Chandigarh

StateCommission

CC/246/2015

Vinod Kumar & anr. - Complainant(s)

Versus

M/s PUMA Realtors Pvt. Ltd, & anr. - Opp.Party(s)

Vipul Aggarwal & Gagandeep Singh

12 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Consumer Complaint	:	246 of 2015
Date of Institution	:	16.10.2015
Date of Decision	:	12.04.2016

 

1. Vinod Kumar s/o Sh. Vijay Singh r/o H.No.1316, Sector 35/B, Chandigarh.
2. Deepti Sharma w/o Sh. Vinod Kumar r/o H.No.1316, Sector 35/B, Chandigarh.

……Complainants.

Versus

1. M/s Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Registered Office at No.5, Dhanraj Chambers, 1st Floor, Satbari, New Delhi-110074, through its Managing Director/Director/ Authorized Signatory/Representative.
2. M/s Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Corporate Office at SCO No.6 - 8, First & Second Floors, Sector 9-D, Madhya Marg, Chandigarh 160009, through its Managing Director/Director/Authorized Signatory/Representative.

….Opposite Parties.

Argued by:

 

 

Sh.  Vipul Aggarwal,  Advocate  for  the complainants.

Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

 

Consumer Complaint	:	247 of 2015
Date of Institution	:	19.10.2015
Date of Decision	:	12.04.2016

 

Smt. Amarjit Sandhu w/o Sh. G. S. Sandhu, R/o House No.213-L, Sector 4, M.D.C., Panchkula.

……Complainant.

Versus

1. M/s Puma Realtors Pvt. Ltd., Office at S.C.O No.6-8, Sector 9, Madhya Marg, Chandigarh through its Director.

….Opposite Party.

2. Mr. Raj Kumar Verma S/o Sh. Pyare Lal Verma, R/o House No.325, Ward No.17, Tohana, District Fatehbad, Haryana.

….Performa Opposite Party.

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

 

 

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

                 SH. DEV RAJ, MEMBER.

                 MRS. PADMA PANDEY, MEMBER.

               

Argued by:

 

Sh.  Parvinder Singh Bedi,  Advocate  for  the complainant.

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

Service of Opposite Party No.2 dispensed with vide order dated 17.11.2015.

 

PER DEV RAJ, MEMBER

              Vide this common order, we propose to dispose of two complaints bearing No.246/2015 and 247/2015, referred to above. Since the facts involved in the two complaints are almost identical, the facts are being culled from complaint case No.246 of 2015 titled as ‘Sh. Vinod Kumar & Anr. Vs. M/s PUMA Realtors Private Limited & Another’.

2.           The facts, in brief, are that in the year 2011, the Opposite Parties launched a project under the name and style of IREO HAMLET in Sector 98, SAS Nagar, Mohali. The complainants, as alleged, fell in their trap and were allotted a preferentially located residential plot measuring 250.59 Sq. Yards approx. at the basic sale price of Rs.23,000/- per sq. yard, totaling Rs.57,63,570/-. The Opposite Parties further charged Rs.1,275.10 per sq. yard towards External Development Charges and Rs.500/- per sq. yard towards Preferential Location Charges and Rs.350/- per sq. yard towards IFMS. The total sale consideration of the plot, in question, was Rs.62,96,098.81. The complainants paid Rs.6,50,000/- while giving the application for allotment. The Opposite Parties allotted plot No.303 vide provisional allotment letter dated 29.04.2011 and the complainants opted for time linked payment plan, as per which, 95% of the total sale consideration was required to be paid within 18 months from the date of booking and remaining 5% was to be paid on delivery of possession. Thereafter, the complainants paid Rs.2,14,536/- and Rs.9,75,740.58 vide receipts dated 27.5.2011 and 26.7.2011 respectively. A Plot Buyer’s Agreement dated 21.07.2011 (Annexure C-10) was entered into between the parties. As per Clause 11.1 of General Clauses of the Agreement, possession of the plot, in question, was to be handed over  within 24 months from the date of execution of the said Agreement with further grace period of 6 months but not later than 30 months i.e. latest by 21.01.2014. As per Clause 11.2 of the Agreement, in case, possession was not offered within the stipulated period, then the Opposite Parties were liable to pay compensation calculated @Rs.50/- per sq. yard of the area every month until possession is actually handed over. The complainants initially opted for “Time Linked Payment Plan” but the Opposite Parties offered to change the plan to “Development Linked payment Plan” alongwith the schedule of payment. The Opposite Parties raised demand of 3^rd installment of Rs.9,79,612.70 under the head ‘on start of development’. The complainants also raised loan of Rs.30 Lacs from HDFC Bank for payment of further installments. The complainants paid the 3^rd installment of Rs.9,79,612.70Ps vide receipts dated 27.5.2013 & 28.5.2013, by withdrawing Rs.3,40,000/- from the sanctioned loan amount from HDFC Bank. As is evident from letter dated 16.5.2015 of HDFC Bank (Annexure C-18), the complainants cleared the loan, which they had taken from HDFC Bank and HDFC Bank had no claim, right, title or interest in respect of the property i.e. Plot No.303, IREO Hamlet, Sector 98, Mohali. The complainants as on 27.05.2013 paid 45% i.e. Rs.28,19,889.28Ps of the total sale consideration.

