Chandigarh

StateCommission

CC/72/2017

Sunil Bhutani - Complainant(s)

Versus

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

Gaurav Bhardwaj, Adv.

31 Mar 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	72 of 2017
Date of Institution	:	20.01.2017
Date of Decision	:	31.03.2017

 

Sunil Bhutani son of Sh.Mohinder Kumar Bhutani, House No.1225-9B, Vishnu Nagar, Jagadhari Workshop, Yamuna Nagar, Haryana.

 

……Complainant

 

V e r s u s

 

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

….. Opposite Parties.

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

 

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

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by: Sh. Gaurav Bhardwaj, Advocate for the complainant.

                 Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                As per facts on record, the complainant purchased a flat, for his personal/family use, in the project of the opposite parties, launched by them, under the name and style ‘IREO RISE’, Sector 99, SAS Nagar, Mohali, Punjab, by moving an application on 01.11.2010, on making payment of Rs.2,80,000/- plus (+) Rs. 84,000/-, vide receipts Annexure C-1 and C-2. On 02.11.2010, he was allotted flat bearing no.CCA-05-002, in the said project, vide provisional allotment letter Annexure C-3, in Tower-A, 5^th Floor, category 3B2T-S, measuring 1609 square feet. Total sale price of the said unit was fixed at Rs.45,42,570/-. The no. of flat was subsequently changed to CCA-04-002, vide document dated 28.03.2011 Annexure OP-7. Thereafter, the complainants paid following amount:-

	30.11.2010	200000.00
	30.11.2010	41470.00
	10.02.2011	419358.00
	14.03.2012	506179.00
	27.02.2013	270000.00
	27.02.2013	200000.00
	27.02.2013	39000.00
	03.12.2013	508518.00
	22.01.2014	510279.20
	02.04.2014	512882.00
	26.06.2014	515124.00
	29.09.2014	475000.00
	29.09.2014	40123.00

 

It is case of the complainant that in terms of Clause 13.3 of the Agreement, it was committed by the opposite parties to deliver possession of the unit within a period of 30 months from the date of agreement or approval of the building plans and the Company was entitled to grace period of 180 days for unforeseen delays, in obtaining the occupation certificate etc.. Clauses 13.3 and 13.4 of the Agreement read thus:-

‘“13.3 - Subject to Force Majeure, as defined herein, and further subject to the Proposed Allottee having complied with all its obligations under the terms and conditions of this Agreement, and the Proposed Allottee not being in default under any part of this Agreement including but not limited to the timely payment of the total Sale Consideration, Stamp Duty and other charges and also subject to the Proposed Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Apartment to the Proposed Allottee within a period of 30  months from the date of this agreement or approval of the Building Plan and/or fulfillment of the preconditions imposed thereunder, whichever is later (“Commitment Period”). The Proposed Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 (One Hundred and Eighty) days (“Grace Period”), after the expiry of the said Commitment Period to allow for unforeseen delays in obtaining the Occupation Certificate etc., from the Competent Authority under the Punjab Rules, in respect of IREO-RISE.

13.4-Subject to Clause 13.3, if the Company fails to offer possession of the said Apartment to the Proposed Allottee by the end of the Grace Period, it shall be liable to pay to the Proposed Allottee compensation calculated at the rate of Rs.7.50/- (Rupees Seven and paise Fifty only) per sq. ft. of the Super Area (“Delay Compensation”) for every month of delay thereafter until the actual date fixed by the Company for handing over of possession of the said Apartment to the Proposed Allottee. The Proposed Allottee shall be entitled to payment/adjustment against such ‘Delay Compensation’ only at the time of ‘Notice of Possession’  or at the time of payment of the final installment, whichever is earlier”.

