Per Justice Sham Sunder , President This order shall dispose of the aforesaid two appeals, arising out of the order dated 8.2.2011, rendered by the District Consumer Disputes Redressal Forum-I, U.T. Chandigarh (hereinafter to be referred as the District Forum only), vide which it accepted the complaint and directed the OPs as under ; “The OPs are, therefore, jointly and severally directed to refund to the complainants Rs.16,85,750/- alongwith current SBI term deposit interest rate from the date of its deposit with them alongwith Rs.50,000/- as compensation for causing them mental agony and harassment. The OPs shall also pay Rs.5,000/- to the complainants as costs of litigation. The order shall be complied with by the OPs jointly and severally within 30 days from the date of receipt of copy of this order failing which the OPs would be liable to pay to the complainants Rs. 16,85,750/- with penal interest @18% p.a. instead of paying it @ SBI term deposit interest rate along with penal interest @ 18% p.a. besides payment of compensation of Rs.50,000/- and litigation costs of Rs.5,000/- ,till the order is fully complied with. 2. The complainants(now respondents No.1 & 2) applied for a residential flat with the OPs(now appellants), the total cost of which was Rs.51,43,000/-. They deposited a sum of Rs.2,57,000/- alongwith the application form. In the draw of lots, the complainants were allotted one bedroom flat No.G01 on the ground floor in Block E-2 and allotment letter dated 11/15.10.2007 was issued. In terms of the construction linked plan, the balance payment was to be made in instalments. It was stated that the complainants made a total payment of Rs.16,85,750/- to OP Nos.1 & 2. It was further stated that as per clause 9(a) of the agreement executed amongst the complainants and the OPs, the construction of the flat was to be completed by OP Nos. 1 & 2, within 36 months from 6.10.2006, the date when the development agreement was executed between them (OPs). When the complainants visited the site in the 2nd week of June 2010, they found that even the foundation stone had not been laid by the OPs. After waiting for a sufficiently long time, the complainants served upon the OPs a legal notice dated 2.7.2010 for cancellation of allotment of flat and refund of Rs.16,85,750/- alongwith interest and compensation, but they failed to settle the matter. It was further stated that the OPs deprived the complainants of their hard earned money and did not perform their obligations, as per the agreement executed amongst the parties. It was further stated that the aforesaid acts of the OPs, amounted to deficiency, in service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by them. 3. OP Nos.1 & 2, in their written reply, admitted the factual matrix of the case. It was admitted that the complainants were allotted the flat aforesaid. It was also admitted that the amount of Rs.16,85,750/- was deposited by the complainants by way of instalments. It was stated that on 6.10.2006, immediately after signing of the development agreement, between the OPs, the Chandigarh Housing Board handed over 123.79 acres of land to OP No.1, which the said Board claimed to be unencumbered, though, in fact, it was not unencumbered. It was further stated that in January,2007, OP No.1 commenced erection of fencing around the said land, when the Haryana Government claimed ownership over a part of the same, as such it (OP No.1) was stopped from carrying on its activities. On 9.2.2007, the Chandigarh Housing Board informed OP No.1, that the dispute had been resolved. Believing the assurance given by the Chandigarh Housing Board, OP No.1 once again, commenced the erection of fencing. On 15.2.2007, OP No.1 was surprised when the Haryana Government again raised objections, stating that the dispute had not been resolved. It was further stated that the alternate and revised demarcated land which was offered to OP No.1, by the Chandigarh Housing board included the land belonging to the Forest Department on which there existed more than 200 full grown trees and restrictions were imposed by the Forest Department with regard to the felling of the same and use of this land for the project. It was further stated that since possession of the entire unencumbered land of the project was not handed over to OP Nos.1 & 2, the construction could not be started, as it was an integrated project. It was further stated that a period 36 months for the completion of the project, was to commence, from the date, when possession of the entire unencumbered land of the project was to be handed over to OP NOs.1 & 2, which stage never arrived at. It was further stated that, under these circumstances, OP Nos.1 & 2, were not at fault in completing the construction. It was further stated that OP NOs.1 & 2 had not abandoned the project. Even, the dispute, has been referred to the arbitrators, and their decision is still awaited and, as such, the District Forum had no jurisdiction to entertain and decide the complaint. It was further stated that, under these circumstances, if the complainants wanted the refund of amount already deposited, they could only be refunded the same, after deduction of 5% of the basic price of the flat. It was denied that OP Nos. 1 & 2, were deficient, in rendering service, or indulged into unfair trade practice. 4. OP NO.3, in its separate written reply, admitted the factual matrix of the case. It was stated that, as per the flat buyer agreement, OP No.3, was only to provide the land to OP Nos. 1 & 2. It was further stated that the whole project was to be constructed by OP Nos.1 & 2, as per schedule, mentioned in the agreement, and in the event of non performance of their part of the obligation, they were liable to refund the amount alongwith interest etc. It was further stated that possession of the entire unencumbered land was handed over to OP Nos.1 & 2. It was further stated that OP No.3 was neither deficient, in rendering service, nor it indulged into unfair trade practice. 5. The parties led evidence, in support of their case. 6. After hearing the Counsel for the parties , and, on going through the evidence and record of the case, the District Forum, passed the order, in the manner, referred to, in the opening para of the instant order. 7. Feeling aggrieved, the aforesaid two appeals, one by Parsvnath Developers Ltd. & another appellants/OPs, for setting aside the impugned order, and the second by the Chandigarh Housing Board, appellant/OP for exonerating it of its liability, to pay any amount, to the complainants and setting aside the impugned order, were filed. 8. We have heard the Counsel for the parties, and have gone through the record of the case, carefully. 9. The Counsel for the Parsvnath Developers Ltd. and another, appellants/OPs in Appeal No.46/2011 submitted that, till date the Chandigarh Housing Board, had not handed over the possession of the entire unencumbered land, required for the project, in question. He further submitted that it was, under these circumstances, that the construction of the project could not be undertaken and the possession could not be delivered, as it was an integrated project. He further submitted that the appellants have not abandoned the project. He further submitted that the complainants were only entitled to the refund of amount, after deduction of 5% of the basic price, in view of the provisions of clause 5(a) of the flat buyer agreement. He further submitted that the interest was awarded by the District Forum, at a higher rate. He further submitted that the order of the District Forum, being illegal, is liable to be set aside. 10. The Counsel for the Chandigarh Housing Board, appellant/OP, in Appeal Case NO.59/2011, submitted that, it was the responsibility of the developer to construct the flats and deliver possession thereof within 36 months from 6.10.2006, the date when the development agreement between the OPs, was executed. He further submitted that, as per clause 9( c)of the flat buyer agreement, on account of non-delivery of possession within the prescribed time, compensation indicated therein, could only be awarded against the developer, but the District Forum was wrong, in holding the Chandigarh Housing Board, jointly and severally liable, to pay the compensation of Rs.50,000/-. It was further submitted that the compensation of Rs.50,000/- for alleged mental agony and harassment was wrongly awarded by the District Forum. It was further submitted that the appeal be accepted and the order of the District Forum be set aside. 11. The Counsel for the complainants/respondents submitted that the impugned order is legal and valid. 12. The first question, that arises for consideration, is, as to within which period the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants applied for the allotment of a flat. They were allotted a flat. They deposited Rs.16,85,750/- through various instalments, towards the price of flat, which was allotted to them, as admitted by the OPs. Clause 9(a) of the flat buyer agreement annexure C4, dated 15.2.2008, referred to above, which is relevant, for answering the question, posed at the outset of this paragraph, reads as under ; “Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.” 13. The plain reading of Clause 9(a) of the flat buyer agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the development agreement dated 06.10.2006 annexure R1/1. The time could be extended, in terms of the development agreement dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the developer. OP Nos.1 & 2 admitted, in their written reply that, in the first instance, possession of the entire project land was handed over to them by OP No.3, and when the fencing was being done, the Haryana Govt. raised dispute with regard to the ownership of a portion of the land. It is further the case of OP Nos. 1 & 2 that when that dispute was resolved, and in lieu of the disputed portion of the land, possession of some other land was given to them, the same was discovered to be that of the Forest Department. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of the residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the developer, that delay was caused, in the construction of residential units . The developer also could not take shelter of force majeure clause. No document was produced by OP Nos.1 & 2, that any restriction was imposed by any Court or Authority upon them, as a result whereof, they could not raise construction of residential units, in time. Even, it was not proved that there was delay, in the grant of environmental clearance. OP Nos.1 & 2, without first confirming the clear title of the land, over which the project was to be developed, started booking the flats and allotting the same to the prospective buyers, by fleecing them of huge amounts and making misleading statement that the construction of residential units will be completed within 36 months w.e.f. 6.10.2006. Even long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. OP Nos.1 & 2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009. 14. The next question, that arises for consideration, is, as to whether the complainants were entitled to the refund of the amount, deposited by them with interest or not ? Clause 9(d) of the flat buyer agreement annexure C4, which is relevant, to answer this question, reads as under; “9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.” 