Per Justice Sham Sunder , President The facts, in brief, are that the opposite parties entered into an agreement dated 16.4.2008, with the complainant, for the sale of a residential unit category ‘C’, bearing No.PH-2, on third floor, in Block C-23, having an approximate super built area of 3000 sq.ft, consisting of three bedrooms, one drawing –cum-dining room, kitchen, three toilets, lawn, balconies, and servant quarter etc., in the complex namely Parsvnath Prideasia, at Chandigarh. The basic price of the unit was settled at Rs.2,14,50,000/- which was to be paid according to Plan B, i.e. construction linked payment plan. The complainant deposited a sum of Rs.10,72,500/-, as acknowledged in para-4 of flat buyer agreement C1 dated 16.4.2008. Thereafter, the complainant paid instalments, as and when the same fell due, and, in all, he paid Rs.57,62,500/-, including Rs.1 lac, towards open car parking. It was stated that the complainant waited patiently for the possession of flat, as the same was to be delivered within 36 months from 6.10.2006, but the inspection of the area under ‘Prideasia Project’ in which, the flat was to be constructed, revealed that there was nothing that could be termed as ongoing construction and it could be assumed that the building was likely to come up, at any point of time near or far future. It was further stated that the complainant learnt from discreet enquiries from the area that OP No.1, was directed to refund the amount alongwith damages, interest etc., so that gullible investors may not suffer unduly, at the hands of the OPs. The complainant got served legal notice dated 19.5.2010, upon the OPs, seeking refund of the deposited amount, alongwith interest and compensation, but to no effect. It was further stated that the OPs were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainant, 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 by him, claiming refund of Rs.57,62,500/- alongwith interest @ 18% p.a., and compensation of Rs.57,62,500/- on account of loss of opportunity and fluctuation of prices, to the tune of 100%, besides litigation expenses. However, the complainant restricted his claim to Rs.1 crore only, in the complaint itself. 2. At the time of filing the complaint, the complainant had arrayed Parsvnath Developers Ltd., New Delhi and local office as OP No.1 and Parsvnath Developers Ltd. SCO No.1,First Floor, Sector-26, Chandigarh as OP NO.2. However, subsequently, the complainant moved an application for impleading Chandigarh Housing Board as OP No.2, instead of earlier impleaded OP NO.2. Accordingly, his application was allowed vide order dated 14.7.2011, and the name of Chandigarh Housing Board was incorporated in place of already existing OP NO.2. 3. M/s Parsvnath Developers Ltd. OP No.1, in its written reply, admitted that the complainant applied for the allotment of a flat, in the aforesaid project. It was also admitted that the flat buyer agreement dated 16.4.2008, was executed, amongst the complainant, and the OPs. 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 No.1, by the Chandigarh Housing Board OP No.2. It was further stated that when OP No.1, was fencing the land, possession whereof was delivered to it, 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 OP No.1, 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 by OP No.2, and not earlier thereto, as per article 2.2.2. of the development agreement. It was admitted that the complainant deposited Rs.57,62,500/- towards the part price of the flat. It was further stated that the basic price of the flat, in question, was Rs.2,14,50,000/-, and in case of cancellation,5% amount of the basic price i.e. Rs.10,72,500/-, was required to be forfeited, and balance amount of Rs.46,90,000/- shall be refunded, without interest, as there was no stipulation, in the flat buyer agreement C1 regarding the payment of interest and compensation. It was further stated that the dispute between the OPs, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Commission was barred. It was denied that OP No.1 was deficient, in rendering service, and indulged into unfair trade practice. The remaining averments, were denied, being wrong. 4. OP NO.2, Chandigarh Housing Board, in its reply, stated that, as per clause 9(e) of the flat buyer agreement, it had to provide land, which was provided well in time to the developer OP No.1, and it was the sole responsibility of the developer to deliver the allotted units timely. It was further stated that the developer OP No.1, was to pay the bid price of Rs.821.21 crores, in six quarterly instalments, from the date of signing the development agreement dated 6.10.2006, against which, it deposited only Rs.5,16,53,37,880/- and the balance bid price of Rs.3,04,67,83,330/- was due to be deposited. It was further stated that the developer failed to carry out the development of project, as per the terms and conditions of the development agreement, and stopped all activities at the site. It was further stated that when the developer was asked to pay the balance bid price, it raised certain issues, for which the arbitration proceedings were going on. 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 complainant. 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 only to the extent of 30% of the total deposited amount, by the allottees, and 70% amount was to be paid, by the developer. It was further stated that till date the refund case of the complainant was not received by the Chandigarh Housing Board, from the developer. It was denied that OP NO.2, was deficient, in rendering service, or it indulged into unfair trade practice. The remaining allegations, were denied, being wrong. 5. The complainant, in support of his case, led evidence by way of the affidavit of his General Power of Attorney Sh.Karanvir Singh Sibia, alongwith which, a number of documents were attached. 6. OP No.1, led evidence, by way of the affidavit of Sh.V.Mohan, Senior Vice President (Legal) and Company Secretary, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi, and also attached a number of documents therewith. 7. OP No.2, led evidence, by way of the affidavit of Sh.M.M. Sabharwal, its Secretary. 8. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 9. The Counsel for the complainant, submitted that the complainant, applied for the allotment of a flat. He further submitted that, as per flat buyer agreement C-1, dated 16.4.2008, the construction of the residential units, was likely to be completed within 36 months of signing 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.57,62,500/- was deposited by the complainant, on the basis of construction linked payment plan, with the OPs, yet not even foundation 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 16.4.2008, relating to the payment of instalments, on the part of the complainant, yet, he was not given possession of the flat, by the promised date. He further submitted that the complainant, therefore, could not wait for an indefinite period, and was entitled to the refund of amount, deposited by him, with interest @ 18% p.a., as also compensation of Rs.57,62,500/- on account of loss of opportunity and fluctuation of prices to the tune of Rs.100% but he restricted his claim to only rupees one crore. He further submitted that OP No.1 could not deduct 5% of the basic price, from the amount, deposited by the complainant, in the event of refund of the same, as there was no default, in making payment of any instalment, in time, by him. He further submitted that the OPs were certainly deficient, in rendering service, to the complainant, by neither refunding the entire amount, deposited by him, with interest , nor paying him the compensation, and they also indulged into unfair trade practice. 