State Consumer Disputes Redressal Commission
Ashutosh Sood & Anr. vs Mirage Infra Limited And Anr. on 20 May, 2015
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Consumer Complaint : 41 of 2015 Date of Institution : 09.03.2015 Date of Decision : 20.05.2015 Ashutosh Sood son of Sh. Amar Chand Sood; Meena Sood wife of Sh. Ashutosh Sood, Both residents of H.No.963, Sector 41-A, Chandigarh. ......Complainants. Versus Mirage Infra Limited through its Managing Director, Regd. Office SCO No.18-19, Sector 28-C, Chandigarh. Chetan Singla, Director, Mirage Infra Limited, Regd. Office SCO No.18-19, Sector 28-C, Chandigarh and Incharge of Project namely, "Acropolis". ....Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by:
Ms. Rupali Shekhar Verma, Advocate for the complainants.
Sh. D. K. Singal, Advocate for the Opposite Parties.
PER DEV RAJ, MEMBER The facts, in brief, are that the complainants being husband and wife are self-employed and are working as agents and financial advisors dealing in various saving schemes, being promoted by the Government of India and other financial institutions. It was stated that the complainants were in need of space to earn their livelihood from where they could peacefully carry on their professions. It was further stated that in the month of October 2010, the complainants were contacted by the agents of Opposite Party No.1 and represented that the Opposite Parties were developing the project "Acropolis" at Plot No.68, Industrial Area, Phase-I, Chandigarh and they had the requisite statutory permissions.
2. It was further stated that on 15.11.2010, the complainants jointly applied for an office space of 885 sq. feet under construction linked plan (Unit No.230, Block B) in the project of the Opposite Parties namely "Acropolis" and paid Rs.10 Lacs as booking amount vide cheques No.846700 & 858777 dated 15.11.2010 and receipt No.MIL/ACR/1007 dated 17.11.2010 (Annexure C-1) was issued by them (Opposite Parties). It was further stated that the complainants were informed that a buyer seller agreement would be entered into at a later stage and possession of the unit would be handed over to them within three years i.e. 15.11.2013. It was further stated that the complainants kept on paying the sale consideration as per the demands raised by the Opposite Parties and by 05.07.2012, they paid an amount of Rs.41,43,774/- i.e. almost 53% of the total cost of the unit vide receipts (Annexure C-2 colly.). The break-up of the aforesaid amount is tabulated hereunder:-
Date Cheque No. Amount (Rs.) 15.11.2010 846700 5,00,000.00 15.11.2010 858777 5,00,000.00 30.05.2011 220604 4,00,000.00 30.05.2011 315962 4,00,000.00 22.07.2011 066448 84,562.00 22.07.2011 315971 84,563.00 26.09.2011 836294 2,00,000.00 30.09.2011 315984 2,00,000.00 30.12.2011 836311 1,87,650.00 30.12.2011 316000 2,00,000.00 21.02.2012 836319 2,00,000.00 19.04.2012 709810 3,00,000.00 19.04.2012 836334 2,87,000.00 05.07.2012 447918 4,00,000.00 05.07.2012 709822 2,00,000.00 Total:
41,43,774.00
3. It was further stated that on 05.11.2013 (Annexure C-3), the Opposite Parties raised another demand of Rs.11,81,475/- but this time, the complainants insisted for the execution of formal unit buyer agreement. It was further stated that the complainants also came to know that the property wherein they had invested, was resumed by the Chandigarh Administration and Opposite Party No.1 was no longer the owner of the said property. It was further stated that Opposite Party No.1 kept on dilly dallying the matter and the complainants failed to get any satisfactory response. It was further stated that in the absence of appropriate reply, vide application dated 09.06.2014 followed by reminder dated 21.08.2014 (Annexure C-4 colly.), the complainants were left with no other option but to approach the Public Information Officer, Estate Office, Chandigarh under Right to Information Act, 2005, so as to obtain correct information as regards the status of the property. It was further stated that as per the information/letter dated 25.09.2014 (Annexure C-5) obtained under RTI, the property, in question, stood resumed by the Estate Office/Chandigarh Administration due to non-payment of statutory dues. However, the details were not provided.
