STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Kasturi Lal Sapra son of late Sh. Sri Ram Sapra, House No.884, Sector 38-A, Chandigarh.

…… Complainant

V e r s u s

Shalimar Estates Pvt. Ltd., having its office at SCO 110-111, Sector 8-C, Chandigarh through its authorized signatory.

              .... Opposite Party

Complaint under Section 17 (wrongly mentioned as Section 11/12) of the Consumer Protection Act, 1986.

BEFORE:     JUSTICE SHAM SUNDER, PRESIDENT.

                    S.  JAGROOP  SINGH   MAHAL, MEMBER.

Argued by:  Sh. Hemant Saini, Adv. for the complainant

                   Sh. Arun Kumar, Adv. for the OP.

PER  JAGROOP  SINGH   MAHAL, MEMBER

                    The facts, in brief, are that the complainant booked a commercial showroom with the OP, under the assured rental scheme, having a super area of 400 sq. ft., in Shalimar Plaza, Site No.1 IFP, Phase VIII-B, IT City, Mohali. However, despite depositing Rs.22.5 lacs neither he was handed over the symbolic possession within two years nor any building was constructed and even the assured rent was not paid to him even after completing all the formalities. He represented to the OP several times vide letters dated 14.5.2010 and 18.11.2010 to fulfil their obligations, but to no avail.  Hence this complaint under Section 17 (wrongly mentioned as Section 11/12) of the Consumer Protection Act 1986 (hereinafter referred to as the Act) alleging that the aforesaid acts of the OP amount to deficiency in service and unfair trade practice. 

2.                      In their written reply the OP took the preliminary objections that the complainant is not a consumer; that the complaint involved complicated questions; that this Commission has no jurisdiction etc. etc.  On merits the OP did not dispute the facts with regard to the booking of the showroom and payments made by the complainant.  However, it has been denied that the symbolic possession was to be handed over to the complainant or that the alleged letters were ever received by them.  It has been submitted that the delay was due to force majorie (?) circumstances which was not intentional.  Pleading that there has been no deficiency in service or unfair trade practice on their part, prayer for dismissal of the complaint has been made.

3.                      Parties led evidence in support of their case.

4.                      We have heard the ld. Counsel for the parties and have gone through the evidence on record of the case carefully. 

5.                      The ld. Counsel for the OP has argued that it is a case relating to the allotment of a showroom which involves a commercial activity and, therefore, the complainant is excluded from the definition of a ‘consumer’ under Section 2(1)(d) of the Act.  The ld. Counsel argued that in several cases decided by this Commission, this argument was upheld and the complaints filed by the different complainants, relating to the non delivery of possession of the commercial showrooms or the refund of the payment made in connection therefor, have been dismissed.  In the present case, admittedly the complainant had applied for the allotment of a commercial showroom. The question would be as to whether mere application for allotment of a showroom would be considered to be a ‘commercial activity’ to be excluded from the purview of ‘consumer’ even if the complainant is not doing any commercial activity therein.  We are of the opinion that each case depends on its own facts.  In the present case, it was an assured rental scheme floated by the OP vide their brochure (Annexure C-2).  Under the heading ‘POSSESSION’ in Annexure C-2 it is mentioned as follows :-

“The actual & physical symbolic possession of the showrooms to be allotted to the intending allottees shall remain with the company for 10 years for lesse out to the prospective lessee’s/sub lessee’s. The allottee(s) shall be entitled for delivery of symbolic possession of the showrooms within 2 years only after he/she/they has completed all the formalities and paid all the dues and furnished/executed all documents required/prescribed under the scheme and in allotment letter.”

Then under the heading “COMMENCEMENT OF MONTHLY RENTAL” it is mentioned as under :-

                   “All those intending allottee(s)/Regd. Applicants, who will fulfill all obligations as part of their performance under this Scheme and to whom Symbolic Possession will be given shall be only entitled for the rent assured under this scheme from the date of delivery of symbolic possession.”

