Chandigarh

StateCommission

CC/776/2016

Ajay Nashikkar - Complainant(s)

Versus

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

Narender Kaur, Adv.

02 May 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.

:

776 of 2016

Date of Institution

:

07.11.2016

Date of Decision

:

02.05.2017

 

Ajay Nashikkar s/o Late Sh. B. R. Nashikkar r/o 117, Shubham Complex, Nau-Gaja Road, Shinde-Ki-Chawani, Lashkar, Gwalior, residing at #2052, Phase VIII, Mohali, Pin-160062, (temporarily on deputation at Amritsar).

 

……Complainant

V e r s u s

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

….. Opposite Parties.

Argued by: Ms. Narender Kaur, Advocate for the complainants.

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

                  Service of Opposite Party No.2 dispensed with vide order dated 09.11.2016.

 

Complaint case No.

:

969 of 2016

Date of Institution

:

28.12.2016

Date of Decision

:

02.05.2017

 

  1. Kharaiti Lal Malhotra S/o Late Sh. Chaman Lal Malhotra R/o H.No.324-A, Sector 51A, Chandigarh.
  2. Pawan Malhotra S/o Kharaiti Lal Malhotra R/o H.No.324-A, Sector 51A, Chandigarh.

 ……Complainants

V e r s u s

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

….. Opposite Parties.

 

Argued by: Ms. Narender Kaur, Advocate for the complainants.

                  Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

 

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

 

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

               MR. DEV RAJ, MEMBER.

               MRS. PADMA PANDEY, MEMBER

 

PER MR. DEV RAJ, MEMBER

             After hearing arguments on 19.04.2017, it was agreed between the parties that the issues in law and facts involved in the above two complaints, are virtually the same and therefore, the aforesaid complaints can be disposed of, by passing one consolidated order.

2.          The facts, in brief, are that the complainant purchased Unit No.CCB-02-001 in the project of Opposite Party No.1 i.e. Puma Realtors (In fact ‘Ireo Rise’), Mid Rise, Second Floor, Cassia Court, Block-B, Sector-99, Mohali, measuring approx. 1609 sq. ft. from one Harinder Singh, who had further purchased the said unit from the original allottee Mr. Badri Nath Luthra, to whom the said flat was allotted by Opposite Party No.1 on 18.04.2011 vide allotment letter (Annexure C-2). The unit was duly endorsed in the name of the complainant on 27.05.2013 (Annexure C-3). Uptill September 2014, the complainant, paid an amount of Rs.49,16,835/- to Opposite Party No.1 i.e. 95% of the total consideration amount of Rs.52 Lacs including basic price and other charges. The complainant also took loan of Rs.50 Lacs @10.5% p.a. interest and is paying EMI of Rs.49,760/- per month.

3.          As per clause 13.3 of Apartment Buyer’s Agreement, executed on 02.01.2012, physical possession of the unit, in question, was to be handed over by Opposite Party No.1 within a period of 30 months from the date of execution of the same. It was further stated that for the delayed period in offering possession, Opposite Party No.1 was liable to pay penalty @Rs.7.50 per sq. ft. per month. The complainant visited the site in January 2014 but was shocked to see that there was no progress in the project. He again visited the site in June 2014 but still there was no development. It was further stated that though there was no development, yet Opposite Party No.1 sent a demand notice dated 07.08.2014 (Annexure C-8) to the complainant asking to deposit installment of Rs.5,51,614.88, which he deposited on 04.09.2014 vide receipt (Annexure C-9).

4.          Again on visiting the site in July 2015, the complainant found no development at the site. The complainant approached Opposite Party No.1 a number of times to know about the status of delivery of possession of the flat but every time, Opposite Party No.1 failed to give any positive response. It was stated that neither there was provision of electricity connection nor water connection was laid down. It was further stated that the complainant was shocked to know that electricity shall be provided by Opposite Party No.1 at exorbitant price. 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 tracks, visitors car parking, intercom facility and CCTV camera, which were promised in the Agreement, have not been started at the project site. It was further stated that external development of the area where the flat, in question, is situated, had also not been completed by 2016. It was further stated that Opposite Party No.1 had promised to provide modular kitchen and admittedly, lower portion of the modular kitchen has been provided but the upper portion has not been provided. It was further stated that there is no provision for split ACs, which is in contradiction of the promised facilities. It was further stated that Opposite Party No.1 for its convenience constructed approximately 70 flats over the existing tower thereby enriching itself by approximately 60/70 crores, which has caused lot of inconvenience to other allottees and such construction shall put burden upon the existing common facilities.

