Per Justice Sham Sunder , President This order shall dispose of the aforesaid three appeals, arising out of the order dated 15.10.2010, rendered by the District Consumer Disputes Redressal Forum-II, U.T. Chandigarh (hereinafter to be referred as the District Forum only), vide which it accepted the complaint with costs of Rs.5000/- and directed the OPs to refund the entire amount of Rs.5,29,100/- to the complainants alongwith interest at the current maximum SBI term deposit rate, prevalent on the date of refund, from the respective dates of deposits till actual refund was made. The OPs were also directed to pay Rs.50,000/- as compensation for causing mental agony and harassment. The OPs were further directed to comply with the aforesaid order, jointly and severally within 45 days, from the date of receipt of its certified copy, failing which the OPs shall be liable to pay interest @ 18% p.a. from the date of respective dates of deposit till its realization. 2. The complainants applied for a flat measuring 740sq.feet of Super Belt Area in “Parsvnath Prideasia” IT Park, Kishangarh, U.T. Chandigarh, in pursuance of the advertisement, with regard to the launch of the project made by the OPs, vide application alongwith which cheque No.916120 dated 25.12.2007, drawn on State Bank of Indore, Chandigarh, in favour of OP Nos.1 & 2, for Rs.2,64,550/- was enclosed. Receipt dated 26.12.2007 in relation to the cheque was issued in their favour. Another cheque No.932967 dated 29.1.2008 drawn on State Bank of Indore, Chandigarh for a sum of Rs.2,64,550/- was issued, in favour of Parsvnath Developers Ltd. against receipt dated 30.1.2008. The complainants were allotted flat No.303, 3rd floor, Block No.E4 with the basic price of Rs.52.91 lacs. An agreement C-4 dated 26.3.2008 was entered into amongst the complainants and the OPs. It was stated that the construction was to be completed and possession was to be delivered within 36 months from 6.10.2006, the date of development agreement, entered into between the OPs. It was further stated that the OPs failed to construct the flats. Even, the site plan had not been approved. It was further stated that not even a single brick had been laid, at the site. It was further stated that the OPs had dishonest intention, right from the very beginning, to usurp the amount deposited by the complainants, without raising construction, and delivering possession of the flat. It was further stated that the OPs were deficient, in rendering service, by not constructing the flat, and delivering the possession thereof, as per the terms and conditions of the agreement. Under these circumstances, left with no alternative, the complainants asked for the refund of Rs.5,29,100/- deposited by them, with interest and compensation for harassment. When their grievance, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by them. 3. OP Nos.1 & 2, in their reply, admitted that the complainants applied for the allotment of a flat, in pursuance of the advertisement, made by them. It was also admitted that the complainants were allotted a flat with tentative super area of 740sq.ft. It was further stated that the basic price of the said flat was Rs.52.91 lacs. It was also stated that a sum of Rs.5,29,100/- in two instalments, was deposited by the complainants, towards the part price of the flat. It was further stated that a development agreement dated 6.10.2006 was executed between the OPs. It was further stated that the period of 36 months for the completion of project, committed with the complainants, in terms of the flat buyer agreement, as per Article 2.2 of development agreement dated 6.10.2006, was to start from the date, when the possession of entire unencumbered project land was handed over to the developer, which stage had not yet arrived. It was further stated that after signing the development agreement on 6.10.2006, the Chandigarh Housing Board handed over the possession of 123.79 acres of land to the developer, claiming it to be unencumbered, but on erection of fencing around it, the Haryana Government claimed ownership over a part of it, due to which the OPs, were stopped from carrying on its activities. It was further stated that the Chandigarh Housing Board informed the OPs on 9.2.2007, as well as on 12.4.2007, that the dispute had been resolved, with the Haryana Government, and handed over a revised demarcation plan of the land to the OPs, but they refused to deliver physical possession of the revised/changed area. It was further stated that the alternative and revised demarcated land which was offered to the OPs, by the Chandigarh Housing Board, included the land belonging to the Forest Department. It was further stated that the dispute was pending with the Arbitrators, and the decision was still awaited. It was further stated that, thus, the Consumer Fora had no jurisdiction to entertain and decide the complaint. It was admitted that the amount, in question, was deposited by the complainants for the allotment of a flat. It was further stated that as per clause 5(a) of the flat buyer agreement dated 26.3.2008, in case, the complainants wanted the refund of amount, deposited by them, then 5% of the basic price to the tune of Rs.2,64,550/- was to be deducted and only the remaining amount could be refunded. It was further stated that there was no deficiency, in service, on the part of the OPs, nor they indulged into unfair trade practice. 4. OP NO.3, Chandigarh Housing Board, in its written statement admitted the factual matrix of the case. It was stated that the flat buyer agreement was signed amongst all the three parties i.e. complainant, Chandigarh Housing Board and the developer. It was further stated that as per clause 9 (a) of the said agreement, OP Nos.1 & 2, were required to complete the construction within 36 months of signing the development agreement dated 6.10.2006. It was further stated that it was the developer, which was responsible for non-completion of construction within the stipulated period. It was further stated that as per clause 5(a) of the flat buyer agreement, in the event of allottee, seeking refund of the deposited amount, the same was to be refunded to him after deducting 5% of the basic price. It was stated that OP No.3, was not deficient, in rendering service, nor it indulged into unfair trade practice. The remaining allegations, were denied, being wrong. 5. After hearing the Counsel for the parties , and, on going through the record, the District Forum passed the order, in the manner, referred to, in the opening para of the instant order. 6. Feeling aggrieved, the aforesaid three appeals, one by the appellants/complainants claiming interest @ 24% p.a. and revival of the allotment of the unit in terms of clause 5(a) of the flat buyer agreement, the second by Parsvnath Developers Ltd. & another appellants/OPs for setting aside the impugned order and the third by the Chandigarh Housing Board, appellant/OP also for exonerating of their liability to pay any amount to the complainant, and setting aside the impugned order were filed. 7. We have heard the Counsel for the parties, and have gone through the record of the case, carefully. 8. The Counsel for the appellants/complainants, in Appeal case No.420 of 2010 submitted that, the amount deposited by the appellants, was illegally withheld by the OPs for a sufficiently longer period, as a result whereof, they were deprived of the use thereof. He further submitted that the District Forum, granted too meagre interest @ 18% p.a. He further submitted that the appellants were entitled to interest @ 24% p.a. He further submitted that even the relief, with regard to the revival of allotment of the unit, to the complainants, in terms of clause 5(a), in case, the project was revived by the OPs, was sought, but the same was not granted to the complainants, without any rhyme or reason. He further submitted that, since there was no default, in making payment on the part of the complainants, the OPs could not deduct 5% of the basic price, from the amount deposited by them, at the time of refund thereof. He further submitted that the order of the District Forum be modified to that extent. 9. The Counsel for the Parsvnath Developers Ltd., and another, appellants/OPs in Appeal No.424/2010 submitted that, till date the Chandigarh Housing Board had not handed over the possession of the entire unencumbered land, required for the project in question. He further submitted that it was, under these circumstances, that the construction of the project could not be undertaken and the possession could not be delivered, as it was an integrated project. He further submitted that the appellants have not abandoned the project. He further submitted that the complainants were only entitled to the refund of amount after deduction of 5% of the basic price, in view of the provisions of clause 5(a) of the flat buyer agreement. He further submitted that the interest was awarded by the District Forum at a higher rate. He further submitted that the order of the District Forum, being illegal, is liable to be set aside. 10. The Counsel for the Chandigarh Housing board, appellant/OP in Appeal Case NO.461/2010, submitted that, it was the responsibility of the developer to construct the flats and deliver possession thereof within 36 months from 6.10.2006, the date when the development agreement between the OPs, was executed. He further submitted that, as per clause 9( c)of the flat buyer agreement, on account of non-delivery of the possession, within the prescribed time, compensation indicated therein, could only be awarded against the developer, but the District Forum was wrong, in holding the Chandigarh Housing Board, jointly and severally liable to pay the compensation of Rs.50,000/-. It was further submitted that the compensation of Rs.50,000/- for alleged mental agony and harassment was wrongly awarded by the District Forum. It was further submitted that the appeal be accepted and the order of the District Forum be set aside. 11. The first question, that arises for consideration, is, as to within which period the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants applied for the allotment of a flat. They were allotted a flat. They deposited Rs.5,29,100/- in two instalments, towards the price of flat, which was allotted to them, as admitted by the OPs. Clause 9(a) of the flat buyer agreement annexure C4 dated 26.3.2008, referred to above, which is relevant, for answering the question, posed at the outset of this paragraph, reads as under ; “Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.” 