Chandigarh

StateCommission

CC/150/2016

Rajinder Singh - Complainant(s)

Versus

PUMA Realtors - Opp.Party(s)

Sh, Savinder Singh Gill, Adv.

20 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	150 of 2016
Date of Institution	:	20.04.2016
Date of Decision	:	20.09.2016

 

1. Rajinder Singh s/o Late Sh. Ajit Singh R/o House No.1179, Sector 43-B, Chandigarh.
2. Bhajan Kaur w/o Sh. Rajinder Singh, r/o House No.1179, Sector 43-B, Chandigarh through her General Power of Attorney Holder Sh. Rajinder Singh s/o Late Sh. Ajit Singh R/o House No.1179, Sector 43-B, Chandigarh.  

……Complainants

V e r s u s

M/s Puma Realtors Private Limited, SCO No.6-8, First and Second Floors, Sector 9-D, Chandigarh.

 

            ....Opposite Party.

 

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. Savinder Singh Gill, Advocate for the complainants.

Sh. Ramnik Gupta, Advocate for the opposite party.

 

PER DEV RAJ, MEMBER

             The facts, in brief, are that the complainants, who are living on rent, were willing to own a residential plot for their family and personal use. As such, they applied for a plot in the project of the Opposite Party, namely ‘IREO Hamlet’ in Sector 98, S.A.S. Nagar, Mohali on 14.02.2011. They were allotted Plot No.90 measuring 273.79 sq. yards on 29.04.2011 vide allotment letter (Annexure C-2). The complainants paid an amount of Rs.6,50,000/- and Rs.2,94,576/- on 26.04.2011 and 27.05.2011 respectively. A Plot Buyer’s Agreement was executed between the parties on 04.08.2011 at Chandigarh. After execution of the Agreement, the complainants paid an amount of Rs.10,31,853/- each on 30.09.2011 and 20.07.2013 respectively. As per Clause 11 of the Agreement, Possession of the plot, in question, was to be delivered within a period of 24 months plus grace period of 6 months plus additional 12 months extended grace period, i.e. 42 months from the date of execution of the Agreement. As per the complainants, till date, an amount of Rs.30,08,282/- stood paid to the Opposite Party. It was stated that they withheld payments seeing the slow pace of development of the project. When possession was not offered within the period stipulated, in terms of Clause 11.3 of the Agreement, the complainants vide email dated 10.12.2015 (Annexure C-4) requested the Opposite Party to terminate the allotment/Agreement and refund the deposited amount.

2.          It was further stated that neither the development work on the project site has been completed nor the notice of possession has been issued to the complainants. Layout plans were not final till the year 2015 and the project has not been provided electricity connection and the Opposite Party has been issued temporary connection for construction purpose; PSPCL has not sanctioned any regular permanent electricity load for residential purposes nor the Opposite Party has deposited any amount to PSPCL on account of security/estimate cost; vertical roads (approach roads) dividing sectors 97-98 and horizontal roads dividing sectors 86-98 are not built and can only be built after acquisition of land. It was further stated that the deadline given by GMADA to complete the said project has already elapsed on 30.06.2015. The Opposite Party has not obtained the completion certificate till date.

3.          It was further stated that the aforesaid acts of the opposite party, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Party, to refund the amount of Rs.30,08,282/-, alongwith interest @18% p.a., from the respective dates of deposits till realization; pay compensation, to the tune of Rs.5 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.1,00,000/-.

4.            The Opposite Party, in its written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration clause No.33 in the Plot Buyer’s Agreement dated 04.08.2011; that present complaint related to the enforcement of agreement to sell/purchase of a residential plot i.e. an immoveable property and hence was not covered under the Act; that the complainants did not hire any services of the Opposite Party, as  the parties did not enter into any contract for hiring the services and the contract was only to sell a piece of land to the complainants; that the complainants did not  book the plot for their personal use but for investment/commercial purpose and that the allegations in the complaint being of contractual nature, were only triable by the Civil Court. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits. Apart from above objections, a specific objection with regard to the territorial jurisdiction of the Commission on account of existence of Clause 35 in the Agreement has been raised stating that the Courts at Mohali and the Punjab & Haryana High Court at Chandigarh alone had the jurisdiction.

5.          On merits, it is stated that it was nowhere agreed that the total cost of the plot would be Rs.62,97,170/-, which was only the basic sale price whereas the actual consideration was Rs.67,42,106.13 including EDC and IFMS charges. The execution of the Plot Buyer’s Agreement has been admitted by the Opposite Party. It was further stated that the installment payable within three months was demanded vide demand note dated 02.07.2011, followed by reminders dated 02.08.2011 and 17.08.2011 and thereafter, the said installment of Rs.10,31,852/- was paid by the complainants. It was further stated that similarly, the installment, which became due on commencement of development at the site, was paid by the complainants in July 2013, after receipt of demand note dated 30.04.2013 followed by reminders dated 31.05.2013, 21.06.2013 and final notice dated 12.07.2013 but no interest on that delayed payment was paid. It was further stated that the next due installment, demand for which was raised vide demand note dated 16.01.2014 followed by reminders 16.02.2014, 10.03.2014 and final notice dated 31.03.2014 was not paid by the complainants till date. Similar was the position in the case of next installment, demand for which, was raised vide demand note dated 15.07.2014 followed by reminders dated 16.08.2014, 05.09.2014 and final notice dated 26.09.2014.

6.            It was denied that the complainants were assured that the possession would be handed over within a period of 30 months from the date of execution of the Agreement. It was further stated that the period of handing over of the plot was subject to the complainants complying with all their obligations under the terms and conditions of the Agreement. It was further stated that as per Clause 11 of the Agreement, the period for offering possession travels beyond the alleged period of 30 months since the complainants duly agreed to receive delayed compensation @Rs.50/- per sq. yard of area of the plot every month until actual date fixed by the Opposite Party for handing over of possession. It was further stated that development work commenced on site w.e.f. 01.05.2013 and stood carried on continuously in a phased manner at a good pace till April, 2015 and resultantly, the Opposite Party started process of handing over possession of the developed plots by way of issuing notices of possession to various allottees w.e.f. May 2015. It was denied that there was no development at the site.

7.           It was further stated that the Opposite Party could cancel the allotment due to persistent default in making payment of installments by the complainants yet it offered possession of the plot vide notice of possession dated 23.11.2015 after complete development but the complainants never paid the balance consideration price nor came for taking possession of the plot.  It was further stated that all basic amenities/facilities for handing over a plot in a plotted colony, were in existence at the site at the time of offer of possession on 23.11.2015.  It was further stated that complainants on receipt of possession letter, sought refund vide email dated 10.12.2016 and, as such, Clause 11.3 was not applicable. It was further stated that even the report of Local Commissioner filed in complaint titled ‘Abha Arora Vs. PUMA Realtors Pvt. Ltd. and another’, bearing No.170 of 2015, clearly unveils the false allegations made by the complainants. It was further stated that PSPCL approved the electricity load to the project vide lettr dated 08.07.2015 and the Chief Electrical Inspector to the Government of Punjab granted approval for commissioning of electrical installations on 07.08.2015.

8.          It was further stated that the project is approved under the provisions of Punjab State Industrial Policy 2003 and Government of Punjab in furtherance of Letter of Intent dated 30.09.2005 vide its Notification dated 14.08.2008 had exempted the Opposite Party from the provisions of Punjab Apartment and Property Regulation Act, 1995 (in short ‘PAPRA 1995) except Section 32 thereof. It was further stated that the Opposite Party has duly complied with the terms and conditions of the same and as such, they were/are under no obligation to obtain any completion/partial completion from the Authority under Section 14 of PAPRA 1995. It was further stated that Opposite Party has already installed the STP and the same is fully functional at the site, as is clear from the report of the Local Commissioner. It was further stated that electricity line has already been provided by PSCPL to the Opposite Party at the site for construction purposes.

9.          It was further stated that the development work, as per Clause 21.2 of the Agreement at the site was complete. It was further stated that the main entrance of the project opens directly on the 200 ft. wide road and hence, all the internal roads of the project shall automatically stand connected to the Sector road. 

10.        It was further stated that the Opposite Party had laid all the basic amenities viz. sewerage/sewer line, sewerage treatment system, waterlines, drinking water supply, drainage, electricity load distribution system, electrical lines, rain water harvesting system,/storm water disposal system, laying of roads etc. It was denied that even today, there is no development at the site as LC report is self-sufficient to negate the said allegation.  It was further stated that the sector roads were to be developed by the State Authorities in terms of Clause 21 of the Agreement. It was further stated that all basic amenities, which are required for starting construction of a residential house, are available at the site. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

11.       The complainants filed rejoinder, wherein they reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Party.

12.        The parties led evidence, in support of their cases.

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

14.        It is evident, on record, that vide allotment letter dated 29.04.2011 (Annexure C-2), the complainants were allotted Plot No.90 in the residential project “IREO Hamlet” admeasuring 273.79 sq. yard, Sector 98, SAS Nagar, Mohali, the basic sale price whereof was Rs.23,000/- per sq. yard besides External Development Charges (EDC) @Rs.1,275.10 per sq. yard and IFMS charges @Rs.350/- per sq. yard. Admittedly, Plot Buyer’s Agreement was executed between the parties on 04.08.2011 (Annexure C-3). The payment against the aforesaid plot was to be regulated as per payment plan, Annexure I (at Page 66 of the file). Against the total price of Rs.67,42,106.13P of the plot including External Development Charges and IFMS Charges, the complainants made payment in the sum of Rs.30,08,282/-. The complainants were in default of making payments. While payments due on 29.07.2011 and 27.05.2013 were delayed, demands raised vide demand notes dated 16.01.2014 and 15.07.2014 were not paid despite reminders and final notices. As admitted by the Opposite Party, the development work started at the site only on 01.05.2013, almost two years after the execution of Plot Buyer’s Agreement dated 04.08.2011. The possession was offered vide letter dated 23.11.2015 (dispatched on 26.11.2015) i.e. before filing of the complaint on 20.04.2016.Possession letter dated 23.11.2015, was received back by the Opposite Party with the remarks “consignee shifted from the given address”. The Opposite Party has stated that scan copy of possession letter was sent by email to the complainants (Annexure OP-39) on 10.12.2015 and on receipt of the same, the complainants vide email dated 10.12.2015 sought refund. 

15.           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. This question has already been elaborately dealt with by this Commission in Consumer Complaint No.213 of 2016 titled ‘Gobind Paul Vs. Emaar MGF Land Limited & Another’ decided on 16.08.2016. Paras 8 to 15 of the said order, inter-alia, being relevant, are extracted hereunder:-

                    “8……….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.”

9.                 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.

10.               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.”

 

11.               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.

12.               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-à-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.

13.               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 have spent his life savings to get a unit, for their 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 up-to 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.

14.               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 unit, in the said project, launched by the opposite parties. However, his hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the unit, 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.

15.               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.””

             In view of the above, the objection raised by Counsel for 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.

16.        The next question that falls for consideration, is, as to whether, the plot, in question, was purchased by the complainants, for their personal use, or they were speculators, as alleged by the opposite party. No doubt, to defeat claim of the complainants, an objection was raised by the Opposite Party, to the effect that the complainants, being investors, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, they 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 record to show, that the complainants are property dealer(s) and are indulged in sale and purchase of property, on regular basis. On the other hand, it has been clearly averred by the complainants, in para no.1 of their complaint that the plot, in question, was purchased by them, for their family and personal use. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite party, 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, it was held by the National Commission that the buyer(s) of the  residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the plot, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs. Nirmala Devi Gupta, 2016 (2) CPJ 316. The complainant, thus, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Party, in its written reply, therefore, being devoid of merit, is rejected.  

17.        An objection was raised by the Opposite Party that since the present complaint related to an agreement to sell/purchase of a residential plot i.e. an immovable property, therefore, the same is not covered under 1986 Act and further, since the complainants sought enforcement of the Agreement, only a Civil Court has the jurisdiction, and as such, consumer complaint was not maintainable. It may be stated here, that the complainants hired the services of the Opposite Party, for purchasing the pot, 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, it was to hand over possession of the plot, in question, within a period of forty two months i.e. (24 months + 6 months grace period + 12 months extended grace period), from the date of execution of the same (Agreement). Section 2(1)(o) of 1986 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”.