3.           It was further stated that as per master plan, a 25 meter wide road was to pass through the project site but the Opposite Parties deliberately concealed this material fact. The Opposite Parties, without giving any prior intimation to the complainants about the change of the location of the plot, in question and without allotting a new plot in the same preferential location, unilaterally and deliberately changed it to a non-preferential location, thereby causing an immense loss to the complainants. The Opposite Parties had charged the 4^th installment but at the location of the plot, no development work had ever started. The Opposite Parties assured that very soon they would allot a new plot in a preferential location. The complainants also sent email dated 27.05.2013. It was further stated that stipulated period of two years and six months grace period passed on 21.01.2014 but Opposite Parties did not allot a new plot, what to talk of handing over of possession of the plot. As per the complainants, till date, the Opposite Parties had not even obtained completion certificate and even stopped giving satisfactory reply to them (complainants). When nothing was heard from the Opposite Parties, the complainants                  sought refund of the deposited amount vide email                      dated 06.05.2015 (Annexure C-17). The complainants wrote another email dated 14.07.2015 (Annexure C-19) but to no avail.

4.           Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) claiming refund of Rs.28,19,889.28 alongwith interest @18% per annum from the respective dates of deposits, Rs.2,00,000/- as compensation on account of mental agony, physical harassment & deficiency in service and Rs.30,000/- as cost of litigation.

5.           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 21.07.2011; 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 the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainants did not book the plot for their personal use but for investment/commercial 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 vide their application dated 23.02.2011 by paying a sum of Rs.6,50,000/- towards booking amount. It was denied that amount of Rs.62,96,098.91 was agreed as the total sale consideration. It was further stated that bare perusal of the application for booking and 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 complainants vide recital No. ‘K’ of the said Agreement themselves represented that they were not influenced by any kind of sales brochures, advertisements, representations, warranties etc. and they had relied upon their own independent investigations while deciding to purchase the plot, in question. It was denied that the complainants were assured that possession would be handed over within a period of 24 months from the date of execution of the Agreement. It was further stated that the period of handing over of the plot was subject to the complainants complying with all their obligations under the terms and conditions of the Agreement. It was further stated that as per Clause 11 of the Agreement, the period for offering possession travels beyond the alleged period of 30 months since the complainants duly agreed to receive delayed compensation @Rs.50/- per sq. yard of area of the plot every month until actual date fixed by the Opposite Parties for handing over of possession.

7.           It was further stated that the Opposite Parties offered change of payment plan to the complainants from ‘Time Linked Payment Plan’ to ‘Development Linked Payment Plan’ vide its letter dated 26.9.2011, which the complainants duly accepted. It was further stated that after acceptance of the above said offer, the complainants neither made any payment till lapse of the alleged period of 18 months nor the Opposite Parties demanded the same. It was further stated that development work at the site started on 1.5.2013 and according to the agreed payment plan, the Opposite Parties raised demand of installment, which became due on start of the site development. It was denied that the Oposite Parties illegally charged PLC on the plot allotted to the complainants. It was stated that the Opposite Parties never assured to allot a new plot in the same preferential location. It was further stated that as per Clause 10 of the Agreement, the Oppostie Parties relocated a new fully developed plot bearing No.221 and offered possession of the same vide letter dated 18.12.2015 and as a special case and gesture of good will, also gave concession benefits of Rs.14,00,000/- approx. It was further stated that the complainants never opted for termination of the Agreement and sought refund in terms of Clause 11.3 of the Agreement.  It was further stated that the project is approved under the provisions of Punjab State Industrial Policy 2003 and Government of Punjab in furtherance of the Letter of Intent dated 30.09.2005 vide its Notification dated 14.08.2008 had exempted the Opposite Parties from the provisions of Punjab Apartment and Property Regulation Act, 1995 (in short ‘PAPRA 1995) except Section 32 thereof. It was further stated that the Opposite Parties have duly complied with the terms and conditions of the same and as such, they were/are under no obligation to obtain any completion/partial completion from the Authority under Section 14 of PAPRA 1995.

8.           It was further stated that the report of Local Commissioner dated 24.10.2015 brought, on record, of Consumer Complaint No.170 of 2015 titled “Abha Arora Vs. Puma Realtors Pvt. Ltd.’, which also involved the question of development and existence of basic amenities in the IREO Hamlet Project, unequivocally spells about the development as well as the existence of the basic amenities at the site and, thus, clearly unveils the false allegations made by the complainants in the present complaint. It was further stated that as per agreed terms and conditions of the said Agreement, possession of the fully developed plot has already been offered with concessions and monetary benefits to the complainants and, thus, nothing remained to be adjudicated by this Commission.  It was further stated that in view of Notification dated 28.07.2011, building plans have been sanctioned by the duly empanelled Architect of GMADA and submitted with GMADA, which itself proved that there existed fully developed site fit for construction and habitation. It was further stated that as regards sector roads, the same are to be constructed by GMADA as external development, for which the process of acquisition of land has already been completed. It was denied that the Opposite Parties ever promised to refund the amount and that too alongwith interest within a period of 3 months or up to 05/08/2015. 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.

