Chandigarh

StateCommission

CC/885/2016

Rishi Malhotra - Complainant(s)

Versus

Unitech Limited - Opp.Party(s)

Jitender Malik, Adv.

20 Mar 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	885 of 2016
Date of Institution	:	02.12.2016
Date of Decision	:	20.03.2017

 

Rishi Malhotra son of Sh.Surinder Nath Malhotra, permanent resident of House No.103, C-Block, Sirsa-125005. Now residing at #19870 N, 68^th Dr.Glendale AZ (Arizona), USA-85308.

…… Complainant

 

V e r s u s

1. Unitech Limited, through its Branch Manager, SCO No.189-90-91, Sector 17-C, Chandigarh.
2. Sh.Ajay Chandra, Managing Director/Executive Director (Non-Independent Director), M/s United Limited, # C-41, Mayfair Gardens, Hauz Khass, New Delhi.
3. Sh.Ajay Chandra, Chairman/Executive Non-Independent Director, M/s United Limited, # C-41, Mayfair Gardens, Hauz Khass, New Delhi.

…. 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.Jitender Malik, Advocate for the complainant.

Mrs.Vertika H. Singh, Advocate for opposite parties

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The present complaint has been filed by the complainant seeking refund of the amount paid, in respect of the shop/unit purchased by him, in the project of the opposite parties. It was his case that allured by tall claims made by the opposite parties, in respect of their project, namely ‘Gardens Galleria’, to be developed in the Mega Township, Uniworld City, Sector 106, Mohali, Punjab, he purchased a commercial unit/shop therein. The said unit was purchased by him to earn his livelihood, by way of self-employment. To purchase the said unit, he filed an application on 12.08.2010. Vide letter of the even date (Annexure C-1), shop bearing no.0008, measuring 1032 square feet was allotted to him, for a sale consideration of Rs.43,34,400/-. Agreement to sell/Buyer’s Agreement Annexure C-2 was executed between the parties, on 12.08.2010. As per Clause 4.1 of the Agreement, possession of the constructed unit was agreed to be delivered within 21 months, from the date of signing of the above said Buyer’s Agreement i.e. on or before 11.05.2012, subject to force majeure circumstances, failing which penal clause was to be applicable. On demands raised from time to time, the complainant continued to make payment and had paid an amount of Rs.17,67,243/- out of the total sale consideration.   Payment receipts have been placed on record as Annexures C-3 to C-6.

                It is case of the complainant that despite receiving substantial amount of Rs.17,67,243/-, the opposite parties did not start construction of the unit. Possession of the unit was not even offered by the stipulated date and even till the date of filing of this complaint. Visits made by the complainant to the office of the opposite parties, a number of times, requesting them to do the needful, did not yield any result. Ultimately, on 10.10.2016, the opposite parties refused to start construction of the unit.  Request for amicable settlement of the dispute, went without result. Left with no alternative, legal notice dated 13.10.2016 was also served upon the opposite parties, but the same was not even responded by them. It was averred that the aforesaid acts of the opposite parties amounted to indulgence into unfair trade practice and deficiency in providing service to the complainant.

2.         By stating as above, the instant complaint has been filed by the complainant with a prayer to issue directions to the opposite parties to refund the amount deposited alongwith interest; compensation for mental agony and physical harassment; litigation expenses etc.
3.         Upon notice, joint reply was filed by the opposite parties. Disputing territorial jurisdiction of this Commission, to entertain the complaint, it was stated that Buyer’s Agreement was executed at New Delhi; demands were raised from Gurgaon Office; receipts were also issued from the said office, and the Branch Office at Chandigarh, at no time did any act, which may give any cause of action to the complainant to invoke territorial jurisdiction of this Commission. Pecuniary jurisdiction of this Commission was also disputed. Status of the complainant as consumer, was also disputed by stating that he had purchased the said shop/unit in a commercial complex, for earning profits, by selling it in future, on escalation of prices, as such, he being investor, would not fall within the definition of consumer, as defined under Section 2 (1) (d) of the Act.
4.         On merits, it is admitted that the complainant had purchased the unit, in question, from the opposite parties. Price of the said unit and the payments made by the complainant, in respect thereof, as mentioned in the complaint, is also not disputed. Execution of the Agreement aforesaid, between the parties, is also not disputed.  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  4.1 of the Agreement, the  opposite parties were to hand over possession of a fully constructed unit, to the  complainant within a period of 21 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It was stated that the said period was tentative. It is clarified that the opposite parties could not complete the construction/development work and hand over possession of  the unit to the complainant, as there was global meltdown/recession of the economy worldwide, resulting into financial hardships and also due to 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 construction/development work and providing of the basic amenities was delayed. It was also averred that in terms of Clause 12.2 of the Agreement, it was open to the opposite parties to ask for further extension of time to handover possession of the unit, on account of force majeure circumstances, under which construction/development work could not be completed. It is stated that construction/ 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 unit, to the complainant. It is averred that for any delay, stipulated penalty has been provided in the Agreement, which safeguarded rights of the complainant, in case, he is eligible for that. It was also stated that the opposite parties vide letter dated 03.02.2016, have applied to the Competent Authority, to issue partial completion certificate, in respect of the project, in question. It was stated that, in case, the buyer cancels the allotment, and/or seek refund of the amount deposited, the opposite parties are at liberty to forfeit the booking/earnest amount, out of the deposited amount, as the case may be, as per terms and conditions of the Agreement. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
5.         The parties led evidence in support of their case. 
6.         We have heard Counsel for the parties and have gone through the evidence and record of the case, very carefully.
7.         First of all, we will like to deal with the objection raised by Counsel for the opposite parties that this Commission lacks territorial jurisdiction to entertain and decide the complaint.  In the instant case, it has been candidly admitted by the opposite parties, that they have Marketing Office at Chandigarh i.e. at SCO No.189-90-91, Sector 17-C, Chandigarh.              Such an issue was raised earlier also by  the opposite parties no.1 and 2, in large number of cases filed against them, before this Commission and in case of Mr.Om Parkash Dua and ors. Vs. Unitech Limited and another, decided on 22.08.2016, the above issue was decided by observing as under:-

“Contention of Counsel for opposite party no.1 qua lack of territorial jurisdiction of this Commission to entertain and decide the complaint needs rejection. In the Buyer’s Agreement, it was specifically stated that the Marketing Office of opposite party no.1 is situated at SCO 189-90-91, Sector 17-C, Chandigarh. A similar plea raised by the opposite parties qua lack of territorial jurisdiction of this Commission to entertain and decide the complaint failed against them, was earlier rejected by this Commission, vide judgment 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, as such this Commission has got territorial jurisdiction to entertain the complaint. 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.”

 

                Similar view was reiterated by this Commission in a case titled as Amit Kohli and another Vs. Unitech Limited and Ors., complaint case no.210 of 2016, decided on 01.09.2016 and also in Manmohan Sandhu Vs. Unitech Limited and ors., Complaint Case no.284 of 2016, decided on 07.10.2016 (02 connected cases) and thereafter also, in number of similar cases.

                Besides as above, when we look into the documents placed on record, by the opposite parties, relating to seeking permissions from the Competent Authorities, in relation to the project, in question, it reveals that correspondence took place between Regional Office of the opposite parties at Chandigarh and the Authorities concerned, for release of electricity connection and to complete other formalities, which are necessary to develop the project. On the basis of above facts, it is held that since 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 Counsel for the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected. 

8.         It has vehemently been contended by Counsel for the opposite parties that the dispute is qua a shop, purchased by the complainant in a commercial complex, launched by the opposite parties and there is nothing on record to prove that the shop was purchased by the complainant to earn his livelihood, by way of self-employment, as such, he would not fall within the definition of consumer, in terms of Section 2 (1) (d) of the Act.                  We are not going to agree with the contention raised. There is nothing on record to show that the shop was purchased by the complainant to earn profits, in future, by selling it at a higher premium. No evidence has been produced on record by the opposite parties to prove that the complainant is the property dealer and deals in the sale and purchase of property, on regular basis, and as such, the unit has been purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Similar controversy, as to whether the complainant(s) on purchase of a shop/unit would fall within the definition of consumer complaint or not, came up for consideration, before this Commission, in a case titled as M/s Chandigarh Overseas Private Limited Vs. Easow Mathew, First Appeal No.284 of 2015, decided on 25.01.2016. Taking note of similar contentions, this Commission, gave findings as under:-

6. On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the opposite parties. Defence taken by the appellant that the respondent was not a consumer was righty rejected, by observing as under:-

“As we have already observed, the complainant has specifically pleaded in his complaint that he wanted to settle a business for himself for earning his livelihood and to become an independent business owner, he agreed to purchase the said unit of 100 sq. ft. in Design Studio No.12.  The complainant has also pleaded that he is a consumer as per the provisions of the Consumer Protection Act as the said unit was purchased by him for earning his livelihood.  The allegations of the complainant are supported by his own affidavit.  The OPs have not produced any such evidence that the complainant is a property dealer dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainant from the OPs is only 100 sq. ft. which is for small investors.  Since the complainant wanted to settle a business for himself for earning his livelihood, it cannot be inferred that the said unit was purchased by him with the sole motive of earning profits.  As far as the contention of the learned counsel for the OPs that the complainant is not qualified to run his unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether he was eligible under “Small Investor Scheme” or not.  At this stage, such an objection is not tenable.  In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon’ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer.”

7.         Contention of Counsel for the appellant that the respondent was not a consumer also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-

“Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

8.         By noting ratio of the judgment of the Hon`ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case,  application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession of the unit. In the year 2009, when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellant on 22.06.2009, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the respondent, on 04.08.2009 vide letter Annexure C-7. On account of that act, the respondent cannot be excluded from the definition of a consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja`s case (supra), that surplus funds can be invested, in such a manner, in purchasing property/unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he would fall within the definition of a consumer.”

 

9.         The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Moreover, in the instant case, it is specifically stated by the complainant in his complaint, that the said unit was purchased by him, for running the same to earn his livelihood, and also that he be able to produce additional income for his parents, by way of self-employment. 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, falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Counsel for the  opposite parties, being devoid of merit, is rejected.  
10.         An objection was also raised by the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. It may be stated here that as per Section 17 (1) (a) (i) of the Act, the State Commission shall have the pecuniary jurisdiction, where the value of the goods or services and compensation, if any claimed, exceeds rupees twenty lacs but does not exceed rupees one crore. In the present case, the complainant has sought refund of amount deposited to the tune of Rs.17,67,243/-, plus compensation to the tune of Rs.5 lacs, aggregative value whereof, if added exceeds Rs.20 lacs but it is below Rs.1 crore. Besides as above, even the value of the unit, in dispute, is Rs.43,34,400/-, as such, in view of that also, this Commission has got pecuniary jurisdiction to entertain and decide the complaint, in view of ratio of judgment titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016, by  larger Bench of the National Consumer Disputes Redressal Commission, New Delhi. In view of above, objection raised by the opposite parties stands rejected.
11.         An objection was also raised by the opposite parties 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 complainant hired the services of the opposite parties, for purchasing the unit, in the manner, referred to above. According to Article  4.1 of the  Agreement, the  opposite parties were liable to deliver physical possession of the constructed unit, in the developed project, within a period of 21 months, from the date of execution of the same (Agreement), alongwith all basic amenities. However, by not doing so, the opposite parties breached the terms and conditions of the Agreement. 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 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 raised by Counsel for the  opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
12.         It is not disputed that the complainant has purchased the unit, in question, in the project of the opposite parties, in the manner, referred to above, for an amount of Rs.43,34,400/-. He had already paid an amount of Rs.17,67,243/-  towards price of the said unit.

                It is apparent on record that the opposite parties have failed to discharge their promise made vide Agreement dated 12.08.2010. Possession of the constructed unit, in a developed project was to be delivered within 21 months, from the date of execution of the Agreement. As per arguments raised by Counsel for the complainant, construction has not even started till date. At the time of arguments, we specifically asked Counsel for the opposite parties, to confirm or deny the above said fact. However, she failed to rebut the arguments raised by Counsel for the complainant. She even failed to commit about the period within which, construction can be completed in near future and possession of the unit can be delivered. Even in the written reply, no definite time period has been given, within which, possession of the unit can be delivered in near future. It has only been stated that construction work is in full swing and the opposite parties are making every effort to deliver possession of the unit to the complainant.

                In the written version, the opposite parties, frankly admitted that possession of the unit, in question, could not be offered to the complainant, by the stipulated date, as they had failed to complete the construction and 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). It is significant to note here that even partial completion certificate has not been obtained by the opposite parties, till date, what to speak of obtaining final completion certificate, which is mandatory, before delivery of possession of the unit. Admission made by the opposite parties, itself makes it clear that they have not obtained necessary approvals/sanctions from the PSPCL, as a result whereof, they were not provided with electricity, for the project in question. Still, the opposite parties are working on obtaining permissions, from the PSPCL/GMADA.

                Secondly, when the opposite parties had received substantial amount then it does not lie in their mouth to say, 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 complete construction of units and 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.

                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 units/shops were agreed to be sold to the consumers. There is no allegation of any lockout 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 them, 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.”.

 

                The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. The opposite parties, therefore, cannot take shelter under Articles 4.4 and 4.5  of the Agreement, for extension of period, for delivery of possession of the unit or that the said period of 21 months, for delivery of possession of the unit, under above circumstances can be presumed to be tentative. As on today, not even a single brick has been laid to raise the complex, in which the shop purchased by the complainant, is situated. By making a misleading statement, that  possession of the unit, in question, would be delivered within a period of 21 months, from the date of execution of the Agreement but on the other hand, by not abiding by the commitments made, especially when they failed to prove by placing on record any convincing document that they actually faced force majeure circumstances, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice.

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

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

 

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

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

 

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

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

 

                In the present case, as explained above, the position is the worst. Under these circumstances, it is held that since there was a material violation on the part of the opposite parties, in not offering and handing over possession of the unit by the stipulated date and also still, after expiry of period of more than 04 years of the stipulated date, position is the same, the complainant is 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.

16.         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.17,67,243/- 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 2.3 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, alongwith interest @15% compounded quarterly, (less than the rate of interest charged by the opposite parties, in case of delayed payment i.e. 18% compounded quarterly, as per Article 2.3 of the Agreement), till realization. 
17.         Since it has already been held above that the complainant is entitled to refund of the amount deposited, alongwith interest and compensation, as such, plea taken by Counsel for the opposite parties, at the time of arguments, that the opposite parties are ready to pay compensation for the period of delay, as per the Agreement, has no legs to stand and is accordingly rejected.
18.         Though not taken in the written version, a plea was taken by Counsel for the opposite parties, at the time of arguments that in the face of existence of arbitration Clause no.17 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  Arbitration and Conciliation Act, 1996, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        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.

26.      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.”

27.                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.”

28.      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.

29.       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.”

30.   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.

31.        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.

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 case, the complainant has spent his life savings to get a unit, for his residential purpose. His 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,  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.

33.        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 complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, 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.

34.        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.”

35.   In  view of the above, the plea taken by the opposite party, 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.”

                In view of the above, the above said plea taken by Counsel for the opposite parties, being devoid of merit, is rejected.

19.         As far as the plea taken by the opposite parties, regarding forfeiture of earnest money is concerned, it may be stated here that the same stands rejected, because it is not their (opposite parties) case, that they were ready with possession of the unit, to be delivered to the complainant, by the stipulated date but the complainant wanted to rescind the contract, on account of some unavoidable circumstances/financial constraints or for any personal reason, and is seeking refund of the amount deposited. Had this been the case of the opposite parties, only in those circumstances, it would have been held that since the complainant himself is rescinding the contract, as such, he is entitled to the amount deposited, after deduction of the earnest money, as per the terms and conditions of the Agreement. Still the opposite parties are not ready for possession for want of construction of the unit and basic amenities. In this view of the matter, the plea taken by the opposite parties, in this regard, has no legs to stand and is accordingly rejected.
20.         No other point was urged by Counsel for the parties
21.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under: -

1.       To refund the amount of Rs.17,67,243/- alongwith interest @15% compounded quarterly, from the respective dates of deposits onwards, to the complainant.
2.       To pay compensation, in the sum of Rs.1.25 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.30,000/- 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.

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

Pronounced.

20.03.2017

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.