10. On the other hand, the Counsel for OP No.1, 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 the entire unencumbered land, for the project, was to be provided by OP No.2. He further submitted that since OP No.2, did not hand over the possession of 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, in case of cancellation of allotment, the complainant was only entitled to the refund of amount, after deduction of 5% of the basic price, as per Clause 5(a) of the agreement dated 16.4.2008. 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 16.4.2008, for the completion of construction, yet the same was to commence, only after the possession of the entire unencumbered land, had been handed over to OP No.1 , for the development of project, by OP NO.2, but it (OP NO.2) failed to do so. He further submitted that, under these circumstances, OP No.1, was neither deficient, in rendering service, nor it indulged into unfair trade practice, nor it was liable to pay any compensation. . 11. The Counsel for OP No.2, submitted, that it was the responsibility of OP No.1, to complete the construction in 36 months, commencing from 6.10.2006, as per the agreements R-1/1 and C1. She 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 No.1, according to the agreement, executed between the OPs. She further submitted that the construction of the residential flats, could certainly be started by OP No.1, on that land, but it did not do so intentionally and, as such, it was liable to pay the amount, deposited by the complainant. 12. 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 complainant applied for the allotment of a flat and he was allotted a flat. He deposited Rs.57,62,500/-, in instalments, towards the price of flat, according to construction linked payment plan, as admitted by the OPs. Clause 9(a) of the flat buyer agreement annexure C1 , 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.” 13. 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 No.1 admitted, in its written reply, that, in the first instance, the possession of the entire project land was handed over to it by OP No.2, which it claimed to be unencumbered, 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 No.1, that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to it, the same was discovered to be that of the Forest Department. No evidence was, however, produced, by OP No.1, 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 No.1, that any restriction was imposed by any Court or Authority, upon it, as a result whereof, they could not raise construction of the residential units, in time. Even, it was not proved, that there was delay in the grant of environmental clearance. OP No.1, 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 No.1, 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. 14. The next question, that arises for consideration, is, as to whether the complainant is entitled to the refund of amount, deposited by him, 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.” 15. The complainant deposited the instalments, in time, with the hope of getting possession of the flat, allotted to him, within a period of 36 months from 6.10.2006, but by May,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 complainant could not wait for an indefinite period. The only option with the complainant, in such circumstances, was to ask for the refund of amount. He sent legal notice C-6 dated 19.5.2010 , 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 complainant is, thus, held entitled to the refund of amount of Rs.57,62,500/- with interest at the SBI term deposit rate, as per Clause 9(d) of the agreement, referred to above. 16. Coming to the submission of the Counsel for OP No.1, that since there was breach of Clause 5(a) of the flat buyer agreement, by the complainant, he was only entitled to the refund of the remaining amount, deposited by him, 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 No.1, is misconceived. Clause 5(a) of the aforesaid agreement dated 16.4.2008, 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.” 17. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly payment of the instalments/amounts due, was 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 complainant, or not ? It was proved, as also admitted by the OPs, that the payment of instalments was made by the complainant, 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 complainant. Since, after the expiry of the period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainant 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 complainant. 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 complainant was, thus, entitled to the refund of entire amount, deposited by him, with interest, as held above. The submission of the Counsel for OP No.1 ,in this regard, being without merit, must fail, and the same stands rejected. 18. The next question, that arises for consideration, is, as to whether, the complainant is entitled to compensation, for not handing over possession to them, as per the terms and conditions of the agreement C1 dated 16.4.2008, referred to above, 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. ” 19. The possession of the flat was not offered, to the buyer, 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 complainant 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. The parties executed the agreement, aforesaid, with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No compensation, beyond the terms and conditions, contained in Clause 9 ( C) of the aforesaid agreement, could be claimed by the complainant. It is, thus, held that the complainant is entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of unit, per month, from 5.10.2009, the last date of completion of the project, till the actual payment was made to him. In this view of the matter, no further compensation claimed by the complainant, on account of loss of opportunity and fluctuation of prices, to the tune of 100% , can be granted to him. 20. Coming to the factum, as to whether, the complainant is entitled to interest @ 18% p.a. claimed by him, in the complaint, it may be stated here, that this relief cannot be granted to him. It has been held in para 15 above, that the OPs are liable to refund the amount , received from the complainant, 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 16.4.2008. No interest, beyond the terms and conditions contained in Clause 9( d) of the aforesaid agreement, could be allowed to the complainant. Since, the complainant has claimed the refund of amount deposited, which has been allowed alongwith interest and compensation, as stated above, therefore, he is not entitled to interest @ 18% p.a. 21. Coming to the submission of the Counsel for OP No.1, 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 (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003)7 SCC233. 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. 22. 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.57,62,500/- deposited by the complainant, 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 complainant 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. 23. Certified Copies of this order be sent to the parties, free of charge. 24. The file be consigned to the Record Room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | |