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

10.         The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.

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

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 the complainants vide letter dated 29.4.2011 (Annexure C-4) were allotted plot No.303 in the residential project “IREO Hamlet” admeasuring 250.59 sq. yard, Sector 98, SAS Nagar, Mohali, the basic sale price whereof was Rs.23,000/- per sq. yard besides External Development Charges (EDC) @Rs.1,275.10 per sq. yard, Preferential Location Charges (PLC) @Rs.500/- per sq. yard and IFMS charges @Rs.350/- per sq. yard. Admittedly, Plot Buyer’s Agreement was executed between the complainants and the Opposite Parties on 21.07.2011 (Annexure OP-2). The payment against the aforesaid plot was to be regulated as per payment plan (Annexure A, at Page 44 of the file). Against the total price of Rs.62,96,098.81/-, the complainants made payment in the sum of Rs.28,19,889.28, up-to 27.05.2013. It is also evident that the Opposite Parties 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 the Opposite Parties, the development work started at the site only on 01.05.2013. Thus, the development started, almost two years after the execution of Plot Buyer’s Agreement dated 21.07.2011. It is also evident that emails dated 6.5.2015 and 14.7.2015  (Annexures C-17 and C-19) written by the complainants to the Opposite Parties seeking refund, did not invoke any response. The instant complaint was filed on 16.10.2015 and possession was offered on 18.12.2015 i.e. after filing of the complaint.

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 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, brushed aside argument, raised by Senior Counsel for the builder, that dispute is required to be settled through arbitration while holding as under:-

“15.        Before dealing with the arguments raised by Counsel for the respective parties, it is necessary to notice the background, in which the Consumer Protection Act (in short 1986 Act) was enacted. Its’ salient features also needs to be mentioned.

              The United Nations, in its General Assembly, with a view to protect interest of the consumers, particularly those in the developing countries, adopted the draft guidelines submitted by the Secretary General to the Economic and Social Council (UNESCO) in 1983, by passing Resolution No.39/248. Our Country is signatory to the said Resolution. The objectives of these guidelines are:

(a) To assist countries in achieving or maintaining adequate protection for their population as consumers.

(b) To facilitate production and distribution patterns responsive to the needs and desires of consumers.

(c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers.

(d) To assist countries in curbing abusive business practices by all enterprises at thenational and international levels which adversely affect consumers.

(e) To facilitate the development of independent consumer groups.

(f) To further international cooperation in the field of consumer protection.

(g) To encourage the development of market conditions which provide consumers with greater choice at lower prices.

16.         With a view to fulfill the objectives, as mentioned to above and taking note of vast expansion in trade and commerce, providing variety of consumer goods in the market, the Consumer Protection Bill was introduced to provide better protection of interest of the consumers. It talks of promoting the rights of consumers, such as:-

(a) the right to be protected against marketing of goods which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible, access to an authority of goods at competitive prices.

(d) the right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums;

(e) the right to seek Redressal against unfair trade practices or unscrupulous exploitation of consumers, and

(f) right to consumer education.

17.         Thereafter, 1986 Act was enacted on 24.12.1986, and all provisions of the said Act, came into force, with a view to achieve the above said objectives.

              Noting objectives of this enactment, the Hon’ble Supreme Court of India, in Fair Air Engineers (P) Ltd. v. N.K. Modi (1996) 6 SCC385,observed as under:-

“The preamble of the Act declares that it is an Act to provide for better protection of the interest of consumers and for that purpose to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and matters connected therewith. In Section 3 of  the Act in clear and unambiguous terms it is stated that the provisions of the 1986 Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi- judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi-judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders."

18.         Qua the consumers, 1986 Act is a special legislation. The poor consumers cannot fight the might of multinational companies/traders. The said companies/ traders have lot of resources at their command. As in the present cases, the consumers/complainants have spent their entire life earnings to purchase plot(s)/residential units, in a complex of the opposite parties, which is a part of ‘Mega Housing Project”. To force the complainants’ further, to incur huge expenses to get her rights, settled through regular litigation/arbitration is not desirable at all. The Hon’ble Supreme Court of India in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 has specifically observed as under:-

“The trend of the decisions of this Court is that the jurisdiction of the Consumer Forum should not and would not be curtailed unless there is an express provision prohibiting the Consumer Forum to take up the matter which falls within the jurisdiction of civil court or any other forum as established under some enactment. The Court had gone to the extent of saying that if two different fora have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the  power of the Consumer Forum to adjudicate upon the dispute could not be negated.”

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).

              We have to give response to the arguments raised by the parties, in the light of spirit of law, laid down by the Hon’ble Supreme Court of India, as referred to above.

