Chandigarh

StateCommission

CC/281/2016

Mr.Deepak Kumar - Complainant(s)

Versus

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

Gagan Anand, Parveen Moudgil, Rajat Chopra,Adv.

30 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	281 of 2016
Date of Institution	:	23.06.2016
Date of Decision	:	30.09.2016

 

Mr.Deepak Kumar son of Puran Chand, R/o House No.56, Khalapur Hanuman Road, Gali Khatiyon, Shamli, Uttar Pradesh.

……Complainant

V e r s u s

1. Puma Realtors Pvt. Ltd.,  SCO No.6-8, 1^st and 2^nd Floors, Sector 9D, Chandigarh-160009.
2. Ms.Sunaina Minhas, Authorized Signatory, Puma Realtors Pvt. Ltd.,  SCO No.6-7-8, 1^st and 2^nd Floors, Sector 9D, Madhya Marg, Chandigarh-160009.

            ....Opposite Parties

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

BEFORE:         JUSTICE JASBIR SINGH, PRESIDENT.

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER.

 

Argued by:       Sh.Parveen Moudgil, Advocate for the complainant.

                        Sh.Ramnik Gupta, Advocate for opposite party no.1.

 

PER JUSTICE JASBIR SINGH, PRESIDENT

                The complainant purchased a residential plot bearing no.35, measuring 248.73 square yards, in a project launched by the opposite parties, namely ‘IREO Hamlet’, Sector 98, Mohali, Punjab, on payment of Rs.6.50 lacs, vide allotment letter Annexure C-1. He paid an amount of Rs.2,08,119/- vide receipt dated 01.06.2011 Annexure C-2. Another amount of Rs.9,68,496.16Ps, was paid by him, vide receipt dated 02.08.2011 Annexure C-3. Plot Buyer’s Agreement (in short the Agreement) Annexure C-4 was executed between the parties, on 15.09.2011. Basic price of the plot was fixed at Rs.57,20,790/-. Apart from that, the complainant was also required to pay External Development Charges (EDC), Preferential Location Charges (PLC) etc. In this manner, the total sale consideration of the plot was fixed at Rs.61,62,310.62Ps. Payment plan was annexed as Annexure-I with the Agreement. Vide letter dated 26.09.2011 Annexure C-5, the above ‘time linked payment plan’ was changed to ‘development linked payment plan’. It is case of the complainant that when despite having made payment of substantial amount, it was noticed that there was no development at the site, notice Annexure C-13 to terminate the contract was issued to the opposite parties on 02.06.2016. When it failed to get any result, the present complaint was filed by alleging deficiency in providing service and adoption of unfair trade practice on the part of the opposite parties. Directions were sought to be issued to the opposite parties to refund an amount of Rs.27,98,957/- with interest. Besides as above, compensation to the tune of Rs.10 lacs for mental agony and physical harassment as also cost of litigation to the tune of Rs.50,000/- was also claimed by the complainant.

