STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                   UNION TERRITORY, CHANDIGARH.

                                                          Complaint Case No.   58 of 2011      

                                                    Date of institution:         5.08.2011

                                                    Date of decision  :       16.01.2012

Sumit Kumar S/o Sh.Bishamber Das, R/o H.No.286, Anand Vihar, Baltana, Zirakpur.     

                                                                                    …Complainant

                                       Versus

1.              M/s Silver City Housing and Infrastructure Ltd. Regd. Office, # 89, Sector 8-A, Chandigarh through its Managing Marketing.

2.             M/s Silver City Housing and Infrastructure Ltd., NAC, Zirakpur, Chandigarh-Ambala  Highway (N.H.22) District Mohali, Punjab. 

                                                                                     … Opposite Parties. 

                      Complaint U/s 17 of Consumer Protection Act,1986.

Present:      Sh.Arun K. Kaundal, Advocate, for the complainant.

                   Sh.Surinder Gera, Advocate for the opposite parties. 

           CORAM:     Justice Sham Sunder, President

                                 Mrs. Neena Sandhu, Member

                               Sh. Jagroop Singh Mahal, Member

Per Justice Sham Sunder , President

             The facts, in brief, are  that the opposite parties advertised the launch of residential apartments project, in the name of “Silver City Themes” at Village Bhankarpur, M.C.Derra Bassi,  as an exquisitely designed luxurious township endowed with leisure, bliss, amusement and satisfaction, on the outskirts of  Chandigarh, away from the noise of the city, and as a value living for its residents.  The complainant applied for the residential apartment, in the said project of the opposite parties, and submitted an application form for the same on 10.1.06, vide receipt No.06999 after making payment of Rs.1,45,000/- in cash.  The booking of the complainant was confirmed, by the opposite parties, vide letter dated 8.2.2006.  The complainant was allotted flat No.149-A, Ist floor, Block-V, Category B-2, measuring 1145.04 sq. feet of super covered area, with car parking of 112 sq. feet at a total  price of Rs.14.50 lacs, after giving a special discount of Rs.50,000/- in ‘Silver City Themes’. The payment of Rs.1,45,000/- was duly acknowledged, by the opposite parties, in the said confirmation letter dated 8.2.2006 annexure C3.  An agreement dated 8.2.2006,  was entered into between the parties.  The possession was to be delivered, as per the terms and conditions of the agreement dated 8.2.2006, on or before 31.7.2007.  The complainant deposited a total sum of Rs.13,55,000/- i.e. to the extent of 95% of the amount of price, but the opposite parties, did not deliver the possession.  In the letter dated 4.10.2008, the opposite parties assured that possession of the flat shall be handed over, to the complainant on 30.11.2009. Another letter dated 15.5.2009,  was sent by the opposite parties, whereby it was assured that  possession of the flat shall be handed over in 12 to 15 months.  It was stated that the opposite parties, however, did not adhere to the commitment, made by them, as per the terms and conditions of the agreement and the letters, referred to above.  It was further stated that the complainant had to take accommodation, on rent, for which he was paying Rs.8,000/-  per month.  The complainant sent a number of letters, and reminders, to the opposite parties, for  delivery of possession, but to no avail.  It was further stated that non-delivery of possession on 31.07.2007, as per the commitment, made in the agreement dated 08.02.2006, by the opposite parties, amounted to unfair trade practice, as also deficiency, in rendering service.  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),  for  directing the opposite parties to hand over the possession, to the complainant, of the flat; to pay interest @ 12% on the amount of Rs.13,55,000/- ,  till the delivery of possession;, to pay rent @ Rs.8,000/- per month from 31..7.2007, being paid by him (complainant) to his landlord; to pay compensation in the sum of Rs.5 lacs, to pay damages in the sum of Rs.5 lacs; and to pay litigation costs to the tune of Rs.35,000/-.  