It was stated that the ‘end date’ to deliver possession stood expired on 11.08.2013. Possession of the unit was not so offered. It is further case of the complainant that as per terms and conditions of the Agreement, the opposite parties under took to pay compensation, for the period of delay @ Rs.7.50ps. (Rupees Seven and paisa Fifty only) per sq. ft. of the super area of the flat.  The amount to be so awarded comes to Rs.12,067.50ps. per month. However, neither possession of the unit was offered nor amount of compensation, as referred to above, was paid, for the period of delay. When this complaint was filed, the complainant had already paid an amount of Rs.46,01,933.20Ps. towards price of the said unit. It was further stated that the said clause 13.4 does not safeguard the right of the complainant. It is further case of the complainant that without delivering possession of the unit, as agreed, fresh advertisements were published inviting more applications to purchase properties, from the opposite parties. It was also stated that the Contractor/Company, which was to construct the units, was replaced with some other Company, as a result whereof, the construction work came to stand still. The basic facilities are not available at the site. It was averred that the opposite parties are not intending to provide modular kitchen and provision of split ACs, as per specifications, mentioned in the Agreement. It was further stated that the complainant had also obtained housing loan from ICICI limited, which he has repaid and loan account was closed on 13.08.2015. Requests made by the complainant to deliver possession of the unit, failed to yield any result. Hence this complaint was filed seeking following relief:-

1. To direct the OPs to handover the possession when the project is fully complete and all the amenities as guaranteed in the agreement are provided.
2. To direct the OPs for making the compensation for delayed possession as per Clause No.13.4. In the case of the complainant the said compensation is to be started after the completion of 30 months. The project is already delayed by 39 months. The OPs be directed to pay the money at the first instance along with 15% interest and start making the monthly delayed payments for the period for which the flat is not offered for possession with amenities.
3. To direct the OPs for making the compensation for a sum of Rs.10 lacs in lumpsum on account of harassment, mental agony cause to the complainant.
4. Holding that the agreement prepared by the OPs is one sided and arbitrary and as such the conditions which are one sided cannot be made applicable upon the complainant.
5. OPs be directed to make the provisions for electricity, water and sewerage from the govt.
6. To direct the OPs to provide the amenities along with the possession as guaranteed in the brochure and agreement. Further directing the OPs for providing complete modular kitchen i.e. the lower cupboards as well as upper cupboards and for providing the Split ACs provision in all the rooms.
7. To direct the OPs to pay litigation charges to the tune of Rs.55,000/-.

 

