Chandigarh

StateCommission

CC/230/2016

Lt. Col. Dalvinder Singh - Complainant(s)

Versus

PUMA Realtors Pvt Ltd. - Opp.Party(s)

Arun Kumar & Varun Bhardwaj, Adv.

02 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	230 of 2016
Date of Institution	:	24.05.2016
Date of Decision	:	02.09.2016

 

Lt. Col. Dalvinder Singh, Aged 54 years son of Sh. Pritpal Singh, resident of House No.242 R, Model Town, Ludhiana.

……Complainant.

V e r s u s

1. Puma Realtors Pvt. Ltd., A Company incorporated under the Companies Act, 1956 (An IREO Group Company), having its Registered Office at No.5, Dhanraj Chambers, 1^st Floor, Satbari, New Delhi-110074 and Corporate Office at SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh-160009 (India), through its Managing Director.

2. The Director, Puma Realtors Pvt. Ltd., A Company incorporated under the Companies Act, 1956 (An IREO Group Company), having its Registered Office at No.5, Dhanraj Chambers, 1^st Floor, Satbari, New Delhi-110074 and Corporate Office at SCO No.6-8, First and Second Floors, Sector 9D, Chandigarh-160009 (India).

            ....Opposite Parties

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

 

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

MR. DEV RAJ, MEMBER.

               MRS. PADMA PANDEY, MEMBER.

 

Argued by:

 

Sh. Arun Kumar and Sh. Varun Bhardwaj, Advocates for the complainant.

Sh. Ramnik Gupta, Advocate for the opposite parties.

 

PER DEV RAJ, MEMBER

             The facts, in brief, are that initially Ms. Shikha Singla and Mr. Amit Malhotra deposited a sum of Rs.6,00,000/- with the Opposite Parties and they were provisionally allotted residential plot No.104 measuring 250.59 sq. yards in the project, namely IREO Hamlet, Sector 98, Mohali, Punjab vide allotment letter dated 29.04.2011. Subsequently, they paid an amount of Rs.2,26,947/-on 27.05.2011 and Plot Buyer’s Agreement was executed between them and the Opposite Parties on 05.07.2011 at Chandigarh. Thereafter, they paid Rs.5,00,000/- on 13.09.2011 to the Opposite Parties. Subsequently, the said plot was purchased by the complainant from the above allottees for his personal use. Necessary endorsement was made by the Opposite Parties in favour of the complainant on 03.11.2011. The complainant paid an amount of Rs.4,38,153/- to the Opposite Parties vide cheque against receipt dated 04.11.2011. Thereafter, the complainant kept on paying the amount to the Opposite Parties as per demands raised from time to time. The complainant in all paid an amount of Rs.58,08,238/- to the Opposite Parties. It was stated that as per Clause 21.2 of the Agreement, the Opposite Parties were to carry out internal developments by laying roads, water lines, sewer lines and electrical lines etc.

2.          It was further stated that as per Sub Clauses 11.1, 11.2 & 11.3 of Clause No.11 of the Agreement, after development, physical possession of the plot was to be delivered to the complainant within 42 months, from the date of execution of above Agreement. After making the aforesaid payment, the complainant visited the site in the last weeks of December, 2014 & April 2015 and in the first week of January, 2016, and found that there was no development as promised by the Opposite Parties. When there was no development, the complainant requested the Opposite Parties to refund the amount alongwith up-to-date interest. Instead of refunding the amount, the Opposite Parties cleverly issued letter dated 12.05.2015 offering possession to the complainant, which is nothing but an offer of paper possession. It was further stated that till 12.05.2015, the Opposite Parties have not even obtained completion certificate from the competent authority. It was further stated that the letter of possession issued is mere a camouflage just to usurp hard earned money of the complainant. It was further stated that the Opposite Parties have not refunded the amount despite repeated requests and as such, they are liable to refund the amount alongwith interest @24% per annum. 

3.          It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency, in rendering service, as also indulgence 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, seeking directions to the opposite parties, to refund the amount of Rs.58,08,238/-, alongwith up-to-date interest prevailing in the market, from the respective dates of deposits till realization; pay compensation, to the tune of Rs.10 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.1,00,000/-.

