Chandigarh

StateCommission

CC/85/2015

Dr. Sudha Mirchia - Complainant(s)

Versus

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

Arun Kumar, Adv.

20 Jul 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	85 of 2015
Date of Institution	:	12.05.2015
Date of Decision	:	20.07.2015

 

Dr. Sudha Mirchia wife of Dr. Rajiv Mirchia, Resident of House No.128, Sector 6, Panchkula, Haryana.

 

……Complainant.

Versus

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

 

              ....Opposite Parties.

 

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

               

BEFORE:   JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

                 SH. DEV RAJ, MEMBER.

                 MRS. PADMA PANDEY, MEMBER.

               

 

Argued by:

 

Sh. Arun Kumar, Advocate for the complainant.

Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

PER DEV RAJ, MEMBER

              The facts, in brief, are that, one Chiranjeev Milkha Singh resident of H.No.725, Sector 8, Chandigarh applied for a residential plot in the project, namely IREO HAMLET of Opposite Party No.1 in Sector 98, SAS Nagar, Mohali on 01.03.2011, the total cost whereof was Rs.73,86,480/-. It was stated that Chiranjeev Milkha Singh deposited a sum of Rs.23,14,054 with the Opposite Parties, whereafter, he was provisionally allotted residential plot No.260 measuring 307.77 sq. yards vide allotment letter dated 29.04.2011. It was further stated that the Plot Buyer’s Agreement dated 21.07.2011 was also executed between Chiranjeev Milkha Singh and the Opposite Parties at Chandigarh.

2.         It was further stated that due to some personal reasons, Chiranjeev Milkha Singh surrendered his plot, which was subsequently purchased by the complainant, for her personal use and other family members, after paying a sum of Rs.23,14,054/- to him (Chiranjeev Milkha Singh). It was further stated that necessary endorsement, in favour of the complainant was also made by the Opposite Parties on 02.03.2013, in their record as well as on the back side of the documents. It was further stated that  the Opposite Parties also intimated the complainant vide letter dated 02.04.2013 that onward rights/obligations with respect to the plot, in question, had been assigned to her, as transferee of the original allottee in terms of Clause 14 of the Plot Buyer’s Agreement. It was further stated that after purchase of the plot, when the Opposite Parties issued demand notice dated 30.04.2013, asking her (complainant) to deposit Rs.12,06,081.38, she deposited the same vide cheque No.004826 on 17.07.2013, receipt for which was issued on 18.07.2013. It was further stated that, subsequently, the complainant deposited another amount of Rs.12,06,081/- vide cheque No.004839 dated 20.03.2014 and receipt dated 05.04.2014 was issued. It was further stated that another amount of Rs.12,06,081.15Ps was deposited by the complainant with the Opposite Parties vide receipt dated 01.10.2014. It was further stated that the complainant thereafter deposited an amount of Rs.7,38,648/- with the Opposite Parties vide receipt dated 17.01.2015.

3.         It was further stated that despite making total payment of Rs.66,70,945.53Ps to the Opposite Parties by the complainant, they failed to develop the said project by laying roads, water lines, sewer lines, electrical lines etc. in term of Clause 21.1 of Plot Buyer’s Agreement dated 21.07.2011. It was further stated that as per Clauses 11.1, 11.2 and 11.3 of the Plot Buyer’s Agreement, possession of the allotted plot was to be handed over to the complainant by the Opposite Parties after 42 months of the execution thereof, but they failed to hand over the same and also failed to give any satisfactory reply, in this regard. It was further stated that the complainant visited the spot in November, 2014 and found that there was no development at the site. It was further stated that the complainant again visited the site on 05.03.2015 but the position was the same, as there was no development. It was further stated that the complainant repeatedly requested the Opposite Parties for handing over possession of the plot, or in the alternative, to refund the amount alongwith interest @24% per annum, but to no avail.

4.            It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund the amount of Rs.66,70,945.53Ps alongwith interest @24% per annum from the respective dates of deposits till realization; pay Rs.5,00,000/- as compensation for mental torture and harassment and Rs.50,000/- as litigation expenses.