20 to 23 xxxx

24. Before dealing with the legal issues, it is necessary to note down amended and unamended provisions of Section 8 of 1996 Act and other provisions, which were added in the 1996 Act (principal Act), by the Arbitration and Conciliation Amendment Act, 2015, which was signed by the Hon’ble President of India on 31.12.2015.

              Unamended provisions of Section 8 of 1996 Act, reads thus:-

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

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

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

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

25.         After amendment, Section 8 of 1996 Act, reads as under:-

 

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

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

26. The provisions which needs interpretation/ explanation, as added in the principal Act, have been underlined, in the above extracted paragraph. Vide the 2015 Act, in principal Act, Fourth Schedule was added with it, scale of fee, to be charged by an Arbitrator has been prescribed. Besides as above, by making amendment in Section 11 of 1996 Act, it is provided that any application of the contesting parties to appoint an Arbitrator is to be decided by the High Court/its nominee expeditiously as possible and an effort be made to dispose of the same, within 60 days, from the date of service of notice upon the opposite party. Further, by making an amendment in the principal Act, Section 29 A has been added providing that an Arbitrator is supposed to make an award within 6 months from the date the Arbitral Tribunal enters upon the reference. There is a provision for extending the time period for 6 months more, with consent of the parties. Thereafter, the Court has been given power to extend it, in case of need. As per Section 34 of 1996 Act, the award so passed, can be challenged before the Court. As per amended provisions added in the principal Act, the Court is supposed to dispose of the said dispute within a period of one year, from the date, on which the notice is served upon the opposite party. As per law, the matter can further be challenged in the High Court and may be, thereafter, it will go to the Hon’ble Supreme Court of India.

 

27.  Now, we would like to deal with applicability of Section 8 (amended) of the principal Act, to the proceedings before this Commission. It is to be decided, as to whether, in the face of existence of an arbitration clause in the Agreement, it is open to this Commission, to entertain a consumer complaint, in terms of provisions of Section 3 of 1986 Act or not.

 

              Here, it is necessary to reproduce the provisions of Section 3 of 1986 Act, for consideration:-

 

“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.”

28.   Such issue was also raised, when unamended provisions of Section 8 of 1996 Act, was in existence. Similar argument was raised that when settlement of disputes is provided through arbitration in the Agreement, the consumer complaint is not maintainable. In umpteen number of cases, it is held by the Hon’ble Supreme Court of India, National Commission and various State Commissions, that Section 3 of 1986 Act provides additional remedy and existence of arbitration clause, in the Agreement, to settle disputes between the parties, is not a bar to entertain a complaint filed by the consumer, alleging deficiency in providing service etc.

 

              A similar issue came up before this Commission in Sh.Dharam Pal Gupta Vs. M/s Emaar MGF Land Limited and another, Consumer Complaint No.147 of 2015, decided on 13.10.2015. After noting the ratio of judgments of the Hon’ble Supreme Court of India, in various cases, and also of the National Commission, it was observed as under:-

 

It was next vehemently argued by Counsel for Opposite Parties No.1 and 2 that the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer’s Agreement. To say so, reference was made to Clause 42 of the Buyer’s Agreement, which reads thus:-

 

“42. In the event of any dispute arising out of or touching upon or in relation to the terms of this Agreement or its termination, including the interpretation and validity thereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussion, failing which the same shall be settled through arbitration of an Arbitrator to be appointed(by?)the Company. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996, or any statutory amendments, modifications or re-enactment thereof for the time being in force and shall be held at New Delhi. The Courts at Mohali alone shall have the territorial jurisdictions in all matters arising out of/touching and/or concerning this Agreement”

It is stated that in case of dispute, an attempt will be made to settle the same, in an amicable manner, failing which, the same shall be referred to an Arbitrator in terms of Arbitration and Conciliation Act, 1996 (in short the 1996 Act). Heavy reliance has been placed on judgment of Calcutta High Court titled as Sudarshan Vyapar Pvt. Ltd. and another’s case (supra). Further reliance was placed on a judgment rendered by the State Consumer Disputes Redressal Commission, Punjab, at Chandigarh, titled as Raj Kumar Singal Vs. M/s Puma Realtors Private Limited and another, Miscellaneous Application Nos.1226 and 1227 of 2014, in Consumer Complaint No.60 of 2014 and also upon a case titled as M/s S.B.P. and Co. Vs. M/s Patel Engineering Limited and another, AIR 2006 SC 450.

 

On the other hand, it is stated by Counsel for the complainant that in terms of Section 3 of the 1986 Act, above plea supported by the said judgments, needs to be rejected.