2.           In the written reply, filed by the opposite parties, it was pleaded that the complainant did not fall within the definition of a consumer, as the property sought to be purchased, was for commercial purpose. It was further pleaded that the complainant had no locus standi, to file the complaint. It was admitted that the complainant booked a flat. It was also admitted that he deposited a total sum of Rs.13,55,000/- being 95% of the amount of the price of the flat.  The execution of the agreement, and allotment of flat,  were also admitted. It was stated that the construction could not be completed on account of the stay of operation of Annexure R7 dated 17.1.2006, containing the guidelines for setting up of residential colonies by the promoters, in the State of Punjab, granted by the Hon’ble High Court of Punjab and Haryana in C.W.P No.18632 of 2005 Dharam Chand & another Vs the State of Punjab & Ors. It was further stated that the stay was vacated on 1.5.2008.  It was, thereafter, that the Punjab Pollution Control Board vide letter dated 19.9.2008  issued ‘No Objection Certificate’.  It was further stated that, thereafter, the construction of the project was re-started.   It was further stated that, thus, the delay in construction, was beyond the control of the opposite parties and, as such, they were entitled to extension of time according to clause 23 of the agreement dated 8.2.2006.  It was further stated that since the complainant did not make payment of the last and final instalment of 5%, he was not entitled to possession of the flat and interest on the amount deposited  It was denied that the opposite parties indulged into unfair trade practice and were deficient, in rendering service. The remaining averments, were denied, being wrong.

3.      The parties led evidence,  in support of their case.

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

5.           An objection was taken by the opposite parties, in the written reply, that the flat was booked and sought to be purchased, by the complainant for commercial purpose, and, as such, he did not fall within the definition of ‘consumer’.  The said objection appears to be misconceived.  In the complaint, the complainant, in clear-cut terms, stated that the opposite parties, advertised  the launch of residential apartments project. It was, in pursuance of this advertisement, that the complainant applied for the allotment of a residential apartment, vide annexure C2.  No evidence was produced, on record, by the Opposite Parties, that the apartment agreed to be purchased, by the complainant, was for running any commercial activity, with a view to generate profit. Once a residential apartment was booked, by the complainant and he paid 95% of the price thereof, the only presumption that could  be drawn, was that it was for residence and not for running any commercial activity. Under these circumstances, the objection referred to above, at outset of this para, being devoid of merit, must fail, and the same stands rejected.

6.             The last instalment of 5%,  was to be paid, by the complainant on or before 31.7.2007, as per the agreement annexure C4, when the possession of the flat was to be delivered.  Admittedly, the possession was not delivered to the complainant on 31.7.2007, the date committed by the opposite parties. By that time, no progress in construction had taken place. It is evident from annexure C12, letter dated 4.10.2008, that after the vacation of stay, and grant of ‘no objection certificate’  on 19.9.2008 by the Punjab Pollution  Control Board, the opposite parties had allegedly restarted the construction of their project.  It was, intimated vide this letter that the last  instalment of 5% instalment be deposited.  There is another letter C13,  dated 15.5.2009, whereby the complainant was intimated, by the opposite parties, that their endeavour was to hand over the possession in 12 to 15 months. The opposite parties neither adhered to the original date of delivery of possession i.e. 31.7.2007, nor to the time schedule mentioned in letters C12 & C13.  The opposite parties, collected money from the prospective vendees, including the complainant, knowing fully well  that, at the time of booking of the flat,  they did not have got requisite  permissions/approvals for raising construction. By making false promise to the complainant to hand over  possession by 31.7.2007, or even by the extended time, intimated vide letters C12 & C13, the opposite parties, fleeced him of his hard earned money.  The opposite parties have not delivered possession of the flat till date. The complainant is, thus, entitled possession of the flat. The opposite parties were, thus,  not only deficient, in rendering service, but also indulged into unfair trade practice.

7.         It was submitted by the Counsel for the opposite parties, that the last instalment of 5%, towards the price of flat, which was due to the opposite parties, from the complainant on 31.07.2007, was not paid by him and, as such, he committed default.  He further submitted that he was, thus,  not entitled to possession. The submission of the Counsel for the opposite parties, in this regard, does not appear to be correct. As stated above, till the filing of the complaint , and even till date,  possession of the flat, has not been delivered to the complainant.  When there was no progress in  construction of the project, nor there was any hope of delivery of possession of the flat to the complainant, by the opposite parties, the former could stop making payment of the last instalment. He, therefore, could not be said to have committed  any default.   In Prasad Homes Pvt. Ltd. Vs E.Mahender Reddy & Ors. 1(2009)CPJ 136 (NC),  no development work had been  carried out, at the site. Thus, the   payment of further  installments, was stopped, by the complainant. It was, in these circumstances,  held by the Hon’ble National Commission, that the builder could  not be allowed to take shelter, under any clause of the agreement, to usurp money, deposited by the complainant. The principle of law, laid down, in the aforesaid case, is fully applicable to the facts of the instant case. The submission of the Counsel for the opposite parties, in this regard, being without merit, must fail, and the same stands rejected.

