Chandigarh

StateCommission

CC/210/2016

Amit Kohli - Complainant(s)

Versus

Unitech Limited - Opp.Party(s)

Savinder Singh Gill, Adv.

01 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	210 of 2016
Date of Institution	:	13.05.2016
Date of Decision	:	01.09.2016

 

1. Amit Kohli son of Late Sh.Suresh Kumar Kohli, resident of House No.1238, Sector 42-B, Chandigarh.
2. Anita Latawa wife of Sh.Amit Kohli, resident of House No.1238, Sector 42-B, Chandigarh.

…… Complainants

V e r s u s

1. Unitech Limited, SCO 189-191, Sector 17C, Chandigarh, through its Managing Director/Authorized Signatory.
2. Unitech Limited, having its Registered Office at 6, Community Centre, Saket, New Delhi-110017, through its Managing Director/Authorized Signatory.
3. Alice Developers Private Limited, having its office at Basement, 6, Community Centre, Saket, New Delhi-110017.

…..Opposite parties no.1 to 3

4. Housing Development Finance Corporation Limited (HDFC), SCO 153-155, Sector 8-C, Madhya Marg, Chandigarh, through its Managing Director/Authorized Signatory (Performa Opposite Party).

…..Opposite party No.4

Complaint under Section 17 of the Consumer Protection Act, 1986

 

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER.

 

Argued by:-     Sh.Savinder Singh Gill, Advocate for the         complainants.

Sh.Rahul Bhargava, Advocate for opposite parties no.1 and 2.

Sh.Ramnik Gupta, Advocate proxy for Mrs.Rupali Shekhar Verma, Advocate for opposite party no.4.

Opposite party no.3 exparte.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The complainants are husband and wife. It is their case that they purchased a residential flat with super area measuring 1485 square feet, from opposite parties no.1 to 3, in a project launched by them, under the name and style of ‘Gardens’, situated in Mega Township, Uniworld City, Sector 97, Mohali, Punjab. Alongwith the application dated 22.11.2010, they deposited an amount of Rs.4 lacs, as booking amount. They were allotted flat no.0503, Block-A-1, vide allotment letter dated 01.12.2010 Annexure C-3, for an amount of Rs.38,48,400/-. They opted for construction linked payment plan. Buyer’s Agreement Annexure C-4 (in short the Agreement) was executed between the parties on 27.04.2011. Article 4.a.(i) of the Agreement reads thus:-

“(i) That Subject to the Apartment Allottee(s) complying with various terms and conditions of this agreement and other requirements as indicated by the Developer, the possession of the Apartment is proposed to be offered to the Apartment Allottee(s) within 36 months of signing of these presents, subject to Force Majeure circumstances and upon registration of Sale Deed provided all amounts due and payable by the Apartment Allottee(s)  under this Agreement have been paid within the stipulated period. It is, however, understood between the Parties that various Apartments shall be ready and shall be completed in phases and handed over to the Apartment Allottee(s) of the completed Tower/Block accordingly.”

2.         Before delivery of possession, as per Article 4.b., it was incumbent for opposite parties no.1 to 3, to give notice to the complainants, in case of delay in handing over possession of the unit, beyond the period of 36 months, subject to force majeure circumstances. It was further provided in the said Agreement that penalty @Rs.5/- per square feet, per month of the super area, for the period of delay shall be paid by the opposite parties no.1 to 3, to the complainants.
3.         As per the Agreement, end date to hand over possession  of the unit was 26.04.2014.  To make payment, the complainants raised loan of Rs.20 lacs from opposite party no.4, for which Tripartite Agreement was signed between the parties on 11.07.2012. Thereafter, amount was paid by opposite party no.4, to opposite parties no.1 to 3, in the following manner:-

“S.No.	Date	Receipt No.	Amount (in Rs.)
	13/7/2012	001210	4,25,000/-
	25/9/2012	001416	4,74,843/-
	20/11/2012	001663	4,74,969/-
	5/12/2012	001749	1,74,116/-
	5/12/2012	001750	5,380/-
	19/3/2013	002148	1,74,116/-
	19/3/2013	002149	5,380/-

 

