Chandigarh

StateCommission

CC/601/2017

Vishal Wadhwa - Complainant(s)

Versus

Puma Realtors Private Limited - Opp.Party(s)

Gaurav Bhardwaj Adv.

05 Mar 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	601 of 2017
Date of Institution	:	09.08.2017
Date of Decision	:	05.03.2018

 

Vishal Wadhwa S/o Sh. Prithvi Raj Wadhwa R/o #3562, Sector 71, Mohali, Punjab. Now at 3054, ATS Advantage, Plot No.17, Ahinsa Khand, Indirapuram, Ghaziabad.

 ……Complainant

V e r s u s

1.  Puma Realtors Pvt. Ltd. a company incorporated under the Companies Act, 1956  (An IREO Group Company) Corporate Office at SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh 160009 (India) through its Authorised Signatory/Directors Sh. Anupam Nagalia & Sh. Amrick Singh Gambhir.

2^nd Address:-

Registered Office at No.5, Dhanraj Chambers, 1^st Floor, Sarbari, New Delhi 110074.

2.  Sh. Anupam Nagalia, Director, Puma Realtors Private Limited, SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh.

3.  Sh. Amrick Singh Gambhir, Director, Puma Realtors Private Limited, SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh.

….. Opposite Parties.

Argued by: Sh. Gaurav Bhardwaj, Advocate for the complainant.

                 Sh. Rohit Tanwar, AGM (Legal) of the Opposite Parties.

 

Complaint case No.	:	695 of 2017
Date of Institution	:	15.09.2017
Date of Decision	:	05.03.2018

 

1.  Shashi Luthra w/o Sunil Luthra,

2.  Sunil Luthra s/o Om Parkash Luthra,

Both R/o H.No.683, Sector 12, Sonepat, Haryana.

……Complainants.

V e r s u s

M/s. Puma Realtors Private Limited, SCO No.6-7-8, Sector 9-D, Madhya Marg, Chandigarh through its Managing Director.

…. Opposite Party.

Argued by:

 

Sh. Maninder Singh, Advocate for the complainant.

Sh. Rohit Tanwar, AGM (Legal) of the Opposite Party.

 

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

 

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

                SH. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER.

 

 

PER DEV RAJ, MEMBER

            After hearing arguments on 16.02.2018, it was agreed between the Counsel for the complainant(s) and Sh. Rohit Tanwar, AGM (Legal) of the Opposite Parties that the facts involved in the above two complaints, by and large, are the same and therefore, the aforesaid complaints can be disposed of, by passing one consolidated order. To dictate order, facts are being taken from complaint bearing No.601 of 2017, titled as ‘Vishal Wadhwa Vs. Puma Realtors Private Limited & Ors.’.

2.         The facts, in brief, are that as the complainant was looking for a flat for himself and his family, he purchased a flat bearing No.JCC-00-003 in the project of the Opposite Party, namely, IREO RISE, in Juniper Court C having super area of 1511 sq. ft. with one parking space, in resale, from Mr. Rajwinder Singh and Mr. Jaswinder Singh Walia, the original allottees. The total consideration money of the unit, in question, was fixed at Rs.48,03,880/- @Rs.3,179.27 per sq. ft. In Annexure IV i.e. Consturction Linked Plan, the total amount was mentioned as Rs.51,24,010/-. Apartment Buyer’s Agreement was executed between the original allottees and the Opposite Parties on 14.04.2012. The complainant paid Rs.16,14,600/- to the original allottees through demand drafts dated 11.05.2012 and also paid Rs.42,444/- as transfer fee to the Opposite Parties on 11.05.2012 and the unit, in question, was transferred in his favour vide letter dated 28.05.2012. The complainant had paid a sum of Rs.48,47,890/- as against the total sale consideration of Rs.48,03,880/- excluding other charges or Rs.51,24,010/- as per Annexure IV.