12. The plain reading of Clause 9(a) of the flat buyer agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the development agreement dated 06.10.2006 annexure R2. The time could be extended, in terms of the development agreement dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the developer. OP Nos.1 & 2, admitted in their written reply that, in the first instance, the possession of entire project land was handed over to them by OP No.3, and when the fencing was being done, the Haryana Govt. raised dispute with regard to the ownership of a portion of the land. It is further the case of OP Nos. 1 & 2, that when that dispute was resolved, and in lieu of the disputed portion of the land, possession of some other land was given to them, the same was discovered to be that of the Forest Department. Even if, it is assumed for the sake of arguments, that the ownership of a small portion of the land, was disputed, that did not mean that the construction of the residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not on account of the circumstances, beyond the control of the developer, that delay was caused, in the construction of residential units . The developer also could not take shelter of force majeure clause. No document was produced by OP Nos.1 & 2, that any restriction was imposed by any Court or Authority upon them, as a result whereof they could not raise construction of residential units, in time. Even, it was not proved that there was delay in the grant of environmental clearance. OP Nos.1 & 2, without first confirming the clear title of the land, over which the project was to be developed, started booking the flats and allotting the same to the prospective buyers, by fleecing them of huge amounts, and making misleading statement, that the construction of residential units will be completed within 36 months w.e.f. 6.10.2006. Even long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. OP Nos.1 & 2, thus indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009. 13. The next question, that arises for consideration, is, as to whether the complainants were entitled to the refund of the amount deposited by them with interest or not ? Clause 9(d) of the flat buyer agreement annexure C4, which is relevant, to answer this question, reads as under; “9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.” 14. The complainants deposited two instalments, in time, with the hope of getting possession of the flat allotted to them, within a period of 36 months from 10.6.2006, but all their hopes were dashed to the ground when they found that even by the year 2010, not even a single brick had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option with the complainants, in such circumstances, was to ask for the refund of the amount. They, thus, issued a legal notice for refund of the amount with interest, but the OPs failed to do so. The plain reading of Clause 9(d) extracted above, reveals that if the developer, for whatever the reasons may be, fails to deliver the residential unit to the buyer, the developer and the Chandigarh Housing Board shall be liable to refund the amounts received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable, on the date of refund. The OPs were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount with interest as provided under Clause 9(d) of the agreement, referred to above. The complainants were, thus, entitled to the refund of the amount of Rs.5,29,100/- with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above, from the date of deposit till realization. The District Forum was right, in holding so. 15. Coming to the submission of the Counsel for OP Nos.1 & 2, that since there was breach of Clause5(a) of the flat buyer agreement, by the complainants, they were entitled to the refund of the amount deposited by them, only after deduction of 5% of the basic price of the flat. It may be stated here, that such an argument advanced by the Counsel for OP Nos.1 & 2, is misconceived. Clause 5(a) of the aforesaid agreement C4 , reads as under ; “5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.” 16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the agreement and if the payment was not made, within the stipulated period, or the buyer committed breach of any of the terms and conditions of the agreement, the agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in making the payment of instalments, or violation of any other term and condition of the agreement aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the OPs, that the payment of two instalments was made by the complainants, as and when the same fell due. There was no delay, in making payment of two instalments towards the price of the flat, on the part of the complainants. Since, after the payment of the aforesaid amount and expiry of the period of 36 months from 6.10.2006, not even a single brick had been laid, the complainants were left with no alternative, than to ask for the refund of the amount. There was also no breach of any other term and condition of the agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of the entire amount, deposited by them, with interest. The District Forum was also right, in holding so. The findings of the District Forum, in this regard, are affirmed. The submission of the Counsel for the Parsvnath Developers & another appellants, in this regard, being without merit, must fail, and the same stands rejected. 