4.         By 19.03.2013, the complainants had paid an amount of Rs.36,72,614/-. The complainants visited the site of the project in the years 2014, 2015 and 2016, and were shocked to see that construction had virtually been stopped. It was specifically stated that the unit was purchased by the complainants for their residential purpose and amount towards the same was paid by withdrawing amount from their GPF account and raising loan from opposite party no.4. By stating as above, prayer has been made to refund the amount paid, with interest, compensation for mental agony and physical harassment alongwith litigation expenses.
5.         Despite deemed service, none put in appearance, on behalf of opposite party no.3, as a result whereof, it was proceeded against exparte, vide order dated 27.06.2016
6.         Upon notice, reply was filed by opposite parties no.1 and 2, raising various preliminary objections like territorial jurisdiction of this Commission. It was pleaded that as per Article 12.b of the Agreement, the Courts at Mohali shall have Jurisdiction to entertain and adjudicate the complaint, as such, the Jurisdiction of this Commission was barred. It was also stated that the complaint is barred by limitation. It is asserted that the unit, in question, was purchased for future gain, as such, the complainants being investors, would not fall within definition of a consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986.  It was pleaded that in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was averred that the complaint is bad for mis-joinder of parties.
7.         On merits, it was admitted that the complainants had purchased the residential unit, in question, in the manner, referred to above. Payments made by the complainants are also not disputed. Fact qua price of the unit, as mentioned in the complaint was also not disputed. Execution of Buyer’s Agreement and Tripartite Agreement is admitted. It was also admitted that payment was to be made as per construction linked plan. It is stated that the dispute being a contractual one, consumer complaint is not maintainable, and only a Civil Court, could adjudicate the same. It was also not disputed that as per Article 4.a.(i) of the Agreement, possession of the fully developed unit, was to be delivered to the  complainants within a period of 36 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It was further stated that it was opposite party no.3, which was to construct the units and deliver possession of the same, as such, no liability can be fastened  upon opposite parties no.1 and 2.  It was stated that construction is in full swing. To say so, photographs of the site was placed on record, qua tower in which flat allotted to the complainants is situated.
8.         It was further stated that the developer was entitled to reasonable extension of time for delivery of possession of the unit, on account of force majeure circumstances or the reasons beyond its control. It was stated that possession of the unit was delayed due to Global meltdown of the economy worldwide, wherein the Foreign Investors, as anticipated by the Company, have refrained from any kind of investment and there is a total financial crisis throughout. It was also stated that opposite parties no.1 and 2 have no liability to make refund of the amount deposited. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
9.         In reply filed, opposite party no.4 stated that loan to the tune of Rs.20 lacs, was sanctioned in favour of the complainants. As per Loan Agreement, loan amount was disbursed @10.5% per annum. Approximately, half of the amount of loan has been paid to opposite parties no.1 to 3, out of the sanctioned loan amount. It was pleaded that, in case, this Commission, comes to the conclusion that the complainants are entitled to refund of the amount deposited, opposite party no.4 shall have first charge/right, to seek apportionment of its dues. It was stated that complaint qua opposite party no.4, is liable to be dismissed, as neither deficiency in rendering service and adoption of unfair practice has been proved against it, nor any allegation with regard to the same has been leveled by the complainants.
10.         The complainants and opposite parties no.1, 2 and 4, led evidence in support of their case. 
11.         Counsel for the parties concerned raised arguments in terms of pleadings noted in earlier part of this order, which were heard, in detail.
12.         It is admitted on record that Buyer’s Agreement was signed between the parties on 27.04.2011. Constructed unit was sold in favour of the complainants, for an amount of Rs.38,48,400/- As per Article 4.a.(i) of the Agreement, possession of the fully developed unit was to be delivered to the  complainants within a period of 36 months, from the date of execution of the same (Agreement), subject to force majeure conditions. As per construction linked plan, the complainants had paid an amount of Rs.36,72,614/-, by 19.03.2013. As per payment plan, rest of the amount was to be paid on getting final notice of possession of the unit, which was never issued by opposite parties no.1 to 3, to the complainants within the stipulated time or even till date.
13.         At the time of arguments, Counsel for opposite parties no.1 and 2 by referring to the photographs on record, vehemently contended that possession of the unit will be offered to the complainants within a maximum period of four months. We are not inclined to accept the statement made. We have perused the photographs of Tower in question, at page 22 of the file, in which unit, in question, allotted to the complainants is situated and are satisfied that completion of construction will not be possible in the next about one year. Not only as above, to a communication sent by the complainants to opposite parties no.1 to 3, to know about status of delivery of possession of the unit, opposite parties no.1 and 2 sent letter dated 18.06.2016 to complainant no.1. The contents of letter reads thus:-

“To.

