Shri Swapan Kumar Mahanty, President.
This is an application u/s.12 of the C.P. Act, 1986.
The brief facts of the case are that the complainant Deepak Kumar Singh booked a residential flat with the O.P.-1 in a project namely “Ivy Greens” which the O.P.-1 to develop within Chandpur Gram Panchayat under Rajarhat P.S. The O.P.-2 is the Director of the O.P.-1 company. O.P.-3 acts as Marketing Agent of O.P.-1 and O.P.-4 is the Director of O.P.-3 company. Unit No.-A2, Floor-02, Block-IG-15, measuring about 990 sq. ft. was allotted to the complainant in the above referred project for a consideration of Rs.32,20,000/- (plus GST). An agreement for sale dated 11/04/2015 was executed incorporating their respective obligations with respect of the aforesaid transactions. In terms of the Agreement for Sale complainant has paid Rs.10,62,592/-to the O.P.-1 against money receipts. As per Sale Agreement the possession is to be delivered to the complainant within thirty six months from the effective date. However, the complainant decided not to purchase the flat on account of sudden demise of his sister and requested the O.Ps.-2 to 4 to refund the earnest money. The O.Ps.-2 to 4 agreed to refund Rs. 8,12,892/- after deducting cancellation charge of Rs.2,50,000/- in terms of the Sale Agreement. Ultimately, the O.P.-3 issued three cheques amounting to Rs.3,54,197/- each, and Rs.Rs.3,54,198/- dated 22/11/2016, 10/12/2016 and 27/12/2016 respectively to the complainant towards refund including interest with a request not to present the cheques until written communication. The grievance of the complainant is that in spite of depositing original Agreement for Sale, allotment letter, money receipts the O.Ps. did not refund the earnest money. Finding no other alternative, complainant issued legal notices dated 04/12/2017, 22/12/2017 and 12/04/2018 to the O.Ps.-2 and 4 claiming refund of earnest money but such notices were unattended. There is unfair trade practice and deficiency in service on the part of the O.Ps. The complainant is, therefore, before this Forum seeking refund of the aforesaid amount along with compensation, interest and litigation cost.
The complaint is resisted by the O.Ps.-1 & 2, who took a preliminary objection that the complaint is barred by limitation and this Forum has no pecuniary jurisdiction to entertain the consumer complaint as the value of the flat is Rs.32,20,000/- and the compensation claimed by the complainant is Rs.5,00,000/-. Thus, the total value of goods and service is Rs.37,20,000/-. The complainant is not a consumer within the meaning of C. P. Act, 1986 as he booked the flat for commercial purpose. In their W.V. the answering O.Ps. have not disputed the allotment made to the complainant and subsequent cancellation of the agreement for sale for which they suffered loss and injury. The Consumer Forum could not adjudicate the dispute in summary manner and the Civil Court could decide such dispute. Hence, answering O.Ps. have prayed for dismissal of the complaint.
The O.Ps.-3 & 4 have also contested the case by filing W.V. alleging inter alia that answering O.Ps. are not party to the Agreement for Sale dated 11/04/2015 executed between the complainant and the O.Ps.-1 & 2 in respect of the flat in question. Therefore, there is no legal privity of contract between the complainant and the answering O.Ps. Thus, there is no question of deficiency in service and unfair trade practice on the part of the answering O.Ps. The answering O.Ps. have no role in connection with construction of the project and the complainant had made payment to the O.P.-2 in terms of the Agreement for Sale. Accordingly, the answering O.Ps. have prayed for dismissal of the complaint.
Decision with Reasons
Both parties have tendered evidence through affidavit. They have also given reply against the questionnaires set forth by the adversaries. Both parties have also filed their BNAs. We have heard the Ld. Advocates for the parties and have also gone through the evidence as well as documents on record.
Fact remains that the complainant had entered into an Agreement for Sale dated 11/04/2015 with the O.P.-1 Vedic realty Pvt. Ltd. for purchasing a flat (Unit No. A2, Block No.-IG-15) on the 2nd Floor measuring about 990 sq. ft. at Ivy Greens, Rajarhat at a total consideration of Rs.32,20,000/- (plus GST) and in terms of the agreement the complainant had paid Rs.10,62,592/- on 05/02/2015, 12/03/2015, 02/04/2015 and 21/05/2015 respectively. This fact is also admitted that the complainant vide letter dated 19/05/2017 submitted a prayer to the O.P.-3 for cancellation of the allotment of flat (Unit No.-15A/2). There is also no dispute that the complainant issued legal notice dated 12/04/2018 to the O.Ps.-2 & 4 with a request to refund Rs.8,12,892/- but such notice was unattended.