2.         Upon notice, the opposite parties, filed their joint written version, raising numerous objection that in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was averred that the consumer complaint was not maintainable, as the matter relates with regard to dispute of contractual nature and an agreement to sell/purchase of an apartment only i.e. an immovable property. It was stated that no services were to be provided by the opposite parties to the complainant. It was further stated that, in this view of the matter, consumer complaint was not maintainable and only a Civil Court could adjudicate the dispute, in question. Territorial jurisdiction of this Commission was also disputed. It was stated that, time was not the essence of contract.  It was averred that there is no continuing cause of action, in favour of the complainant to file this complaint. It was further stated that since the complainant had purchased the unit, in question, for investment/ commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. He possesses house no.1225-9B, Yamuna Nagar, Haryana, where he is living with his family, since long.
3.         On merits, sale of the unit, in question, in the name of the complainant was admitted. Payment made by the complainant towards price of the unit was not disputed. Execution of Buyer’s Agreement between the parties was also not disputed. It was also admitted that the complainant was relocated to the unit, referred to above, by way of addendum agreement. It was stated that possession period of the unit was to be counted from the date of approval of the building plans i.e. 18.01.2012 and not from the date of execution of the agreement. It was further stated that as per terms and conditions of the Agreement, the complainant has given a consent that in case of delay in delivery of possession of the unit beyond period of 30 months, opposite parties shall be liable to pay delayed compensation @Rs.7.50Ps., per square feet of the super area of the unit, per month. It was stated that delayed payment amount was to be adjusted at the time of issuance of notice of possession. It was denied that the complainant is entitled to get any interest on the amount, as prayed for by him. It was further stated that qua objections regarding providing modular kitchen, the facility will be provided under the slab and not above the slab. As far as the provision of split AC in all the rooms, as mentioned in the Agreement are concerned, the same has been provided by the opposite parties. It was further stated that construction work of the unit, as also development at the site is complete. It was averred that completion certificate for the unit, in question, has been applied to the competent Authorities on 11.08.2016 and  after receiving it, possession will be handed over to the complainant. It was further stated that the complainant vide Clause 3.5 of the agreement, agreed to pay the applicable registration amount and stamp duty, revised/enhanced EDC, Service Tax, GST or any other 3^rd party/statutory taxes, fees, charges etc. as may be applicable. It was further stated that it was nowhere agreed that construction would be done by L&T or any other Company. It was further stated that L&T Company had carried out majority of the development work but having found delays on the part of the said construction Company, M/s Akalia Constructions (a sub-contractor of L&T) was appointed for finishing works of the Juniper Block & Firangipani Block only and not the Block, where the complainant was allotted apartment. It was further stated that the complainant misrepresented the email dated 31.12.2015 sent by the opposite parties. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
4.         The parties led evidence, in support of their case.
5.         We have heard Counsel for the parties, and have gone through the evidence, and record of the case, carefully.
6.         It is not in dispute, that the complainant purchased the said flat, by moving an application on 01.11.2010, on making payment of Rs.2,80,000/- plus (+) Rs. 84,000/-, vide receipts Annexure C-1 and C-2, as a result whereof, on 02.11.2010, he was allotted flat bearing no.CCA-05-002, in the said project, vide provisional allotment letter, for an amount of Rs.45,42,570/-. Agreement was executed between the parties on 11.02.2011, in respect of the said flat. He was also eligible for one car parking space. It is also an admitted fact that, subsequently, flat no. was changed to CCA-04-002, vide document dated 28.03.2011 Annexure OP-7. By September 2014, the complainant had paid an amount of Rs.46,01,933.20Ps. As per Clause 13.3 of the Agreement, it was committed by the opposite parties to deliver possession of the unit within a period of 30 months from the date of agreement or approval of the building plans. Admittedly, the building plans were approved on 18.01.2012. As such, as per terms and conditions of the Agreement, possession of the constructed unit was to be delivered on or before 17.07.2014.

                It was further stipulated that the Company is entitled to get further grace period of 180 days, after the expiry of the above said period i.e. from 17.07.2014,  with a view to obtain occupation certificate etc. only. However, to obtain the above said certificates, admittedly, application was moved by the opposite parties, to the Competent Authorities, only on 11.08.2016 and still it is awaited. It is also not in dispute that by the end of stipulated date i.e. 17.07.2014, substantial amount, towards price of the said unit, stood paid. Since, the fault lays upon the opposite parties, in not completing the construction by the stipulated date (17.07.2014) and moving application for occupation certificate etc., immediately, thereafter, there is no necessity to give any grace period to them (opposite parties). The grace period was to be provided, only in case, construction of the unit was completed within the stipulated period and some more time was needed to apply and get the said certificates. However, it is not the case of the opposite parties, as far as the present complaint is concerned. The opposite parties are deficient in providing service to the complainant, on this count.

7.         Under above circumstances, in the first instance it is held that the complainant is certainly entitled to get possession of the unit, in question. Secondly, now the question arises, as to what amount, the complainant is entitled towards compensation, for the period of delay, in delivery of possession of the unit, in question.

                It is necessary to mention here that, under similar cases, where there is a delay in handing over possession of the units and the consumers are still seeking possession thereof, this Commission, while adhering the principle of law laid down by the Hon’ble Supreme Court of India as also the National Commission, is granting interest upto 12% p.a. on the amount deposited, for the period of delay, till actual physical possession is delivered to them. However, in the present complaint, the complainant himself has pressed to issue directions to the opposite parties, for payment of compensation @Rs.7.50ps. per square feet of the super area of the unit, per month, as per Clause 13.4 of the Agreement, for the period of delay, alongwith interest. As such, this Commission cannot go beyond the relief claimed and is inclined to consider the rate of compensation, sought for by the complainant.

