Chandigarh

StateCommission

CC/253/2018

Harsh Dhawan - Complainant(s)

Versus

Unitech Ltd. - Opp.Party(s)

Sanjeev Sharma, Adv.

10 Dec 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	253 of 2018
Date of Institution	:	01.06.2018
Date of Decision	:	10.12.2018

 

1. Harsh Dhawan wife of Akshay Grover.
2. Akshay Grover son of Sh.Sajinder Grover.

Both through their Power of Attorney Holder Sh.Amit Khurana son of Sh.Ashok Khurana, resident of T12, 6B Ozone park apartment, Sector 86, Faridabad, Haryana-121002.

…… Complainants

V e r s u s

 

1. Unitech Limited, through its Chairman having its Marketing Office at SCO No.189-90-91, Sector 17-C, Chandigarh.

        2^nd Address: M/s Unitech Limited, through Director Ajay Chandra, having Registered Office at 6, Community Centre, Saket, New Delhi-110017.

2. Ramesh Chandra, Chairman of M/s Unitech Limited, having its Marketing Office at SCO No.189-90-91, Sector 17-C, Chandigarh.
3. Sanjay Chandra, Director of M/s Unitech Limited, having its Registered Office at 6, Community Centre, Saket, New Delhi-110017.
4. Alice Developers Private Limited, through its Director, having Registered Office at 6,   Community Centre,  Saket, New Delhi-110017.
5. Sanjeev Hingorani, Director of M/s Alice Developers Private Limited, having Registered Office at 6, Community Centre, Saket, New Delhi-110017.

…..Opposite parties

Complaint under Section 17 of the Consumer Protection Act, 1986

 

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

                        MRS.PADMA PANDEY, MEMBER

                        MR.RAJESH K. ARYA,  MEMBER.

 

Argued by:-      Sh.Sanjeev Sharma, Advocate for the        complainants.

Mrs.Vertika H.Singh, Advocate for opposite party No.1.

Sh.Harsh Nagar, Advocate for opposite party no.4.

Sh.Neeraj Sobti, Advocate for opposite party no.5.

Opposite parties no.2 and 3 exparte.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                It is case of the complainants that despite the fact that they had paid Rs.46,56,385/-, as per demands raised by the opposite parties, they were not delivered possession of apartment bearing no.0502 (3 Bedroom), Block B3, 5^th Floor, measuring 1790 square feet, purchased by them, in their (opposite parties) project namely, ‘Gardens’, Uniworld City, Sector 97, Mohali, Punjab (in short the unit), for want of construction, basic amenities and necessary approvals/sanctions, whereas, vide Clause 4 a (i) of the Agreement dated 14.03.2011, Annexure C-4, executed between the parties, they (opposite parties), promised to deliver the same by 13.03.2014 i.e. within a period of 36 months, from the date of signing the same (Agreement). It was stated that total cost of the said unit was fixed at Rs.48,90,634/-, which included external development charges to the tune of Rs.80,550/-, preferential location charges to the tune of Rs.89,500/-, and Rs.3,00,000/- towards one car parking. It was specifically stated that number of visits were made by the complainants, at the project site, as well as office of the opposite parties, to know, as to when possession of the unit, in question, will be delivered to them, after completing the construction and basic amenities, but to no avail. It was further stated that, as on today, there is no likelihood of completion of construction of the unit, in question, including the basic amenities, as such, the question of delivering possession thereof, in the near future did not at all arise. It was further stated that the opposite parties are also not in possession of necessary permissions/sanctions, as far as the present project is concerned. Request was made to the opposite parties, to refund the amount paid alongwith interest but it was not acceded. It was averred that hopes of the complainants to have their own house, have been shattered. It was pleaded that for making payment towards the said unit, the complainants had raised housing loan from State Bank of India, Bhilai, for which they paid heavy rate of interest. Now the said loan amount has been repaid and loan account stood closed. Till date neither possession of the unit has been offered, nor compensation for the period of delay in offering possession has been paid nor amount paid has been refunded to the complainants, by the opposite parties.

                It was stated that the aforesaid acts of the opposite parties, amounted to deficiency in providing service and adoption of unfair trade practice. Hence this complaint has been filed by the complainants, seeking refund of the amount paid, alongwith interest, compensation etc.