3.         As per Clause 13.3 of the aforesaid Agreement, physical possession of the unit, in question, was to be handed over by the Opposite Parties within a period of 30 months from the date of execution of the same, which stood expired in October 2014. It was further stated that there was a willful, intentional delay of more than 33 months and till date, possession has not been offered by the Opposite Parties. It was further stated as per Clause No.20 of the said Agreement, time was essence in making payment of installments and as per Clause 13.4, the Company was liable to pay delay compensation @Rs.7.50 per sq. ft. per month in the event of delay in handing over possession, which came to be Rs.11,332.50 per month. It was further stated that the Opposite Parties were trying to justify the delay in offering possession under the garb of Clause 13.4, which is most inadequate and meaningless considering the fact that the complainant has paid Rs.48,47,890/- upon which, monthly interest @12% and 15% per annum comes to Rs.48,478/- and Rs.60,598/- per month and, therefore, Clause 13.4 does not safeguard the interest of the complainant. It was further stated that after having made more than 95% of payment, the Opposite Parties failed to offer/deliver possession of the apartment, in question till date. It was further stated that Larsen & Tubro Company had been withdrawn and some new construction company namely M/s Akalia Constructions was engaged. It was further stated that after engaging the new construction company, the development/construction work at the site has come to a standstill. It was further stated that the amenities/facilities, as promised in the Agreement, like multipurpose hall, swimming pool, gym, badminton and basket ball courts, kids play area and jogging track etc. have not even been started to be developed in the project.

4.         The grievances expressed by the complainant in Para 15 of his complaint, related to unilateral change of contract from L&T to M/s Akalia Construction; delay in offering possession; offering possession without completing the amenities; not constructing drop road till the tower, in question; unilateral construction of approximately 70 flats by making flats over the existing towers and the Apartment Buyer’s Agreement is completely one sided as has been very cleverly crafted by the Opposite Parties in order to have all the conditions in their favour and have all the options open which may be detrimental to the interest of its customers. It was stated that the Opposite Parties might not apply for regular connection from Govt. Department and on the contrary shall keep on supplying electricity at exorbitant rates to the occupants by installing Gen Sets.

5.         It was stated that modular kitchen was promised but only cupboards in the lower portion of the modular kitchen have been provided and not in the upper portion. It was further stated that Split AC fittings were to be provided in all the rooms including bedrooms but the Opposite Parties backed out from their commitment and are providing Split AC fitting only in the living room. It was further stated that the acts of the Opposite Parties amounted to deficiency, in rendering service and indulgence into unfair trade practice.

6.         Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Parties to hand over possession of the apartment, in question with all amenities as promised in the Agreement; pay interest @15% p.a. on the deposited amount; pay compensation for delayed possession as per Clause 13.4 of the Agreement; pay Rs.10,00,000/- as compensation on account of harassment, mental agony etc.; provide electricity, water and sewerage from the Govt.; besides Rs.55,000/- as litigation charges.

7.         The Opposite Parties, in their written statement, took-up certain preliminary objections, to the effect that Opposite Parties No.2 & 3 are unnecessary parties as they neither entered into any agreement with the complainant nor promised to deliver the apartment nor received any money from the complainant; that the complaint was liable to be dismissed, due to existence of arbitration Clause No.34 in the Apartment Buyer’s Agreement dated 14.04.2012; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the complainant did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainant has not bought any goods; that the complainant is not a consumer as he purchased the unit, in question, not for his personal use but for investment/commercial purposes; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the  1986 Act. 

