Per Justice Sham Sunder , President The facts, in brief, are that the complainant who wanted to buy a luxury apartment for himself in Chandigarh, to fulfill his desire of owning a good quality flat, approached the OPs, believing OP No.1 to be one of the leading construction companies in India, and applied for allotment of residential Unit in category ‘A’ i.e. five bedrooms unit in the Pride Asia Complex. He deposited Rs.19,10,000/- , being 5% as earnest money, in favour of OP No.1 vide cheque dated 20.9.2007 alongwith the application form No.A-16240. A copy of the acknowledgement receipt dated 21.9.2007 is annexure C-1. Thereafter, the OPs allotted a five bedrooms flat Pent House No.1 on 3rd floor in Block No.1 by issuing allotment letter dated 28.9.2007 annexure C-2. The complainant opted for time linked payment plan and deposited Rs.19,12,500/- on 12.10.2007 to complete 10% payment, for which a receipt was issued, copy of whereof is C-3. The complainant then deposited Rs.63,33,750/- representing the basic cost and covered Car parking cost vide receipt dated 15.11.2007, copy whereof is annexure C-4. The OPs wrote letter C5 dated 8.12.2007 acknowledging total receipt of Rs.1,01,56,250/- and raised a demand of Rs.52,55,937.50/- from the complainant. The complainant, being a bonafide purchaser, deposited the said amount of Rs.52,55,938/- vide receipt dated 2.1.2008, copy whereof is C-6. The parties entered into a flat buyer agreement dated 12.2.2008, annexure C-7. According to clause 5(a) and (b) of the said agreement, in case of breach of terms and conditions by the buyer, the agreement was liable to be cancelled, and, in that eventuality, earnest money of 5% of basic price was to be forfeited and, in case of delayed payment of installments, the buyer was to pay interest @ 24% p.a. Clause 9 (c) of the said agreement was with regard to the payment of compensation @Rs.10 per sq.ft per month, by the developer, to the buyer, in case of delay, in handing over possession beyond the period of 36 months from the stipulated date i.e. 6.10.2006. The OPs, thereafter, sent letter dated 1.3.2008 annexure C-8 acknowledging receipt of Rs.1,54,12,188/- and raised further demand of Rs.52,55,937/- from the complainant. The said amount of Rs.52,55,937/- was deposited by the complainant vide receipt dated 1.4.2008, copy of which is C9. Still the OPs admitted having received Rs.2,06,68,125/- and raised an additional demand of Rs.43,22,500/- vide letter dated 11.6.2008 annexure C10. The complainant deposited the said amount of Rs.43,22,500/- vide receipt dated 2.7.2008 annexure C-11. Thereafter, the complainant deposited another sum of Rs.38,22,500/- vide receipt dated 3.10.2008, a copy whereof is C12. Thus, in this way, the complainant deposited a total sum of Rs.2,88,13,105/- till October,2008, but no construction activity had even commenced and this created a lot of doubt and apprehension, in the mind of the complainant, that something was amiss and that there was a danger of the failure of housing project, floated by the OPs, and loss of money already paid by him. It was further stated that the housing project started by the OPs, had failed to take off, and they themselves committed breach of their commitment, to start timely construction. It was further stated that the complainant visited the site time and again, after October,2010, but was disappointed to see that no construction activity had been initiated and the officials of OP NO.1, at the site, kept on giving false hopes and promises. The complainant, perturbed at the developments that there was no hope for revival of the project, sent letter dated 30.4.2009 C13 to the OPs, requesting them to refund the entire amount paid by him alongwith interest. The OPs, vide letter dated 10.7.2009 refunded the amount of Rs.2,69,03,125/- by retaining Rs.19,09,980/- which represented 5% earnest money paid at the time of booking of the flat in the year 2007. The complainant wrote letter dated 10.12.2010 requesting the OPs to refund the retained amount, but to no avail. It was further stated that on account of non-construction of the flats and non giving of possession to the complainant, physical harassment and mental agony was caused to him. It was further stated that 5% amount of the basic price could not be arbitrarily deducted by the OPs, as the complainant was not at fault, in making payment of instalments. It was further stated that the OPs were, thus, deficient, in rendering service and 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 claiming refund of Rs.19,09,980/- alongwith interest @ 24% p.a. with effect from 28.9.2007 till realization, compensation @ Rs.55,000/- per month from 5.10.2009 till the date of filing this complaint, amounting to Rs.9,90,000/- and for payment of future compensation; Rs.2,50,000/- for mental harassment and litigation charges, Rs.5.00 lacs, on account of loss of opportunity, as the OPs illegally retained a sum of Rs.2,88,13,105 for a period of about two years and interest @ 11% on Rs.2,69,03,125/- from 28.9.2007 till realization i.e. 10.7.2009. 