2.         It is necessary to mention here that earlier, consumer complaint bearing no.663 of 2017 had been filed by the complainants, in respect of the unit, in question, which was got dismissed as withdrawn, vide order dated 09.04.2018, with liberty to file afresh one, after adjusting their claim.
3.         Notice in this complaint was issued to the opposite parties on 12.06.2018, for 16.07.2018. Initially, Mrs.Vertika H.Singh, Advocate, put in appearance on behalf of opposite parties no.1 to 3, however, later on, she gave a statement on 25.09.2018 that she is not appearing on behalf of opposite parties no.2 and 3. On the said date, she filed written reply and evidence on behalf of opposite party no.1 only. Accordingly, when this Commission felt that there is an attempt to delay the proceedings and at the same time, none put in appearance, on behalf of opposite parties no.2 and 3, they were proceeded against exparte, vide order dated 23.10.2018.
4.          In the written statement, filed by opposite party no.1, factual matrix of the case was not seriously disputed. However, an attempt has been made to wash of its hands, by stating that as per Developer’s Agreement executed between opposite parties no.1 and 4, it (opposite party no.4) was to construct the units and hand over possession thereof, to the purchasers including the complainants. It was further stated that as opposite party no.4  failed to do so, no liability can be imposed upon opposite party no.1. Territorial jurisdiction of this Commission was challenged by stating that Buyer’s Agreement was signed at New Delhi; unit in question is located at Mohali; and also all the payments which were received at Chandigarh office, demands thereof were raised by Gurgaon Office of the opposite parties and receipts thereof had also been released from the said office. Pecuniary jurisdiction of this Commission was also challenged. It was stated that the complainants being investors, would not fall within definition of consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986.
5.         On merits, it was admitted that the complainants had purchased the residential unit, in question, in the said project. It was stated that total cost of the said unit was fixed at Rs.48,90,634/- and not Rs.40,24,075/-. It was not disputed that as per condition no. 4.a.(i) of the Agreement, possession of the fully developed unit, was to be delivered to the complainants within a period of 36 months, from the date of execution of the same (Agreement). It was stated that the said period was extendable and until such time, the sale deed is executed, the builder was to remain owner of the property, in question. It was submitted stated that Chandigarh Office of opposite party no.1 was providing various facilities to the purchasers, including the complainants, on behalf of opposite party no.4. Documents, if any, issued by opposite party no.1, were issued on behalf of opposite party no.4. Further, while admitting that amount was collected from the complainants, by Chandigarh Office of opposite party no.1, it was stated that the same was deposited in the designated account of opposite party no.4. It was stated that opposite party no.4 was authorized to use Unitech Trade Mark and Corporate Logo, of opposite party no.1, for various purposes, such as promotional, marketing, advertisements etc. It was further stated that the dispute being a contractual one, consumer complaint is not maintainable, and only a Civil Court, could adjudicate the same. The complainants should have filed recovery suit, to recover the amount paid towards the said unit. Delay in construction of unit(s) in the said project occurred on account of force majeure circumstances, for which the developer was entitled to reasonable extension of time for delivery of possession thereof. It was averred that in terms of Clause 2 (e) of the Agreement, in case, the buyer cancels the allotment, and/or seeks refund of the amount deposited, the developer was at liberty to forfeit the booking/earnest amount, out of the deposited amount, as the case may be. Since  it was opposite party no.4, which was to construct the units and deliver possession of the same, as such, no liability can be fastened upon opposite party no.1, as it was only the confirming party and had a very limited role. All necessary approvals/sanctions had been obtained from the Competent Authorities, as far as the project, in question, is concerned. It was pleaded that, delay, if any, took place, is solely attributable to the Punjab State Power Corporation Limited (PSPCL), as it  took a long time for granting approval to provide electricity to the project. At the time of arguments, it was contended with vehemence by Counsel for opposite party no.1 that the complaint was bad for non-joinder of necessary party i.e. PSPCL. It was stated that all basic amenities including construction work of the unit are complete and opposite party no.1 has already applied for completion certificate vide letter dated 03.02.2016. It was pleaded that the complaint filed is beyond limitation. The remaining averments were denied, being wrong.
6.         Opposite party no.4 took almost the same pleas, as have been taken by opposite party no.1, in its written reply. In addition to that, it was stated that opposite party no.4 is making honest efforts to deliver possession of the unit, to the complainants, at the earliest. To wriggle out of the situation, it was pleaded that construction could not be completed on account of global recession/slowdown in the market, which comes under the purview of force majeure circumstances. It was stated that the complainants have not paid the remaining sale consideration. They have paid Rs.46,56,385/- against Rs.48,90,634/-. They being defaulters, are not entitled to any relief.  It is averred that for any delay, stipulated penalty has been provided in the Agreement, which safeguarded rights of the complainants, in case, they are eligible for that. It was submitted that as per terms and conditions agreed to between the parties, only the Courts at Mohali, shall have jurisdiction to entertain and decide the present complaint, as such, jurisdiction of this Commission is barred. It was stated that proper court fee has not been deposited by the complainants. It was averred that since opposite party no.5 has resigned from the post of Director of the Company, as such, his name be deleted from the array of parties. The remaining averments were denied, being wrong.
7.         Opposite party no.5, in his short reply filed, tried to evade his liability, by saying that since he was an Independent non-active Director of the Company/Alice Developers Private Limited, he was not involved in day to day affairs of the Company, as such, he cannot be held liable for any act, as far as the present transaction is concerned. He cannot be held liable for any act of the Companies (Alice Developers and Unitech Limited). It was pleaded that opposite party no.5 himself is victim of Unitech Limited, as possession of the flat purchased by him, in its project, has not yet been offered and delivered. Prayer was made to dismiss complaint against him.
8.         The contesting parties led evidence in support of their case and also raised arguments in terms of pleadings noted in earlier part of this order, which were heard, in detail.
9.         The first question, that falls for consideration, is, as to whether, the complainants are speculators, and that they have purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, they would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, as alleged by opposite parties no.1 and 4. It may be stated here that there is nothing, on record to show that the complainants are the property dealers and are indulged in sale and purchase of property, on regular basis. In para no.3 of the complaint, supported by the affidavit, it has been specifically stated by the complainants that the unit, in question was purchased by them, for their residential purposes. Thus, in the absence of any cogent evidence, in support of the objection raised by opposite parties no.1 and 4, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316.  The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by no.1 and 4 in their written reply, therefore, being devoid of merit, is rejected. 
10.         Now we will like to decide an objection raised by opposite parties no.1 and 4 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) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016.  Relevant part of the said order reads thus:-

