Punjab

StateCommission

CC/435/2017

Ajay Kumar Chauhan - Complainant(s)

Versus

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

R.C.Sharma

06 Apr 2018

ORDER

2^nd Additional Bench

PUNJAB STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

DAKSHIN MARG, SECTOR 37-A, CHANDIGARH

 

Consumer Complaint No.435 of 2017         

                                                          Date of institution :  30.05.2017

                                                          Date of reserved    :  21.03.2018

                                                          Date of decision    :   06.04.2018                  

Ajay Kumar Chauhan son of Shri P.C. Chauhan, resident of House No.6181, Roda Colony Sarkaghat, Distt-Mandi, Himachal Pradesh.

                                                                                                 …..Complainant

Versus

1. Unitech Ltd., having its registered office at 6, Community Centre, Saket,

    New  Delhi through its Managing Director.

2. Regional Manager, Unitech Ltd, Marketing Office at SCO 189-90-91,

    Sector 17-C, Chandigarh, presently at site office at Sector 107, Uniworld

     City, Mohali.

3. Alice Developers Private Limited having its registered Office at 6,

   Community   Centre, Saket, New Delhi through its Managing Director.                                                                                             .....Opposite parties

                                      Complaint under Section 17 of the

                                      Consumer Protection Act, 1986.

Before:-

          Sh. Gurcharan Singh Saran, Presiding Judicial Member

          Sh. Rajinder Kumar Goyal, Member

 

Present:-

 

          For the complainant               :         Sh. R.C. Sharma, Advocate

          For Ops No.1&2                    :         Mrs. V.H. Singh, Advocate

          For Op No.3                                     :         Ex-parte  

         

 Rajinder Kumar Goyal, Member

                                                Order

                   Complainant has filed this complaint against the opposite parties (hereinafter referred as OPs) under Section 17 of the Consumer Protection Act 1986 (for short the Act) on the averments that the Op No.1-M/s Unitech Limited had launched  their mega township on their project land to be known as ‘Uniworld City’ in the year 2008-09 and offered residential units called ‘Unihomes’ for sale in the said project by way of advertisements and promotion through their authorized agencies. The complainant booked an independent floor in Sector 107 Mohali in the said project for personal use by paying the booking amount of Rs.2,25,000/- on 11.12.2009 to OP No.2 through the authorized agency of Ops at Chandigarh. The Ops allotted unit No.0014 measuring 1077 square feet in Block-B Floor-02 in the said project. The Buyers Agreement was executed on 02.02.2010 wherein basic sale price of the unit was fixed Rs.22,50,452/-. From the Buyers Agreement complainant came to know about the fact that both the Ops shall be operating as confirming party and developer respectively with Unitech Limited as confirming party in the transfer/allotment and assignment of rights in the developed units to the prospective purchasers and also to execute the conveyance deed for such developed units. As per Clause 4A of the Agreement the possession of the unit was proposed to be offered within 36 months of signing of the agreement i.e. 02.02.2010 subject to force majeure conditions. Further as per Clause 4C of the Agreement in case of delay the company was liable to pay charges @ Rs.5 per square feet per month which were to be adjusted at the time of the issuance of notice for possession. As per Clause 2C the payment was required to be made as per payment plan annexed with the agreement and in the event of delay interest at the rate of 18% compounded quarterly was payable by the purchasers. There was also a provision of forfeiture of booking/earnest/registration money in the event of failure to pay the installments due within 90 days from the date due. The complainant has paid all the installments (amounting to Rs.22,37,657) as per agreement and as per demand raised by OP No.1 from time to time in the manner stated below:-