                Furthermore, compensation aforesaid, was to be paid for every month of delay, until actual date of handing over possession of the unit. It was further stipulated in Clause 13.4, that the said compensation will be adjusted at the time of issuance of notice of possession. We feel that the provision to pay/adjust the amount of compensation on issuance of notice of possession, especially when there is an inordinate delay, is not only arbitrary, rather draconian. It is case of the complainant that on account of delay, he is suffering heavily. He had paid an amount of Rs.46,01,933.20Ps. by 29.09.2014. As per terms and conditions of the Agreement, possession of the unit was to be handed over by 17.07.2014 i.e. 30 months from the date of approval of building plans only, as it has already been held above, that there is no necessity to give any grace period to the opposite parties.

                Be that as it may, if not from 17.07.2014, certainly the complainant is entitled to get delayed compensation in terms of Clause 13.4, whereof 29.09.2014 (01.10.2014) at the stipulated rate. Payment of compensation has been delayed and as such, compensation for each month shall be paid, after calculating interest @12% p.a. for each delay upto the date of actual delivery of possession. To make it more clear, it is held that as per the calculation chart given below, for the period from 01.10.2014 to 31.03.2017, the complainant is entitled to a sum of Rs.4,70,632.50ps., towards delayed compensation:-

Compensation per month	From	To	Total period	Int. Rate	Total PxRxT 100
Rs.12,067.50   (Rs.7.50 x 1609 sq.ft.)	01.10.2014	31.03.2017	30 months	12% p.a.	Rs.4,70,632.50Ps.

 

Thereafter, the amount of compensation to the tune of Rs.12188.17ps. per month, calculated @Rs.7.50/- i.e. (Rs.12067.50ps x 12% p.a. x 01 month), is required to be paid by the opposite parties on monthly basis, starting from 01.04.2017, till the date of actual physical possession of the unit, to the complainant.

8.         Now coming to the dispute with regard to modular kitchen, this issue stood decided by this Commission in a similar case titled as Sh. Karan Pal Kandhari Vs. M/s Puma Realtors Private Ltd. and another,  Consumer Complaint No. 236 of 2016, decided on 15.09.2016. In that case, the opposite parties were held deficient on this count, while holding as under:- 

“The next question, which falls for consideration, is, as to whether Opposite Party No.1 by not providing complete modular kitchen was deficient in rendering service. As per Annexure I, Opposite Party No.1 was to make provision for modular kitchen. The provision and specifications, so mentioned in Annexure-I appended to the Agreement, at Page 115 of the reply, qua the aforesaid facility, is extracted hereunder:-

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

 Admittedly, the provision in accordance with the specifications in the Apartment Buyer’s Agreement was not made. It was argued on behalf of Opposite Party No.1 that it was nowhere agreed that modular kitchen comprising of both upper and lower cabinets/cupboards was to be provided. It was further argued that it was nowhere mentioned that portion above the working slab is a must for a modular kitchen. Opposite Party No.1 cannot draw its own conclusion that modular kitchen would be complete, even if the cupboards are provided only below the slab. Had it been so mentioned in the specifications, the position would have been different. When it is clearly mentioned that modular kitchen is to be provided, it would mean that modular kitchen with cup-boards below and above the slab is to be provided. Therefore, Opposite Party No.1 is clearly deficient in not providing this facility in the Apartment. Not only this, Opposite Party No.1 sought acceptance of complainant to provide this facility at additional cost, which amounted to unfair trade practice. Opposite Party No.1 is, therefore, liable to provide modular kitchen with cup-boards upper the slab also”.

                In the present case also, opposite parties, were to provide a similar modular kitchen with same specifications/ fittings, as was to be provided in the aforesaid case. As such, non-provision of the modular kitchen, as promised, is a grave deficiency on the part of the opposite parties.  Opposite parties are therefore liable to provide modular kitchen with cup-boards upper the slab also.

                As far as the provision of split AC in all the rooms are concerned, it may be stated here that the opposite parties have admitted in their written reply that the same has been provided by them, in all the areas, as mentioned in the Agreement. However, if, at any stage, it is found that provision of the split AC has not been provided, by the opposite parties, as promised, the complainant shall be at liberty to file execution application in that regard. 

9.         The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.

                According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”, meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only as above, perusal of addendum agreement, referred to above, reveals that the same has been executed between the parties, at Chandigarh. Furthermore, perusal of almost all the letters, including the payment receipts placed on record, reveal that the same were issued by the opposite parties from their Chandigarh Office, as the same bore address of the Company as “SCO 6-8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh”. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

10.         No doubt, in the written version, an objection was also taken by the opposite parties that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case. In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to the complainant, to file the complaint. The submission of Counsel for the opposite parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
11.         An objection has also been raised by the opposite parties that since the complainant had purchased the unit, in question, for investment/commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on record to show, that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. On the other hand, the complainant in his complaint has clearly stated that the unit, in question, was purchased by him for his personal use only. The mere fact that the complainant is residing in the house, address whereof has been mentioned in the headnote of this complaint, will not debar him, to purchase a flat in the project of the opposite parties and that too for his residential purpose. Even otherwise, still the complainant is seeking possession of the unit, in question. Mere placing on record, a copy of passport of the complainant, has no relevancy, as far as the present dispute, is concerned. In the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. It may be stated here that in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only this, recently in a case titled as  Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-

“In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In a given case, separate houses may be purchased by a person for the individual use of his family members.  A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house. 

 

 

                The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainant, thus, falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by  the opposite parties, in their written reply, therefore, being devoid of merit, is rejected. 

12.         The next question, that falls for consideration, is, as to whether, there is a contract to sell  a flat/apartment only, to the complainant and no services were to be provided as alleged, by the opposite parties to the complainant, as such, he would not fall within the definition of consumer. It may be stated here that it is not the case of the opposite parties that they sold the unit, in question, in an open auction, on “as is where is basis”. The builder/opposite parties are bound to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by the allottees. In Haryana State Agricultural Marketing Board vs. Bishamber Dayal Goyal and Ors., Civil Appeal No.3122 of 2006, decided on 26.03.2014, the Hon’ble Supreme Court, while placing reliance on its earlier judgment titled as Municipal Corporation, Chandigarh & Ors. vs. Shantikunj Investment (P) Ltd. & Ors., (2006) 4 SCC 109, under similar circumstances held that though it was not a condition precedent but there is an obligation on the part of the Administration to provide necessary facilities such as roads, drainage, drinking water, sewerage, street lighting etc. etc., for full enjoyment of the same by allottees. In view of above facts, the plea taken by the opposite parties, in this regard, stands rejected.
13.         Another objection raised by Counsel for the opposite parties that since the unit, in question, falls under the category of immovable property, as such, in that event, time is not to be considered as essence of the contract, is also bereft of merit, in view of ratio of judgment titled as Saradamani Kandappan vs S. Rajalakshmi & Ors., Civil Appeal Nos. 7254-7256  of 2002 & and  Contempt Petition (C) No. 28-29 of 2009, decided on 4^th  July, 2011, wherein the Hon`ble Supreme Court held as under:-

“A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S. Vidyanadam and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed:

"It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.

In the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .........We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation.

Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."

(emphasis supplied) Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.”

 

               

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

 

25.        The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

35.   In  view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

                In view of the above, the objection raised by Counsel for the opposite parties, being devoid of merit, is rejected.

15.         Another objection raised by Counsel for the opposite parties was that since the complainant did not buy goods and did not hire any services, and is seeking enforcement of the Agreement in respect of immovable property i.e. a flat, therefore, only a Civil Court can decide the complaint, and consumer complaint was not maintainable. As stated above, the complainant hired the services of the opposite parties, for purchasing the unit, in question, in the manner, referred to above, on payment of sale consideration. According to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite parties, they were to hand over possession of the constructed unit, in question, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions, whichever is later (commitment period). Admittedly, the opposite parties failed to comply with the commitments made. There is a breach of terms and conditions of the Agreement, which amounts to deficiency in providing service. The relief sought in the complaint are on account of deficiencies committed by the opposite parties.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the Company failed to develop the same, the complainant was well within his rights to file consumer complaint against the opposite parties. Section 2 (1) (o) of the Act, defines service as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

                From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2 (1) (o) of the Act. Similar principle of law was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainant has a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of 1986 Act, can also be availed of by him, as he falls within the definition of consumer. In this view of the matter, the objection of the opposite parties in this regard, being devoid of merit, must fail, and the same stands rejected.