2. OP No.1, in its written reply, admitted that a flat buyer agreement R1/2 amongst the complainant and the OPs, was executed, which constituted a binding contract dated 12.2.2008. It was also admitted that a sum of Rs.2,83,13,105/- by way of instalments, towards the price of the flat, in question, was deposited by the complainant, from time to time. It was stated that the Chandigarh Administration was desirous of developing residential, commercial and other related infrastructure facilities, as an integrated project, at Rajiv Gandhi Chandigarh Technological Park, in Chandigarh. It was further stated that immediately after signing of the development agreement dated 6.10.2006, between the OPs, the Chandigarh Housing Board handed over 123.79 acres of land to OP No.1, which the said Board claimed to be unencumbered, though, in fact, it was not unencumbered. It was further stated that in January,2007, OP No.1 commenced erection of fencing around the said land, when the Haryana Government claimed ownership over a part of the same, and, as such, it (OP No.1) was stopped from carrying on its activities. On 9.2.2007, the Chandigarh Housing Board informed OP No.1, that the dispute had been resolved. Believing the assurance given by the Chandigarh Housing Board, OP No.1, once again, commenced the erection of fencing. On 15.2.2007, OP No.1 was surprised when the Haryana Government again raised objections, stating that the dispute had not been resolved. It was further stated that the alternative revised demarcated land which was offered to OP No.1, by the Chandigarh Housing Board, included the land belonging to the Forest Department, on which there existed more than 200 full grown trees, and restrictions were imposed by the Forest Department with regard to the felling of the same, and use of this land, for the project. It was further stated that since possession of the entire unencumbered land of the project was not handed over to OP No.1 , the construction could not be started, as it was an integrated project. It was further stated that a period 36 months for the completion of project, was to commence, from the date, when possession of the entire unencumbered land of the project, was to be handed over to OP NO.1 , which stage was never arrived at. It was further stated that, under these circumstances, OP No1, was not at fault, in completing the construction. It was further stated that OP NO.1 had not abandoned the project. It was further stated that even, the dispute, has been referred to the arbitrators, and their decision is still awaited and, as such, this Commission has no jurisdiction to entertain and decide the complaint. It was further stated that, as the complainant, did not deposit the entire price of the flat, but got his allotment cancelled midway, under these circumstances, in accordance with clause 5(a) of the agreement Annexure R-1/2, a sum of Rs.19,09,980/- towards 5% of the basic price of flat allotted to him, which was Rs.3,82,25,000/-, was deducted and the balance amount of Rs.2,69,03,125/- stood refunded without any interest or other charges. It was denied that OP No 1 was deficient, in rendering service, or indulged into unfair trade practice. 3. OP No.2, in its written statement, admitted the execution of the development agreement dated 6.10.2006 R-1/1 between it, and OP No.1. The execution of flat buyer agreement dated 12.2.2008 amongst the complainant and the OPs was also admitted. It was also admitted that a sum of Rs.2,88,13,105/- was deposited towards the part price of the flat by the complainant. It was further stated that as per the terms and conditions of the agreement dated 12.2..2008 ,it was the entire responsibility of OP No. 1 to refund the deposited amount by the complainant. It was further stated that the application of the Complainant for cancellation of the dwelling unit, and the draft for refund was sent to OP No.1 to do the needful in terms of the Escrow Agreement dated 1.6.2007, as OP No.2, was only liable to pay amount to the extent of 30% of the amount, as per the said agreement. It was admitted that the developer had failed to carry out the development of the project, as per the terms and conditions of the development agreement, and on account of dispute between the OPs, the matter was referred to the arbitrators and their decision was still awaited. It was further stated that there was no deficiency, in rendering service, on the part of OP NO.2, as it was OP No.1 who was liable to refund the amount. 4. The complainant, in support of his case, filed his own affidavit , by way of evidence, alongwith which various documents were attached. 5. OP No.1, in support of its case, submitted the affidavit of Sh.P.K.Jain, President M/s Parsvnath Developers Ltd., by way of evidence, who proved the documents R-1/1 the Development Agreement dated 6.10.2006 executed between the OPs , Annexure R-1/2 the flat buyer agreement and R-1/3 the Escrow Agreement executed amongst the Chandigarh Housing Board, M/s Parsvath Developers Limited and State Bank of India . 