 

18.        From the afore-extracted Section 2(1)(o) of 1986 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 1986 Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors., AIR (2014) S.C. 1766. Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainants have remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of 1986 Act, can be availed of by them, as they fall within the definition of a consumer, as stated above. In this view of the matter, the objection of the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

19.        The next objection raised by the Opposite Party is that existence of Clause 35 in the Plot Buyer’s Agreement, bars the territorial jurisdiction of this Commission, to entertain and try the complaint. It may be stated here that this issue has already been dealt with in detail by this Commission in the case of ‘Jarnail Singh Sandhu Vs. M/s Puma Realtors Pvt. Ltd. & Anr.’, Consumer Complaint No.173 of 2016 decided on 02.09.2016. Para 19 of the said judgment, being relevant is, inter-alia, extracted hereunder:-

“19……..It may be stated here that according to Section 17 of the Act, a consumer complaint could 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, that receipt dated 12.07.2011 in the sum of Rs.9,37,500/- (Annexure C-I), provisional allotment letter dated 04.08.2011 (Annexure  C-II), receipt dated 15.10.2011 in the sum of Rs.10,53,130.58 (Annexure C-III), letter dated 26.09.2011 regarding offer for change of payment plan (Annexure C-IV) and two receipts dated 13.08.2013 (Annexure C-V colly.) were issued by the Chandigarh office of the Opposite Parties i.e. Puma Realtors Private Limited, S.C.O. no.6-7-8, Second Floor, Sector 9-D, Chandigarh. Since a part of cause of action, arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. A similar question arose, before the National Commission, in Smt. Shanti Vs. M/s. Ansal Housing & Construction Ltd., First Appeal No.142 of 2001 decided by the National Commission on 11.04.2002, wherein the National Commission held as under:-

“This appeal is directed  against  the  order dated  9.4.2001  of the Delhi Consumer Disputes Redressal Commission  non suiting the appellant on a preliminary issue holding that  Delhi State Consumer Dispute  Redressal Commission will have no jurisdiction  to entertain the complaint.

    What led the State Commission to pass this order was clause 24 of the agreement for allotment of residential flat to the appellant.   It is stated that ‘any dispute arising out of this agreement shall be subject to jurisdiction of Lucknow Courts only”.  State Commission   also   relied   on   the   decision of   the Supreme Court in the case of  A.B.C. Laminart Pvt. Ltd. & Anr. Vs. A.P. Agencies, Salem - AIR 1989 SC 1239 to hold that only the courts in Lucknow  would have jurisdiction.

          We do not think State Commission examined the whole issue in a pragmatic manner.  Complainant is a consumer and raised a consumer dispute under the Consumer protection Act, 1986. To help  and assist a consumer   and to achieve the objects of the Act, Section 11 of the Act was amended.   This  Section relates to  the jurisdiction of the District Forum.  Now  a complaint could be filed against the opposite party  not only at the place where  he actually or voluntarily reside or personally works for  gain  but also where he carries on business or has branch office.  The words “carries  on business or has a branch office” were added by the amending Act of 1993.   Jurisdiction of a District Forum is exclusively covered  by Section 11 of the Act.  For this we do not have to refer any provisions of the Code of Civil Procedure. Any provision  of the agreement which oust the jurisdiction of a District Forum   even from a place where the opposite  party has a branch office  cannot  be held to be  valid or binding.  Moreover, the clause  on which the complainant was non-suited   refers to the jurisdiction  of Lucknow Courts.  District Forum is  not a court as understood in the Code of Civil Procedure.   That clause in the agreement  will have no  meaning as far as jurisdiction of the District Forum where the opposite party has even branch office is concerned. 

          National Commission has already taken a view on this aspect of the matter.  Accordingly the impugned order of the State Commission is set aside and the matter is remanded to the State Commission to decide the complaint in accordance with law. Party shall appear before the State Commission on 8.7.2002 for further directions.  This appeal is disposed of as above.”