In course of hearing of argument the Ld. Advocates for the O.Ps. have submitted that this Forum has no pecuniary jurisdiction to entertain the consumer complaint as the value of the flat is Rs.32,20,000/- and the compensation claimed by the complainant is Rs.5,00,000/-. On the contrary, the Ld. Advocate for the complainant has submitted that the total consideration of the flat is Rs.32,20,000/- and various installments were paid to a total amount of Rs.10,62,592/-. On account of demise of his sister complainant does not want to pursue with the possession. In these circumstances, complainant requested for refund of booking amount after deduction of Rs.2,50,000/- in terms of Article-4, Clause-V of the Agreement for Sale dated 11/04/2015.
We have considered the arguments advanced by the Ld. Advocates for the parties and have also examined the record. The following prayers have been made in complaint.
- Direct the O.Ps. to make payment of Rs.8,12,892/- along with interest for delay at the rate of 10 percent p.a. w.e.f. 09/05/2017 till the date of adjudication of the consumer complaint.
- Direct the OPs to pay Rs.5,00,000/- as compensation for mental agony, physical harassment and anxiety.
- Litigation costs and incidental expenses,
- Any other order, relief as may be deemed fit and proper as the Hon’ble Forum may deem fit and proper.
It is clear that the main request is for refund of Rs.8,12,892/- with 10 percent interest per annum. Apart from this, the complainant has also request for compensation of Rs.5,00,000/- and litigation cost . The Section 11 (1) of the Consumer protection Act, 1986 reads as under :-
“ 11. Jurisdiction of the District Forum : -
- Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complainants where the value of the goods or services and compensation, if any, claimed does not exceed Rupees Twenty lakhs.’’
Needless to say, the jurisdiction means the authority of a Court/Forum to administer justice subject to the limitations imposed by law, which are three-fold, viz. – (a) as to subject matter; (b) as to territorial jurisdiction and (c) as to pecuniary jurisdiction. If any Court or Forum passes any order without any competence, the said order would be a nullity. It is well settled that the question of territorial and pecuniary jurisdiction has to be ascertained at the initial stage or in the nascent phase of the proceeding. However, in a decision reported in (2005) 7 SCC 791 (Harshad Chiman Lal Modi – vs. – D.L.F. Universal Ltd. & Anr.) the Hon’ble Apex Court has observed that the question of pecuniary jurisdiction or territorial jurisdiction has to be dealt with before the Court/Forum where the suit/complaint has been instituted and not in an appellate stage. Therefore, it is incumbent upon a Forum constituted under the Act to see at the time of admission of complaint that the provisions contained in Section 11or Section 17or Section 21 of the Act are strictly followed so that a real consumer may not suffer on technical fault at the end of the day.
The Act does not specifically lay down as to how a complaint is to be valued for the purpose of jurisdiction. However, the Hon’ble National Commission is consistent with the view that it is the total value of the goods and / or services as well as that of compensation would determine the pecuniary limit of jurisdiction of Consumer Forum. In a decision reported in 1996 (2) CPR 26 (M/S Quality Foils India Pvt. Ltd Vs Bank of Madura Ltd and Anr.) a larger Bench of Hon’ble National Commission presided by Justice V. Balakrishna Eradi has observed –
‘in our view, where a claim of compensation is pleaded in a Consumer Complaint, then the total value of the goods and / or services as well as that of compensation would determine the pecuniary limit of jurisdiction’.
In a decision dated 12.03.2012 in RP/2679/2011 (P.S. Srijan Enclave and Ors Vs Sanjeev Bhargav) the National Commission has observed thus:
“it is settled Law that determination of pecuniary jurisdiction in respect of a dispute regarding service relating to housing would include the value of the property as a whole as well as the compensation demanded in the complaint.”
The Hon’ble National Commission has decided the issue of pecuniary jurisdiction in the matter of Ambrish Kumar Shukla & 21 Ors – Vs – Ferrous Infrastructure Pvt. Ltd. reported in I (2017) CPJ 1. The said judgment in para 15 while giving the gist of the answers to various questions, mentions the following ;
“15. Issue No. (iii)
The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint to determine the pecuniary jurisdiction of the Consumer Forum.“
From the above it is clear that the consideration paid at the time of hiring of the service of the OPs may also decide the pecuniary jurisdiction in certain cases, particularly in cases of refund where no further amount is to be paid. In the present case only Rs.10,62,592/- has been paid and the complainant claim Rs.8,12,892/-. The value of consideration as per definition of “ Consumer “ is given under Section 2 (1) (d) of the Consumer Protection Act, 1986 includes “ partly paid and partly promised “. Thus, in case of refund of the amounts paid to the OPs / Developer, there would only be the element of “partly paid” and the element of “promised to be paid” would be missing. Thus, the consideration in a case of refund would only mean the amount paid and therefore, consideration paid in the above quoted observation in the decision in ‘ Ambrish kumar Shukla & Ors (Supra)’ could be only the amount paid by the complainant to the OPs and this shall decide the pecuniary jurisdiction of the Consumer Forum. Obviously, there is difference in the cases where parties one to go ahead and conclude the sale of goods or availment of services and where one party is only seeking refund and thereby clearly deciding for non-execution of the agreement. Thus, the value of service in a complaint case seeking refund of the paid amount would be limited to the amount paid whose refund has been sought for.
