Per Justice Sham Sunder , President The facts, in brief, are that the complainants who are husband & wife jointly applied for allotment of a residential flat for their personal use in the project of the OPs . The total cost of the flat was Rs.51,43,000/-. The complainants deposited a sum of Rs.2,57,000/- alongwith application form vide cheque No.025373 dated 21.9.2007. The balance amount of the flat was to be deposited as per construction linked payment plan, in instalments. In the draw of lots, the complainants were allotted one bedroom flat bearing No.201 on the second floor in Block No.EI having approx. 740 sq.ft of super built area in the project of Parsvnath Prideasia, Rajiv Gandhi Technology Park, Chandigarh. Copies of the allotment letter and construction linked payment plan are annexure C-2. Thereafter, the complainants paid a sum of Rs.2,57,300/- vide demand draft No.018984 dated 19.12.200. On 25.1.1008, a flat buyer agreement was entered into amongst the complainants and the opposite parties, a copy whereof is annexure C-4. It was stated that the complainants after raising a home loan from ICICI Bank, paid a sum of Rs.9.00 lacs vide demand draft No.202316 dated 31.5.2008 and Rs.1,71,450/- vide cheque No.463774 dated 4.6.2008. In all, the complainants, paid a sum of Rs.15,85,450/- towards the price of the flat. It was further stated that as per the development agreement dated 6.10.2006, entered into between the parties, the construction of the flat was to be completed by the OPs within 36 months from 6.10.2006. It was further stated that the complainants visited the spot, a number of times, where the flats were to be constructed, but found that the OPs had not even laid the foundation. It was further stated that the housing project undertaken by the OPs, had failed to take off, and they themselves committed breach of their commitment, to start timely construction and kept on giving false hopes and promises for taking money from the buyers. It was further stated that the complainants after waiting for a sufficiently long period, wrote a letter to the OPs cancelling the allotment and sought refund of Rs.15,85,450/-, but the OPs refused to pay any interest on the said amount and further intimated to forfeit 5% of the basic price of the flat, vide letter dated 13.10.2010, a copy whereof is annexure C-7. It was further stated that on account of non-construction of the flats and non-giving of possession to the complainants, physical harassment and mental agony was caused to them. It was further stated that the complainants had to pay interest of Rs.2,80,439/- on account of interest on the home loan. It was further stated that the OPs were, thus, deficient, in rendering service and indulged into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act,1986(hereinafter to be called as the Act only), was filed claiming refund of Rs.15,85,750/- alongwith interest @ 24% p.a. from the date of deposit till realization, Rs.3,56,276/- which the complainants had to pay to the ICICI Bank on account of home loan, Rs.20 lacs on account of loss of opportunity to have a flat in the city beautiful, Rs.5.00 lacs as compensation on account of physical harassment and mental agony, besides costs of Rs.25,000/- 2. OP Nos.1&2, in their written reply, admitted that the complainants applied for the allotment of a flat, in question, in the aforesaid project. It was also admitted that a flat buyer agreement R-1/2 was executed amongst the complainants and the OPs, on 25.1.2008. It was also admitted that the amount of Rs.15,85,750/- was deposited by the complainants towards the price of the flat. It was stated that after the execution of the development agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to OP Nos.1&2, by the Chandigarh Housing Board. It was further stated that when OP Nos.1&2 were fencing the land, possession whereof was delivered to them, for the development of project, a dispute arose, as the Haryana Government claimed ownership, with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to them, but it was discovered to be the land of Forest Department. It was further stated that a period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same. It was further stated that the complainants did not deposit all the instalments and, as such, violated the provisions of clause 5(a) of the aforesaid agreement. It was further stated that the complainants were only entitled to the refund of amount, after deduction of 5% of the basic price of the flat, in question, as per the provisions of clause 5(a) of the agreement dated 25.1.2008. It was further stated that the dispute between the OPs inter-se, has already been referred to the arbitrators, and their decision, was awaited and , as such, this Commission has no jurisdiction to entertain and decide the complaint. It was denied that OP Nos.1&2 were deficient, in rendering service, and indulged into unfair trade practice. The remaining averments were denied, being wrong. 3. OP NO.3, Chandigarh Housing Board, in its reply, stated that the possession of the entire unencumbered land, had been handed over by it, to M/s Parsvnath Developers Ltd. OP Nos.1&2. It was further stated that the developer was solely responsible, for constructing the residential units, within the stipulated period, and delivering possession of the flat, to the complainants. It was admitted that the construction was to be completed within 36 months from 6.10.2006, the date when the development agreement was executed between the OPs. It was further stated that, in view of the Escrow agreement executed between the OPs, in case of refund to the buyers, the liability of the Chandigarh Housing Board was to the extent of 30% only as the revenue received from the sale of residential units had been apportioned between the OPs, in the ratio of 70:30, and, as such, Parsvnath Developers Ltd. are liable to refund 70% amount to the complainants. It was denied that OP NO.3, was deficient, in rendering service, or it indulged into unfair trade practice. The remaining allegations, were denied, being wrong. 