Chandigarh

StateCommission

CC/52/2016

Amar Singh - Complainant(s)

Versus

Unitech Limited, Real Estate Division - Opp.Party(s)

Vishal Goel Adv.

26 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	52 of 2016
Date of Institution	:	08.02.2016
Date of Decision	:	26.04.2016

 

Amar Singh son of Sh.Bachan Singh, resident of House No.182-D, Punjabi Bagh, Civil Lines, Patiala.

 ……Complainant

 

V e r s u s

 

1. Unitech Limited, Real Estate Division, SCO 189-90-91, Sector 17-C, Chandigarh, through its Authorized Officer
2. Unitech Limited, Real Estate Division (Marketing) 5^th Floor, Tower-A, Signature Towers, South City 1, NH-8, Gurgaon, through its Managing Director.

              ....Opposite Parties

                 

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.Vishal Goel, Advocate for the complainant.

Ms.Vertika H. Singh, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

            The complainant purchased a plot, bearing no.0071, Block/Tower C, measuring 358.80 square yards (in short the unit), in a project, launched by the opposite parties, under the name and style of “ASPEN GREENS”, Sector 107, Uniworld City, Mohali, Punjab. An amount of Rs.7,25,300/- was paid by the complainant to the opposite parties, towards booking amount of the said unit. Buyer’s Agreement was executed between the parties, on 21.07.2011, at Chandigarh. In a very clever manner, the said Agreement was shown to have been executed at New Delhi. Total sale consideration of the said unit was fixed at Rs.76,72,579/-, which included basic price; External Development Charges (EDC) etc. By 03.08.2011, the complainant had paid an amount of Rs.52,36,831/-. In a way, he had paid the said amount, in less than a month, of execution of the Agreement. For making payment, the complainant had raised loan of Rs.10 lacs, from the Housing Development Finance Corporation Limited (HDFC), against payment of interest. 

2.       As per Article 4.a.(i) of the Agreement, the opposite parties were to deliver possession of the unit, in question, to the complainant, within a period of 18 months, from the date of execution of the same (Agreement) i.e. latest by 20.01.2013, subject to force majeure circumstances. However, commitment made was never honoured by the opposite parties. When despite making requests, nothing was done, this complaint was filed by the complainant, seeking refund of the amount paid alongwith interest @15% p.a., plus (+)  Rs.5 lacs, as compensation for mental agony and physical harassment and litigation expenses to the tune of Rs.33,000/-.
3.       It is necessary to mention here that opposite party no.1 is face of opposite party no.2, in Chandigarh. Both filed joint written reply to the complaint, on 01.04.2016. With that reply, one application was filed stating that in terms of provisions of Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996, as stipulated in the Agreement, dispute be referred to an Arbitrator. The said application was disposed of by this Commission, on 01.04.2016, ordering that the question of applicability of arbitration clause will be considered, at the time of final arguments in the main complaint. That order has become final.
4.       In the joint written reply filed by the opposite parties, numerous preliminary objections were taken stating that in the face of existence of arbitration clause in the Agreement to settle disputes between the parties, this Commission has no jurisdiction to entertain the same (complaint). This Commission lacks territorial and pecuniary Jurisdiction to hear and decide this dispute. It is asserted that the unit, in question, was purchased for future gain, as such, the complainant would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act.
5.       On merits, it is admitted that the complainant had purchased a residential unit, from the opposite parties. Fact qua basic price of the unit, as mentioned in the complaint is admitted. Charges qua EDC etc. are also admitted. The amount paid by the complainant, as mentioned in the complaint was not disputed. It is also not disputed that the complainant availed of loan from the HDFC, as mentioned by him, in his complaint, to make payment of installments, towards price of the said unit. However, it was frankly admitted in para no.3 of the “reply on merits”, that part amount towards the price of said unit was received by opposite party no.1 at Chandigarh.  It is stated that consumer complaint was not maintainable, and only a Civil Court, could adjudicate the dispute, in question. It is admitted that as per Article 4.a.(i) of the Agreement, the opposite parties were to hand over possession of the unit, in question, to the complainant within a period of 18 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It is clarified that the opposite parties, could not hand over possession of the unit to the complainant, as there was global meltdown of the economy worldwide, resulting into cash crunch throughout and also due to some objection raised by the Punjab State Power Corporation Limited (PSPCL), a number of times, as such, electricity could not be made available at the site, by the opposite parties, due to which, rest of the development work and the basic amenities had been delayed. It is stated that development work at the site, is being carried out in full swing and the opposite parties, are making sincere efforts to hand over possession of the said unit, to the complainant, very shortly. It is averred that it is well within the knowledge of the complainant that for any delays, stipulated penalty has been provided in the Agreement, which safeguarded his rights. It is stated that, in case, still the complainant sought refund of the amount deposited, in that event, forfeiture Clause would attract, as envisaged in the Agreement. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
6.       The parties led evidence in support of their cases, by way of filing their respective affidavits, alongwith which, number of documents were attached. 
7.       On completion of the proceedings, arguments of the parties, were heard, in detail.
8.        First coming to the objection, qua applicability of provisions of amended Section 8 of 1996 Act, it may be stated here that qua another adjoining sector, in the same project launched by the opposite parties, a consumer complaint bearing no.251 of 2015, was filed by an allottee namely Sh. Manish Aggarwal, on 28.10.2015 (Sh.Manish Aggarwal Vs. M/s Unitech Limited and Ors.) before this Commission. After taking note of position existing prior to amendment of Section 8 of 1996 Act and thereafter, it was said by this Commission, vide order dated 08.04.2016 in that case, that the remedy available under Section 3 of 1986 Act, is an independent remedy and that existence of arbitration clause in the Buyer’s Agreement, will not bar this Commission, from entertaining the complaint, like the one in hand. In the above case, it has been observed by this Commission, as under:-

 

“30.    Now it is to be seen, whether, after making amendment in Section 8 of the principal Act, any additional rights have accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling disputes through an Arbitrator, this Commission is not empowered 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.

31.  Now, we will have to see what difference has been made by effecting 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 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 for arbitrator, notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said. Otherwise also, as has been stated in the earlier part of this order, where there is any ambiguity in understanding meaning of provision of law, or where two interpretations are possible, one beneficial to the consumer would be accepted.

32.    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 cases, the consumers/ complainants have spent their entire life savings to get a plot, so that they can construct a house thereon. Their 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,  the complaint is supposed to be decided within three months, from the date of service of 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,  the consumer will be forced to (as in the present case) pay huge expenses. As in the present case, the complainant is claiming refund of Rs.65,56,513/- alongwith interest, compensation and litigation costs, aggregate value whereof, if added may be near about Rs.1 crore. In that event, the complainant will be forced to pay an amount of Rs.1,68,750/-  towards her share of Arbitrator fees. Not only as above, it is admissible to an Arbitrator, to decide the dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of General Assembly Resolution No.39/248 and the provisions of 1986 Act. In view of above, the ground raised by Counsel for opposite party no.1, stands rejected.”

18. Similar view was reiterated by this Commission, in Praveen Kumar Arora and another Vs. Emaar MGF Land Limited, consumer complaint No.198 of 2015, decided on 04.04.2016, by further holding as under:-

“20. 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. In the present case, the complainants have spent their entire life earnings to purchase a unit, in a housing project, launched by the opposite party. It was their hope that they will live therein. However, their hopes were shattered, when despite making payment of entire amount towards price, they failed to get possession of a unit, in a developed project. As per established ratio of the judgment in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and also in the judgment of 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), it was said that the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer 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.”

 

9.       Further, in a case titled as Sukhjinder Singh Vs. M/s IREO Fiveriver Pvt. Ltd., consumer complaint no.278 of 2015, decided on 18.04.2016, this Commission, apart from, what has been held in Sh.Manish Aggarwal's case (supra), further held as under:-

“Not only as above, execution of judgment/decree passed by the Consumer Foras is very easy and less time consuming. Invariably, in all the judgments passed, between one to three months’ time, is granted to the judgment debtors(s) to discharge liability. If it is not so done, and the order is not stayed in the meantime by the Higher Fora, two options are available with the complainant/decree holder. Section 25 of 1986 Act provides the procedure to enforce orders by the Consumer Foras. In Sector 25 (3), it is provided that where any amount is due from any person, under an order passed by any Consumer Fora, the concerned Consumer Fora, on an application moved by the decree holder, may issue a certificate to the Collector of the District, to recover the said amount, by way of land revenue, in  terms of Section 72 of the Punjab Land Revenue Act, 1887. The said provision is also very stringent. The Collector is supposed to attach the holding of the judgment debtors to take the said property under his own management and control. The Collector is further supposed to manage the said property and raise all rents and profits accruing therefrom to the exclusion of the defaulter, until the decree is satisfied. The above procedure will consume at the maximum four to six months, for realization of the amount awarded. Further option is also available to a complainant/decree holder, to move an application under Section 27 of 1986 Act, which provides that where a trader or a person against whom, a complaint was made, fails or omits to comply with the order passed by the Consumer Fora, such party would entail award of punishment of imprisonment for a term, which shall not be less than one month, but may extend to three years, or with fine, which shall not be less than Rs.2,000/-, and may be extended upto Rs.10,000/-, or both. This provision is very effective, as and when application is moved under Section 27 of 1986 Act, for fear of imprisonment, it is seen that immediately the judgment debtor(s) make an attempt to comply with the order passed by the Consumer Foras. Whereas, to the contrary Section 36 of 1996 Act, provides that award shall be enforced, in accordance with the provisions of the Code of Civil Procedure 1908, in the same manner, as if it was a decree of a Court. Such a procedure is very costly and time consuming. Executing a decree would virtually mean fighting one more litigation, in a Court, to get enforcement of the award. If such a procedure is adopted, it will defeat the very purpose and spirit of 1986 Act. Accordingly, in this view of the matter and also in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite party, stands rejected.”

 

10.       Accordingly, in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite parties, in this regard, stands rejected.    
11.       The next question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not. According to Section 17 of the Act, 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 out of the deposited amount, an amount of Rs.52,36,531/- and Rs.10 lacs, in respect of the unit, in question, was received by Marketing Office of the opposite parties, at Chandigarh, i.e. Unitech Ltd., SCO 189-90-91, Sector 17-C, Chandigarh, vide different cheques, as is evident from Annexures C-3 and C-4 (at pages 21 an 22). Not only this, it has been frankly admitted by the opposite parties in their joint written reply that they are having their marketing office at SCO 189-90-91, Sector 17-C, Chandigarh, meaning thereby the project, in question, was marketed from Chandigarh only. 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 parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 
12.        Another objection raised by Counsel for the opposite parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here, that the complainant has sought refund of the amount of Rs.69,61,831/-, paid by him, towards price of the same, alongwith interest @15% p.a., from the respective dates of deposits, till realization; compensation to the tune of Rs.5 lacs, for mental agony and  physical harassment; and cost of litigation, to the tune of Rs.33,000/-, aggregate value whereof [excluding the interest claimed] came to be around Rs.74,94,831/- and, as such, fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint, for the reasons given hereinafter.

            Now, the question, that arises for consideration, is, as to whether, interest @15% p.a., claimed by the complainant, on the amount of Rs.69,61,831/-,  aforesaid, was required to be added, to the value of the reliefs claimed, or not, for determining the pecuniary Jurisdiction of this Commission.  In Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), a case decided by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, the facts were that the complainant filed a Consumer Complaint, before the State Consumer Disputes Redressal Commission, Haryana, claiming an amount of Rs.18,33,000/-, with interest @18% per annum, on this amount, from the date of claim, till realization. It also claimed suitable damages, on account of loss caused to it. The State Consumer Disputes Redressal Commission, vide order dated 08.08.2002, disposed of the complaint, with liberty reserved to the complainant, to approach the National Consumer Disputes Redressal Commission, holding that if interest @18% P.A. was allowed, on the amount of Rs.18,33,000/- it (amount) will exceed Rs.20 lacs (at that time the pecuniary Jurisdiction of the State Consumer Disputes Redressal Commission was upto Rs.20 lacs), for which it had no pecuniary Jurisdiction. Feeling aggrieved, the complainant/appellant filed the aforesaid appeal. The National Consumer Disputes Redressal Commission, in the aforesaid appeal, held as under:-

“Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs.18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

Accordingly, while accepting appeal, the order dated 8.8.2002 is set aside. On complaint being returned by the State Commission, the appellant is permitted to file it before the appropriate District Forum for being decided on merits in accordance with law. No order as to costs”.

            Not only this, a similar question regarding pecuniary Jurisdiction, came up for consideration before this Commission, in a case titled as Karnail Singh  and another Vs. M/s Emaar MGF Land Limited, Consumer Complaint No.05 of 2014 decided on 09.04.2014. In that case also, an objection was raised by the Opposite Parties (Emaar MGF Land Limited) that since the complainants,  had sought refund of amount of Rs.62,60,750/- alongwith interest @24% P.A., from the respective dates of deposits, alongwith compensation and litigation costs, as such, if the reliefs are clubbed together alongwith interest claimed, the aggregate value therefore fell above Rs.1 crore, and as such, this Commission had no pecuniary Jurisdiction to entertain the complaint. In that case, while rejecting said objection of the Opposite Parties, this Commission, by placing reliance on Shahbad Cooperative Sugar Mills Ltd.' case (supra),  came to the conclusion that it had pecuniary Jurisdiction to entertain the complaint, and ordered refund of the amount alongwith interest, compensation and litigation costs, vide order dated 09.04.2014. Appeal filed by the Opposite Parties (Emaar MGF Land Limited) against the order dated 09.04.2014, before the National Commission, was dismissed with punitive damages of Rs.5 lacs. Still feeling aggrieved, the Opposite Parties, filed Special Leave to Appeal (C) No.29392 of 2014, which was also dismissed by the Hon'ble Supreme Court of India, in limine, vide order dated 14.11.2014. In this manner, the findings given by this Commission in Karnail Singh and another's case (supra), by placing reliance on Shahbad Cooperative Sugar Mills Ltd.'s case (supra), to the effect that it has pecuniary Jurisdiction to entertain and decide the complaint, in the manner, referred to above, were upheld by the National Commission, and also the Hon'ble Supreme Court of India. Recently, in the case of Denis Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided On 08 Mar 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the submission of Counsel for the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

13.       To defeat claim of the complainant, another objection was raised by Counsel for the opposite parties, that since the complainant has purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not.

            It may be stated here that there is nothing, on the record to show, that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the opposite parties,  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. Consumer Complaint No.137 of 2010, decided on 12.02.2015, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the  residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs  Nirmala Devi Gupta,  Revision Petition No. 3861 of 2014, decided on 26.08.2015. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties, in their written reply, therefore, being devoid of merit, is rejected.  

14.       Another objection was raised by Counsel for the opposite parties that the consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainant hired the services of the opposite parties, for purchasing the unit, in the manner, referred to above. According to Article 4.a.(i) of the  Agreement, the opposite parties were liable to deliver physical possession of the developed unit, within a period of 18 months, from the date of execution of the same (Agreement), alongwith all basic amenities as mentioned in Article 2.a.(ii) of the Agreement. Section 2 (1) (o) of the Act, defines service as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. 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 the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, as stated above, Section 3 of the 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainant has a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can also be availed of by him, as he falls within the definition of consumer. In this view of the matter, the objection of the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

15.       The next question, that falls for consideration, is, as to within which period, possession of the unit, in question, was to be delivered to the complainant. According to Article 4.a.(i) of the Agreement, the opposite parties, were to hand over possession of the unit, in question, to the complainant, within a period of 18 months, from the date of execution of the same (Agreement) i.e. by 20.01.2013. Admittedly, possession of the unit, in question, was not delivered to the complainant, by the stipulated date, or even by the time, the complaint was filed. Even, in the written version, the opposite parties, frankly admitted, that possession of the unit, in question, could not be offered to the complainant, as they failed to complete the development work, on account of extreme financial hardship, due to recession in the market/global meltdown, and also on account of non-provision of electricity in the said project, by the Punjab State Power Corporation Limited (PSPCL). Admission made by the opposite parties, itself makes it clear that they had not obtained necessary approvals/sanctions from the PSPCL, as a result whereof, they were not provided with electricity, for the project in question. Secondly, when the opposite parties, had already received more than 90% of the sale consideration of the unit, in question, from the allottee, then it does not lie in their mouth, that they faced extreme financial hardship, due to recession in the market, as far as the project, in question, is concerned. It is not that the opposite parties were, in the first instance, required to develop the project, by arranging funds out of their own sources, and, thereafter, the units were to be sold to the allottees, on future payment basis. Had this been the case of the opposite parties, only in those circumstances, the plea with regard to facing extreme financial hardship would have been considered to be correct, by this Commission. Admittedly, more than 90% of the sale consideration of the unit, in question, had already been paid, by the time of filing the complaint, but possession of the same, was not delivered to the complainant. Now, even as on today, on account of pending construction and development works, as admitted by the opposite parties, firm date of handing over possession of the unit, in question, could not be given to the complainant. 

            Even otherwise, the said difficulty/ground i.e. recession in the market/global meltdown would not fall under the definition of force majeure circumstances, for not completing the construction of unit(s). A change in economic or market circumstances affecting the profitability of a contract or the circumstance, is not regarded as a force majeure condition. Neither any new legislation was enacted nor an existing rule, regulation or order was amended, stopping suspending or delaying the construction of the project, in which flat(s)/plot(s) were agreed to be sold to the consumers. There is no allegation of any lock-out or strike by the labour, at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite parties or the contractors engaged by it, at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God, which could have delayed the completion of the project, within the time stipulated in the Agreement. A similar question fell for determination before the Hon'ble National Consumer Disputes Redressal Commission, New Delhi, in  Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints),  decided on 14 Aug 2015. The National Commission, in that case, while rejecting the plea of the builder, held as under:-

“Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.

Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.”.

 

16.       The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. By making a misleading statement, that  the possession of unit, in question, would be delivered within a period of 18 months, from the date of execution of the Agreement,  and by not abiding by the commitments made, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice.
17.       The next question, that falls for consideration, is, as to whether, because in the instant case, the complainant had sought refund of the amount deposited, the forfeiture Clause will attract, as envisaged in the Agreement. The Agreement was executed between the parties, on 21.07.2011. As stated above, according  to Article 4.a(i) of the Agreement,  the opposite parties, were to hand over physical possession of the unit, in favour of the complainant, within a period of 18 months, and not later than that, from the date of execution of the same (Agreement), complete in all respects. Admittedly, possession of the unit, was not even offered to the complainant, by 20.01.2013 i.e. by the stipulated date, what to speak of delivery thereof, as still the development work was going on and the opposite parties, are still trying to provide the basic amenities at the site, as has been admitted by them. Had the development work been complete and had the amenities, complete in all respects, been provided, in respect of the area, where the unit of the complainant was situated, by the stipulated date and had the opposite parties, offered possession to the complainant, but, on the other hand, he (complainant) had sought refund of the amount deposited, the matter would have been different. In that event, it would have been held that since the complainant rescinded the contract, as such, forfeiture clause contained in the Agreement would be applicable. However, in the present case, possession of the unit, in question, was not even offered to the complainant, by the stipulated date, or even till date, as such, it was justifiable for the complainant to seek refund of the amount deposited without application of forfeiture Clause. It was so said by the National Consumer Disputes Redressal Commission, New Delhi in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). In the above case, possession   was   not   delivered   in   time. Complaint was filed for refund of amount paid. The State Commission partly allowed it. The builder was allowed to forfeit 10% of the deposited amount, on the ground that the complainant himself rescinded the contract by asking refund of the amount, as possession of the unit had already been offered to him. The remaining amount was allowed to be returned with interest. The complainant in that case was also awarded litigation cost etc. The builder namely Emaar MGF Land Limited went in appeal, which was dismissed, wherein it was specifically observed by the National Commission, that when the promoter/builder has violated material condition in not handing over possession, in time, it is not obligatory for the purchaser to accept possession after that date. The principle of law laid in the aforesaid case, is fully applicable to the instant case. On account of that, the complainant is entitled to get refund of the entire amount deposited by him, without application of forfeiture clause. The submission of Counsel for the opposite parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

            The complainant cannot be made to wait for an indefinite period, for delivery of physical possession of the unit, on the bald ground taken by the opposite parties, that they were entitled to extend the time of delivery of possession of the unit, in question, as per Clause 8.b., on account of the force majeure circumstances, mentioned in the Agreement. As stated above, the opposite parties failed to prove, by placing on record, any cogent and convincing material, that they encountered any force majeure circumstances, as a result whereof, possession of the unit, in question, was delayed. On the other hand, stand taken by the opposite parties, in this regard, has been negated by this Commission, while giving detailed findings. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the unit, in question. The complainant is, thus, entitled to get refund of amount deposited by him. In view of above facts of the case, the opposite parties, are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.

18.       It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.69,61,831/-, i.e. more than about 90% of the sale consideration, was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest (compounded quarterly @18%) as per Article 2.c. of the Agreement, for the period of delay in making payment of instalments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.69,61,831/- alongwith interest @15% compounded quarterly, from the respective dates of deposits (less than the rate of interest charged by the opposite parties, in case of delayed payment i.e. 18% compounded quarterly, as per Article 2.c. of the Agreement), till realization.
19.       No other point, was urged, by Counsel for the parties.     
20.       For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, are jointly and severally directed as under:-

 

1. To refund the amount of   Rs.69,61,831/- to  the complainant, alongwith interest @15% compounded quarterly,  from the respective  dates  of  deposits onwards.

 

2. To pay compensation, in the sum of Rs.3 lacs, 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.33,000/- (as prayed), to the complainant.

 

4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) 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 @18% compounded quarterly, instead of @15%, from the respective dates of deposits onwards, and interest @15% compounded quarterly, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

 

21.       However, it is made clear that since admittedly the complainant has availed loan facility from the HDFC, for making payment of installments towards the said unit, as such, it (HDFC) will have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
22.       Certified Copies of this order be sent to the parties, free of charge.
23.       The file be consigned to Record Room, after completion.

Pronounced.

26.04.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

 

Rg.