Sr. No	Date of Credit	Cheque/DD	Amount in Rs.
1	21.12.2009	808334	225000
2	22.03.2010	815022	137079
3	29.04.2010	016739	115917
4	19.03.2010	337354	2550
5	27.12.2010	337355	5795
6	27.12.2010	021854	249233
7	07.03.2011	001481	5795
8	14.03.2011	018421	249231
9	03.05.2011	516551	38885
10	04.05.2011	024550	249231
11	06.06.2011	516552	39257
12	06.06.2011	024600	225045
13	09.11.2011	337357	5810
14	02.12.2011	337359	2897
15	13.12.2011	023275	112518
16	27.04.2012	001482	3660
17	27.04.2012	029880	112522
18	28.05.2012	001483	3477
19	31.05.2012	031625	112518
20	04.02.2013	850795	116192

 

                   The OP No.2 had issued ledger account statement showing/ confirming deposit of the above payments with total credit of Rs.22,37,657/-. Ops have also issued receipts against the above payments deposited by the complainant. Therefore, the complainant has already made payment of Rs.22,37,657/-   against  the  total basic  cost  of Rs.22,50,452/-. However, Ops have failed to handover the possession of the unit despite the fact that there were no force majeure conditions seen at any point of time.  On inquiry from the Chandigarh Office it was informed that due to some administrative problems the work is presently stopped but the same would be completed very soon. The complainant went to the site on 10.01.2017, but  no progress at the site. When inquired, the officials about the refund of money with interest, if there is no scope of possession in near future so that he can think of some alternate, but it was informed that efforts are being made to revive the project but refund with interest cannot be given. The Ops have failed to achieve the completion of the work and completion certificate from the competent authorities. Due to which the complainant was left with no alternative but to file this complaint. Alleging deficiency in service on the part of Ops, this complaint has been filed by the complainant against the Ops, seeking following directions:-

1. Refund a sum of Rs. 2237657/- so received the opposite parties from the complainant alongwith  interest @18% per annum compounded quarterly from the date of deposit till realization  which the opposite parties have charged from complainant for delay in payment when the home loan was being processed.
2. To pay Rs.50,000/- as litigation cost along with an amount of Rs.4,00,000/- for causing harassment, undue hardship and mental agony and damages caused due to the deficiency in services of the opposite parties.
3. Any other relief as may be considered appropriate.

 2.               Upon notice , Op No.1&2 appeared whereas Op No.3 did not appear and   vide order dated 03.08.2017, Op No.3 was proceeded  ex-parte.

3.                Op No.1&2 in its written reply filed through Mr. Lalit Gupta Legal Executive of the Ops by taking preliminary objections that this commission does not have territorial jurisdiction to adjudicate upon the present complaint as buyer’s agreement was executed between the parties at New Dehli and  the payment was made by the complainant to the Gurgoan office and from there payment receipts were issued; buyer’s agreement was executed between Ops No.1&2 and OP-3 on 02.02.2010 wherein it was clearly mentioned that Alice Developers Pvt. Ltd. is the developer and Unitech Ltd. is the confirming party. It was agreed upon between the parties that on a part of the said land, the developer shall construct and complete independent floors to be known as Unihomes. The developer had also authorized Unitech to market, sell either itself or through its channel partners the builtup/ developed areas/ apartments on its behalf including deposit of collected monies of sold units in the designated account of the developer. Therefore, these Ops had limited role qua the buyer’s agreement and hence any complaint regarding delay should have been made against Op3; The facts narrated by the complainant in the complaint do not constitute a consumer dispute. Complainant is seeking a relief which is not covered under the definition of  Consumer Dispute as defined in CPA 1986. The issues raised relate to contractual matter arising of the terms and conditions of the agreement which can only be adjudicated in Civil Proceedings. Therefore, the complaint deserved to be dismissed being not maintainable and  the complainant ought to have filed a suit in the appropriate civil suit; The complainant has filed the complaint on false, frivolous and vexatious grounds because of slump in the real estate market, the complainant has sought to withdraw its investment. The complainant being an investor just wants to wriggle out of the transaction; The complainant is a permanent resident of Mandi, Himachal Pradesh and had no valid reason to shift to Mohali. The complaint is not maintainable as no cause of action has arisen in favour of the complainant against the answering OPs. There is no negligence on the part of the OPs.  On merits, the  averments stated in the preliminary objections were reiterated and all other averments were denied and finally prayed to dismiss the complaint with heavy costs.

4.                The parties were allowed to lead their respective evidence. Counsel for the complainant to prove his case tendered into evidence the affidavit of Sh.Ajay Kumar Chauhan, complainant, dated 21.12.2017 as Ex.CA alongwith the documents, copy of allotment letter dated 21.12.2009 as Ex.C-1, copy of Buyers Agreement dated 02.02.2010 as Ex.C-2, copy of receipt dated 21.12.2009 as Ex.C-3, copy of receipt dated 25.03.2010 as Ex.C-4, copy of account statement dated 19.01.2016as Ex.C-5 and close the evidence on behalf of the complainant.  In rebuttal, counsel for the Ops No.1&2 tender in evidence affidavit of Sh. Lalit Gupta, Authorized Representative, Unitech Limited as Ex.OP-1/A along with photocopies of documents i.e. Resolution dated 19.06.2015 as Ex.OP-1/1 and Trade Mark Licence dated 09.05.2009 as Ex.OP-1/2 and closed the same on behalf of OP No.1.& 2.

5.                We have heard the counsel for the complainant and gone through the record and averments in the complaint carefully.

6.                The first question that falls for consideration is as to whether this Commission has territorial jurisdiction to entertain and decide the complaint or not. According, to Section 17 (2) (c) of the CPA, a consumer complaint can be filed by the complainants before State Commission within the territorial jurisdiction whereof a part of cause of action arose to them. No doubt the agreement to sell was issued by New Delhi Office of the Ops or the receipts were issued by the Ops from Gurgaon Office but it has not been explained from where the payments were made to the Ops. Moreover, the project site namely Uniworld City of the Ops in question is situated in Mohali and there are averments that before booking of the unit & during completion of the project, the complainant had visited the site at Mohali, therefore, a part of cause of action has arisen at Mohali, which is within the territorial jurisdiction of this Commission. Therefore, we do not see any merit in the objection raised by the Ops and hold that this Commission has territorial jurisdiction to entertain this complaint.

7.                The next objection taken by the Ops is that the complainant is not a consumer and that the dispute between parties  is not a consumer dispute. A plea has been taken by the counsel for the Ops that the complainant had booked a flat for resale purposes but due to slump in the market he could not resale the same. He is permanent resident of Mandi in the State of Himachal Pradesh therefore, he is not in a need of any flat at Mohali. In case, the complainant has any plot or house at Mandi, it does debar the complainant to have any other property at Mohali. However, in case the complainant is not trading in real estate, then it cannot be said that he is not a consumer. In this regard, we are fortified by the judgment 2017(3) CLT 459 “Pranab Basak versus Suhas Chatterjee”. In that case, two flats were booked by the complainant and a plea was taken that the complainant had booked these flats for investment purposes. It was observed by the Hon’ble National Commission that unless it is established that the complainant is dealing in sale and purchase or his real intention in booking the flat was to sell the same on profit, on appreciation of the value of the real estate. The Ops have failed to place on the record any document that previously the complainant was trading in real estate. In the absence of those findings, we do not agree with the plea taken by the counsel for the Ops that the complainant had booked the flat for investment purposes.

