Chandigarh

DF-I

CC/356/2015

Gurvinder Singh Sidhu - Complainant(s)

Versus

Parsvnath Developers Ltd. - Opp.Party(s)

Kapil Kumar Bhardwaj

02 Nov 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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Consumer Complaint No.	:	CC/356/2015
Date of Institution	:	04/06/2015
Date of Decision	:	02/11/2015

 

 

1.      Gurvinder Singh Sidhu aged 43 years son of late S. Sher Singh Sidhu.

2.      Rajvinder Kaur Sidhu aged 41 years wife of Shri Gurvinder Singh Sidhu

          Both residents of House No.3015, Sector 19-D, Chandigarh.

…..Complainants

V E R S U S

1.      Parsvnath Developers Limited, through its Director, Parsvnath Royale, Behind Society No.105/11, Sector 20, Panchkula.

2.      The Director, Parsvnath Developers Limited, Registered and corporate Office, 6^th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi-110001.

3.      The Chairman, Chandigarh Housing Board, 8, Jan Marg, Sector 9, Chandigarh-160019.

……Opposite Parties

 

QUORUM:	P.L.AHUJA	PRESIDENT
	MRS.SURJEET KAUR	MEMBER

                               

                                               

ARGUED BY	:	Sh. Kapil Kumar Bhardwaj, Counsel for complainants
		Sh. A.S. Khara, Proxy Counsel for Sh. Ashwani Talwar, Counsel for OPs 1 & 2.
		Sh. Varun Gumber, Proxy Counsel for Sh. Vishal Sodhi, Counsel for OP-3

PER P.L.AHUJA, PRESIDENT

1.         Sh. Gurvinder Singh Sidhu (husband) and Smt. Rajvinder Kaur Sidhu (wife), complainants have filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against Parsvnath Developers Limited and others, Opposite Parties (hereinafter called the OPs), alleging that they applied for a residential flat in the project of OPs.  The total basic price of the flat was Rs.51,43,000/- and the complainants deposited Rs.2,57,000/- as earnest money alongwith application form.

                According to the complainants, the draw of lots was held by OP-3 and they were allotted 1 bedroom flat on first floor, Category-E bearing flat No.107 in Block No.E-1 having approx. 740 sq. ft. area in the project Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh. Allotment letter dated 11/15.10.2007 was issued in favour of the complainants.  The balance amount was to be paid by the complainants in installments as per Plan B : construction linked payment plan and accordingly they again paid another sum of Rs.2,57,300/- vide cheque dated 6.11.2007 towards 10% of total basic price.  The complainants have averred that as per Flat Buyer Agreement dated 25.1.2008, OPs 1 & 2 were to complete construction within 36 months from 6.10.2006, but, they failed to do so. Ultimately OPs 1 & 2 vide their letter dated 30.3.2015 refunded their 70% share of the principal deposited amount of Rs.3,60,010/- vide cheque dated 25.3.2015 without interest and compensation. Initially OP-3 also refunded its 30% share of the principal deposited amount of Rs.1,54,290/- vide draft dated 6.2.2015 without any interest, but, subsequently on 4.3.2015 it paid the interest of Rs.91,420/-.  The complainants have alleged that due to the acts of the OPs, they have suffered great mental torture and harassment. Hence, this complaint.

2.         In their short reply, OPs 1 & 2 have taken a number of preliminary objections including that the complaint is barred by limitation; that the present complaint has been moved for the purpose of recovery for which the complainants should have filed a recovery suit before the civil court.  It has been averred that in terms of the development agreement, arbitration proceedings were initiated to resolve the inter se dispute between OP-1 and
   OP-3 in which the learned sole arbitrator passed the award dated 9.1.2015 holding that the amount received from the respective customers shall be refunded in terms of clause 9(d) of the Flat Buyer Agreement in the ratio of 70:30 with interest at SBI term rate.  It has been pleaded that OPs 1 & 2 have already refunded a sum of Rs.3,60,010/- being 70% of its share vide letter dated 30.3.2015.  As regards payment of compensation under clause 9(c) of the agreement, the OPs have submitted that the said issue was pending adjudication before the Hon’ble Supreme Court in Special Leave to Appeal bearing SLP No.17133-17134/2013 titled Parsvnath Developers Limited Vs. Harsohin Kaur & Anr. alongwith other connected matters which were disposed of vide order dated 21.4.2015.  It has been stated that per the arbitral award dated 9.1.2015, 36 months required for completion of the development work is to be reckoned from 5.2.2008.  Pleading that there is no deficiency in service or unfair trade practice on their part, OPs 1 & 2 have prayed for dismissal of the complaint.
3.         In its separate written reply, OP-3 has pleaded that the complaint is liable to be dismissed qua it as it has already refunded its 30% share alongwith 9% interest per annum to the complainants vide demand drafts dated 6.2.2015 and 3.3.2015.  It has been contended that the terms and conditions of the flat buyer agreement make it clear that in case any delay is caused, either directly or indirectly, in completing the project or constructing the flats or handing over the possession of the flats to the buyers, then only OPs 1 & 2/Developer would solely pay all the damages and compensation to the buyers and that OP-3 is not responsible for any delay, defect or default of the same.
4.         The parties led evidence in support of their contentions.
5.         We have gone through the entire evidence, written arguments submitted by the complainants and heard the arguments addressed by the learned Counsel for the parties. 
6.         The first material point for consideration is whether the complaint filed by the complainants is within the period of limitation or not?  It has been urged by the learned counsel for the OPs 1 & 2 that the flat buyer agreement in the present case was signed on 25.1.2008 and if the limitation is computed from that date, then there is a delay of more than five years in filing of the present complaint.  Apart from that, the project was to be completed upto 6.10.2009 subject to the provisions of clause 2.2.2 of the agreement.  The learned counsel for the OPs 1 & 2 has submitted that since Consumer Protection Act envisages a period of two years to any consumer for initiating proceedings under the Act, the complaint filed by the complainants in the year 2015 is patently barred by limitation. 
7.         We have carefully considered the above arguments of the learned counsel for the OPs 1 & 2, but, we are not impressed with the same. It is true that the flat buyer agreement in respect of the unit of the complainants was executed on 25.1.2008, but, it is evident that neither the physical possession thereof was handed over by the promised date i.e. 6.10.2009 nor any interest on the amount of Rs.3,60,010/-, being 70% of the share of the principal amount refunded on 30.3.2015, was paid by OPs 1 & 2. Thus, there was a continuing cause of action in favour of the complainants to file the present complaint and the complaint cannot be held to be barred by time.
8.         The second material question for determination is whether for the purpose of recovery of the amount the complainants should have filed a recovery suit before the civil court and this Forum has no jurisdiction? It is important to note that the complainants hired the services of the OPs for purchasing the flat in question and they were allotted the same for consideration. According to clause 9(a) of the agreement (Ex.C-5), the construction of the residential units and other related infrastructure was likely to be completed within a period of 36 months from 6.10.2006, the date of signing of the Development Agreement.  The housing construction also comes within the definition of ‘service’ as defined in Section 2(1)(o) of the Consumer Protection Act. Accordingly, the present complaint involves a consumer dispute and the same is maintainable. Apart from it, Section 3 of the Consumer Protection Act provides an alternative remedy. Even if it is assumed that the complainants have a remedy to file a suit for recovery in the civil court, the alternative remedy provided under Section 3 of the Act could be availed by them as they fall within the definition of ‘consumer’.  In this view of the matter, the present complaint is maintainable before this Forum.
9.         It is the admitted case of the parties that the complainants had deposited an amount of Rs.2,57,000/- as earnest money with the application form on 20.9.2007 and further paid an amount of Rs.2,57,300/- vide cheque dated 6.11.2007 to the OPs.  Vide letter dated 30.3.2015, OPs 1 & 2 refunded their 70% share of the principal deposited amount of Rs.3,60,010/- without interest & compensation.  The next material question for determination is whether the complainants are entitled to interest and compensation on the said amount or not?
10.         The learned counsel for the OPs 1 & 2 has argued that the arbitration proceedings were initiated to resolve the inter se dispute between OPs 1 & 3 and in the said proceedings, the learned sole arbitrator passed an award dated 9.1.2015 wherein it was held that the amount received from the respective customers shall be refunded in terms of clause 9(d) of the Flat Buyer Agreement in the ratio of 70:30 alongwith interest at SBI term rate and OPs 1 & 2 have already paid their 70% share of the deposited amount to the complainants.  He has contended that the payment of compensation is to be made by the developer and the Chandigarh Housing Board in the ratio of 70:30 as per award of the sole arbitrator.  He has further contended that the sole arbitrator has also held that the development period of 36 months has to be counted from 5.2.2008 (date of delivery of possession) and not from 6.10.2006 (date of development agreement), therefore, the development agreement is to be considered to be applicable from 5.2.2008 and 36 months period is required to be reckoned from 5.2.2008.  The learned counsel for the OPs 1 & 2 has also drawn our attention to the order dated 21.4.2015 passed by the Hon’ble Supreme Court in case titled Parsvnath Developers Limited Vs. Harsohin Kaur & Anr., bearing SLP No.17133-17134 of 2013 and has argued that Sh. Rakesh Dwivedi, learned senior counsel argued before the Hon’ble Supreme Court that in view of the award passed by the arbitrator, the period that is stipulated in the agreement has been extended from 6.10.2008 to 5.2.2008.
11.         We have carefully considered the above arguments of the learned counsel for the OPs 1 & 2.  It is significant to note that it is the admitted case of the complainants that OPs 1 & 2 have refunded their 70% share of the principal deposited amount of Rs.3,60,010/- through cheque dated 25.3.2011 vide their letter dated 30.3.2015. The Chandigarh Housing Board/OP-3 has also refunded its  30% share of the principal deposited amount of Rs.1,54,290/- vide demand draft dated 6.2.2015. Further, OP-3 has also paid the interest of Rs.91,420/- as their 30% share of interest on 4.3.2015. Thus, OP-3 has made the payment as per the award of the sole arbitrator.  However, OPs 1 & 2 have not made the payment of interest on the principal amount at the SBI term rate.  Since the project did not take off at all and the offer of possession was not made by 6.10.2009 and OPs 1 & 2 utilized the money deposited by the complainants for a long time, therefore, OPs 1 & 2 were liable to make payment of the interest as per clause 9(d) of the flat buyer agreement dated 25.1.2008.  We are of the view that since OPs 1 & 2 paid their share of the principal amount on 30.3.2015, they are liable to pay interest on the said amount from the respective date of deposit till 30.3.2015. However, since OP-3 has already made the payment of its share of the principal amount as well as interest, no relief survives against it and the complaint qua it deserves to be dismissed.
12.         The last question that survives for determination is whether the complainants are entitled to any compensation as per clause 9(c) of the Flat Buyer Agreement which is reproduced below :-

