Sh. Kanwal Jeet Saini filed a consumer case on 25 Nov 2019 against Omaxe Chandigarh Extension Developers Pvt. Ltd. in the StateCommission Consumer Court. The case no is CC/428/2018 and the judgment uploaded on 29 Nov 2019.
Omaxe Chandigarh Extension Developers Private Limited, S.C.O. 143-144, First Floor, Sector 8C, Chandigarh 160008, through its Managing Director/Authorized Signatory.
…..Opposite party
Sh.Arjun Grover, Advocate for the complainants.
Sh.Munish Gupta, Advocate for the opposite party.
Complaints under Section 17 of the Consumer Protection Act, 1986
BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.
MRS. PADMA PANDEY, MEMBER.
MR.RAJESH K. ARYA, MEMBER.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT
Common questions of facts and law have been emerged in above captioned two complaints; apart from it the facts of both the complaints are analogous to a great extent. As such, both are taken together and shall be disposed of with a common judgment which shall be delivered in consumer complaint bearing no.428 of 2018 titled as Sh.Kanwal Jeet Saini and anr. Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd.
Both the complaints have been filed by different persons asserting themselves to be the consumers under the provisions of Section 2 (1) (d) of the Act. It has been specifically pleaded therein that the complainants are aggrieved of unfair trade practice, negligence and deficiency in rendering service at the hands of the opposite party.
Facts in consumer complaint bearing no.428 of 2018:-The complainants have filed this complaint seeking directions to the opposite party to deliver actual physical possession of flat bearing no.695/First Floor, measuring 2200 sq. ft., located in ‘Omaxe Cassia’, New Chandigarh, Mullanpur, Punjab, which was purchased by them, in resale, on 01.09.2014, from one Mr.Rajesh Kumar Pathak, total price whereof was fixed at Rs.64,02,014/-. Allotment letter/agreement was executed between the complainants and opposite party on 16.09.2014. It is the definite case of the complainants that despite the fact that out of total sale consideration, they had paid substantial amount of Rs.60,93,627/- to the opposite party but it failed to offer possession of the unit in question by 15.09.2016 i.e. within a maximum period of 24 months as per Clause 23 (b) of the allotment letter/agreement dated 16.09.2014 (Annexure C-6) because the construction and development work is still incomplete. It is further the case of the complainants that when the matter was taken up with the opposite party, no positive steps were taken by it, whereas, on the other hand, in a very illegal manner, letter dated 08.06.2018 (Annexure C-10) was issued by it, terming it as offer of possession. However, to their utter shock, a statement of account was also sent alongwith the said letter, wherein an illegal and arbitrary demand of Rs.13,05,982/- was raised by the opposite party, under different heads. The said alleged offer of possession and statement of account was challenged by the complainants by way of writing number of letters/emails and making physical visits to the office of the opposite party but all in vain.
Facts in consumer complaint bearing no.429 of 2018:- In this complaint, the complainants have purchased flat bearing no.692/First Floor, in the aforesaid project of the opposite party i.e. “Omaxe Cassia’, in resale on 09.07.2014, from one Mr.Naresh Kumar. The only difference in this case is that Agreement dated 08.08.2012 (Annexure C-4) had been executed between the original allottee and the opposite party, which was later on got endorsed in favour of the complainants. In this case also, the opposite party failed to deliver possession of the unit in question, by the stipulated date i.e. 07.02.2015 and on the other hand, possession was offered after a long delay, vide letter dated 08.06.2018 (Annexure C-13) alongwith demand of Rs.11,13,690.26ps. which has also been challenged by the complainants, on the same grounds, as have been raised in consumer complaint bearing no.428 of 2018.
By stating that the aforesaid act and conduct of the opposite party, in both the complaints, amount to deficiency in providing service and adoption of unfair trade practice, the complainants have filed these complaints, seeking possession of their respective units; compensation, litigation expenses etc.
Their claim has been contested by the opposite party, in both the complaints on almost similar grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaints; that they did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act; they have concealed material facts from this Commission; that this Commission did not vest with pecuniary and territorial jurisdiction: that possession was offered to them after completing the construction and development work; that too on receipt of occupation certificates from the competent Authority but they failed to take over the same on making remaining payment legally demanded from them; that they were defaulters in making payment as such they are not entitled to any relief for delay in offering possession; that at the time of purchase of the unit, an undertaking has been given by the complainants that possession date will be reckoned from the date of endorsement in their names: that no permission has been sought by them for filing joint complaint; and that they cannot absolve their liability of making payment towards increase in area of the units as it was agreed to between the parties that the area of the unit is tentative and subject to increase or decrease.