 

In the case of M/s S.B.P. and Co.’s case (supra), the Hon’ble Supreme Court dealt with altogether a different issue i.e. what is the nature of function of the Chief Justice or his designate, under Section 11 of the 1996 Act. Whether it is purely an administrative function or the Chief Justice or his designate, has the power to adjudicate upon the issues like existence of Arbitration clause in the Agreement/its validity. None of the provisions of 1986 Act were under consideration. The Hon’ble Supreme Court in M/s S.B.P. and Co.’s case (supra) discussed in detail, the provisions of the 1996 Act, and then gave a finding that powers of the Chief Justice of India or the High Court, under Section 11 (6) is not an administrative power but it is a judicial power. When discussing the question, as to who would fall within the definition of Judicial Authority, in terms of Section (8) of the 1996 Act, by making reference to ratio of judgment in the case Fair Air Engineers Pvt. Ltd.  &  anr. Vs. N.K. Modi, III (1996) CPJ 1 (SC) = (1996 (6) SCC 385, it was only said that judicial authority will include the Courts, and also specific Tribunals like Consumer  Fora. Whether the Consumer Fora is bound to refer the matter to the Arbitrator, was not under consideration, in the above case.

 

The part of ratio of judgment in case Fair Air Engineers Pvt. Ltd.  &  anr.’s case(supra) dealing with above aspect, was not discussed in M/s S.B.P. and Co.s case (supra). In the former judgment besides opining that Consumer  Fora have all the trappings of the judicial authority, further, by making reference to the provisions of Section 34 of the Arbitration Act,1940 viz a viz Section 3 of 1986 Act, in Fair Air Engineers Pvt. Ltd.  &  anr.’s case (supra),it was observed as under:-

 

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

It was specifically opined that the remedy under Section 3 of the 1986 Act, is in addition to and not in derogation to any other remedy available to an individual.

 

The above question was again dealt with, by the Hon’ble Supreme Court of India, in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy  &  anr., I (2012) CPJ 1 (SC).  Taking note of the provisions of 1996 Act and Section 3 of the 1986 Act, it was observed as under:-

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

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

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

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

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

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

Ratio of the judgments have left nothing to chance. It was mandated that even in the case of special legislation, it is permissible for an individual to avail remedy, under the 1986 Act. The National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013 after taking ratio of judgment in the case of M/s S.B.P. and Co.’s case (supra), came to a specific conclusion that remedy provided under Section 3 of the 1986 Act is in addition to and not in derogation of the provisions of any other law, for the time being in force. It was specifically stated that ratio of judgment passed in M/s S.B.P. and Co.’s case (supra), will not debar a Consumer Fora from entertaining the complaint, even in cases where an alternative remedy of Arbitration is provided. Vide that judgment many Revision-Petitions were decided.

Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/Opposite Party challenged above order in the Hon’ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), the  Hon’ble Supreme Court of India, by making reference to the ratio of  judgment in the case M/s S.B.P. and Co.’s case (supra),  observed that the judgment has no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction  can be exercised by the Consumer  Fora or not. In that judgment, the Supreme Court had not interpreted the provisions of 1996 Act in the light of the provisions contained in 1986 Act. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act is mandatory, cannot lead to an inference that the Consumer  Fora is bound to make a reference to the Arbitral Tribunal. As such, the facts of Sudarshan Vyapar Pvt. Ltd. and another’s and Raj Kumar Singal’s cases (supra) relied upon by Counsel for Opposite Parties No.1 and 2, cannot be applied to the facts of the present case.

The position has further been clarified by the National Commission, in the latest Judgment titled as Shri Satish Kumar Pandey and another Vs. M/s Unitech Limited, Consumer Complaint No.427 of 2014 (alongwith other 23 connected cases), decided on 08.06.2015. It was observed as under:-

“It was also contended by the learned counsel for the opposite party that since the agreements between the parties contains arbitration clause, arbitration and not a complaint before this Commission is the appropriate remedy. I, however, find no merit in this contention. As provided in Section 3 of the Consumer Protection Act, the provision of this Act are in addition to the other remedies available to a consumer. Therefore, the availability of arbitration as a remedy does not debar the complainant from approaching a consumer forum in a case of deficiency in the services rendered to him by the service provider or adoption of unfair trade practices by him. This issue came up for consideration of the Hon’ble Supreme Court in National Seeds Corporation Vs. M. Madhusudhan Reddy  &  anr. (2012)2 SCC 506 and after taking into consideration the provisions of the Section 8 of the Arbitration Act of 1996 and the Section 3 of the C.P. Act it was held that the plain language of Section 3 of the C.P. Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.  The Hon’ble Supreme Court has also held that the complaint filed by a consumer before the consumer fora would be maintainable despite their being an arbitration clause in the agreement to refer the dispute to the Arbitrator. In view of the above referred authoritative pronouncement of the Hon’ble Supreme Court which was later followed by a Three Members Bench of this Commission in DLF Ltd. Vs. Mridul Estate Pvt. Ltd., R.P. No.412 of 2011 decided on 13-05-2013, the aforesaid contention advanced by the learned counsel for the opposite party is liable to be rejected.”

Reading of ratio of the judgments referred to above, make it clear that in case of  M/s S.B.P. and Co.’s case (supra), the issue before the Supreme Court of India was altogether different. The provisions of 1986 Act were not under consideration viz. a viz. the provisions of 1996 Act.  As such, the ratio of judgments referred to above, makes it very clear that the judgments in Sudarshan Vyapar Pvt. Ltd. and another’s and Raj Kumar Singal’s cases (supra), were given by wrongly interpreting the ratio of M/s S.B.P. and Co.’s case (supra).   

In view of the above, it is held that the submission of Counsel for Opposite Parties No.1 and 2, that  the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer’s Agreement, being devoid of merit, stands rejected.

29.     Not only this, in the latest judgment titled as Mahindra Holidays & Resorts India Ltd. Vs. Adnan Samoon Rassiawala & 6 Ors., First Appeal No. 127 of 2016, decided on 18.03.2016, the National Commission observed as under:-

“The short question for consideration in this Appeal is as to whether the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (for short “the State Commission”) was justified in dismissing the application filed by the Appellant, the Opposite Party in the Complaint, under Section-8 of the Arbitration and Conciliation Act, 1996, seeking stay of the proceedings in the Complaint and for referring the matter to arbitration, in view of the fact that there was an Arbitration Agreement between the parties.

Though Mr. Pattjoshi, learned Senior Counsel, has made valiant attempt to convince us that in the light of the decision of the Hon’ble Delhi High Court in HDFC Bank Ltd. v. Satpal Singh Bakshi, 2013 (134) DRJ 566 (FB), the parties were bound by the Arbitration Agreement and in view of the clear provision of Section-8 of the said Act, the dispute, subject matter of the Complaint, ought to have been referred to arbitration, yet we are unable to persuade ourselves to agree with the learned Senior Counsel.  The issue sought to be raised is no more res integra as stands concluded by a number of authoritative pronouncements by the Hon’ble Supreme Court (see Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (dead) through LRs & Ors., (2004) 1 SCC 305; Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294; and National Seeds Corporation Ltd. v. Madusudan Reddy, (2012) 2 SCC 506).

In light of the said decisions of the Hon’ble Supreme Court, directly on the point, decision of the High Court cannot be relied upon, particularly when none of the afore-noted decisions have been noticed in the High Court’s decision, on which reliance has been placed by the learned Senior Counsel.

We do not find any illegality in the impugned order, warranting our interference.

Consequently, the Appeal fails and is dismissed in limine”.

30.    Now it is to be seen, whether, after making amendment in Section 8 of the principal Act, any additional rights have accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling disputes through an Arbitrator, this Commission is not empowered to entertain a consumer complaint.

              As has been held by Hon’ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act.

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

32.    We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/ traders. As in the present cases, the consumers/ complainants have spent their entire life savings to get a plot, so that they can construct a house thereon. Their hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  the complaint is supposed to be decided within three months, from the date of service of the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act,  the consumer will be forced to (as in the present case) pay huge expenses. As in the present case, the complainant is claiming refund of Rs.65,56,513/- alongwith interest, compensation and litigation costs, aggregate value whereof, if added may be near about Rs.1 crore. In that event, the complainant will be forced to pay an amount of Rs.1,68,750/-  towards her share of Arbitrator fees. Not only as above, it is admissible to an Arbitrator, to decide the dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon’ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of General Assembly Resolution No.39/248 and the provisions of 1986 Act. In view of above, the ground raised by Counsel for opposite party no.1, stands rejected.”

15.     Similar view has been reiterated by this Commission in Praveen Kumar Arora & Anr. Vs. Emaar MGF Land Limited, Complaint case No.198 of 2015, decided on 04.04.2016 alongwith other connected cases, in which, it was further held as under :-

“20. 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. In the present case, the complainants have spent their entire life earnings to purchase a plot, in a housing project, launched by the opposite party. It was their hope that they will construct a house on the said plot and live therein. However, their hopes were shattered, when despite making payment of entire amount towards price, they failed to get possession of a plot, in a developed project. As per established ratio of the judgment in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and also in the judgment of United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), it was said that the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer 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.

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

16.         In view of the ratio of judgments, referred to above, the plea of the Opposite Parties is not sustainable and is, thus, rejected.

17.         To defeat claim of the complainants, the next objection raised by the Opposite Parties was that 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  consumer, as defined by Section 2 (1) (d) (ii) of the 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 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. 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 the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

18.       Another objection was raised by Counsel for the Opposite Parties 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 the Opposite Parties, 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 the Opposite Parties, 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”

19.         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. 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. Bishambar Dayal Goyal &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. However, in the present case, the Opposite Parties were clearly deficient in rendering service and failed to deliver possession within the stipulated time period, grace period, extended period and even thereafter by the date the complaint was filed. By no stretch of imagination, the allotment in the present case, can be said to be on ‘no profit no loss basis’. In the present case, the complainants did not seek possession but sought refund in terms of the Plot Buyer’s Agreement. As such, Bangalore Development Authority Vs. Syndicate Bank’s case (supra), being distinguishable on facts, is of no help to the Opposite Parties.

20.        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, in this regard, being devoid of merit, must fail, and the same stands rejected.

