Chandigarh

StateCommission

CC/62/2017

Lalitha Saini - Complainant(s)

Versus

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

Varinder Arora, Adv.

05 May 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	11 of 2017
Date of Institution	:	06.01.2017
Date of Decision	:	05.05.2017

 

1. Shruti Chhabra aged 37 years, wife of Sh.Arvind Chhabra.
2. Arvind Chhabra aged 44 years, son of Sh.M.L. Chhabra

Both are residents of House No.1147/1, Sector 44-B, Chandigarh.

…… Complainants

V e r s u s

M/s Omaxe Chandigarh Extension Developers Pvt. Ltd., Office at SCO No.139, 140, First Floor, Sector 8-C, Madhya Marg, Chandigarh-160008, through its Director/Authorized Signatory.

…. Opposite party

 

Argued by:-      Sh.Davinder Lubana, Advocate for the      complainants.

Sh.Munish Gupta, Advocate for the opposite party

 

======================================================

 

Complaint case No.	:	62 of 2017
Date of Institution	:	20.01.2017
Date of Decision	:	05.05.2017

 

Lalitha Saini wife of Sh.Jaswinder Singh, resident of House No.1097 (FF), Sector 15-B, Chandigarh.

…… Complainant

 

V e r s u s

1. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Authorized Signatory, having its Regional Office at SCO No.139-140, Sector 8C, Madhya Marg, Chandigarh.
2. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Authorized Signatory, having its Regd. Office Omaxe City, 111^th Mile Stone, Near Bad Ke Balaji Bus Stand, Jaipur, Ajmer Expressway, Jaipur-302026.
3. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Chairman and Managing Director, Sh.Rohtash Goyal, having its Corporate Office 10, Local Shopping Complex, Kalkaji, New Delhi-110019.
4. M/s Harrow Realtors Pvt. Ltd., through its Authorized Representative, Showroom No.214, Sector 29-B, Chandigarh.

…. Opposite parties

Argued by:-      Sh.Varinder Arora, Advocate for the complainant.

Sh.Munish Gupta, Advocate for opposite parties No.1 to 3.  

Sh.Kabir Sarin, Advocate for opposite party no.4.

 

Complaints under Section 17 of the Consumer Protection Act, 1986

 

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

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                By this order, we propose to dispose of aforesaid two consumer complaints. Arguments were heard in common, in the above cases, as the issues involved therein, except minor variations, here and there, of law and facts are the same. In both the complaints, the complainants are original purchasers of their respective units and have sought refund of the amount deposited. In consumer complaint no.11 of 2017, possession of the unit booked has been offered, though at belated stage and that too during pendency of this complaint, whereas, in consumer complaint bearing no.62 of 2017, possession of unit therein, has not been offered to the complainant, nor it is in sight, as is evident from the evidence/documents, placed on record.  At the time of arguments, on 28.04.2017, it was agreed by Counsel for the contesting parties, that facts involved in the above complaints, by and large, are the same, and therefore, both the complaints can be disposed of, by passing a consolidated order.

2.         To dictate order, facts are being taken from consumer complaint bearing no.11 of 2017, titled as Shruti Chhabra and another Vs. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd. The complainants are wife and husband respectively. For their residential purpose, they intended to purchase a flat/unit, measuring 1425 square feet, from the opposite party, in its project, known as ‘Ambrosia Independent Floor Chandigarh’ Mullanpur, District Mohali, Punjab. On 06.12.2011, the complainants moved an application for purchase of the said unit, on making payment of Rs.8 lacs, towards booking amount. On 09.05.2012, the opposite party issued a letter, inviting the intending purchasers, for allotment of the unit, as per the individual preference. The complainants opted for a unit, situated on the ground floor, on a plot measuring 250 square yards. Price of the unit, in question, at ground floor was fixed at Rs.46,13,404.17ps. Vide provisional allotment letter dated 23.11.2012 Annexure C-2, they were allotted an independent floor, on plot bearing no.4660/GF, (ground floor), with built-up area of 1425 square feet, in the said project. Allotment letter/Agreement dated 27.10.2014 Annexure C-3, was executed between the parties, in respect of the said unit. As per Clause 7 (a), it was promised that the possession of the constructed unit will be handed over within a period of 15 months, from the date of signing of that Agreement, with grace period of six months i.e. total 21 months. The possession was subject to force majeure conditions.
3.         It is grievance of the complainants that booking amount was received in the month of December 2011. Thereafter, further amount was paid, however, in a malafide manner, the Agreement was got executed between the parties, only on 27.10.2014. From time to time, the complainants continued making payments. They came to know that the unit at ground floor will not be made available to them. The opposite party has decided to raise construction of the flat on stilts. Ground floor has been kept for parking of cars. When the complainants visited the office of the opposite party to confirm above said fact, it was admitted by them.
4.         It was specifically stated that the complainants had opted the unit at ground floor because their parents were old. Their entitlement was wrongly changed to first floor, instead of ground floor.