It may be stated here that, for determining the territorial jurisdiction, to entertain and decide the complaint, the  Consumer Foras are bound by  the provisions of Section 11 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, as the Foras are not  the Courts.  It was further held, in the said case, that there is a difference between Section 11 of the Act, and the provisions of  Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. Further, 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) CPJ31 (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 of 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 of 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 Section 11 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to the instant case.  At the same time, it is also held in the face of case Ethiopian Airlines Vs Ganesh Narain Saboo’s (supra), decided by the Supreme Court of India, the judgment titled as M/s Taneja Developers and Infrastructure Limited Vs. Gurpreet Singh and another, First Appeal No.33 of 2014, decided on 25.02.2016, by the National Commission, reliance whereupon has been placed by Counsel for the opposite parties, to support his contention, that this Commission has no territorial jurisdiction, shall not hold the field. In these circumstances, such a Clause contained in the Agreement, therefore, 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 objection taken by the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.”

 

               In view of above, this objection raised by the Opposite Parties stands rejected.

20.        Now coming to the merits of the case, in Para 3 of the complaint, the complainants stated that they with-held the payments seeing the slow pace of development at the project. Perusal of record reveals that the complainants were in default of making payments from the beginning, as is evident from the position stated hereinafter:-

1. Installment in the sum of Rs.10,31,852.91 fell due on 29.07.2011. The Opposite Party vide its letter dated 02.07.2011 (Annexure OP-21) asked the complainants to remit the same by 29.07.2011. Reminder on 02.08.2011 (Annexure OP-22) was also issued by the Opposite Party. The complainants vide their letter dated 04.08.2011 (Annexure OP-23) sought extension of 60 days for making payment of the aforesaid installment and also expressed their willingness to pay interest @15%.
2. Another installment in the sum of Rs.10,31,852.91 became due on 27.05.2013, demand note for which was sent vide letter dated 30.04.2013 (Annexure OP-25), asking the complainants to remit the same by 27.05.2013. The complainants were again reminded for remitting the installment amount vide reminders dated 31.05.2013, 21.06.2013 and 12.07.2013 (Annexures OP-26, OP-27 and OP-28 respectively). The same was paid on 20.07.2013.
3. Another installment within three months of commencement of development work at the site fell due and demand note (Annexure OP-29) in the sum of Rs.10,31,852.91 was sent on 16.01.2014. Reminders to remit the aforesaid amount were issued on 16.02.2014, 10.03.2014 and Final notice on 31.3.2014 (Annexures OP-30, OP-31 and OP-32 respectively) but the installment was never remitted.
4. Another demand note for payment, which fell due on partial (50%) completion of laying of services i.e. excavation, laying of pipes etc., was sent on 15.07.2014 (Annexure OP-33) and the amount due, together with the previous outstanding amount against the complainants, was Rs.20,63,705.13. Despite reminders dated 16.08.2014, 05.09.2014 and 26.09.2014 (Annexures OP-34, OP-35 and OP-36 respectively), both the installments remained unpaid.

Thus, the plea taken by the complainants regarding slow pace of development of the project is afterthought. There is nothing on record that the complainants, on receipt of demand for installments and reminders, wrote to the Opposite Party regarding slow pace of development, on account of which, they did not make the payments. The only communication brought, on record, by the Opposite Party is letter dated 04.08.2011 (Annexure OP-23) wherein the complainants sought extension of 60 days time to remit the installment of Rs.10,31,853/- as already stated above. Therefore, delay in payment of installments and non-payment of installments is clear breach of terms and conditions of the Agreement, by the complainants.

21.        The Opposite Party offered possession vide letter dated 23.11.2015 (Annexure OP-3). Since the possession letter sent was received back with the remarks, “consignee shifted from the given address”, scan copy of the same was sent through email on 10.12.2015 (Annexure OP-39). The Opposite Party has stated that refund was sought vide email dated 10.12.2015, after possession was offered. There is, thus, an attempt by the complainants to wriggle out of their obligation to perform their part of Agreement. The plea of the complainants would have been relevant, had they (complainants) performed their part of contract. There is merit in the argument of the Opposite Party that the complainants cannot be allowed to take advantage of their own wrong and default.