Again this is mentioned under condition No.11 & 12 of the terms and conditions that the actual physical possession of the showroom will not be given to the complainant for 10 years from the date of symbolic delivery of possession.   In this manner, when the complainant is not to get the actual physical possession of the showroom, the question of his indulgence in commercial activity in the said showroom does not arise.  Further the contention of the ld. Counsel for the complainant is that he is an old man of 69 years.  He retired from the Government of India as Sr. General Manager. There is no intention on his part, nor any evidence to that effect, if he would start a commercial activity in these premises after the delivery of actual physical possession is given to him when he would be 80 years old.  It is, therefore, clear that neither at present nor in future when the possession is delivered to the complainant, he would be interested to start any commercial transaction in the showroom.

6.                      It is also the case of the complainant that as a retired Government servant, he received his retiral benefits and, in order to augment his income, he invested the same in the purchase of this showroom simply because it would give him assured rental income. The ld. Counsel referred to page 4 of the brochure (Annexure C-2) in which at Sr. No.5 is mentioned that the complainant would get assured monthly rental income of Rs.36,000/- for the first three years, Rs.41,400/- for the next three years, Rs.47,610/- for the next three years  and Rs.54,752/-  in the 10^th year.  We find sufficient merit in his contention that the showroom was to be purchased by him in order to get rental income as mentioned in the brochure and not for running any commercial activity. Had there been any intention on the part of the complainant to do some commercial business, there were so many options available to him in the market for purchasing a showroom, the possession of which could be delivered to him promptly.  The complainant, however, chose a showroom with a specific scheme of assured monthly rental income which is a clear intention on his part that he only wanted rental income from the showroom and not its physical possession to start any commercial activity therein.  

7.                      In case of Haryana Urban Development Authority Vs. Usha Vohra-IV (2009) CPJ 305 (NC), it was held in para 3 as follows :-

          “Undisputedly what was allotted to respondent was a booth site but simply by virtue of respondent having been allotted a booth site no conclusive finding can be recorded about booth having been allotted for commercial consideration and not for earning livelihood as that would require lot of consideration to unsuit the respondent.”

Simply because the complainant has requested for allotment of a commercial site is not the conclusive proof that it would be used for commercial purpose. 

8.                      In view of these facts, the contention of the ld. Counsel for the OP that the dispute is outside the purview of the Act on the ground the showroom involves a ‘commercial activity’ cannot be accepted as correct.  We are of the opinion that the facts and circumstances make it specifically clear that the complainant intended only to augment his income and not to start any commercial transaction in the showroom.

9.                      The ld. Counsel for the complainant has argued that the symbolic possession of the premises was to be given to the complainant within two years of acceptance cum demand letter dated 7.11.2007 and the said period has since expired on 6.11.2009.  It is also admitted that the possession of the premises has not so far been delivered to the complainant. There is, therefore, deficiency in service on the part of the OP.

10.                  As per Annexure C-2, the complainant was to complete all the formalities and pay al dues and furnish/execute all documents required/prescribed under the scheme and in the allotment letter to be entitled to get the symbolic possession of the premises.  In the present case, a sum of Rs.22.5 lacs has already been paid by the complainant to the OP. The remaining amount is to be paid in installments.  The OP have not completed the construction of the premises and have not delivered the symbolic possession to the complainant. They have not even asked the complainant to execute any document in this respect.  There is, therefore, no violation of the terms and condition of the allotment on the part of the complainant.  He is entitled to the delivery of symbolic possession as he satisfied all the requirements therefor. The deficiency is only on the part of the OP who have not been able to complete the construction and deliver symbolic possession to the complainant.  Otherwise also, the OP have not mentioned any reasons nor adduced any such evidence to justify the non delivery of symbolic possession within two years or to seek extension of time beyond the said period on any ground whatsoever.

11.                  As per clause 17 of the terms and conditions mentioned in Annexure C-2, the OP promised to pay the complainant compensation @ Rs.10/- per sq. ft. per month of the super area if the symbolic possession is delayed beyond the period of two years.  It was alleged that the complainant can, at the most, ask for the said compensation and nothing more.  We do not find any merit in this argument.  The compensation of Rs.10/- per sq. ft. does not mean that the OP would not raise any construction on the premises and would keep the amount of Rs.22.5 lacs on payment of Rs.4,000/- per month (400 sq. ft. x 10).  Had this been the intention of the parties, then there is no need for the OPs to construct any building.  They should collect the amount of Rs.22.5 lacs from all the intending purchasers, start some business with the said amount and go on paying Rs.4,000/- per month to the allottees without any further liability either to construct the building or to pay compensation for mental and physical harassment or to pay compensation for the increase in prices of the similar buildings which, with the passage of time, the complainant would not be able to purchase with the said amount and on the top of it the OP would not be liable even to refund the amount.  We do not believe if this was the intention of the parties.  The complainant himself is no longer interested in purchasing the showroom in view of the conduct and deficiency in service on the part of the OP. Rs.10/- per sq. ft. may be a sufficient compensation if the complainant intended to take possession of the premises by condoning the delay and not in the eventuality where due to violation of the agreement, the complainant wants the return of the amount instead of waiting indefinitely for the completion of construction.  The unfair trade practice adopted by the OP is further clear from the fact that even after the lapse of 25 months, the  OP have not paid even a single paise to the complainant towards the compensation under clause 17, referred to above. A period of two years, stipulated under Annexure C-1, expired on 6.11.2009 and even the period of next two years expired on 6.11.2011. The OP themselves discarded this condition of paying compensation @ Rs.10/- per sq. ft. per month which shows that in their own opinion this condition was not to be acted upon and it would not be sufficient compensation for the amount retained by them without delivering symbolic possession of the premises to the complainant.  As per clause 11 of Annexure C-2, the complainant would have been entitled to a rental of Rs.36,000/- per month. We, therefore, cannot order that Rs.10/- per sq. ft. of the super area would be sufficient compensation to the complainant.

12.                  Since the OP have not been able to fulfil their part of the agreement to give symbolic possession of the premises to the complainant nor have they started paying rent @ Rs.36,000/- per month, we are of the opinion that they cannot withhold the amount taken by them from the complainant.  They are, therefore, liable to refund the amount on account of the defaults committed by them in not completing the construction even after 50 months of the allotment letter (Annexure C-1), though the same was to be completed within 24 months.

13.                  The OP have retained the amount of the complainant without raising construction as per Annexure C-1. The complainant was liable to pay interest @ 12% per annum on the equated monthly instalments to be paid by him. However, in case of default/delay in paying any instalment, he was liable to pay interest @ 15% per annum as mentioned in clause 44 of the terms and conditions of Annexure C-2.  Ordinarily the OP should be liable to pay the same rate of interest i.e. 15% per annum as they impose on the complainant.  Interest @ 15% per annum on the amount of Rs.22.5 lac comes out to Rs.28,125/- per month, whereas interest @ 12% per annum comes out to Rs.22,500/- per month. On the other hand OP had agreed to pay to the complainant monthly rental of Rs.36,000/- per month for the first three years.  We, therefore, take a lenient view against the OP and direct them to pay interest @ 12% per annum which is lowest of the three above mentioned figures. The complainant has also prayed for Rs.one lac for extreme hardship and mental agony caused to him.  We are of the opinion that withholding the amount and driving the complainant to litigation in this old age certainly requires compensation from the OP. We, therefore, order that the OP shall pay Rs. One lacs as compensation towards harassment. 

14.                  In view of the above discussion, we are of the opinion that the present complaint succeeds. The same is accordingly allowed. The OP is directed to refund to the complainant the sum of Rs.22.5 lacs alongwith interest @ 12% per annum from the date of deposit till its actual payment to the complainant. The OP shall also pay to the complainant Rs.one lac towards the compensation for mental and physical harassment.  The entire amount shall be paid within thirty days from the date of receipt of copy of the order failing which the OP would be liable to pay the amount of Rs.22.5 lac alongwith penal interest @ 15% per annum w.e.f the date of deposit till its actual payment to the complainant.  However, the amount of Rs. One lac shall carry interest @ 12% w.e.f. the date of order i.e. 5.1.2012 till its payment to the complainant.  The OP shall also pay Rs.10,000/- towards the costs of litigation.

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

Pronounced.

5.1.2012

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

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