Chandigarh

StateCommission

CC/777/2017

Renu Garg - Complainant(s)

Versus

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

Vishal Gupta, Adv.

17 Jul 2018

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	777 of 2017
Date of Institution	:	03.11.2017
Date of Decision	:	17.07.2018

 

1. Renu Garg wife of Ravinder Garg.
2. Ravinder Garg son of Sh.Thakur Dass.

Both residents of H.No.2202/2, Sector 45-C, Chandigarh.

……Complainants

V e r s u s

1. Omaxe Chandigarh Extension Developers Private Limited, having its Registered Office at Omaxe City, 111^th Mile Stone, Near Bad Ke Balaji Bus Stand, Jaipur-Ajmer Express Way, Jaipur through its Managing Director.
2. Omaxe Chandigarh Extension Developers Private Limited, having its Regional Office at SCO 139-140, Sector 8-C, Chandigarh, through its Regional Manager/Branch Manager.
3. Mr.Aditya, Authorized Representative, Omaxe Chandigarh Extension Developers Private Limited, SCO 139-140, Sector 8-C, Chandigarh.

 

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.Vishal Gupta, Advocate for the complainants.

Sh.Sanjeev Sharma, Advocate for the opposite parties.

 

PER PADMA PANDEY, MEMBER

                The complainants have filed this complaint, seeking refund of amount paid, to the tune of Rs.16,18,826/-, paid by them, from time to time, to the opposite parties, towards price of plot bearing No.OCEP/P/44, purchased in the project launched by them (OPs), under the name and style, ‘Omaxe Chandigarh Extension’, New Chandigarh, Mullanpur, Punjab. Total price of the said plot was fixed at Rs.36,12,470/-, inclusive of all. It was stated that, as per payment plan Annexure C-3, it was committed by the opposite parties that possession of the plot, in the developed project, will be handed over within a period of 24 months, from the date of execution of the agreement, but the same (agreement) was never offered to the complainants for signatures. It is specific case of the complainants, despite the fact that they had already paid substantial amount, referred to above, and the last payment was made on 28.04.2015, yet, no progress and development work, was carried out at the site, by the opposite parties. It was further stated that, in this manner, by neither sending the agreement for signatures of the complainants; nor developing the project site despite receiving huge amount of more than Rs.16 lacs; nor delivering possession of the plot, in question; nor refunding the amount paid, they (complainants) have been left in lurch. By alleging that the aforesaid acts of the opposite parties amounted to deficiency in providing service and also adoption of unfair trade practice, the present complaint has been filed by the complainants.

2.         In the reply filed by the opposite parties, many preliminary objections were taken, to defeat genuine claim of the complainants. It was averred that the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as they being investors had purchased the plot, in question, for commercial purpose i.e. for selling the same, as and when there was escalation in the prices of real estate, to gain huge profits. Pecuniary and Territorial jurisdiction of this Commission was challenged. It was further stated that since the disputed plot falls under the category of immoveable property, as such, time was not to be considered as essence of the contract. 
3.         On merits, payments made by the complainants, as mentioned in the complaint were admitted. Receipts issued in favour of the complainants, against payment of Rs.16,18,826/-by the opposite parties, was also admitted. It was stated that possession of the plot was to be offered within a period of 24 months from the date of signing the allotment letter/agreement and not from the date of booking thereof. It was pleaded that in the present case, since draw of lots for allotment of plot number was yet to be held, and only thereafter, allotment letter/agreement was to be got signed from the complainants, however, they, instead of waiting for the same (draw of lots), straightway, filed this complaint before this Commission, which is not maintainable. It was averred that development at the project site is going on; considerable progress has been made and the opposite parties are making earnest efforts, in the matter. It was stated that since the proceedings before this Commission are summary, in nature, as such, consumer complaint is not maintainable, and only a Civil Court, could adjudicate the same. It was pleaded that since the complainants failed to implead the dealer, through which, the said plot was purchased, as such, the complaint is liable to be dismissed on this ground. Prayer was made to dismiss the complaint.
4.         In the rejoinder filed, the complainants reiterated all the averments contained in the complaint, and repudiated those, contained in written version of the opposite parties.
5.         The parties led evidence in support of their case.
6.         Counsel for the parties raised arguments, in tune of the facts narrated above.
7.         We have heard Counsel for the parties and have gone through the evidence and record of the case, very carefully.
8.         Before making any reference to the merits of the case, we will like to decide an objection raised by the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. It may be stated here that as per Section 17 (1) (a) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016.  Relevant part of the said order reads thus:-

“It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum.  The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer.  Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction.  If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint.  For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum.  Similarly, if  for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. ”

In the present case, total value of the plot, in question, i.e. Rs.36,12,470/-, plus compensation claimed by way of interest @18% p.a. on the deposited amount of Rs.16,18,826/- and also Rs.5 lacs, claimed as compensation for mental agony and physical harassment, if taken into consideration, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide this complaint. The objection taken by the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

9.         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, it is evident that the demand letters dated 21.02.2015 Annexure C-6 and 13.03.2015 Annexure C-9, were issued by the opposite parties, from their Chandigarh office, as the said letters bear round stamp of the said Office. Furthermore, even the payments receipts dated 13.01.2015 Annexure C-4, 12.03.2015 Annexure C-8, 11.04.2015 Annexure C-11 and 28.04.2015 Annexure C-12 were also issued by Regional Office of the opposite parties i.e. SCO 139-140, Sector 8-C, Chandigarh. The said address is found on the said payment receipts. Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

10.         The next question, that falls for consideration, is, as to whether, the complainants fell within the definition of a consumer, as defined by Section 2 (1) (d) of the Act, or not. It may be stated here that the mere bald objection of the opposite parties that the complainants had purchased the plot, by way of investment, to gain huge profits, by selling the same, as and when there was escalation in prices, does not carry any weight and is liable to be rejected. It has been mentioned by the complainants, in their complaint, that the said plot was purchased by them for their  residential purpose. On the other hand, nothing contrary to this, has been proved by the opposite parties, by placing on record, any document. Mere fact that the complainants are allegedly owning some other house also, does not debar them to purchase a plot, in the project of the opposite parties or somewhere else. There is nothing, on the record, that the complainants are property dealers, and deal in the sale and purchase of property, on regular basis. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided 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,  2016 (2) CPJ 316. Not only as above, 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, while rejecting similar plea raised by the builder, observed as under:-

“ In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In a given case, separate houses may be purchased by a person for the individual use of his family members.  A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house.  Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose.  In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015.”

 

                Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. 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 parties, therefore, being devoid of merit, is rejected.  

11.         It is evident from Annexure C-1, a copy of preprinted application form, that the plot, in question, was purchased by the complainants, through dealer of the opposite parties, namely M/s D.M. Associates (P) Ltd., 1^st and 2^nd Floor, SCO 88, Sector 44-C, Chandigarh. It is also an admitted fact that, initial amount of Rs.5 lacs were paid by the complainants, vide cheque dated 09.01.2015, copy of which is placed on record as Annexure C-2 and receipt dated 13.01.2015, Annexure C-4, in this regard was issued by the opposite parties only. In the payment plan Annexure C-3, vide Clause 5, it was committed by the opposite parties that possession of the plot purchased by the complainants, will be offered within a period of 24 months, from the date of execution of the agreement. However, it is also an admitted fact, that instead of sending agreement to the complainants, for signatures, the opposite parties kept on making demands and by April 2015, they had received substantial amount of Rs.16,18,826/- against total sale consideration of Rs.36,12,470/-. The fact that the total cost of plot was fixed at Rs.36,12,470/- is evident from demand letter dated 21.02.2015 Annexure C-6. From the contents of said demand letter, it is evident, that demand was raised by the opposite parties, in reference to the application for provisional allotment of plot no.OCEP/P/44. From the sequence of events narrated above, it is evident that the opposite parties kept on receiving amount from the complainants, even in the absence of execution of allotment letter/agreement. Whereas, it was the bounden duty of the opposite parties, to send allotment letter/agreement to the complainants for their signatures, within a period of two to three months, after receiving about 25% of the sale consideration, but they failed to do so. It was also earlier so said by this Commission, in a case titled as Usha Kiran Ghangas Vs DLF Homes Panchkula Private Limited, Complaint Case No.93 of 2016, decided on 02.06.2016. Relevant portion of the said case, reads thus:-

“The opposite parties are also guilty of adoption of unfair trade practice. It is on record that the complainant booked the unit, in question, in the project aforesaid, on 16.02.2011. She was allotted unit, vide letter dated  23.02.2011, on which date, she had paid an amount of Rs.4 lacs. Buyer’s Agreement was not put for signing in a reasonable time, say two  to three months. She continued to make payment and when Buyer’s Agreement was got signed, on 18.08.2011, she had already paid an amount of Rs.21,68,524/-. By not offering Buyer’s Agreement, for signing in a reasonable time, the opposite parties also committed unfair trade practice. The complainant is a widow. Her interest needs to be protected”.

 

12.         No doubt, a plea was taken by the opposite parties, that since in the present case allotment letter and also agreement were not executed between the parties and also the fact that draw of lots was still to be conducted for allotment of plot to the complainants, as such, they (complainants) should have waited for the same, but, on the other hand, they have filed this complaint, which should be dismissed. In the first instance, it may be stated here that once plot no.OCEP/P/44 was provisionally allotted to the complainants, as is evident from the demand letter Annexure C-6,  it has not been clarified by the opposite parties, as to for what purpose, the draw of lots was to be held. Even if for the sake of arguments, the version of the opposite parties to this effect, is accepted to be true (though not admitting only assuming), then, it has further not been clarified by them, as to for what product/goods, they kept on receiving payments from the complainants, by raising demands. Furthermore, it has also not been clarified by the opposite parties, when still agreement containing detailed terms and conditions was not sent for signatures of the complainants, under what clause they kept on making demands from them (complainants) and for which plot, when a specific stand has been taken by them, that still draw of lots was to be held for allotment of plot number to the complainants. Above fact clearly demonstrates that deficiency in providing service and adoption of unfair trade practice, on the part of the opposite parties, is writ large. Plot was purchased in the year 2015, now it is July 2018. More than two and a half years have lapsed. Despite making payment of more than about 45% of the sale consideration, still the opposite parties are claiming that draw of lots is to be held and only thereafter agreement will be sent for signatures of the complainants. However, no timeline to do so, has still been given by the opposite parties. Under these circumstances, we are of the considered opinion that the complainants cannot be made to wait for an indefinite period, at the whims and fancies of the opposite parties. The complainants, are, thus, held entitled to refund of the entire amount deposited by them, with the opposite parties.  
13.          Another objection taken by the opposite parties that since the plot, in question, falls under the category of immovable property, as such, in that event, time is not to be considered as essence of the contract, is bereft of merit, in view of ratio of judgment titled as Saradamani Kandappan vs S. Rajalakshmi & Ors., Civil Appeal Nos. 7254-7256  of 2002 &                                      and  Contempt Petition (C) No. 28-29 of 2009, decided on 4^th  July, 2011, wherein the Hon`ble Supreme Court held as under:-

“A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S. Vidyanadam and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed:

"It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.

In the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .........We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation.

Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."

(emphasis supplied) Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.”

 

14.         An objection was also raised by the opposite parties, that only a Civil Court can decide this complaint case, as the proceedings before this Commission, are summary in nature. It may be stated here, that the complainants hired the services of the opposite parties, for purchasing the plot, in the manner, referred to above. It is a simple case of non-execution of buyer’s agreement in respect of the plot purchased by the complainants; non-completion/development of the project in question within a reasonable period; and non-offer of possession of the plot, purchased by the complainants against sale consideration, which act amounts to deficiency in providing service, negligence and adoption of unfair trade practice. 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. No complex questions are involved in this complaint. In this view of the matter, objection taken by the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

                The above objection taken by the opposite parties is also bereft of merit, in view of judgment passed by the Hon’ble National Commission, titled as M/s. Karwa Developers & 3 Ors. Vs. Shree Vinayak Co-Operative Housing Society Ltd. & 3 Ors., First Appeal No. 980 of 2016,  decided on 3^rd  March, 2017, wherein, a similar plea of the builder was negated, while holding as under:-

“We also do not find any substance in the plea taken by the appellant that under clause 14(a) of the development agreement, the complainant was required to file a civil suit under the Specific Relief Act only, because they were asking for monetary relief.  The State Commission rightly stated that the relief sought in the complaint were on account of deficiencies committed by the OP Developers, vis-à-vis, the society.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the developers failed to develop the same, the society was well within its rights to file consumer complaint against the OP builder.”

 

15.         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.16,18,826/- was paid by the complainants towards price of the said plot. The said amount has been used by the opposite parties for their own benefit. The complainants are empty handed today, despite the fact that plot was booked by them, in January 2015 and also that they have paid substantial amount of Rs.16,18,826/- to the opposite parties. They have been caused huge financial loss. 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 Rs.16,18,826/- alongwith interest @12% p.a., from the actual dates of deposits till realization.
16.         An objection was also raised by the opposite parties that since the complainants failed to implead the dealer as necessary party to this complaint, through which, the said plot was purchased, as such, the complaint is liable to be dismissed on this ground. It may be stated here that it is not the case of the opposite parties that the entire payment made by the complainants or the part thereof, was received directly by the said dealer, and, as such, it was also required to be impleaded as necessary party to the complaint. At the same time, as stated above, payment receipts placed on record clearly reveals that the entire payment has been received by the opposite parties only. Even in the reply filed by the opposite parties, it has been admitted by them, that they have received the payments made by the complainants. Not even a single document has been placed on record to show that that out of the amount of Rs.16,18,826/-, paid by the complainants, a single penny was retained by the said dealer therefrom. In this view of the matter, it is held that the said dealer was not required to be impleaded as necessary party to this complaint. Objection taken in this regard, being devoid of merit, must fail and the same stands rejected.  
17.         No other point, was urged, by the contesting parties.
18.         For the reasons recorded above, this complaint is partly accepted with costs, with following directions to the opposite parties, jointly and severally:-

1. To refund the amount Rs.16,18,826/- to the complainants, alongwith interest @12% p.a. from the respective dates of deposit onwards.
2. To pay compensation, in the sum of Rs.75,000/- for causing mental agony and physical harassment, to the complainants, and also deficiency in providing service and adoption of unfair trade practice.
3. To pay cost of litigation, to the tune of Rs.33,000/- to the complainants.

19.         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) thereafter shall carry penal interest @15% p.a., from the date of default, and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing this complaint, till realization.
20.         However, it is made clear that, if the complainants have availed loan facility from any banking or financial institution, for making payment of installments towards the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
21.         Certified Copies of this order be sent to the parties, free of charge.
22.         The file be consigned to Record Room, after completion.

Pronounced.

17.07.2018

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

 (DEV RAJ)

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg