Chandigarh

StateCommission

CC/211/2015

Mr. Varun Bakshi - Complainant(s)

Versus

M/s Unitech Limited - Opp.Party(s)

Pradeep Sharma, Adv.

26 Nov 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	211 of  2015
Date of Institution	:	11.09.2015
Date of Decision	:	26.11.2015

 

1. Mr.Varun Bakshi son of Mr. Vijay K. Bakshi
2. Mrs.Mandeep Sangha W/o Mr.Varun Bakshi,

Both earlier residents of House No.141, First Floor, M2K Aura Society, Sector-47, Gurgaon, Haryana-122001

Currently residents of Flat No.3, First Floor, DDA, MIG Flat, Prasad Nagar, Phase 1, New Delhi-110005.

……Complainants

 

V e r s u s

1. M/s Unitech Limited, SCO No.189-191, Sector 17-C, Chandigarh, through its Managing Director/Director.
2. M/s Unitech Limited, Office 6, Community Centre, Saket, New Delhi 110017, through its Managing Director/Director.

              .... Opposite Parties

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

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

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by: Sh. Pradeep Sharma, Advocate for the complainants.

                  Ms. Vertika H. Singh, Advocate for the Opposite   

                  Parties.

 

PER MRS. PADMA PANDEY, MEMBER

           

            The facts, in brief, are that the complainants booked a residential unit, with the Opposite Parties, vide application dated 07.07.2011, in their project, launched under the name and style of “Executive Floors”, Sector 97, Uniworld City, Mohali, Punjab. Alongwith the said application, the complainants paid an amount of Rs.5 lacs, towards booking amount. As such, the complainants were allotted Floor No.96, Tower D, measuring 1796 square feet (in short the unit), in the said project, vide allotment letter dated 15.07.2011 Annexure C-3. Total sale consideration of the said unit was to the tune of Rs.50,38,370/-. Buyer's Agreement dated 29.08.2011 Annexure C-2, in respect of the said unit, was executed between the parties. It was stated that, as per Article 4.a.i) of the Agreement, it was depicted that the Opposite Parties were to deliver possession of the unit, in question, to the complainants, within a period of 24 months, from the date of execution of same (Agreement) i.e. by 28.08.2013, failing which, they were liable to pay penalty @Rs.5/- per square feet of the saleable area of the unit, in question, per month, for the period of delay.

