Deepi Saini filed a consumer case on 15 Mar 2016 against Unitech Limited in the StateCommission Consumer Court. The case no is CC/312/2015 and the judgment uploaded on 21 Mar 2016.
Chandigarh
StateCommission
CC/312/2015
Deepi Saini - Complainant(s)
Versus
Unitech Limited - Opp.Party(s)
Sanjeev Sharma, Adv.
15 Mar 2016
ORDER
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Complaint case No.
:
312 of 2015
Date of Institution
:
21.12.2015
Date of Decision
:
15.03.2016
Deepi Saini son of Sh.Hakikat Rai Saini, resident of House No.593, First Floor, Phase-IV, Mohali, Punjab.
Sukhjeet Kaur wife of Deepi Saini, resident of House No.593, First Floor, Phase-IV, Mohali, Punjab.
……Complainants
V e r s u s
Unitech Limited, through its Branch Head/Manager, having its Marketing Office at SCO No.189-90-91, Sector 17-C, Chandigarh.
Unitech Limited, through its Chairman/Managing Director, having Registered Office at 6, Community Centre, Saket, New Delhi-110017.
.... opposite parties
Complaint under Section 17 of the Consumer Protection Act, 1986.
BEFORE: MR. DEV RAJ, PRESIDING MEMBER.
MRS. PADMA PANDEY, MEMBER
Argued by: Sh. Sanjeev Sharma, Advocate for the complainants.
Ms. Vertika H. Singh, Advocate for the Opposite Parties.
PER MR. DEV RAJ, PRESIDING MEMBER
The facts, in brief, are that allured by advertisements made by the opposite parties, in respect of their project, launched under the name and style of “UNIHOMES”, Sector 107, Uniworld City, Mohali, Punjab, the complainants decided to purchase a flat in the same. As such, the complainants booked a residential unit, with the opposite parties, vide application dated 16.10.2009, in the said project. Alongwith the said application, the complainants paid an amount of Rs.5,13,936/-, towards booking amount. As such, the complainants were allotted Floor No.0048, 3BHK, Block A, Floor 01, measuring 1077 square feet (in short the unit), in the said project, vide provisional allotment letter dated 16.10.2009 Annexure C-1 (colly.). Total sale consideration of the said unit was to the tune of Rs.22,41,304/-, which included External Development Charges to the tune of Rs.1,11,627/-. Buyer's Agreement dated 17.12.2009 Annexure C-2, in respect of the said unit, was executed between the parties. It was stated that, as per Article 4.a.(i) of the Agreement, the opposite parties were to deliver possession of the unit, in question, to the complainants, within a period of 36 months, from the date of execution of same (Agreement i.e. by 16.12.2012, subject to force majeure circumstances, failing which, as per Article 4.c, they were liable to pay penalty @Rs.5/- per square feet of the saleable area of the unit, in question, per month, for the period of delay.
It was further stated that for making payment, towards the said unit, the complainants had raised loan to the tune of Rs.12 lacs, from the LIC Housing Finance, Chandigarh, for which a Tripartite Agreement dated 27.11.2010 Annexure C-4 was executed amongst the parties.
It was further stated that despite the fact that the amount of Rs.19,32,538/- i.e. more than about 86% of the sale consideration, had been paid by the complainants, possession of the unit, in question, was not even offered to them (complainants), by the stipulated date, what to speak of delivery thereof. The complainants visited the site, where the unit, in question, was allotted to them, but were surprised to see that no construction activity was going on there. It was further stated that, thereafter, the complainants kept on visiting the Office of the opposite parties, with a request to apprise them, regarding status of the construction of unit; development of the project, and also delivery of possession of the same (unit), in their favour, but they failed to give any positive reply. It was further stated that even necessary approvals/sanctions, in respect of the project, in question, had not been obtained by the opposite parties, from the Competent Authorities. It was further stated that various letters sent to the opposite parties, in the matter, followed by final notice dated 07.12.2015 Annexure C-5, seeking refund of the amount deposited with interest, yielded no results. It was further stated that, on account of non-delivery of possession of the unit, in question, the complainants were forced to live in a rented accommodation, and, as such, they were caused additional financial loss, on account of the rent, being paid by them, and also they were deprived of comfort of living in their own house/flat.
It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the opposite parties, to refund the amount deposited, to the tune of Rs.19,32,538/-, alongwith interest @18% p.a., from the respective dates of deposits, till realization; Rs.5 lacs, as compensation, for causing mental agony and physical harassment, as also deficiency in rendering service and adoption of unfair trade practice; and cost of litigation, to the tune of Rs.50,000/-.
The opposite parties, in their joint written version, pleaded that the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as they had purchased the unit, in question, for commercial purpose i.e. for selling the same, as and when there was escalation in the prices of real estate, to gain huge profits. It was further pleaded that this Commission has no territorial and pecuniary Jurisdiction to entertain and decide the complaint. It was further pleaded that the consumer complaint was not maintainable, and only a suit for specific performance, in the Civil Court, for the enforcement of the Agreement, could be instituted. Payment of the amount mentioned in the complaint, towards part price of the unit, in question, made by the complainants, was not disputed. It was 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 complainants within a period of 36 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It was stated that the opposite parties, could not hand over possession of the unit, to the complainants, as there was global meltdown of the economy worldwide, resulting into cash crunch throughout. It was further stated that due to some objection raised by the Punjab State Power Corporation Limited (PSPCL), 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 was further stated that construction activities at the site, are in full swing and the opposite parties were making endeavour to hand over possession of the said unit, to the complainants, in the near future, after obtaining occupation certificate, from the Competent Authority. It was further stated that it was well within the knowledge of the complainants that for any delays, stipulated penalty had been provided in the Agreement, which safeguarded their rights. It was further stated that in case, still the complainants sought refund of the amount deposited, in that event, forfeiture Clause would attract, as envisaged in the Agreement. It was further stated that since the requisite Court fees, has not been paid by the complainants, the complaint is liable to be dismissed, on this ground alone. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
The complainants, in support of the averments contained in the complaint, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.
The opposite parties, in support of their case, submitted the affidavit of Sh. Lalit Gupta, their Authorized Representative, by way of evidence, alongwith which, a number of documents were attached.
We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
The first question, that falls for consideration, is, as to whether, the complainants fell within the definition of “consumer”, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here, that the mere bald objection of the opposite parties, having been taken by them, in the absence of any cogent and convincing evidence, that the complainants being speculators, purchased the unit, in question, by way of investment, to gain huge profits, by selling the same, as and when there was escalation in prices, does not carry any weight, and is liable to be rejected. It was clearly averred by the complainants, in paragraph No.10 of the complaint, supported by their separate affidavits aforesaid, submitted by way of evidence, that they had purchased the unit, in question, to have a roof over their head i.e. for their residential purpose. Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainants, was sufficient to prove that it was to be used for the purpose of residence, by them. At the same time, there is nothing, on the record, that the complainants are property dealers, and are engaged in sale and purchase of property(s), on regular basis. In 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. The principle of law, laid down, in Kavita Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it could be said that the plot, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. The complainants, 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 statement, therefore, being devoid of merit, is rejected.
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 complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident, that part amount, 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. Not only this, it is further evident that the document Annexure C-6 (Customer Ledger), was also issued by Chandigarh Office of the opposite parties i.e. Unitech Ltd., SCO 189-90-91, Sector 17-C, Chandigarh. Further, it is also significant to mention here that in para no.1 of the preliminary submission, the opposite parties have candidly admitted that their Marketing Office for marketing the project, in question, is located at SCO 189-90-91, Sector 17-C, Chandigarh. Since, as per the documents, referred to above, and also the fact that the project, in question, is being marketed from the Office of the opposite parties, at Chandigarh, a part of cause of action, arose to the complainants, 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.
The next question, that falls for consideration, is, as to whether, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint or not. It may be stated here, that the complainants have sought refund of the amount of Rs.19,32,538/-, paid by them, towards price of the said unit, alongwith interest @18% P.A., from the respective dates of deposits, till realization; compensation to the tune of Rs.5 lacs, for mental agony, physical harassment, financial loss and escalation in prices of real estate; and cost of litigation, to the tune of Rs.50,000/-, aggregate value whereof [excluding the interest claimed in view of principal of law laid down in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC),] came to be around Rs.24,82,538/- and, as such, fell below Rs.1 crore. Thus, this Commission has got pecuniary 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.
The next question, that falls for consideration, is, as to whether, since the complainants sought enforcement of the Agreement, in respect of the unit, in question, i.e. immoveable property, only a suit, in the Civil Court was maintainable. It may be stated here, that the complainants hired the services of the opposite parties, for purchasing the unit, in question, and they were allotted the same for consideration. According to Article 4.a.(i) of the Agreement, the opposite parties were to hand over possession of the unit, in question, to the complainants within a period of 36 months, from the date of execution of the same (Agreement), after providing basic amenities, as per Article 2.a. (iii). It was not that the complainants purchased the unit, in an open auction, on “as is where is basis”. 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 Act, provides an alternative remedy. Even if, it is assumed that the complainants had a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, could be availed of by them, as they fall within the definition of ‘consumer’. In this view of the matter, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
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 complainants. According to Article 4.a.(i) of the Agreement, the opposite parties were to hand over possession of the unit, in question, to the complainants, within a period of 36 months, from the date of execution of the same (Agreement) i.e. by 16.12.2012. Admittedly, possession of the unit, in question, was not delivered to the complainants, 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 complainants, as they failed to complete the construction, 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). The admittance of 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 86% of the sale consideration of the unit, in question, from the allottees, including the complainants 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. Admittedly, more than 86% 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 in favour of the complainants. Now, even as on today, on account of pending development works, as admitted by the opposite parties, as also for want of various permissions, firm date of handing over possession of the unit, in question, could not be given to the complainants. 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) 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 Buyer's 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.”.
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 36 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.
The next question, that falls for consideration, is, as to whether, since in the instant case, the complainants have sought refund of the amount deposited, forfeiture Clause will attract, as envisaged in the Agreement. It may be stated here that the instant complaint was filed on 21.12.2015 and written statement was filed by the opposite parties on 12.02.2016. The Agreement, Annexure C-2, was executed between the parties, on 17.12.2009. 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 complainants, within a period of 36 months, and not later than that, from the date of execution of the same (Plot Buyer's Agreement), after constructing the flat, complete in all respects. Admittedly, possession of the unit, was not even offered to the complainants, by 16.12.2012 i.e. by the stipulated date, what to speak of delivery thereof, as still the construction/development work was going on and the opposite parties were trying to expedite the basic amenities at the site, as has been admitted by them. Had the construction of unit, in question, been complete and had the amenities, complete in all respects, been provided, in respect of the area, where the flat of the complainants was situated, by the stipulated date and the opposite parties had offered possession to the complainants, but, on the other hand, they (complainants) had sought refund of the amount deposited, the matter would have been different. In that event, it would have been held that since the complainants rescinded the contract, as such, forfeiture clause would be applicable. Since, in the present case, possession of the unit, in question, was not even offered to the complainants, by the stipulated date, or even till date, it was justifiable for the complainants 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 complainants are entitled to get refund of the entire amount deposited by them, without application of forfeiture clause. The submission of the Counsel for the opposite parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.19,32,538/-, deposited by them. Since, the opposite parties are unable to deliver possession of the unit, in question, on account of pending development works, want of basic amenities, and non-provision of electricity, as admitted by them, firm date of delivery of possession of the unit, in question, could not be given to them (complainants), so they are entitled to the refund of amount, deposited by them, towards the price of the unit, in question, alongwith interest @ 15% compounded quarterly, from the respective date(s) of deposit.
It was, however, submitted by the Counsel for the opposite parties, that since the parties are governed by the terms and conditions of the Agreement, in case of delay, in delivery of physical possession of the unit, they (opposite parties), were only liable to make payment of penalty, in the sum of Rs.5/- (Rupees Five only) per sq.feet, per month of the super area, for such period of delay, as per Article 4.c. of the Agreement. She further submitted that the opposite parties were ready to pay this amount, for the period of delay, in delivery of possession of the unit. It may be stated here, that such a submission of the Counsel for the opposite parties, would have been considered to be correct, had the complainants, prayed for delivery of physical possession of the unit, in question. In the instant case, as stated above, prayer for the refund of amount, referred to above, was made by the complainants, in the complaint, in the circumstances, referred to above. This Article could be invoked, by the opposite parties only, in the event, the complainants, in the complaint, had sought the relief of delivery of physical possession of the unit. As stated above, the hard-earned money of the complainants was used by the opposite parties, for investment, for a long time. They were not refunded the amount, to which they were entitled to. If the opposite parties are allowed to invoke Article 4.c. of the Agreement, in the instant case, that would amount to enriching them, at the cost of the complainants. Under these circumstances, shelter cannot be taken by the opposite parties, under Article 4.c. of the Agreement. Had the complainants prayed for possession of the unit, in question, in the complaint, the matter would have been different. The complainants, in our considered opinion, as stated above, are entitled to the refund of amount of Rs.19,32,538/-, alongwith interest @ 15% compounded quarterly (lesser than the rate of interest being charged by the opposite parties from the allottees i.e. 18% compounded quarterly, as per Article 2.c (Payment Plan) of the Agreement, in case of delay in making payment), from the respective dates of deposits.
The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14 (1) (d) of the Act, on account of mental agony and physical harassment and injury caused to them, as also escalation in prices, by not delivering physical possession of the unit, to them or by not refunding the amount deposited. The complainants, underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the opposite parties. Compensation, to the tune of Rs.2 (Two) lacs, on account of mental agony and physical harassment, caused to the complainants, due to the acts of omission and commission of the opposite parties, and escalation in prices, if granted, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.2 (Two) lacs, as indicated above.
No doubt, an objection was also taken by the opposite parties, in their written version, that since the requisite Court fees, has not been paid by the complainant, the complaint is liable to be dismissed, on this ground alone. The objection taken by the opposite parties, in this regard, does not merit acceptance. It may be stated here, that according to Rule 9A (2) of the Consumer Protection Rules, 1987, if the total value of goods or services and the compensation claimed, is above twenty lacs and upto fifty lacs, the amount of fee payable is Rs.2000/-. As per the aggregate value of relief claimed by the complainant, in the instant complaint, it fell above twenty lacs and below fifty lacs, meaning thereby that the complainant was required to pay a sum of Rs.2,000/-, as Court fees. It is evident, from the record, that a sum of Rs.2000/-, vide Demand Draft dated 23.11.2015, was deposited by the complainant. The correct fee was, thus, paid by the complainant. The objection taken by the opposite parties, in this regard, therefore, being devoid of merit, is rejected.
No other point, was urged, by the Counsel for the parties.
For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties are jointly and severally, directed as under:-
To refund the amount of Rs.19,32,538/-, to the complainants, alongwith interest @ 15% compounded quarterly, from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.2 (Two) lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.50,000/-, to the complainants.
LIC Housing Finance, Chandigarh, from which the loan was taken by the complainants, for payment of installments towards the said unit, shall have first charge on the amount, referred to in Clause (i) above, to the extent of unpaid loan amount, by them (complainants).
The aforesaid awarded amounts, in the manner mentioned in clauses (i) to (iii), shall be paid by the opposite parties, to the complainants, within a period of two months (02) from the date of receipt of a certified copy of this order, failing which, the amount mentioned in clause (i) shall carry penal interest @ 18% compounded quarterly, instead of 15% compounded quarterly, from the respective dates of deposits till realization and the amounts mentioned in clauses (ii) and (iii) shall carry interest @ 15% compounded quarterly, from the date of filing of this complaint, till realization.
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
15.03.2016
Sd/-
[DEV RAJ]
PRESIDING MEMBER
Sd/-
(PADMA PANDEY)
MEMBER
Rg.
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