Chandigarh

StateCommission

CC/240/2018

Rajesh Kumar - Complainant(s)

Versus

Parsvnath Developers Ltd - Opp.Party(s)

ADS Jattana & MS Gill, Adv.

10 Jun 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	240 of 2018
Date of Institution	:	24.05.2018
Date of Decision	:	10.06.2019

 

1. Rajesh Kumar S/o Shri Ram, H.No.412, Power Colony, Industrial Area, Phase-II, Panchkula.
2. Mrs.Geeta Rani @Geeta Kumar wife of Sh.Rajesh Kumar, H.No.412, Power Colony, Industrial Area, Phase-II, Panchkula. (name added vide order dated 02.05.2019).

……Complainants

 

V e r s u s

Parsvnath Developers Ltd., SCO No.1, First Floor, Madhya Marg, Sector 26, Chandigarh, through its Manager/Managing Director/Authorized Representative;

Second Address:-The Managing Director, Parsvnath Developers Limited, Parsvnath Royale, Opposite Society No.105, Sector 20, Panchkula, Haryana;

Third Address:-

The Managing Director, Parsvnath Developers Limited, Parsvnath Metro Tower, Near Shahdara Metro Station, Shahdara, New Delhi-110032.

 .... Opposite Party

 

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:    JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                   MRS. PADMA PANDEY, MEMBER.

                   MR. RAJESH K. ARYA, MEMBER.

 

 

Argued by:        Sh. A.D.S Jattana, Advocate for the complainants.

                        Sh. Satpal Dhamija, Advocate for the opposite party.

 

JUSTICE JASBIR SINGH (RETD.), PRESIDENT

               

                Before going into the facts of the case, it is necessary to mention here that on 09.01.2019, arguments in this complaint had been heard and it was reserved for orders. However, at the time of dictating judgment, it was noticed that the complaint has been filed by Rajesh Kumar (complainant no.1) only, though Mrs.Geeta Rani @Geeta Kumar, his wife was also a co-allottee. As such, the matter was fixed for rehearing and on 02.05.2019, following order was passed by this Commission: -

 “Arguments in this case were heard and it was reserved for orders. Taking note of a fact that the unit was purchased by two persons, namely, the complainant and his wife, however, the complaint was filed only in the name of one i.e. the complainant, the matter was fixed for rehearing.

                When confronting with above fact, Sh. A.D.S. Jattana, Advocate, Counsel for the complainant has placed on record an affidavit of Geeta Rani @ Geeta Kumar wife of Sh. Rajesh Kumar, stating that she accept the complaint filed by her husband, namely, Sh. Rajesh Kumar  – complainant. She has further stated that she has no objection, in case the entire amount is released in favour of her husband Sh. Rajesh Kumar.

                We are not satisfied with the observations made.

                Faced with the situation, Sh. A.D.S. Jattana, Advocate, Counsel for the complainant states that let the complaint be treated as a joint complaint in the names of Sh. Rajesh Kumar and Mrs. Geeta Rani @ Geeta Kumar wife of Sh. Rajesh Kumar and if allowed, the amount be refunded in equal share in the names of both.

                To the said proposal, Sh. Satpal Dhamija, Advocate, Counsel for the opposite party has no objection.

                We order accordingly.

                Mrs. Geeta Rani @ Geeta Kumar wife of Sh. Rajesh Kumar, who is residing at the same address as that of complainant No.1, is impleaded as complainant No.2 in the complaint case.

                Let necessary addition be made by the office in the memorandum of parties and wherever needed.

                Arguments heard.

                Reserved for orders.”

 

In view of above, now we will treat this complaint, having been filed on behalf of Rajesh Kumar S/o Shri Ram and Mrs.Geeta Rani @Geeta Kumar wife of Sh.Rajesh Kumar, complainants no.1 and 2 respectively. Otherwise also, we have perused the reply filed by the opposite party, no such objection qua non-joinder of one of the allottees, has been raised therein.  