8.         On merits, it was stated that in terms of Clause 13.4 of the Agreement, the complainant duly agreed to receive liquidated damages from the end of the grace period i.e. 30 months plus 6 months, till possession is actually offered.  It was further stated that the complainant vide Clause No.13.3 of the Agreement agreed that the starting period for 30 months shall be date of the said Agreement or approval of the building plans and/or fulfillment of precondition imposed thereunder, which ever was later. It was further stated that as agreed between the parties, in case of failure of the Opposite Parties to deliver possession within aforesaid period of 36 months, the complainant was entitled to the liquidated damages @Rs.7.50 per sq. ft. per month till possession of the apartment was actually offered. It was further stated that the delay compensation @Rs.7.50 per sq. ft. of the super area was to be adjusted and reduced from the last and final installment, which would be demanded at the time of offer of possession. It was further stated that the Opposite Parties applied for grant of partial occupation certificate vide application dated 22.11.2016 for Juniper Tower where the apartment, in question, is situated, which is still awaited. It was further stated that possession of the apartment, in question, would be offered to the complainant immediately on receipt of the said partial completion certificate, alongwith liquidated damages as agreed under the said Agreement.

9.         It was further stated that it was nowhere agreed that construction would be done by L&T or any other else company. It was further stated that L&T company had carried out the entire (100%) construction work in the Juniper Block, where the apartment has been allotted to the complainant. It was further stated that through the said L&T Company has carried out majority of development work but having found delay on the part of the said construction company, M/s Akalia Constructions (a sub-contractor of L&T) was appointed for undertaking the finishing works. It was further stated that the entire construction work of the apartment, in question, has been done by L&T only. It was further stated that the Opposite Parties never proposed to offer possession of the apartment without completing the amenities. It was further stated that the Opposite Parties are in the process of obtaining approvals for additional areas as duly agreed under Clauses 9.10 and 21.3 (in fact 10.10 and 22.3) of the Agreement.

10.       It was denied that the Opposite Parties shall not apply for regular connection from Govt. Department and on the contrary, shall keep on supplying the electricity at exorbitant rates to the occupants by installing Gen Sets. It was further stated that the Opposite Parties vide application dated 26.11.2013 applied for approval of electrical layout plan and grant of NOC to the PSPCL after submitting requisite details and PSPCL duly granted NOC dated 08.07.2015. It was further stated that the Chief Electrical Inspector to Govt. of Punjab approved the electrical installations laid in the project for commissioning of the same vide its NOC dated 07.08.2015. It was further stated that the Opposite Parties duly applied online vide RID No.15250 dated 27.08.2015 for the release of electric connection for the IREO Rise Project and PSPCL duly granted feasibility clearance dated 20.11.2015 for release of load/connection on the project. It was further stated that the Opposite Parties have already deposited Bank Guarantee dated 22.3.2015 for R.3,24,10,301/- plus Rs.2.97 Lacs towards Advance Consumption Deposit on 12.4.2016 in compliance to demand notice dated 28.12.2015. It was further stated that all formalities have been duly complied with and no dues remain to be paid or deposited on the part of the Opposite Parties towards energization of the electrical connection by PSPCL.

11.       It was further stated that the Opposite Parties have already constructed all the roads as per the approved layout plan. It was further stated that the Opposite Parties have already constructed underground water tanks duly connected with the approved bore well, which have further been connected to the overhead tanks of each tower with pumping system to supply the water for domestic use. It was further stated that the Opposite Parties have already constructed and installed underground STP for the disposal of the sewage. It was further stated that it was nowhere agreed that modular kitchen comprising of both upper and lower portion slabs would be provided. It was further stated that there was no agreement to provide Split AC fittings in all the rooms, rather on the contrary, said Agreement provides for provision for Split AC. It was further stated that the Opposite Parties have made provision for ACs in all the rooms. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

12.       The complainant filed rejoinder, wherein he reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Party.

13.       The complainant, in support of his case, submitted his affidavit, by way of evidence, alongwith which, a number of documents were attached.

14.       The Opposite Parties, in support of their case, submitted the affidavit of Sh. Rohit Tanwar, its Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

15.       We have heard the Counsel for the parties, and have gone through the evidence, and record of the case, carefully. 