2.         Notice of the complaint was served upon the opposite parties. On 19.07.2016, Sh.Ramnik Gupta, Advocate, put in appearance on behalf of opposite party no.1 and stated that opposite party no.2 was an employee of opposite party no.1 and she has left her job. Accordingly, Counsel for the complainant stated that let she be not served at that stage. In those circumstances, only opposite party no.1 was directed to file reply and evidence.
3.         Reply and evidence were filed by opposite party no.1 on 16.08.2016, wherein, it was pleaded that in the face of existence of arbitration Clause No.33 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 further pleaded that since the plot, in question, was purchased by the complainant for commercial purpose i.e. for investment purpose, as such, he did not fall within the definition of consumer. It was further pleaded that the consumer complaint was not maintainable, as the matter relates to an agreement to sell/purchase of a plot only. It was further pleaded that consumer complaint was not maintainable, and only a Civil Court, could adjudicate the dispute, in question. In para no.2.b.(ii) it was stated that there was no part of the Agreement, which obligates opposite party no.1 to provide any service, as alleged. Territorial jurisdiction of this Commission was also disputed.
4.         On merits, it is admitted that the complainant had purchased the plot, in question, from opposite party no.1, at the rate, mentioned in earlier part of this order. It  was stated that possession of the plot was to be delivered within 30 months, from the date of execution of the Agreement, plus 12 months more, against payment of delayed penalty amount i.e. after 42 months, subject to completion of all the obligations by the complainant, contained in the terms and conditions of the same (Agreement) and not otherwise. It was further stated that from the day one, the complainant was guilty of breach of terms and conditions of the Agreement. Payments were made delayed, as and when demand notices were issued. Copies of demand notices were brought on record. It was further stated that when to the notices issued on 31.05.2013, 21.06.2013 and 16.01.2014 and final notice dated 13.06.2014, no compliance was made by the complainant, in making the payment, allotment of the plot was cancelled vide advice dated 05.01.2015. In the meantime, after receipt of final notice, the complainant requested for time to make payment, however, thereafter, nothing was heard from his side. It was further stated that development work was complete; all the basic amenities had been provided at the site and also necessary permissions/sanctions had been obtained by opposite party no.1, as a result whereof, it had even offered possession of units in the said project, to various allottees. To say that development work was complete; all the basic amenities had been provided at the site, reference was made to the report made by the Local Commissioner dated 24.10.2015. It was further stated that opposite party no.1 terminated the Agreement and cancelled the allotment of plot, in question, strictly as per the terms and conditions of the agreement, as the complainant miserably failed to pay the remaining amount towards the same, despite giving him number of opportunities. It was further stated, that neither there was any deficiency, in rendering service, on the part of opposite party no.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
5.         The complainant and opposite party no.1, led evidence in support of their case.
6.         We have heard Counsel for the complainant and opposite party no.1 and, have gone through the evidence and record of the case, carefully. 
7.         The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

                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.”

                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.”

8.         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.
9.         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.”

10.         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.
11.         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.
12.         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. 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.2000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to opposite party no.1. 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.
13.         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 opposite party no.1. He is now running behind opposite party no.1 to get his amount, legally due to be paid to him, after cancellation of the plot. 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.
14.         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.”

15.         In view of the above, the plea taken by opposite party no.1, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.
16.          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 the record, that the Agreement dated 15.09.2011 was executed between the parties at Chandigarh. Not only this, perusal of almost all the documents placed on record, issued by opposite party no.1 to the complainant reveals that the same were issued from its Chandigarh Office, as the same bore address of the Company as “SCO 6-7-8, 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 opposite party no.1, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

17.         No doubt, in the written version, an objection was also taken by opposite party no.1, that as per Clause 35 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 opposite party no.1, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

18.         The next question, that falls for consideration, is, as to whether, there is a contract to sell a plot only, to the complainant and no service was to be provided as alleged, opposite party no.1 to him (complainant), as such, he would not fall within the definition of consumer. It may be stated here that the stand taken by opposite party no.1, needs rejection, in view of Clause  21.2 of the Agreement, which reads thus:-

“The Company shall carry out the internal development within the IREO Hamlet project, which inter alia includes laying of roads, water lines, sewer lines, electrical lines etc. However, it is understood that external linkages for these services beyond the periphery of the IREO Hamlet project, such as water lines, sewer lines, storm water drains, roads, electricity, horticulture and other such integral parts are to be provided by the State Government and/or the local authorities.”

 

19.         Perusal of contents of the afore-extracted Clause, clearly goes to reveal that it was specifically stated that the Company shall carry out internal development within the project, which included laying of roads, water lines, sewer lines, electrical lines etc., however, external development thereof, will be the responsibility of State Government. Above Clause leaves no doubt that possession of fully developed plot, over which construction can be raised, was a promise made by opposite party no.1, to the complainant. Not only as above, the project of opposite party no.1 is a part of Mega Housing Project. If it is so, it cannot be said that only a plot will be sold to a consumer, without making any development. The said Mega Housing Project is covered under the provisions of Punjab Apartment and Property Regulation Act 1995. Thus, since, it was bounden duty of opposite party no.1 to provide basic facilities and infrastructure to make the plot habitable, as such, it cannot be said that only a plot was to be delivered to the complainant, without any amenities/facilities. Under similar circumstances, in Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held as under:-