On merits, it has been admitted in both the complaints that the complainants purchased the said units in their project, in resale, in the manner explained by them in their complaints. Payments made by each set of complainants have also not been disputed.
However, it has been commonly explained in the respective replies in each complaint that some delay took place in offering possession of the units to the complainants, but that needs to be ignored because the project is a mega one; that period of possession was to be computed after excluding Saturdays, Sundays and Bank Holidays; and that only the name of floors has been changed being the same located on stilts.
However, in consumer complaint no.429 of 2018, an additional objection has been taken by the opposite party that this complaint is bad for non-joinder of parties, as financial institution from which the complainants have raised loan for making payment towards the unit has not been impleaded as necessary party. Common prayer in the reply to each complaint has been made to dismiss both the same.
In the replications filed, the complainants reiterated all the averments contained in the complaint and controverted those, contained in written replies of the opposite party.
The contesting parties have been afforded adequate opportunities to adduce evidence in support of their respective contentions, by way of affidavit and they also produced numerous documents.
We have heard counsel for the parties and have carefully gone through record of the cases, including the additional documents placed on record during pendency of both the complaints.
The possession has been delivered to the complainants on 18.05.2019 in CC No.428 of 2018, whereas the same has been delivered on 01.07.2019 to the complainants in CC No.429 of 2018, during pendency of these complaints. Now the controversy involved in these complaints is with regard to payment of compensation for the delayed possession and payment of interest.
From the pleadings of parties and other material available o on the record, following points have emerged for consideration in these cases: -
Whether in the face of existence of arbitration clause in the agreements, jurisdiction of this Commission is barred?
Whether this Commission has pecuniary and territorial jurisdiction to entertain the complaints?
Whether the complainants fall under the definition of consumer?
Whether the complaints are bad for non-joinder of parties?
Whether the complainants could be termed as defaulters?
Whether the complainants are entitled to any compensation for delay in delivery of possession of their respective units and if yes, to what extent?
First of all, coming to the objection raised with regard to jurisdiction of this Commission in the face of existence of Arbitration clause in the agreements, it may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by the opposite party in this regard stands rejected.
Now coming to objection raised with regard to pecuniary jurisdiction, it may be stated here that in the present cases, if the total value of the respective units; plus (+) interest @18% on deposited amount for the period of delay; plus (+) compensation claimed to the tune of Rs.2 lacs for mental agony etc. and other reliefs are added, the same exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide these complaints. Objection taken in this regard stands rejected.
Now coming to the objection regarding territorial jurisdiction, it may be stated here that Sub-section 2 of Section 17 of the Act envisages that person aggrieved have remedy to file a complaint before a State Commission within the limits of whose jurisdiction:-
“(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises”.
In the instant cases, perusal of number of documents placed on record reveal that the same have been issued by the opposite party from its Chandigarh Office, as the same bears round stamp of Chandigarh Office of the Company. Even the requests forms dated 01.09.2014 (Annexures C-4) and 09.07.2014 (Annexure C-7), respectively, whereby the units in question stood transferred in the name of the complainants have also been signed at Chandigarh office of the Company. Address of Regional Office of the Company is found mentioned on various documents on record as “SCO 139-140, Sector-8C, Madhya Marg, Chandigarh-160008”, meaning thereby that each opposite party was actually and voluntarily residing and carrying on its business, and has also a branch office at Chandigarh and thus the opposite party personally works for gain here at. Besides this, 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 these complaints. Objection taken in this regard stands rejected.
Now coming to the objection that the complainants did not fall within the definition of consumer, it may be stated here that in their complaints supported by their affidavits, it has been stated by them that the unit in question has been purchased for their personal use. Furthermore, the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite party to establish that the complainants have purchased the units to indulge in ‘purchase and sale of flats’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since it failed to discharge its onus, hence we hence hold that the complainants are ‘consumers’ as defined under Section 2(1)(d) of the Act.