4.            The Opposite Parties, in their written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration clause No.33 in the Plot Buyer’s Agreement dated 05.07.2011; that present complaint related to the enforcement of agreement to sell/purchase of a residential plot i.e. an immoveable 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 and the contract was only to sell a piece of land to the complainant; that the complainant did not  book the plot for his personal use but for investment/commercial purpose and that the allegations in the complaint being of contractual nature, were only triable by the Civil Court. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits. Apart from above objections, a specific objection with regard to the territorial jurisdiction of the Commission on account of existence of Clause 35 in the Agreement has been raised stating that the Courts at Mohali and the Punjab & Haryana High Court at Chandigarh alone had the jurisdiction.

5.          On merits, it is stated that it was no where agreed that the total cost of the plot would be Rs.62,97,170/-, which was only the basic sale price. It was admitted that the plot, in question, was transferred in the name of the complainant vide nomination/Assignment Agreement dated 03.11.2011. It was further stated that reminders dated 16.02.2014, 12.08.2014 and 17.11.2014 (Annexures OP-25 to OP-27) were issued to the complainant for making the balance payment against demand notes dated 16.01.2014, 10.7.2014 and 16.10.2014.  It was further stated that it was not agreed that possession was to be offered after expiry of 42 months from the date of Agreement. On the contrary, it was agreed vide Clause 11.1 of the Agreement that the complainant shall punctually pay the due installments in time and further, if the Opposite Parties failed to offer possession on expiry of grace period (30 months), the Opposite Parties shall be liable to pay compensation @50/- per sq. yard per month till actual date fixed for handing over of possession. It was further stated that the complainant never opted for termination of allotment before dispatch of notice of possession dated 12.05.2015.

6.          It was further stated that development work commenced on site w.e.f. 01.05.2013 and stood carried on continuously in a phased manner at a good pace till April, 2015 and resultantly, the Opposite Parties started process of handing over of the developed plots by way of issuing notices of possession to various allottees w.e.f. May 2015. It was denied that there was no development at the site either in December 2014 or in April 2015 or in January 2016. It was further stated that all basic amenities/facilities for handing over a plot in a plotted colony, were in existence at the site at the time of offer of possession on 12.05.2015.  It was further stated that even the report of Local Commissioner filed in complaint titled ‘Abha Arora Vs. PUMA Realtors Pvt. Ltd. and another’, bearing No.170 of 2015, clearly unveils the false allegations made by the complainants.

7.          It was further stated that the Opposite Parties have been granted exemption from all the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short ‘PAPRA 1995’) by the Punjab Govt. and, as such, they are/were not required to obtain completion certificate under the said Act.  It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

8.          The parties led evidence, in support of their cases.

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

10.        It is evident, on record, that vide provisional allotment letter dated 29.04.2011 (Annexure C-2), one Ms. Shikha Singla was allotted Plot No.104 in the residential project “IREO Hamlet” admeasuring 250.59 sq. yard, Sector 98, SAS Nagar, Mohali, the basic sale price whereof was Rs.22,000/- per sq. yard besides External Development Charges (EDC) @Rs.1,275.10 per sq. yard, Preferential Location Charges (PLC) @Rs.500/- per sq. yard and IFMS charges @Rs.350/- per sq. yard. Admittedly, Plot Buyer’s Agreement was executed between Ms. Shikha Singla, Mr. Amit Malhotra (original allottees) and the Opposite Parties on 05.07.2011 (Annexure C-5) at Chandigarh. The complainant purchased the plot aforesaid from the original allottees and endorsement to this effect was made in his favour on 03.11.2011. The payment against the aforesaid plot was to be regulated as per payment plan, Annexure I (at Page 52 of the file). Against the total price of the plot including External Development Charges, Preferential Location charges and IFMS Charges, the complainant made payment in the sum of Rs.58,08,238/-. As admitted by the Opposite Parties, the development work started at the site only on 01.05.2013, almost two year after the execution of Plot Buyer’s Agreement dated 05.07.2011. The possession was offered on 12.05.2015 i.e. before filing of the complaint on 24.05.2016. The case of complainant is that possession offered was without complete development and basic amenities and the Opposite Parties did not have all the approvals when possession was offered.