“It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum.  The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer.  Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction.  If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint.  For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum.  Similarly, if  for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. ”

In the present case, total value of the unit, in question, i.e. Rs.48,90,634/-, plus compensation claimed by way of interest @12% p.a. on the deposited amount of Rs.46,56,385/- and also Rs.2 lacs, claimed as compensation for mental agony; physical harassment etc., if taken into consideration, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide this complaint. The objection taken by opposite parties no.1 and 4, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

11.         The next question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not. According to Section 17 of the Act, a consumer complaint can be filed by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case,  it is evident from contents of the Buyer’s Agreement, that it has specifically been stated that the Company i.e. Unitech is a Public Limited, having its Marketing Office at Unitech Limited, SCO 189-90-91, Sector 17C, Chandigarh. It has also come on record that at one point of time, account statement/customer ledger Annexure C-8 pertaining to the unit of the complainants was issued by Marketing Office of opposite parties no.1 to 3, at Chandigarh, as it bears the address of Chandigarh Office of the Company (Unitech Limited). Not only as above, it has been candidly admitted by opposite party no.1, in number of paragraphs of its written reply that it had received payments towards price of the said unit, from the complainants; application for booking the said unit alongwith booking amount was also received by Chandigarh Office; and also various documents were issued by the said Office at Chandigarh. If that is so, it can safely be said that the Marketing Office of the Company (Unitech) at Chandigarh, was actively playing a significant role, in respect of the transaction in question, meaning thereby that it was actually carrying on business for gains, from Chandigarh. Under these circumstances, it can safely be said that this Commission has got territorial jurisdiction to entertain and decide this complaint, in view of law laid down by the Hon’ble Supreme Court of India in State of Punjab Vs. Nohar Chand, 1984 SCR (3) 839, in which it was held that the Court(s), in whose Jurisdiction, products/goods are marketed, will have the territorial Jurisdiction to entertain and decide a complaint. Similar findings were given by the National Commission, in a case titled as Parsvnath Developers and anr. Vs. Som Nath Sharma and 2 ors., First Appeal No.1613 of 2016, decided on 21.03.2017. Relevant contents of the said order read thus:-

“Regarding the question of territorial jurisdiction, the some part of cause of action accrues in Delhi as the agreement was signed at New Delhi.  The  payment  was received at Panchkula in the office of OPs 1 to 3.  Similar issue was decided by this Commission in the case of Ravinder Kumar Bajaj vs. Parsvnath Developers Pvt. Ltd. & Ors., first appeal No. 515 of 2016 decided on 23.08.2016 qua same very builder.  It was held that “officers of opposite parties no. 1 to 3 sitting in Branch Office at Chandigarh were actively participating in marketing and propagating the project, in question.  They were dealing with the complainants throughout, by receiving their letters qua progress at the spot and also accepted payment made through cheques.  In view of above, objection raised in this regard, stands rejected.”

               

                No doubt, opposite party no. 4 took an objection that since as per Clause 12.b of the Agreement, it was mutually agreed to between the parties that the Courts at Mohali, shall have Jurisdiction, to entertain and adjudicate the dispute(s) in respect of the unit, in question,  and, as such, the jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case. In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if it is assumed for the sake of arguments, that the complainants had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to them (complainants), to file the complaint. In view of above, objection taken by opposite party no. 4, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

12.         It is not in dispute that the opposite parties have failed to deliver possession of the unit, in question, within the stipulated period or even as on today. The complainants have sought refund of the amount paid, alongwith interest and compensation etc. It is to be analyzed as to whether, in view of facts noted above; pleadings on record and arguments raised, it is open to the complainants, to claim above said reliefs or not. It is not in dispute that the complainants purchased the unit, in question, vide Agreement dated 14.03.2011. Constructed unit was sold in favour of the complainants, for an amount of Rs.48,90,634/-, which includes basic sale price, external development charges, preferential location charges etc. In all, the complainants have paid an amount of Rs.46,56,385/-, towards price of the said unit. As per condition no. 4.a.(i) of the Agreement, possession of the fully constructed unit, in a developed project, was to be delivered to the complainants within a period of 36 months, from the date of execution of the same (Agreement), subject to force majeure conditions i.e. on or before 13.03.2014. The due date of offer of possession of the unit already stood expired. Now it is December 2018.

                Contention of Counsel for the complainants that construction at the spot is not complete needs acceptance. By the date, when arguments were addressed before us, possession has not been offered to the complainants. It is not a case of the opposite parties that possession of the unit was ready to be delivered by the stipulated date, but the complainants have refused to come forward to accept the same (possession). Rather, in the written statement filed, it has been candidly stated by opposite party no. 4, that it is making best efforts to complete construction and deliver possession of the unit to the complainants. However, exact date/period has still not been given. Even at the time of arguments, Counsel for opposite parties no.1 and 4 failed to give any positive date/time, as to when, possession of the constructed unit will be given. It was said that possession of the unit, will be delivered in near future and that they have applied for completion certificate, which is awaited. Qua this very project, in  large number of cases, it has been found as a matter of fact that construction has come to stand still. As stated above, even at the time of arguments, no commitment was made to deliver possession of the unit, in time bound manner.

                Furthermore, not even a single convincing document has been placed on record, by the opposite parties to prove that the unit, in question, can be made habitable or that the development at the project will be completed, in near future. It is well settled law that the onus to prove that the project has been completed and the area/site, in question, is fully developed, or it is about to complete, is on the builder/opposite parties. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present case, it is very strange that not even a single document has been placed on record, by opposite parties no.1 and 4, in respect of the unit, in question, to prove that the construction is about to complete. In case, all the development activities are being undertaken and construction of the units is going to be completed shortly, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify the same, but they failed to do so. Mere placing on record an application dated 03.02.2016, allegedly sent to the Competent Authorities, seeking partial completion certificate in respect of the project, in question, is of no help to the opposite parties.