It was further argued with vehemence by Counsel for the opposite party in both the complaints, that since the complainants are subsequent allottees, as such, they are not entitled to any relief for the period of delay in offering possession of the respective units. The contention raised is devoid of merit, in view of principle of law laid down by the Hon’ble Supreme Court of India in DLF Homes Panchkula Pvt. Ltd. vs D.S. Dhanda Etc., Civil Appeal Nos. 4910-4941/2019, (@ SLP(C) Nos. 3623-3654 OF 2019), decided on 10 May, 2019, wherein it was held that in the cases, where the original allottee has transferred the residential units, the transferee shall be entitled to compensation by way of interest, from the date of expiry of due date as per the agreement or from the date of transfer, whichever is later. Furthermore, in Vatika Limited Vs Mr. Rajneesh Aggarwal, Revision Petition No. 525 of 2013, decided on 22.07.2014, wherein the complainant was the fourth subsequent allottee, it was held by the Hon’ble National Commission that since the complainant had purchased the apartment in question from the first transferee, when the construction had not been completed and purchase/transfer of the apartment was duly approved by the builder, then it could not deny its role as a service provider to the respondent/complainant and has to be held liable for any deficiency in service with reference to the terms and conditions of the agreement which was made equally applicable to the complainant also consequent upon transfer of the apartment.
The facts mentioned by the complainants in their complaints, with regard to purchase of the respective units, in the said project, in resale; payments made by them; execution of agreements; non-delivery of possession of the units by the stipulated date or by the dates when these complaints have been filed are not in dispute. It is also an admitted fact that during pendency of these complaints, possession of the respective units stood delivered to the complainants on 18.05.2019 (in CC No.428 of 2018) and 01.07.2019 (in CC No.429 of 2018) respectively. On the other hand, as per Clause 23 (b) of the agreement in CC No.428 of 2018 possession of the unit therein was to be delivered latest by 15.03.2017 i.e. 30 months (24 months plus 6 months grace period) from the date of execution of the said agreement dated 16.09.2014. Similarly, as per Clause 23 (b) of the agreement in CC No.429 of 2018 possession of the unit therein was to be delivered latest by 07.02.2015 i.e. 30 months (24 months plus 6 months grace period) from the date of execution of the said agreement dated 08.08.2012. As such, there is a delay in delivering possession of the units, which caused great hardship to the complainants due to the acts and omissions of the opposite party and also they have suffered mental agony and harassment. Therefore, the circumstances of the case require that the complainants deserve to be suitably compensated.
Thus, to the mind of this Commission, the complainants are entitled to compensation by way of awarding interest on the amounts deposited by them, for causing mental agony; physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation.
What relief can be granted to a consumer, for delay in offering possession of the residential units/plots, fell for determination before the Hon’ble Supreme Court of India in DLF Homes Panchkula (P) Ltd. vs Sushila Devi, 2019 (Civil Appeal Nos. 2285-2330 of 2019 (@ SLP(C) NOS.928-930, 932-938, 940-967 and 969-976 of 2019), decided on 26 February 2019, wherein, under similar circumstances, interest @9% p.a. on the deposited amount for the period of delay in offering possession, was confirmed. The principle of law laid down in the aforesaid case is fully applicable to the present case. It is therefore held that the complainants are entitled to get interest @9% p.a., on the deposited amount, towards price of their respective units, for the period of delay in offering possession.
Though possession of unit in CC No.428 of 2018 was actually delivered to the complainants during pendency of the complaint on 18.05.2019 and in CC No.429 of 2018 on 01.07.2019 also, during pendency thereof, yet, Counsel for the opposite party, in both the complaints contended with vehemence that possession of the respective units was offered to the complainants, vide letters dated 08.06.2018, after completing construction and development works and also receiving occupation certificates from the competent authorities, but the complainants failed to come forward to take over the same, and also failed to make the remaining payment. However, we have considered this contention but the same is bereft of any merit. A bare perusal of contents of the alleged ‘offer letters’ dated 08.06.2018, sent by the opposite party to the complainants, it is made abundantly clear that upto that stage the project was not complete and as such the possession could not be delivered. In the said offer letters, it has been specifically and commonly intimated to the complainants that “development of the project is on the verge of completion” meaning thereby that by 08.06.2018, development work was still going on at the project site. However, to convince this Commission that the development work has been completed by the said date, the only option available with the opposite party was to place on record copy of the completion certificate having been issued by the competent Authority. Mere placing on record copy of the occupation certificate will not absolve the opposite party of its liability.
It is significant to mention here that under the provisions of Section 14 of the Punjab Apartment and Property Regulation Act, 1995 (in short the PAPR Act) it is mandatory on the part of the builder/promoter to obtain occupation and completion certificates before offering and delivering possession of residential plot(s)/unit(s) to the allottees. Similar view was taken by the Hon’ble National Commission in Inderjit Singh Bakshi Versus S.M.V. Agencies Private Limited, FA No. 729 of 2013, decided on 30.11.2015, wherein the opposite party claimed that the possession was offered twice i.e. in the year 2012 and 2013 but infact on that date, the builder has not obtained the completion certificate from the competent authority and such an offer was found to be of no avail. Relevant part of the said order is reproduced hereunder:-
“We are not convinced with the stand of the Respondent that the possession of the flat having been offered to the Complainant in the year 2012 and then in 2013, there was no inordinate delay in delivery of possession, which was to be delivered in the year 2009. Admittedly in the year 2012 or even in 2013, when the possession is claimed to have been offered, the Respondent was not possessed of the completion certificate from the authorities concerned. As a matter of fact, it is conceded that requisite completion certificate has been recently received in the year 2015. If that be so, offer of possession, stated to have been made to the Complainant in the year 2012, was no offer at all. An allottee is not obliged to take possession of a flat unless it is complete in every respect, including the completion certificate.”
Since, in the present cases, it is a flat, as such, the complainants were obliged to take possession thereof, only if all the development work was complete in all respects and occupation and completion certificates have been obtained by the opposite party, from the Competent Authority. There is no dispute that when possession of the units in question was allegedly offered for the first time, on 08.06.2018, the opposite party was not in possession of completion certificate. Thus, the opposite party indulged into unfair trade practice in offering possession of the units in question, in the absence of completion certificate, which was not binding upon on the complainants to take over the same.
Under these circumstances, since it is not disputed that in both the complaints, the units had been purchased by the complainants, when the period of possession as stipulated in the agreements had not expired (i.e. in CC No.428 of 2018, agreement has been executed on 16.09.2014 and possession of the unit therein was due to be delivered on or before 15.03.2017, whereas it was purchased in resale on 01.09.2014 and similarly in CC No.429 of 2018, agreement has been executed on 08.08.2012 and possession of the unit therein was due to be delivered on or before 07.02.2015 and it was also purchased in resale on 09.07.2014), as such, in view of law laid down in DLF Homes Panchkula Pvt. Ltd. and Vatika Limited cases (supra), the complainants are entitled to get compensation by way of interest @9% p.a. on the deposited amount from the due dates as per agreements, till the possession has been actually delivered to them, during pendency of these complaints.
Furthermore, in no way, the opposite party can wriggle out of its deficiencies by saying that delay took place on account of the reason that the complainants defaulted in making payment. In our considered opinion, the complainants cannot be said to be defaulters, in the face of settled law that the allottees of units/plots could not be expected to go on making payments to the builder as per the payment plan, when they could discover that it is not in a position to hand over possession of the property in time, for want of construction and development at the project site. This view is supported by the judgment of the Hon’ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein, it was held that if the builder is at fault in not delivering possession of the unit by the stipulated date, it cannot expect the allottee(s) to go on paying installments to it. Plea taken by the opposite party in this regard is not acceptable.
As far as the plea taken by Counsel for the opposite party, in both the complaints, that while computing period of possession, Sundays, Saturdays, Bank Holidays, etc. are to be ignored, it may be stated here that the said issue came up for consideration before this Commission qua another project of the opposite party, in the case of Dr.Divya Dahiya Vs. M/s Omaxe Chandigarh Extension Developers Private Limited and another, Consumer Complaint No.57 of 2016, decided on 15.07.2016, which was rejected by holding that when no explanation for extension of six months period has been furnished, the builder at the most could be allowed one out of the two benefits i.e. either six months extension beyond 24 months or period on account of Sundays/Holidays etc. Similar view has been reiterated by this Commission thereafter also, in number of cases, facts of which were almost identical. The findings given in the said cases are applicable to the instant complaints also. As such, this Commission is not convinced with the plea taken by the opposite party and as such, the same is rejected.
