Chandigarh

StateCommission

CC/227/2016

Vishal Bhardwaj - Complainant(s)

Versus

Unitech Limited - Opp.Party(s)

Munish Goel, Adv.

25 Jul 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	227 of 2016
Date of Institution	:	23.05.2016
Date of Decision	:	25.07.2016

 

Vishal Bhardwaj son of Kewal Krishan Bhardwaj, R/o 8/802, NRI Complex, Seawaoods Estate, Navi Mumbai, Maharashtra, PIN 400706.

…… Complainant

V e r s u s

1. Unitech Limited, Registered Office at 6, Community Centre, Saket, New Delhi-110017, through its Managing Director/ Director/Authorized Signatory.
2. Unitech Limited, Real Estate Division (Marketing), 5^th Floor, Tower A, Signature Towers, South City, NH-8, Gurgaon-122001, through its Managing Director/Director/Authorized Signatory.
3. Unitech Limited, SCO 189-90-91, Sector 17-C, Chandigarh, through its Managing Director/Director/Authorized Signatory.

              ....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.Munish Goel, Advocate for the   complainant.

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

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The facts in brief are that the  complainant approached the opposite parities, in the month of April 2012, in order to purchase a house, for his residential purpose, in a project, launched by them, under the name and style of  ‘Executive Floors’,  Sector 97, Uniworld City, Mohali, Punjab. It was told by representatives of the opposite parties that development work at the site is in full swing and that all necessary permissions/approvals have already been obtained from the Govt. It was  assured that possession of the apartment/unit, if booked, shall be delivered within a period of two years, from the date of registration. As such, the complainant booked an apartment with the opposite parties on making payment of Rs.4,89,987/-. Vide Agreement dated 25.05.2012, the complainant was allotted apartment no.0094, floor-02, measuring 166.85 square meters (1796 square feet), Block D, (in short the unit) in the said project, for a total sale consideration of Rs.51,91,370/-, inclusive of External Development Charges (EDC), Preferential Location Charges (PLC) etc. As per Article 4.a.(i) of the Agreement, the opposite parties were liable to deliver possession of the constructed unit, in question, to the  complainant, within a period of 24 months, from the date of execution of the same (Agreement) i.e. on or before 24.05.2014. It was further provided in the said Agreement that in case of delay in handing over possession, penalty @Rs.5/- per square feet, per month of the saleable area, for the period of delay shall be paid by the opposite parties, to the complainant. To make payment towards price of the said unit, the complainant availed loan from the HDFC Limited, vide Tripartite Agreement dated 09.06.2012. By 15.06.2015, the complainant had paid an amount of Rs.51,57,853/- to the opposite parties.

2.         It was stated that after making payment of substantial amount, the complainant contacted the opposite parties, number of times, to know the stage of development and construction work at the site but no positive response was given. It was further stated that, thereafter, number of emails/letters were written to the opposite parties, in the matter, but to no avail. Requests made by the complainant to expedite delivery of possession of the unit, failed to yield any result. It was averred that the complainant also came to know that even the land, whereupon the project, in question, is to be developed, is not vested with the ownership of the opposite parties. Legal notice dated 28.12.2015 sent by the complainant also failed to get any result.  It was stated that the opposite parties are not in a position to deliver possession of the unit(s) in the said project, even as on today.
3.         By stating as above, prayer has been made to issue directions to the opposite parties to refund an amount of Rs.51,57,853/- deposited by the complainant to him, with interest @18% p.a. It is further prayed that penal amount for the period of delay in delivery of possession @Rs.5/- per square feet, per month, of the saleable area be also ordered to be paid to him. Besides as above, compensation to the tune of Rs.5 lacs, for mental agony & physical harassment and Rs.33,000/-, towards litigation expenses have also been claimed.
4.         Upon notice, reply was filed by the opposite parties, wherein numerous preliminary objections were taken stating that since the unit, in dispute, is situated in Mohali; Buyer’s Agreement was executed at New Delhi; and even the demand for payment was raised from Gurgaon Office; payments were also made through bank in an account maintained by the opposite parties at New Delhi; this Commission lacks territorial jurisdiction. Pecuniary Jurisdiction of this Commission was also disputed. It is stated that the complaint is premature. It is asserted that the unit, in question, was purchased for future gain, as such, the complainant being investor, would not fall within definition of a consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986.
5.         On merits, it is admitted that the complainant had purchased the residential unit, in question, from the opposite parties. Fact qua price of the unit, as mentioned in the complaint was 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.a.(i) of the Agreement, the opposite parties were to hand over possession of the constructed unit, to the  complainant within a period of 24 months, from the date of execution of the same (Agreement), subject to force majeure conditions. It is clarified that the opposite parties could not complete the construction/development work and hand over possession of  the unit to the  complainant, by the stipulated date, as there was global meltdown/recession of the economy worldwide, resulting into cash crunch throughout and also due to some objection raised by the Punjab State Power Corporation Limited (PSPCL), a number of times, as such, electricity could not be made available at the site, by the opposite parties, due to which, rest of the construction/development work and providing of the basic amenities was delayed. It is stated that development work at the site, is being carried out, in full swing and the opposite parties are making sincere efforts to hand over possession of the constructed unit, to the complainant. It is averred that for any delays, stipulated penalty has been provided in the Agreement, which safeguarded rights of the complainant. 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 averred that if still the complainant is interested in seeking refund of the amount deposited, his case will be governed strictly, in accordance with the terms and conditions of the Agreement. In other words, it is said that forfeiture clause shall be attracted and the complainant will lose considerable amount, in case, refund of the deposited amount is ordered by this Commission. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
6.         In the rejoinder filed, the complainant reiterated all the averments contained in the complaint and repudiated those, contained in the written version of the opposite parties.
7.         The parties led evidence in support of their case, by way of filing their respective affidavits, alongwith which, number of documents were attached. 
8.         On completion of the proceedings, arguments of the parties were heard, in detail.
9.         We would first like to deal with the objection raised by the opposite parties that this Commission has got no territorial Jurisdiction, to entertain and decide the complaint. According to Section 17 of the Act, a consumer complaint could be filed by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. It is apparent on record that the Branch Office of opposite parties no.1 and 2 is situated at Chandigarh. In the Buyer’s Agreement dated 25.05.2012, description of first party to the Agreement is given as under:-

“UNITECH LIMITED, a Public Limited Company duly incorporated under the Companies Act 1956, having its Marketing Office at Unitech Ltd., SCO 189-90-91, Sector 17-C, Chandigarh and its Registered Office at 6, Community Centre, Saket, New Delhi 110017 (hereinafter referred to as the Developers 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(ies).”

10.         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 parties, alongwith written statement, it becomes apparent that Marketing Office at Chandigarh 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 opposite parties no.1 and 2,  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. Customer ledger Annexure C-13 in respect of the unit, in question, was also issued by opposite party no.3 at Chandigarh. In para no.1 of the preliminary objections, it is also mentioned that Marketing Office of the Company is situated at Chandigarh. 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 opposite parties no.1 and 2 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 parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 
11.         Another objection raised by Counsel for the opposite parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here, that the complainant has sought refund of an amount of Rs.51,57,853/-, paid by him, towards price of the unit, in question, alongwith interest @18% p.a. from the respective dates of deposits, till realization;  compensation @Rs.5/- per square feet, per month, for the period of delay; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.33,000/-, aggregate value whereof [excluding the interest claimed] fell above Rs.20 lacs and below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint.

                As far as the interest claimed by the complainant, on the deposited amount is concerned, it is not required to be added, at this stage, to the value of the reliefs claimed, for determining the pecuniary Jurisdiction of this Commission, in view of law laid down by three Member Bench of the National Commission, in a case titled as Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), wherein it was clearly held that since rate and the period for which interest has to be allowed, is within the discretion of Consumer Foras, and that too at the stage, when the complaint is finally disposed of, as such, the same being imaginary would not be taken into consideration, at the time of filing of the same (complaint), for the purpose of determination of pecuniary jurisdiction. Not only as above, in the case of Denis Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided on 08 March 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the submission of Counsel for the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

12.         To defeat claim of the  complainant, another objection was raised by Counsel for the opposite parties, that the complainant is a speculator, as he has purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, he 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 complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. On the other hand, the complainant, in paragraph no.1 of his complaint supported by his affidavit and also in rejoinder, has clearly averred that he had purchased the said unit, for his residential purpose. In the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. 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. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties, in their written reply, therefore, being devoid of merit, is rejected.  

13.         Another objection was raised by Counsel for the opposite parties that the consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainant hired the services of the opposite parties, for purchasing the unit, in the manner, referred to above. According to Article 4.a.(i) of the  Agreement, the opposite parties were liable to deliver physical possession of the unit, within a period of 24 months, from the date of execution of the same (Agreement) i.e. latest by 24.05.2014, alongwith all basic amenities as mentioned in Article 2.a.(iii) 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 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 a consumer. In this view of the matter, the objection of the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

14.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainant, is premature or not. It may be stated here, that possession of the unit, was required to be delivered, in favour of the complainant by 24.05.2014. Admittedly, possession of the unit, in question, was not even offered to the complainant 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 the opposite parties, for delivery of possession of the unit, for want of complete construction, development work and basic amenities. Under these circumstances, the complainant was at liberty to file the complaint after 24.05.2014 i.e. the promised date, when after waiting for sufficient time, he found that the opposite parties are unable to deliver possession of the unit, in question. Had the complainant filed this complaint before 24.05.2014 (promised date), only in those circumstances, it would have been said that the complaint filed is premature. In view of above, an objection taken by the opposite parties, in this regard, is rejected out-rightly.
15.         Admittedly, possession of the unit, was not delivered to the  complainant, by 24.05.2014 or even till date. Even, 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 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). 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 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 almost the entire sale consideration, towards the  unit, in question, 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 the opposite parties were, in the first instance, required to develop the project, by arranging funds out of their own sources, and, thereafter, the units were to be sold to the allottees, on future payment basis. Had this been the case of the opposite parties, only in those circumstances, the plea with regard to facing extreme financial hardship would have been considered to be correct, by this Commission.

                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 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  complainant. 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.”.

16.         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 Clause 8.b. of the Agreement, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  the possession of unit, in question, would be delivered within a period of 24 months, from the date of execution of the Agreement but on the other hand, by not abiding by the commitments made, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice.
17.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.51,57,853/-, deposited by him. It is an admitted fact that the opposite parties are unable to deliver  possession of the unit, in question, on account of pending development works; construction  of the unit; want of basic amenities etc.  as admitted by them, and firm date of delivery of possession of the unit, could not be given to him (complainant). The complainant cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. As stated above, the opposite parties failed to prove, by placing on record, any cogent and convincing material, that they actually encountered any force majeure circumstances, as a result whereof, possession of the unit, in question, was delayed. On the other hand, stand taken by the opposite parties, in this regard, has been negated by this Commission, while giving detailed findings. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the unit, in question. The complainant is thus, entitled to get refund of amount deposited by him. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.

18.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the  complainant. It is not in dispute that an amount of Rs.51,57,853/-,  was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest (compounded quarterly @18%) as per Article 2.c. of the Agreement, for the period of delay in making payment of instalments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the  complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.51,57,853/-, alongwith interest @15% compounded quarterly, from the respective dates of deposits (less than the rate of interest charged by the opposite parties, in case of delayed payment i.e. 18% compounded quarterly, as per Article 2.c. of the Agreement), till realization.  

                Since it has already been held by this Commission that the complainant is entitled to refund of the deposited amount, alongwith interest and compensation towards mental agony and physical harassment, as such, he cannot be doubly benefited by granting penalty/compensation @Rs.5/- per square feet, per month, for the period of delay, in delivery of possession of the unit, as claimed by him. Had a prayer with regard to possession of the unit, been made by the complainant, only in those circumstances, he would have been suitably compensated in that regard, as per law.

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 the case of the opposite parties, that they were ready with possession of the fully developed unit, to be delivered to the complainant, by the stipulated date i.e. 24.05.2014 , but the complainant wanted to rescind the contract, on account of some 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. 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, the complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-

1. To refund the amount Rs.51,57,853/-,  to  the  complainant, alongwith interest @15% compounded quarterly,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.33,000/- (as prayed) to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @18% compounded quarterly, instead of @15%, from the respective dates of deposits onwards, and interest @15% compounded quarterly, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

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.

25.07.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

Rg.