“In the light of the above pronouncement of this Court the High Court was perfectly justified in holding that the activities of the appellant-company in the present case involving offer of plots for sale to its customers/members with an assurance of development of infrastructure/ amenities, lay-out approvals etc. was a ‘service’ within the meaning of clause (o) of Section 2(1) of the Act and would, therefore, be amenable to the jurisdiction of the fora established under the statute. Having regard to the nature of the transaction between the appellant-company and its customers which involved much more than a simple transfer of a piece of immovable property it is clear that the same constituted ‘service’ within the meaning of the Act. It was not a case where the appellant-company was selling the given property with all 7 Page 8 advantages and/or disadvantages on “as is where is” basis, as was the position in U.T. Chandigarh Administration and Anr. v. Amarjeet Singh and Ors. (2009) 4 SCC 660. It is a case where a clear cut assurance was made to the purchasers as to the nature and the extent of development that would be carried out by the appellant company as a part of the package under which sale of fully developed plots with assured facilities was to be made in favour of the purchasers for valuable consideration. To the extent the transfer of the site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant-company had indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers like the respondents”.

                Besides this, 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 Municipal Corporation, Chandigarh &Ors. vs. Shantikunj Investment (P) Ltd. & Ors., (2006) 4 SCC 109, 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 opposite party no.1, in this regard, stands rejected.

20.         Another objection raised by Counsel for opposite party no.1 was that the issues raised in the present complaint being of contractual nature, as such only the Civil Court has power to adjudicate the same, and this Commission did not have the jurisdiction to adjudicate the present complaint.  It was also argued that the complainant is seeking directions from this Commission to re-write the agreed terms and conditions of the Agreement.  It may be stated here, that the complainant hired the services of opposite party no.1, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite party no.1, it was to deliver physical possession of the unit, within a maximum period of 30 months, as explained above, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 21.2. By not completing the development and construction within the stipulated period, opposite party no.1 violated the terms and conditions of the Agreement and was deficient in rendering service. 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”.

 

21.         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. case (supra), 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, as stated above, Section 3 of the 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 the Act, can be availed of by him, as he falls within the definition of consumer, as stated above. In this view of the matter, the objection raised by opposite party no.1 in this regard, being devoid of merit, must fail, and the same stands rejected.
22.          The next question that falls for consideration, is, as to whether, the plot, in question, was purchased by the complainant, for his personal use, or he was a speculator, as alleged by opposite party no.1. No doubt, to defeat claim of the complainant, an objection was raised by opposite party no.1, to the effect that the complainant being investor, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing on the record to show that the complainant is the property dealer and is indulged in sale and purchase of property, on regular basis. Thus, in the absence of any cogent evidence, in support of the objection raised by opposite party no.1, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, 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 as above, recently under similar circumstances, in  a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

 “ In the case of the purchase of the 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.  Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose.  In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015.”

 

                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 opposite party no.1, in its written reply, therefore, being devoid of merit, is rejected.  

23.         It is on record that vide Buyer’s Agreement dated 15.09.2011, the complainant purchased plot measuring 248.73 square yards, in a project referred to above, launched by opposite party no.1, for a total sale consideration of Rs.61,62,310.62Ps.. Possession of the fully developed plot was to be delivered within 42 months, in the manner aforesaid. It is also not in dispute that an amount of Rs.27,98,957/- already stood paid by the complainant. Final notice was given to him to make further payment. When he failed to make further payment, termination/ cancellation advice was issued on 05.01.2015 Annexure OP-31. Perusal of said advice indicates that in terms of clause 19.1 of the Buyer’s Agreement dated 15.09.2011, an amount of Rs.9,24,346.59Ps. was forfeited towards earnest money; an amount of Rs.21,974/- was adjusted towards interest and under brokerage charges, an amount to the extent of Rs.1,95,222/- was also deducted from the amount paid. Balance amount refundable to the complainant was shown as Rs.16,57,414.57Ps.
24.         As per established law, the amount calculated by opposite party no.1 aforesaid, appears to be incorrect. It is true that after making part amount of Rs.27,98,957/- even on making further demands, on issuance of many notices, the complainant failed to make further payment. In those circumstances cancellation of allotment on the part of opposite party no.1 cannot be said to be wrong in law. However, the amount deducted by it, out of the amount paid, appears to be wrong. As per Clause 19.3 of the Agreement, opposite party no.1 has imposed a cut of earnest money @15% of the sale consideration out of the amount deposited by the complainant, when making cancellation of allotment in his favour. Total sale consideration of the plot was fixed at Rs.61,62,310.62Ps.. The said amount exceeds 10% of the total sale consideration of the plot and as such, that amount cannot be forfeited. A similar controversy came up for consideration, before this Commission, in  a case titled as Hardeep Kaur and ors. Vs. PUMA Realtors Pvt. Ltd. and another, consumer complaint no.09 of 2016,_decided on 27.06.2016, wherein, it was observed as under:-

“The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount deposited with the opposite parties, on account of the reason that the plot, in question, allotted in their favour, was cancelled, and, if yes, to what extent. It is an admitted fact and as has been held above, that allotment of the plot, in question, was rightly cancelled by the opposite parties, as the complainants breached the terms and conditions of the Agreement, as they stopped making payments, after making part payment, towards the same, meaning thereby they rescinded the contract/ Agreement. Thus, once the complainants had rescinded the contract, their case with regard to refund of the deposited amount was to be dealt, in accordance with Clause 19.3 of Agreement, which says that in case of termination of the contract, on account of default in making payment towards the said plot, the opposite parties were entitled to forfeit the earnest money to the extent of 15% of the sale consideration, out of the deposited amount, and thereafter, were liable to refund the amount paid by the allottees, without any interest. However, in the present case, not even a single penny has been refunded to the complainants, by the opposite parties, after the allotment of plot, in question, was cancelled by them, in January 2014. To the contrary, now the opposite parties, have taken a wrong stand, in para nos.14,15, 20 and 21 of their written version, that the complainants are not entitled to refund of the amount, deposited by them.

                In the first instance, it may be stated here that, no doubt, as per Clause 19.3 of Agreement, the opposite parties have made themselves, entitled to forfeit earnest money to the extent of 15% of the sale consideration, out of the deposited amount, in case of cancellation of the unit, in question, yet, in our considered opinion, an amount exceeding 10% of the total price of the unit/property, cannot be forfeited by the opposite parties; it being unreasonable, unless they show that they had suffered loss to that extent of the amount to be forfeited by them. The Counsel for the complainants relying upon a case titled as DLF Limited vs. Bhagwanti Narula, Revision Petition No. 3860 of 2014, decided by the Hon’ble National Commission on 06.01.2015, pleaded that the opposite parties could forfeit 10% of the sale consideration. In para no.11 of the aforesaid case, the National Commission held as under:-

“11.    It was contended by the learned Counsel for the Petitioner Company that since the complainant had specifically agreed to deliver 20% of the sale price as earnest money, the forfeiture to the extent of 20% of the sale price cannot be said to be unreasonable, the same being inconsonance with the terms agreed between the parties. This was also his contention that so long as the Petitioner Company was acting as per the terms and conditions agreed between the parties, it cannot be said to be deficient in rendering services to the complainant. We, however, find ourselves unable to accept the aforesaid contention, since, in our view, forfeiture of the amount which cannot be shown to be a reasonable amount would be contrary to the very concept of forfeiture of the earnest money.  If we accept the aforesaid contention, an unreasonable person, in a given case may insert a clause in Buyers Agreement whereby say 50% or even 75% of the sale price is to be treated as earnest money and in the event of default on the part of the Buyer; he may seek to forfeit 50% of the sale price as earnest money.  An Agreement for forfeiting more than 10% of the sale price, in our view, would be invalid since it would be contrary to the established legal principle that only a reasonable amount can be forfeited in the event of default on the part of the Buyer.  In Bharathi Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd.- (1996) 4 SCC 704, the Hon’ble Supreme Court accepted the contention that in an appropriate case, the Consumer Forum without trenching upon acute disputed question of facts may decide the validity of the  terms of the contract based upon the fact situation and may grant relief, though, each case depends upon its own facts.”

