Chandigarh

StateCommission

CC/136/2015

Nirmal Singh Brar - Complainant(s)

Versus

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

Aftab Singh Khara, Adv.

11 Sep 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	136 of 2015
Date of Institution	:	15.07.2015
Date of Decision	:	11.09.2015

 

1. Nirmal Singh Brar son of Bakhtawar Singh Brar,
2. Sukhjeet Singh Brar son of Nirmal Singh Brar (through his father GPA Nirmal Singh Brar)

Residents of House No.1054, Shri Balaji Enclave-1, Patiala Road, Zirakpur, District Mohali, Punjab.

……Complainants.

Versus

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

              ....Opposite Parties.

 

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

 

 

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

                 SH. DEV RAJ, MEMBER.

                 MRS. PADMA PANDEY, MEMBER.

               

 

Argued by:Sh.  Aftab Singh Khara,  Advocate  for  the

complainants.

Sh. Ramnik Gupta, Advocate for the Opposite Parties.

PER DEV RAJ, MEMBER

              The facts, in brief, are that, the complainants applied for a residential plot in the project of the Opposite Parties, namely, IREO HAMLET, in Sector 98, SAS Nagar, Mohali, for a total cost of Rs.62,64,750/- i.e. Rs.25,000/- per sq. yard. Facilities like club house, shopping complex, landscape, plazas, inner road networks, basket and tennis court etc. were assured to be provided, as per advertising pamphlet (Annexure C-1) and the project was to be located opposite proposed 125 acre park on 200 ft. vide sector road. A Plot Buyer’s Agreement (Annexure C-3) was executed between the parties on 11.08.2011 at Chandigarh. As per the conditions of the Agreement aforesaid, the possession was to be completed within a period of 24 months from the date of execution thereof i.e. by August 2013. The complainant paid the amounts to the Opposite Parties regularly as per receipts (Annexure C-4 colly.) and in case of delay in payment, the Opposite Parties were charging 15% per annum interest from the complainants. The complainants have already paid more than Rs.50 Lacs to the Opposite Parties but the project was still not complete. In case of delay in offering possession, the Opposite Parties were to pay Rs.50/- per sq. yard every month as delay compensation to the complainants, till possession was offered. It was stated that the Opposite Parties cleverly changed the time linked payment plan to development linked payment plan vide their letter dated 26.09.2011. The complainants received letter dated 23.06.2015 (Annexure C-5) from the Opposite Parties, informing that the plot in question, was ready for possession, subject to fulfillment of certain conditions. However, on enquiry, it was found that the project is still not complete, photographs whereof are annexed with Annexure C-5. There was no access road to the plot, in question, as the entrance road is not constructed. Even the internal roads are not developed. The water, sewer and electrical lines are not connected. When the complainants enquired about the sewer treatment plant (STP), it was informed that the same would be done in due course. The said STP is not there and possession itself is incomplete. It has been stated that when complainants served a legal notice dated 6.4.2015 (Annx. C-5) upon the Opposite Parties, Opposite Parties issued notice of possession dated 23.6.2015, just to extract balance amount. Even the grace period alongwith the extended period, totaling 42 months for handing over possession of the plot, in question, from the date of the Agreement viz.11.8.2011, had expired in the month of February 2015.

2.           Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainants filed the instant complaint claiming refund of Rs.50,40,632/- alongwith interest @18% per annum from the date of deposit, Rs.1,00,000/- as exemplary damages and Rs.1,00,000/- as litigation expenses.

3.           The Opposite Parties, in their written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration clause No.33 in the Plot Buyer’s Agreement dated 11.08.2011; that the complainants were not consumers 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 complainants did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that the complainants did not book the plot for their personal use but for investment/commercial purposes and that the allegations in the complaint being of contractual nature, were only triable by the Civil Court.

