State Consumer Disputes Redressal Commission
M/S Greenfield Sites Management Pvt. ... vs Amit K Jain on 25 January, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 282 of 2015 Date of Institution : 28.10.2015 Date of Decision : 25.01.2016 M/s Greenfield Sites Management Private Limited, SCO No.196-197, Top Floor, Sector 34-A, Chandigarh - 160022, through its Managing Director. Now at SCO 18, Sector 20-D, Chandigarh. ......Appellant/Opposite Party No.2 V e r s u s Amit K. Jain son of Sh.Pramod K. Jain. Ritu K. Jain both were residents of House No.86, New Model Town, Ludhiana Now residents of House No.402, Jaipuria Sunrise Society, Ahimsa Khand, Indira Puram, Ghaziabad, U.P. ....Respondents/Complainants ===================================================== First Appeal No. : 283 of 2015 Date of Institution : 28.10.2015 Date of Decision : 25.01.2016 M/s Chandigarh Overseas Private Limited, SCO No.196-197, Top Floor, Sector 34-A, Chandigarh - 160022, through, its Managing Director. Now at Registered Office S.C.O. No.249, Sector 44-C, Chandigarh-160047. ......Appellant/Opposite Party No.1 V e r s u s Amit K. Jain son of Sh.Pramod K. Jain. Ritu K. Jain both were residents of House No.86, New Model Town, Ludhiana Now residents of House No.402, Jaipuria Sunrise Society, Ahimsa Khand, Indira Puram, Ghaziabad, U.P. ....Respondents/Complainants Appeals under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
Argued by:Sh.Surjeet Bhadu, Advocate for the appellant(s).
Sh.Ravinder Pal Singh, Advocate for the respondents.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT This order shall dispose of the aforesaid two appeals bearing Nos .2 82 of 2015 titled as M/s Greenfield Sites Management Private Limited, Vs. Amit K. Jain and another and 2 83 of 2015 titled as M/s Chandigarh Overseas Private Limited Vs. Amit K. Jain and another , arising out of a common order dated 09.09.2015, rendered by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (in short the Forum only), vide which, it accepted a complaint, filed by the complainants (now respondents) and directed the opposite parties (now appellants) as under:-
"For the reasons recorded above, the complaint is partly accepted with costs in the following manner:-
OPs are directed to pay a sum of Rs.7,50,000/- (i.e. the amount of buy-back offer) to the complainants.
OPs are further directed to pay penalty @ Rs.50/- per sq.yard per month of the super area of the unit allotted to the complainants, as per clause 28 of the Developer Buyer Agreement, for the period from 19.1.2010 until realization of the amount (less the amount already paid to them, if any).
OPs are further directed to pay Rs.50,000/- to the complainants as compensation for mental agony and physical harassment.
OPs shall also pay Rs.10,000/- as litigation costs to the complainants.
This order be complied with by OPs within one month from the date of receipt of its certified copy, failing which they shall make the payment of the amounts mentioned at Sr.No.(i) to (iii) above, with interest @ 12% per annum from the date of filing of the present complaint till realization, apart from compliance of direction at Sr.No.(iv) above."
The appellant/opposite party no.1 had floated a project, in the year 2006, under the name and style of "Fashion Technology Park", in Sector 90, Mohali, which was widely published. Impressed with the qualities of the project, to settle independent business for earning livelihood, the respondents intended to purchase a design studio, measuring 100 square feet, in the same (project). For the said purpose, application no.101450 was moved by them on 17.08.2006 and an amount of Rs.1,25,000/- was paid towards earnest money. The respondents were allotted design studio no.2, 5th Floor, Block A-2, in the said project. Basic price of the unit was fixed at Rs.5 lacs. The respondents paid an amount of Rs.4,75,000/- and remaining amount of Rs.25,000/- was to be paid at the time of getting possession of the said unit. Developer Buyer Agreement was executed on 17.01.2007, between the respondents and opposite party no.1. Lease Agreement was also executed between the respondents and opposite party no.2, on 17.01.2007. The appellants made an offer to the respondents, to buy back the unit, for an amount of Rs.7.5 lacs. The said offer was accepted by the respondents. It was acknowledged by opposite party no.2/appellant, that the said buyback option would be honoured by 30.06.2010. It was grievance of the respondents that neither possession of the unit was handed over as promised, nor lease rent amount @Rs.30,000/- per month, was paid by the appellants.
Above complaint was contested by the opposite parties, by filing a joint reply. It was stated that the respondents would not fall within the definition of consumer, as the unit was purchased by them, to give it on lease and then to resell it, to the appellants, at a higher price. Qua delay in delivery of unit, it was stated that there was no intentional delay to complete construction. It had happened because stay on construction, was granted by the Competent Court, which remained in operation between 26.04.2011 to 23.08.2014. The remaining averments were denied being wrong.
In the rejoinder filed by the respondents, they reiterated all the averments contained in the complaint, and repudiated those, contained in the written version of the appellants. It was however stated that they had purchased the said unit, to earn their livelihood, by way of self employment.
The parties led evidence, in support of their case.