Based on the above consideration, it is clear that in the present case even if total refund of Rs.8,12,892/- is taken in to consideration along with interest at the rate of 10 percent per annum from 09.05.2017 till the date of adjudication of the case and compensation of Rs.5,00,000/- the total figure does not cross the limit of Rs.20,00,00/-. Hence, this Forum has pecuniary jurisdiction to entertain the instant consumer complaint. In a case reported in II (2018) CPJ 567 (NC) Deepak Sharma – Vs – BPTP Ltd. (Consumer Case No. 3179 of 2014) supported the case of the complainant. Therefore, the OPs 1 & 2 being the Builder & Director are liable to refund Rs.8,12,892/- to the complainant out of earnest / booking money of Rs.10,62,592/- for the flat to the complainant. The OPs 1 & 2 have also right to deduct Rs.2,50,000/- from the earnest money for the flat deposited by the complainant in terms of article-4 of Clause-V of the Agreement for Sale dated 11.04.2015.
The next point involved in this case relates to whether the complainant is a consumer as per provision of Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986. Admittedly, complainant hired services from OPs 1 & 2 upon payment of consideration and thereby he is a consumer under Section 2 (1) (d) (ii) of the CP. Act., 1986.
It is true that OPs 3 & 4 are not the Party to the Agreement for Sale dated 11.04.2015 executed between the complainant and the OP-1 Vedic Realty Pvt. Ltd. in respect of Unit No. A/2, 2nd Floor, Block No. IG-15 measuring about 990 Sq. ft. in a project “ Ivy Greens “. There is also no legal relationship of privity of contract between the complainant and the OPs 3 & 4 in so far as development and construction of the flat in question. Payment receipts go to show that all payments were made to the OP-1. The role of the OPs 3 & 4 were limited to indentify the customers who were interested to buying / booking of flats in the Real Estate Market, introducing them to the OP-1 / Developer for facilitating the negotiation. The OPs 3 & 4 did not provide any services to the complainant. As such, there is no deficiency in service and unfair trade practice on the part of the OPs 3 & 4. In our opinion, they are unnecessary parties to the instant Consumer Case .
The last point as to whether the complaint is barred by limitation. Fact remains that vide letter dated 19.05.2017 complainant cancelled the Agreement for Sale dated 11.04.2015 deposited original allotment letters & money receipts with a request to refund the booking amount after deducting of Rs.2,50,000/- in terms of the Sale Agreement. The instant consumer complaint is filed on 08.05.2018 within two years from the date of cancellation of Sale Agreement. Therefore, the Consumer Case is not barred U/section 24A of the Consumer Protection Act, 1986,.
Based on the above discussion, we are of the view that there is deficiency in service and unfair trade practice on the part of the OPs -1 & 2 and in fact they withhold the booking amount without any cogent reason. The Consumer Protection Act came in to being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The act and conduct of the OPs 1 & 2 are a clear case of deception, which resulted in the injury and loss of opportunity to the complainant. The complainant cannot wait indefinitely to get the booking money. The complainant has suffered mental agony and harassment. It is settled principle of law that the compensation should be commensurate with loss of suffered and it should be just fair and reasonable and not arbitrary. To get the relief the complainant has to wage a long drawn and tedious legal battle. In the circumstances, the complainant is entitled to refund Rs.8,12,892/- from the OPs 1 & 2 along with interest at the rate of 08 percent per annum from the date of cancellation of Sale Agreement till realisation.
In the result, the case succeeds in part.
Hence,
ORDERED
That the complaint case be and the same is allowed on contest in part against the OPs 1 & 2 with litigation cost of Rs.5,000/- (Rupees five thousand) only and is also dismissed on contest against the OPs 3 & 4 without any costs.
OPs 1 & 2 are jointly and severally directed to refund Rs.8,12,892/- (Rupees eight lakhs twelve thousand eight hundred ninety-two) only along with interest at the rate of 8 percent per annum from 19.05.2017 i.e. the date of cancellation of the Sale Agreement till realisation including litigation cost to the complainant within one month from the date of this order.
OPs 1 & 2 are further directed to deposit Rs.5,000/- (Rupees five thousand) only as punitive damage to this Forum for unfair trade practice within the stipulated period.
Liberty be given to the complainant to put the order in execution, if OPs 1 & 2 transgress to comply the order.