4.           On merits, it was admitted that the project of the Opposite Parties is located adjoining to 200 feet Master Plan Sector Road falling between sectors 97 and 98. It was denied that any assurance of providing various facilities, as alleged, was made to the complainants. It was stated that vide Clause K of the Agreement, the decision of the complainants to buy the plot, in question, was not influenced. Execution of Plot Buyer’s Agreement dated 11.08.2011 was admitted. It was stated that change of payment plan from time linked to development linked was offered to the complainants vide letter dated 26.09.2011, to which they never objected. It was further stated that the complainants themselves willfully did not abide by the payment schedule and made several defaults in making payment of the due installments, as detailed in Para 5 of the reply. It was denied that the development at the site was not complete. It was further stated that it was nowhere agreed that possession was to be offered within 24 months. It was further stated that the complainants are misleading the Commission                 by misreading Clause 11 of the Agreement, by                 alleging that possession was to be offered within 42 months from the date of the said Agreement. On the contrary, the elapse of 42 months period merely provided that subject to Clause No.11.1, the complainants could exercise their option to terminate the Agreement and seek refund, but they did not do so. The complainants further failed to pay long due installments, demands whereof were raised vide demand notices dated 16.10.2014 and 19.02.2015.

5.           It was further stated that the development work commenced at the site w.e.f. 1.5.2013. It was further stated that the Opposite Parties developed the plot, in question, in terms of Clause 21.2 of the Agreement by laying of roads, water lines, sewer lines, electric lines etc. and offered the same to the complainants vide Notice of Possession dated 23.06.2015. It was stated that the complainants utterly failed to place, on record, any material to show that the aforesaid facilities were not laid down. It was stated that it is only the final blacktopping of the internal roads, which has consciously been not undertaken by the Opposite Parties because the internal roads were likely to be damaged due to movement of heavy vehicles due to construction related work. It was further stated that non-blacktopping of the roads did not mean that there are no internal roads. As regards access road, it was stated that the project is located on 200’ wide sector road/grid, which is to be developed by the State of Punjab. 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 the Opposite Parties never represented or assured for construction of the sector road. With respect to STP, it was stated that technically STP works/operates on some required minimum habitation in the project. It was further stated that provisions for providing STP in the project have duly been made. It was further stated that STP is not required at the stage of handing over of possession in a plotted development since a substantial quantity of sewage disposal is required to run STP. It was further stated that the validity of ‘consent to establish’ (NOC) granted was extended up to 13.5.2016 vide letter dated 29.06.2015 (Annexure OP-30).   It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor did they indulge into unfair trade practice. The remaining averments, were denied, being wrong.

6.           The complainants filed replication, wherein, they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.

7.           The complainants, in support of their case, submitted the affidavit of complainant No.1, by way of evidence, alongwith which, a number of documents were attached.

8.           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. 

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

10.         The Counsel for the complainants submitted that the complainants applied for a plot in the project of the Opposite Parties, the total price whereof was Rs.62,64,750/-. He further submitted that a Plot Buyer’s Agreement was executed on 11.8.2011 at Chandigarh and the complainants in all paid a sum of Rs.50,40,632/-. He further submitted that as per Clause 11.1 of the Agreement, possession was to be delivered within a period of 24 months plus 6 months grace period. He further submitted that as per Clause 11.2, after expiry of 30 months period, for a period of one year, compensation @Rs.50/- per sq. yard was payable and if possession was not delivered after expiry of 42 months, the complainants could exercise the option to terminate the contract within the period of 90 days. He further submitted that 42 months period expired on 11.2.2015 and the complainants served legal notice upon the Opposite Parties on 6^th April, 2015, seeking refund of deposited amount.  He further submitted that the Opposite Parties did not refund the amount deposited by the complainants and offered possession of the plot, in question, vide letter dated 23.6.2015. He further submitted that cause of action accrued to the  complainants  on  completion of 42

