Chandigarh

StateCommission

CC/98/2016

Jasbir Singh Manocha - Complainant(s)

Versus

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

Manish Jain

13 Jun 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	98 of 2016
Date of Institution	:	14.03.2016
Date of Decision	:	13.06.2016

 

1. Jasbir Singh Manocha, r/o House #2131, Sector 15-C, Chandigarh – 160 015.

 

2. Mrs. Adarsh Manocha, wife of Sh. Jasbir Singh Manocha, r/o House #2131, Sector 15-C, Chandigarh – 160 015.

 

……Complainants

V e r s u s

M/s Unitech Limited, SCO No.189-191, Sector 17-C, Chandigarh – 160 017, through its Managing Director.

                                                    .... Opposite Party

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Manish Jain, Advocate for the complainants.

Mrs. Vertika H.Singh, Advocate for the Opposite Party.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that the complainants booked a unit measuring 914.43 sq. ft. in the project of the Opposite Party  known as “Garden Galleria” at Sector 106, Mohali. It was stated that at the time of booking of the said property, the complainants paid the amount of Rs.4,11,000/- to the Opposite Party  vide cheque dated 01.06.2010 (Annexure C-1). Thereafter, the Opposite Party  allotted shop bearing No.00-00-0016 in Garden Galleria, Sector 106, Mohali to the complainants vide allotment letter dated 12.08.2010 (Annexure C-2) and as per the allotment letter, the total sale price was fixed at Rs.41,14,935/-. It was further stated that the said property purchased by the complainants in order to earn their livelihood as they had planned opening of a cafe/restaurant in the said premises. Thereafter, Agreement to Sell was executed between the parties on 12.08.2010 (Annexure C-4) and as per Article 4.1 of the Agreement, possession of the unit was to be delivered to the complainants within a period of 21 months from the date of the Agreement. It was further stated that the Opposite Party demanded an amount of Rs.4,11,986/- as per demand letter dated 13.09.2010 (Annexure C-5), from the complainants, which was duly paid by them vide receipt (Annexure C-6 colly.). Thereafter, the complainants remitted an amounts of Rs.4,32,698/- and Rs.4,22,104/-, as per demand letters issued by the Opposite Party, vide Annexure C-8 (Colly.) & Annexure C-10 respectively. As such, the complainants remitted all the payments, as demanded by the Opposite Party, within time. Thus, the complainants have paid a total consideration of Rs.16,77,788/- to the Opposite Party in respect of the property, in question. It was averred that the complainants visited the site and was shocked to see that there was hardly any development in the proposed area, where the property is located and till the date of filing the complaint, no structure has been raised/developed by the Opposite Party. Therefore, the Opposite Party clearly failed to complete its obligation, as per the Agreement and was not in a position to hand over the same. It was further averred that as per Clause 4.3 of the Agreement, the Opposite Party would be liable to pay compensation @Rs.7/- per sq. ft. of the super area per month for space/unit for the period of delay in offering possession of the said space/unit beyond the committed date. It was further stated that the complainants waited patiently for more than 5 years for the Opposite Party to hand over possession but it failed to deliver the same and, as such, the complainants are entitled for refund of the deposited amount with interest. Ultimately, the complainants wrote a letter dated 24.12.2014 (Annexure C-11) to the Opposite Party for refund of the deposited amount alongwith interest but to no avail.  It was further stated that the aforesaid acts, on the part of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