6. OP No.2, in support of its case, submitted the affidavit of Sh.M.M. Sabharwal, PCS, 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 complainant, submitted that, by April,2009, and even till date not even a single brick has been laid at the spot, and as such, the question of construction of flats, as committed, did not at all arise. He further submitted that, at the time of refund in July,2009, of the remaining amount, out of the amount deposited by the complainant, a sum of Rs.19,09,980/- was illegally retained by the OPs, on the ground that there was breach of the terms and conditions of the flat buyer agreement R-1/2. He further submitted that a lot of physical harassment was caused to the complainant, besides mental agony. He further submitted that he also suffered a financial loss, as his hard earned money was withheld by the OPs for a long time, without paying him any interest, thereon, and, on the other hand, they enriched themselves, by getting interest on that amount. He further submitted that there was no breach of the terms and conditions of the flat buyer agreement, on the part of the complainant. He further submitted that the complainant made the payment of instalments towards the price of the flat in question, always in time. He further submitted that according to the agreement dated 12.2.2008, 5% of the basic price of the flat could only be forfeited by the OPs, at the time of refund, had there been breach of any condition of the said agreement, by the complainant. He further submitted that the complainant was, thus, entitled to the amount illegally retained by the OPs, being 5% of the basic price of the flat. He further submitted that the complainant was also entitled to interest @ 24% p.a. on the amount, deposited by him, till the date part refund therefrom, was made, as also on the illegally retained amount. He further submitted that the complainant was also entitled to compensation for physical harassment and mental torture besides compensation as per the terms of the agreement dated 12.2.2008. 9. On the other hand, the Counsel for OP No.1, submitted that, no doubt, development agreement R-1/1 dated 6.10.06 was executed between OPs, as a result whereof, 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 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 the final decision by them was still awaiting. He further submitted that, since there was breach on the part of the complainant in depositing the remaining instalments, towards the price of flat, he was only entitled to the refund of amount, if he applied for the cancellation of allotment, after deduction of 5% of the said amount, as per Clause 5(a) of the agreement dated 12.2.2008. He further submitted that a period of 36 months was provided under Clause 2.2.1 of the agreement R-1/1 dated 6.10.2006 and under Clause 9(a) of the agreement dated 12.2.2008, for the completion of construction, and 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. He further submitted that, under these circumstances, OP No.1 was not at all deficient, in rendering service, nor it indulged into unfair trade practice,nor it was liable to pay any compensation, but only liable to refund the amount after deducting 5% of the basic amount, from the amount deposited by the complainant, towards the price of the flat. It was further stated that however, a sum of Rs.2,69,03,125/- had already been refunded to the complainant by rightly retaining a sum of Rs.19,09,980/- being 5% amount of the basic price of the flat. He further submitted that in the present case the complainant applied for the cancellation of allotment and sought refund before 5.10.2009, therefore, he was not entitled to the amount forfeited by OP No.1, in view of the flat buyer agreement executed amongst the parties. 10. On the other hand, 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 agreement R-1/2. He further submitted that a big chunk of unencumbered land on which the residential complex was to be developed, had already been handed over to OP No1 , according to the agreement, executed between the OPs. He further submitted that the construction of 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 sought for by the complainant. 11. The first question, that falls for consideration, is, as to whether, the OPs were entitled to forfeit Rs.19,09,980/- being 5% of the basic price of the flat. The main contention of the Counsel for OP No.1, is that the deduction of Rs.19,09,980/- was perfectly legal and valid in view of clause 5(a) of the flat buyer agreement R-1/2 , according to which, it could forfeit 5% amount of the basic price . Clause 5(a) of the flat buyer agreement reads as under :- “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.” 12. 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 was liable to be cancelled and the amount was to be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was any breach in payment of instalments, or of any other terms and conditions of the agreement dated 12.2.2008 , 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 the flat, through instalments, on the part of the complainant. Since, till April,2009 not even a brick had been laid, the complainant, had to ask for the refund of the amount vide letter dated 30.4.2009 annexure C13. There was no breach of the terms and conditions of the Agreement dated 12.2.2008, on the part of the complainant and, 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 entitled to the refund of the entire amount, deposited by him, and the OPs were liable to refund the illegally deducted amount of Rs.19,09,980/- with interest. The submission of the Counsel for the OP No.1 ,in this regard, being without merit, must fail, and the same stands rejected. 13. The next question, that arises for consideration is, as to whether, the complainant is entitled to interest, on the amount deposited by him, or not ? There is, no dispute, about the factum, that the complainant applied for the allotment of a flat/pent house. He was allotted the same. He deposited Rs.2,88,13,105/-, in instalments, towards the price of penthouse, which was allotted to him, as admitted by the OPs. Clause 9(a) of the agreement R1/2 dated 12.2.2008, 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.” 14. The plain reading of Clause 9(a) of the agreement dated 12.2.2008, extracted above, clearly goes to show 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 R-1/2. 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. In the instant case, the possession of 112 acres of land which was unencumbered, was handed over to OP No.1, for the development of project. On this land, construction of the residential flats, could certainly be undertaken, if OP No.1 wanted to do so. The mere fact that it was an integrated project, does not mean that if a few acres of land (measuring about 11/12 acres) was not given to the developer, due to some dispute, the construction could not be undertaken. Therefore, there was no circumstance, beyond the control of the developer, which could cause delay, in the construction of the residential units. The developer also could not take shelter of force maejure clause. The complainant had invested his hard earned money worth Rs.2,88,13,105/- by making payment through instalments, in time, with the hope of getting possession of the flat allotted to him, within a period of 36 months from 10.6.2006, but on coming to know that even, not a single brick had been laid, at the spot, till April,2009, what to speak of construction of flats, he sought refund of the amount through letter dated 30.4.2009. Ultimately, the complainant received refund of Rs.2,69,03,125/- on 10.7.2009 vide annexure C16. It is, therefore, held that the complainant was entitled to the refund of the total amount deposited by him with interest, as per Clause 9(d) of the agreement dated 12.2.2008. The OPs were, thus, deficient, in rendering service by not paying interest as provided under Clause 9(d) of the Agreement dated 12.2.2008 at the time of part refund of the amount. The complainant is, thus, held entitled to interest on the amount which remained deposited with the OPs till 10.7.2009 at the SBI term deposit rate, as per Clause 9(d) of the agreement dated 12.2.2008 and on Rs.19,09,980/- illegally deducted from 11.7.2009 till its actual realization. 15. No doubt, the period of handing over the possession was to expire on 5.10.2009, yet the complainant applied for the refund of the amount on 30.4.2009 vide annexure C13, as not even a brick has been laid, at the spot, by that time. Even till date, not even a brick had been laid at the spot, by OP No.1, what to speak of construction of flats. Had the refund of the entire amount been made to the complainant on 10.7.2009, vide annexure C16, he would have certainly not become entitled to compensation, as per clause 9( C) of the flat buyer agreement. However, on 10.7.2009, only a part refund of the amount deposited by the complainant was made to him. At that time an amount of Rs.19,09,980/- was illegally retained by the OPs, which has not been refunded till date. In this view of the matter, the complainant is entitled to compensation, as per clause 9( c) of the agreement annexure R1/2. 16. 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 R1/3executed 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.” 17. 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. 16. For the reasons, recorded above, the complaint must succeed and the same is accordingly 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.19,09,980/- to the complainant , illegally deducted, by them, alongwith interest at the SBI Term Deposit rate as applicable at the time of refund with effect from the date of its illegal deduction/withholding i.e. 11.7.2009 till actual realization, as provided by Clause 9(d) of the Agreement dated 12.2.2008 R1/2 ; (ii) Parsvnath Developers Limited and Chandigarh Housing Board are held liable jointly and severally to pay interest to the complainant at the SBI Term Deposit rate, on the amount of Rs.2,88,13,105/- from the respective dates of deposit of instalments, till 10.7.2009, when the amount of Rs.2,69,03,125/- was refunded to him, from the aforesaid amount, as provided by Clause 9(d) of the agreement dated 12.2.2008 ; (iii) Parsvnath Developers Limited shall be liable to pay compensation @ Rs.107.60 per square meter (Rs.10/- per sq.feet) of the super area of the unit per month from 5.10.2009, the last date of completion of project, till actual payment of the aforesaid amounts is made, as provided by clause 9 ( c)of the flat buyer agreement. (iv) The aforesaid directions shall be complied with, by the OPs, within 30 days from the date of the 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. 16. Certified Copies of this order be sent to the parties, free of charge. 17. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | |
