State Consumer Disputes Redressal Commission
Silver City vs Rajiv Kumar on 1 June, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Appeal
Case No.
:
84
of 2012
Date of Institution
:
14.03.2012
Date of Decision
:
1.06.2012
1.
Silver
City Housing & Infrastructure Ltd., through its Managing Director, Regd. Office
H.No.89, Sector 8-A, Chandigarh
2.
Silver
City Housing & Infrastructure Ltd. through its Manager Accounts Mr.Raj
Kumar, Silver city-Derabassi, MC Zirakpur, Chandigarh Ambala Highway(NH-22),
District Mohali, Punjab.
Appellants
V E R S U S
Sh.Rajiv Jain, C/o Ambuja Cement Ltd.,
Village Navagraon, P.O. Jhajra, Tehsil Nalagarh, Distt. Solan (HP).
....Respondent.
Appeal U/s 15 of
Consumer Protection Act, 1986
BEFORE: JUSTICE
SHAM SUNDER(Retd), PRESIDENT.
MRS. NEENA SANDHU, MEMBER.
Present:
Sh.Sandeep Bhardwaj, Advocate for the appellants None for the respondent.
PER JUSTICE SHAM SUNDER(Retd), PRESIDENT This appeal is directed against the order dated 6.2.2012 , 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 in the following terms ;
As a result of the above discussion, this complaint is accepted and OPs are directed to refund the amount of Rs.10,57,500/- to the complainant along with interest @12% p.a. from respective dates of deposit till realization along with Rs.15,000/- as costs of litigation.
This order be complied with by OPs within one month from the date of receipt of its certified copy, failing which OPs shall be liable to pay total amount of Rs.10,57,500/- along with penal interest @ 15% p.a. from respective date of deposit till realization besides Rs.15,000/- as litigation costs.
2. The facts, in brief, are that the complainant impressed by the pamphlet and brochure as well as news item published in various newspapers, applied for the allotment of a flat of A Category, 5th floor and paid the booking amount of Rs.2,11,500/-. The Opposite Parties vide letter dated 11.1.2007 allotted flat No.187E, 5th floor to the complainant at Silver City Themes, Village Bhankarpur, M.C.Dera Bassi, District Mohali. Thereafter, the complainant entered into an Agreement with the Opposite Parties on 19.1.2007, copy whereof is Annexure C-2. It was stated that the complainant raised housing loan from HDFC Sector-35, Chandigarh, for making payment of the price of flat, and paid interest on the loan amount. It was further stated that the Opposite Parties promised to give possession of the apartment within 18 months. It was further stated that the complainant presumed and assumed that the Company had offered the booking of flat after taking all the required permissions from PUDA, Central Government, Punjab Government and other appropriate authorities for the development of Colony, so he paid Rs.3,17,250/- on 10.2.2007, being Ist instalment, to the Opposite Parties. It was further stated that the complainant vide letter dated 25.5.2007 requested the Opposite Parties to inform him of the present status of construction, so that necessary arrangement for remittance of the balance amount due, as per schedule dated 19.1.2007, could be made. It was further stated that, for the first time, the complainant received letter dated 19.1.2008 from the Opposite Parties, wherein, it was stated that the Government of Punjab, Department of Science and Technology, Environment and Non-Conventional Energy had issued a Notification dated 7.8.2007, according to which, there was no impediment in resuming construction and he was assured that the Opposite Parties would complete the project in a time bound manner. It was further stated that the Opposite Parties vide letter dated 30.9.2008 issued revised payment plan schedule. Accordingly, the complainant paid 2nd instalment of Rs.5,28,750/- vide receipt dated 12.11.2008. It was further stated that, by this time, the Complainant, in total, paid Rs.10,57,500/-, but there was no construction activity going on, at the site. The complainant received letter dated 26.5.2009, wherein, it was stated that possession would be handed over in a span of 12 to 15 months. It was further stated that the Opposite Parties again issued a fresh schedule of payment plan.
It was further stated the flats could not be constructed and made ready for possession even by 21.3.2011. It was further stated that as there was uncertainty regarding the completion of flats by the Opposite Parties, the complainant vide letter dated 22.3.2011 requested them to refund the amount alongwith interest @ 15% p.a. within 10 days, but there was no response. The complainant then sent legal notice dated 5.4.2011 to the Opposite Parties, calling upon them to refund the amount alongwith interest, but to no effect. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, he filed a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only).
3. The Opposite Parties, in their written version, stated that an Agreement, was executed between the parties on 19.1.2007, in respect of flat No.187E, 5th Floor with car parking , in Silver City THEMES, at Village Bhankarpur, M.C., Derabassi, Patiala. It was further stated that the construction work could not be completed, in time, because of the stay Order passed by the Honble High Court, on 30.1.2007, in Civil Writ Petition No.18632 of 2005, titled as Dharam Chand and another Vs. State of Punjab and others. It was further stated that, the said stay was later on vacated by the Honble High Court, vide order dated 1.5.2008. It was further stated that, thereafter, the Punjab Pollution Control Board, vide letter No.MHL/NOC/2008/F-83 dated 19.09.2008, issued No Objection Certificate. It was further stated that, thereafter, the construction work of the project was started.
It was further stated that the construction activity, was in full swing, at the site. It was further stated that the construction work could not be completed, on account of the circumstances, beyond the control of the Opposite Parties, and, as such, they were entitled to extension of time, according to Clause 23 of the Agreement, aforesaid. It was further stated that the complainant made payment of Rs.10,57,500/- towards the part price of apartment. He stopped making payment of the remaining installments, as per schedule and, as such, he was not entitled to the refund of amount and compensation, as he failed to adhere to the payment schedule. It was further stated that the complainant did not fall within the definition of a consumer, as he purchased the apartment, in question, for commercial purpose. It was further stated that, according to the arbitration clause, contained in the Agreement, aforesaid, in case of dispute, between the parties, the matter was to be referred to the Arbitration. It was further stated that, as such, the District Forum had no jurisdiction to entertain and decide the complaint. It was further stated that the District Forum, U.T. Chandigarh had no territorial jurisdiction, to entertain and decide the complaint. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. 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, 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, was filed by the appellant/ complainant .
7. On behalf of the respondent, his Counsel entered appearance on 30.4.2012. However, none put in appearance, on his behalf on 21.5.2012, and, as such, he was proceeded against ex parte.
8. We have heard the Counsel for the appellants, and have gone through the evidence, and record of the case, carefully.
9. The Counsel for the appellants, at the very outset, submitted that the apartment, in question, was purchased, by the complainant, with a view to get handsome returns and generate profits, and, as such, he did not fall within the definition of a consumer. The submission of the Counsel for the appellants, in this regard, does not appear to be correct.
The complainant purchased the flat in question, by raising loan from HDFC Bank for residence, on the assurance of the Opposite Parties, that the same was a time bound project, but they failed to adhere to the terms and conditions of the Agreement dated 19.1.2007 and he had to pay exorbitant rent. As such, it could not be said that the apartment purchased, by the complainant, was for commercial purpose, with a view to generate profits. The complainant is not a property dealer. There is no evidence, on record, that he purchased the apartment, for the sale thereof, to earn profits. There is also, no evidence, on record, that the complainant intended to run some commercial activity, in the apartment, with a view to earn profits. If an apartment is purchased by the complainant, for his own residence, or with an intention to provide accommodation to his wards, it could not be said that such an activity, falls within the definition of a commercial activity. Admittedly, it was a housing project, in which the complainant purchased an apartment. If a person purchases an apartment, in a residential project, the only inference, which can be drawn, is that, it is for the purpose of his residence, or residence of his parents or wards. The complainant, therefore, fell within the definition of a consumer. The submission of the Counsel for the appellants, being devoid of merit, must fail, and the same stands rejected.
10. It was next submitted by the Counsel for the appellants, that the Consumer Fora, U.T., Chandigarh, had no territorial jurisdiction, to entertain and decide the complaint. He further submitted that the property, in question, is situated at Dera Bassi, District SAS Nagar (Mohali), Punjab. It may be stated here, that in para No.18 of the complaint, it was in clear-cut terms, stated by the complainant, that the Registered Office of the Opposite Parties, is at Chandigarh and the Agreement was signed at Chandigarh. The complainant, in his evidence, by way of affidavit, also testified, in this regard. No doubt, in reply to para No.18 of the complaint, it was stated by the Opposite Parties, that the averments, contained in this para, being wrong were denied. No evidence, in this regard, was produced by the Opposite Parties. In the documents C1, C4, C6, C7,C-8,C-9 and C-10 which were issued by the Opposite Parties, the address of their Registered Office is mentioned as House No.89, Sector-8A, Chandigarh. Further on the letters R1, R2,R3, and R4 written to the complainant, by the Opposite parties, their Registered Office was stated to be at House No.89, Sector-8A, Chandigarh. Since, the installments towards part price of the apartment, were paid at Chandigarh and the Registered Office of the Opposite Parties, is at Chandigarh, cause of action to file the complaint arose at Chandigarh.
The District Fora, U.T., Chandigarh, thus, had the territorial Jurisdiction, to entertain and decide the complaint. The submission of the Counsel for the appellants, in this regard, being devoid of merit, is rejected.
11. It was next submitted by the Counsel for the appellants, that since the complainant, did not make payment of the remaining installments, as per schedule of payment plan revised from time to time, towards the price of apartment, he committed breach of the terms and conditions of the Agreement dated 19.1.2007, and, thus, he was not entitled to the refund of amount, with interest. Agreement dated 19.1.2007, Annexure C2, was executed, between the parties. The total price of the apartment was Rs.19,95,000/-, and cost of the car parking area was Rs.50,000/-. Out of Rs.20,45,000/-, the complainant, deposited Rs.10,57,500/- i.e. more than 50% of the price. It means that substantial amount was deposited, by the complainant, out of the sale consideration of apartment. He stopped making further payment of installments, when he found that there was no progress, in construction, at the spot. According to the Agreement dated 19.1.2007, 5th installment of 5%, was to be paid on 30.04.2008. As per annexure C8, 5th instalment was to be paid by 15.11.2009. By that time, not even a brick had been laid, at the spot, what to speak of raising construction. The Opposite Parties did not adhere to the time schedule. Even till the institution of the complaint, on 19.7.2011, no progress, in the construction of the project, had been achieved. Under these circumstances, it is to be determined, as to whether, the complainant, was liable to make payment of further installments. In our considered opinion, since there was no progress, in construction, at the site, the complainant was not liable, to make payment of further installments. In Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), no development work was carried out, at the site. Thus, the payment of further installments, was stopped by the complainant. It was, under these circumstances, held that the builder could not be allowed to take shelter, under the Agreement Clause, to usurp the money, deposited by the complainant. It was further held that the builder cannot forfeit the entire money, paid by the complainant, on account of his own fault, in not carrying out the development work. Ultimately, the Honble National Commission, ordered the refund of amount with interest. The principle of law, laid down in Prasad Homes Private Limited`s case (supra), is fully applicable to the facts of the instant case. Under these circumstances, it could not be said that the complainant was at fault. On the other hand, the Opposite Parties, were at fault, in not raising the construction. The complainant, could not wait indefinitely, just at the whims and fancies of the builder. Neither the complainant has been handed over possession of apartment, even after the lapse of 4 years of the execution of Agreement, nor the refund of amount was made to him. The complainant was, thus, entitled to the refund of amount. The District Forum, was right, in holding so. The submission of the Counsel for the appellants, in this regard, being without merit, must fail, and the same stands rejected.
12. It was next submitted by the Counsel for the appellants, that the construction could not be undertaken, due to the circumstances, beyond the control of the Opposite Parties. He took shelter under Clause 23 of the Agreement dated 19.1.2007, in support of his contention, which reads as under:-
The allottees agree that sale of Apartment/dwelling unit is subject of force majeure clause which interalia include delays on account of non availability of steel and/or other building materials, or water supply or electric power or slow down strike or due to a dispute with construction agency employed by the company/promoter civil commotion, militant action or by reasons beyond the control of the company/promoter and in any of the aforesaid events the company/promoter shall be entitled to a reasonable corresponding extension of the time of the delivery of possession of the said Apartment/dwelling unit on account of force majeure circumstances. The company/promoter as a result of such contingency arising reserves the right to alter or vary the term and conditions of allotment or if the circumstances beyond the control of the company/promoter so warrant the company/promoter may suspend the scheme for such period as it may consider expedient and no compensation of any nature whatever can be claimed by the allottee for the period of delay/suspension of scheme. Inconsequence of the company/promoter abandoning the scheme the company/promoter liability shall be limited to the refund of the amount paid by the allottee without any interest or compensation whatsoever.
13. The High Court of Punjab & Haryana in Civil Writ Petition No.18632 of 2005 titled as Dharam Chand and another Vs. State of Punjab and others, vide order dated 30.01.2007, stayed the operation of the letter dated 17.01.2006 (Annexure R-8), vide which the Punjab Pollution Control Board laid down the guidelines for setting up colonies by the Promoters. Vide order dated 01.05.2008, the order dated 30.01.2007, was vacated. There is nothing, on record, that upto 29.01.2007, no objection was obtained, from the Punjab Pollution Control Board, and the construction activity, was undertaken, by the Opposite Parties, though there was no stay, during this period. The stay, as stated above, was vacated on 01.05.2008. There is also, no document, on record, to show that from 02.05.2008, until the filing of complaint, any construction was carried out, by the Opposite Parties , at the site. Even if, the period of stay aforesaid, is excluded, the Opposite Parties , were required to undertake construction of the project, before the stay was granted, and after the same was vacated. When there was no progress, in construction, even after the vacation of stay, left with no alternative, the complainants had to ask for the refund of amount. The circumstances, before 30.01.2007 and after 01.05.2008, were not beyond the control of the Opposite Parties, as a result whereof, the construction activity could not be undertaken. Even the permission for raising construction, vide letter dated 03.01.2006 Annexure R-6, by Nagar Council Dera Bassi, Patiala, was granted subject to fulfillment of certain conditions. It is not known, as to whether, those conditions were fulfilled by the Opposite Parties, or not. Annexure R-13 dated 19.9.2008 is the No Objection Certificate which was granted by the Punjab Pollution Control Board, Patiala.
Even in Annexures R-3 dated 26.5.2009, addressed to the complainant, it was stated that the possession would be handed over in 12 to 15 months. As stated above, the complaint was filed on 19.7.2011 and by that time, the possession of apartment, had not been delivered to the complainant. It is evident from annexure R-10 dated 02.04.2007, that No Objection Certificate from Pollution angle, was refused to the Opposite Parties. It was clearly mentioned, in this document, that on 22.02.2007, at the time of site visit, it was found that the construction was started by the Promoter, without obtaining the no objection certificate. It means that, at the time, the Agreement, dated 19.1.2007, was executed, between the parties, No Objection Certificate from the Punjab Pollution Control Board had not been obtained by the opposite party. In Kamal Sood Vs. DLF Universal Ltd. reported as III(2007) CPJ-7 (NC), it was held that a builder should not 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 for construction etc., in the first instance, and, thereafter, obtain money, from the purchasers of the flats/building. The ratio of law, laid down, in the aforesaid case, is squarely applicable, to the facts and circumstances of the instant case. As stated above, from 19.1.2007, when the Agreement, was executed, between the parties, upto 29.01.2007, and from 02.05.2008 onwards, there was no legal hitch, in the way of the Opposite Parties, to raise construction. The Opposite Parties, therefore, could not take shelter under the force majeure Clause 23 of the Agreement. Under these circumstances, it could not be said, that the construction activity could not be undertaken, wholly, on account of the circumstances, beyond the control of the Opposite Parties. The District Forum, was right, in holding that refusal, on the part of the Opposite Parties, to refund the amount, amounted to deficiency in service. The District Forum was also right, in holding that the Opposite Parties, by not obtaining No Objection Certificate from the Punjab Pollution Control Board, Patiala, before collecting money, from the complainant, and the other prospective buyers, indulged into unfair trade practice. The findings of the District Forum, in this regard, being correct, are affirmed.
14. The next question, that arises for consideration, is, as to whether, for the period, during which the stay, granted by the Punjab & Haryana High Court, was operative, and the construction activity could not be undertaken, interest could be granted to the complainant, or not. Since, the Honble High Court, granted stay of operation of Annexure R-8 dated 17.01.2006, on 30.01.2007, and vacated the same on 01.05.2008, no liability of interest, could be fastened upon the Opposite Parties, for that period. Non-raising of construction, during this period, was on account of the circumstances, beyond the control of the Opposite Parties. Under these circumstances, it is held that the complainant, shall only be entitled to interest from the respective dates of deposits, upto 29.01.2007 and then from 02.05.2008, till the realization of amount. The order of the District Forum, deserves to be modified to this extent.
15. It was next submitted by the Counsel for the appellants, that the normal interest granted by the District Forum @ 12% p.a. and penal interest granted @ 15% P.A., are unfair, unjust and arbitrary. In our opinion, the normal and penal interest granted by the District Forum @ 12% p.a. and 15% P.A. respectively, are on the higher side. The normal interest, if reduced to 9% P.A, and if the penal interest is reduced to 12% P.A. the same could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification.
16. Coming to the submission of the Counsel for the appellants , that since the remedy for settlement of disputes, by way of arbitration, has been provided as per Clause 30 of the Agreement, aforesaid, executed between the parties, the jurisdiction of the District Forum was barred, it may be stated here, that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be made, which reads as under ;
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.
Section 3 of the Act, is worded, in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere fact that the remedy of arbitration, has been provided, in the Agreement dated 19.1.2007, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law, was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for the appellants, being devoid of merit, must fail, and same stands rejected.
17. For the reasons, recorded above, the appeal is partly accepted, with costs quantified at Rs.5000/-, and the impugned order is modified, in the following manner:-
i) The Appellants/Opposite Parties, are directed to refund the amount of Rs.10,57,500/-,to the complainant, alongwith interest @ 9% per annum (instead of 12% P.A. granted by the District Forum), from the respective dates of deposits, till realization (excluding the period, from 30.01.2007 to 01.05.2008, during which, the stay granted by the Punjab & Haryana High Court remained operative).
ii) The appellants/Opposite Parties shall pay penal interest @ 12% P.A. instead of 15% P.A. granted by the District Forum.
iii) The other directions given, and reliefs granted, by the District Forum, subject to the aforesaid modification, shall remain unaltered.
18. Certified Copies of this order be sent to the parties, free of charge.
19. The file be consigned to the Record Room, after completion Pronounced. Sd/-
June 1, 2012 [JUSTICE SHAM SUNDER(Retd)] PRESIDENT Sd/-
[NEENA SANDHU] MEMBER *Js STATE COMMISSION (Appeal No.84 of 2012) Present: Sh.Sandeep Bhardwaj, Advocate for the appellants.
Respondent ex parte.
Dated: June 1st,2012 ORDER Vide our detailed order of the even date, recorded separately, this appeal has been partly accepted with costs and the impugned order has been modified in the terms depicted therein.
(Neena Sandhu) (Justice Sham Sunder ) Member President