2.           The Opposite Party, in its written version, has stated that this Commission has got no territorial jurisdiction to adjudicate the complaint because the property, in dispute, is situated at Mohali, Agreement to Sell was executed between the parties at New Delhi ; payments made by the complainants to the Gurgaon office and receipts of the same issued by the Gurgaon Office of the Opposite Party.  It was further stated that the complainants did not fall within the definition of “Consumer” as per Section 2 (d) of the Consumer Protection Act, 1986 because the complainants had bought the said shop for commercial purposes. It was further stated that the complainants are investors, who invested in the said shop for resale purposes but they could not resell the said property due to slump in the real estate market. It was further stated that consumer complaint is not maintainable, and only a Civil Court, could adjudicate the dispute, in question. It was further stated that the period mentioned in the Agreement i.e. 21 months for delivery of possession of the unit, was only tentative time period, which was subject to force majeure circumstances. It was further stated that the Opposite Party could not hand over possession of the unit to the  complainants, by the stipulated date, as there was global meltdown/recession of the economy worldwide, resulting into cash crunch throughout and also due to some objection raised by the Punjab State Power Corporation Limited (PSPCL), a number of times and, as such, electricity could not be made available at the site,  due to which, rest of the development work and providing of the basic amenities was delayed. It was further stated that development work at the site, is being carried out in full swing and the Opposite Party is making sincere efforts to hand over possession of the said unit, to the complainants. It was further stated that the Opposite Party is entitled for reasonable extension of time in handing over of possession, as per Agreement to Sell, since the Opposite Party is itself a victim of global market recession. It was further stated that the Opposite Party vide letter dated 03.02.2016 had applied to GMADA for issuance of partial completion certificate (Annexure OP-3). It was further stated that if the complainants seek refund of the amount deposited by them, then the forfeiture clause would be applicable upon them, as per the Agreement. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice.

3.           The complainants, filed rejoinder to the written statement of the Opposite Party, wherein they reiterated all the averments, contained in the complaint, and refuted those, contained in the written version of the Opposite Parties. 

4.           The Parties led evidence, in support of their case.

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

6.           Admittedly, the complainants booked a shop/unit in the project of the Opposite Parties i.e. “Garden Galleria” at Sector 106, Mohali. It is also the admitted fact that the shop bearing No.00-00-0016 was allotted to the complainants vide allotment letter dated 12.08.2010  (Annexure C-2). It is also the admitted fact that the complainants paid the total consideration of Rs.16,77,788/- to the Opposite Party, in respect of the shop, in question. It is also the admitted fact that Agreement to Sell dated 12.08.2010 (Annexure C-4) was also executed between the parties and as per Clause 4.1 of the Agreement, possession of the same was to be delivered to the complainants within a period of 21 months from the date of Agreement i.e. latest by May/June, 2012 but neither the Opposite Party delivered possession of the shop, in question, nor refunded the deposited amount to the complainants, despite repeated requests.

7.         The first question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not. The Opposite Party stated in its written statement that the property, in question, is situated at Mohali, Agreement to Sell was executed between the parties at New Delhi and the receipts of the payments issued by the Gurgaon office of the Opposite Party, as such, this Commission has no territorial Jurisdiction to entertain and decide the complaint.

              According to Section 17 of the Act, a 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,  the cheques/drafts in the sum of Rs.4,11,000/- dated 01.06.2010 (Annexure C-1), Rs.4,11,986/- dated 12.10.2010 (Annexure C-6 colly.), Rs.4,32,698/- dated 12.12.2010 (at page No.40 of the file), Rs.4,22,104/- dated 26.12.2011 (Annexure C-10) were received by the Regional Office of the Opposite Party at Chandigarh i.e. “Unitech Limited, Regional Office, SCO 189-191, Sector 17-C, Chandigarh-160017”. Not only this, it is further evident, that the letters written by the Opposite Party to PSPCL (Annexure OP-2 colly.) were also addressed from its Regional Office at Chandigarh. Since, as per the documents, referred to above, a part of cause of action, arose to the complainants, at Chandigarh and, therefore, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the Opposite Party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

8.         To defeat claim of the complainants, another objection was raised by Counsel for the Opposite Party, that the complainants are investors, as they purchased the shop, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, they would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act. After going through the documents and record of the case, we do not find any merit in the contention of the Counsel for the Opposite Party because the complainants have specifically mentioned in para No.4 of their complaint that the said property had been purchased by them in order to earn their livelihood as they had planned opening of a cafe/restaurant in the said premises. So, it is clearly proved that the complainants purchased the said shop for the purpose of earning his livelihood.

              It may be stated here that there is nothing, on the record to show, that the complainants are the 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 Party, mere bald assertion to that effect, cannot be taken into consideration. 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. 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 principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the shop, 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 Counsel for the Opposite Party, therefore, being devoid of merit, is rejected.

9.           Another objection was raised by Counsel for the Opposite Party that the consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainants hired the services of the Opposite Party, for purchasing the shop, in the manner, referred to above. According to Article 4.1 of the Agreement to Sell dated 12.08.2010  the Opposite Party was liable to deliver possession of the shop, within a period of 21 months from the date of Agreement, i.e. latest by May/June, 2012. 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”

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 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can also be availed of by them, as they fall within the definition of consumer. In this view of the matter, the objection taken by the Counsel for the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

10.          The next question, that falls for consideration, is, as to within which period, possession of the shop, in question, was to be delivered to the complainants. According to Article 4.1 of the Agreement to Sell dated 12.08.2010 (Annexure C-4), the Opposite Party, was to hand over possession of the said shop to the  complainants, within a period of 21 months from the date of Agreement i.e. latest by May/June, 2012. Admittedly, possession of the shop, was not delivered to the complainants, by the stipulated time frame, as mentioned in the Agreement i.e. by May/June, 2012 or even till date. Even, in its written version, the Opposite Party frankly admitted that the Company could not hand over possession of the unit due to recession in the market/global meltdown, and also on account of non-provision of electricity in the said project, by the Punjab State Power Corporation Limited (PSPCL). Even partial completion certificate has not been obtained by the Company, till date, what to speak of obtaining final completion certificate, which is mandatory, before delivery of possession of the unit. Admission made by the Opposite Party, itself makes it clear that it had not obtained necessary approvals/sanctions from the PSPCL, as a result whereof, it was not provided with electricity, for the project in question. Secondly, when the Opposite Party, had already received huge amount from the allottee(s), then it does not lie in its mouth, that it faced extreme financial hardship, due to recession in the market, as far as the project, in question, is concerned. It is that the Opposite Party was, in the first instance, required to develop the project, by arranging funds out of its own sources, and, thereafter, the units were to be sold to the allottees, on future payment basis. Had this not been the case of the Opposite Party, only in those circumstances, the plea with regard to facing extreme financial hardship would have been considered to be correct, by this Commission.

              Even otherwise, the said difficulty/ground i.e. recession in the market/global meltdown would not fall under the definition of force majeure circumstances, for not completing the construction of unit(s). A change in economic or market circumstances affecting the profitability of a contract or the circumstance, is not regarded as a force majeure condition. Neither any new legislation was enacted nor an existing rule, regulation or order was amended, stopping suspending or delaying the construction of the project, in which flat(s)/plot(s) were agreed to be sold to the consumers. There is no allegation of any lock-out or strike by the labour, at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the Company or the contractors engaged by it, at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God, which could have delayed the completion of the project, within the time stipulated in the Agreement(s). A similar question fell for determination before the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in  Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others vs. M/s Unitech Limited (along three connected complaints),  decided on 14 Aug 2015. The National Commission, in that case, while rejecting the plea of the builder, held as under:-

“Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.

Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the  complainants. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.”.

11.         The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. The Opposite Party, therefore, cannot take shelter under Clause 12.2 of the Agreement, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  possession of unit, in question, would be delivered within a period of 21 months i.e. by May/June, 2012, but on the other hand, by not abiding by the commitments made, the Opposite Party was not only deficient, in rendering service, but also indulged into unfair trade practice.

12.        An objection was also taken by the Opposite Party that time was not the essence of contract. It may be stated here that as per Clause 4.1 of the Agreement, it was clearly mentioned that, possession of the unit shall be delivered to the purchaser within 21 months from the date of Agreement. It is pertinent to note that the unit was to be delivered to the complainants latest by May/June, 2012 but till date, the Opposite Party failed to deliver possession of the unit, in question, to the complainants, after receipt of the huge amount from them, despite repeated requests. If specific time of 21 months have been mentioned in the Agreement for delivery of possession, it can safely be said that time was, thus, unequivocally made the  essence of contract. The objection taken by the Opposite Party, in this regard, thus, being devoid of merit, must fail, and the same stands rejected.
13.        The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.16,77,788/-, deposited by them. It is an admitted fact that the Opposite Party  is unable to deliver  possession of the shop, in question, on account of pending development works, want of basic amenities, and non-provision of electricity, as admitted by it, and firm date of delivery of possession of the shop, could not be given to them (complainants). The complainants cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. As stated above, the Opposite Party failed to prove, by placing on record, any cogent and convincing material, that it encountered any force majeure circumstances, as a result whereof, possession of the unit, in question, was delayed. On the other hand, stand taken by the Opposite Party, in this regard, has been negated by this Commission, while giving detailed findings. The Opposite Party, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the shop/unit, in question. The complainants are, thus, entitled to get refund of amount deposited by them.

              As far as the plea taken by the Opposite Party regarding forfeiture of earnest money is concerned, it may be stated here that the same stands rejected, because it is not the case of the Opposite Party, that it was ready with possession to be delivered to the complainants, by the stipulated date i.e. May/June, 2012, but it was they (complainants) who wanted to rescind the contract, on account of deficiency in the services of the Opposite Party, and is seeking refund of the amount deposited. Had this been otherwise and only in those circumstances, it would have been held that since the complainants themselves are rescinding the contract, they are entitled to the amount deposited, after deduction of the earnest money, as per the terms and conditions of the Agreement. In this view of the matter, the plea taken by the Opposite Party, in this regard, has no legs to stand and is accordingly rejected. 

14.        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.16,77,788/-, was paid by the  complainants, without getting anything, in lieu thereof. The said amount has been used by the Opposite Party, for its own benefit. There is no dispute that for making delayed payments, the Opposite Party was charging heavy rate of interest (compounded quarterly @18% p.a.) as per Article 2.3 of the Agreement, for the period of delay in making payment of installments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon’ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.16,77,788/- alongwith interest @15% compounded quarterly, from the respective dates of deposits (less than the rate of interest charged by the Company, in case of delayed payment i.e. 18% compounded quarterly, as per Article 2.3 of the Agreement), till realization.

15.          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 caused to them. It may be stated here, that according to Section 14(d) of the Act, the Consumer Foras can grant compensation, to the complainant(s). The word ‘compensation’ is again of very wide connotation.  It has not been defined, in the Act. According to the dictionary, it means compensating or being compensated, thing given as recompense. In legal sense, it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss.  Therefore, when the Consumer Foras have been vested with the Jurisdiction to award the value of goods or services and compensation, it has to be construed widely enabling them (Consumer Foras), to determine compensation, for any loss or damage suffered by the consumers, which in law is otherwise, the wide meaning of ‘compensation’. The provision, in our considered opinion, enables the consumers to claim and empowers the Consumer Foras to redress any injustice done to the complainant(s). The Commission or the Forum in the Act, is, thus, entitled to award not only the value of the goods or services, but also to compensate the consumers, for injustice suffered by them. Similar principle of law was laid down, in Ghaziabad Development Authority v. Balbir Singh, II (2004) CPJ 12 (SC)=III (2004) SLT 161=(2004) 5 SCC 65. In the instant case, the complainants suffered a lot of mental agony and harassment, at the hands of the Opposite Party, for a number of years, as it neither delivered physical possession of shop nor refunded the amount to the complainants. The complainants purchased the shop for earning their livelihood, but their hopes were dashed to the ground. Till date, physical possession of the shop, has not yet been given, to the complainants, by the Opposite Party. The complainants, thus, underwent a lot of mental agony and harassment, on account of the acts of omission and commission of the Opposite Party. Compensation to the tune of Rs.3,00,000/- if granted, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.3,00,000/-.

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

17.          For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Party is directed, as under:-

1. To refund the amount Rs.16,77,788/-, to  the  complainants, alongwith interest @15% compounded quarterly,  from the respective  dates  of  deposits onwards.

 

2. To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainants.

 

3. To pay cost of litigation, to the tune of Rs.50,000/- to the  complainants.

 

4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @18% compounded quarterly, instead of @15%, from the respective dates of deposits onwards, and interest @15% compounded quarterly, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

 

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

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

Pronounced.

June 13, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

 

 [DEV RAJ]

MEMBER

 

 (PADMA PANDEY)

        MEMBER

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