16.       It is evident, on record, that Mr. Rajwinder Singh and Mr. Jaswinder Singh Walia were allotted Apartment No.JCC-003, Ground Floor, Tower Juniper Court-C in Group Housing Colony known as “Ireo Rise”, situated in Sector 99, SAS Nagar, Mohali, having tentative super area of 1511 sq. ft. together with one parking space, forming indivisible part thereof and Apartment Buyer’s Agreement was executed between him, Mr. Jaswinder Singh Walia (co-allottee) and the Opposite Parties on 14.04.2012 (Annexure C-15 colly./OP-5). The basic sale price of the unit was Rs.48,03,880/- besides External Development Charges (EDC) Rs.1,51,100/- and IFMS charges Rs.45,330/-. Thus, the total sale consideration of the unit, in question, was Rs.50,00,310/-. However, as per Annexure-IV, Payment Plan (at Page 146 of the written statement), the total cost by including service tax of Rs.1,23,700/- is shown as Rs.51,24,010.00. The payment against the aforesaid unit was to be regulated as per aforesaid Payment Plan, Annexure IV.  The unit, in question, was purchased by the complainant from Mr. Rajwinder Singh & Mr. Jaswinder Sing Walia, the original allottees and the nomination/rights in the said unit were transferred in his favour vide letter dated 28.05.2012 (Annexure C-4). The complainant made payment in the sum of Rs.48,47,890.56 as is apparent from latest accounts statement (Annexure OP-9). In terms of Clause 13.3 of the Agreement, since the Apartment Buyer’s Agreement was executed on 14.04.2012 i.e. after approval of building plans on 18.01.2012 (Annexure OP-10), 30 months period for handing over possession, expired on 13.10.2014. Admittedly, possession has not been offered/delivered to the complainant by the Opposite Parties.

            The plea that Opposite Parties No.2 & 3 (Directors of the Company) are not necessary parties is without any basis. A Company acts through its Directors. It has not been denied that Opposite Parties No.2 and 3 are not Directors of the Company and were not responsible for managing the affairs of the Company. The objection is, therefore, not tenable and the same stands rejected.

            As regards deficiency in promised amenities viz. multipurpose hall, swimming pool, gym, badminton and basket ball courts, kids play area and jogging track etc., the Opposite Parties have categorically stated in their written statement that these facilities/amenities shall be completed before handing over of possession. The Opposite Parties have also specifically denied the allegation of supplying electricity at exorbitant rates. As is evident from evidence adduced by the Opposite Parties, electricity installation have been approved vide NOC dated 07.08.2015. All the formalities have been duly complied with and no dues remain to be paid by the Opposite Parties.

17.       The complainant has not stated as to how change of contract from L&T to M/s Akalia Constructions caused prejudice to him. The Opposite Parties have specifically stated that L&T had carried out the entire (100%) construction work in the Juniper Block, where the apartment, in question, is located. It was further stated that L&T Company was engaged in order to deliver best in class project to its customers. It was also stated that the said L&T Company also carried out majority of development work. The objection of the complainant is, therefore, devoid of merit. Further during arguments, Counsel for the complainant did not press the issues relating to change of contract from L&T to M/s Akalia Constructions and provision for the electricity, water and sewerage.

18.        The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause No.34 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, it is admissible to an Arbitrator to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), 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.”

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

            In  view of the above, the plea taken by the Opposite Parties, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

19.         Another objection raised by the Opposite Parties was that since the complainant did not buy goods and did not hire any services, and was seeking enforcement of the Agreement in respect of immovable property, therefore, only a Civil Court can decide the complaint, and consumer complaint was not maintainable. It may be stated here, that the complainant hired the services of the Opposite Parties, for purchasing the unit, in question, in the manner, referred to above. According to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were to hand over possession of the apartment, in question, within a period of thirty months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions, whichever is later (commitment period).  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 Act provides an alternative remedy. Even if, it is assumed that the complainant has remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by her, as she falls within the definition of ‘consumer’, as stated above. In this view of the matter, the objection of the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

20.         The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to her. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”, meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only this, receipt against draft received, letter dated 28.05.2012, receipts qua amounts received (Annexures C-3 to C-13) and provisional allotment offer letter dated 23.09.2011 (Annexure C-14) were issued by the Opposite Parties to the complainant, from its Chandigarh Office i.e. SCO 6-7-8, 1st & 2nd Floors, Sector 9-D, Chandigarh. Since, as per Clause 33 of the Agreement and the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.