 

25.         It is therefore held that opposite party no.1 could forfeit an amount to the extent of 10% of the total sale consideration i.e. Rs.6,16,231.06Ps. (10% of sale consideration of Rs.61,62,310.62Ps.) out of the deposited amount of Rs.27,98,957/-.
26.         Qua amount deducted towards interest, brokerage charges etc., in the case of Hardeep Kaur and ors. (supra), it was further observed by this Commission, as under:-

“Except the amount of Rs.7,29,846/-, aforesaid, it is, further held that the opposite parties are not entitled to forfeit any other amount such as interest; brokerage amount etc.,  if any, in view of the principle of law laid down, in DLF Universal Limited Vs. Nirmala Devi Gupta's case (supra), wherein, the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in para no.11, held that the Revision Petitioner was not entitled to charge interest as non-refundable amount on the subsequent installments in the wake of cancellation of plot. Para no.11 of that order reads thus:-

“11.       In so far as interest on delayed payments, stated to be non-refundable amount in the agreement is concerned, the OP deducted a sum of Rs.3,65,479.25ps in the cancellation letter. It is observed in this regard that the complainant made payments of a sum of Rs.12 lakh at the time of initial booking and then made two further payments in the last week of June 2011. Since no further payments were made, as per the terms and conditions of the allotment as contained in Para 65 of the plot-buyers’ agreement, the OP was well within its rights to initiate the process of cancellation of the plot after the first default in making payment of an instalment. In its own wisdom, if it decided not to do so immediately, it is not entitled to charge interest as non-refundable amount on the subsequent instalments in the wake of cancellation of plot. The letter of cancellation dated 23.05.2012 makes it clear that the plot-buyers’ agreement if executed, stood cancelled and the allottee shall not have any lien or right on the said property. It is held, therefore, that the OP cannot deduct a sum of Rs.3,65,479.25ps as non-refundable amount from the money deposited by the complainant.”

The principle of law, laid down, in the aforesaid case, is fully applicable to the instant case. Thus, in our considered opinion, forfeiture of a sum of Rs.7,29,846/- is adequate enough to compensate the opposite parties, on account of loss, if any, including brokerage charges.”

 

27.         The case of the complainant is squarely covered by the ratio of the judgment referred to above and as per our view, out of the total deposited amount of Rs.27,98,957/-, opposite party no.1 could forfeit a sum of Rs.6,16,231.06Ps. only, which is sufficient to cover its loss, if any including brokerage charges. As such, the complainant was entitled to the refund of an amount of Rs.21,82,725.94Ps. i.e. [Rs.27,98,957/- minus (-) Rs.6,16,231.06Ps.].  It is very significant to mention here that, when opposite party no.1 cancelled the allotment of plot, in question, vide their letter dated 05.01.2015, after forfeiting 10% of sale consideration, it ought to have refunded balance amount to the complainant forthwith, but it failed to do so and on the other hand, have been utilizing the same, for the last about more than 20 months, for its own benefit. It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). By not refunding the aforesaid amount of Rs.21,82,725.94Ps. immediately, after the cancellation of allotment of plot, in question, opposite party no.1 indulged into unfair trade practice and the same also certainly amounted to deficiency, in rendering service, on its part. The complainant is, thus, entitled to refund of an amount of Rs.21,82,725.94Ps. alongwith interest @12% per annum from 05.01.2015 i.e. the date of issuance of cancellation letter Annexure OP-31.
28.         No other point, was urged, by Counsel for the parties.   
29.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite party no.1 is directed as under:-

 

1. To refund an amount of   Rs.21,82,725.94Ps. to  the complainant, alongwith interest @12% p.a., from 05.01.2015 i.e. the date of issuance of cancellation letter Annexure OP-31.
2. To pay cost of litigation, to the tune of Rs.30,000/- to the complainant.
3. The payment of awarded amounts mentioned at sr.nos.(i) and (ii), shall be made by opposite party no.1  to the complainant, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, it (opposite party no.1) shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @15% p.a. instead of @12% p.a., from 05.01.2015 and interest @12% p.a., on the amount mentioned at sr.no. (ii), from the date of filing of this complaint, till realization.

30.         However, it is made clear, that in case, the complainant, has availed loan facility from any banking/financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
31.         Complaint against opposite party no.2 is dismissed with no order as to costs, as she being no more employee of opposite party no.1, as stated by Counsel for opposite party no.1.
32.         Certified copies of this order be sent to the parties, free of charge.
33.         The file be consigned to Record Room, after completion.

Pronounced.

30.09.2016

Sd/-

(JUSTICE JASBIR SINGH)

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

Sd/-

(PADMA PANDEY)

        MEMBER

Rg.