8.                It has been argued by the counsel for Ops that the dispute is not covered under the definition of consumer dispute, therefore, the matter be referred to the Civil Court. In case we go through the pleadings of the parties, the complainant had booked one residential flat with Ops and had paid agreed amount of Rs.22,37,657/-. Apartment Allotment Agreement is there and Ops have failed to deliver the possession within the time frame mentioned in the agreement. It is only the interpretation of agreement and then to see whether there is any deficiency in service on the part of Ops. We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission and the matter needs to be referred to the Civil Court. The benches of this Commission are headed by retired High Court Judges/retired District & Session Judges, who have long experience at their back and are fully competent to decide such like matters. In this regard, we are fortified by the judgment of “Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi”, 2002(6) SCC 635 wherein it was held that ‘the State Commission and District Forum are headed by retired High Court Judges and officers of District Judge level and in our view, this is not such a case which cannot be decided by the ‘Consumer Fora’ after obtaining evidence and if need be after getting an expert opinion’. Further reference can be made to “Shiv Kumar Agarwal versus Arun Tandon and another”, 2007(2) CLT 287, decided by the Hon’ble National Commission. In that case a plea that case involves complicated questions of fact and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled – Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. Therefore, we are of the opinion that this Commission is fully competent to decide this complaint and no cause of action is made out to refer the case to the Civil Court.

9.                The complainant apart from his own affidavit has placed on the record Ex. C-1 Allotment Letter dated 21.12.2009 vide which flat No. E-02-0014 (3 Bedroom) UniWorld City, Sector 107, Mohali for a total sale consideration of Rs.23,62,079/- was allotted in favour of the complainant. Then buyer’s agreement dated 02.02.2010 was executed. According to Clause 4.a(i), the possession of the apartment was proposed to be offered within a period of 36 months of singing of this agreement i.e. upto 01.02.2013, the possession was to be delivered. According to the complainant, he has paid a sum of Rs.22,37,657/-. Ops have not placed on the record any document vide which any further payment was demanded by the Ops and not paid by the complainant.

10.              The main plea taken by Ops is that this agreement is between the complainant, Alice Developers and Unitech Limited and the project was to be developed by Op No.3 and that Op No.1& 2 were just a confirming party but the payment receipts Exs. C-3, C-4 and customer ledger C-5 shows that the payments were received by Op No.1& 2. Therefore, once the Op No.1& 2 has received the payment, then Op No.1& 2 cannot take a plea that there is no liability even if the project was to be developed by Op No.3 as per authorization given by Op No.1&2. When payments were received by Op No.1&2, then all the Ops are vicariously liable to deliver the flat within the agreed time and in case possession has not been delivered then the complainant is entitled to the refund. A reference has been taken from the judgment of the Hon’ble National Commission reported as II (2014) CPJ 131 “PUDA versus Kanwalpreet Singh” that in case there is delay in handing over the possession, it amounts to deficiency in service and refund order can be passed. A reference has also been made to I (2017) CPJ 513 (NC) “Neha Suri versus Unitech Reliable Project Pvt. Ltd.” In that case, the possession of the flat was not given as agreed. It amounts to deficiency in service. Amount deposited alongwith interest was ordered to be refunded. Similar order was passed in I (2017) CPJ 113 “Vishal Issar v. Park Wood Developers Pvt. Ltd.”. This Commission has already held in Consumer Complaint No. 164 of 2016 “Harmit Singh Arora versus M/s Country Colonisers Private Limited”, decided on 2.2.2017 against the same opposite party that in case possession of the apartment has not been given as agreed then it amounts to deficiency in service and that the complainants are not bound to pay further payments when the project is not coming at the site and refund alongwith interest order was ordered. Therefore, we are of the opinion that there is deficiency in services on the part of Ops and in case the construction is not completed within the agreed time then the complainant has a right to withdraw from the scheme and to seek the refund.

11.               It has been further argued by the counsel for the Ops that according to Clause No. 4.c, in case there is delay in delivery of the possession then the Ops are liable to pay the penalty as per Clause 4.c(ii) i.e. @ Rs. 5/- per sq. ft. per month of super area for the period of delay in offering the possession of the said apartment. Whereas it has been contended by the counsel for the complainant that in case of late payment, the Ops are claiming interest @ 18% then similar treatment be given to the complainant. It is one sided agreement and in case of default on the part of complainant, he has to pay 18% interest whereas Ops are to pay just 3%. This question has been dealt in detail by the Hon’ble National Commission in CC No. 427 of 2014 “Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd.” decided on 8.6.2015 wherein the Hon’ble National Commission observed as under:-

 “However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyer’s Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer’s Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer’s Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer’s Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment. It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer’s Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer

Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word “including” before the words “any of the following practices”.

                   The same view was upheld by the Hon’ble National Commission in CC No. 347 of 2014, “Swarn Talwar & Ors. Vs. Unitech Ltd.” decided on 14.8.2015. A reference has also been made to the judgment of the Hon’ble Supreme Court in “K.A. Nagmani Vs.Housing Commissioner, Karnataka Housing Board”, C.A . No.6730-6731, decided on 19.9.2012. In that case, the District Forum has allowed interest @ 12% p.a. and its appeal was dismissed by the State Commission as well as the Hon’ble National Commission and after relying upon the judgment of “Ghaziabad Development Authority Vs. Balbir Singh”, (2004) 5 SCC 65, the interest @ 18% per annum on the deposited amount was allowed alongwith Rs. 50,000/- as compensation. Against the judgment of the Hon’ble National Commission in “Swarn Talwar & Ors. Vs. Unitech Ltd.”,

C.C. No. 347 of 2014 (supra), Op preferred the appeal before the Hon’ble Supreme Court i.e. Civil Appeal No. 35562 of 2015, decided on 11.12.2015 and passed the order as under:- “We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to

entertain the appeal. The judgment does not warrant any interference.

                   The Civil Appeal is dismissed.”

12               However, it was further observed by the Hon’ble National Commission in another judgment 2017(3) CLT 520 (NC) “Ankur Goswami versus Supertech and another” observed that this clause in the allotment letter would be applied to the case where allottee is seeking possession of the flat and not seeking refund of the amount. However, in the present case, the allottee is seeking the refund, therefore, the penalty @ Rs. 5/- per sq. ft. will not be applicable. Further under Rule 17 of PAPRA Rules,1995 i.e. Rate of Interest on refund of advance money upon cancellation of agreement has been provided as under:-

 “17. Rate of Interest on refund of advance money upon cancellation of agreement. – The promoter shall refund full amount collected from the prospective buyers under subsection (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment.”

 

                    In the above rule it has been observed to refund the amount alongwith interest @ 12% p.a. In number of similar complaints, we  have allowed the interest @ 12% p.a. i.e. Consumer Complaint No.386 of 2016 “Meenakshi Puri versus Country Colonizers Pvt. Ltd. & Ors.”, decided on 28.11.2017 and ‘Consumer Complaint No. 3 of 2017 “Lt. Gurnur Singh Mahiwal & Anr. Versus M/s Country Colonisers Pvt. Ltd. & Ors.”, decided on 4.1.2018. Therefore, to be just and reasonable, the complainant will be entitled to interest @ 12% on the deposited amount.

 

13.              No other point was argued.

 

14.              Sequel to the above, we allow the complaint and direct Ops as under:-

 

(i)      To refund a sum of Rs.22,37,657/- to the complainant alongwith  interest @ 12% from the various dates of deposit till actual payment;

          (ii)     To pay a sum of Rs. 50,000/- as compensation on account of  

                   mental and physical harassment suffered by the complainant.

(iii)     To  pay Rs. 21,000/- towards litigation expenses.

 

                    The above directions be complied by the Ops within a period of 45 days from the date of receiving of the copy of the order, failing which the complainant shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.

15.              The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.

16.               The counsel for the parties/parties are directed to collect free certified copy of the order from the office of the Commission within a period of 15 days from the date of pronouncement.

 

 

  (Gurcharan Singh Saran)

                                                                   Presiding Judicial Member

                                                                  

 

April   06, 2018                                         (Rajinder Kumar Goyal)

PK/-                                                                      Member