Chandigarh

StateCommission

CC/199/2017

Aarushi Parmar - Complainant(s)

Versus

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

Sandeep Khunger, Adv.

24 Aug 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.

:

199 of 2017

Date of Institution

:

07.03.2017

Date of Decision

:

24.08.2017

 

 

  1. Aarushi Parmar wife of Bimal Jeet Singh,
  2. Bimal Jeet Singh son of Baldev Singh

Complainants No.1 & 2 both are resident of House No.1088, Top Floor, Phase No.10, Sector 64, S.A.S. Nagar, Mohali.

……Complainants

Versus

  1. Puma Realtors Pvt. Ltd., a Company incorporated under the Companies Act, 1956 (An IREO Group Company) having its Corporate Office at SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh – 160009 (India) through its Managing Director.

 

  1. The Managing 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, 1st Floor, Satbari, New Delhi – 110074. (Deleted vide order dated 09.03.2017).

 

  1. State Bank of India, Chandigarh Main Branch, SCO No.43-48 Bank Square, Sector 17-B, Chandigarh, through its Branch Manager.

         

  ....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. Sandeep Khunger, Advocate for the complainants.

Sh. Ramnik Gupta Advocate for Opposite Party No.1.

Sh. Jagdish Singh Mahal, Advocate for Opposite Party No.3.

Opposite Party No.2 deleted vide order dated 09.03.2017.

 

 

PER DEV RAJ, MEMBER

             The facts, in brief, are that lured by the proclamations made by Opposite Party No.1, the complainants applied for booking of an apartment in the project of Opposite Party no.1 vide application (Annexure C-1) and paid Rs.4.50 Lacs as booking amount vide cheque dated 21.07.2011 (Annexure C-2). Along with welcome letter dated 22.07.2011 (Annexure C-3), a provisional allotment offer letter dated 22.07.2011 was issued to the complainants (Annexure C-4). Thereafter, an Apartment Buyers Agreement was executed between the complainants and Opposite Party No.1 on 29.08.2011 (Annexure C-5), as per which, the total sale consideration of the allotted Apartment No.001 at 4th Floor Juniper Court, A-Tower, having 1609 sq. ft. (149.47 sq. meters) with one parking space, was Rs.52,66,620/-. As per the agreement, possession of the apartment was to be handed over within a period of 30 months from the date of Agreement i.e. on or before 28.08.2014.

2.          It was further stated that the complainants, being in service, obtained a housing loan from Housing Development Finance Corporation Limited (HDFC) and a Tripartite Agreement dated 28.12.2011 was also executed. It was further stated that at present the housing loan is with State Bank of India and as per statement of account dated 18.02.2017, an amount of Rs.37,81,359/- is payable by the complainants to State Bank of India. It was stated that the complainants, in all, paid an amount of Rs.52,97,686.56 as per account statement (Annexure C-6). It was further stated that till 28.08.2014, there was very little development at the spot and only the structure was raised and still there is no development. It was further stated that the last installment was paid by the complainants on 23.02.2015 and inspite of that, possession of the apartment, in question, has not been offered to the complainants till date. It was further stated that even various amenities like solar water heating for kitchen, multipurpose hall, swimming pool, fully equipped Gym, badminton and basketball courts, kids play area, jogging track, visitors car parking, intercom facility and CCTV camera have not been started at the project site. It was further stated that Opposite Party No.1 was required to make the provisions for split AC in all the bedrooms, drawing and dining room, however, no such provision has been made in the flats.

3.          It was further stated that the complainants recently visited the office of Opposite Party No.1 on 16.02.2017 and raised hue and cry by referring to harassment suffered, however, the officials of Opposite Party No.1 behaved rudely and stated that no fix date for delivery of possession can be given as finishing work is incomplete and certain approvals are also awaited and have not been able to obtain the occupation certificate from GMADA. It was further stated that looking at the behavior and conduct of the Opposite Parties and the stage of development, the complainants being in dire need of immediate residential accommodation, requested the officials of Opposite Party No.1 to refund the amount deposited by them along with interest @24% p.a. from the respective dates of deposits. It was further stated that Opposite Party No.1 neither has obtained necessary permissions nor completion certificate as required under Punjab Apartment & Property Regulation Act, 1995, meaning thereby that the development works have not been completed in all aspects as per terms and conditions of the license granted u/s 5 of the said Act.

4.          Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Party No.1, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Parties to refund Rs.52,97,686.56 alongwith interest @24% per annum compounded quarterly from the respective dates of deposits; clear the outstanding amount as on date of payment of State Bank of India at the first instance and then pay the balance amount to the complainants as per terms and conditions of the tripartite agreement; pay Rs.5,00,000/- as compensation on account of inconvenience, mental harassment and damages suffered by the complainants due to deficiency in service on the part of Opposite Party No.1 and pay Rs.1,00,000/- as litigation expenses.

5.          Opposite Party No.1, in its written statement, specifically stated that there was no Managing Director of Opposite Party No.1 and hence, Opposite Party No.2 had unnecessarily been impleaded, therefore, his name was liable to be struck off from the array of parties. Opposite Party No.1 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 29.08.2011; that present complaint related to the enforcement of agreement to sell/purchase of a residential apartment i.e. an immoveable property and hence was not covered under the Act; that the complainants did not buy any goods or hire any services of Opposite Party No.1, as the parties did not enter into any contract for hiring the services and the agreement is only to sell/purchase of a residential apartment i.e. an immoveable property; that the complainants did not book the plot for their 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 this Commission on account of existence of Clause 36 in the Agreement has been raised stating that the Courts at Mohali and the Punjab & Haryana High Court at Chandigarh alone had the jurisdiction.

6.            On merits, the factum regarding purchase of the apartment and execution of Agreement on 29.08.2011 has been admitted. It was stated that Opposite Party No.1, after obtaining the requisite approvals and sanctions, developed and constructed its group housing under the name and style of “IREO Rise”. It was further stated that as per Clause 13 of the Agreement, the period of possession was to reckon from the date of the Agreement or from the date of approval of the building plans, which ever was later and in the present case, the building plans were approved on 18.01.2012 and, thus, the period to hand over possession commenced from 18.01.2012 and not from the date of agreement. It was further stated that the revised rate of service tax was already intimated to the complainants vide letter dated 12.04.2012 (Annexure OP-6) and accordingly, the total sale consideration price of the unit, in question, was Rs.56,16,830.08 as per latest statement of account (Annexure OP-7).

7.          It was further stated that Opposite Party No.1 agreed to pay interest for two years i.e. from the date of 1st disbursement by HDFC and accordingly, when demand note dated 27.01.2012 was issued for Rs.15,57,678.61, the said Bank deducted Rs.2,99,446/- towards interest for two years w.e.f. 25.02.2012 to 01.02.2014 and released Rs.12,20,260/- vide cheque dated 25.02.2012. It was further stated that rest of the amount of Rs.37,973/- was paid by the complainants vide cheque dated 25.02.2012. It was further stated that though the aforesaid amount of Rs.2,99,446/- was never paid by the complainants yet credit thereof was given to the complainants. It was specifically denied that the complainants till date paid an amount of Rs.52,97,686.56 as they never paid the aforesaid amount of Rs.2,99,446/-.  It was further stated that Opposite Party No.1 never undertook that construction was to be done by L & T but in order to provide class product to allottees, the contract was allotted to the said L&T, which was subsequently, allocated to M/s Akalia Contractors, the sub contractor of L & T to complete the left over work. It was denied that the complainants ever visited the office of Opposite Party No.1 on 16.02.2017 or ever sought refund.

8.          It was further stated that Opposite Party No.1 was not required to obtain the completion certificate since its project was exempted from the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short ‘PAPRA 1995’). It was further stated that NOC for withdrawal of ground water was granted on 19.08.2011, environmental clearance was granted on 30.11.2012; NOC by Punjab Pollution Control Board was granted on 14.05.2013, which was then extended vide letters dated 09.12.2014 & 29.06.2015; service plans were approved on 18.05.2015; revised layout plans were approved on 15.05.2013; NOC by PSPCL was granted on 08.07.2015; approval for commissioning of electrical installations was accorded on 07.08.2015; consent to operate was granted by Punjab Pollution Control Board on 05.01.2016 and Bank Guarantee to the tune of Rs.3,24,10,301/- was submitted to PSPCL on 22.03.2016. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

9.          Upon notice of complaint, Sh. Ramnik Gupta, Advocate put in appearance only on behalf of Opposite Party No.1 and stated that since there was no post of Managing Director of Opposite Party No.1 – Company, therefore, the name of Opposite Party No.2, be deleted from the array of the parties. Accordingly, the name of Opposite Party No.1 was ordered to be deleted vide zimini order dated 09.03.2017.

10.       The complainants filed rejoinder, wherein they reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of Opposite Party No.1.

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

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

13.        It is evident, on record, that the complainants were allotted Residential Apartment No.JCA-04-001, in Group Housing Project known as ‘Ireo Rise’ on Fifth Floor, Tower – Juniper Court - A, situated in Sector 99, SAS Nagar, Mohali having tentative super area of 1609 sq. ft. (149.47 sq. mtrs.) together with one parking space, forming indivisible part thereof and Apartment Buyer’s Agreement was executed between the complainants and the Opposite Parties on 29.08.2011 (Annexure C-2). The basic sale price of the unit was Rs.52,66,620/- besides External Development Charges (EDC) Rs.1,60,900/- and IFMS charges in the sum of  Rs.48,270/-. Thus, the total sale consideration of the unit, in question, including the revised service tax in the sum of Rs.1,41,040.08 was Rs.56,16,830.08. The payment against the aforesaid unit was to be regulated as per Payment Plan, Annexure IV (at Page 135 of the written statement). The complainants made payment in the sum of Rs.52,97,686.56 as is apparent from statement of account placed on record by the Opposite Parties as Annexure OP-7 (at Page  184 of the written statement). In terms of Clause 13.3 of the Agreement since building plans were approved on 18.01.2012, 30 months period for handing over possession, expired on 17.07.2014. Admittedly, possession has not been offered/delivered to the complainants by Opposite Party No.1. As regards deficiency in promised amenities viz. multipurpose hall, swimming pool, gym, badminton and basket ball courts, kids play area and jogging track etc., Opposite Party No.1 has categorically stated in its written statement that these facilities/amenities shall be completed before handing over of possession.

14.            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. 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.”

 

             Same is the ratio of recent judgment passed by three Judges Bench of Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh & Ors. Vs. Emaar MGF Land Ltd. & Anr.’, III (2017) CPJ 270 (NC).

             In  view of the above, the plea taken by Opposite party No.1, 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.

15.        Another objection raised by Opposite Party No.1 was that since the complainants did not buy goods and did not hire any services, and were 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 complainants hired the services of Opposite Party No.1, 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 Opposite Party No.1, it was 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”

 

 

 

 

16.        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 complainants have remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of ‘consumer’, as stated above. In this view of the matter, the objection of Opposite Party No.1, in this regard, being devoid of merit, must fail, and the same stands rejected.

17.        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 complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. 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, provisional allotment letter dated 22.07.2011 (Annexure C-4) and letter dated 30.12.2015 (Annexure C-9) were issued by Opposite Party No.1 from its Chandigarh Office i.e. SCO 6-7-8, 1st & 2nd Floor, 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 complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.

18.        No doubt, in the written version, an objection was also taken by Opposite Party No.1 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 complainants, 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.

19.        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 complainants 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 them, to file the complaint. The submission of Counsel for Opposite Party No.1, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

20.        To defeat claim of the complainants, the next objection raised by Opposite Party No.1 was that since the complainants had purchased the unit, in question, for investment/commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, they would not fall within the definition of ‘consumer’, as defined by Section 2(1)(d)(ii) of 1986 Act. It may also be stated here that there is nothing, on record to show, that the complainants are property dealer(s), and are indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by Opposite Party No.1, mere bald assertion to that effect, cannot be taken into consideration. Counsel for Opposite Party No.1 placed reliance on Mehmooda Sheikh Vs. M/s Distinct Infrastructure Ltd. & 3 Ors., Revision Petition No.2962 of 2015 decided by National Commission on 14.3.2016 alongwith which, connected Revision Petitions Nos.2963 of 2015 to 2970 of 2015 were also decided. The facts of Mehmooda Sheikh Vs. M/s Distinct Infrastructure Ltd. & 3 Ors’s case (supra) are distinguishable as in that case, the complainants were allotted nine plots. The National Commission in Paras 8 and 9 observed that “…… why the family need nine plots plus house, where they are residing now a days.” It was further observed that had the intention of the petitioners/complainants been fair, she/he would have purchased the same in his/her individual name that too 4 to 5 plots only. In  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 unit, in question, was purchased by the complainants, 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. 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.”

 

             Therefore, in view of law settled by the National Commission in the aforesaid cases, the complainants fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Opposite Party No.1, in its written reply, therefore, being devoid of merit, is rejected.  

21.        The next 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. It may be stated here that as per Clause 13.3 of the Apartment Buyer’s Agreement dated 29.08.2011, subject to force majeure conditions and reasons, beyond the control of Opposite Party No.1, 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. As is evident from Annexure OP-11, the building plans were approved on 18.01.2012 after 29.08.2011 when agreement was executed; 30 months period for delivering possession expired on 17.07.2014. On account of force majeure circumstances, referred to above, Opposite Party No.1 was entitled to advantage of 180 days grace period after expiry of 30 months. No cogent evidence or justification for seeking advantage of 180 days grace period has been placed on record by Opposite Party No.1. The complainants have stated that it was assured by Opposite Party No.1 that possession shall be provided within a period of 30 months from the date of agreement with a grace period of 180 days. The fact remains that even after expiry of grace period of 180 days, Opposite Party No.1 failed to offer/deliver possession of the unit, in question, to the complainants. Clause 13.4 of the Agreement envisages that in case of delay beyond the period as referred to above, in handing over possession, Opposite Party No.1 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, at the maximum, possession was to be delivered to the complainants by 17.07.2014. Opposite Party No.1 has not adduced any evidence that it applied for occupation certificate within 180 days after 17.07.2014 and therefore, it is not entitled to grace period of 180 days. Even if, it is accepted that Opposite Party No.1 is entitled to further 12 months of extended delay period, as per Clause 13.5 of the Agreement, date of handing over possession come to an end on 17.07.2015. It is an admitted fact that possession of the unit, in question, has not been offered, by the date of filing the instant complaint, or even till date, for want of completion of unit and basic amenities at the site despite the fact that the complainants had already paid an amount of Rs.52,97,686.56 as against the sale consideration of Rs.56,16,830.08. The complainants have also placed on record letter dated 30.12.2015 (Annexure C-9), wherein Opposite Party No.1 intimated as under:-

“We anticipate to start offering of possession before the end of June 2016 and the handover shall be in a phase wise manner.”

 

22.        Opposite Party No.1 even failed to abide by its commitment to offer possession of the unit, in question, as per Agreement and as committed vide aforesaid letter dated 30.12.2015 i.e. by June 2016. The complainants cannot be made to wait indefinitely.   The fact remains that Opposite Party No.1 has failed to place, on record, any cogent and convincing evidence, with regard to date, by which, construction of the unit is going to be complete. Opposite Party No.1 was duty bound to hand over possession within 30 months   i.e. by 17.07.2014. Counsel for Opposite Party No.1 could not give any firm date, by which Opposite Party No.1 would be handing over possession. Clearly there is delay in delivering possession. 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 No.1) 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 Opposite Party No.1. 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. Recently 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 Opposite Party No.1, in not handing over possession of the unit by the stipulated date or even till date, the complainants are entitled to refund of the amount deposited, alongwith interest and compensation by way of filing the instant complaint.

23.          It is to be further seen, as to what amount the complainants paid to Opposite Party No.1 and whether, interest, on the amount refunded can be granted, in favour of the complainants. The complainants have averred that they paid a sum of Rs.52,97,686.56. On the other hand, Opposite Party No.1 in its written statement has stated that out of Rs.52,97,686.56, an amount of Rs.2,99,446/- was paid by it. Perusal of account statement (Annexure OP-7) clearly depicts that the complainants paid Rs.52,97,686.56. It is relevant to note that in terms of Clause 3 of Tripartite Agreement (Annexure OP-8), under Scheme of arrangement between the Borrower and the Builder, the Builder (Opposite Party No.1) assumed the liability of payments under the loan agreement as payable by the Borrower during the period of 24 months from the date of first disbursement by HDFC. Further as per FRIL Calculation (Annexure OP-9), disbursed amount to the complainants was Rs.15,19,706/-, out of which, a sum of Rs.2,99,446/- being interest for 24 months was received by HDFC under subvention scheme, at discounted interest rate of 9.30% against subvention interest rate of 10.75%. The liability of complainants to repay the loan amount would be Rs.15,19,706/- and not Rs.15,19,706.00 minus  (-) Rs.2,99,446.00 = Rs.12,20,260.00. However, since Opposite Party No.1 has incurred liability of interest on Rs.15,19,706/- for 24 months (25.02.2012 to 01.02.2014), the complainants are not entitled to interest on Rs.15,19,706/- for 24 months. Qua rest of the amount, the complainants are entitled to interest from the respective dates of deposit. It is not in dispute that an amount of Rs.52,97,686.56 was paid by the  complainants, without getting anything, in lieu thereof. The said amount has been used by Opposite Party No.1, for its own benefit. Opposite Party No.1 was charging compounded 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 simple interest @13% per annum.

24.        The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to them. The complainants in Para 2(e), (t) have averred that they met the officials of Opposite Party No.1 on 16.02.2017 and raised hue and cry for the harassment meted out to them by their landlord who was pressing hard to vacate the tenanted premises. It has also been averred that they (complainants) were made to run from pillar to post making urgent and necessary enquiries qua their residential apartment but the same remained absolutely futile. Opposite Party No.1, therefore, cannot be heard to say that there is no allegation qua mental agony and harassment suffered by the complainants. Clearly possession of the unit, in question, has not been offered to the complainants till date on account of which, they (complainants) suffered mental agony and physical harassment. The compensation in the sum of Rs.5 Lacs claimed by the complainants is certainly on the higher side. Compensation for mental agony and physical harassment and deficiency in providing service, in the sum of Rs.2 lacs (Rupees Two Lacs only), if granted, would be adequate to serve the ends of justice.

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

26.         For the reasons, recorded above, the complaint is partly accepted with costs against Opposite Party No.1. Opposite Party No.1 is held liable and directed as under:-

(i)    To refund the amount of Rs.52,97,686.56, to   the   complainants, alongwith interest @13% (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. However, it is made clear that the complainants shall not be entitled to interest on the loan amount of Rs.15,19,706/- for the period between 25.02.2012 to 01.02.2014 i.e. during the period, Opposite Party No.1 had paid pre-EMI interest to the financial institution concerned, under Subvention Scheme.

(ii)   To pay an amount of Rs.2,00,000/- (Rupees Two Lacs only), 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 Opposite Party No.1, shall be liable to pay the amount mentioned in Clause (i) above, with interest @15% (simple), from the date of filing the complaint, till realization and amount(s) mentioned in Clause (ii) above, with interest @13% (simple) from the date of filing the complaint till realization.

27.       However, it is made clear that the HDFC or the State Bank of India, or any other financial institution from whom, the complainants have availed loan facility, shall have the first charge on the amount payable, to the extent, the same is due against the complainants.

28.        However, the complaint against Opposite Party No.3 (State Bank of India) stands dismissed with no order as to costs.

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

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

Pronounced.

24.08.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 (DEV RAJ)

MEMBER

 

 

(PADMA PANDEY)

MEMBER

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