2.         By way of filing this complaint, the complainants are seeking refund of the amount of Rs.50,52,802/- paid towards purchase of flat bearing No.T3-101, First Floor, Tower No.T3, measuring 1780 square feet, from the opposite party, in its project namely “Parsvnath Royale”, Sector 20, Panchkula, Haryana, for a sum of Rs.57.85 lacs, on the ground that despite the fact that vide Clause 10 (a) of the buyer’s Agreement dated  07.01.2011, it was promised by the opposite party that possession of the unit will be handed over within a period of 36 months plus 6 months i.e. total 42 months, of the commencement of construction i.e. on or before 28.07.2014 (42 months from the date of start of construction being 29.01.2011), yet, it failed to do so, for want of construction, development and basic amenities. For making payment towards part price of the said unit, the complainants have also obtained housing loan from State Bank of Patiala, for which Tripartite Agreement Annexure C-2 was executed on 17.02.2011. Faced with the situation, the complainants served legal notice dated 30.05.2017 Annexure C-6 seeking refund of the amount paid, alongwith interest etc. but the opposite party failed to even reply to the said notice, what to speak of refunding the amount with interest. Hence this complaint.     
3.         In the reply filed by the opposite party, sale of unit in question, to the complainants against price mentioned in the complaint; payments made by the complainants; execution of buyer’s agreement dated 07.01.2011 and also tripartite agreement were not disputed. It was stated that the complainants were defaulters in making payment towards price of the said unit. Construction work at the site was in progress, however, delay was caused due to global recession, as a result whereof,  the opposite party suffered financial crunch, which was beyond its control. The complainants were intimated that due to recession in market, construction work was delayed. Requisite compensation for delay in handing over possession of the unit will be paid in terms of Clause 10 (c) of the Agreement. Infact delayed compensation stood credited in the account of the complainants, maintained by the opposite party. It was stated that now the construction work is in full swing and will be completed by 31.03.2019 (which date stood expired). It was averred that it is a case of contract between the parties and the dispute can be settled by Civil Court only. It cannot be adjudicated by this Commission, under summary proceedings. It was further pleaded that infact the complainants were required to file a recovery suit, and not a consumer complaint before this Commission. Territorial jurisdiction of this Commission was challenged. It was stated that time was not the essence of contract. Only promise was made to make an attempt to hand over possession of the unit within 36 months plus six months grace period, from the date of start of construction. Remaining averments were denied being wrong. Prayer was made to dismiss the complaint with cost.
4.         Earlier also, a complaint (CC No.522 of 2017) on the same cause of action had been filed, which was got dismissed by complainant no.1, as withdrawn, vide order dated 27.04.2018, with permission to file a fresh one, with better particulars.
5.         The contesting parties led evidence, in support of their case.
6.         We have heard the contesting parties and have gone through the evidence and record of the case, carefully.
7.         It is not in dispute that the complainants purchased a flat in a project launched by the opposite party, for which they paid total amount of Rs.50,52,802/- against total sale consideration of Rs.57.85 lacs, as per demands raised by it, from time to time. It is also not in dispute that the Buyer’s Agreement was executed between the parties on 07.01.2011. As per Clause 10 (a) of the said Agreement, possession of the constructed unit was to be delivered within a period of 36 months plus 6 months i.e. total 42 months, of the commencement of construction i.e. on or before 28.07.2014. Admittedly, till the time of filing this complaint, on 24.05.2018, possession of the unit was not even offered to the complainants. In the reply filed and also at the time of arguments, it is not denied that construction at the spot was not complete by the end of committed date i.e. 28.07.2014, when possession of the unit was to be delivered. Even at the time of arguments, no firm date was given, by Counsel for  the opposite party, as to when possession of the unit is likely to be delivered to the complainants. In the written reply, it was mentioned that construction work will be completed by 31.03.2019 (which date stood expired), but nothing in that regard has been done by the opposite party. Still no exact date and time has been committed even now. Under above circumstances, it can safely be said that by making false promise and not delivering possession of the unit, which was booked as far as back in the year 2010, the opposite party is guilty of rendering deficient service and also adopting unfair trade practice.
8.         Counsel for the opposite party made an attempt to wriggle out of the situation by stating that construction work could not be completed on account of global recession. It is very significant to mention here that once the opposite party has already received more than 85% of the sale consideration, towards the unit, then it does not lie in its mouth, that it faced extreme financial hardship, due to global meltdown in the market, resulting into financial crunch, as far as the project, in question, is concerned. It is not that the opposite party was, in the first instance, required to develop the project, by arranging funds out of its own sources, and, thereafter, the units were to be sold to the allottees, on future payment basis. Had this been the case of the opposite party, only in those circumstances, the plea with regard to facing extreme financial hardship on account of global meltdown would have been considered to be correct, by this Commission.

                Even otherwise, the said difficulty/ground i.e. recession in the market/global meltdown would not fall under the definition of force majeure circumstances, for not completing the construction and development work at the site. A change in economic or market circumstances affecting the profitability of a contract or the circumstance, is not regarded as a force majeure condition. Neither any new legislation was enacted nor an existing rule, regulation or order was amended, stopping suspending or delaying the construction/development work of the project, in which flat(s)/plot(s) were agreed to be sold to the consumers. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God, which could have delayed the completion of construction/development work in the project, within the time stipulated in the Agreement. A similar question fell for determination before the Hon`ble National Consumer Disputes Redressal Commission, New Delhi, in a case titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), 2015 (4) CPR 34. The National Commission, in that case, while rejecting the plea of the builder, held as under:-

“Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.

Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainant. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having been used alongwith the words lock-out and strike, has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.”.

