Chandigarh

StateCommission

CC/768/2017

Col Virender Singh - Complainant(s)

Versus

The Omaxe New Chandigarh Extension Developers Private Limited - Opp.Party(s)

In Person

25 Apr 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	768 of 2017
Date of Institution	:	31.10.2017
Date of Decision	:	25.04.2018

 

Col. Virender Singh son of Sh.Gian Chand Thakur, Commanding Officer, 11 Field Regiment (ZOJILA), PIN-925711, c/o 56 APO.

……Complainant

V e r s u s

M/s Omaxe Limited, formerly Omaxe Construction Ltd., a Company registered under the Companies Act, 1956, having its Regional Zonal Office at Omaxe Developers Pvt. Ltd., India Trade Tower, 1^st Floor, Baddi Kurali Road, New Chandigarh, Mullanpur, District SAS Nagar, Punjab, PIN-140901.

              .... 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:       Complainant in person

      Sh.Munish Gupta, Advocate for the opposite    party.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The complainant, who is a serving Army Officer, has filed this complaint, seeking refund of the amount paid by him, to the tune of Rs.52,65,297.66ps., to the opposite party, towards purchase of flat/floor bearing no.AIFC/GF/557H, measuring 1425 square feet, in the project launched by it, under the name and style “Ambrosia G+2 Independent Floor”, Omaxe New Chandigarh, Mullanpur, District Mohali, Punjab. It was averred that deficiency in providing service and adoption of unfair trade practice, on  the part of the opposite party is writ large, as it failed to get execute the Allotment Letter/Agreement with a reasonable period after receiving huge amount of Rs.8 lacs towards booking amount of the said unit, and, on the other hand, the same was done after lapse of two years and nine months, thereby causing financial loss to the complainant. It is specific case of the complainant that despite the fact that as per terms and conditions of the Allotment Letter/Agreement dated 24.11.2014, the opposite party was liable to deliver possession of the said unit, within a total period of 21 months (15 months plus 6 months grace period) which period expired on 23.08.2016, but even by the date of filing this complaint, the complainant is empty handed. It was stated that, furthermore, despite allotment of ground floor unit, without intimation, the complainant has been shifted to a unit constructed on stilts. Ground floor has been used for parking. It was further stated that despite making payment of entire sale consideration towards the said unit, the opposite party are now asking the complainant to pay escalation cost amounting to Rs.7,09,639/-. It was averred that, as the opposite party failed to deliver possession of the unit, the complainant was forced to liquidate all his savings and foreclose the home loan, raised from AGIF, thereby causing him additional financial loss. By stating that there was delay in handing over possession of the unit and further terms and conditions of the Agreement have been violated, by not offering possession of the unit, on ground floor, the complainant sent two legal notices requesting the opposite party, to refund the entire amount paid, but no response was received from the opposite party. Hence this complaint was filed by the complainant, seeking refund of the amount paid, alongwith interest, compensation etc.

2.         Upon notice, written reply was filed by the opposite party, wherein, it was pleaded that as per Clause 62 of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide dispute between the parties, because as per above said provision, for settlement of dispute, the matter needs to be referred to an arbitrator for adjudication. Territorial and pecuniary jurisdiction of this Commission was also challenged. It was pleaded that the complainant being investor, would not fall within definition of consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986. It was averred that the complainant has concealed material facts, as such, is not entitled to get any relief.

                On merits, purchase of the unit, in question, by the complainant was admitted. Payments made were also admitted. It was stated that no notice was ever sent by the complainant seeking refund of amount paid with interest. It was averred that delay in execution of Allotment Letter/Agreement was on the part of the complainant and not the opposite party. It was stated that the complainant failed to make timely payment, as such, delay is solely attributable on his part. It was further stated that, at no point of time, escalation cost was demanded from the complainant. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.

3.         A separate application under Section 8 of the Arbitration and Conciliation Act, 1996, was also filed by the opposite party, stating that this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitrator for adjudication. The said application was disposed of vide order dated 09.02.2018, with the direction that question qua arbitration will be considered, at the time of final arguments in the main cases.
4.         The contesting parties, led evidence in support of their case and also raised arguments in terms of pleadings noted in earlier part of this order, which were heard, in detail.
5.         First, we will deal with an objection, raised by the opposite party, that in the face of existence of provision 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 objection has been raised in the written statement filed by the opposite party, by placing reliance on Clause 62 contained in the allotment letter. It may be stated here that this issue has already been dealt with, by this Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as 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), 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), and held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018.

                In view of the above, the objection raised by the opposite party, in this regard, being devoid of merit is rejected.

6.         Now we will deal with the objection taken by the opposite party, that the complainant being investor, has purchased the unit in dispute, for selling the same, to earn profits and not for personal use, as such, he would not fall within the definition of consumer, as defined under the Act.

                It may be stated here that there is nothing on record, that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis, in the open market and, as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Since, the opposite party, has levelled allegations against the complainant, as such, the onus lays upon it, to prove it, which it failed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by the opposite party, mere bald assertion i.e. simply saying that the complainant being investor, did not fall within the definition of a consumer, cannot be taken into consideration. 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. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainant, thus, falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party, in its written reply, therefore, being devoid of merit, is rejected. 

7.         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, perusal of almost all the documents placed on record reveals that the same have been issued by the opposite party from its Chandigarh Office. Even as per clause 59 (e) the Allotment Letter/Agreement, copy of which has been placed on record by the opposite party, itself,  reveals that all the communication in respect of the unit, in question, was to be carried out with “SCO 139-140, 1^st Floor, Madhya Marg, Sector 8-C, Chandigarh-160008”. Under these circumstances, the opposite party cannot wriggle out of the same, by taking a plea in its written statement, to the contrary, just with a view to defeat the genuine claim of the complainant. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

8.         Now we will like to decide an objection raised by the opposite party that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. It may be stated here that as per Section 17 (1) (a) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016.  Relevant part of the said order reads thus:-

“It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum.  The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer.  Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction.  If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint.  For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum.  Similarly, if  for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. ”

                In the present case also, total value of the unit, in question, i.e. Rs.52,36,404.77ps., plus compensation claimed by way of interest and for mental agony and physical harassment, if taken into consideration, in no way, exceeds Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection taken by the opposite party that this Commission lacks pecuniary jurisdiction, being devoid of merit, must fail and the same stands rejected.

9.         Now it is to be seen, as to whether, the complainant is entitled to refund of the amount paid or not. It is not in dispute that the complainant booked the unit, in question, in the project of the opposite party, on 21.11.2011, on making payment of Rs.8 lacs, against the unit, in question, price of which was fixed at Rs.52,36,404.77ps.  By the time, this complaint was filed, he had already paid an amount of Rs.52,65,297.66ps. It is stated by the complainant that  he had purchased the said unit, on ground floor, yet, the opposite party changed it to first floor i.e. on stilts, as the ground floor was left for parking.

                To the contrary, it is contention of Counsel for the opposite party that as per Rules of the Government, in such like projects, construction of flats is allowed on stilts and the ground floor area is to be kept for parking of the cars. The building plan was also approved accordingly, to raise construction of the units on stilts. Be that as it may, it may be a requirement of the Rules aforesaid,  but there is nothing on record to show that at any point of time, any intimation of the said change was sent to the complainant or his consent was ever obtained. Had the said fact of raising construction of the unit, in question, on stilts been brought to the notice of the complainant, in advance, he might have changed his mind and would have got opportunity, to seek refund of the amount paid. Without disclosing the material fact, the opposite party continued to get the amount deposited, from the complainant. Furthermore, under above circumstances, arguments raised by the complainant, that he is not interested in purchasing the constructed unit on stilts, appears to be correct. 

10.         It is not in dispute that possession of the constructed unit  was to be delivered by the opposite party to the complainant, within 21 months i.e. (15 months plus 6 months) from the date of signing of the  Agreement dated 24.11.2014, as per Clause 7 (a), which read thus:-

“The Company shall try to complete the development/construction of the Unit/Project within 15 (Fifteen) months from the date of signing of this Allotment Letter by the Allottee(s) or approval of the building plans, whichever is later and within such further extended grace period of 6 (six) months. Completion of development of the Unit within such 21 (Twenty One) months is subject to force majeure conditions (as mentioned in Clause (b) hereunder) and subject to timely payment by the Unit Allottee(s) or subject to any other reasons beyond the control of the Company. No claim by way of damages/compensation shall lie against the Company in case of delay in handing over the possession on account of any of the aforesaid reasons and the Company shall be entitled to a reasonable extension of time for the delivery of possession of the said Unit to the Allottee(s). The aforesaid period of development shall be computed by excluding Sundays, Bank Holidays, enforced Govt. holidays and the days of cessation of work at site in compliance of order of any Judicial/concerned State Legislative Body.”

       

11.         At the time of arguments, it was virtually admitted by both the parties that end date to hand over possession of the unit was fixed on 23.08.2016. It is on record that construction by that time was not complete. Contention of the complainant that construction at the spot is not complete needs acceptance. By the date, when arguments were addressed before us, possession has not been offered to the complainant. It is not a case of the opposite party that possession of the unit was ready to be delivered by the stipulated date, but the complainant has refused to come forward to accept the same (possession). Rather, at the time of arguments, Counsel for the opposite party failed to give any positive date/time, as to when, possession of the constructed unit will be given. It is only said that the opposite party is making best efforts to deliver possession. Qua this very project, in a large number of cases, it has been found as a matter of fact that construction has been delayed. As stated above, even at the time of arguments, no commitment was made to deliver possession of the unit, in near future.

                At the same time, not even a single convincing document has been placed on record, by the opposite party to prove that the unit, in question, will be made habitable in near future. It is well settled law that the onus to prove that the project has been completed or is about to complete, is on the builder/the opposite party. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present case, it is very strange that not even a single document has been placed on record, by the opposite party, in respect of the flat, in question, to prove that the construction is near completion and  it will be actually ready for offer and delivery of possession, in the near future. In case, all the development activities had been undertaken and construction of the flats is near completion, then it was for the opposite party, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/ Architects, as they could be said to be the best persons, to testify, as to whether, all these development and construction activities, are being undertaken and near completion, but it failed to do so.

                Under these circumstances, it can be said that there is a material violation on the part of the opposite party. At the same time, it is also a settled law that when there is a material violation on the part of the builder, in not handing over possession by the stipulated date, the purchaser is not bound to accept the offer, even if the same is made at a belated stage and on the other hand, can seek refund of amount paid. It was so said by the Hon’ble National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held  as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same.

 

Furthermore, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the Hon’ble National Commission, under similar circumstances, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

 

                In the present case, as stated above, possession of the unit, has not even been offered, what to speak of delay in offering thereof. Under these circumstances, it is held that since there was a material violation on the part of the opposite party, in not offering and handing over possession of the unit by the stipulated date or by the time, this complaint was filed, the complainant, is, thus, entitled to get refund of amount actually deposited by him. In view of above facts of the case, the opposite party is also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.

12.         Objection taken by the opposite party to the effect that the complainant was defaulter in making payment, is also bereft of merit. It is an admitted fact that against the total sale consideration of Rs.52,36,404.77ps., the complainant has paid an amount of Rs.52,65,297.66ps. i.e. some amount has been made over and above the sale consideration. Remaining amount towards stamp duty, electricity etc. was to be paid, had possession of the unit been delivered to the complainant, which admittedly has not been made so far. As far as making of payment of Rs.52,65,297.66ps. is concerned, it may be stated here that not even a single document has been placed on record, by the opposite party to prove that the complainant was defaulter in making timely payment of such amount, as a result  whereof, he was reminded time and again, by way of sending reminders by the opposite party, in that regard. The objection taken, in this regard, stands rejected.
13.         Unfair trade practice and deficiency in rendering service, on the part of the opposite party is writ large, as despite the fact that booking amount of Rs.8 lacs was received by the opposite party as far as back on 21.11.2011, yet, the Allotment Letter/Agreement was executed after a huge delay of more than three years i.e. only 24.11.2014. However, we are not granting any compensation, in that regard, because the complainant has sought refund of the amount paid and it has been held by us, that he is entitled for the same, alongwith interest and compensation, which will take care of financial loss, mental agony and physical harassment suffered by him, on this count too.
14.         No other point, was urged, by the contesting parties.
15.         For the reasons recorded above, this complaint is partly accepted with costs and the opposite party is directed as under:-

1. To refund the amount of Rs.52,65,297.66ps., to  the  complainant, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.2,00,000/-, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.55,000/- to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii),  shall be made, within a period of two (2) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a. instead of @12%, from the respective dates of deposits onwards, and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

16.         However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment towards the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
17.         Certified copies of this order be sent to the parties, free of charge.
18.         The file be consigned to Record Room, after completion.

Pronounced.

25.04.2018

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.