21.         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 Plot Buyer’s Agreement was entered into between the parties on 21.07.2011 (Annexure C-10). As per Clause 11.1 of General Clauses of the Agreement, possession of the plot, in question, was to be handed over  within 24 months from the date of execution of the said Agreement with further grace period of 6 months but not later than 30 months i.e. latest by 21.01.2014. Further, as per Clause 11.2 of the Agreement, in case, possession was not offered within the stipulated period, then the Opposite Parties were liable to pay compensation calculated @Rs.50/- per sq. yard of the area every month until possession is actually handed over. Clauses 11.1 and 11.2 of the Plot Buyer’s Agreement dated 21.07.2011, being relevant, are extracted hereunder:-

“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”.

22.        Since the Plot Buyer’s Agreement was executed on 21.07.2011, 30 months period including 6 months grace period expired on 21.01.2014. Even 12 months extended period in terms of Clause 11.3 of the Agreement expired on 21.01.2015. The complainants requested for refund of the deposited amount vide emails dated 06.05.2015 and 14.07.2015 (Annexures C-17 and C-19). Admittedly, the possession was not offered till filing of the complaint on 16.10.2015 and the same (possession) was offered much later i.e. on 18.12.2015 vide letter (Annexure OP-3), even beyond the extended period. This meant that even after lapse of 4 years 5 months, the development and amenities were not complete. Whether mere offer of possession and that too after a delay, would disentitle the complainants to claim refund of amount paid or not. In Sh. Dharam Pal Gupta’s case (supra) a similar question fell for determination before this Commission. This Commission in that case, held as under:-

“In a similar case, titled as GuninderJeet Singh SalhVsM/s Emaar MGF Land Limited and another, Consumer Complaint No. 113 of 2015, was decided by this Commission on 23.09.2015, noting ratio of the judgment of the National Commission, in the case of Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), it was said that the consumer can claim refund.

The National Commission was dealing with a similar situation, in the above case. In that case also, possession was not offered within the stipulated date. The consumer complaint was filed by the complainant, before this Commission, claiming refund of the amount paid by him. This Commission took it as a case of rescinding of contract and allowed the Opposite Parties to forfeit 10% of the deposited amount. The above named builder went in appeal, which was dismissed, by the National Commission, holding as under:-

“It is apparent from the above clause, that possession of the apartment was to be handed over within a period of 36 months from the date of allotment,  with  grace period of 3 months. Admittedly, no possession was offered to the original allottee or to the respondent, till 26.11.2011 when she stepped into the shoes of original allottee. Thus, on the date of accepting the present respondent as allottee on 26.11.2011, the apartment in question was not complete.

23.    As appellants did not offer possession within the period prescribed under Clause 21 of the ‘Apartment Buyer Agreement’, the deficiency on the part of appellants,  started right from that very moment. It is an admitted fact, that while offering the possession even in the year 2013, appellants sent letter dated 13.5.2013 and  respondent was asked to deposit sum of Rs.3,05,969.70, within 30 days. When payment of the instalments is construction linked,  then we fail to understand as to how  before completing the construction appellants demanded the aforesaid amount.  This act of appellants goes on to show, that even on 13.5.2013 construction of apartment was not complete. It was only vide letter dated 16.8.2013, appellants offered possession of the apartment,  subject to certain payments.

24.    Thus, appellants themselves have violated the material conditions with regard to handing over of the possession, now it does not lie in their mouth to demand further payment from  the respondent. Even assuming for arguments sake, that payment as demanded vide letter dated 16.8.2013 was due, but the respondent was fully justified in not making the payment, when appellants failed to complete the construction and handover the possession, within the agreed period.  Appellants could not force the respondent, after having accepting money from the original allottee in the year 2006 and  part payment from present respondent in the year 2011, to accept possession of the apartment in the year 2013,  which was against the terms of the Agreement.  The above facts clearly goes on to show, that appellants have been enjoying the substantial amount of money received by them in the year 2006, till 2013.  Therefore, this plea of appellants, that they have done their part of the duty and it is the respondent who is defaulter, does not hold any water.

25.    The deficiency on the part of appellants is writ large in this case. We may note, that under such circumstances there was no occasion for the State Commission to have deducted 10% of the deposited amount as respondent was not at fault at all. On the other hand, appellants were deficient when they themselves have violated the terms and conditions of ‘Apartment Buyer Agreement’, The case law relied by ld. counsel for appellants are not applicable at all to the facts of the present case.”

It was clearly stated by the National Commission, in Emaar MGF Land Limited and another’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 the above case, it was laid down as a matter of fact that non-acceptance of possession after the agreed date, would not amount to rescinding of contract.

In the present case also, Opposite Parties No.1 and 2 committed breach of their obligation, in not offering possession of the plot, in question, within 12 months, whereof 15.01.2012 (Buyer’s Agreement was signed on this date). As a matter of fact, possession of the plot was offered only on 15.10.2014. It is also on record that Buyer’s Agreement was offered for signing, after about one year and two months of allotment of the plot. In the allotment letter, there was no stipulation to impose penal interest on delayed payment towards price of the plot, however, penal interest was imposed without any justification. When the Buyer’s Agreement was signed, the schedule of payment annexed with the allotment letter was virtually over. Above facts clearly goes to show that Opposite Parties No.1 and 2 were deficient, in rendering service, to the complainant”. 