Now coming to the objection taken to the effect that application under Section 12 (1) (c) seeking permission to file joint complaint has not been filed by the complainants, the complaint is liable to be dismissed on this ground alone, we do not agree with the same. Once, the unit in question was purchased, jointly by the complainants, in each complaint, and also endorsement thereof was also made in their respective names, they are not required to file application under Section 12 (1) (c) seeking permission to file a joint complaint. The view taken by this Commission is supported by the judgment of the Hon’ble National Commission titled as Karnail Singh & 2 Ors.Vs. M/S. Emerald Lands (India) Private Limited & 5 ors., Consumer Case No. 2809 of 2018, decided on 02 Jan 2019, wherein the three complainants who had jointly been allotted plot in a project, moved an application under Section 12(1)(c) of the Act, which was rejected by it saying that it is wholly misconceived and the complaint was treated to have been filed under Section 12(1)(a) of the Act. In this view of the matter, objection taken stands rejected.
As far as plea taken in CC No.429 of 2018 regarding dismissal of complaint on the ground that the financial institution from which the complainants had availed housing loan has not been impleaded as a party is concerned, it may be stated here that the same is rendered infructuous, in view of the reason that the said loan amount has already been repaid by the complainants, which fact has been clarified by them, by way of filing replication, which goes unrebutted by the opposite party. Thus the complaint cannot be dismissed on this score.
Now coming to increase in area of the units to the extent of 160 square feet i.e. from 2200 square feet to 2360 square feet (in CC No.428 of 2018) and 200 square feet i.e. from 2200 square feet to 2400 square feet (in CC No.429 of 2018), it may be stated here that though the same has been increased without taking any consent from the complainants, however, keeping in mind the fact that the said increase is only to a small extent of equal to about 7% and 9% of the total area of the units, respectively, as such, we are not giving any adverse findings in this regard. However, in both the cases, it is made clear that the opposite party shall charge the original rates prevailing at the time of booking of the units, towards increased area thereof.
No other point has been urged before us nor cropped up during the course of arguments.
For the reasons recorded above, both the complaints are partly accepted with costs, as under:-
Consumer Complaint bearing no.428 of 2018:-
To execute and get registered the sale deed in respect of the unit in question in favour of the complainants, within a period of one month from the date of receipt of a certified copy of this order, on payment of legally due amount strictly as per agreement including the stamp duty charges. However, it is made clear that the opposite party shall not charge any delayed payment interest from the complainants, as in the absence of development work and offer of possession of the unit by the stipulated date, it was not entitled to demand any further amount from the complainants.
To pay compensation, by way of interest @9% p.a., on the entire deposited amount to the complainants from 15.03.2017 (due date of possession) till 18.05.2019, the date when possession was actually delivered within a period of one month, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry penal interest @12% p.a. instead of 9% p.a., from the date of default till the payment is made.
To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum to the tune of Rs.50,000/-, to the complainants within a period of 30 days from the date of receipt of a certified copy of this order failing which the said amount of Rs.50,000/- shall carry interest @12% p.a. from the date of passing of this order till realization.
Consumer Complaint bearing no.429 of 2018:-
To execute and get registered the sale deed in respect of the unit in question in favour of the complainants, within a period of one month, from the date of receipt of a certified copy of this order, on payment of legally due amount strictly as per agreement including the stamp duty charges. However, it is made clear that the opposite party shall not charge any delayed payment interest from the complainants, as in the absence of development work and offer of possession of the unit by the stipulated date, it was not entitled to demand any further amount from the complainants.
To pay compensation, by way of interest @9% p.a., on the entire deposited amount to the complainants from 07.02.2015 (due date of possession) till 01.07.2019, the date when possession was actually delivered within a period of one month from the date of receipt of a certified copy of this order failing which thereafter the said amount shall carry penal interest @12% p.a. instead of 9% p.a., from the date of default till the payment is made.
To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization.
Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed in connected case file.
The files be consigned to Record Room after completion.
Pronounced.
25.11.2019
Sd/-
[RAJ SHEKHAR ATTRI]
PRESIDENT
Sd/-
(PADMA PANDEY)
MEMBER
Sd/-
(RAJESH K. ARYA)
MEMBER
Rg.
Consumer Court Lawyer
Best Law Firm for all your Consumer Court related cases.