2.       It was further stated that for making payment, towards the said unit, the complainants had raised loan to the tune of Rs.29 lacs, from Housing Development Finance Corporation Limited (HDFC), for which a Tripartite Agreement was also executed amongst the parties.
3.       It was further stated that despite the fact that the amount of Rs.49,46,648/- i.e. more than about 95% of the sale consideration, had been paid by the complainants, possession of the unit, in question, was not even offered to the complainants, by the stipulated date, what to speak of delivery thereof. The complainants visited the site, where the unit, in question, was allotted to them, but were surprised to see that no construction activity was going on there. It was further stated that, thereafter, the complainants kept on visiting the Office of the Opposite Parties, with a request to apprise them, regarding status of the project, in question, and also delivery of possession of the said unit, in their favour, but to no avail. It was further stated that various emails/letters exchanged between the parties, yielded no results.
4.       It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking various reliefs. 
5.       The Opposite Parties, in their joint written version, pleaded that the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as they had purchased the unit, in question, for commercial purpose i.e. for selling the same, as and when there was escalation in the prices of real estate, to gain huge profits. It was further pleaded that this Commission has no territorial and pecuniary Jurisdiction to entertain and decide the complaint. It was further pleaded that the consumer complaint was not maintainable, and only a suit for specific performance, in the Civil Court, for the enforcement of the Agreement, could be instituted. It was further pleaded that the complainants have not sought permission, from this Commission, by moving an application, under Section 12 (1) (c) of the Act, to file the complaint jointly. Payment of the amount mentioned in the complaint, towards part price of the unit, in question, was not disputed. It was admitted that as per Article 4 Clause (4.a.) of the Agreement, the Opposite Parties were to hand over possession of the unit, in question, to the complainants within a period of 24 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It was stated that the Opposite Parties, could not hand over possession of the unit, to the complainants, as there was global meltdown of the economy worldwide, resulting into cash crunch throughout. It was further stated that completion work of the unit, in question, was going on. It was further stated that the Opposite Parties were making endeavour to hand over possession of the said unit, to the complainants. It was further stated that it was well within the knowledge of the complainants that for any delays, stipulated penalty had been provided in the Agreement, which safeguarded their rights. It was further stated that the Opposite Parties, were ready to pay penalty/ compensation, to the complainants, for the period of delay. It was further stated that, in case, this Commission came to the conclusion that the complainants are entitled to refund of the amount, deposited by them, the amount shall be payable directly to the HDFC Limited. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
6.       In the rejoinder filed by the complainants, they reiterated all the averments contained in the complaint and repudiated those, contained in the written version of the Opposite Parties.
7.       Complainant No.1, in support of the averments contained in the complaint, submitted his affidavit, by way of evidence, alongwith which, a number of documents were attached.
8.       The Opposite Parties, in support of their case, submitted the affidavit of Sh. Lalit Gupta, their Authorized Representative, by way of evidence, alongwith which, a number of documents were attached. 
9.       We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully. 
10.       The first question, that falls for consideration, is, as to whether, the complainants fell within the definition of “consumer”, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here, that the mere objection of the Opposite Parties, that since the complainants are residents of the house, address whereof has been mentioned in headnote of the complaint, as such, they being speculators, purchased the unit, in question, by way of investment, to gain huge profits, by selling the same, as and when there was escalation in prices, does not carry any weight, and is liable to be rejected. It was clearly averred by the complainants, in paragraph No.1 of the complaint, supported by the affidavit aforesaid, by way of evidence, that they purchased the unit, in question, for their residential purpose. Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainants, was sufficient to prove that it was to be used for the purpose of residence, by them. At the same time, there is nothing, on the record, that the complainants are property dealers, and deal in the sale and purchase of property. Recently, 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. 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 statement, therefore, being devoid of merit, is rejected.  
11.         The next question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not. According to Section 17 of the Act, the Consumer Complaint could be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident, that application form Annexure C-1, in respect of booking of the said unit, alongwith which, an amount of Rs.5 lacs, was also remitted by way of cheque, was moved to the Marketing Office of the Opposite Parties at Chandigarh, i.e. Unitech Ltd., SCO 189-90-91, Sector 17-C, Chandigarh. The said address of the Opposite Parties is also mentioned in the Buyers Agreement, executed between the parties. Not only this, it is further evident from the receipt at page 67 of the file, that an amount of Rs.26,14,813/- towards part price of the unit, in question, had been remitted vide cheque No.867569, drawn on HDFC Bank Limited, Sector 35-B, Chandigarh, favouring Unitech Limited Uniworld city, Mohali Floor Sales Account No.01722560001837, Kotak Mahindra Bank Limited, Chandigarh. Since, as per the documents, referred to above, a part of cause of action, arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the Opposite Parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 
12.       The next question, that falls for consideration, is, as to whether, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint or not. It may be stated here, that the complainants have sought refund of the amount of Rs.49,46,648/-, paid by them, towards price of the said unit, alongwith interest @24% P.A., from the respective dates of deposits, till realization; penalty @ Rs.5/- per square feet, per month, as per the Agreement, for the period of delay; compensation to the tune of Rs.10 lacs, for mental agony, physical harassment, financial loss and escalation in prices of real estate; and cost of litigation, to the tune of Rs.2 lacs, aggregate value whereof [excluding the interest claimed] came to be around Rs.63,71,148/-, and, as such, fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection, taken by the Opposite Parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
13.       The next question, that arises for consideration, is, as to whether, interest @24%, claimed by the complainants, on the amount of Rs.49,46,648/-,  aforesaid, was required to be added, to the value of the reliefs claimed, or not, for determining the pecuniary Jurisdiction of this Commission.  In Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), a case decided by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, the facts were that the complainant filed a Consumer Complaint, before the State Consumer Disputes Redressal Commission, Haryana, claiming an amount of Rs.18,33,000/-, with interest @18% per annum, on this amount, from the date of claim, till realization. It also claimed suitable damages, on account of loss caused to it. The State Consumer Disputes Redressal Commission, vide order dated 08.08.2002, disposed of the complaint, with liberty reserved to the complainant, to approach the National Consumer Disputes Redressal Commission, holding that if interest @18% P.A. was allowed, on the amount of Rs.18,33,000/- it (amount) will exceed Rs.20 lacs (at that time the pecuniary Jurisdiction of the State Consumer Disputes Redressal Commission was upto Rs.20 lacs), for which it had no pecuniary Jurisdiction. Feeling aggrieved, the complainant/appellant filed the aforesaid appeal. The National Consumer Disputes Redressal Commission, in the aforesaid appeal, held as under:-

“Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs.18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

Accordingly, while accepting appeal, the order dated 8.8.2002 is set aside. On complaint being returned by the State Commission, the appellant is permitted to file it before the appropriate District Forum for being decided on merits in accordance with law. No order as to costs”.

14.       Not only this, a similar question regarding pecuniary Jurisdiction, fell before this Commission, in a case titled as Karnail Singh  and another Vs. M/s Emaar MGF Land Limited, Consumer Complaint No.05 of 2014 decided on 09.04.2014. In that case also, an objection was raised by the Opposite Parties (Emaar MGF Land Limited) that since the complainants,  had sought refund of amount of Rs.62,60,750/- alongwith interest @24% P.A., from the respective dates of deposits, alongwith compensation and litigation costs, as such, if the reliefs are clubbed together alongwith interest claimed, the aggregate value therefore fell above Rs.1 crore, and as such, this Commission had no pecuniary Jurisdiction to entertain the complaint. In that case, while setting aside the said objection of the Opposite Parties, this Commission, while placing reliance on Shahbad Cooperative Sugar Mills Ltd.' case (supra),  came to the conclusion that it had pecuniary Jurisdiction to entertain the complaint, and ordered refund of the amount alongwith interest, compensation and litigation costs, vide order dated 09.04.2014. Appeal filed by the Opposite Parties (Emaar MGF Land Limited) against the order dated 09.04.2014, before the National Commission, was dismissed with punitive damages of Rs.5 lacs. Still feeling aggrieved, the Opposite Parties, filed Special Leave to Appeal (C) No.29392 of 2014, which was also dismissed by the Hon'ble Supreme Court of India, in limine, vide order dated 14.11.2014. In this manner, the findings given by this Commission in Karnail Singh and another's case (supra), while placing reliance on Shahbad Cooperative Sugar Mills Ltd.'s case (supra), to the effect that it has pecuniary Jurisdiction to entertain and decide the complaint, in the manner, referred to above, were upheld by the National Commission, and also the Hon'ble Supreme Court of India, meaning thereby that the same had attained finality. The principle of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the submission of Counsel for Opposite Parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.
15.       The next question, that falls for consideration, is, as to whether, since the complainants  sought enforcement of the Agreement, in respect of the unit, in question, i.e. immoveable property, only a suit, in the Civil Court was maintainable. It may be stated here, that the complainants hired the services of the Opposite Parties, for purchasing the unit, in question, and they were allotted the same for consideration. According to Article 4.a.) of the Agreement, the Opposite Parties were to hand over possession of the unit, in question, to the complainants within a period of 24 months, from the date of execution of the same (Agreement). It was not that the complainants purchased the unit, in an open auction, on “as is where is basis”.  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”