5.         The Opposite Parties, were served and put in appearance on 17.06.2015. They filed their joint written statement on 29.06.2015. In the written statement, the Opposite Parties, 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 21.07.2011; that the complainant was not a consumer as the present complaint related to the enforcement of agreement to sell/purchase of a residential plot i.e. an immoveable property and hence, was not covered under the Act; that the complainant did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainant did not book the plot for her personal use but for investment/commercial purposes; that the allegations in the complaint being of contractual nature, were only triable by a Civil Court and that this Commission had no territorial and pecuniary jurisdiction to entertain and try the complaint.

6.         On merits, it was admitted that Chiranjeev Milkha Singh applied for the allotment of a residential plot in their project on 01.03.2011. However, it was denied that the total cost of the plot was Rs.73,86,480/-. It was stated that provisionally plot No.260 measuring 307.77 sq. yards was allotted after receipt of initial amount of Rs.9 Lacs. It was denied that provisional allotment was made after receipt of Rs.23,14,054/-, as alleged. It was further stated that at the time of execution of Plot Buyer’s Agreement, the payment plan was time linked payment plan, which was later on changed to development linked payment plan vide letter dated 26.09.2011. It was further stated that the original allottee Mr. Chiranjeev Milkha Singh neither surrendered the said plot nor was the same purchased by the complainant. It was further stated that Mr. Chiranjeev Milkha Singh had merely entered into the said Agreement with the Opposite Parties to purchase the plot, in question, and he subsequently assigned all his rights in the said Agreement in favour of the complainant vide nomination/transfer agreement dated 02.03.2013, request for which, was made by her separately vide letter dated 02.03.2013. It was further stated that accordingly, endorsement in favour of the complainant was duly made and she was intimated as regards the same vide letter dated 02.04.2013.

7.         It was further stated that as per Clause 19 of the Agreement, timely payment was the essence of the Agreement. It was further stated that as per Clause 11, the period of handing over possession was also subject to timely payments of installments by the complainant. It was further stated that the complainant never made the payment of due installments within time and had always delayed the payments. It was further stated that the complainant blatantly violated Clause 19.1 of the Agreement with impunity by not adhering to the agreed payment plan. It was further stated that as per Clause 21.2 of the Agreement, no allottee could raise the question of incomplete development before possession was offered. It was further stated that as per Clause 21.2, it was agreed to between the parties that the Opposite Parties shall carry out the internal development within the periphery of the IREO Hamlet project only and the development beyond the periphery, was to be carried by the State of Punjab. It was further stated that as per Clause 11.1 of the Agreement, the allottee was to pay the due installments in time and as per Clause 11.2, in case the Opposite Parties failed to offer possession on expiry of grace period of 30 months, then the Opposite Parties were liable to pay compensation @Rs.50/- per sq. yard per month till possession was actually offered to the allottee.

8.         It was further stated that as per Clause 11.3 of the Agreement, the allottee could opt for termination of the allotment and seek refund of the actual paid amount plus delay compensation @Rs.50/- per sq. yard per month for 12 months, after the lapse of 30 months from the date of execution of the Agreement dated 21.7.2011. It was further stated that as per Clause 11.1, the period of handing over possession of the plot was subject to the complainant complying with all her obligations under the terms and conditions of the Agreement. It was further stated that the complainant made several defaults in making payment of the due installments. It was further stated that the complainant could exercise this option only until offer of possession of plot by the Opposite Parties was made. It was further stated that notice of possession dated 4.5.2015, dispatched on 5.5.2015, was duly received by the complainant on 7.5.2015 and she never opted for termination of the allotment and sought refund.

9.         It was further stated that the development work commenced at the site w.e.f. 1.5.2013 and was carried on continuously in a phased manner at a good pace and, as such, notices of possession stood issued to the allottees including the complainant in May 2015. It was further stated that according to the agreed payment plan, the Opposite Parties raised demands from time to time. It was further stated that the complainant violated clause 19.1 of the Agreement as she did not adhere to the payment plan and made the payment after delay, several times and is still in default. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