5.          It was further stated that the complainant is ready to deposit the remaining amount of 5% as agreed between the parties, subject to handing over possession of the flat. It was further stated that the complainant is residing in a rented accommodation and is paying rent @Rs.25,000/- per month.  It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service and indulgence into unfair trade practice.

6.          Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to Opposite Party No.1 to hand over possession of the unit, in question, complete in all respects, with all amenities, within a period of three months; pay rent @Rs.25,000/- per month for the time stipulated, pay penalty as per Clause 13.4 of the Agreement; pay interest @15% on the deposited amount from respective dates of deposits; make provision for electricity, water and sewerage from the Government; pay Rs.5,00,000/- as compensation on account of mental agony and physical harassment and Rs.50,000/- as cost of litigation.

7.          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.34 in the Apartment Buyer’s Agreement dated 02.01.2012; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the complainant did not hire any services of Opposite Party No.1, as the parties did not enter into any contract for hiring the services; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the  1986 Act. 

8.          On merits, it was stated that the allotment of the unit, in question, was assigned in favour of the complainant vide letter dated 05.06.2013 as the complainant had purchased the allotment rights vide agreement to sell dated nil but as attested by the notary on 17.05.2013. It was further stated that the transfer documents were executed and furnished on 27.05.2013 by the complainant. It was further stated that the total sale consideration price agreed to be paid by the complainant was Rs.51,98,798/-. It was further stated that the complainant vide clause 2 of the application, agreed to pay the applicable registration amount and stamp duty, revised/enhanced EDC, Service Tax, GST or any other 3rd party/statutory taxes, fees, charges etc. as may be applicable. It was further stated that the complainant was informed about the revised service tax vide letter dated 12.04.2012 (Annexure OP-13). It was further stated that in terms of Clause 13.4 of the Agreement, the complainant duly agreed to receive liquidated damages from the end of the grace period i.e. 30 months plus 6 months, till possession is actually offered.  It was further stated that the complainant vide Clause No.13.3 of the Agreement agreed that the starting period for 30 months shall be date of the said Agreement or approval of the building plans and/or fulfillment of precondition imposed thereunder, which ever was later. It was further stated that building plans were approved on 18.01.2012 (Annexure OP-16) and that being so, the starting period for 30 months would not be the date of the said Agreement but would be 18.01.2012.

9.          It was further stated that as agreed between the parties, in case of failure of Opposite Party No.1 to deliver possession within aforesaid period of 36 months, the complainant was entitled to the liquidated damage @Rs.7.50 per sq. ft. per month till possession of the apartment is actually offered. It was further stated that the delay compensation @Rs.7.50 per sq. ft. of the super area was to be adjusted and reduced from the last and final installment, which would be demanded at the time of offer of possession. It was further stated that the construction work in the Cassia Block, where the unit, in question, is situated, has already been completed by L&T and Opposite Party No.1 has already applied for issuance of the Occupation Certificate with the competent authorities on 11.08.2016, much before the filing of the present complaint. 

10.        It was further stated that Opposite Party No.1 vide application dated 26.11.2013 applied for approval of electrical layout plan and grant of NOC to the PSPCL after submitting requisite details; NOC by PSPCL was granted on 08.07.2015; approval for commissioning of electrical installations was accorded on 07.08.2015; Opposite Party No.1 applied for release of electric connection for IREO Rise project on 27.08.2015; PSPCL granted feasibility clearance dated 20.11.2015 for release of load/connection to the project and Bank Guarantee to the tune of Rs.3,24,10,301/- was submitted to PSPCL on 22.03.2016. The allegation that Opposite Party No.1 shall keep on supplying electricity at exorbitant rates was denied.

11.        It was further stated that the main entrance of IREO Rise group housing project of Opposite Party No.1 directly abuts the sector road, which has already been constructed. It was further stated that the complainant is misreading letter dated 30.12.2015. It was further stated that Opposite Party No.1 is in progress of obtaining approvals for additional areas and duly agreed under Clause 9.10 and 21.3 of the Agreement that Opposite Party No.1 shall be entitled to make additional construction to the extent permitted by the competent authorities under the relevant laws. 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 any unfair trade practice. The remaining averments, were denied, being wrong.

12.        On 09.11.2016, Sh. Ashok Sharma,  Advocate, who appeared for Opposite Party No.1 only, did not appear on behalf of Opposite Party No.2 - Managing Director of the Company, stating that no post of Managing Director existed in the Company and there is no necessity to serve Opposite Party No.2. In view of statement made, the service of Opposite Party No.2 was dispensed with vide order dated 09.11.2016.

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

14.        Opposite Party no.1, in support of its case, submitted the affidavit of Sh. Rajneesh, its Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

15.        The complainant filed replication, wherein, he reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of Opposite Party No.1. 

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

17.        It is evident, on record, that initially, one Mr. Badri Nath Luthra was allotted Residential Apartment No.CCB-02-001, in Group Housing Project known as ‘Ireo Rise’ on Second Floor, Tower - Cassia Court B, 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 original allottee and Opposite Party No.1 on 02.01.2012 (Annexure  C-1). The basic sale price of the unit was Rs.48,64,370/- 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 service tax in the sum of Rs.1,25,258/- was Rs.51,98,798/-. The payment against the aforesaid unit was to be regulated as per Payment Plan, Annexure IV (at Page 148 of the written statement). The apartment, in question, was transferred in the name of the complainant, on 05.06.2013 as is evident from Nomination/ Assignment of rights vide letter dated 05.06.2013 (Annexure OP-9). The complainant made payment in the sum of Rs.49,16,838.88 as is apparent from statement of account placed on record by Opposite Party No.1 as Annexure OP-14 (at Page  228 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 complainant 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. In Para 20(f), on merits, Opposite Party No.1 has termed allegation of complainant that electricity shall be supplied at exorbitant rates, to be absolutely wrong, baseless and conceived. It has been stated that electrical installation stood approved on 07.08.2015. Therefore, the apprehension of complainant is not well based.

18.           It was argued by counsel for Opposite Party No.1 that in the face of existence of arbitration clause No.34 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        The next 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.

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.”

27.                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.”

28.      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.

29.       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.”

30.     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.

31.        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 a 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.

32.        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 has spent his life savings to get a unit, for his 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 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 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.

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.”

35.     In  view of the above, the plea taken by the opposite party, 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.”

             In view of the above, the objection raised by Opposite Party No.1, being devoid of merit, is rejected.

19.        Another objection raised by Opposite Party No.1 was that since the complainant 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 complainant 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”

 

 

 

 

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

21.        The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. 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 18.04.2011 (Annexure C-2) and receipts (Annexures C-4 to C-7 & 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 complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.

22.        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 complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

23.        In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to him, to file the complaint. The submission of Counsel for Opposite Party No.1, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

24.        To defeat claim of the complainant, the next objection raised by Opposite Party No.1 was that since the complainant 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, he would not fall within the definition of consumer, as defined by Section 2(1)(d)(ii) 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. 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. 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 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. 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 complainant falls 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 their written reply, therefore, being devoid of merit, is rejected.  

25.        The next question, which falls for consideration, is, as to whether Opposite Party No.1, by not providing Split AC fittings and complete modular kitchen, was deficient in rendering service. As per Annexure I, Opposite Party No.1 was to make provision for Split AC and modular kitchen. The provision and specifications, so mentioned in Annexure-I appended to the Agreement, at Pages 144 and 145 of the file, qua the aforesaid two facilities, are extracted hereunder:-

 

KITCHEN

MODULAR KITCHEN

Fitted modular Kitchen, SS Sink, CP fittings, provision for RO system, built-in hob/chimney.

 

 

COUNTERTOP

Granite

AIR CONDITIONING

 

Provision for Split AC in all bedrooms, drawing & dining room.

 

Admittedly, the provision in accordance with the specifications in the Apartment Buyer’s Agreement was not made. It was argued on behalf of Opposite Party No.1 that it was nowhere agreed that modular kitchen comprising of both upper and lower cabinets/cupboards was to be provided, and that it was nowhere mentioned that portion above the working slab is a must for a modular kitchen. We are not convinced with the above argument. Had it been so mentioned in the specifications, the position would have been different. When it is clearly mentioned that modular kitchen is to be provided, it would mean modular kitchen with cup-boards below and above the slab. Opposite Party No.1 has also failed to clarify, why the provision of Split AC was not made. Thus, Opposite Party No.1 is liable to provide modular kitchen with cup-boards upper the slab also and so also the provision for split AC fittings in the bedrooms and drawing & dining room.

26.        The next question, which falls for consideration, is, as to whether the construction of approximately 70 flats over the existing tower(s) by Opposite Party No.1 is at the cost of existing common facilities/amenities and against the agreed terms and conditions. Relevant clauses 22.3 and 10.10 in the Apartment Buyer’s Agreement read as under:-

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

 

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

 

             In view of aforesaid, we are inclined to agree with Opposite Party No.1 that construction of additional flats is in accordance with the specific provision in the Apartment Buyer’s Agreement. The objection of the complainant is, therefore, not tenable. Opposite Party No.1 is well within its rights to raise construction of additional flats in terms of provisions in the agreement.

27.        The next question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainants. As stated 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 liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment  of   the   preconditions   whichever   is   later (commitment period). Undoubtedly, the building plans relating to this project were approved on 18.01.2012. Since, Buyer’s Agreement was executed on 02.01.2012, computing 30 months from 18.01.2012, commitment period for handing over possession was up-to 17.07.2014. On account of force majeure circumstances, referred to in the Agreement, Opposite Party No.1 was entitled to advantage of 180 days grace period after the expiry of commitment period, for unforeseen delays in obtaining the Occupation Certificate etc. from the Competent Authority. In the instant case, Opposite Party No.1 applied for the Occupation Certificate vide application dated 11.08.2016 (Annexure OP-15) i.e. after expiry of 180 days grace period and the same is still awaited. In such circumstances, Opposite Party No.1 is not entitled to benefit of grace period of 180 days. Opposite Party No.1 has failed to place, on record, any cogent and convincing evidence, that construction of the unit is going to be complete in the near future and also that development in area is in progress. The complainant has also placed on record email dated 30.12.2015 (Annexure C-10), whereby Opposite Party No.1 informed him that all the amenities mentioned in the said letter shall be completed and made available for the residents by the time Opposite Party No.1 completes the hand over for all the apartments. It was further stated in this letter 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.”

28.        Opposite Party No.1 even failed to abide by its commitment to offer possession of the unit, in question, by the end of June 2016. The complainant cannot be made to wait indefinitely. Opposite Party No.1 was, therefore, duty bound to hand over possession within 30 months i.e. by 17.07.2014. Admittedly, Opposite Party No.1 has not yet received the occupation certificate. The fact remains that possession has still not been offered. The Counsel for Opposite Party No.1 could not give any firm date, by which Opposite Party No.1 would be handing over possession. By making a misleading  statement, that possession of the unit, was to be delivered within the period as discussed above, and by not abiding by the commitment made despite payment of around 95% payment by the complainant, it (Opposite Party No.1) was not only deficient, in rendering service, but also indulged into unfair trade practice. Clearly there is delay in delivering possession.

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

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

9.      xxxxxxxxxxxxx

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

(1)         xxxxxxxxxxxxxx

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

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

30.        No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, but it does not mean that even in the event of inordinate delay, that too without justified reasons, in completing the construction and delivering the possession, the complainant would be entitled to meagre compensation of Rs.7.50 per sq. ft. of super area, which is much less than the bank rate for loan or fixed deposit. If the argument of Opposite Party No.1 is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer, for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates. This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.

31.        Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the case, referred to above, award of interest @12% on the deposited amount for the period of delay i.e. w.e.f. 18.07.2014, till delivery of possession of the unit, would meet the ends of justice.