                 By stating that there was delay in handing over possession of the unit and further terms and conditions of the Agreement have been violated, by not offering possession of the unit, on ground floor, they sent legal notice dated 27.05.2016 Annexure C-5, asking the opposite party to refund amount paid by them, with interest. When they failed to get any response, the present complaint was filed seeking following relief:-

 

1. Refund the total amount of Rs.43,85,542/- (Rupees Forty Three Lakhs Eighty Five thousand Five hundred forty two only) alongwith interest @24% per annum to the complainants.
2. The opposite party may be directed to pay compensation of Rs.5,00,000/- (Rupees Five Lakhs only) to the Complainant for the pain, hardship, unnecessary harassment and mental agony.
3. The opposite party may be directed to pay Rs.55,000/- as cost of litigation to the complainant.
4. The opposite party may be directed to grant any other relief to which the Complainants are found entitled to by this Hon’ble Forum”

       

5.         Upon notice, written reply was filed by the opposite party, wherein, it was pleaded that as per Clause 62 of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide dispute between the parties, because as per above said provision, for settlement of dispute, the matter needs to be referred to an arbitrator for adjudication. Territorial and pecuniary jurisdiction of this Commission was also challenged. It was pleaded that the complainants being investors, would not fall within definition of consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986. The complainants continued to make payments, even after issuance of legal notice by them on 27.05.2016, and even after filing of this complaint. It was averred that the complainants have concealed material facts, as such, are not entitled to get any relief. It was pleaded that the complaint is bad for non-joinder of Punjab National Bank, from which they obtained loan for making payment towards price of the said unit, as a necessary party to this complaint, as such, it is liable to be dismissed on this ground alone. It was further pleaded that even no permission for filing joint complaint was sought for by the complainants, by moving separate application. It was averred that time was not the essence of contract. 

                On merits, purchase of the unit, in question, was admitted. Payments made were also admitted. It was stated that occupation certificate, on completion of construction work had been obtained by the opposite party, from the Competent Authorities, on 13.02.2017 and thereafter, possession of the unit was also offered to the complainants, vide letter dated 09.03.2017. The complainants have even made payments thereafter, as such, they cannot ask for refund of the amount paid by them, on account of their act and conduct. It was denied that period to hand over possession will run from the date of booking of the unit. It was stated that possession of the unit was to be delivered within a specific fixed time, from the date of allotment letter/agreement dated 27.10.2014. It was further stated that no notice was ever sent by the complainants seeking refund of amount paid with interest. It was further stated that, in case, the complainants still want refund of the amount deposited, the same would amount to surrendering of the unit, and would attract forfeiture charges. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.

6.         In both the complaints, separate applications under Section 8 of the Arbitration and Conciliation Act, 1996, were also filed by the opposite party(s)/developers, stating that this Commission has no jurisdiction to entertain the consumer complaints and let the matter be referred to an arbitrator for adjudication. The said applications were disposed of vide orders dated 09.02.2017 and 30.03.2017 respectively, with the direction that question qua arbitration will be considered, at the time of final arguments in the main cases.
7.         In the rejoinder filed, the complainants reiterated all the averments contained in the complaint, and repudiated those, contained in written version of the opposite party(s).
8.         The contesting parties, in both the complaints, led evidence in support of their cases and also raised arguments in terms of pleadings noted in earlier part of this order, which were heard, in detail.
9.         Before going into merits of the case, we would like to decide preliminary objection taken by the opposite party, that the complainants being investors, have purchased the unit in dispute, for selling the same, to earn profits and not for personal use, as such, they would not fall within the definition of consumer, as defined under the Act.