8.             It was next  submitted by the Counsel for the opposite parties, that the construction could not be undertaken, due the circumstances, beyond the control of the opposite parties. He took shelter under Clause 23 of the agreement C-4,    in support of his contention,  which reads as under:-

“The allottees agree that sale of Apartment/dwelling unit is subject of force majeure clause which interalia include delays on account of non availability of steel and/or other building materials, or water supply or electric power or slow down strike or due to a dispute with construction agency employed by the company/promoter civil commotion, militant action or by reasons beyond the control of the company/promoter and in any of the aforesaid events the company/promoter shall be entitled to a reasonable corresponding extension of the time of the delivery of possession of the said Apartment/dwelling unit on account of force majeure circumstances. The company/promoter as a result of such contingency arising reserves the right to alter or vary the term and conditions of allotment or if the circumstances beyond the control of the company/promoter so warrant the company/promoter may suspend the scheme for such period as it may consider expedient and no compensation of any nature whatever can be claimed by the allottee for the period of delay/suspension of scheme. Inconsequence of the company/promoter abandoning the scheme the company/promoter liability shall be limited to the refund of the amount paid by the allottee without any interest or compensation whatsoever.”

9.           The High Court of Punjab & Haryana in Civil Writ Petition No.18632 of 2005 titled as ‘Dharam Chand and another Vs. State of Punjab and others’,  vide order dated 30.01.2007, stayed the operation of letter dated 17.01.2006  (Annexure R-7), vide which the Punjab Pollution Control Board laid down the guidelines for setting up, colonies by the Promoters. Vide order dated 01.05.2008 Annexure R-11, the order dated 30.01.2007, was vacated. There is nothing, on record, that from 8.02.2006, when C-4 agreement, was executed, between the parties, upto 29.01.2007( stay having been granted on 301.2007), no objection was obtained from the Punjab Pollution Control Board and the construction activity, was undertaken, by the opposite parties, though there was no stay, during this period. The stay, as stated above, was vacated on 01.05.2008. There is also, no document, on record, to establish that from 02.05.2008, until the filing of the complaint, any construction was carried out, by the opposite parties, at the site. Even if, the period of stay aforesaid, is excluded, the opposite parties, were required to undertake the construction of the project, before the stay was granted and after the same was vacated.  When there was no progress, in construction, even after the vacation of stay, left with no alternative, the complainant had to file the instant complainant, seeking possession, interest on the amount deposited, rent paid by him and compensation.   Even according to clause 11 of annexure R-5, dated 03.01.2006, vide which permission for raising construction, was granted to the opposite parties, by Nagar Council Dera Bassi, Patiala, it was made clear that  construction could be started only after obtaining ‘No Objection Certificate’ from the Ministry of Environments & Forests.   There is nothing on  record, that this condition was fulfilled by the opposite parties. Vide annexure R9 ‘No Objection Certificate’ from pollution angle, was refused by the Punjab Pollution Control Board.  It was, vide letter annexure  R12 dated 19.9.2008 that ‘No Objection Certificate’  was granted to the opposite parties.  This proves that, at the time of execution of  agreement C4 ‘No Objection Certificate’, from the Punjab Pollution Control Board had  not been obtained by the opposite parties.  In the absence of ‘No Objection Certificate’ from the Punjab Pollution Control Board, no construction could be raised.  In  Kamal Sood Vs. DLF Universal Ltd., III(2007) CPJ-7 (NC),   it  was held that a builder should not collect money, from the prospective buyers, without obtaining the required permissions, such as zoning plan, layout plan, and schematic building plan. It is the duty of the builder, to obtain the requisite permissions or sanctions, such as sanction for construction etc., in the first instance, and, thereafter, recover the consideration money, from the purchasers of the flats/building. The ratio of law, laid down, in the aforesaid case, is squarely applicable to the facts and circumstances of the instant case. As stated above, from 8.2.2006, when the agreement annexure C-4, was executed, between the parties, upto 29.01.2007, and from 02.05.2008 onwards, there was no legal hitch, in the way of the opposite parties, to raise construction, but they did not do so. Under these circumstances, the opposite parties could not   take shelter under the force majeure Clause 23 of the agreement C-4. It could not be said, that the construction activity, could not be undertaken, wholly on account of the circumstances, beyond the control of the opposite parties .These acts also amounted to deficiency in rendering service and indulgence into unfair trade practice on the part of the opposite parties.  

10.                   The next question, that arises for consideration, is, as to whether, the complainant is entitled to interest, if so, at what rate and from which date.  The hard earned money to the tune of Rs.13,55,000/- being 95% (towards the price of the flat, deposited by the complainant) was illegally and improperly withheld by the opposite parties atleast from 1.8.2007 onwards(excluding the period from 30.1.2007 to 1.5.2008, when there was stay granted by the Hon’ble High Court).  Had this amount been invested, by the complainant, in some business or deposited, in the bank, he would have certainly earned handsome returns thereon. He was, thus, caused financial loss. The complainant, is, therefore, entitled to interest @ 12% p.a. on Rs.13,55,000/- from 1.8.2007 till possession of the flat is delivered (excluding the period from 30.1.2007 to 1.5.2008).

11.        The next question, that arises for consideration, is, as to whether, the complainant is entitled to rent claimed by him.  In the complaint, no doubt, the complainant stated that he took, on rent, some property and started paying rent @ Rs.8000/- per month. He, however, did not produce the receipts of rent showing payment thereof alongwith the complaint, or during the course of evidence, adduced by him.  However, alongwith the replication he submitted the photocopies of receipts allegedly issued by Sh.P.C.Goel. Photocopies of some receipts show payment of  rent @ Rs.6000/- per month and the  photocopies of other receipts showing the payment of rent @ Rs.8000/-. The number and location of the premises for which the rent was allegedly paid, are not written in the receipts. In case, these receipts were available with the complainant, at the time of filing the complaint, he should have produced the same at that time. No sanctity is attached to these rent receipts, especially when the  affidavit of the person, who allegedly issued the same was not produced, nor signatures, on the same, were identified by the complainant. The complainant is, thus, not entitled to rent claimed by him.  

12.       The next question, that arises for consideration, is, as to whether, the complainant is entitled to compensation, if so, to what extent.  The possession of the flat was to be delivered to the complainant on or before 31.7.2007. As stated above, he has already made payment of a sum of Rs.13,55,000/- towards the price of flat which comes to 95% , on the assurance of the opposite parties,  that he would be delivered possession of the flat within the stipulated  time, but the same has not been delivered till date.  For all these years, the complainant, underwent tremendous physical harassment and mental agony.  In these circumstances, it would be just and fair, if the complainant, is awarded compensation of Rs.one lac. It is, therefore, held that the complainant is entitled to compensation of Rs.one lac. 

13.       For the reasons, recorded above,  the  complaint is partly accepted  with costs,  in the following manner ;

(i)                 The opposite parties are directed to hand over possession of the allotted flat to the complainant, within 6 months,  from the date of receipt of a copy of the order, on payment of the remaining amount of price by him (complainant). .

(ii)               The opposite parties are further directed to pay interest @ 12% p.a. on the amount of Rs.13,55,000/- from 1.8.2007, till the delivery of possession of the flat by them to the complainant (excluding the period from 30.01.2007 to 01.05.2008)..

(iii)             The opposite parties are further directed to pay compensation to the complainant in the sum of Rs.one lac.  

(iv)             The opposite parties shall also pay cost of litigation to the tune of Rs.10,000/- to the complainant.   

(v)               The amount of compensation, shall be paid within 30 days, from the date of receipt of a copy of the order, failing which, the opposite parties shall be liable to pay interest @12% p.a. on this amount from today, till realization, besides costs. 

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

15.        The file be consigned to the Record Room.

                                                                                                Sd/-

Announced                                                   (JUSTICE SHAM SUNDER)

January 16,    2012                                                                   President

                                                                                                              Sd/-

                                                                                (NEENA SANDHU)

                                                                                                          Member

                                                                                                              Sd/-

                                                                            ( JAGROOP SINGH MAHAL)

js                                                                                             Member