Mr.Amit Kohli

This is to intimate you that the construction in Mohali project has been started and we are doing efforts for completing your Flat No.0503 in Block A-1, Gardens, Uniworld City, Sector -97, Mohali. We regret for the delay as the company could not hand over the possession of the Flat due to Global meltdown of the economy worldwide wherein the Foreign Investors, as anticipated by the company, have refrained from any kind of investment and there is a total financial crisis throughout. We have been facing extreme financial hardship due to the recession in the reality market. All these circumstances were beyond the control, but now we have managed to start the construction and will be handing over the Possession with in the period of 9 to 12 months with all the amenities. It is requested to kindly bear with us, give your support and some more time so that we can deliver you the flat. We will be highly obliged for your kind support.”

14.         It is specifically stated that construction qua project had started and efforts are being made to complete construction of flat allotted to the complainants. It was further stated that delay in delivery of possession caused on account of global meltdown of the economy worldwide, and the Foreign Investors had refrained from any kind of investment, as anticipated. It was further stated that possession will be offered within nine to twelve months, with all the amenities. The above fact amply proves that opposite parties no.1 to 3 have failed to perform their commitment. Possession of the unit was not offered within the given date, as such, opposite parties no.1 to 3 are guilty of making false promises, which would amount to adopting unfair trade practice. They are also deficient in providing service.  
15.         Objection raised qua territorial Jurisdiction of this Commission to entertain and decide the complaint, worths rejection.  In the Buyer’s Agreement, it was specifically stated that Marketing Office of opposite parties no.1 and 2 is situated at SCO No.189-90-91, Sector 17-C, Chandigarh. This Commission has rejected a similar objection raised by opposite parties no.1 and 2/Unitech Limited, in a case titled as Mr.Om Parkash Dua and ors. Vs. Unitech Limited and another, decided on 22.08.2016. In that case, it was noted that the Marketing Office of opposite parties no.1 and 2 is situated in Chandigarh and the said office was responsible for development and marketing of the project, in question. In that case, it was observed by this Commission as under:-

 

“Contention of Counsel for opposite party no.1 that this Commission has got no territorial Jurisdiction, to entertain and decide the complaint deserves to be rejected. According to Section 17 of the Act, a consumer complaint could be filed by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to the complainants. It is apparent on record that the Marketing Office of opposite party no.1 is situated at SCO No.189-90-91, Sector 17-C, Chandigarh. In the Buyer’s Agreement dated 28.10.2009, description of opposite party no.1 is given as under:-

“UNITECH LIMITED, a Public Limited Company duly incorporated under the Companies Act 1956, having its Marketing Office at SCO 189-90-91, Sector 17-C, Chandigarh and its Registered Office at 6, Community Centre, Saket, New Delhi 110017 (hereinafter referred to as Unitech/Confirming Party) which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to include its executors, administrators, successors and assigns) acting through its authorized signatory”

It is clearly mentioned that the Marketing Office of opposite party no.1 is situated at SCO 189-90-91, Sector 17-C, Chandigarh. It has been earlier noticed by this Commission, in the case of Sanjeev Dhir  Vs.  Unitech Limited,  Complaint case No. 177 of 2016, decided on 01.08.2016, that it was the Marketing Office of opposite party no.1 situated at Chandigarh, which was responsible for development and marketing of the project, in question. Taking note of information placed on record, in the above case, it was observed as under:-

“It is clearly mentioned that the Company has its Marketing Office at SCO 189-90-91, Sector 17-C, Chandigarh. Registered Office is situated at 6, Community Centre, Saket, New Delhi.  Be that as it may, as per documents placed on record by the opposite party, alongwith written statement, it becomes apparent that Marketing Office at Chandigarh/opposite party was responsible for development and marketing of the project, in question. Entire correspondence with the Authorities qua development of the project and getting necessary permissions were being taken up by the Officers of the opposite party,  posted at Chandigarh. Above fact makes it clear that the Branch Office at Chandigarh was substantially taking up the activities qua the project, in question. Copy of customer ledger account Annexure C-25 in respect of the unit, in question, was also issued by the opposite party at Chandigarh. In para no.1 of the preliminary submission, it is also mentioned that Marketing Office of the Company is situated at Chandigarh. Besides all above, it has been candidly admitted by the opposite party, in para no.24 of its reply on merits, that that all the payments were received from the complainant by Chandigarh Office of the Company. The Hon’ble Supreme Court of India in State of Punjab Vs. Nohar Chand, 1984 SCR (3) 839 held that the Court(s), in whose Jurisdiction, products/goods are marketed, will have the territorial Jurisdiction to entertain and decide a complaint. The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. In view of fact of Marketing Office of  the opposite party at Chandigarh and also 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.”

 

Not only as above, payment of Rs.1,36,695/- vide cheque dated 21.07.2012, was received by the Regional Office of opposite party no.1, at Chandigarh. Photocopy of the cheque with receipt given is available at page 36 of the paper book. Facts narrated above, clearly goes to show that a part of action has accrued to the complainants at Chandigarh i.e. within the territory of this Commission, as such, this Commission has got territorial jurisdiction to entertain and decide the complaint.”

 

16.         Not only as above, it is proved on record that through cheques, substantial amount was received by the Marketing Office/Registered Office of opposite parties no.1 and 2, towards price of the unit, at Chandigarh, as is evident from the receipts Annexure C-7 (colly.). Photocopy of cheques and receipts are available at pages 82 to 88. Facts mentioned above clearly go to show that a part of action has accrued to the complainants at Chandigarh i.e. within the territory of this Commission, as such, this Commission has got territorial jurisdiction to entertain and decide the complaint
17.         No doubt, in the written version, an objection was also taken by opposite parties no.1 and 2, that as per Article 12.b of the Agreement, the Courts at Mohali, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainants, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII(2011)SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

                In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum,  in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainants had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts at Mohali, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to the complainants, to file the complaint. The submission of Counsel for opposite parties no.1  and 2, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

18.         To defeat claim of the  complainants, another objection was raised by Counsel for opposite parties no.1 and 2, that the complainants are speculators, as they have purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, they would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act.

                It may be stated here that there is nothing, on record to show, that the complainants are the property dealers, and are indulged in sale and purchase of property, on regular basis. On the other hand, the complainants, in paragraph no.1 of their complaint supported by their affidavit, have clearly averred that they had purchased the said unit, for their residential purpose. In the absence of any cogent evidence, in support of the objection raised by opposite parties no.1 and 2, mere bald assertion to that effect, 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. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by opposite parties no.1 and 2, in their written reply, therefore, being devoid of merit, is rejected.  

19.         Another objection was raised by Counsel for opposite parties no.1 and 2, that the dispute being related to contractual matter, the consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainants hired the services of opposite parties no.1 to 3, for purchasing the unit, in the manner, referred to above. According to Article 4.a.(i) of the  Agreement, physical possession of the unit, was to be delivered by opposite parties no.1 to 3, within a period of 36 months, from the date of execution of the same (Agreement) i.e. latest by 26.04.2014 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, Section 3 of the 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainants have 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 them, as they fall within the definition of consumer. In this view of the matter, the objection of opposite parties no. 1 and 2, in this regard, being devoid of merit, must fail, and the same stands rejected.

20.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants is time barred or not. It may be stated here that as per the Agreement, possession of the unit, was required to be delivered, in favour of the complainants by 26.04.2014. Admittedly, possession of the unit, in question, was not even offered to the complainants, by the stipulated date, or even by the time, the complaint was filed. On the other hand, still no firm date has been assigned by opposite parties no.1 to 3, for delivery of possession of the unit, for want of complete development work and basic amenities. Still, they are saying that it will take around nine to twelve months. At the same time, till date, amount deposited was also not refunded to the complainants alongwith interest. As such, there is continuing cause of action, in favour of the complainants to file a consumer complaint, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The objection taken by opposite parties no.1 and 2, in this regard, being devoid of merit, must fail, and the same stands rejected.
21.         The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

                To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

22.         Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
23.         In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

24.         Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
25.         Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis 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.
26.         We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainants have spent their life savings to get a unit, for their residential purpose. 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.2000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take 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 the provisions of 1986 Act.
27.         The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainants have spent their entire  life earnings to purchase the flat, in the said project, launched by opposite parties no.1 to 3. However, their hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the constructed unit, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
28.         Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

                In view of the above, objection raised by Counsel for opposite parties no.1 and 2, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

29.          Now coming to the plea taken by opposite parties no.1 and 2 to the effect that possession of the unit, in question, could not be offered to the  complainants, by the stipulated date, on account of extreme financial hardship, due to recession in the market/global meltdown. It may be stated here that, when opposite parties no.1 to 3 had already received substantial amount, referred to above, towards the unit(s), from the allottee(s), 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 opposite parties no.1 to 3 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 their case, only in those circumstances, the plea with regard to facing extreme financial hardship would have been considered to be correct, by this Commission.

                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 and development work at the site. 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/development work 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 was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God, which could have delayed the completion of construction/development work in 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 a case titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints),  2015 (4) CPR 34. 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 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 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.”.

30.         The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. Opposite parties no.1 to 3, therefore, cannot take shelter under Article 8.b. of the Agreement, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  possession of the unit, in question, would be delivered within a period of 36 months, from the date of execution of the Agreement but on the other hand, by not abiding by the commitments made, opposite parties no.1 to 3 were not only deficient, in rendering service, but also indulged into unfair trade practice.
31.         Vide Agreement aforesaid, built-up unit was purchased by the complainants from opposite parties no.1 and 2, for an amount of Rs.38,48,400/-. As stated above, by the time, this complaint was filed, they had paid an amount of Rs.36,72,614/-. There is nothing on record to show that construction was raised as per schedule given, to handover possession within 36 months from the date of signing of Agreement. Counsel for opposite parties no.1 and 2 have failed to give any commitment, as to within how much time, construction of the unit, will be completed, by placing on any cogent evidence in that regard. At the time of arguments, very hesitantly, it has been said that delivery of possession will take not less than nine to twelve months. Above facts, clearly goes to show that opposite parties no.1 to 3 are guilty of deficiency in providing service to the complainants. The complainants are thus, entitled to get refund of amount deposited by them. In view of above facts of the case, opposite parties no.1 to 3 are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.
32.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the  complainants. It is not in dispute that an amount of Rs.36,72,614/- was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by opposite parties no.1 to 3, for their own benefit. There is no dispute that for making delayed payments, opposite parties no.1 to 3 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).

                However, it is made clear that since in the instant case, half of the amount towards the said unit, has been paid by opposite party no.4, out of the loan amount sanctioned by it, in favour of the complainants, as such, we are going to grant simple interest @15% p.a., on the amount to be refunded, from the respective dates of deposits and not @15% compounded quarterly as has been granted in other cases, till realization, to meet the ends of justice.  

33.         As far as the liability of opposite parties no.1 and 2, is concerned, it may be stated here that once it has been proved on record that opposite parties no.1 and 2 were necessary parties to the Agreement; they also marketed the project, in question; and had also received substantial amount from the complainants, towards the said unit, through the cheques/receipts, referred to above,  as such, they are equally liable alongwith opposite party no.3, to refund the amount paid by them (complainants). The complaint, in no way, can be dismissed, on the pretext of misjoinder of parties. The objection raised by Counsel for opposite parties no.1 and 2, in this regard, being devoid of merit, stands rejected.
34.         No other point, was urged, by Counsel for the complainants and opposite parties no.1, 2 and 4.
35.         For the reasons recorded above, the complaint is partly accepted, with costs. Opposite parties no.1 to 3 are jointly and severally directed as under:-

1. To refund the amount Rs.36,72,614/-, to  the  complainants, alongwith interest @15% p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.1.50 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.40,000/- to the  complainants.
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% p.a.,  instead of @15%, from the respective dates of deposits onwards, and interest @15% p.a.,  on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
5. Complaint against opposite party no.4 is dismissed with no order as to costs.

36.         However, it is made clear that, opposite party no.4 will have the first charge of the amount payable, to the extent, the same is due to be paid by them  (complainants).
37.         Certified Copies of this order be sent to the parties, free of charge.
38.         The file be consigned to Record Room, after completion.

Pronounced.

01.09.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

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(PADMA PANDEY)

        MEMBER

Rg.