                Under these circumstances, it can be said that there is a material violation on the part of the opposite parties. At the same time, it is also a settled law that when there is a material violation on the part of the builder, in not handing over possession of the unit(s) by the stipulated date, the purchaser is not bound to accept the offer, 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 Hon’ble 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.”

 

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.

 

Furthermore, 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 Hon’ble 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”.

 

The above view taken by the National Commission, has been reiterated by it, recently in the case titled as Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No. 1814 of 2017 decided on 05.07.2018. Relevant part of the said order reads thus:-

“This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment”.

 

                However, in the present case, as stated above, possession of the unit has not even been offered, what to speak of delay in offering thereof. 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 or by the time, this complaint was filed, the complainants are, thus, entitled to get refund of amount actually deposited by them. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

                A plea was also taken by opposite parties no.1 and 4 that delay aforesaid, is attributable to the PSPCL, as it took a long time to grant approval for supply of electricity to the project. It may be stated here that mere bald plea taken by opposite parties no.1 and 4 has no legs to stand. To substantiate their stand, opposite parties no.1 and 4 were required to place on record cogent and convincing evidence on record, to convince this Commission that despite the fact that every step was taken at their end, but the said Authority delayed the matter, unnecessarily, leading to delay in completing the project. Had this been actually the case of the opposite parties, they would have definitely taken up the matter with the Competent Authorities, by sending letters followed by reminders, to grant timely approval with regard to provision of electricity to the project. However, no such documents are on record. As such, it can very well be said that such a plea has been taken by opposite parties no.1 and 4, just with a view to evade their liability. Under these circumstances, no help, therefore, can be drawn by the opposite parties, from Clause 8 (b) of the Agreement, relating to force majeure circumstances, as far as the present case is concerned. As stated above, the complainants are certainly entitled to get refund of the amount actually deposited by them, towards price of the said unit, as held above.

                In view of above, it is also held that since there was no privity of contract with PSPCL and the complainants, as such, plea taken by opposite parties no.1 and 4 that the said Authority was required to be impleaded as necessary party to this complaint, being devoid of merit, stands rejected.

13.         Counsel for opposite parties no.1 to 4 also made an attempt to wriggle out of the situation by stating that construction could not be completed on account of global recession/slowdown in the market, resulting into shortage of building material. It is very significant to mention here that once the opposite parties have already received more than 95% of the sale consideration, towards the unit, in question, from the complainants, then it does not lie in their mouth, that they faced extreme financial hardship, due to global meltdown 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 taken with regard to facing extreme financial hardship on account of global meltdown/shown in the market, would have been considered 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 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 party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project”.

The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. The opposite parties, therefore, cannot take shelter under the garb of force majeure Clause of the Agreement, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  possession of the unit, in question, would be delivered within a period of 36 months, from the date of signing of the agreement, but on the other hand, by not abiding by the commitments made and at the same time, taking  a bald stand that there was global recession or that there was shortage of building material in the market, the opposite parties are not only deficient in providing service but also indulged into unfair trade practice. Under these circumstances, it can safely be said that such a plea has been taken by opposite parties no.1 and 4, for the first time, in the written statement, just with a view to escape from their liability, which is not sustainable in the eyes of law and is accordingly rejected.

14.         An objection was also raised by opposite parties no.1 and 4 that the dispute being related to contractual nature, the consumer complaint is not maintainable, and only a Civil Court can decide the case. It may be stated here, that the complainants hired the services of the opposite parties, for purchasing the unit, in the manner, referred to above. According to condition no.4.a.(i) of the Agreement, physical possession of the unit, was to be delivered by the opposite parties, within a period of 36 months, from the date of execution of the same (Agreement) i.e. latest by 13.03.2014 alongwith all basic amenities as mentioned in Article 2.a.(ii) of the Agreement. By not doing so, the opposite parties have breached the terms and conditions of the said agreement, leading to deficiency in providing service and adoption of unfair trade practice. Section 2 (1) (o) of the Act, defines service as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

 

                From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the 1986 Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can also be availed of by them, as they fall, within the definition of consumer. In this view of the matter, objection taken by opposite parties no.1 and 4, in this regard, being devoid of merit, must fail, and the same stands rejected.

                Such type of objection taken by opposite parties no.1 and 4 is also bereft of merit, in view of judgment rendered by the Hon’ble National Commission, titled as M/s. Karwa Developers & 3 Ors. Vs. Shree Vinayak Co-Operative Housing Society Ltd. & 3 Ors., First Appeal No. 980 of 2016,  decided on 3^rd March, 2017, wherein, a similar plea of the builder was negated, while holding as under:-

“We also do not find any substance in the plea taken by the appellant that under clause 14(a) of the development agreement, the complainant was required to file a civil suit under the Specific Relief Act only, because they were asking for monetary relief.  The State Commission rightly stated that the relief sought in the complaint were on account of deficiencies committed by the OP Developers, vis-à-vis, the society.  Since there is a specific clause in the agreement for giving the possession of the flat within specific time frame and penalty has been provided if the developers failed to develop the same, the society was well within its rights to file consumer complaint against the OP builder.”

 

15.         It is to be further seen, as to whether, interest on the amount refunded, can be granted in favour of the complainants. It is an admitted fact that an amount of Rs.46,56,385/-, was paid by the complainants, against price of the said unit. Despite making payment of that amount, the complainants are still empty handed.  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 (@18% per annum, compounded quarterly) 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). In view of above, the complainants are certainly entitled to get refund of the amount deposited by them, alongwith interest. It is pertinent to add here that this Commission, under similar circumstances, in the complaints filed by similar located allottees in respect of the project in question, have been granting interest @15% compounded quarterly, (less than the rate of interest charged by the opposite parties, in case of delayed payment i.e. 18% p.a. compounded quarterly, as per Article 2.c. of the Agreement), from the date, when the amount was actually deposited, till realization, yet, in the present complaint, the complainants have sought refund of amount paid, alongwith interest @12% p.a., as such, this Commission is bound to grant interest, at such rate only.
16.         As far as the plea taken by opposite parties no.1 and 4  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 unit, to be delivered to the complainants, by the stipulated date or even by the date when this complaint was filed but the complainants wanted to rescind the contract, on account of some unavoidable circumstances/financial constraints or for any personal reason, and are 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 complainants themselves are rescinding the contract, as such, they are entitled to the amount deposited, after deduction of the earnest money, as per law. In this view of the matter, the plea taken by opposite parties no.1 and 4, in this regard, has no legs to stand and is accordingly rejected.

                Under above circumstances, plea taken by opposite party no.4, to the effect that in case of delay in handing over possession of the unit, the complainants were entitled to delayed compensation @Rs.5/- per square feet of the area of the unit, per month, for the period of delay, also stands rejected. Had the complainants sought directions with regard to possession of the unit, in question, the matter would have been different, and in those circumstances, this Commission would have passed necessary directions, in that regard, as per prevailing law.

17.         A plea was taken by opposite parties no.1 and 4 to the effect that the complainants have paid an amount of Rs.46,56,385/- out of Rs.48,90,634/-. Since, they have failed to make payment of the remaining amount, as such, they were defaulters. It may be stated here that, it is an admitted fact that opposite parties no.1 to 4 are guilty of delay in completing the project and even as on today the complainants are empty handed. On the other hand, the complainants have already paid more than 95% of sale consideration against the said unit.  If the complainants have not made the remaining amount towards price of the said unit, which infact was to be paid at the time of offer of possession (as per payment plan at page 53 of the paper book, forming part of the agreement), which event did not occur, therefore, in our considered opinion, they were well within their right, not to pay the same, in view of principle of law laid down in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments can be stopped by the purchaser. As such, plea taken by opposite parties no.1 and 4, in this regard, stands rejected.  
18.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not.  It may be stated here that since, as stated above also, it is an admitted case that offer of possession of the unit, in question, could not be made till date for want of completion of construction and basic amenities, and on the other hand, amount deposited was also not refunded to the complainants alongwith interest, as such, there is continuing cause of action, in their favour, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by limitation. The submission of Counsel for opposite parties no.1 and 4, in this regard, being devoid of merit, must fail, and the same stands rejected.
19.         As far as the liability of opposite party no.1, including opposite parties no.2 and 3, is concerned, it may be stated here that once it has been proved on record that the Company i.e. Unitech Limited was a necessary party to the Agreement; it also marketed the project, in question; documents such as allotment letter, application form etc. was also issued by the said Company (Unitech); and it had also admittedly received substantial amount from the complainants towards the said unit, as such, opposite parties no.1, 2 and 3, are equally liable alongwith opposite party no.4/Alice Developers Private Limited, to refund the amount paid by them (complainants). The objection raised by opposite party no.1 to the effect that it being facilitator or confirming party and was having a limited role, is not liable to refund the amount paid by the complainants, alongwith opposite party no.4, being devoid of merit, stands rejected.
20.         To evade his liability by opposite party no.5, his Counsel contended that since he was Independent non-active Director of the Company, and was not involved in day to day affairs of the Company, as such, he cannot be held liable for any act of opposite party no.4 or opposite parties no.1 to 3, as far as the present transaction is concerned.

                We are not going to accept the said contention. It is very significant to mention here that earlier also, we have decided number of cases, against Unitech and Alice Developers Limited, in which opposite party no.5 was also one of the necessary parties and have held them jointly and severally liable. In none of those cases, it had been pleaded by opposite party no.5 that he was an Independent non-active Director of the Company or that he was not looking after day to day affairs of the Company. Whereas, on the other hand, it had been stated in those cases that he being Director of the Company, cannot be made liable in his personal capacity. This is the first case, in which, a story has been concocted and placed before this Commission, by way of filing reply by opposite party no.5 that he was an Independent non-active Director of the Company and, as such, cannot be made liable for the act of the Companies, referred to above. It appears that opposite party no.5 wishes to take undue advantage by twisting the law/Companies Act, by concocting a deceptive story. The stand taken by opposite party no.5 that he was an Independent non-active Director of the Company, is falsified from his own resignation letter dated 12.06.2017 Annexure OP-4/2, contents of which reveal that he was Director of the Company and not an Independent non-active Director. In the said letter, he wrote to the Board of Directors of opposite party no.4 that “I wish to resign from the directorship of the company with immediate effect”. In the said letter, it was nowhere mentioned that he was an Independent non-active Director of the Company.          Furthermore, opposite party no.5 also cannot evade its liability merely by saying that since he is no more the Director of the Company, as such, he could not be made liable in the present case. It may be stated here that it is settled law that a Director who has resigned, shall be liable even after his resignation for the offences which occurred during his tenure. Under above circumstances, it is held that opposite party no.5, who was Director of the Company, at the relevant time, is equally liable alongwith opposite parties no.1 to 4, as far as the present transaction is concerned. Stand taken by opposite party no.5 in this regard, being devoid of merit, stands rejected.

21.         At the time of arguments, plea was taken by opposite parties no.1 and 4, that in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitrator, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this issue has already been dealt with, by this Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as 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), 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), and held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. In view of above, the plea raised by opposite parties no.1 and 4, in this regard, being devoid of merit is rejected.
22.         Now coming to the objection taken by opposite party no.4 with regard to court fees, we have gone through the requisite documents and found that correct fees to the tune of Rs.4,000/- being the claim of the complainants above Rs.50 lacs and below Rs.1 crore, has been paid by them. Objection taken in this regard, as such, being frivolous, is rejected.
23.          No other point, was urged, by the contesting parties.
24.         For the reasons recorded above, this complaint is partly accepted, with costs. Opposite parties no.1 to 5, are jointly and severally directed as under:-

1.       To refund, to the complainants, the amount of Rs.46,56,385/-, alongwith interest @12% p.a. (as prayed) from the respective dates of deposits onwards.
2.       To pay compensation, in the sum of Rs.1,50,000/- for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
3.       To pay cost of litigation, to the tune of Rs.50,000/- to the  complainants.
4.       The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall further carry penal interest @15% p.a., instead of 12%, from the date of default and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing this complaint, till realization.
5.       However, it is made clear that, if the complainants in this case have availed loan facility from any banking or financial institution, for making payment of installments towards the unit, in question, and the same is still running, it will have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).

     

25.         Certified copy of this order be sent to the parties free of cost.
26.         The file be consigned to Record Room, after completion.

Pronounced.

10.12.2018

Sd/-

JUSTICE JASBIR SINGH (RETD.)

(PRESIDENT)

 

 

Sd/-

 

(PADMA PANDEY)

 MEMBER

 

Sd/-

 

(RAJESH K. ARYA)

 MEMBER

 

Rg.