11.           The first question, that falls for consideration, is, as to whether, 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. This question has already been elaborately dealt with by this Commission in Consumer Complaint No.213 of 2016 titled ‘Gobind Paul Vs. Emaar MGF Land Limited & Another’ decided on 16.08.2016. Paras 8 to 15 of the said order, inter-alia, relevant, are extracted hereunder:-

                    “8……….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.”

                    It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

9.                 Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

10.               In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

 

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

 

11.               Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

12.               Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis-à-vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

13.               We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant have spent his life savings to get a unit, for their residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take up-to 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 can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

14.               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 unit, in the said project, launched by the opposite parties. However, his hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the unit, 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.

15.               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 objection raised by Counsel for 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.

12.        The next question that falls for consideration, is, as to whether, the plot, in question, was purchased by the complainant, for his personal use, or he was speculator, as alleged by the opposite parties. No doubt, to defeat claim of the complainant, an objection was raised by the opposite parties, to the effect that the complainant, being investors, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing, on record to show, that the complainant is a property dealer and is indulged in sale and purchase of property, on regular basis. On the other hand, it has been clearly averred by the complainant, in para no.1 of his complaint that the plot, in question, was purchased by him, for his residential purpose. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, 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 Commission 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. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the flat, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs  Nirmala Devi Gupta, 2016 (2) CPJ 316. The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in its written reply, therefore, being devoid of merit, is rejected.  

13.        Another objection raised by the Opposite Parties is that the allegations contained in the complaint relate to specific clauses of the Agreement relating to sale and purchase of an immovable property, which could only be raised before and dealt with by a Civil Court and, as such, are beyond the scope and jurisdiction of this Commission. It was also stated that parties did not enter into any contract for hiring of services. It may be stated here that the objection raised by the Opposite Parties, needs rejection, in view of Haryana State Agricultural Marketing Board vs. Bishamber Dayal Goyal and Ors., Civil Appeal No.3122 of 2006, decided on 26.03.2014 (AIR 2014 S.C. 1766), wherein the Hon’ble Supreme Court, while placing reliance on Municipal Corporation, Chandigarh & Ors. vs. Shantikunj Investment (P) Ltd. & Ors., (2006) 4 SCC 109, held that though it was not a condition precedent but there is an obligation on the part of the Administration to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by allottees. Thus, since, it was bounden duty of the Opposite Parties to provide basic facilities and infrastructure to make the flat habitable, as such, it cannot be said that only an apartment was to be delivered to the complainant, without any amenities/facilities. Under similar circumstance, in Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  the National Commission, held as under:-

“In the light of the above pronouncement of this Court the High Court was perfectly justified in holding that the activities of the appellant-company in the present case involving offer of plots for sale to its customers/members with an assurance of development of infrastructure/ amenities, lay-out approvals etc. was a ‘service’ within the meaning of clause (o) of Section 2(1) of the Act and would, therefore, be amenable to the jurisdiction of the fora established under the statute. Having regard to the nature of the transaction between the appellant-company and its customers which involved much more than a simple transfer of a piece of immovable property it is clear that the same constituted ‘service’ within the meaning of the Act. It was not a case where the appellant-company was selling the given property with all 7 Page 8 advantages and/or disadvantages on “as is where is” basis, as was the position in U.T. Chandigarh Administration and Anr. v. Amarjeet Singh and Ors. (2009) 4 SCC 660. It is a case where a clear cut assurance was made to the purchasers as to the nature and the extent of development that would be carried out by the appellant company as a part of the package under which sale of fully developed plots with assured facilities was to be made in favour of the purchasers for valuable consideration. To the extent the transfer of the site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant-company had indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers like the respondents”.