16.       From the afore-extracted Section 2 (1) (o) of the Act, it is evident that housing construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2 (1) (o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C.1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainants had a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, could be availed of by them, as they fall within the definition of consumers. In this view of the matter, the submission of the Counsel for the Opposite Parties, being devoid of merit, must fail, and the same stands rejected.
17.        The next question, that falls for consideration, is, as to within which period, possession of the unit, in question, was to be delivered to the complainants. According to Article 4.a.i) of the Agreement, the Opposite Parties were to hand over possession of the unit, in question, to the complainants, within a period of 24 months, from the date of execution of the same (Agreement) i.e. by 28.08.2013. Admittedly, possession of the unit, in question, was not delivered to the complainants, by the stipulated date, or even by the time, the complaint was filed. Even, in the written version, the Opposite Parties frankly admitted, that possession of the unit, in question, could not be offered to the complainants, as they failed to complete the construction, on account of extreme financial hardship, due to recession in the market, and also on account of non-provision of electricity in the said project, by the Punjab State Power Corporation Limited (PSPCL). The admittance of the Opposite Parties, itself makes it clear that they had not obtained necessary approvals/ sanctions from the PSPCL, as a result whereof, they were not provided with electricity, for the project in question. Secondly, when the Opposite Parties had already received more than 95% of the sale consideration of the unit, in question, from the allottees, including the complainants then it does not lie in their mouth, that they faced extreme financial hardship, due to recession in the market, as far as the project, in question, is concerned. Admittedly, more than 95% of the sale consideration of the unit, in question, had already been paid, by the time of filing the complaint, but possession of the same, was not delivered in favour of the complainants. Now, even as on today, on account of pending development works, as admitted by the Opposite Parties, as also want of various permissions, firm date of handing over possession of the unit, in question, could not be given to the complainants. By making a misleading statement, that  the possession of unit, in question, would be delivered within a period of 24 months, from the date of execution of the Agreement,  and by not abiding by the commitments, made by the Opposite Parties, they (Opposite Parties) were not only deficient, in rendering service, but also indulged into unfair trade practice.
18.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.49,46,648/-, deposited by them. Since, the Opposite Parties are unable to deliver  possession of the unit, in question, on account of pending development works, want of basic amenities, and non-provision of electricity, as admitted by them, firm date of delivery of possession of the unit, in question, could not be given to the complainants, so they are entitled to the refund of amount, deposited by them, towards the price of the same (unit, in question), alongwith interest @15% compounded quarterly.  
19.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14 (1) (d) of the Act, on account  of mental agony and physical harassment and injury caused to them, as also escalation in prices, by not delivering physical possession of the unit, to them or  by not refunding the amount deposited. The complainants,  underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Parties. Compensation, to the tune of Rs.3 lacs, on account of mental agony and physical harassment, caused to the complainants, due to the acts of omission and commission of the Opposite Parties, and escalation in prices, if granted, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.3 lacs, as indicated above.
20.       It was, however, submitted by the Counsel for the Opposite Parties, that since the parties are governed by the terms and conditions of the Agreement, in case of delay, in delivery of physical possession of the unit, they (Opposite Parties), were only liable to make payment of penalty, in the sum of Rs.5/- (Rupees Five only) per sq.feet, per month of the super area, for such period of delay, as per Article 4.c.) of the Agreement. He further submitted that the Opposite Parties were ready to pay this amount, for the period of delay, in delivery of possession of the unit. It may be stated here, that such a submission of the Counsel for the Opposite Parties, would have been considered to be correct, had the complainants, prayed for delivery of physical possession of the unit, in question. In the instant case, as stated above, prayer for the refund of amount, referred to above, was  made by the complainants, in the complaint, in the circumstances, referred to above. This Article could be invoked, by the Opposite Parties only, in the event, the complainants, in the complaint, had sought the relief of delivery of physical possession of the unit. As stated above, the hard-earned money of the complainants was used by the Opposite Parties, for investment, for a long time. They were not refunded the amount, to which they were entitled to. If the Opposite Parties are allowed to invoke Article 4.c.) of the Agreement, in the instant case, that would amount to enriching them, at the cost of the complainants. Under these circumstances, shelter cannot be taken by the Opposite Parties, under Article 4.c.) of the Agreement. Had the complainants prayed for possession of the unit, in question, in the complaint, the matter would have been different. The complainants, in our considered opinion, as stated above, are entitled to the refund of amount of Rs.49,46,648/-,  alongwith interest @ 15% compounded quarterly, from the respective dates of deposits.    Similarly, the complainants are also not entitled for penalty @ Rs.5/- (Rupees Five only) per sq.feet per month, of the super area, for the period of delay, as prayed by them, as they had sought refund of the amount, deposited by them, for which they have been held entitled, alongwith interest, in the manner, referred to above, in the preceding paragraph of this order.
21.       As far as the objection regarding permission of this Commission, to file joint complaint, by the complainants is concerned, it may be stated here that the unit, in question, was purchased by the complainants- Mr.Varun Bakshi and Mrs. Mandeep Sangha, husband and wife, jointly. Perusal of the complaint goes to reveal that the complaint has been signed by the complainants i.e. Mr.Varun Bakshi and Mrs. Mandeep Sangha. Once, the consumer complaint has been ordered to be registered and admitted by this Commission, after hearing the party(s) concerned, the permission is deemed to have been granted to him/her, in that regard. At the same time, it is pertinent to mention here that the Consumer Protection Act, 1986, is a beneficial legislation, meant to provide speedy, inexpensive and hassle free redressal to the grievance of the consumers. The provisions of the Code of Civil Procedure, except the one contained in Section 13 (4) of the Act, are not applicable to the consumer disputes. The Consumer Foras are to evolve their own procedure, for adjudicating the consumer disputes, by resorting to the principles of natural justice. Under these circumstances, by no stretch of imagination, it could be said that the consumer complaint filed by the complainants, was not maintainable, on this count. The submission of the Counsel for the Opposite Parties, in this regard, therefore, being devoid of merit, must fail and the same stands rejected.    
22.       No other point, was urged, by the Counsel for the parties.
23.       For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally, directed as under:-

1. To  refund the amount of   Rs.49,46,648/-,  to  the complainants,  alongwith interest @ 15% compounded quarterly, from the respective dates of deposits onwards,   within 2 months, from  the  date of receipt of a certified copy of  this order.
2. To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices, within 2 months, from the date of receipt of a certified copy of this order.
3. To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants.
4.  Housing Development Finance Corporation Ltd., from which the loan was taken by the complainants, for payment of installments towards the said unit, shall have first charge on the amount, referred to in Clause (i) above, to the extent of unpaid loan amount, by them (complainants).
5. In case, the payment of awarded amounts, is not made, within the stipulated period, then the Opposite Parties shall be liable to pay the same, alongwith penal interest @ 18% compounded quarterly, instead of 15% compounded quarterly, from the respective dates of deposits, till realization.

24.       Certified Copies of this order be sent to the parties, free of charge.
25.       The file be consigned to Record Room, after completion.

Pronounced.

26.11.2015

Sd/-

[JUSTICE JASBIR SINGH  (RETD.)]

PRESIDENT

 

Sd/-

[DEV RAJ]

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

Rg.