32.             The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to him, by not delivering physical possession of the unit to him, by Opposite Party No.1, by the promised date in the Agreement i.e. by 17.07.2014. The complainant purchased the unit, with the hope to have a roof over their head alongwith family members  but his hopes were dashed to the ground. The possession of unit, in question, has not been offered to the complainant, till date by Opposite Party No.1, what to speak of delivery thereof. The complainant has, thus, undergone a lot of mental agony and physical harassment, on account of the acts of omission and commission of Opposite Party No.1. However, compensation in the sum of Rs.5 Lacs claimed by the complainant is clearly on the higher side. The complainant, in our considered opinion, has been adequately compensated by granting interest @12% per annum on the deposited amount for the delay period. In addition, he (complainant) will also get the benefit of escalation in the price of unit, in question because Opposite Party No.1 has stated in its written statement that it is committed to offer possession of the apartment on the rate agreed to at the time of execution of agreement. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.

33.        The next question, which falls for consideration, is, as to whether the complainant needs to be compensated for paying rent @Rs.25,000/- per month on account of delay in possession. In absence of any cogent evidence regarding payment of rent, complainant cannot be granted any relief. Even if, it is accepted for the sake of argument that the complainant has been paying rent, in our opinion, he (complainant) is not entitled to any further relief as he has been adequately compensated by granting 12% interest for the delay period and compensation of Rs.1,50,000/-.

34.        Similarly, in connected Consumer Complaint bearing No.969 of 2016, the agreement was executed on 15.05.2012 i.e. subsequent to approval of building plans relating to this project on 18.01.2012. Therefore, computing 30 months from the date of agreement i.e. 15.05.2012, the possession of the unit, in question, was to be delivered by Opposite Party No.1 by 14.11.2014 but the same has not been offered till date. For the reasons assigned in Consumer Complaint bearing No.776 of 2016, the complainants, in this case, are also entitled to the same relief i.e. interest @12% on the deposited amount w.e.f. 15.11.2014, till delivery of possession of the unit. The complainants are also held entitled to compensation of Rs.1,50,000/-, besides costs of litigation in the sum of Rs.35,000/-.      

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

36.         For the reasons, recorded above, both the complaints bearing Nos.776 of 2016 & 969 of 2016 are partly accepted with costs.

Complaint Case No.776 of 2016.

             Opposite Party No.1 is, held liable and directed as under:-

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

      

  1. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.
  2. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 18.07.2014 to 31.05.2017, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., from the date of default till realization.
  3. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant w.e.f. 01.06.2017, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a.,  from the date of default, till payment is made.
  4. To pay compensation, in the sum of Rs.1,50,000/- on account of mental agony and physical harassment, caused to the complainant, and Rs.35,000/- as cost of litigation, to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.

Complaint Case No.969 of 2016.

             The Opposite Parties are, held liable and, jointly and severally, directed as under:-

  1.    To hand over physical possession of  the unit, allotted in favour of the complainants, complete in all respects, including modular kitchen with cupboards above the slab also and provision for Split AC (fittings) in all bedrooms, drawing & dining room, to the complainants, within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against them.
  2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainants.
  3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, from 15.11.2014 to 31.05.2017, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a. from the date of default, till realization.
  4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainants w.e.f. 01.06.2017, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a.,  from the date of default, till payment is made.
  5. To pay compensation, in the sum of Rs.1,50,000/- on account of mental agony and physical harassment, caused to the complainants, and Rs.35,000/- as cost of litigation, to the complainants, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.

37.        However, complaint bearing No.776 of 2016, against Opposite Party No.2 – The Managing Director, Puma Realtors Pvt. Ltd. stands dismissed, with no order as to cost.

38.        Certified Copy of this order be placed in the file of complaint bearing Nos.969 of 2016.

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

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

Pronounced.

02.05.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER

Ad

 

 

 

 

Consumer Court Lawyer

Best Law Firm for all your Consumer Court related cases.

Bhanu Pratap

Featured Recomended
Highly recommended!
5.0 (615)

Bhanu Pratap

Featured Recomended
Highly recommended!

Experties

Consumer Court | Cheque Bounce | Civil Cases | Criminal Cases | Matrimonial Disputes

Phone Number

7982270319

Dedicated team of best lawyers for all your legal queries. Our lawyers can help you for you Consumer Court related cases at very affordable fee.