“9(c) In case 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 within 30 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. ”

So far as the contention of OPs 1 & 2 that OP-3 is also liable to pay its share of the amount of compensation is concerned, the Hon’ble Supreme Court in the judgment dated 21.4.2015 titled Parsvnath Developers Limited Vs. Harsohin Kaur & Anr. (supra) has held that a reading of clause 9(c) would show that the said clause also envisages payment of compensation to the buyer at  a particular rate.  This clause would be applicable against developers only if they are not in a position to offer flat to the buyer after the expiry of 36 months/extended period as stipulated under clause 9(a) of the agreement.  In this view of the matter,
OP-3 is not liable to make payment of any compensation.

13.         As far as the contention of learned counsel for OP 1 & 2 that 36 months period required for completion of the development work is to be reckoned from 5.2.2008 is concerned, it is pertinent that no copy of the arbitral award dated 9.1.2015 passed by the learned sole arbitrator has been produced by OPs 1 & 2.  Apart from it, the Hon’ble Supreme Court in the judgment Parsvnath Developers Limited Vs. Harsohin Kaur & Anr. (supra) in regard to the extension of date from 6.10.2006 to 5.2.2008 observed that they were not inclined to enter into this controversy and the developer was at liberty to take such objections based on the award passed by the arbitrator.  In the instant case, a plain reading of clause 9(a) of the flat buyer agreement reveals that construction of the residential units was to be completed within a period of 36 months of signing the development agreement dated 6.10.2006.  The time could be extended in terms of the development agreement dated 6.10.2006 subject to force majeure circumstances beyond the control of the developers.  OPs 1 & 2 have not produced any document to prove that any restriction was imposed by any court or authority upon them or the project in question as a result whereof they could not raise the construction of the residential units in time.  Since construction was not completed within 36 months from 6.10.2006, OPs 1 & 2 indulged into unfair trade practice, therefore, in terms of clause 9(c) of the aforesaid agreement, the complainants are entitled to compensation @ 107.60 per sq. meter of the super area of the unit per month from 6.10.2009 onwards.
14.         For the reasons recorded above, we find merit in the complaint and the same is partly allowed against OPs 1 & 2.  OPs 1 & 2 are jointly and severally directed :-

(i)     To pay interest on the amount of Rs.3,60,010/- at the SBI term deposit rate (as applicable on 30.3.2015) as per clause 9(a) of the flat buyer agreement dated 25.1.2008 (Ex.C-5) from the respective date(s) of deposit till 30.3.2015 i.e. the date when the same (Rs.3,60,010/-) was refunded to the complainants vide cheque dated 25.3.2015.

(ii)    To also pay compensation @ Rs.107.60 per sq. meter of the super area of the unit per month from 6.10.2009 (the last date of completion of the project) till actual payment of interest as indicated above to the complainants is made as provided by clause 9(c) of the flat buyer agreement dated 25.1.2008 (Ex. C-5).

(iii)   To pay costs of litigation to the tune of Rs.10,000/- to the complainants.

4. To comply with the aforesaid directions, within a period of 30 days from the date of receipt of a certified copy of this order, failing which they shall be further liable to pay interest @ 12% p.a., instead of SBI Term Deposit rate of interest, on the amount of Rs.3,60,010/- from the date of default, besides payment of costs of Rs.10,000/-, till realization.

15.         The complaint qua OP-3 is dismissed with no order as to costs.
16.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

		Sd/-	Sd/-
02/11/2015		[Surjeet Kaur]	[P. L. Ahuja]
hg		Member	President