                Perusal of the facts on record, clearly indicate that the complainants have purchased the unit, in question, for their own use. It was mentioned by them in their complaint, that their parents are old and on account of that reason, they had purchased the unit, in question, on ground floor, in the project of the opposite party. It was also stated that they continued making payments as per demands raised, to avoid any penalty being imposed by the opposite party, which is very heavy, as is evident from Clause 36 of the Agreement. We are inclined to accept reasoning given by the complainants. It was contended by Counsel for the complainants that the complainants had paid the said amount, even after filing of the complaint to ward off imposition of penalty to be accrued, as delayed interest. Furthermore, only on account of the reason that the complainants were regular in making payments, just to avoid breach of terms and conditions of the Agreement; they cannot be deprived of seeking refund of amount paid, on account of material violation committed by the opposite party, in not handing over possession of the unit, as per promise made i.e. by the stipulated date and also not giving possession on ground floor. It was only under those circumstances, that the complainants were forced to seek refund of amount paid with interest and compensation, and in no way, they can be called as speculators.

                Otherwise also, there is nothing on record, that the complainants are property dealers, and deal in the sale and purchase of property, on regular basis, in the open market and, as such, the unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Since, the opposite party, has levelled allegations against the complainants, as such, the onus lays upon it, to prove it, which it failed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by the opposite party, mere bald assertion i.e. simply saying that the complainants being investors, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, 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 the aforesaid cases, is fully applicable to the present case. The  complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party, in its written reply, therefore, being devoid of merit, is rejected. 

10.         The next 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 of the Act, a consumer complaint can 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, perusal of almost all the documents placed on record reveals that the same have been issued by the opposite party from its Chandigarh Office. Even the Allotment Letter/Agreement, containing detailed terms and conditions in respect of the sale of the unit, in question, was executed at Chandigarh, as the same bears the stamp of Chandigarh Office of the opposite party. 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 party, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.         Another objection taken by the opposite party, with regard to pecuniary jurisdiction of the Commission, also deserves rejection. It may be stated here, that the complainants have sought refund of amount of Rs.43,85,542/-, (excluding interest claimed @24% p.a. from the respective dates of deposits); compensation to the tune of Rs.5 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.55,000/- , aggregate value whereof fell above Rs.20 lacs and below Rs.1 crore.

                Counsel for the opposite party, at the time of arguments, while relying upon the ratio of judgment titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016, argued that if interest claimed @24% p.a. on the amount, referred to above, is added to other reliefs claimed, this Commission has no pecuniary Jurisdiction to entertain the complaint. It may be stated here that to clarify the position, a similar question fell for determination before this Commission in Surjit Singh Thadwal  Vs. M/s Emaar MGF Land Pvt. Ltd.,  and another, Consumer Case No. 484 of 2016, decided on 15.12.2016, wherein while negating the said plea, it was held as under:-

“Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.

In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer :

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. 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.”

 

It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

 

“12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

 

(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

 

(2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

 

(3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and

 

(ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.”

 

In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.`s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected. ”

 

                Thus, the objection taken by the opposite party, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

12.         Now it is to be seen, as to whether, the complainants are entitled to refund of the amount paid or not. It is not in dispute that the complainants booked the unit, in question, in the project of the opposite party, on 06.12.2011. They were invited to choose a flat, as per their convenience, on 09.05.2012. They opted for a ground floor unit, to be constructed on a plot measuring 250 square yards. Built-up area of the unit was 1425 square feet. Total price of the said unit was fixed at Rs.46,13,404.17ps. By the time, this complaint was filed, they had already paid an amount of Rs.43,85,542/-. It is stated by the complainants that  they decided to purchase ground floor unit, because their parents are old. To make their stay comfortable, ground floor was opted by them.

                To the contrary, it is contention of Counsel for the opposite party that as per Rules of the Government, in such like projects, construction of flats is allowed on stilts and the ground floor area is to be kept for parking of the cars. The building plan was also approved accordingly, to raise construction of the units on stilts. Be that as it may, it may be a requirement of the Rules aforesaid,  but there is nothing on record to show that at any point of time, any intimation of the said change was sent to the complainants or their consent was ever obtained. Had the said fact of raising construction of the unit, in question, on stilts been brought to the notice of the complainants, in advance, they might have changed their plan and would have got opportunity, to seek refund of the amount paid, as the purpose of purchase of the said unit, keeping in mind the old age of their parents, was going to be defeated, but they could not do so, as the said fact was never intimated to them, by the opposite party. Without disclosing the material fact, the opposite party continued to get the amount deposited, from the complainants. Furthermore, under above circumstances, case of the complainants that they are not interested in purchasing the constructed unit on stilts, appears to be correct.  

13.         It is not in dispute that possession of the constructed unit on ground floor, was to delivered by the opposite party to the complainants, within 21 months i.e. (15 months plus 6 months) from the date of signing of that Agreement, as per Clause 7 (a), which read thus:-

“The Company shall try to complete the development/construction of the Unit/Project within 15 (Fifteen) months from the date of signing of this Allotment Letter by the Allottee(s) or approval of the building plans, whichever is later and within such further extended grace period of 6 (six) months. Completion of development of the Unit within such 21 (Twenty One) months is subject to force majeure conditions (as mentioned in Clause (b) hereunder) and subject to timely payment by the Unit Allottee(s) 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.”

       

14.         At the time of arguments, it was virtually admitted by both the parties that end date to hand over possession of the unit was fixed on 26.07.2016. It is on record that construction by that time was not complete. Occupation certificate in respect of the said unit was issued by the Competent Authorities only on 13.02.2017 and thereafter possession was offered on 09.03.2017 and that too, during pendency of this complaint. Possession offered during pendency of the complaint, in our considered opinion is of no help to the opposite party, being it the subsequent event. Under similar circumstances, in Sanjay Kumar Baranwal & 2 Ors. Vs. Selene Constructions Ltd.,  Consumer Case No. 914 of 2015, decided on 19^th May 2016, the National Commission held as under:-

“The opposite parties have filed an application under Section 26 of the Consumer Protection Act, 1986, wherein it is objected that this case is not maintainable under Section 12 (1)(c) of the Consumer Protection Act, 1986. In this context, our attention has been invited towards the fact that Mrs. Chandra Prabha and Mr. Arun Choudhary who have been arrayed as complainant No.2 have already got the possession of the premises in dispute on 24-11-2015. However, this complaint was filed on 19-08-2015. They got the possession during the pendency of this case. This is a subsequent event. There lies no rub in taking note of the subsequent event.”

 

                Under above circumstances, on account of material violation of terms and conditions of the Agreement, by the opposite party, cannot be ignored and as such, the complainants cannot be forced to accept possession of the unit, offered at a belated stage, in the absence of any force majeure circumstances. It is well settled law that non-delivery of possession of constructed unit in a developed project, by the stipulated date, is a material violation of the terms and conditions of the Allotment Letter/Agreement, on the part of a builder. Under similar circumstances, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015, decided on 14 Sep 2016, the National Commission negated the plea taken by the builder, while holding as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

                Thus, in view of principle of law laid down in the aforesaid cases, it is held that even if the said offer made was genuine, yet the complainants were not obliged to accept the same, as the same was made after delay of about 8 to 9 months, and especially, when their unit was arbitrarily shifted on stilts, instead of ground floor, without obtaining their consent.  In view of above, it is held that since there was a material violation on the part of the opposite party, as explained above, the complainants were at liberty to seek refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.