                The plea taken by the opposite parties is also bereft of merit, in view of latest judgment of the National Commission, titled as M/s. Karwa Developers & 3 Ors. Vs. Shree Vinayak Co-Operative Housing Society Ltd. & 3 Ors., First Appeal No. 980 of 2016,  decided on 3^rd  March, 2017, wherein, a similar plea of the builder was negated by it, while holding as under:-

“We also do not find any substance in the plea taken by the appellant that under clause 14(a) of the development agreement, the complainant was required to file a civil suit under the Specific Relief Act only, because they were asking for monetary relief.  The State Commission rightly stated that the relief sought in the complaint were on account of deficiencies committed by the OP Developers, vis-à-vis, the society.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the developers failed to develop the same, the society was well within its rights to file consumer complaint against the OP builder.”

16.         Admittedly, the opposite parties failed to deliver possession of the unit, in question. Still no firm date of delivery of possession is given. At the time arguments also, Counsel for the opposite parties stated that there is likelihood of delivery of possession shortly, after receiving the necessary certificates, referred to above. Nothing concrete has been brought on record, which shows that the opposite parties have done regular follow-ups with the Competent Authorities to issue occupation/completion certificates, for which they have applied far back. On the other hand, documents placed on record clearly reveals that till March 2016, the opposite parties were seeking various other approvals/sanctions from the Competent Authorities. The complainants cannot be made to wait indefinitely. The opposite parties were duty bound to hand over possession of the unit within 30 months i.e. by 17.07.2014. The fact remains that possession has still not been offered. The Counsel for the opposite parties could not give any firm date, by which the opposite parties would be handing over possession to the complainant. There is thus a continuing cause of action in favour of the complainant. By making a misleading  statement, that possession of the unit, was to be delivered within the period as discussed above, and by not abiding by the commitment made, despite receiving substantial amount, from the complainant, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice.
17.         The next question, that falls for consideration, is, as to whether, the complainant is  entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to him, by not delivering physical possession of the unit by the opposite parties, by the promised date i.e. by 17.07.2014. The complainant purchased the unit, with the hope to have a roof over his head alongwith family members  but his hopes were dashed to the ground. The possession of unit, in question, has not been offered to the complainant, till date by the opposite parties, what to speak of delivery thereof. The complainant has, thus, undergone a lot of mental agony and physical harassment, on account of the acts of omission and commission of the opposite parties. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.3 lacs, shall be reasonable, adequate and fair.
18.         No other point, was urged, by the Counsel for the parties.
19.         For the reasons, recorded above, this complaint is partly accepted with costs. The opposite parties are jointly and severally directed as under:-

1. To hand over physical possession of  the unit, allotted in favour of the complainant, complete in all respects, including modular kitchen with cupboards above the slab also and provision for Split AC (fittings) in all bedrooms, drawing & dining room (as committed in the written reply also),  within a period of four months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against him.
2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty etc. by the complainant.
3. To pay compensation amount of  Rs.4,70,632.50Ps., as calculated above for the period from 01.10.2014 till 31.03.2017, within a period of 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @15% p.a., from the date of default till realization.
4. To pay Rs.12188.17ps. every month, as compensation (calculated @Rs.7.50/- per square yard of the super area of 1609 square feet, per month, alongwith interest @12% p.a.)  w.e.f. 01.04.2017, onwards, till actual delivery of actual physical possession of the unit, by the 10^th of the following month, failing which, the same shall also carry penal interest @15% p.a., from the date of default, till payment is made.
5.         To pay compensation, in the sum of Rs.3 lacs  (three Lacs), on account of mental agony and physical harassment, caused to the complainant, and Rs.50,000/- as cost of litigation, to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing this complaint till realization.

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

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

Pronounced

31.03.2017

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[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

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[DEV RAJ]

MEMBER

 

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[PADMA PANDEY]

 MEMBER

Rg