       

The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. The opposite party, therefore, cannot take shelter under the garb of force majeure Clause of the Agreement, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  possession of the unit, in question, would be delivered within a period of 42 months, from the date of start of construction but on the other hand, by not abiding by the commitments made and at the same time, taking  a bald stand that time was not essence of the contract,  the opposite party was not only deficient in providing service but also indulged into unfair trade practice.

9.         Now coming to the objection raised regarding territorial jurisdiction of this Commission. It is stated that Agreement was signed at New Delhi. Even the flat is also situated at Panchkula, as such, no cause of action has accrued, within the territorial jurisdiction of this Commission, to entertain and decide the instant complaint. It may be stated here that as per provisions of Section 17 of the Act, a complaint can be filed in a State Commission, within whose jurisdiction, some part of cause of action accrues to the complainants. Perusal of cheques dated 14.02.2011 in the sum of Rs.5,93,396/- (at page 36 of the file),  23.09.2011 in the sum of Rs.5,93,397/- (at page 37 of the file), 04.02.2013 in the sum of Rs.5,99,377/- (at page 42 of the file), 11.07.2013 in the sum of Rs.5,96,374/- (at page 45 of the file)   were received at Chandigarh Office of  the opposite party, and the same was acknowledged to be received by Parsvnath Developers Limited, SCO No.1, 1^st Floor, Madhya Marg, Sector 26, Chandigarh. Secondly, it is evident from application form Annexure B,  in respect of the said unit, placed on record by  the opposite party itself, that the same was signed at its Chandigarh Office on 08.11.2010. Above said facts clearly envisages that cause of action accrued to the complainants to file this complaint before this Commission, at Chandigarh.

                It is also necessary to refer to a case titled as Ravinder Kumar Bajaj Vs. Parsvnath Developers Pvt. Ltd. & 3  Ors., First Appeal No. 515 of 2016, decided by the National Commission on 23.08.2016. In that case, qua project launched by the builder/opposite parties (also  the opposite party in this case), at Rajpura, a complaint was filed by Sh. Ravinder Kumar Bajaj, before this Commission. The said complaint was dismissed for want of territorial jurisdiction, noting that only two payments were credited in the account of the opposite party, in a bank at Chandigarh. By noting that neither the Agreement was signed at Chandigarh, nor substantial payment was received by the opposite party at Chandigarh, the complaint was dismissed by this Commission. Sh. Ravinder Kumar Bajaj went in appeal before the National Commission, which was decided by it, vide order dated 23.08.2016, by noting that at one point of time, Company had a Branch Office at Chandigarh. Appeal was allowed by the National Commission, by observing as under:-

“Since in the Grounds of Appeal, a specific averment is made by the Appellant to the effect that in the year 2007, when the subject flat was booked, the Respondent Company did have a Branch office at Chandigarh, where the payments in respect of the project used to be received regularly, on a pointed query, learned Counsel appearing for the Company very fairly states, on instructions, that the stand of the Appellant is correct.

In light of the statement by learned Counsel for the Respondent Company, I am of the view that in the present case, the State Commission UT, Chandigarh has the Territorial Jurisdiction to adjudicate upon the Complaint filed by the Appellant.

Resultantly, the Appeal is allowed; the impugned order is set aside and the Complaint is restored to the Board of the State Commission UT at Chandigarh for adjudication on merits in accordance with law.”

                Order passed by this Commission was set aside and the matter was remitted back for hearing the complaint, on merits. In Sh. Ravinder Kumar Bajaj case (supra), admittedly, only two payments were credited in bank account maintained by the opposite parties. Even then, it was held by the National Commission that this Commission has territorial jurisdiction to entertain the complaint because at one time, a Branch Office was being maintained by the opposite parties in Chandigarh. In view of above, objection raised in this regard, stands rejected.

10.         Another objection was taken by  the opposite party, in its written version, that consumer complaint was not maintainable before this Commission, under summary proceedings and only a suit, in the Civil Court was maintainable.

                It may be stated here, that the complainants hired the services of the  opposite party, for purchasing the unit, in the manner, referred to above. It is a simple case of non-delivery of possession of the unit, by the stipulated date or even till date, to the complainants, against which substantial amount of Rs.50,52,802/- towards sale consideration stood paid, which act amounts to deficiency in providing service and adoption of unfair trade practice. Section 2 (1) (o) of the Act, defines service as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

 

From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can also be availed of by them, as they fall, within the definition of consumer. In this view of the matter, objection taken by the opposite party, in this regard, being devoid of merit, must fail, and the same stands rejected.