14.        It may be stated here, that the complainant hired the services of the Opposite Parties, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11.1 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). Section 2 (1) (o) of 1986 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”

 

15.        From the afore-extracted Section 2(1)(o) of 1986 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.’s case (supra),  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 1986 Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors.’s case (supra). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, as stated above, 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 1986 Act, can be availed of by him, as he falls within the definition of a 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.

16.        The next objection raised by the Opposite Parties is that existence of Clause 35 in the Buyers Agreement, bars the territorial jurisdiction of this Commission, to entertain and try the complaint. It may be stated here that according to Section 17 of the Act, a consumer complaint could 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 him. In the instant case,  it is evident, that provisional allotment letter dated 29.4.2011 (Annexure C-2),  was issued in favour of Ms. Shikha Singla from the Chandigarh address of the Opposite Parties i.e. SCO Nos.6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh, which was then  endorsed in favour of the complainant vide endorsement dated 03.11.2011. Thus, a part of cause of action, arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. A similar question arose, before the National Commission, in Smt. Shanti Vs. M/s. Ansal Housing & Construction Ltd., First Appeal No.142 of 2001 decided by the National Commission on 11.04.2002, wherein the National Commission held as under:-

   “This appeal is directed  against  the  order dated  9.4.2001  of the Delhi Consumer Disputes Redressal Commission  non suiting the appellant on a preliminary issue holding that  Delhi State Consumer Dispute  Redressal Commission will have no jurisdiction  to entertain the complaint.

    What led the State Commission to pass this order was clause 24 of the agreement for allotment of residential flat to the appellant.   It is stated that ‘any dispute arising out of this agreement shall be subject to jurisdiction of Lucknow Courts only”.  State Commission   also   relied   on   the   decision of   the Supreme Court in the case of  A.B.C. Laminart Pvt. Ltd. & Anr. Vs. A.P. Agencies, Salem - AIR 1989 SC 1239 to hold that only the courts in Lucknow  would have jurisdiction.

        We do not think State Commission examined the whole issue in a pragmatic manner.  Complainant is a consumer and raised a consumer dispute under the Consumer protection Act, 1986. To help  and assist a consumer   and to achieve the objects of the Act, Section 11 of the Act was amended.   This  Section relates to  the jurisdiction of the District Forum.  Now  a complaint could be filed against the opposite party  not only at the place where  he actually or voluntarily reside or personally works for  gain  but also where he carries on business or has branch office.  The words “carries  on business or has a branch office” were added by the amending Act of 1993.   Jurisdiction of a District Forum is exclusively covered  by Section 11 of the Act.  For this we do not have to refer any provisions of the Code of Civil Procedure. Any provision  of the agreement which oust the jurisdiction of a District Forum   even from a place where the opposite  party has a branch office  cannot  be held to be  valid or binding.  Moreover, the clause  on which the complainant was non-suited   refers to the jurisdiction  of Lucknow Courts.  District Forum is  not a court as understood in the Code of Civil Procedure.   That clause in the agreement  will have no  meaning as far as jurisdiction of the District Forum where the opposite party has even branch office is concerned. 

        National Commission has already taken a view on this aspect of the matter.  Accordingly the impugned order of the State Commission is set aside and the matter is remanded to the State Commission to decide the complaint in accordance with law. Party shall appear before the State Commission on 8.7.2002 for further directions.  This appeal is disposed of as above.”

It may be stated here that, for determining the territorial jurisdiction, to entertain and decide the complaint, the  Consumer Foras are bound by  the provisions of Section 11 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, as the Foras are not  the Courts.  It was further held, in the said case, that there is a difference between Section 11 of the Act, and the provisions of  Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. Further, 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.  In Cosmos Infra Engineering  India  Ltd. Vs Sameer Saksena & another I (2013) CPJ31 (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 of 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 of 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 Section 11 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to the instant case.  At the same time, it is also held in the face of case Ethiopian Airlines Vs Ganesh Narain Saboo’s (supra),decided by the Supreme Court of India, the judgment titled as M/s Taneja Developers and Infrastructure Limited Vs. Gurpreet Singh and another, First Appeal No.33 of 2014, decided on 25.02.2016, by the National Commission, reliance whereupon has been placed by Counsel for the opposite parties, to support his contention, that this Commission has no territorial jurisdiction, shall not hold the field. In these circumstances, such a Clause contained in the Agreement, therefore, could not   exclude the jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to the complainant, to file the complaint. The objection taken by the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