4. The complainants, in support of their case, led evidence by way of affidavit of Sh.Vikram Babbar -Complainant No.1 , alongwith which a number of documents were attached. 5. OP Nos.1&2, filed the affidavit of Sh.Prehlad Kumar Jain , President, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi, by way of evidence, and also attached a number of documents therewith. 6. OP No.3, filed the affidavit of Sh.M.M. Sabharwal, its Secretary, by way of evidence. 7. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 8. The Counsel for the complainants, submitted that the complainants , after going through the advertisements of OP Nos.1&2, applied for the allotment of a flat. He further submitted that as per agreement C-4 dated 25.1.2008, the construction of the residential units was likely to be completed within 36 months of the signing of the development agreement R-1/1 dated 6.10.2006, between the developer and the Chandigarh Housing Board. He further submitted that though a sum of Rs.15,85,750/- was deposited by the complainants, on the basis of construction linked plan, by way of instalments, with the OPs, yet not even a brick was laid, at the spot, what to speak of construction of flats. He further submitted that though there was no breach of Clause 5(a) of the agreement dated 25.1.2008, relating to the payment of instalments, on the part of the complainants, yet, they were not given possession of the flat. He further submitted that the complainants, therefore, could not wait for an indefinite period, and were entitled to the refund of amount, deposited by them, with interest, as also compensation for harassment. He further submitted that OP No.1 could not deduct 5% of the basic price, from the amount, deposited by the complainants, in the event of refund of the same, as there was no default, in making payment of any instalment, in time, by them. He further submitted that the complainants were also entitled to interest on the loan amount which they had to pay to the ICICI Bank for raising a home loan and compensation of Rs.20.00 lacs as the complainants lost the opportunity to buy a flat in Chandigarh as the cost has increased many folds, in the last four years. He further submitted that the OPs were certainly deficient, in rendering service, to the complainants, by neither refunding the amount, deposited by them, nor paying them the compensation, and they also indulged into unfair trade practice. 9. On the other hand, the Counsel for OP Nos.1&2, submitted that, no doubt, the development agreement R-1/1 dated 6.10.06, was executed between the OPs, as a result whereof, the possession of entire unencumbered land for the project was to be provided by OP No.3. He further submitted that since OP No.3, did not hand over the possession of the entire unencumbered chunk of land, required for the development of project, the construction could not be undertaken. He further submitted that there was, thus, dispute between the parties, as a result whereof, the matter was referred to the arbitrators, and their final decision was still awaited and, as such, this Commission has no jurisdiction to entertain and decide the complaint. He further submitted that, since there was default, on the part of the complainants, in depositing the remaining instalments, towards the price of flat, they were only entitled to the refund of amount, if they applied for the cancellation of allotment, after deduction of 5% of the basic price, as per Clause 5(a) of the agreement dated 25.1.2008. He further submitted that though a period of 36 months was provided under article 2.2.1 of the agreement R-1/1 dated 6.10.2006, and under Clause 9(a) of the agreement dated 25.1.2008, for the completion of construction, yet the same was to commence, only after the possession of entire unencumbered land, had been handed over to OP Nos.1&2 , for the development of project, by OP NO.3, but it (OP NO.3) failed to do so. He further submitted that, under these circumstances, OP Nos.1&2, were not at all deficient, in rendering service, nor they were liable to pay any compensation, nor they indulged into unfair trade practice. 10. The Counsel for OP No.3, submitted that it was the responsibility of OP Nos.1&2, to complete the construction in 36 months, commencing from 6.10.2006, as per the agreements R-1/1 and C4. He further submitted that the possession of the entire unencumbered land, on which the residential complex was to be developed, had already been handed over to OP Nos.1&2, according to the agreement, executed between the OPs. He further submitted that the construction of residential flats, could certainly be started by OP Nos.1&2, on that land, but they did not do so intentionally and, as such, they were liable to pay the amount deposited by the complainants. 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.15,85,750/-, in 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 , 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 R1/1. 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 the entire project land was handed over to them by OP No.3, and when the fencing was being done, the Haryana Govt. raised a dispute, with regard to the ownership of a portion of the same. It is 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. No evidence was, however, produced, by OP Nos.1&2, in this regard. 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 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 entire 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 Nos1&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 are entitled to the refund of amount, deposited by them, with interest or not ? Clause 9(d) of the flat buyer agreement, 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 the 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 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 wrote letter dated 23.9.2010 for the refund of 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 are, thus, held entitled to the refund of amount of Rs.15,85,750/- with interest at the SBI term deposit rate, as per Clause 9(d) of the agreement, referred to above. 