                The above objection taken by the opposite party is also bereft of merit, in view of judgment passed by the Hon’ble National Commission, titled as M/s. Karwa Developers & 3 Ors. Vs. Shree Vinayak Co-Operative Housing Society Ltd. & 3 Ors., First Appeal No. 980 of 2016, decided on 3^rd March, 2017, wherein, a similar plea of the builder was negated, while holding as under:-

“We also do not find any substance in the plea taken by the appellant that under clause 14(a) of the development agreement, the complainant was required to file a civil suit under the Specific Relief Act only, because they were asking for monetary relief.  The State Commission rightly stated that the relief sought in the complaint were on account of deficiencies committed by the OP Developers, vis-à-vis, the society.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the developers failed to develop the same, the society was well within its rights to file consumer complaint against the OP builder.”

 

11.         Another objection raised by Counsel for the opposite party that since no fixed time was mentioned in the Agreement regarding handing over possession of the unit, to the complainants, as such, time was not the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 10(a) of the Agreement, that possession of the unit was to be handed over within a period of 36 months plus 6 months i.e. total 42 months, of the commencement of construction work, subject to force majeure circumstances. In the instant case, the opposite party did not raise any force majeure circumstances, if any, encountered by it, except a bald one of global recession, which has been rejected by this Commission. Thus, under these circumstances, since as per Clause 10 (a) of the Agreement, the opposite party was bound to deliver possession of the unit, within a maximum period of 42 months, referred to above, as such, time was, unequivocally made the essence of contract.

                At the same time, the opposite party, also cannot evade its liability, merely by saying that since no fixed time was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement/allotment letter, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the plots/unit(s) to the allottees/purchasers thereof.  It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

In view of above, plea of the opposite party in this regard also stands rejected.

12.         As far as plea taken by  the opposite party that the complainants were defaulters in making payment towards price of the said unit, as such, they are not entitled to any relief, is concerned, it may be stated here that since it is an admitted fact that despite the fact that the unit, in question, was booked as far as back in 2010 and also substantial amount of Rs.50,52,802/- stood paid to the opposite party and still in the year 2019, it is nowhere near offering possession of the unit, it cannot blame the complainants that they are defaulters. In our considered opinion, if, the complainants, on account of lackadaisical attitude of the opposite party towards construction, had stopped making payments for some short period, they were right in doing so, in view of principle of law laid down by the Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the unit by the stipulated date, it cannot expect the allottee(s) to go on paying instalments to it. Similar view was also taken by the National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. Under these circumstances, in no way, the complainants can be termed as defaulters.
13.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.50,52,802/- It is an admitted fact that  the opposite party is unable to offer and deliver possession of the unit, in question, which was booked as far as back in 2010 and still firm date of delivery of possession of the unit, could not be given to them (complainants). The complainants cannot be made to wait for an indefinite period, for delivery of possession of the unit purchased by them. The opposite party therefore, had no right to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are thus, entitled to get refund of amount of Rs.50,52,802/-.

                In view of above facts of the case, the opposite party is also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

14.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the  complainants. The amount of Rs.50,52,802/- has been used by the opposite party, for its own benefit. As on date even, the complainants are empty handed. There is no dispute that  the opposite party was charging heavy rate of interest @24% p.a., as per Clause 5 (b) of the Agreement, for the period of delay in making payment of instalments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainants are certainly entitled to get refund of the amount of Rs.50,52,802/- alongwith interest from the respective dates of deposits till realization.          
15.         Since, it has already been held that the complainants are entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by  the opposite party to the effect that it is ready to pay penalty amount for the period of delay, in delivery of possession of the unit, cannot be considered, at this stage. If  the opposite party is  allowed to invoke the relevant Clause of the Agreement, in the instant case, regarding payment of penalty, that would amount to enriching it, at the cost of the complainants. The defence taken is accordingly rejected.
16.         No other point was urged by the contesting parties. 
17.         For the reasons recorded above, this complaint is partly accepted, with costs, against the opposite party. The opposite party is directed as under:-

 

1. To refund the amount of Rs.50,52,802/- to the complainants, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.1,50,000/- for causing mental agony and physical harassment, to the complainants, as also deficiency in providing service, adoption of unfair trade practice and escalation in prices.
3. To pay cost of litigation, to the tune of Rs.33,000/- to the complainants.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) thereafter shall carry penal interest @15% p.a.,  instead of @12%, from the date of default onwards, and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

 

18.         However, it is made clear that, since the complainants have availed loan facility from State Bank of Patiala, for making payment of installments towards the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
19.         It is further made clear that the amount whatsoever comes payable to the complainants by the opposite party, in view of order passed above, the same shall be paid to them, in equal shares i.e. in the names of Rajesh Kumar S/o Shri Ram and Mrs.Geeta Rani @Geeta Kumar wife of Sh.Rajesh Kumar, respectively.
20.         Certified Copies of this order be sent to the parties, free of charge.
21.         The file be consigned to Record Room, after completion

Pronounced.

10.06.2019_

 

Sd/-

 

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 

 

Sd/-

 

(RAJESH K. ARYA)

MEMBER

 Rg