17. The next question, that arises for consideration, is, as to whether, the complainants were entitled to compensation for not handing over possession to them, for causing them physical harassment and mental agony, or not ? No doubt, clause 9( c) of the flat buyer agreement specifies as to at what rate the compensation is to be granted to the complainants, in case the possession is not delivered in time. However, compensation was not granted by the District Forum at the specified rate mentioned in clause 9( c). The District Forum, after taking into consideration the facts, circumstances, the physical harassment and mental agony, suffered by the complainants granted lump-sum compensation of Rs.50,000/- to the complainants. In the appeal filed by the appellants/complainants, they have not challenged the inadequacy of compensation, awarded to them. In the appeal, the appellants/complainants have not claimed compensation, at the rate specified in clause 9(c ) of the agreement, annexure C4. In this view of the matter, the appellants/complainants cannot be granted compensation at the rate, specified in clause 9(c ) of the agreement annexure C4. The compensation of Rs.50,000/- awarded by the District Forum cannot be said to be excessive, unreasonable or unfair. The submission of the Counsel for the appellants in appeal Nos.424 and 461, being devoid of merit is rejected. 18. The District Forum, fell into an error in holding that the Chandigarh Housing Board, was jointly and severally liable with the developer to pay the compensation awarded. According to clause 9(c ) of the agreement annexure C4, it was only the developer, which was liable to pay the compensation and not the Chandigarh Housing Board. To this extent, the order of the District Forum requires modification. 19. The District Forum granted interest @ 18% p.a., in the event of non-compliance of the order within 45 days. It may be stated here, that the interest @ 18% awarded, on account of non-compliance of its order within 45 days, is also on the higher side. In our opinion, the interest @ 12% p.a., on account of non-compliance of the order, could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification. 20. Coming to the factum, as to whether, the complainants are entitled to interest @ 24% p.a. and revival of flat, claimed by them, in the appeal in terms of Clause 5(a) of the agreement, referred to above, in case, the project was revived , it may be stated here, that both these reliefs cannot be granted to them. As stated above, the penal interest could only be granted at a reasonable rate. It has been held in para 19 above that penal interest @ 12% p.a. can be said to be reasonable, fair and just. Since, the complainants have claimed the refund of amount, the question of protecting their right, with regard to the allotment of a flat, as and when the project was revived, does not arise. Daljit Singh Brar & another appellants in Appeal case NO.420 of 2010, therefore, are not entitled to the reliefs, claimed by them, in the appeal. 21. Although, the dispute interse the OPs i.e. Parsvnath Developers Ltd. and the Chandigarh Housing Board, as per clause 18 of the Escrow Agreement dated 1.06.2007, executed amongst them and the State Bank of India has already been referred to the Arbitrators, yet the jurisdiction of the Consumer Fora was not barred. With a view to resolve the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986 is made, 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.” 22. Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being in force. The mere fact that the other remedy of resorting to the arbitration proceedings, as per agreement annexure R4, has been availed of by the OPs, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (2003)2 SCC412 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2006)3 SCC721. The submission of the Counsel for the appellants in appeal NO.424 of 2010, being devoid of merit is rejected. 23. For the reasons, recorded above, Appeal No.424/2010 titled as Parsvnath Developers Ltd. & another Vs Daljit Singh Brar etc. and Appeal No.461 of 2010 titled as Chandigarh Housing Board Vs Daljit Singh Brar and others, are partly accepted, with the following modifications ; (i)that only the Parsvnath Developers Ltd. shall be liable to pay compensation of Rs.50,000/- awarded by the District Forum, for harassment and mental agony, caused to the complainants, and the Chandigarh Housing Board shall not be liable to pay the same. (ii) that the direction of the District Forum regarding the grant of penal interest @ 18% p.a. on non-compliance of the order within 45 days, is modified, and instead the OPs, are ordered to pay penal interest @ 12% p.a. on the aforesaid payable amounts, on account of non-compliance of the order, within the period, stipulated by the District Forum. (iii) the remaining reliefs, granted by the District Forum, shall remain undisturbed. 24. Appeal No.420 of 2010 filed by Daljit Singh Brar & another appellants, being devoid of merit, must fail, and the same is dismissed. 25. The parties in all the appeals, are left to bear their own costs. 26. Complete certified copy of this order, shall be placed in appeal file Nos.424 of 2010 and 461 of 2010. 27.. Certified Copies of this order be sent to the parties, free of charge. 28. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