months period on 11.2.2015 and again on 23.6.2015 when notice of possession was sent to them by the Opposite Parties. He further submitted that as was evident from photographs, the development and amenities were still not complete, as promised and the Opposite Parties also did not obtain necessary approvals. He further submitted that at the time of advertising the project, the Opposite Parties presented a rosy picture saying that the project was opposite to proposed 125 acre park on 200 ft. wide sector road. He further submitted that there was no access road to the plot in question. He further submitted that the Opposite Parties did not set up STP and stated that development of external roads was not their liability. He further submitted that the Opposite Parties in their written statement admitted that final black topping of internal roads was not done. He further submitted that as regards STP, which is a very essential amenity, the Opposite Parties in their written statement have stated that STP is not required at the stage of handing over of possession in a plotted development since a substantial quantity of sewage disposal is required to run the same.

11.         The Counsel for the Opposite Parties submitted that in fact, as per Clause 11 of the Agreement, there was no commitment period of offering possession of the plot, in question.  He further submitted that after expiry of 30 months i.e. 24 months plus 6 months grace period, compensation @Rs.50/- per square yard per month was payable. He further submitted that the complainants could invoke the provisions of Clause 11.3 of the Agreement only in case they had paid all the installments in time as envisaged in Clause 11.1. He further submitted that the complainants defaulted in making payments as was evident from letters (Annexures OP-5 and OP-12). He further submitted that as per demand notice dated 19.2.2015, the complainants were informed that a sum of Rs.13,44,814.91Ps was due against them. He further submitted that the development was complete as was evident from Annexures OP-31 and OP-32, which are certificates from their Officers dealing with the project. He further submitted that the contention of the complainants that necessary approvals were not obtained was afterthought. He further submitted that the facts of case titled ‘Kanwarjit Singh and Another Versus M/s Puma Realtors Private Limited  and Anr.’, Consumer Complaint No.99 of 2015 decided by this Commission on 3.8.2015 were distinguishable from the instant case. He further submitted that the internal roads were complete up to base and only black topping remained to be done. He further submitted that non-execution of work relating to black topping of internal roads was bonafide act to avoid unnecessary wear and tear of internal roads due to construction activity.

12.         It is evident, on record, that Plot No.121 in the residential project “IREO Hamlet” measuring 250.59 square yards approx., in Sector 98, S.A.S. Nagar, Mohali, Punjab was allotted to the complainants. Admittedly, Plot Buyer’s Agreement dated 11.8.2011 (Annexure C-3) was executed between the complainants and the Opposite Parties, at Chandigarh, according to which, the total price of the plot was Rs.62,64,750/-, out of which, the complainants admittedly paid an amount of Rs.50,40,632.40s as per Account Statement (Page 185) appended to Annexure OP-3. It is also evident that the Opposite Parties offered change of payment plan from Time Linked Payment Plan to the Development Linked Payment Plan vide letter dated 26.09.2011 and the complainants 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, the development started, almost two years after the execution of Plot Buyer’s Agreement dated 11.08.2011 and possession of the plot, in question, was admittedly offered vide letter dated 23.06.2015 (Annexure OP-3).   

13.         The first objection, raised by the Opposite Parties, is as regards the existence of arbitration clause 33 in the Plot Buyer’s Agreement dated 11.08.2011. 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 18.03.2013. In this context, reliance has been placed 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, interalia, held 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. 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. It has been 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 Foras fall 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, 1996, 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.

14.         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 that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. The Hon’ble Apex Court also held 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. The Hon’ble Apex court further held 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. The Hon’ble Supreme Court in Para 17 held that 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.

15.         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), in Paras 27 to 31 held 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, the complainants have specifically averred in Para 12 of the complaint that they did not invoke any other provisions of law except filing the present complaint. Since they (complainants) have chosen to file consumer complaint first and, as such, they 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, 1996, 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 Hon’ble Supreme Court in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr.’s case (supra), the objection of the Opposite Parties, in our considered opinion, is not tenable. 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 11.08.2011, is dismissed.

16.           As regards the next objection of the Opposite Parties that since the complainants, did not book the plot for their personal use but for investment/commercial purpose, they were not consumers, it may be stated here that in the absence of any cogent documentary evidence, brought, on record, by the Opposite Parties, to the effect, that the complainants purchased the property for investment/commercial purpose, the objection of the Opposite Parties, is not sustainable in the eyes of law. Even, no evidence was produced by the Opposite Parties, that the complainants are property dealers and are engaged in the sale and purchase of property, with an intention to gain huge profits. Further, nothing has been brought, on record, by the Opposite Parties to show that the complainants already own a house in their name besides the plot, which is the subject matter of the instant complaint. The objection being devoid of merit, is 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 complainants are not consumers, is also not on sound footing. It may be stated here, that it is not the case of the Opposite Parties that the complainants purchased the plot, in an open auction, on “as is where is basis”, without any further promise of the Opposite Parties, of providing amenities/facilities, and developing the area, where the unit, in question, is situated.  In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, for specific performance, in the Civil Court, the alternative remedy provided under  Section 3 of the Act, can be availed of by them, as they fall within the definition of  consumers, as stated above. In this view of the matter, the submission of the Counsel for the Opposite Parties, being devoid of merit, must fail, and the same stands rejected.

18.           The next question, which falls for consideration, is, as to whether the remedy of the complainants to seek refund after offer of possession by the Opposite Parties, vide letter dated 23.06.2015 (Annexure OP-3) was barred. The Counsel for the Opposite Parties submitted that once the notice of possession was sent, the complainants could not seek refund. He relied upon Clause 11.3 of the Plot Buyer’s Agreement dated 11.08.2011, Annexure C-3, which is extracted hereunder:-

“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.

 

The Counsel for the Opposite Parties submitted that the complainants could exercise option of termination only up-till dispatch of the Notice of Possession by the Opposite Parties to them whereupon the said option was deemed to have irrevocably lapsed. In the instant case, from the date of execution of Plot Buyer’s Agreement on 11.8.2011, 42 months period i.e. 24 months + 6 months (grace period) + 12 months (extended delay period), expired on 10.02.2015. The complainants sent legal notice dated 06.04.2015 (Annexure C-6) to the Opposite Parties, seeking refund of the deposited amount. The Opposite Parties in their affidavit (Page 177) did not deny receipt of the legal notice aforesaid. Possession was offered to the complainants vide letter dated 23.06.2015 (Annexure OP-3) much after the complainants sent legal notice seeking refund. The contention of the Opposite Parties that the complainants did not make payment of some of the installments and, as such, they could not terminate the Agreement and were not entitled to refund, is not well based. A perusal of Clause 11.3 of the Plot Buyer’s Agreement clearly provides that “……..from the end of the Grace Period (such 12 month period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt      for termination of the Allotment/Agreement and refund     of the actual paid up installment(s) made against the said Plot….”. It, therefore, means that the complainants         are entitled to refund of amount/installments              paid by them. In our opinion, Clause 11.1 cannot have overriding effect over Clause 11.3 of the Agreement. The legal notice itself is an option exercised by the complainants to terminate the Agreement. Thus, in our considered opinion, the complainants were entitled to refund of the deposited amount and by not refunding the same, the Opposite Parties were deficient in rendering service. Furthermore, when the Opposite Parties are charging interest for any delay in making payment of instalments, their plea that the complainants cannot invoke provisions of Clause 11.3 of the Agreement is not justified.

19.           Not only this, the complainants have challenged the offer of possession  by way of filing the instant complaint for not obtaining necessary approvals from the Competent Authorities by the Opposite Parties and lack of development and basic amenities at the site. The Counsel for the Opposite Parties has specifically taken a plea that the complainants did not aver non-development at the site and non-obtaining of approvals in their complaint and has taken this stand only in the rejoinder. However, bare perusal of contents of Paras 6 and 7 of the complaint clearly reveals that complainants have averred that the project was still not complete and there is no access road to the plot, in question, as the entrance road is not constructed, and even the internal     roads/lanes are not developed alongwith water lines, sewer lines and electrical lines are not connected. Since the possession offered by the Opposite Parties was without complete development and basic amenities, certainly cause of action to seek refund accrued to the complainants. However, the authority relied upon by the Opposite Parties in Ashok Khanna Vs. Ghaziabad Development Authority, Revision Petition No.2002 of 2005, decided by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi on 18.08.2009, to contend that time is not the             essence for handing over possession, is of no help to the Opposite Parties, the same being distinguishable on facts.

20.           The next question, which falls for consideration, is, as to whether the development and the basic amenities were complete at the site before offering possession       vide letter dated 23.06.2015 or not. It may be stated here that there is nothing, on the record, that complete development, in respect of the plot, in question, and amenities at the site as promised, as per the Plot Buyer’s Agreement dated 11.08.2011, Annexure C-3, were available at the site. Had the amenities been completed at the site, then certainly the Opposite Parties, being in possession of the best evidence, having engaged a number of engineers/architects, would have placed, on record, their reports, to prove that factum. Though the Counsel for the Opposite Parties pleaded that the basic amenities such as water lines, sewer lines, etc., were required to be provided underground and the same have been provided, but they failed to produce any cogent and convincing evidence to this effect, that the site where the plot, in question, was located was fully developed. The Opposite Parties have rather admitted in their written statement that they were in the process of completing the balance black topping work also.  It was further admitted that the black topping of the internal roads had not been done to save its wear and tear due to movement of trucks carrying construction material. It was, however, stated that the external road network and other external infrastructure is the obligation of the State Government. The Opposite Parties also stated in their reply that they would be taking up the STP installation work once there was adequate habitation as it is not necessary or required at the time of possession. As is evident from Annexure OP-30, validity of consent to establish NOC from Punjab Pollution Control Board stood expired on 13.05.2015 when possession was offered on 23.06.2015. The same was extended subsequently vide letter dated 29.06.2015. Further, mere writing to the Chief Engineer (Commercial), Punjab State Power Supply Corporation Limited, Patiala vide letter dated 21.01.2013 (Annexure OP-39) seeking approval for plan/load/design does not amount to approval. Final NOC was granted by PSPCL on 08.07.2015 (Annexure OP-40) after notice of possession dated 23.06.2015. Perusal of Annexure OP-41, which is memo dated 07.08.2015 from Punjab Electrical Inspectorate reveals that installations were approved      for commissioning only on 07.08.2015. Even letter dated 18.05.2015 (Annexure OP-43) from Greater Mohali Area Development Authority (GMADA), informed the Opposite Parties that “…….Therefore, the arrangements for suitable provision for drinking water supply and safe disposal of sullage/storm discharge and solid waste management shall be made by promoter at his level separately and he shall obtain all necessary approvals from the concerned Authorities as per law in this regard independently. The construction work shall commence only after obtaining approvals as per law from the concerned Authorities……” Besides, number of other conditions were also required to be complied with by the promoter. The Opposite Parties did not place any cogent documentary evidence that they complied with the aforesaid directions of GMADA. Document (Annexure OP-44), which is letter bearing No.SEIAA/2012/50345 dated 30.11.2012 from State Level Environment Impact Assessment Authority, Punjab, Government of India, Ministry of Environment and Forests, is of no help to the Opposite Parties in view of concluding para of the aforesaid letter, which reads as under:-

“In view of the decision taken by the Authority, the application filed by the project proponent for developing plotted accommodation namely “IREO HAMLET” in the revenue estate of Village Samabalkhi and Dholl, Sector 98, Mohali, SAS Nagar (Punjab) is, hereby, returned. It is also informed that the promoter company will comply with the above said decision no.2 of the SEIAA in true letter & spirit.”

 

The Opposite Parties have not stated that they complied with the aforesaid decision. Certificates dated 5.8.2015 (Annexures OP-31 and 32), given by Sh. Dilip Kumar Solanki Sr. Vice President (Project Management) and Sh. Sukhwinder S. Bhatia, General Manager (Project Management), have been relied upon by Opposite Parties, to contend that laying of sewerage & storm water piping, laying of water supply DI piping, laying of electrical cable, laying of GSB & WBM in the internal roads, fixing Kerb stone, drain channels, construction of rainwater harvesting system, have been completed at site. These officials also certified that all the services like bore well for drinking water, roadside street lights poles and landscaping of area earmarked as parks have also been provided and completed. They also certified that plots have been demarcated, numbered and are identifiable at the site and the entry gate to the project has also been constructed and security guard deployed. It seems that these certificates, which are dated 5.8.2015, have been brought in evidence by the Opposite Parties, to cover up deficiency, when there are specific allegation of non-development and non-provision of certain basic amenities at the site. Rather these officials have admitted that the black topping of the internal roads is pending. Nothing has been said by these officials as regards provision of STP.

 

21.         Thus, from the aforesaid discussion, it is evidently clear that neither the Opposite Parties have completed the development and basic amenities nor did they have all the necessary sanctions/approvals from the Competent Authorities up-till 23.6.2015. Thus, the contention of the complainants that the possession offered was not a valid and legal possession is corroborated from the evidence on record. It is, therefore, held that the Opposite Parties were not only deficient, in rendering service but also indulged into unfair trade practice, by offering a paper possession to the complainants, before completing the basic amenities as also without obtaining the necessary sanctions/approvals.

22.           The next question, which falls for consideration, is, as to whether, in the circumstances, referred to above, the complainants are entitled to refund of the amount deposited by them with interest, if yes, to what extent. Since it has been held above that the Opposite Parties failed to offer possession even after lapse of 42 months, and the possession offered thereafter vide letter dated 23.06.2015 (Annexure OP-3) was not a legal and valid possession with all basic amenities as provided under the terms and conditions of the Plot Buyer’s Agreement dated 11.8.2011 (Ann. C-3) and furthermore, when development at the site was not complete and the Opposite Parties did not give any specific date for completing the same, the complainants are definitely entitled to the refund of amount of Rs.50,40,632.40Ps deposited by them with the Opposite Parties, alongwith interest @7.5% as provided in Clause 20.1 of Plot Buyer’s Agreement dated 11.8.2011.

23.           The next question, which falls for consideration, is, as to whether, the complainants are entitled to any compensation or not. The complainants deposited their hard earned money, in the hope that they will have a house to live in. The Plot Buyer’s Agreement was executed on 11.8.2011 and the complainants opted for time linked payment plan. Subsequently, the Opposite Parties vide their letter dated 26.09.2011 asked the complainants to change the payment plan from time linked payment plan to development linked payment plan, of course, to which the complainants agreed. Clearly as per Clause 11.1 of the Plot Buyer’s Agreement, the initial period, excluding the grace period and the extended delay period, was two years but as admitted by the Opposite Parties, the development at the site started on 01.05.2013, meaning thereby that for almost two years, the process of development did not start. On account of non-delivery of legal physical possession of the plot, in question, complete in all respects, by the Opposite Parties, to the complainants, and, on the other hand, by offering only a paper possession and not refunding the amount deposited, they (complainants) had certainly suffered immense physical harassment and mental agony, and the Opposite Parties were certainly deficient in rendering service and indulged into unfair trade practices, for which, they (complainants) need to be suitably compensated. In our considered opinion, damages and compensation in the sum of Rs.2,00,000/- would be just and adequate, to meet the ends of justice.             

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

25.          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.50,40,632.40Ps, alongwith interest @7.5% per annum, from the respective dates of deposits, 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 Lacs only), to the complainants, as damages and compensation for deficiency in rendering service and unfair trade practices, 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.25,000/-, to the complainants.

 (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.25,000/-.

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

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

Pronounced

September 11, 2015.

 

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER

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