22.        It may be stated here that when final notice was issued by the Opposite Party on 31.03.2014 for making payment by 21.04.2014, and still payment was not made by the complainants, action of the complainants in not making payment amounted to rescinding the contract. In such a situation, the Opposite Party ought to have cancelled the allotment as mentioned by it in the first final notice dated 31.03.2014 and refunded the amount paid by the complainants after deducting 10% of the sale consideration. Though as per Clause 6 of the Agreement, earnest money is 15% of the total sale consideration, but in view of settled principle of law in DLF Ltd. Vs. Bhagwanti Narula, Revision Petition No.3860 of 2014 decided by Hon’ble National Commission on 06.01.2015 and DLF Universal Limited Vs  Nirmala Devi Gupta’s case (supra) and Shri Harjinder S. Kang Vs. M/s Emaar MGF Land Ltd., Consumer Complaint No.482 of 2014 decided on 04.07.2016, not more than 10% of the earnest money can be forfeited. Para 13 and 14 of order passed in Shri Harjinder S. Kang Vs. M/s Emaar MGF Land Ltd.’s case (supra), being relevant, are extracted hereunder :-

“13.   The case of the opposite party is that as per Clause 2(f) of the Buyers’ Agreement, extracted hereinabove, 15% of the total sale price constitutes the Earnest Money which they were entitled to forfeit.  However, it has been held by this Commission in DLF Ltd., Vs. Bhagwanti Narula, Revision Petition No.3860 of 2014, decided on 06.1.2015, that an amount exceeding 10% of the total price of the property cannot be forfeited as Earnest Money unless the opposite party can show that it has suffered loss to the extent of the amount actually forfeited by it.  Applying the principle laid down in the above referred decision of this Commission, the opposite party could have forfeited only a sum of Rs.12,77,475/- from the amount paid to it by the complainant.  The balance amount of Rs.71,97,275/- (84,74,750/- - 12,77,475/-) was required to be refunded to the complainant, which the opposite party has failed to do.

14.   In the event of the failure of the allottee to make the timely payment of the sale consideration, the agreement could be terminated after a delay of more than thirty days from the due date.  In the present case, the default on the part of the complainant occurred for the first time on 26.4.2013 since the instalment payable on that date was not paid in full.  Therefore, the agreement could have been terminated on 26.5.2013.  The opposite party however, failed to do so and continued to utilize the entire amount, which the complainant had paid to it from time to time.  The opposite party therefore, must compensate the complainant by paying compensation by way of interest on the balance amount of Rs.71,97,275/- with effect from 26.5.2013.”

23.        The total sale consideration of the plot being Rs.66,46,280/-, after deducting 10% i.e. Rs.6,64,628/- from Rs.30,08,282/-, the Opposite Party was required to refund Rs.23,43,654/- to the complainants but the Opposite Party did not do so and continued utilizing the entire amount(s) paid by the complainants. By not refunding the aforesaid refundable amount, the Opposite Party was certainly deficient in rendering service and indulged into unfair trade practices. The Opposite Party, despite serious defaults by the complainants and giving final notice(s) for cancellation, did not cancel the allotment and refunded the amount. This was clearly done by the Opposite Party to utilize the money of the complainants to earn profits.

24.        Therefore, in the instant case, the complainants are held entitled to refund of Rs.23,43,654/- alongwith interest @12% per annum w.e.f. 21.04.2014 till actual payment. 

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

26.        For the reasons recorded above, the complaint, is partly accepted with costs against the Opposite Party. The Opposite Party is held liable and directed as under :-

(i)	to refund the amount of Rs.23,43,654/-, to the complainants, alongwith interest @12% per annum (simple), w.e.f. 21.04.2014.
(ii)	to pay Rs.50,000/- to the complainants as cost of litigation.
(iii)	The amounts mentioned, in Clauses (i) and (ii) above, shall be paid, by the Opposite Party to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, they shall pay penal interest @15% per annum, on the amount mentioned in Clause (i) above w.e.f. 21.04.2014 till realization and interest @12% per annum on the amount mentioned in Clause (ii) above from the date of filing the complaint i.e. 20.04.2016 till realization.

 

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

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

Pronounced.

20.09.2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 (DEV RAJ)

MEMBER

 

 

(PADMA PANDEY)

MEMBER

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