STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1. M/s Gee City Builders Pvt. Ltd., through its Managing Director, H.No.1464, Sector 43B, Ground Floor, Chandigarh.

2. Shri Jatinder Mittal, S/o Sh. R.L. Mittal, Director M/s Gee City Builders Pvt. Ltd., r/o H.No.630, Sector 8, Panchkula.

….Appellants

Versus

1. Upkiran Kaur, D/o Sh. Harcharan Singh, resident of H.No.7, Celia Court, Chad Stone, VIC 3148, Australia through his Special Attorney Sh. Harcharan Singh, S/o Sh.Bahal Singh, r/o H.No.B-403, Rishi Apartments, Sector 70, Mohali.

2. Indermeet Kaur, D/o Sh.Harcharan Singh  Baidwan, r/o  E-904, Supertech Incone Apartment, Indrapuram Ghaziabad (U.P.)-201010 through her Special Attorney Sh.Harcharan Singh, S/o Sh.Bahal Singh, r/o H.No.B-403, Rishi Apartments, Sector 70, Mohali.

3. Harcharan Singh Baidwan, S/o Sh.Bahal Singh, r/o D-301, Rishi Apartments, Sector 70, Mohali.

4. Karnail Singh,S/o Sh.Harcharan Singh, r/o H.No.227, Apapa Road, Igamnu Industrial Estate, Iganmu Lagos, P.O.Box  51167,Falomo Ikoyi, Lagos, through his attorney Sh.Harcharan Singh, S/o Sh.Bahal Singh.

……Respondents

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    JUSTICE SHAM SUNDER, PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

                   SH.JAGROOP SINGH MAHAL, MEMBER.

Argued by: Sh.S.S.Chadha, Advocate proxy for Sh.Manjeet Pathania, Advocate for the appellants.

PER  JUSTICE SHAM SUNDER, PRESIDENT

1.             This appeal is directed against the order dated 22.11.2011, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which it accepted the complaint, and directed the Opposite Parties, as under:-

“As a result of the above discussion, this complaint is accepted with a direction to the OPs to refund Rs.13,39,975/- to the complainants along with interest @ 18% per annum from the date of its respective deposits till realization. The Ops are also directed to pay to the complainant a sum of Rs.10000/- as costs of litigation”.

2.             The facts, in brief, are that, in response to a scheme floated by the Opposite Parties, in the year 2006, for the allotment of apartments, in Rishi Apartments, Baddi, Distt. Solan (H.P.), complainant no.1, alongwith her mother Smt.Amarjit Kaur, submitted an application, dated 03.03.2006, for allotment of a residential unit, in the said multistoried apartments. After entering into a flat buyer`s agreement (hereinafter to be referred as agreement) dated 15.12.2006 (Annexure C-4), the complainants were allotted apartment bearing No.B-14-307, having an area of 785  sq. ft., on 3rd Floor, B-14 Block, in the aforesaid Apartments, for a total sale consideration of Rs.13,39,975/-. Smt.Amarjit Kaur, mother of complainant no.1 and co-allottee, died on 22.12.2006. It was stated that complainant no.1, deposited Rs.16 lacs vide receipts Annexures C-6 and C-7, against the total sale consideration of Rs.13,39,975/-. Therefore, the excess amount deposited, by complainant no.1, was adjusted by the Opposite Parties, towards the payments, made by other family members, for purchase of  another apartment bearing No.C6-401,4^th Floor, C-Block, vide receipt No.458 dated 07.03.2007, Annexure C-8, in their scheme.  The possession of apartment no. B-14-307, having an area of 785 sq. ft., on 3rd Floor, B-14 Block, was to be delivered, to the complainants, within 24 months, from the date of signing the agreement i.e. 15.12.2006. The Opposite Parties, however, failed to deliver the possession, till the date of filing the complaint and they even stopped the construction of apartments, for the reasons best known to them. The amount deposited by the complainants, was not refunded, by the Opposite Parties, despite repeated requests and service of legal notice dated 06.06.2009 vide Annexure C-9. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed by them, for refund of Rs.13,39,975/- alongwith interest @24%; compensation to the tune of Rs.1,00,000/- for mental agony and physical harassment; Rs.25,000/- as punitive damages towards unfair trade practice; and Rs.15,000/- as litigation costs.

