10% of sale consideration. On the other hand, Counsel for the complainant argued that deducting 15% earnest money by the Opposite Parties from the deposited amount is arbitrary and against the settled law. He further states that the Opposite Parties, at the maximum, could deduct/forfeit 10%. Had the Opposite Parties acted on the request of the complainant and refunded the amount within a reasonable period of a month or so, after receipt of request of the complainant in September 2015, the position would have been different. When the Opposite Parties have been clearly deficient in not refunding the amount for almost two years, the request of the complainant for refund has to be dealt with and decided in accordance with the prayer made by the complainant and settled law by the Hon’ble National Commission/Hon’ble Apex Court. Undoubtedly, the complainant has suffered immensely by not getting refund. It may be stated here that cause of action to the complainant arose on 30.09.2015 when the Opposite Parties sent letter dated 30.09.2015 (Annexure OP-7) to the complainant that refund shall be after sale of plot. The amount has not been refunded so far. The plea of the Opposite Parties that the complainant was barred by limitation is not sustainable and the same stands rejected.

19.         No doubt, as per Clause 6, earnest money was 15% and as per Clause 19.3 of Agreement, the opposite parties have made themselves, entitled to forfeit earnest money to the extent of 15% of the sale consideration, out of the deposited amount, in case of cancellation of the unit, in question, yet,in our considered opinion, an amount exceeding 10% of the total price of the unit/property, cannot be forfeited by the opposite parties; it being unreasonable, unless they show that they had suffered loss to that extent of the amount to be forfeited by them. In DLF Ltd. Vs. BhagwantiNarula, Revision Petition No.3860 of 2014 decided by Hon’ble National Commission on 06.01.2015, it was held that in the absence of evidence of actual loss, forfeiture of any amount exceeding 10% of the sale price cannot be said to be a reasonable amount. The aforesaid observation of Hon’ble National Commission was recorded taking note of decision of Hon’ble Supreme Court of India inMaulaBux Vs. Union of India, 1969 (2) SCC 544andShree Hanuman Cotton Mills &Ors. Vs. Tata Air Craft Ltd., 1969 (3) SCC 522and SatishBatraVs. SudhirRawal, (2013) 1 SCC 345.

20.         InDLF Universal Limited Vs. Nirmala Devi Gupta, Revision Petition No.3861 of 2014 decided on 26.08.2015, the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in Paras 10 and 11 of its order, held that the Revision Petitioner was not entitled to charge interest as non-refundable amount on the subsequent installments in the wake of cancellation of plot. Paras 10 and 11 of the order read as under:-

“10.  We have now to consider whether the forfeiture amount mentioned in the letter of cancellation under the head “earnest money” and “non-refundable advance” was justified or not.  It has been stated in the said letter that a sum of Rs.15,57,781.25ps. was being forfeited as earnest money.  In the plot-buyers’ agreement, however, this amount has been shown as Rs.14,85,747/-.  It is to be seen, however, whether the OP DLF was within its rights to treat 15% of the total price as earnest money of the plot.  In a case recently decided by this Bench in “DLF Limited vs. BhagwantiNarula,” RP No. 3860 of 2014, decided on 06.01.2015, we have taken the view that an amount exceeding 10% of the total price of the property cannot be forfeited by the seller as earnest money being unreasonable, unless the OP can show that it had suffered loss to the extent the amount was forfeited by it.  Applying the same principle in the present case as well, it is held that the OP DLF was competent to forfeit only 10% of the total amount of the plot in question asearnest money.  Since thetotal value of

the plot including Preferential Location Charges (PLC), is Rs.99,04,986.10ps. as already indicated, 10% of the earnest money comes out to be Rs.9,90,500/-

11.   In so far as interest on delayed payments, stated to be non-refundable amount in the agreement is concerned, the OP deducted a sum of Rs.3,65,479.25ps in the cancellation letter. It is observed in this regard that the complainant made payments of a sum of Rs.12 lakh at the time of initial booking and then made two further payments in the last week of June 2011. Since no further payments were made, as per the terms and conditions of the allotment as contained in Para 65 of the plot-buyers’ agreement, the OP was well within its rights to initiate the process of cancellation of the plot after the first default in making payment of an instalment. In its own wisdom, if it decided not to do so immediately, it is not entitled to charge interest as non-refundable amount on the subsequent instalments in the wake of cancellation of plot. The letter of cancellation dated 23.05.2012 makes it clear that the plot-buyers’ agreement if executed, stood cancelled and the allottee shall not have any lien or right on the said property. It is held, therefore, that the OP cannot deduct a sum of Rs.3,65,479.25ps as non-refundable amount from the money deposited by the complainant.”

Further, recently the 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.”

             The aforesaid judgments clearly lay down that not more than 10% of the earnest money can be forfeited.The Opposite Parties have not adduced any evidence that they suffered loss beyond 10% of the sale consideration. It is, therefore, held that the opposite parties could forfeit an amount to the extent of 10% (i.e. Rs.6,58,428.00) of the total sale consideration of Rs.65,84,277.00, out of the deposited amount of Rs.29,80,238.00. Thus, in our considered opinion, forfeiture of a sum of Rs.6,58,428/- is adequate enough to compensate the opposite parties, on account of loss, if any, including brokerage charges.

21.         In view of above, out of the total deposited amount of Rs.29,80,238/-, after forfeiting a sum of Rs.6,58,428/-, the balance amount was refundable to the complainant. As such, the complainant was entitled to the refund of an amount of Rs.23,21,810/- i.e. [Rs.29,80,238.00 minus (-) Rs.6,58,428.00]. The opposite parties, after forfeiting 10% of sale consideration, ought to have refunded balance amount to him (complainant), but they failed to do so and on the other hand, have been utilizing the same, for the last about more than2½ years, for their own benefit, allotment having been cancelled on 05.01.2015 (Annexure C-9/OP-3). By not refunding the refundable amount to the complainant, the Opposite Parties were deficient in rendering service and indulged into unfair trade practices.

22.         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).By not refunding the aforesaid amount of Rs.23,21,810/-, the opposite parties indulged into unfair trade practice and the same also certainly amounted to deficiency, in rendering service, on their part. The complainant is, thus, entitled to refund of an amount of Rs.23,21,810/-alongwith interest @12% per annum from the date of cancellation of allotment viz. 05.01.2015.

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

24.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under:-

(i)    To refund the amount of Rs.23,21,810/-, to   the   complainant, alongwith interest @12% p.a.simple w.e.f. 05.01.2015, within a period of 45 days, from the date of receipt of a certified copy of this order.

(ii)   To pay cost of litigation, to the tune of Rs.35,000/-, to the complainant within a period of 45 days from the date of receipt of a certified copy of the order.

(iii)  In case, the payment of amount, mentioned in Clause (i), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @15% p.a. simple, from 05.01.2015, till realization and amount mentioned in Clause (ii) above, with interest @12% p.a. (simple) from the date of filing the complaint till realization.

25.         However, it is made clear, that in case, the complainant has availed loan facility from any banking/financial institution(s), it shall have the first charge on the amount payable, to the extent, the same is due to be paid by him(complainant).

26.         Certified copies of this order be sent to the parties, free of charge.

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

Pronounced.

31.07.2017

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

(DEV RAJ)

MEMBER

 

 

 

(PADMA PANDEY)

        MEMBER

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