15. The complainants deposited instalments, in time, with the hope of getting possession of the flat allotted to them, within a period of 36 months from 10.6.2006, but all their hopes were dashed to the ground, when they found that even by the year 2010, not even a single brick had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option with the complainants, in such circumstances, was to ask for the refund of the amount. They, thus, issued a legal notice for refund of the amount, with interest, but the OPs failed to do so. The plain reading of Clause 9(d) extracted above, reveals that if the developer, for whatever the reasons may be, fails to deliver the residential unit to the buyer, the developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable, on the date of refund. The OPs were, thus, deficient, in rendering service by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount, with interest, as provided under Clause 9(d) of the agreement, referred to above. The complainants were, thus, entitled to the refund of the amount of Rs.16,85,750/- with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above, from the date of deposit till realization. The District Forum was right, in holding so. 16. Coming to the submission of the Counsel for OP Nos.1 & 2, that since there was breach of Clause5(a) of the flat buyer agreement, by the complainants, they were entitled to the refund of the amount deposited by them, only after deduction of 5% of the basic price of the flat,it may be stated here, that such an argument advanced by the Counsel for OP Nos.1 & 2, is misconceived. Clause 5(a) of the aforesaid agreement C4 , reads as under ; “5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.” 17. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the agreement and if the payment was not made, within the stipulated period, or the buyer committed breach of any of the terms and conditions of the agreement, the agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in making the payment of instalments, or violation of any other term and condition of the agreement aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the OPs, that the payment of instalments was made by the complainants, as and when the same fell due. There was no delay, in making payment of instalments, towards the price of the flat, on the part of the complainants. Since, after the payment of the aforesaid amount, and expiry of the period of 36 months, from 6.10.2006, not even a single brick had been laid, the complainants were left with no alternative than to ask for the refund of the amount. There was also no breach of any other term and condition of the agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of the entire amount, deposited by them, with interest. The District Forum was also right, in holding so. The findings of the District Forum, in this regard, are affirmed. The submission of the Counsel for the Parsvnath Developers & another appellants, in this regard, being without merit, must fail, and the same stands rejected. 18. The next question, that arises for consideration, is, as to whether, the complainants were entitled to compensation for not handing over possession to them, for causing them physical harassment and mental agony, or not ? No doubt, clause 9( c) of the flat buyer agreement, specifies as to at what rate the compensation is to be granted to the complainants, in case, the possession is not delivered in time. However, compensation was not granted, by the District Forum at the specified rate mentioned in clause 9( c). The District Forum, after taking into consideration the facts, circumstances, the physical harassment and mental agony suffered by the complainants, granted them lump-sum compensation of Rs.50,000/-. No appeal has been filed by the complainants challenging the inadequacy of compensation, awarded to them. The compensation of Rs.50,000/- awarded by the District Forum, cannot be said to be excessive, unreasonable or unfair. The submission of the Counsel for the Chandigarh Housing Board, appellant, in this regard, being devoid of merit is rejected. 19. The District Forum, fell into an error in holding that the Chandigarh Housing Board, was jointly and severally liable with the developer to pay the compensation awarded. According to clause 9(c ) of the agreement annexure C4, it was only the developer, which was liable to pay the compensation and not the Chandigarh Housing Board. To this extent, the order of the District Forum requires modification. 20. The District Forum granted interest @ 18% p.a., in the event of non-compliance of the order within 30 days. It may be stated here, that the interest @ 18% awarded, on account of non-compliance of its order, within 30 days, is also on the higher side. In our opinion, the interest @ 12% p.a., on account of non-compliance of the order, could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification. 21. Although, the dispute interse the OPs i.e. Parsvnath Developers Ltd. and the Chandigarh Housing Board, as per clause 18 of the Escrow Agreement dated 1.06.2007, executed amongst them, and the State Bank of India has already been referred to the Arbitrators, yet the jurisdiction of the Consumer Fora was not barred. With a view to resolve the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986 is made, which reads as under ; “3.Act not in derogation of any other law.— The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.” 22. Section 3 of the Act is worded, in widest terms, and leaves no manner of doubt that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being in force. The mere fact that the other remedy of resorting to the arbitration proceedings, as per agreement annexure R4, has been availed of by the OPs, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (2003)2 SCC412 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2006)3 SCC721. The submission of the Counsel for the Parsvnath Developers Ltd. appellants, in appeal NO.46 of 2011, being devoid of merit is rejected. 23. For the reasons, recorded above, both the aforesaid appeals are partly accepted, with no order as to costs, with the following modifications ; (i)that only the Parsvnath Developers Ltd. shall be liable to pay compensation of Rs.50,000/- awarded by the District Forum, for harassment and mental agony, caused to the complainants, and the Chandigarh Housing Board shall not be liable to pay the same. (ii) that the direction of the District Forum regarding the grant of penal interest @ 18% p.a. on non-compliance of the order within 30 days, is modified, and instead the OPs, are ordered to pay penal interest @ 12% p.a. on the payable amounts, on account of non-compliance of the order, within the period stipulated by the District Forum. (iii) the remaining reliefs, granted by the District Forum, shall remain unaltered. 24.. Certified Copies of this order be sent to the parties, free of charge. 25. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