On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the appellants. Defence taken by the appellants that the respondents were not consumers was righty rejected, by observing as under:-
"As we have already observed, the complainants have specifically pleaded in their complaint that with an intention to establish a designer boutique for complainant No.2 in the Fashion Technology Park to facilitate need of the fashion industry and to earn her livelihood by way of self-employment, they agreed to purchase the said unit of 100 sq. ft. in Design Studio No.2. The complainants have also pleaded that they are consumers as per the provisions of the Consumer Protection Act as the said unit was purchased for complainant No.2 for earning her livelihood. The allegations of the complainants are supported by their affidavits. The OPs have not produced any such evidence that the complainants are property dealers dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainants from the OPs is only 100 sq. ft. which is for small investors. Since the complainants wanted to settle a business for complainant No.2 for earning her livelihood, it cannot be inferred that the said unit was purchased by them with the sole motive of earning profits. As far as the contention of the learned counsel for the OPs that the complainants are not qualified to run the unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether they were eligible under "Small Investor Scheme" or not. At this stage, such an objection is not tenable. In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon'ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer. "
Contention of Counsel for the appellants that the respondents were not consumers also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-
"Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
By noting ratio of the judgment of the Hon'ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583 , it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case, application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession. In the year 2009, when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellants on 22.06.2009, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the respondents. On account of that act, the respondents cannot be excluded from the definition of consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja's case (supra), that surplus funds can be invested, in such a manner, in purchasing property/ unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he/she would fall within the definition of a consumer.
It was further argued by Sh.Surjeet Bhadu, Counsel for the appellants that between the period from 26.04.2011 to 23.08.2014, construction remained stayed, on account of order passed by the Competent Court, and as such, for the said period, no liability can be fastened upon the appellants, in not completing the construction. The argument raised by Sh.Surjeet Bhadu, appears to be attractive, however, on analyzing facts of the case, we feel that it has no legs to stand. Admittedly, as noted by the Forum, possession of the unit was to be delivered by 18.01.2010. By that time, project was not complete. If some order/stay had been passed before the said date (18.01.2010), upto the promised date i.e. 18.01.2010, benefit could have been given to the appellants. However, in the present case, default had already started, when possession of the unit was not delivered on 18.01.2010, as per promise made by the appellants. Stay on construction was imposed thereafter i.e. from 26.04.2011. In view of above, no benefit can be given to the appellants, for the said fact.
In First Appeal No.282 of 2015 titled as M/s Greenfield Sites Management Private Limited, Vs. Amit K. Jain and another, an additional point has been raised by Sh.Surjeet Bhadu, Advocate, stating that opposite party no.2/appellant i.e. M/s Greenfield Sites Management Private Limited, is a separate legal entity and has no connection with opposite party no.1 i.e. M/s Chandigarh Overseas Private Limited/builder, in First Appeal No.283 of 2015, as such, it (opposite party no.2) could not be fastened with any liability for a fight between the respondents and opposite party no.1. He also stated that liability of opposite party no.2/ appellant would start only after handing over possession of the unit to it, by the builder/opposite party no.1 and not before that. As such, the Forum was wrong in holding opposite party no.2/appellant liable to make compensation, alongwith opposite party no.1.
On perusal of record, we are of the considered opinion that the stand taken and argument raised by Sh.Surjeet Bhadu, Advocate, in this regard, needs to be rejected out-rightly. In a consumer complaint filed by the respondents, builder/opposite party no.1 and opposite party no.2 were impleaded as opposite parties. Both of them filed joint written statement, in which no such objection was raised, as has been raised in the present appeal. The averments made by the respondents qua execution of the Developers Buyer Agreement and Lease Agreement on the same date i.e. 17.01.2007, were not controverted. It is apparent from the record that Registered Head Office of opposite parties no.1 and 2, was the same. As per information supplied at the time of arguments (downloaded from the website of Ministry of Corporate affairs), it has come out that when above documents in respect of the unit, were signed, the Managing Director/Director of both the Companies i.e. of the opposite parties, were the same. We have perused the information supplied, at the time of arguments, which shows that many Companies were floated by these persons, may be with a view to dupe the gullible customers.
It is apparent from the record that in the Developer Buyer Agreement, it is specifically mentioned in Clause (5) that opposite party no.2/appellant shall take possession of the unit, on behalf of the buyer(s), from the developer i.e. opposite party no.1 and manage lease transaction on his/her/their behalf. Possession when delivered to opposite party no.2/appellant, shall be deemed to have been handed over to the buyer(s). It is further stipulated in Clause (8) of the Developer Buyer Agreement that, in case, the buyer(s) wishe(s) to transfer his/her interest in the property in dispute, he/she will have to get "No Objection Certificate" from opposite party no.2/appellant. In the Developer Buyer Agreement, it is also stipulated in Clause (28) that compensation for delay in handing over possession of the unit, will be deposited by the developer in a Corpus Fund, which will be opened and maintained for the maintenance, security and upkeep of the unit and surroundings. It is not in dispute that the said maintenance or security was the liability of opposite party no.2/appellant.
Not only as above, the Lease Agreement between opposite party no.2 and the respondents was also got signed on 17.01.2007. It is stipulated therein in Clause (3) that the lessee/opposite party no.2 had agreed to take the unit on "as is where is" basis, for the period of nine years and the said period will start from the date of possession to be given by the developer. It was further stipulated that if possession is not delivered within 30 months, from the date of start of construction, the period of 9 years will be renegotiated and further the lessers/respondents will be entitled to get assured lease rent of Rs.30,000/- per month, from the said date.
Reading of terms and conditions of both the Agreements make it very clear that a composite offer was made by the appellants to the buyers/respondents to purchase shares in the property and then to lease the same to them. There was no option with the buyers to do anything to the contrary. Above fact clearly states that the liability of opposite party no.2 and opposite party no.1 i.e. developer was 'joint and several', as has been held by the Forum. This argument of Counsel for opposite party no.2/appellant, stands rejected.
No other point was urged by Counsel for the parties, in both the appeals.
For the reasons recorded above, both the appeals are dismissed, with no order as to costs. The order of the District Forum is upheld.
Copy of this order be also placed, in the file of appeal bearing No. 2 83 of 2015.
Certified copies of this order, be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
25.01.2016 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Rg