17.       The next question, which falls for consideration, is, as to whether the development and the basic amenities were complete at the site and whether the Opposite Parties had obtained all approvals before offering possession vide letter dated 12.05.2015 or not. The Counsel for the complainant submitted that possession of the plot, in question, vide letter dated 12.05.2015 was not complete, and valid possession.     

18.       The complainant has specifically challenged the offer of possession dated 12.05.2015 by way of filing the instant complaint for not obtaining necessary approvals and lack of development and basic amenities at the site.

19.        The Opposite Parties were duty bound to provide all basic facilities like roads, sewerage, drinking water, electricity, street lights, drainage etc. to the complainant. There is nothing, on record, that complete development, in respect of the plot, in question, and amenities at the site as promised, as per the Plot Buyer’s Agreement dated 05.07.2011, were available at the site. The fact that certain amenities and approvals were complete/obtained after offer of possession, clearly proves deficiency of the Opposite Parties, as is evident from the position indicated hereinafter.

20.       In Memo No.5001 dated 7.8.2015 (Annexure OP-17), which is letter from the Chief Electrical Inspector to Govt. Punjab, Patiala, it is stated that inspection of subject cited electrical installation was carried out by the Electrical Inspector and the same was found to be conforming to the relevant provisions of Central Electricity Authority (Measure relating to safety and Electric Supply) Regulations, 2010 and the  installations  were  approved  for commissioning but clearly, this approval was accorded after offer of possession vide letter dated 12.05.2015.

21.       Even the final NOC to the Opposite Parties for 85.25 Acres residential township in Sectors 86, 98 and 99 in Village Sambhalkhi, SAS Nagar, Mohali was accorded by Punjab State Power Corporation Limited on 8.7.2015 (Annexure OP-16), after offer of possession on 12.05.2015. Further letter dated 18.05.2015 (Annexure OP-15) from Greater Mohali Area Development Authority (GMADA), informing the Opposite Parties that “…….Therefore, the arrangements for suitable provision for drinking water supply and safe disposal of sullage/storm discharge and solid waste management shall be made by promoter at his level separately and he shall obtain all necessary approvals from the concerned Authorities as per law in this regard independently. The construction work shall commence only after obtaining approvals as per law from the concerned Authorities……” was issued after offer of possession. As per this letter, number of other conditions were also required to be complied with by the promoter. The Opposite Parties have not stated whether they complied with the aforesaid conditions. Further, consent to operate an outlet for discharge of the effluent u/s 25/26 of Water (Prevention & Control of Pollution) Act, 1974 was granted to the Opposite Parties vide letter dated 05.01.2016 (Annexure OP-18) i.e. after offer of possession. It may also be stated here that the Opposite Parties furnished Bank Guarantee dated 22.03.2016 (Ann.OP-19) with expiry date/ claim expiry date as 21.03.2021 in the sum of Rs.3,24,10,301/- to the PSPCL as demanded by PSPCL vide demand note dated 28.12.2015, after offer of possession.

22.        The next question which falls for consideration, is, whether the complainants are entitled to refund of the entire amount deposited by them.

23.        To deny the claim of the complainant, it was also argued by the Counsel for the opposite parties/builder that as per Clause 11.3 of the Agreement, he (complainant) could have opted for termination of the Agreement, only after the lapse of 42 months aforesaid, from the date of execution of the same (Agreement) i.e. 24 months plus (+) 6 months grace period plus (+) 12 months (delayed period), till the notice of possession was dispatched, whereas, since possession has been offered, the option to terminate the same (Agreement) by him (complainant) has irrevocably lapsed.

24.        Before discussing effect of aforesaid arguments, it is necessary to note down the provisions of Clauses 11.1 and 11.2 of the Agreement dated 05.07.2011. The provisions read thus:-

“11.1 - Subject to Force Majeure, as defined herein, and further subject to the Allottee having complied with all its obligations under the terms and conditions of this Agreement, and not being in default of any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges, and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Plot to the Allottee within a period of 24 (Twenty Four) months from the date of execution of this Agreement (“Commitment Period”). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 6 (Six) months (“Grace Period”), after the expiry of the said Commitment Period.

11.2-Subject to Clause 11.1, if the Company fails to offer possession of the said Plot to the Allottee by the end of the Grace Period, it shall be liable to pay to the Allottee compensation calculated at the rate of Rs.50/- (Rupees Fifty only) per sq. yd. of the area of the said Plot (“Delay Compensation”) for every month of delay until the actual date fixed by the Company for handing over of possession of the said Plot to the Allottee. The Allottee shall be entitled to payment against such ‘Delay Compensation’ only after completion of all documentation including registration of the Conveyance Deed”.

Perusal of aforesaid provisions, makes it very clear that as per Clause 11.1, handing over possession of the plot is subject to force majeure circumstances. Clause 11.2 stipulates that the stipulation contained therein is subject to the provisions of Clause 11.1. It is not open to the builder to get 12 months, on payment of delayed compensation, as a matter of right. It has to be shown, whether there was any circumstance, which didn’t allow providing of infrastructure at the site. No cogent evidence to show that there existed circumstances for extension of 12 months has been brought on record. There is also nothing on record to show that at the end of 30 months period, the complainant was informed of delay, to get further period of 12 months and payment of delayed compensation. In the notice of offer of possession, which has been held to be paper one, nothing is mentioned regarding payment of delayed compensation to the complainant, on completion of documentation, including registration of the conveyance deed. The above said stipulation qua payment of delayed compensation amount, after registration of conveyance deed, appears to be draconian. It is totally one sided. As such, it could be termed as unfair trade practice, on the part of the opposite parties. Furthermore, in the present case, admittedly, possession of the plot was offered after the lapse of 42 months i.e. 24 months plus (+) 6 months plus (+) 12 months, as such, the above arguments need to be rejected.

25.        Otherwise also, as has been held in large number of cases, the payment of paltry amount of compensation, virtually would amount to no compensation for the loss caused to a consumer. The amount offered is not even equal to simple interest being offered by the Banks, against saving bank account. On account of inaction, on the part of the opposite parties, in not fulfilling their obligation under the contract, the very purpose of Agreement has failed and it is open to the complainant to claim refund of her amount, with interest, notwithstanding anything contained in Clause 11.3 of the Agreement.  The argument raised by Counsel for the opposite parties, in this regard, being devoid of merit, is rejected.   

26.        It may be stated here that offer sent vide letter dated 12.05.2015, has been held to be a mere paper possession Under these circumstances, it is justifiable for the complainant to say no to the same. It was so said by the National Consumer Disputes Redressal Commission, New Delhi in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC). In the above case, possession was not delivered in time. Complaint was filed for refund of amount paid. The State Commission partly allowed it. The builder was allowed to forfeit 10% of the deposited amount, on the ground that the complainant himself rescinded the contract by asking refund of the amount, as possession of the unit had already been offered to him. The remaining amount was allowed to be returned with interest. The complainant in that case was also awarded litigation cost etc. The builder namely Emaar MGF Land Limited went in appeal, which was dismissed, wherein it was specifically observed by the National Commission, that when the promoter/builder has violated material condition in not handing over possession, in time, it is not obligatory for the purchaser to accept possession after that date.

27.       Under similar circumstances, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon’ble National Commission, held 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.

             The principle of law laid in the aforesaid cases, are fully applicable to the instant case. On account of that, the complainant is entitled to get refund of amount deposited by him.

28.       In the present case also, the Opposite Parties committed breach of their obligation by offering the possession of the plot on 12.05.2015 hurriedly without complete development and basic amenities. A perusal of Clause 11.3 of the Plot Buyer’s Agreement clearly provides that “……..from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot….”. When the Opposite Parties are charging  interest  for  any  delay  in  making  payment of

installments, their plea that the complainant cannot invoke provisions of Clause 11.3 of the Agreement after dispatch of notice of possession is not justified being highly unreasonable.

29.        Since the Plot Buyer’s Agreement was executed on 05.07.2011, 30 months period including 6 months grace period expired on 04.01.2014. Even 12 months extended period, in terms of Clause 11.3 of the Agreement expired on 04.01.2015. The possession offered to the complainant vide notice of possession dated 12.05.2015, has been held to be a paper possession as has been discussed in the preceding paras. Finding the possession, so offered, to be a paper possession, the complainant filed the instant complaint on 24.05.2016. Thus, since the Opposite Parties  failed to handover legal and valid possession of the plot, in question, with complete development/basic amenities and approval(s), to the complainant, within the period stipulated in the Plot Buyer’s Agreement, in view of law laid down in Emaar MGF Land Limited and another Vs. Dilshad Gill’s case (supra), the complainant was entitled to refund.

30.       From the aforesaid discussion, it is evidently clear that neither the Opposite Parties have completed the development and basic amenities nor did they have all the necessary sanctions/approvals from the Competent Authorities up-till 12.05.2015, when possession was offered to him (complainant). Thus, the contention of the complainant that possession offered was not a valid and legal possession is corroborated from the evidence on record. It is, therefore, held that the Opposite Parties were not only deficient, in rendering service but also indulged into unfair trade practice, by offering a paper possession to the complainant, before completing the amenities as also without obtaining the necessary sanctions/approvals.

31.        It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.58,08,238/- was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the Opposite Parties, for their own benefit. The Opposite Parties were charging heavy rate of interest, for the period of delay in making payment of installments by the complainant.  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) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). The complainant in Para 21 of his complaint stated that deposited amount of Rs.58,08,238/- be refunded to him with 24% interest but in the prayer clause, sought refund alongwith up-to-date interest as prevailing in the market from the respective dates of deposit. In view of above, the complainant is certainly entitled to get refund of the amount (Rs.58,08,238/-) deposited by him, from the respective dates of deposits, till realization. Considering the averment of complainant as well as his prayer, in our opinion, grant of interest @12% compounded quarterly on the deposited amount shall meet the ends of justice. Since the Plot, in question, was endorsed in favour of the complainant on 03.11.2011, the complainant shall be entitled to interest at the aforesaid rate w.e.f. 03.11.2011 (i.e. the date on which onward rights/obligations with respect to the plot, in question, were assigned to the complainant), on the amounts/installments deposited before 03.11.2011 and interest at the same rate from the respective dates of deposits on the amounts/installments paid after 03.11.2011.

32.        In view of aforesaid position, the Opposite Parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him.

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

34.         For the reasons, recorded above, the complaint is partly accepted, with costs. The Opposite Parties are, jointly and severally, held liable and directed as under:-

(i)    To refund the amount of Rs.58,08,238/-, to   the   complainant,   alongwith interest @12% compounded quarterly w.e.f. 03.11.2011 on the amounts/installments deposited before 03.11.2011 and from the respective dates of deposits on the amounts/installments paid after 03.11.2011, 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.3,00,000/-  (Rupees Three Lacs only), to the complainant, as compensation for mental agony, physical harassment, deficiency in rendering service and unfair trade practices, within a period of 45 days from the date of receipt of a certified copy of the order.

(iii)  To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant within a period of 45 days from the date of receipt of a certified copy of the order.

(iv)  In case, the payment of amount, mentioned in Clause (i), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with penal interest @15% compounded quarterly, w.e.f. 03.11.2011 on the amounts/installments deposited before 03.11.2011 and from the respective dates of deposits on the amounts/installments paid after 03.11.2011, till realization and amount mentioned in Clauses (ii) and (iii) above, with interest @12% (simple) from the date of filing the complaint till realization.

35.        However, it is made clear that in case, the complainant has 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 complainant.

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

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

Pronounced.

September  02, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

MEMBER

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