Chandigarh

StateCommission

CC/105/2016

Somya Aggarwal - Complainant(s)

Versus

Omaxe Chandigarh Extension Developers (P) Ltd. - Opp.Party(s)

Ankit Aggarwal, Adv.

25 Jul 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                        U.T., CHANDIGARH

 

Complaint case No.	:	105 of 2016
Date of Institution	:	17.03.2016
Date of Decision	:	25.07.2016

 

Somya Aggarwal, r/o H.No.3324, Sector 50-D, Chandigarh, through GPA Holder Mrs. Brij Bala wife of Sh.K.K.Aggarwal resident of House No.3324, Sector 50-D, Chandigarh.

                                                …… Complainant

                        V e r s u s

 

Omaxe Chandigarh Extension Developers (P) Ltd., SCO 143-144, Sector 8-C, Chandigarh, through its Managing Director.  

                                                ....Opposite Party

 

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

            MR. DEV RAJ, MEMBER.

            MRS. PADMA PANDEY, MEMBER

 

Argued by:-     Sh.Ankit Aggarwal, Advocate for the  complainant.

Sh. Ashim Aggarwal, Advocater for the Opposite Party.

 

PER PADMA PANDEY, MEMBER.

              The facts, in brief, are that the complainant is working in the private sector and wanted to own residence in or around Chandigarh and, as such, she was interested to buy a residential independent floor in the project of the Opposite Party i.e. Omaxe CASSIA New Chandigarh Mullanpur LPA GMADA, District SAS Nagar, Punjab. The complainant agreed to the offer of the Opposite Party for the residential independent floor, measuring 300 sq. yards having built up area of 1725 sq. ft. and made the payment of Rs.25,57,424/- vide many receipts. It was further stated that the Opposite Party also issued the provisional allotment letter dated 23.12.2011 to the complainant. Copies of the provisional allotment letter and receipts are Annexures C-3 and C-4. After receipt of the payment, the Opposite Party handed over Allotment letter-cum-Agreement dated 20.06.2012 (Annexure C-5) i.e. after 3 months from the payment and as per Clause 23(h) of the Agreement, it was promised that in case of delay in construction, the Opposite Party would pay to the allottee/complainant a sum of Rs.10/- per sq. ft. per month for the super area for the period of delay but the Opposite Party failed to deliver possession, as per the Agreement i.e. within 2 years from the date of the Agreement i.e. by March, 2014. It was further stated that the complainant already cleared 95% of the payment by March, 2012. Accordingly, the total fine per month comes out to 1725 x 10 = Rs.17,250/- per month starting from March, 2014 till today and to be continued until the possession is granted. Copies of the Agreement and payment plan are Annexure C-5 & C-6. Thereafter, the complainant sent many reminders by way of emails (Annexure C-7) to the Opposite Party but the Opposite Party failed to hand over possession of the floor to the complainant. 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 complainant, was not redressed, left with no alternative, a complaint under the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

2.         The Opposite Party, in its written version, has specifically taken an objection as regards existence of Arbitration clause in the Agreement and for referring the matter to the Arbitrator by moving a separate application under Section 8 of Arbitration and Conciliation Act, 1996. It was stated that the complainant did not fall within the definition of “Consumer” as defined under Section 2(d) of the Consumer Protection Act, 1986 because the said unit was purchased by the complainant for speculation or investment purposes. It was further stated that it is well settled principle of law that in cases of sale of immovable property and construction, time is never regarded as the essence of the contract. Thus, the complainant is not entitled to claim possession within any time bound manner, as the same would amount to specific performance of the contract. It was further stated that there was no definitive agreement stating that possession would definitely be delivered within 24 months or extended period thereof. It was further stated that the as per Clause 23(b) of the Agreement/allotment letter, the builder was to deliver possession within 24   months or within 6 months extended period subject to exclusion of Sundays, government holidays etc. and, as such, the date of possession came to be 19.05.2015 (approx.).  It was further stated that the complainant delayed various installments and, as such, he was not entitled to any penalty for delay in construction of the said unit. It was further stated that penalty, if any, would be calculated from 19.05.2015 onward and not March, 2014, as wrongly claimed by the complainant. It was further stated that the Opposite Party always kept the complainant updated with the construction status and vide email dated 19.12.2015 informed that brickwork had been completed on the unit and tentative date of possession would be middle of 2016. It was further stated that neither there was any deficiency, in rendering service, on the part of the replying Opposite Party, nor it indulged into unfair trade practice.