15.         In connected consumer complaint bearing no.62 of 2017, it is an admitted case that even till date, possession of the unit purchased, has not been offered to the complainant by opposite parties no.1 to 3/developers, for want of construction and basic amenities. As such, in this case, the position is worst. In view of the findings given above, in this case also, the complainant is entitled to get refund of the amount deposited, alongwith interest and compensation. The opposite parties no.1 to 3/developers are, as such, held deficient in providing service and also guilty of adopting unfair trade practice.

                In view of above facts of the case, the opposite parties /developers are also under an obligation to compensate the complainants, in both the complaints, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

16.         It was argued by Counsel for the opposite party that since it a case of surrender of unit(s), as such, forfeiture clause shall be attracted. It may be stated here that, in the present case, forfeiture Clause was to be made applicable only if it is proved that the opposite party was ready to deliver possession of the unit, within the stipulated period as promised, but the complainants, wanted to rescind the contract, of their, which is not the case of the opposite party, in this complaint. This Commission, while given detailed findings, has already held that it was on account of deficient services and adoption of unfair trade practice, that the complainants are entitled to refund of the amount deposited alongwith interest and compensation. As such, the plea taken by the opposite party, in this regard, stands rejected.
17.         An objection was also taken by the opposite party that time was not the essence of contract. It may be stated here that, as held above, as per Clause 7 (a) of the Agreement, possession of the constructed unit was to be offered within a period of 15 months, from the date of execution of the Agreement. The opposite party was entitled to 6 months’ grace period, to facilitate handing over possession to the complainants. A clear-cut promise was made to deliver possession of the unit, within a maximum period of 21 months. In view of above, there is no substance in the arguments raised by Counsel for the opposite party that time was not the essence of contract

                At the same time, it is also submitted that the opposite party cannot evade its liability, merely by saying that since the word try/proposed/tentative was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof.  It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

                In view of above, the plea of the opposite party in this regard also stands rejected.

18.         To defeat the claim of the complainants, an objection was also raised that to make payment towards price of the said unit, loan was raised by the complainants from Punjab National Bank (PNB), however, for non-impleading of it (PNB), as a necessary party to this complaint, the same (complaint) is liable to be dismissed. We are not going to agree with the contention raised. The complainant in paragraph no.17 of his complaint has brought to the notice of this Commission, that he had raised loan from the said Bank. The said Bank is not before us. If the complainant has to pay any amount to the said Bank, it automatically will have first lien thereon. Even otherwise, in almost all the cases, where refund has been sought, this Commission orders the refund, as per facts of each case, with the direction that the financial institution, from which the purchaser has availed loan amount, if any, for making payment towards the unit(s), will have the first charge of the amount payable. Even in this case also, this Commission is going to order on the same lines. In view of above, the complaint cannot be dismissed on this ground.
19.         To defeat the claim of the complainants, an objection was also raised that since application for filing a joint complaint is not filed, as such, the complaint is liable to be dismissed on this ground alone.

                We are not going to agree with the contention raised, also.  From the perusal of contents of the complaint, it reveals that the same has been signed by both the complainants. It was for this Commission, to satisfy itself, as to whether, the complaint filed is maintainable or not. Once, notice has been issued by this Commission, in this complaint, after seeing that the complaint was signed by both the complainants, permission is deemed to have been given to the complainants to file this complaint, jointly. Even otherwise, the proceedings before the Consumer Fora, are summary, in nature. The Consumer Protection Act, 1986, is a beneficial legislation, 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, provided under Section 13(4) of the Act, and the Evidence 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, but are not required to enter into technicalities, with a view to deny the substantial justice to the parties. In view of above, the plea taken by the opposite party, stands rejected.

20.         Counsel for the opposite party, also argued that 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 no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitration for adjudication.

                We are not going to agree with the argument raised. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        The next 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  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

 

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

27.                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

28.      Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

29.       In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

30.   Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

31.        Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

32.        We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, 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.”

35.   In  view of the above, the plea taken by the opposite party, that 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 no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

                In view of the above, the plea taken by the opposite party, in this regard, being devoid of merit, is rejected.