21.         No doubt, in the written version, an objection was also taken by the Opposite Parties, that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

22.         In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to him, to file the complaint. The submission of the Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

23.       A specific objection, as regards the complainant being not a consumer as he booked the apartment not for his personal use but for investment/commercial purposes, has been taken. It may be stated here that in Para 2 of the complaint, the complainant has specifically stated that he was looking for a flat for himself and his family. At the same time, there is nothing, on record, to show that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof.  Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion i.e. simply saying that the complainant being investor, did not fall within the definition of a consumer, cannot be taken into consideration. It may be stated here that in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Consumer Disputes Redressal Commission, New Delhi, that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs.  Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”

 

The principle of law, laid down, in the aforesaid cases is fully applicable to the present case. The objection raised, being devoid of any substance, stands rejected.

24.       The next question, which falls for consideration, is, as to whether the construction of approximately 70 flats over the existing tower(s) by the Opposite Parties is at the cost of existing common facilities/amenities and against the agreed terms and conditions. Relevant clauses 22.3 and 10.10 in the Apartment Buyer’s Agreement read as under:-

“22.3      The Proposed Allottee agrees that the Company shall be entitled to connect the electric, water, sanitary and drainage fittings on any additional structures/storeyes with the existing electric, water, sanitary and drainage fittings. The Proposed Allottee further agrees and undertakes that it shall not at any time before or after taking possession of the said Apartment, have any right to object to the Company constructing or continuing with the construction of any other building(s)/ structures in IREO-RISE or putting up additional floors to any of the exiting towers/ Buildings in IREO-RISE or undertaking modification of any unsold apartment/units/ areas therein. The Proposed Allottee further agrees that it shall not claim any compensation or withhold the payment of maintenance and other charges, as and when demanded by the Company on the ground that the infrastructure required for IREO-RISE is not yet complete, or on any other ground whatsoever.

 

10.10      The Proposed Allottee hereby expressly agrees and consents that the Company shall have the absolute right to make additional construction, whether on account of increase in FAR or better utilization of the said Land or for any other reason anywhere in IREO-RISE, to the extent permissible by the government or the Competent Authority under the Act. The Company shall have the absolute and unfettered right to transfer such additional construction in any manner whatsoever as the Company may in its absolute discretion think fit. The Company and its transferees of such additional construction shall have the same rights as the Proposed Allottee with respect to IREO-RISE including the right to be member of the Society of Apartment Owners to be formed under the Apartment Act (“RWA”) and the right to use of the Common Areas and other common amenities of IREO-RISE.”

 

            In view of aforesaid, construction of additional flats is in accordance with the specific provision in the Apartment Buyer’s Agreement. The objection of the complainant is, therefore, not tenable. The Opposite Parties are entitled to raise construction of additional flats in terms of provisions in the agreement.

25.       The next question, which falls for consideration, is, as to whether the Opposite Parties, by not providing Split AC fittings in all rooms including bedrooms and complete modular kitchen, were deficient in rendering service. As per Annexure I, the Opposite Parties were to make provision for Split AC and modular kitchen. The provision and specifications qua these two facilities, are mentioned in Annexure-I appended to the Agreement, at Pages 142 and 143 of the written statement. Admittedly, the provision in accordance with the specifications in the Apartment Buyer’s Agreement was not made. It was argued on behalf of the Opposite Parties that it was nowhere agreed that modular kitchen comprising both upper and lower cabinets/cupboards was to be provided, and that it was nowhere mentioned that portion above the working slab is a must for a modular kitchen. The plea, being devoid of merit, is not sustainable. When it is clearly mentioned that modular kitchen is to be provided, it would mean modular kitchen with cup-boards below and above the slab. The Opposite Parties have also failed to clarify, why the provision of Split AC fittings was not made in all the bedrooms and drawing & dining room. Thus, the Opposite Parties are liable to provide modular kitchen with cup-boards upper the slab also and so also the provision for split AC fittings in the bedrooms and drawing & dining room.

26.       The next question, which falls for consideration, is, whether the alleged unilateral act of non-constructing of the drop road is an act of deficiency on the part of the Opposite Parties. The Opposite Parties, in written statement have categorically denied the allegation of non-construction of the drop road, in question. It has been submitted that the Opposite Parties have already constructed all the roads as per the approved layout plan. In view of specific averment of the Opposite Parties, we do not find any deficiency on this account at this stage.

27.       The next question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainant. According to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment  of   the   preconditions   whichever   is   later (commitment period). The building plans were approved on 18.01.2012 as is evident from Annexure OP-10 whereas Buyer’s Agreement was executed on 14.04.2012. Computing 30 months from 14.04.2012, commitment period for handing over possession was up-to 13.10.2014. On account of force majeure circumstances, referred to above, the Opposite Parties were entitled to advantage of 180 days grace period after expiry of 30 months for unforeseen delays in obtaining the occupation certificate etc. In the instant case, the Opposite Parties applied for the Occupation Certificate vide application dated 22.11.2016 i.e. after expiry of 180 days grace period and the same is still awaited. No cogent evidence or justification for seeking advantage of 180 days grace period has been placed on record by the Opposite Parties. It is an admitted fact that possession of the unit, in question, has not been offered to the complainant, even either expiry of 180 days or after expiry of extended delay period of 12 months, or by the date of filing the instant complaint, or even till date, apparently for want of completion of unit/basic amenities at the site. The Opposite Parties have also failed to place on record, any cogent and convincing evidence that construction of the unit is going to be complete in the near future. No doubt, the Opposite Parties were duty bound to hand over possession within 30 months i.e. by 13.10.2014. Sh. Rohit Tanwar, AGM (Legal) of the Opposite Parties could not give any firm date, by which the Opposite parties would be handing over possession. By making a misleading  statement, that possession of the unit, was to be delivered within the period as discussed above, and by not abiding by the commitment made, they (Opposite Parties) were not only deficient, in rendering service, but also indulged into unfair trade practice. There is, thus, certainly inordinate delay in delivering physical possession of the unit, in question.

28.            The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for delay in delivering physical possession of the unit beyond the time stipulated in the Agreement. It may be stated here that in case titled Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.”

29.      No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, but it does not mean that even in the event of inordinate delay, that too without justified reasons, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.7.50 per sq. ft. of super area, which is much less than the bank rate for loan or fixed deposit. If the argument of the Opposite Parties is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer, for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates. This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.

30.       Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the case, referred to above, award of interest @12% on the deposited amount for the period of delay i.e. w.e.f. 14.10.2014 till delivery of possession of the unit would meet the ends of justice.

31.        The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to him, by not delivering physical possession of the unit to him, by the Opposite Parties, by the promised date in the Agreement i.e. by 13.10.2014. The complainant purchased the unit, with the hope to have a roof over his head alongwith family members  but his hopes were dashed to the ground. The possession of unit, in question, has not been offered to him (complainant), till date by the Opposite Parties, what to speak of delivery thereof. The complainant has, thus, undergone a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Parties. Delay of more than three years in delivering possession is a clear act of deficiency on the part of the Opposite Parties and loss to the complainant. However, the compensation in the sum of Rs.10 Lacs claimed by the complainant is clearly on the higher side. The complainant, in our considered opinion, has been adequately compensated by granting interest @12% per annum on the deposited amount for the delay period. In addition, he (complainant) will also get the benefit of escalation in the price of unit, in question. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.1,50,000/- shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.

32.       In Complaint bearing No.695 of 2017, the complainants have sought refund of the deposited amount of Rs.36,94,638/- alongwith interest @18% p.a. from the respective dates of deposits alongwith compensation of Rs.10 Lacs on account of mental agony and physical harassment; pay rent @Rs.7.5 per sq. ft. i.e. Rs.9165/- per month w.e.f. March 2014 besides Rs.55,000/- as cost of litigation. The receipt of a sum of Rs.36,94,638/- is admitted by the Opposite Party in the Account Statement (Annexure OP-9). The core question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainants and whether the complainants are entitled to seek refund of the amount deposited by them alongwith interest. The unit, in question, was allotted to complainant No.1 (Ms.Shashi Luthra) vide provisional allotment offer letter dated 05.05.2011 (Annexure C-2) and Apartment Buyer’s Agreement between Ms. Shashi Luthra, Ms. Iswar Devi and the Opposite Party was executed on 09.06.2011 (Annexure C-3). Ms. Iswar Devi transferred her share in the unit, in question, in the name of complainant No.2 (Sunil Luthra) on 16.04.2016. As per Clause 13.3 of the Apartment Buyer’s Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions imposed thereunder whichever was later. Since, building plans were approved on 18.01.2012 after execution of the Buyer’s Agreement on 09.06.2011; 30 months period for delivering possession expired on 17.07.2014. On account of force majeure circumstances, referred to above, the Opposite Party was entitled to advantage of 180 days grace period after expiry of 30 months for unforeseen delays in obtaining the occupation certificate etc. No cogent evidence or justification for seeking advantage of 180 days grace period has been placed on record by the Opposite Party. The Opposite Party even did not apply for occupation certificate during the aforesaid period of 180 days. Clause 13.4 of the Agreement envisages that in case of delay beyond the period as referred to above, in handing over possession, the Opposite Party shall be under obligation to pay penalty amount for the delayed period. Computing 30 months from the date of approval of building plans on 18.01.2012 (Annexure OP-14), at the maximum, possession was to be delivered to the complainants by 17.07.2014. Even if, it is accepted that the Opposite Party is entitled to further 12 months of extended delay period, as per Clause 13.5 of the Agreement, date of handing over possession came to an end on 17.07.2015. Admittedly, the possession, in the instant case, has still not been offered/delivered to the complainants by the Opposite Party. It is evident on record that before filing the instant complaint, the complainants vide email dated 24.02.2017 (Annexure C-5) opted to terminate the agreement and sought refund of the deposited amount but to no avail. The notice of possession dated 30.06.2017 (Annexure OP-4), placed on record by the Opposite Party, to similarly situated consumer, is of no relevance in this case. The complainants had already paid an amount of Rs.36,94,640/- as against the sale consideration of Rs.39,22,484.49, as per account statement (Annexure OP-9). However, the complainants have claimed refund of Rs.36,94,638/-.

33.       The Opposite Party failed to abide by its commitment to offer possession of the unit, in question, by the stipulated date as per Agreement. The Opposite Party was duty bound to hand over possession within 30 months i.e. by 17.07.2014. By making a misleading statement, that possession of the unit, was to be delivered within the maximum period of 30 months from the date of execution of the Agreement/approval of building plans and within further extended period of 180 days and thereafter during the extended delay period of 12 months, and by not abiding by the commitment made, it (Opposite Party) was not only deficient, in rendering service, but also indulged into unfair trade practice. Non-delivery of possession of the unit, in question, by the stipulated date, is a material violation of the terms and conditions of the Agreement, on the part of the Opposite Party. This Commission in case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, relying upon the judgments rendered by the Hon’ble National Commission, ordered refund to the complainant while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the  complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the  complainants to accept the same. It was so held by the National Commission in Emaar MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the  complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the  complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.

It was clearly stated by the National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. Further in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015 decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder while holding as under:-

“I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant cannot be compelled to accept the offer of possession at this belated stage and, therefore, is entitled to refund the entire amount paid by him alongwith reasonable compensation, in the form of interest.”

 

              In view of the above, it is held that since there was a material violation on the part of the Opposite Party, in not handing over possession of the unit by the stipulated date, the complainants are entitled to refund of the amount deposited, alongwith interest and compensation by way of filing the instant complaint.

34.           It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.36,94,638/- was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the Opposite Party, for its own benefit. The Opposite Party was charging heavy rate of interest @15% per annum, with quarterly rests, as per Clause 7.3 of the Agreement, for the period of delay in making payment of installments by the complainants.  It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon’ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), 2014 (2014) 6 SCC 335). In view of above, the complainants are certainly entitled to get refund of the amount deposited by them, alongwith interest @13% p.a. (simple) from the respective dates of deposits (less than the rate of interest charged by the Opposite Party).

35.       The complainants are also entitled to compensation on account of mental agony and physical harassment suffered by them (complainants). Compensation in the sum of Rs.1,50,000/-, if granted, would serve the ends of justice.

36.         No other point, was urged, by the Counsel for the parties.

37.          For the reasons, recorded above, both the complaints bearing Nos.601 and 695 of 2017, are partly accepted with costs.

Complaint No.601 of 2017

 

38.         In this case, the Opposite Parties are, jointly and severally, held liable and directed as under:-

1.       To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, including modular kitchen with cupboards above the slab also and provision for Split AC fittings in all bedrooms, drawing & dining room, to the complainant, within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against him.

(ii)        To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.

(iii)       To pay compensation, by way of interest @12% p.a., on the deposited amount(s), to the complainant, from 14.10.2014 to 31.03.2018, [w.e.f. 14.10.2014 in respect of deposits made up-to 14.10.2014 and from respective dates of deposits in respect of amount(s) paid after 14.10.2014], within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a. from the date of default i.e. after expiry of 45 days, till realization.

(iv)        To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant w.e.f. 01.04.2018, onwards (per month), till possession is delivered, by the 10th  of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a.,  from the date of default, till payment is made.

(v)         To pay compensation, in the sum of Rs.1,50,000/- on account of mental agony and physical harassment, caused to the complainant, and Rs.35,000/- as cost of litigation, to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.

Complaint No.695 of 2017

39.         In this case, the Opposite Party is held liable and directed as under:-

(i)   To refund the amount of Rs.36,94,638/-  to the complainants, alongwith interest @13% p.a.(simple) from the respective dates of deposits, within a period of 45 days, from the date of receipt of a certified copy of this order.   

(ii) To pay an amount of Rs.1,50,000/- as compensation for mental agony, physical     harassment, deficiency in rendering service and unfair trade practices and Rs.35,000/-,      as cost of litigation, to the complainants, within a period of 45 days from the date of receipt of a certified copy of the order.

(iii) In case, the payment of amount, mentioned     in Clause (i), is not made, within the      stipulated period, then the Opposite Party,   shall be liable to pay the amount mentioned in Clause (i) above,  with  interest  @15% (simple), from the date of default i.e. after expiry of 45 days period, till realization and amount(s) mentioned in    Clause (ii) above, with interest @13%      (simple) from the date of filing the complaint till realization.

41.       However, it is made clear that in case, the complainants have availed loan facility from any financial institution(s), such an institution shall have the first charge on the amount payable, to the extent, the same is due against the complainants.

42.         Certified Copy of this order be placed in the file of connected complaint bearing No.695 of 2017.

43.         Certified Copies of this order be sent to the parties, free of charge.

44.         The file be consigned to Record Room, after completion.

Pronounced.

05.03.2018.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

(DEV RAJ)

MEMBER 

 

 

 

(PADMA PANDEY)

      MEMBER

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