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

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 complainant was provisionally allotted independent floor on the plot bearing No.461, measuring approx. 300 sq. yards having built up area approx. 1725 sq. ft. in “Omaxe Cassia” at Mullanpur, Punjab vide provisional allotment letter dated 23.12.2011 (Annexure C-3). It is also evident from the receipts (Annexure C-4) that the complainant paid the total amount of Rs.25,57,424.48 paise (say Rs.25,57,424/-) in respect of the unit, in question. It is also the admitted fact that allotment letter dated 20.06.2012 alongwith terms and conditions and payment plan were given to the complainant. It is also the admitted fact that possession of the independent floor was not handed over to the complainant.

7.         The first question that falls for consideration is, as to whether, in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Party, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.” 

            In view of the above, and also in the face of ratio of judgments, referred to above, passed by the National Commission and this Commission, the arguments raised by Counsel for the Opposite Party, stands rejected.

8.         To defeat claim of the  complainant, another objection was raised by the Counsel for the Opposite Party, that the complainant is an investor, as she purchased the unit, in question, for investment/speculation purposes i.e. for resale, as and when there is escalation in the prices of real estate, therefore, he 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 Counsel for the Opposite Party because the complainant has specifically mentioned in para No.2 of his complaint that he is working in the private sector and wanted to have her own residence in or around Chandigarh and as such the complainant got interested in buying a residential independent floor, as per the advertisement published by the Opposite Party. So, it is clearly proved that the complainant has not purchased the said unit for investment purpose only.

            It may be stated here that there is nothing, on the record to show, that the complainant is the property dealer, and is indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by Counsel for 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 unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Counsel for the Opposite Party, therefore, being devoid of merit, is rejected.

9.         No doubt, the Counsel for the Opposite Party, placed reliance on Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., AIR 1993 SC 1742, a case decided by the Hon’ble Supreme Court  to contend that time was not the essence of contract. The facts of  Smt. Chand Rani's case (supra), are distinguishable, from the facts of the instant case. Smt. Chand Rani's case (supra), related to the specific performance of contract. It was held that intention to make time, as the essence of contract, must be expressed in unequivocal terms in the Agreement. It was, under these circumstances, held, in the said case, that time was not the essence of contract. Whereas, in the instant case, as per Clause 23(b) of the allotment letter dated 20.06.2012 (Annexure C-5),  the Opposite Party was to deliver possession within 24   months from the date of signing of the allotment letter or within an extended period of 6 months, subject to exclusion of Sundays, government holidays etc. and, as per Clause 23(h) of the allotment letter, if the Company fails to offer possession within 24 months, as detailed in Clause 23(b), the Company would pay to the allottee a sum of Rs.10/- per sq. ft. per month for the super area for the period of delay.  The time was, thus, unequivocally made the essence of contract. Therefore, no help, from the aforesaid case, can be drawn, by the Opposite Party. The plea taken by the Opposite Party, in its written statement, thus, being devoid of merit, must fail, and the same stands rejected.

10.        The next question, which falls for consideration, is as to whether within which period, the possession of the unit, in question, is to be delivered to the complainant. It is evident from record that allotment letter (Annexure C-5) was issued on 20.06.2012. Clause 23(b) relating to possession reads as under:-

“23(b) The Company shall put its best efforts to complete the development/ construction of the Unit within 24 (Twenty Four) months from the date of signing of this Allotment Letter by the Allottee(s), or within an extended period of 6 (six) months, however construction within aforesaid 30 months is subject to force majeure conditions [as mentioned in sub-clause (c) & (d) hereunder] and subject to all Unit Allottees making timely payment or subject to any other reasons beyond the control of the Company. No claim by way of damages/compensation shall lie against the Company  in case of delay in handing over the possession on account of any of the aforesaid reasons and the Company shall be entitled to a reasonable extension of time for the delivery of possession of the said Unit to the Allottee(s). The aforesaid period of development shall be computed by excluding Sundays, Bank Holidays, enforced Govt. holidays and the days of cessation of work at site in compliance of order of any Judicial/concerned State Legislative Body.”

 

            Thus, computing 24 months period from the date of signing of the allotment letter i.e. 20.06.2012 (Annexure C-5), the possession was to be delivered by 19.06.2014. As per aforesaid clause, another extended period of six months subject to force majeure, was available to the Opposite Party to hand over possession. The Opposite Party has stated that period was to be computed by excluding Sundays, Bank Holidays, enforced Govt. holidays and the days of cessation of work at site in compliance of order of any Judicial/concerned State Legislative Body and a period of around five months was on this account. Apparently, for seeking six months extension beyond 24 months, the Opposite Party owes an explanation, if the delay was on account of force majure conditions but nothing by way of cogent evidence to this effect has been placed on record. It is pertinent to note that the Opposite Party was to deliver possession within 24   months from the date of signing of the allotment letter or within an extended period of 6 months, subject to exclusion of Sundays, government holidays etc., and the said issue was already decided vide order dated 10.06.2016 passed by this Commission in Complaint Case No.311 of 2015 titled as Shellender Singh Vs. M/s. Omaxe Chandigarh Extension Developers Pvt. Ltd., wherein, it was decided that when no explanation for extension of six months period has been furnished, the Opposite Party at the most could be allowed one out of the two benefits i.e. either six months extension beyond 24 months or five months period on account of Sundays/Holidays etc. In view of the aforesaid order passed by this Commission, we are of the view that the possession is to be delivered within 24 months + 6 months i.e. maximum period of 30 months from the date of signing the allotment letter and the said period of 30 months has been calculated from 20.06.2012, as such, the said period expired on 19.12.2014. So, it is clearly proved that possession of the said floor was to be delivered by the Opposite Party latest by 19.12.2014.

11.        The next question, that falls for consideration, is, as to whether, the complainant is entitled to fine/compensation, if so, at what rate, for non-delivery of physical possession of the unit. Earlier, in a case titled as Narender Kumar Yadav Vs. DLF Homes Panchkula Pvt. Ltd. and another, consumer complaint no.224/2015 decided on 13.01.2016, this Commission, had granted compensation @ Rs.10/- per square feet of the saleable area (as provided in the Agreement), alongwith interest, to the complainant, for the period of delay. However, recently in Parsvnath Exotica Ghaziabad Resident's Association Vs. Parsvnath Buildwell Pvt. Ltd. & Anr., consumer complaint no.45/ 2015, decided by the Hon’ble National Commission, on 06.05.2016, under similar circumstances, interest on the deposited amount, for the period of delay was granted, by holding as under:-

“Though, the Agreement between the developer and the flat buyers provides for payment of compensation in case of delay @ Rs.5/- per square feet of the super area per month, such clauses have been found to be unfair trade practice and have been consistently rejected by this Commission in several decision, including  Consumer Complaint No. 427 of 2014 Satish Kumar Pandey & Ors. Vs. Unitech Ltd. and connected matters decided on 08.6.2015.  Therefore, the aforesaid clauses cannot be taken into consideration, while determining the compensation payable to the members of the complainant association for the aforesaid delay in completion of construction.”

12.        Not only this, in another case, titled as Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

 “8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.”

13.        No doubt in the allotment letter, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, was incorporated but it does not mean that the intention was that even in the event of inordinate delay, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.10/- per sq. ft. per month, which is much less than the bank rate for loan or fixed deposit. If the argument of the Opposite Party is to be accepted, it would lead to absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer for its other business venture, at nominal interest of 3 to 4 percent, as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act. Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the cases, referred to above, if interest @12% in lieu of fine, on the deposited amount for the period of delay, till delivery of possession of the unit, is awarded, that would meet the ends of justice.

14.            The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to her, for a long number of years, by not delivering physical possession of the unit to her, by the Opposite Party, by the stipulated period of 24 months mentioned in the allotment letter or extended period of 6 months i.e. latest by 19.12.2014. The complainant purchased the unit, with the hope to have a roof over his head alongwith with his family members but his hopes were dashed to the ground. Even the possession of unit, in question, was not delivered to the complainant, till date i.e. even after the expiry of a period of more than about four years, from the date of signing the allotment letter and more than  about 1 ½ years, from the stipulated date (19.12.2014), by the Opposite Party, what to speak of delivery thereof. The complainant underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Party. Compensation, on account of mental agony and physical harassment, caused to the complainant, due to the acts of omission and commission of the Opposite Party, if granted, to the tune of Rs.3 lacs, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.3 lacs.

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

(i)    To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, as per the terms and conditions of the Agreement, to the complainant, within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against her.

(ii)    To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.

(iii)   To pay fine/compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 19.12.2014 to 31.07.2016, within two months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.

4. To pay fine/compensation by way of interest @12% p.a. on the deposited amount, due to the complainant w.e.f. 01.08.2016, onwards (per month), by the 10th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till payment is made. This amount of penalty shall be paid in this manner till actual delivery of possession. 
5. To pay compensation, in the sum of Rs.3 lacs, on account of mental agony and physical harassment, caused to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.
6. To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

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

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

Pronounced.

July 25, 2016.                                               Sd/-

                                              [JUSTICE JASBIR SINGH (RETD.)]

                                                                                [PRESIDENT]

 

                                                                                        Sd/-

                                                                                [DEV RAJ]

                                                                                 MEMBER

 

                                                                                        Sd/-

        (PADMA PANDEY)

                                                                                 MEMBER

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