3.             The Opposite Parties, put in appearance, and filed written statement, wherein, it was pleaded that the complainants were not consumers, as defined by the Act. It was further pleaded that the apartment, was sought to be purchased, by the complainants, for commercial purpose, to gain profit, and, as such, the District Forum, had no jurisdiction to entertain the complaint and decide the same. It was admitted that complainant no.1, and Amarjit Kaur applied for the allotment of an apartment. It was also admitted that the apartment bearing No.B-14-307 having 785  sq. ft. on 3rd Floor, B-14 Block, in Rishi Apartments, Baddi, Distt. Solan (H.P.), was allotted to them, for a total sale consideration of Rs.13,39,975/-. It was also admitted, that Rs.16 lacs, against the price of Rs. Rs.13,39,975/-, was deposited by them, and the excess amount was adjusted towards the price of another flat, which was  purchased by the family members of complainant no.1. It was stated that Annexure C-4 dated 15.12.2006, did not bear the signatures of  complainant No.1. It was denied that the construction of apartments, was stopped by the Opposite Parties. It was further stated that the construction of apartments was started immediately after 04.01.2008 i.e. when the environmental clearance  was obtained. It was further stated that the completion certificate, was requested from the concerned authority, vide letter dated 18.02.2009. It was further stated that the complainants were offered possession of another apartment on 13.07.2009, and reminder, in this respect, was also sent on 23.12.2009. It was further stated that the complainants, however, refused to take possession of the said offered apartment. It was further stated that, under these circumstances, there was no deficiency, in service, on the part of the Opposite Parties. The remaining averments, were denied, being wrong.

4.             The Parties led evidence, in support of their case.

5.             After hearing the Counsel for the parties and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

6.             Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.

7.             We have heard the Counsel for the appellants, and have gone through the evidence and record of the case, carefully. 

8.             The Counsel for the appellants, submitted that the apartment, in question, was sought to be purchased by the complainants, for commercial purpose, with a view to earn profit and, as such, they did not fall within the definition of consumer. He further submitted that the District Forum, had no jurisdiction to entertain the complaint and decide the same. He further submitted, that Smt. Upkiran Kaur, complainant no.1, did not visit India, nor did she sign the agreement annexure C-4. He further submitted that the Opposite Parties, applied for necessary approvals/permissions/sanctions, before the scheme was floated, but, if the same were not granted, in time, by the competent authorities, no liability could be fastened upon them. He further submitted that the possession of another apartment, was offered to the complainants, but they refused to accept the said offered apartment, and, as such, the Opposite Parties, were not deficient,  in rendering service. He further submitted, that the District Forum, was, thus, wrong in accepting the complaint.

9.             After giving our thoughtful consideration, to the contentions, advanced by the Counsel for the appellants, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, at the preliminary stage, for the reasons to be recorded hereinafter. The first question,  that falls for consideration, is, as to whether, the complainants, fell within the definition of consumer or not. The complainants,  applied for the allotment of residential apartment, to the Opposite Parties. They were allotted residential apartment bearing No.B-14-307, having an area of 785  sq. ft., on 3rd Floor, B-14 Block. The plea, taken up by the Opposite Parties, in their written statement, that the apartment was sought to be purchased, by the complainants, for running commercial activity, with a view to earn profit, is not substantiated from any evidence, on record. Once the residential apartment, was allotted to the complainants, the only presumption, which could be drawn, was that, the same was to be used for the purpose of residence. The District Forum, was, thus, right in holding that the apartment, in question, was not sought to be purchased, by the complainants, for running commercial activity, with  a view to earn profit. The District Forum was also right in coming to the conclusion, that the complainants, fell within the definition of consumer, and, as such, it had jurisdiction to entertain and decide the complaint.

10.                     Coming to the submission of the Counsel for the appellants that Upkiran Kaur, complainant no.1, never visited India nor signed the agreement Annexure C-4, it may be stated here, that such a plea, advanced by the Counsel for the Opposite Parties, is nothing, but a concoction. Annexure C-4, agreement dated 15.12.2006, not only bears the signatures of complainant no.1, Upkiran Kaur, but also of the seller, and of two witnesses. In case, Upkiran Kaur, complainant no.1, had not signed the said document, or was not present, at the time of signing the same, then the authorized signatory, on behalf of the Opposite Parties, who also signed this document, could raise such an objection at that time. No such objection was ever raised by the authorized signatory, on behalf of the Opposite Parties, at the time of signing the agreement Annexure C-4. At this stage, it does not lie, in the mouth of the Opposite Parties, to say that the agreement Annexure C-4, has not been signed by Upkiran Kaur and, therefore, she could not claim any benefit, on the basis, thereof. The submission of the Counsel for the appellants, therefore, being devoid of merit, must fail, and the same stands rejected.

11.           The next question, that arises for consideration, is, as to whether, the Opposite Parties, had obtained all the requisite approvals/permissions/sanctions, from the competent authorities,  before launching the scheme or not. The answer to this question, is in the negative, as would be discussed hereinafter. It is evident, from para no. 3 at page 22/47  of the agreement C-4, that the seller had already obtained the requisite permission/sanction from the competent authority. It was further recited in this para that the seller had taken possession of the land and the maps had been got sanctioned from the concerned authority, for raising construction of the said apartments. However, the facts, contained in para no. 3 at page 22/47 of the agreement C-4, were found to be untrue and false. In para 5 of the preliminary objections, in the written statement, filed by the Opposite Parties, it was admitted by them, that licence had been obtained by them from Himachal Pradesh Housing and Urban Development Authority on 26.08.2006, copy whereof was Annexure R-7. They also admitted, in this para, that drawings were got approved from the Town and City Planner, Baddi- Barotiwala Nalagarh Development Authority, Himachal Pradesh on 07.02.2007 vide Annexure R-8/A(collectively) and environmental clearance letter was obtained from the Government of India on 04.01.2008, vide Annexure R-11. When the Pollution Control Board, Himachal Pradesh, was informed,  the Opposite Parties, were directed by them, to comply with condition No.8 of the said clearance letter, which was done by them on 1.05.2008. The scheme was floated, in the year 2006. The agreement Annexure C-4, was executed between the parties on 15.12.2006. From the afore-narrated facts, it is evident, that by that time, necessary approvals/permissions/sanctions, referred to above, had not been obtained by the Opposite Parties. It means that they misled the prospective allottees/complainants  by making false promise, that they had obtained the necessary approvals/ permissions/sanctions, for the purpose of raising construction of apartments. They collected money from the prospective vendees/complainants, by making false promise, regarding approvals/permissions/sanctions, having already been obtained by them and regarding delivery of possession within 2 years from 15.12.2006. In case of Kamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC), the National Consumer Disputes Redressal Commission, New Delhi, held as under:-,

“2.   In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions  such  as sanction for  construction,   etc.,  in   the  first instance, and, thereafter, recover the consideration money from the purchaser of the apartment/building.”

12.           No doubt, it was submitted, by the Counsel for the appellants, that they applied for approvals/permissions/sanctions to the competent authorities, in time, and, if they did not grant the same immediately, or within a reasonable time, then they could not be blamed, and, as such, they were entitled to reasonable extension of time. Such a plea, on the part of the appellants, cannot be entertained. Before launching the project, it was obligatory, upon them, to get the approvals/ permissions/sanctions, which were necessary for the purpose of raising construction. Mere filing the applications, for the purpose of obtaining approvals/ permissions/sanctions, necessary for raising construction did not amount to grant of the same. Since, necessary approvals/permissions/sanctions, as referred to above, had not been granted, to the Opposite Parties, at the time, they launched the project and even at the time of execution of the agreement Annexure C-4, between the parties, they were not at all entitled, to reasonable extension of time. In Kamal Sood`s case (supra), the National Consumer Disputes Redressal Commission, New Delhi held as under:-

“22. Normally, delay in construction of building may arise because of various reasons. But, in our country, it is known fact that delay occurs in obtaining various permissions from different governmental authorities, and this fact is well-known to the builder. The time normally taken in getting such permissions could have been contemplated by the builder before issuing the brochure. It would be unfair trade practice, if the builder, without any planning and without obtaining any effective permission to construct building/apartments, invites offers and collects money from the buyers.”

13.           The principle of law, laid down, in the aforesaid case, is fully applicable to the facts of the instant case The Opposite Parties, collected money from the complainants, before obtaining the necessary approvals/permissions/ sanctions from the competent authorities, for raising construction. On the other hand they gave misleading information, to the prospective vendees, that the permissions had already been obtained by them. The Opposite Parties, thus, indulged into unfair trade practice. The District Forum, was, thus, right in holding so.

14.           The period of 24 months, with regard to the delivery of possession, was to start from 15.12.2006, the date when the agreement C-4 was executed, between the parties. It was not to start from 04.01.2008, when the environmental clearance certificate, was granted to the Opposite Parties. At the time of entering into the agreement Annexure C-4, with complainant no.1, and deceased Amarjit Kaur, they were never informed by the Opposite Parties, that they had not obtained environmental clearance certificate or other permissions from the competent authorities. On the other hand, assurance was given to them, that all the approvals/permissions/sanctions necessary for raising construction had already been obtained. The submission of the Counsel for the appellants, that period of 24 months for delivery of possession of the apartment, was to start from 04.01.2008, when the environmental clearance certificate was given, therefore, being devoid of merit, must fail and the same stands rejected.

15.           No doubt, it was submitted by the Counsel for the appellants that vide Annexure R-13, possession of apartment no. B-9-302- was offered to the complainants, but they refused to accept the same, and, as such, there was no deficiency, in service on the part of the Opposite Parties. This submission does not appear to be correct. Since the agreement C-4, in respect of the sale of  apartment No.B-14-307, was executed,  between the parties, the Opposite Parties were required to offer possession of the same to the  complainants and not of any other apartment. The Opposite Parties, could not unilaterally, change the location and number of the apartment. Even, vide document R-13, dated 16.04.2009, the possession of the changed apartment, was not offered to the complainants. On the other hand, it was stated, in this document, that the construction had already been completed and only the electric connection from Board was awaited, and the possession shall be offered, as soon as, the electricity connection was released. No evidence was produced by the Opposite Parties, that there was any change in the numbering pattern of the  apartment, which was agreed to be sold to the complainants. . Such a document, was created by the Opposite Parties, just with a view to defeat the claim of the complainants. Under these circumstances, it could be held, that the possession of apartment, which was allotted to the complainants, was not offered to them. Even the possession of the changed apartment, was not offered to them. Even it was not proved by the Opposite Parties, that the location, and the surroundings of the changed apartment, were the same, as were of the original apartment, which was allotted to the complainants. It was, thus, for the complainants, to decide, as to whether, the alleged offer, if any made by the Opposite Parties, with regard to the possession of the changed apartment, was to be accepted by them, or not. It was, under these circumstances, that they asked for the refund of amount. By neither delivering the possession of the apartment, allotted to the complainants, within stipulated period, and even till date, nor refunding the amount deposited by them, the Opposite Parties were deficient in rendering service.

16.           No other point, was urged, by the Counsel for the appellants.

17.           The order passed by the District Forum, being based, on correct appreciation of evidence, and law on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

18.           For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, at the preliminary stage, with no order as to costs. The order of the District Forum is upheld.

19.           Certified Copies of this order be sent to the parties, free of charge.

20.           The file be consigned to Record Room, after completion

Pronounced.

January 11, 2012

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Rg.