15. Coming to the submission of the Counsel for OP Nos.1&2, that since there was breach of Clause 5(a) of the flat buyer agreement, by the complainants, they were only entitled to the refund of the remaining amount, deposited by them, 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 dated 25.1..2008, 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 payment of the 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 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 instalments was made by the complainants, from time to time, as and when the same fell due. There was no delay, in making payment of the price of flat, through instalments, on the part of the complainants. Since, after the expiry of the period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainants had 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 entire amount, deposited by them, with interest, as held above. The submission of the Counsel for the OPs ,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 are entitled to compensation, for not handing over possession to them, as per the terms and conditions of the agreement C4 dated 25.1.2008, referred to above, and for causing physical harassment and mental agony, or not ? Clause 9 ( C ) of the agreement, referred to above, which is relevant for answering the question, reads as under : “9(c) In case of possession of the built up area is not offered to the Buyer within a period of 36 months or extended period as stipulated in sub-clause (a) above the Buyer shall be entitled to receive from Developer compensation @ Rs.107.60 per sq.mtr (Rs.10/- per sq.ft) of the super area of the unit per month and to no other compensation of any kind. In case the Buyer fails to clear his account and take possession of the unit within30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @ 107.60 per sq.mtr. (Rs.10/- per sq.ft) of the super area of the unit per month in addition to the liability to pay interest to the sellers and other consequences of default in payment. ” 18. The possession of the flat was not offered, to the buyers, within a period of 36 months from 6.10.2006. As stated above, even till date, not even a single brick, has been laid, at the spot. In these circumstances, as per Clause 9( c) of the aforesaid agreement, the complainants only became entitled to compensation @107.60 per sq.mtr(Rs.10/- per sq.ft. ) of the super area of the unit, per month. The language of Clause 9(c) is unambiguous and clear. No compensation, beyond the terms and conditions contained in Clause 9( c) of the aforesaid agreement, could be claimed by the complainants. It is, thus, held that the complainants are entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009 the last date of completion of the project, till the actual payment was made to it. 19. Coming to the factum, as to whether, the complainants are entitled to interest @ 24% p.a. and compensation claimed by them, in the complaint for loss of opportunity to have a flat in Chandigarh, interest paid to the bank on home loan and for harassment and mental agony , it may be stated here, that these reliefs cannot be granted to them. It has been held in para Nos.14 & 18 above, that the OPs are liable to the refund of amount , received from the complainants, with interest, at the SBI Term Deposit Rate, as applicable on the date of refund, in terms of Clause 9(d) of the agreement dated 25.1.2008 and compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009 the last date of completion of the project, till the actual payment was made, as per Section 9 ( c) of the aforesaid agreement. The parties executed the agreement, aforesaid with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No interest and compensation, beyond the terms and conditions contained in Clauses 9( c) & (d) of the aforesaid agreement, could be allowed to the complainants. Therefore, the complainants are not entitled to the said reliefs, claimed by them. 20. Coming to the submission of Counsel for OP Nos.1&2, that since the remedy for settlement of dispute, by way of arbitration, has already been availed of by the OPs, in accordance with clause 18 of the Escrow Agreement dated 1.6.2007 Annexure R1/3 executed between them, the complaint under Section 17 of the Consumer Protection Act,1986 was barred, it may be stated here that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be 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.” 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 remedy of arbitration, which was provided, in the agreement dated 1.6.2007 annexure R1/3, has already 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. In this view of the matter, the submission of the Counsel for OP No.1, being devoid of merit, must fail, and same stands rejected. 21. For the reasons, recorded above, the complaint is partly accepted with costs of Rs.5000/- , in the following terms; (i)Parsvnath Developers Limited and the Chandigarh Housing Board are held liable jointly and severally to refund the amount of Rs.15,85,750/- deposited by the complainants alongwith interest at the SBI Term Deposit rate, as applicable on the date of refund, with effect from the respective dates of deposits, till actual realization, as provided by Clause 9(d) of the flat buyer agreement ; (ii)Parsvnath Developers Limited shall also pay compensation, for not offering the built up flat within 36 months @ Rs.107.60 per sq. mtr (Rs.10/- per sq.ft) of the super area of the unit, per month, from 5.10.2009, the last date of completion of the project, till actual payment to the complainants is made, as provided by Clause 9( C) of the flat buyer agreement. (iii)The aforesaid directions shall be complied with, by the OPs, within 30 days, from the date of receipt of a copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a, on the aforesaid payable amounts. 22. Certified Copies of this order be sent to the parties, free of charge. 23. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