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

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

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 one Chiranjeev Milkha Singh, applied for the allotment of a residential plot, in the project of the Opposite Parties. He was allotted Plot No.260 in “IREO Hamlet” measuring approximately 307.77 Square Yards in Sector 98, S.A.S. Nagar, Mohali and Plot Buyer’s Agreement (Annexure C-10) was executed between Chiranjeev Milkha Singh and the Opposite Parties at Chandigarh on 21.07.2011. The complainant opted for Time Linked Payment Plan, according to which, she (complainant) was required to pay 95% of the total sale consideration within 18 months from the date of booking and remaining 5% on delivery of possession. Against the total sale consideration of Rs.73,86,480/-(External Development Charges @Rs.1,275.10Ps per Square Yard were also payable), the complainant till 20.01.2015 (as per Annexure OP-25) paid Rs.66,70,945.53Ps. It is also evident that the Opposite Parties offered change of payment plan to its allottees including the complainant from Time Linked Payment Plan to Development Linked Payment Plan vide letter dated 26.09.2011 and she (complainant) did not raise       any objection, to the same. As admitted by the Opposite Parties,  the development work started at the site only on 01.05.2013, and they (Opposite Parties) raised demands from time to time. Thus, after issuance of provisional allotment letter on 29.4.2011 (Annexure C-8) and execution of the Plot Buyer’s Agreement at Chandigarh on 21.7.2011 (Annexure C-10), development work did not start for almost two years.

14.       The first objection, raised by the Opposite Parties, is as regards the existence of arbitration clause 33 in the Plot Buyer’s Agreement dated 21.07.2011. To this effect, the Opposite Parties also moved an application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 (as amended up to date) for referring the parties to resolve the matter through Arbitration in terms of Clause 33 of the Plot Buyer’s Agreement dated 21.07.2011. In this context, the Counsel placed reliance on Auro Developers Vs. Mala Mukherjee, C.O. No.2828 of 2010, decided by Hon’ble Calcutta High Court on 23.12.2011, wherein the Calcultta High Court while relying upon the judgment of Hon’ble Supreme Court passed by seven Judges Bench in SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr., AIR 2006 SC 450, held, interalia, that “……..It would certainly include the Court as defined in section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum [See Fair Air Engineers (P) Ltd. & Anr. Vs. N. K. Modi, MANU/SC/0141/1997: 1996 (6) SCC 385]….” The Opposite Parties further placed reliance on judgments of Hon’ble Calcutta High Court in Indusind Bank Vs. Gadadhar Banerjee, C.O. No.223 of 2009 decided on 01.04.2010 and Sudarshan Vyapar Pvt. Ltd. & Anr. Vs. Madhusudan Guha & Anr., C.O. No.2648 of 2012 decided on 06.12.2012, wherein in Para 15, it was held that “….once the parties had agreed to resolve their disputes by the arbitration, the jurisdiction of a Civil Court is clearly ousted by reason of Section 5 of the Arbitration and Conciliation Act. In view of the aforesaid and having regard to the law laid down in SBP (supra), this Court is of the view that the consumer forum has no jurisdiction to entertain the said complaint….” The Opposite Parties also placed reliance on CDC Financial Services (Mauritius) Ltd. Vs. BPL Communications Ltd. and others, (2003) 12 SCC 140 and Shin-Etsu Chemical Co. Ltd. Vs. Aksh Optifibre Ltd. and another, (2005) 7 SCC 234, to contend that when there was an arbitration clause in the Agreement, then the parties were required to be directed to go in for arbitration as per the mandatory provisions of Section 8 of the Arbitration and Conciliation Act. The Opposite Parties also referred to K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad Vs. A. Bal Reddy and another, (2008) 7 SCC 166, and contended that jurisdiction of forums has to be decided first. Further, the Opposite Parties cited the case of Allahabad Bank Vs. Canara Bank & Ors., (2000) 4 SCC 406, to contend that the Hon’ble Supreme Court in Para 40 held that the provisions of the latter special law are to prevail over the former special law. The Counsel submitted that the judgment of  Hon’ble Supreme Court of India in Fair Air Engg. Pvt. Ltd. & another Vs. N.K.Modi (1996) 6 SCC 385, is not applicable as the Hon’ble Apex Court had discussed the applicability of Section 34 of the old Arbitration Act, 1940 and there was no occasion of discussing  the  scope  and  applicability of Sections 5

and 8 of the Arbitration and Conciliation Act 1996. He further submitted that under Section 34, there was no bar of jurisdiction of the Judicial Authority but the discretion was vested with the Judicial Authority either to proceed with the matter before it or to stay the matter and refer the dispute to be adjudicated    by the arbitrator. He further submitted that in Para 11 it was held by the Hon’ble Apex Court that the Consumer Fora falls within the definition of Judicial Authorities. He further submitted that in National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr., I (2012) CPJ 1 (SC), since the Hon’ble Apex Court did not discuss the scope and applicability of Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, the same was not applicable in the instant case. He further submitted that under Section 5 of Arbitration and Conciliation Act, 1966, there is an absolute bar and Section 3 of the Consumer Protection Act, 1986 cannot be made applicable in view of the fact that Arbitration and Conciliation Act came into force in the year 1996 when the Consumer Protection Act, 1986 was already in existence. Therefore, the provisions of the Act, enacted later on would prevail.

15.       With a view to appreciate the controversy, in   its proper perspective, reference to Section 3 of the Act is made, which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of an arbitration clause, in the document, aforesaid, would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act. In Fair Air Engg. Pvt. Ltd. & another Vs. N.K.Modi’s case (supra), the Hon’ble supreme Court of India held in Paras 12 to 17 held as under:-

“12. The question then is : whether the case shall be stayed by operation of Section 34 of the Arbitration Act? Section 34 envisages that where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings, before filing a written statement at any time or before taking any other step in the proceedings, shall apply to the judicial authority before which the proceedings are pending to stay the proceedings; and such authority, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.

13. It would thus be clear that, by invocation of Section 34, the party to the proceedings does not get an automatic right to have the proceedings pending before the judicial authorities stayed. The said section gives discretion to the authorities to stay the proceedings on their satisfying that there was no sufficient reason why the matter should not be referred in accordance with the agreement between the parties for arbitration when the party seeking stay of the proceedings was and still remains ready and willing to do all things necessary to the proper conduct of the arbitration. In other words, on judicial satisfaction as to the contract between the parties and subject matter of the dispute as to the nature of the dispute, the judicial authority has been invested with a discretion to stay the proceedings or proceed with the matter pending before it. Similar power is available under Section 8 of the Arbitration and Conciliation Third Ordinance, 1996. The Act was enacted to provide for protection of the interests of consumers and for that purpose the Act has made provision for the establishment of Consumer. Councils and other authorities, viz., District Forums, State Commissions and National Commission for the settlement of consumers' disputes and for matters connected therewith.

14. This Court in Lucknow Development Authority v. M.K. Gupta elaborately considered the scheme and object of the Act. It was held that object was to secure social purpose to promote the facilities in a comprehending manner for settlement of issue involved in the consumer complaints and to assess the damage. In construing the object of the Act, the interests of the consumers which the Act seeks to protect are given predominance. The Act has departed from the settled legal forums provided under the CPC. The importance of the Act is to promote the welfare of the society by enabling the consumers to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as a 'network of rackets' or a society in which producers have secured power' to rob the rest or as the might of public bodies which are degenerating into storehouses of inaction where papers do not move from, one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampant, widespread and deep that the society, instead of bothering, complaining and fighting against it, is accepting it as a part of life. The Act, therefore, intends to secure inexpensive and expeditious consumer service.

15. Accordingly, it must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words "in derogation of the Provisions of any other law for the time being in force" would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act, Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well-founded. The Parliament is aware of the provisions of the Arbitration Act and the Contract Act and the consequential remedy available under Section 9 of the CPC, i.e., to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.

16. It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the CPC. Thereby, as seen, Section 34 of the Act does not confer and automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on their own and on the peculiar facts and circumstances of the particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.

17. Considered from this perspective, we hold that this dispute need not be referred to arbitration under Clause (12) of the agreement and the matter could be decided on merits by the State Commission itself.”

It may be stated here that the Hon’ble Supreme Court of India in its judgment in National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr.’s case (supra), held in Paras 27 to 31 as under:-

“27. The next question which needs consideration is whether the growers of seeds were not entitled to file complaint under the Consumer Act and the only remedy available to them for the alleged breach of the terms of agreement was to apply for arbitration. According to the learned Counsel for the appellant, if the growers had applied for arbitration then in terms of Section 8 of the Arbitration and Conciliation Act the dispute arising out of the arbitration clause had to be referred to an appropriate arbitrator and the District Consumer Forums were not entitled to entertain their complaint. This contention represents an extension of the main objection of the appellant that the only remedy available to the farmers and growers who claim to have suffered loss on account of use of defective seeds sold/supplied by the appellant was to file complaints with the concerned Seed Inspectors for taking action under Section(s) 19 and/or 21 of the Seeds Act.

28. The consideration of this issue needs to be prefaced with an observation that the grievance of a farmer/grower who has suffered financially due to loss or failure of crop on account of use of defective seeds sold/supplied by the appellant or by an authorised person is not remedied by prosecuting the seller/supplier of the seeds. Even if such person is found guilty and sentenced to imprisonment, the aggrieved farmer/grower does not get anything. Therefore, the so-called remedy available to an aggrieved farmer/grower to lodge a complaint with the concerned Seed Inspector for prosecution of the seller/supplier of the seed cannot but be treated as illusory and he cannot be denied relief under the Consumer Act on the ground of availability of an alternative remedy.

29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2-Judge Bench interpreted that section and held as under:

the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Mr. Suri, that the words ‘in derogation of the provisions of any other law for the time being in force’ would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.

It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.”

(Emphasis supplied)

30. In Skypak Couriers Limited v. Tata Chemicals Limited (supra), this Court observed:

“Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.

31. In Trans Mediterranean Airways v. Universal Exports (supra), it was observed:

“In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy.”

In view of the law settled by the Hon’ble Supreme Court of India in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr.’s case (supra), wherein the Hon’ble Apex Court, while discussing a number of judgments thread-bare, clearly held that “..The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996.” In DLF Limited Vs. Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 decided on 13.05.2013 by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, after discussing a number of cases decided by the Hon’ble Supreme Court, it was held that mere existence of an arbitration clause in the Agreement did not oust the jurisdiction of the Consumer Fora from entertaining and deciding the consumer complaint. The National Commission took cognizance of the decision of the Apex Court in SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr., AIR 2006 SC 450, as is evident from Para 33 of its judgment, which reads as under:-

“33.    Faced with this, Ld. Counsel appearing for the Opposite Parties contended that in this case, the Hon’ble Supreme Court did not take into consideration the decision of the Seven Judges Bench in the S.B.P & Co.’s case. We do not find substance in this submission as well.  In Madhusudhan Reddy’s case (Supra) , Supreme Court after taking into consideration the background, objectives and reasons behind the enactment of C.P. Act, juxtapositioning the provisions of the C.P. Act and the Arbitration Act of 1996 (Section 3 of the C.P. Act and Section 8 of the Arbitration Act of 1996) held that the complaint filed by a consumer under the C.P. Act would be maintainable and the relief cannot be denied by invoking the jurisdiction of section 8 of the Arbitration Act of 1996.  We are bound to follow the law laid down by the Supreme Court.  The judgment is binding precedent.

By establishing the Consumer Disputes Redressal Forums, the Legislature has provided special remedy for the redressal of the grievances of “small consumers” who buy the goods or avail of services for their personal purpose. Persons who have bought the goods or availed of services for commercial purposes have been specifically excluded from the definition of ‘consumer’ except where the goods have been bought or services availed of by a small consumer for earning his livelihood by way of self- employment.  Remedy provided under the C.P. Act is a special remedy with the objective of redressal of the grievances of the affected consumers in an expeditious and non-expensive manner. If the small consumers are relegated to the Alternative Dispute Resolution (ADR) mechanism of arbitration, the remedy provided under the C.P. Act would become illusionary.  It would be neither expeditious nor in-expensive. It would defeat the very purpose of enactment of the C.P. Act.” 