21.         No other point, was urged, by Counsel for the parties, in both the complaints.
22.         For the reasons recorded above, both the complaints are partly accepted, with costs, in the following manner:-

 

In consumer complaint bearing no.11 of 2017, titled as Shruti Chhabra and another Vs. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd., the opposite party is directed as under:-

1. To refund the amount of Rs.43,85,542/-, to  the  complainants, alongwith interest @10% p.a.,  from the respective  dates  of  deposits onwards. (In this case, lesser rate of interest is granted, as there was delay of about 8 to 9 months, in offer of possession of the unit, in question)
2. To pay compensation, in the sum of Rs.1.50 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
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 two (2) 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 @13% p.a. instead of @10%, from the respective dates of deposits onwards, and interest @13% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of the complaint, till realization.

 

In consumer complaint bearing no.62 of 2017, titled as Lalitha Saini Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and others, opposite parties no.1 to 3/developers, jointly and severally are directed as under:-

1. To refund the amount of Rs.52,81,803/-, to  the  complainant, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.50,000/-, to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of two (2) 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 @15% p.a. instead of @12%, from the respective dates of deposits onwards, and interest @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of the complaint, till realization.
5. Since it has been proved on record that opposite party no.4 was only a broker, through which, the deal for purchase of the unit, in question, took place, as such, its role was limited upto the final draw of lots of the said unit, which admittedly held and the complainant was allotted the same. Since, after allotment of the unit, Agreement was executed between the complainant and opposite parties no.1 to 3, and they (opposite parties no.1 to 3) were only responsible to deliver possession of the unit, in question, which they failed to do so, as such, in our considered view,  the complaint qua opposite party no.4 deserves dismissal, and is accordingly, dismissed with no order as to cost.

23.         However, it is made clear that, if the complainant(s) in any of the above complaints, have availed loan facility from any banking or financial institution, for making payment towards the said units, it will have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
24.         Certified copy of this order, be placed on connected complaint file, referred to above.
25.         Certified copies of this order be sent to the parties, free of charge.
26.         The file be consigned to Record Room, after completion.

Pronounced.

05.05.2017_

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

MEMBER

 Rg.

 

 

 

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	62 of 2017
Date of Institution	:	20.01.2017
Date of Decision	:	05.05.2017

 

Lalitha Saini wife of Sh.Jaswinder Singh, resident of House No.1097 (FF), Sector 15-B, Chandigarh.

…… Complainant

 

V e r s u s

 

1. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Authorized Signatory, having its Regional Office at SCO No.139-140, Sector 8C, Madhya Marg, Chandigarh.
2. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Authorized Signatory, having its Regd. Office Omaxe City, 111^th Mile Stone, Near Bad Ke Balaji Bus Stand, Jaipur, Ajmer Expressway, Jaipur-302026.
3. Omaxe Chandigarh Extension Developers Pvt. Ltd., (A Wholly Owned Subsidiary of Omaxe Limited), through its Chairman and Managing Director, Sh.Rohtash Goyal, having its Corporate Office 10, Local Shopping Complex, Kalkaji, New Delhi-110019.
4. M/s Harrow Realtors Pvt. Ltd., through its Authorized Representative, Showroom No.214, Sector 29-B, Chandigarh.

…. 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.Varinder Arora, Advocate for the complainant.

Sh.Munish Gupta, Advocate for opposite parties No.1 to 3. 

Sh.Kabir Sarin, Advocate for opposite party no.4.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                Vide our separate detailed order of the even date, recorded in  consumer complaint bearing no.11 of 2017, titled as Shruti Chhabra and another Vs. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd., this complaint has been partly accepted with costs.

2.         Certified copy of the order passed in consumer complaint bearing No. 11 of 2017, shall also be placed on this file.
3.         Certified copies of this order, alongwith the main order passed in consumer complaint bearing No. 11 of 2017, be sent to the parties, free of charge.
4.         The file be consigned to Record Room, after completion.

 

 

Sd/-                                 Sd/-                                         Sd/-

 

(DEV RAJ) MEMBER

(JUSTICE JASBIR SINGH (RETD.)) PRESIDENT

(PADMA PANDEY) MEMBER

 

Rg.