23.         The request of the complainants for refund was clearly in terms of Plot Buyer’s Agreement and when the Opposite Parties failed to deliver possession, they (Opposite Parties) were duty bound to refund the amount alongwith interest. By not doing so, the Opposite Parties were clearly deficient in rendering service and also indulged into unfair trade practice. What to talk of offering possession within the stipulated time period, complete in all respects, when the Opposite Parties were not even in a position to handover the originally allotted plot and relocated the same to another plot No.221, while offering possession vide letter dated 18.12.2015 (Annexure OP-3), which it (Opposite Party) never communicated to the complainants earlier. Para No.1 of Change in location of Plot-cum-notice of possession letter dated 18.12.2015 (Annexure OP-3), reads thus:-

“Reference your emails dated 27.05.2013, 06.05.2015 and 14.07.2015, we apologize at the very outset for being unable to revert to your good self, due to inadvertent communication gap. As you are aware, on account of certain planning requirements for our IREO Hamlet project, it became imperative to relocate certain plots from their existing location. This has resulted in relocation of Plot No.303 allotted to you vide our Plot Buyer’s Agreement dated 21.-Jul-11. Consequently, your Plot No.303 stands relocated to Plot No.221, which we could not communicate to you earlier.”

24.        As already discussed above, the Opposite Parties committed breach of their obligations by not offering possession of the plot, in question, within the stipulated period. Thus, relocating the originally allotted plot and offering possession thereof, after filing of the complaint, which was filed on 16.10.2015, clearly establishes that the amenities, promised as per Plot Buyer’s Agreement dated 21.07.2011, were never at the site till 18.12.2015. 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 Syed Nisam Ali Vs. Guruprasad, Revision Petition No.463 of 2016 decided by the National Commission on 29.02.2016, alongwith which, six more revision petitions were disposed of, inter-alia, it held as under:-

“The contention of the Counsel for the Revision Petitioner that awarding 15% interest is excessive also cannot be sustained as the District Forum had awarded this interest only by way of damages and did not award any amount towards compensation.  This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot.  At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment…….” 

Thus, relocation of the originally allotted plot is a clear-cut admission on the part of the Opposite Parties, that the site, where the initial plot was allotted to the complainants was not developed and was without basic amenities. Offer sent vide letter dated 18.12.2015 is held to be a mere paper possession. In view of law settled by the National Commission in Emaar MGF Land Limited and another Vs. Dilshad Gill;s case (supra), it is justifiable for the complainants to say no to the same. Therefore, the principle of law laid in the aforesaid case, is fully applicable to the instant case. On account of that, the complainants are entitled to get refund of amount deposited by them. In view of above facts of the case, the Opposite Parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

25.         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.28,19,889.28Ps was paid by the complainants, 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 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.28,19,889.28Ps 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.

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

27.          For the reasons, recorded above, this complaint bearing No.246 of 2015 is partly accepted, with costs. The Opposite Parties are, jointly and severally, held liable and directed in the following manner:-

(i)    To refund the amount of Rs.28,19,889.28Ps, to   the   complainants,   alongwith interest compounded quarterly @12%, 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.2,00,000/-  (Rupees              Two Lac 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)  To pay cost of litigation, to the tune of Rs.30,000/-, to the complainants within a period of 45 days from the date of receipt of a certified copy of the order.

 (iv) In case, the payment of amounts, 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 compounded quarterly @15%, from the respective dates of deposits, till realization and amount mentioned in Clause (ii) and (iii) above, with interest compounded quarterly @12% from the date of filing the complaint till realization.

Complaint Case No.247 of 2015 titled ‘Smt. Amarjit Sandhu Vs. M/s Puma Raltors Pvt. Ltd. & Anr.’

 

              In view of reasons recorded above, the complaint bearing No.247 of 2016 is partly accepted against Opposite Party No.1 only, with costs. However, the same (complaint) is dismissed against Opposite Party No.2, with no order as to costs. Opposite Party No.1 is held liable and directed in the following manner:-

 (i)   To refund the amount of Rs.26,71,485/-, to   the   complainant,   alongwith interest compounded quarterly @12%, 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.1,00,000/-  (Rupees              One Lac only), to the complainant, 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)  To pay cost of litigation, to the tune of Rs.25,000/-, to the complainant within a period of 45 days from the date of receipt of a certified copy of the order.

(iv)  In case, the payment of amounts, 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 compounded quarterly @15%, from the respective dates of deposits, till realization and amount mentioned in Clause (ii) and (iii) above, with interest compounded quarterly @12% from the date of filing the complaint till realization.

28.         Certified copy of this order be placed in Consumer Complaint No.247 of 2015.

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

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

Pronounced

April  12, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER