Haryana

StateCommission

CC/115/2015

DHIRAJ GUPTA - Complainant(s)

Versus

UNITECH LTD. - Opp.Party(s)

B.K.GUPTA

01 Jun 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

         

                             Consumer Complaint No.     115 of 2015

                                      Date of Institution                  10.07.2015

                                       Date of Decision                             01.06.2016

 

 

 

 

 

 

 

 

1.      Dhiraj Gupta son of Sh. B.K. Gupta.

 

2.      Punita Gupta wife of Dhiraj Gupta, resident of 260, Block-K, Spangle Condoes, Dhakoli, Zirakpur - 140603

                                      Complainants

Versus

 

Managing Director, Unitech Limited, Real Estate Division (Marketing), Ground Floor, Signature Tower, South City-1, NH-8, Gurgaon -122001, Haryana.

Opposite Party

 

 

CORAM:   Hon’ble Mr. Justice Nawab Singh, President.

                   Mr. B.M. Bedi, Judicial Member.

                   Mr. Diwan Singh Chauhan, Member.

                                                                                                               

 

For the parties:   Shri Dhiraj Gupta, complainant in person

                             Shri Vinay Vohra, Advocate for the opposite party.

 

                                                   O R D E R

 

NAWAB SINGH J,

 

          The present complaint under Section 17 of the Consumer Protection Act, 1986 (for short, ‘Consumer Act’) has been filed by Dhiraj Gupta and his wife Punita Gupta-complainants averring that on February 12^th, 2011, they booked a flat with Unitech Limited-opposite party (for short, ‘Builder’) in the project Unitech Gardens, Sector 97, Uniworld City, Mohali by paying Rs.3,77,763/- through cheque No.001852.  An agreement dated March 08^th, 2011 (Exhibit C-2) was executed between the complainants and the builder.  As per clause 4 a (i) of the agreement, the possession of the flat – apartment was to be given within thirty six months of signing the agreement.  The builder had issued allotment letter (Exhibit C-3) whereby flat No.504 in Block No.3 was allotted to the complainants for a total consideration of Rs.40,48,875/-.  The complainants paid amount of Rs.38,58,247/- to the builder vide receipts Exhibit C-4 to 14.  Inspite of repeated requests made to the builder to handover the possession to the complainants, the possession was not handed over.  The complainants prayed that the builder be directed to refund the deposited amount, that is, Rs.38,58,247/- alongwith interest at the rate of 18% per annum from the date of its respective deposit; compensation and to pay Rs.8,91,049/- as financial loss suffered on account of pre Equated Monthly Installments.

2.      Unitech, in its reply, resisted the complaint on various grounds, including its maintainability. The builder in preliminary objections averred that this Commission does not have the pecuniary jurisdiction to try/adjudicate the complaint because the complainants are not “Consumers” within the meaning of Section 2(1)(d) of the Consumer Act, as they already own residential property and the flat in question has been booked for resale/commercial purpose;  vide Clause-13 of the Buyer’s Agreement, dated March 08^th, 2011, it was resolved between the parties that all their disputes, differences or disagreements arising out of, in connection with or in relation to the Agreement, shall be decided by Arbitration in accordance with the provisions of the Arbitration & Conciliation Act, 1996 (for short, ‘Arbitration Act, 1996’) and in view thereof, no Court or Commission or Tribunal, except the Arbitral Tribunal, has jurisdiction to entertain any dispute arising out of the transaction in question.  On merits, it is pleaded that the possession has got delayed due to force majeure circumstances, inasmuch as, due to active implementation of social schemes, like National Rural Employment Guarantee Act (NREGA) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM), there was a sudden shortage of labour in the real estate market and, therefore, the brief amenities, to be provided, could not be completed on time.  Further, the overall recession and financial problems, which were not foreseen, also contributed to the delay in the completion of the project.  

3.      The complainants in their evidence examined Dhiraj Gupta- complainant as CW1 and produced documents.  The builder tendered affidavit of Lalit Gupta, authorized representative alongwith document Exhibit OP-1.

4.      The following questions arise for consideration:-

(i)      Whether the complainants are consumers or not?

(ii)      Whether the present complaint is to be referred to Arbitration in view of Clause-13 of the Buyer’s Agreement, dated March 08^th, 2011?

(iii)     Whether the builder defaulted in delivering the possession of the flat to the complainants or not?

5.      The first question, that falls for consideration is whether the complainants are consumers or not?  Since at the time of booking of the flat, the complainants were already owning a house and therefore, the flat was booked for resale/commercial purpose and hence they were not “Consumers” within the meaning of Section 2(1)(d) of the Consumer Act, unless there is evidence on record to show that the complainants had booked more than one property/flat for the purpose of trading, a bald assertion by the builder that property/flat had been bought for the purpose of making profits is not sufficient to hold that the transaction was for “Commercial purpose.”  Except for a bald plea in the reply that the flat had been purchased by the complainants with a view to sell it on premium and make profits, Builder has not said even an additional word in this behalf, leave alone leading evidence to prove the assertion.  So, this plea of the builder is hereby rejected.

6.      The next question is as to whether the matter is to be referred to the Arbitration per clause 13 of the Buyer’s Agreement, dated March 08^th, 2011 or not? 

7.      Learned counsel for the builder has contended that after enactment of the Arbitration and Conciliation (Amendment) Act, 2015 in Section 8 of the Arbitration Act, it is mandatory for this Commission to refer the parties to arbitration.

8.      Section 8 of the Arbitration Act, 1996 is reproduced 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 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.”

9.      After amendment of the Section in the year 2015, Section 8 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.”

10.    Section 3 of the Consumer Act is relevant to adjudicate the point at issue. So, it is necessary to reproduce the provisions of Section 3 of the Consumer Act:-

“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.”

11.    Upon reading of the Section 3 of the Consumer Act, it is clear that it provides additional remedy and existence of arbitration clause, in the agreement, to settle disputes between the parties, is not a bar to entertain a complaint filed by the consumer, alleging deficiency in service in providing services etc.  It is a remedy in addition to and not in derogation to any other remedy available to an individual.  Hon’ble Supreme Court in Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294 held as under:-

                   “Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.”

12.    In another case Trans Mediterranean Airways v. Universal Exports 2011(4) R.C.R.(Civil) 472 (SC), Hon’ble Supreme Court held as under:

                   “In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy      

13.    No doubt these authorities were rendered prior to the amendment of Section 8 of the Arbitration Act, 1996 but even then the spirit of Section 8 of Arbitration (Amendment) Act, 2015 and Section 3 of the Consumer Act is the same, that is, the remedy is in addition to and not in derogation to any other remedy available.  In a recent judgment Lt. Col. Anil Raj and Another Versus M/s Unitech Limited and another, C.C. No.346 of 2013, decided on May 02^nd, 2016 by Hon’ble Mr. Justice D.K. Jain, President, National Consumer Disputes Redressal Commission, New Delhi after considering the amendment in Section 8 of the Arbitration (Amendment) Act, 2015 held that in spite of the recent amendments in the Arbitration Act that the protection provided to the consumers under this Act is in addition to the remedies available under any other statute, including the consentient arbitration under the Arbitration Act.  It was held that the complaint filed by a consumer before the Consumer Fora would be maintainable despite there being an arbitration clause in the agreement to refer the dispute to the Arbitrator.  Hence, the aforesaid contention advanced by learned counsel for the builder is rejected.   

14.    The next question is whether there were any “force majeure” conditions, which prevented Unitech from developing Unitech Gardens, Sector 97, Uniworld City, Mohali and delivering the flat to the Complainants within the stipulated time?

15.     In Lt. Col. Anil Raj (supra), Unitech Limited-builder had taken the defence of force majeure with regard to a project in Sector 106 in Mohali, that is, the Sector nearby Sector 97 of Mohali in the present case that due to implementation of social schemes like NREGA, JNNURM etc, there was shortage of labour, so, the project could not be completed within stipulated time.  The said defence was repelled by the Hon’ble National Commission in the aforesaid case by holding as under:-

          “13.     The law in relation to “force majeure”, has been explained by the Hon’ble Supreme Court in M/s Dhanrajamal Gobindram Vs. M/s Shamji Kalidas & Co. - AIR 1961 SC 1285. Referring to Lebeaupin Vs. Crispin - [1920] 2 K.B. 714, M. Hidayatullah, J. (as his Lordship then was), speaking for a three Judge Bench, observed that where reference is made to “force majeure”, the intention is to save the performing party from the consequences of anything over which, he has no control.

14.     Bearing in mind the object and intention of the said expression, in our opinion, the alleged non-availability of Labour on account of successful implementation of social schemes, like NREGA and JNNURM, cannot, by any stretch of imagination, be a condition or circumstances, constituting “force majeure”, howsoever widest meaning may be assigned to it. Apart from the fact that no material has been placed on record by Unitech to show that despite efforts, it was unable to procure labourers to complete the development of the subject Sector for over four years. Even otherwise, it is not its case that there was no construction/development activity in Sectors 97, 106 and 107, Mohali, referred to in the Agreement, between the period December 2011 when the Agreement was entered into and December 2012, when the possession of the plot was to be delivered, for the same very reasons. It belies our conviction that a developer like Unitech, who, in its Written Version claims to be a builder of great reputation, having earned name through high quality of work, was unable to organize a small Labour force for providing the so called “Brief amenities”, as referred to in the said Written Version, to the Complainants.  Hence, we have no hesitation in rejecting the defence of “force majeure”.”

          In view of this, the defence taken by the builder is not convincing and is hereby repelled.

16.    Indisputably, the complainants had applied for flat with the builder.  Apartment Allotment Agreement (Exhibit C-2) was executed between the parties on March 08^th, 2011. Flat No.504 in Block No.3 was allotted to the complainants. The complainants paid Rs.38,58,247/- to the builder.  As per clause 4 a (i) of the agreement, the possession of the flat – apartment was to be given within thirty six months of signing the agreement, that is, by March 08^th, 2014 but the builder failed to do so and it was certainly a case of deficiency in service.  Dhiraj Gupta-CW1 reiterated the facts mentioned in the complaint. 

17.    In view of above, the complaint is allowed. M/s Unitech Limited-builder is directed to pay Rs.38,58,247/- (Rupees Thirty Eight Lac Fifty Eight Thousand and Two Hundred Forty Seven Only) to the complainants, alongwith interest at the rate of 12% per annum from the date of its respective deposits till the date of realization; Rs.10,000/- as compensation for rendering deficient services and Rs.5,000/- towards litigation expenses. The entire amount be paid by the builder within a period of 45 days, from the date of receipt of the order, otherwise, it will carry interest at the rate of 18% per annum, till realization and it calls for pointed notice that under Section 27 of the Act, if the builder fails or omits to comply with this order, it shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine or with both.          

  

Announced 01.06.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President

U.K