In the instant case also, the complainant chose to file consumer complaint first and, as such, she cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. As regards the contention of the Opposite Parties that since there is an absolute bar under Section 5 of Arbitration and Conciliation Act, 1966, the provisions of Section 3 of Act cannot be made applicable, it may be stated here that the Consumer Protection Act, 1986 is a beneficial legislation and in view of the law laid down by the National Commission in DLF Limited Vs. Mridul Estates (P) Ltd.’s case (supra) and National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr.’s case (supra), the contention of the Opposite Parties that there is an absolute bar on the Consumer Fora to entertain the complaint, in our considered opinion, is not well based. As such, this Commission has the jurisdiction to entertain and try the complaint. In this view of the matter, this objection of the Opposite Parties, being devoid of merit, must fail, and the same stands rejected. Accordingly, the application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 for referring the parties to resolve the matter through Arbitration in terms of Clause 33 of the Plot Buyer’s Agreement dated 21.07.2011, is dismissed.

16.         As regards the next objection of the Opposite Parties that the complainant, did not book the plot for her personal use but for investment/commercial purpose, and, as such, she was not a consumer, it may be stated here that the complainant in Para 5 of the complaint has specifically stated that she purchased the plot, in question, for her personal use and use of her other family members. Therefore, in the absence of any cogent documentary evidence, brought, on record, by the Opposite Parties, to the effect, that the complainant purchased the property for investment/commercial purpose, the objection of the Opposite Parties, is not sustainable in the eyes of law. The same, therefore, stands rejected.

17.         The contention of the Opposite Parties that an Agreement for sale/purchase of a plot, cannot be treated as service and, therefore, the complainant is not a consumer, is also not on sound footing. The Opposite Parties, as is evident from the contents of the Agreement, were to offer possession of the plot, in question, after developing the same. However, they failed to develop the same and offer possession within the time-limit laid down in the Agreement, which amounted to deficiency, in rendering service. The objection, being devoid of merit, is not sustainable and the same, is therefore, rejected.

18.           The next question, which falls for consideration, is, as to whether the complainant is entitled to refund of the amount deposited by her or not. Clauses 11.2 and 11.3 under heading “POSSESSION AND HOLDING CHARGES”, of Plot Buyer’s Agreement dated 21.07.2011 (Annexure C-10), being relevant, are extracted hereunder:-

11.2

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

11.3

Subject to Clause 11.1, in the event of delay by the Company in handing over the possession of the said Plot beyond a period of 12 months from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot after adjusting the interest/penalty on delayed payments along with Delay Compensation for 12 months. Such refund shall be made by the Company within 90 days of receipt of intimation of this effect from the Allottee, without any interest thereon. For removal of doubt, it is clarified that Delay Compensation payable to the Allottee who is validly opting for termination, shall be limited to and calculated for the fixed period of 12 months only irrespective of the date on which the Allottee actually exercised the option for termination. This option of termination may be exercised by the Allottee only up till dispatch of the Notice of Possession by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever, monetary or otherwise shall lie against the company nor be raised otherwise or in any other manner by the Allottee.

19.         In the instant case, the Plot Buyer’s Agreement was executed on 21.07.2011 and as per the terms of the same (Agreement), the complainant was entitled to compensation @Rs.50/- per sq. yard of the actual area of the said plot for every month of delay until the actual date fixed by the Company for handing over of possession of the said plot. As per Clause 11.3 aforesaid, in the event of delay by the Company in handing over possession of the said plot beyond a period of 12 months from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the complainant could have opted for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot after adjusting the interest/penalty on delayed payments along with delayed compensation for 12 months. The Opposite Parties have claimed that possession was offered to the complainant before filing of the complaint and this fact was concealed by her. In support of their contention, the Opposite Parties placed reliance on document (Annexure OP-29 colly.), at Page 223, which is report regarding dispatch of letter of possession dated 4.5.2015 (Annexure OP-30) and its delivery to one Ram Singh on 7.5.2015. When the communication was addressed to Dr. Sudha Mirchia, complainant, its receipt by one Ram Singh without disclosing as to in which manner, he was connected or related to the complainant, does not establish  that the communication offering possession was received by her (Dr. Sudha Mirchia). In the instant case, the extended period aforesaid of 12 months including grace period had already expired on 20.01.2015, whereas, the Opposite Parties failed to establish that the offer of possession to the complainant was made before filing the complaint. As such, the Opposite Parties, under the aforesaid clause, were required to refund the entire amount paid by the complainant, to her, when they (Opposite Parties) failed to handover possession of the allotted plot till the date of filing the complaint before this Commission. The complainant is thus, entitled, to the refund of the amount paid by her towards installments of the said plot, in terms of Clause 11.3 and 20.1 of Plot Buyer’s Agreement dated 21..7.2011 alongwith interest @7.5% from the respective dates of deposits.

20.       The next question, which falls for consideration, is, as to whether, the complainant is entitled to any compensation or not. The complainant deposited her hard earned money in the hope that she will have a house to live in. As admitted by the Opposite Parties, development started in May, 2013 i.e. almost two years after the execution of Plot Buyer’s Agreement on 21.7.2011. On account of non-delivery of possession of the plot, in question, by the Opposite Parties, to the complainant, complete in all respects, within the stipulated period or the extended delay period, or even till the filing of the complaint, and not refunding the amount deposited, she (complainant) had certainly suffered physical harassment and mental agony at the hands of the Opposite Parties, for which, she needs to be suitably compensated. In our considered opinion, compensation in the sum of Rs.2,00,000/- would be just and adequate, to meet the ends of justice.      

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

22.        For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Parties are jointly and severally, held liable and directed in the following manner:-

(i)   To refund the amount of Rs.66,70,945.53Ps, alongwith interest @7.5% per annum, from the respective dates of deposits, till realization, within three months, from the date of receipt of a certified copy of this order.

(ii)  To pay an amount of Rs.2,00,000/-  (Rupees Two Lac only), to the complainant, as compensation for mental agony and physical harassment, within a period of three months from the date of receipt of a certified copy of the order.

(iii) To pay cost of litigation, to the tune of Rs.15,000/-, to the complainant.

 (v)  In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @10.5% per annum, instead of 7.5% per annum, from the respective dates of deposits, till realization and amount mentioned in Clause (ii) above, with interest @12% per annum from the date of default till realization, besides payment of costs, to the tune of Rs.15,000/-.

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

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

Pronounced

July 20, 2015.

Sd/-

[JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

 

 

Sd/-

[DEV RAJ]

MEMBER

 

 

Sd/-

[PADMA PANDEY]

 MEMBER

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STATE COMMISSION

(Complaint Case No.85 of 2015)

[Dr. Sudha Mirchia Vs. Puma Realtors Ltd. & Anr.]

 

Argued by:

 

Sh. Arun Kumar, Advocate for the complainant.

Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

Dated the 20^th day of July 2015

 

ORDER

 

            On 06.07.2015, Counsel for the complainant moved an application for appointment of Local Commissioner, to visit the project namely IREO Hamlet of Opposite Party No.1 in Sector 98, SAS Nagar, Mohali and to submit his report with regard to the existing position at the site and to take photographs from inside and outside of the project.

2.         Reply to the application aforesaid was filed by the Opposite Parties on 13.07.2015, stating therein that in November 2014 and 5.3.2015, the development at site was in progress and, as such, the question of its completion on the respective dates as per Plot Buyer’s Agreement dated 21.7.2011 did not arise. It was further stated that the Opposite Parties have started offering possession of the plots including that of the complainant vide notice of possession dated 4.5.2015 and, thus, they fully complied with their obligation  as per condition No.12 of the Agreement. It was prayed that the application aforesaid be dismissed.

3.         We have gone through the contents of the application and have heard the Counsel for the parties.

4.         As admitted by the Opposite Parties, in their written statement and the reply to the application aforesaid, the development at the site was in progress in November and as on 5.3.2015. Once they themselves admitted the factum of development at the site still going on, there is no need for the report of the Local Commissioner. It may also be stated here, that, in case, at this stage, the application for appointment of Local Commissioner is allowed, that will delay the disposal of the complaint, thereby defeating the very purpose of the provisions of Section 13 (3A), of the Consumer Protection Act, 1986, stipulating the specific time, for the disposal of the Consumer Disputes. Thus, there is no justification, whatsoever, to allow the application, for the appointment of Local Commissioner, at this stage. The application is, accordingly, dismissed.

5.         Arguments, in the main complaint already heard.

6.         Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted, with costs, as per the directions given in the main order.

 

Sd/- (DEV RAJ) MEMBER

Sd/- (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT

Sd/- (PADMA PANDEY) MEMBER

 

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