4. It was further stated that the complainants were deceived by the Opposite Parties and on 07.10.2014, they (complainants) filed an appeal before the Appellate Authority under Section 19(1) of the Right to Information Act, 2005 (Annexure C-6) seeking directions to the concerned CPIO to supply the information, which was denied to them. It was further stated that on 18.11.2014, the Appellate Authority passed an order (Annexure C-7) in favour of the complainants, directing the concerned Department to furnish the information sought by the complainants within a week's time. It was further stated that, accordingly, on 12.12.2014, the complainants received the appropriate documents, from the Estate Office, U.T., Chandigarh, wherefrom it transpired that the Opposite Parties did not pay the statutory dues since 22.12.2009, on account of which, the property was resumed on 19.09.2012 vide resumption order (Annexure C-8).
5. It was further stated that the Opposite Parties were in default of Rs.27.78 Crores, which was payable to the Chandigarh Administration and owing to their default, the property stood resumed on 19.09.2012 after completion of legal proceedings initiated on 22.04.2010. It was further stated that during this period, the Opposite Parties kept on raising demands of installments without disclosing the factum of resumption proceedings. It was further stated that the demands raised vide letters dated 17.08.2011, 28.12.2011, 01.05.2012 and 05.11.2013 (Annexure C-9 colly.) were illegal as the same were made at the time when the Opposite Parties did not even have clearance from the Government as far as the conversion of land use was concerned and resumption proceedings were pending. It was further stated that the Opposite Parties failed to fulfill their part of the obligation and misappropriated the hard earned money of the complainants. It was further stated that, ultimately, the complainants sent a legal notice dated 15.01.2015 (Annexure C-10) (In fact 12.01.2015) to the Opposite Parties, seeking refund of the amount deposited, but to no avail.
6. It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties to refund the amount of Rs.41,43,774/- alongwith interest @18% per annum from the date of respective deposits till realization; pay Rs.2,00,000/- as compensation for harassment, mental agony and undue hardship caused to the complainants on account of deficiency in service and unfair trade practice; and Rs.50,000/- as litigation expenses.
7. The Opposite Parties, were served and put in appearance on 20.04.2015. They filed their joint written statement on 30.04.2015. In the written statement, the Opposite Parties, took-up certain preliminary objections, to the effect that since the complainants approached the Opposite Parties for allotment of commercial site and accordingly, one commercial unit in the project namely "Acropolis" measuring 885 Sq. ft. had been booked by them (complainants) vide application form dated 15.11.2010, the total consideration whereof was Rs.84,30,500/-, they did not fall within the definition of consumers as defined in the Act. It was further stated that the complainants are also running Booth No.1 in Sector 16, Chandigarh and, as such, they are not the consumers. In this regard, the Opposite Parties placed reliance on Monstera Estate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd., (2010) CPJ 299 (NC) and Richa & Co. Vs. DLF Universal Ltd., IV (2012) CPJ 597 (NC).
8. On merits, it was stated that the commercial space was booked by the complainants on 15.11.2010 by paying an amount of Rs.10,00,000/- to the Opposite Parties, as against the booking amount of Rs.11,81,475/- and they (complainants) accepted the terms and conditions of construction linked plan. It was denied that the complainants were in need of space to earn their livelihood wherefrom they could peacefully carry on their profession. It was also denied that the complainants were contacted by the agent of Opposite Party No.1 in October, 2010. It was further denied that the complainants were informed that buyer seller agreement would be entered at a later stage and the possession would be handed over to them within 3 years i.e. by 15.11.2013. It was further stated that the complainants have not been providing financial advice, as alleged and the space was booked for earning profit by selling it on higher rate. It was further stated that the possession of the booked unit was to be handed over only after receipt of payment of the due installments as per payment schedule mentioned in the booking form.
9. It was further stated that the complainant were required to deposit the next 10% amount within the period of 45 days from the application form but they failed to do so. It was further stated that thereafter, the Opposite Parties issued reminder dated 07.02.2011 to the complainants for making the payment of first installment by 11.02.2011 but they did not pay any heed to the said request. It was further stated that another reminder dated 04.04.2011 was issued to the complainants, who approached the Opposite Parties on 30.05.2011 and deposited Rs.8,00,000/- as part payment. It was further stated that as per Clause No.10 of the application form, timely payment of installments was essence of the present transaction and any default in payment thereof was to attract cancellation of allotment and forfeiture of the amount paid till such time or decided by the Company. It was further stated that the complainants had not made the payments in time and the same was borne out from the payment schedule. It was further stated that during the course of construction, the complainants were duly intimated vide letter dated 17.08.2011 (Annexure OP-1/5) about the stage of construction and they were requested to make the payment of due installments.
10. It was further stated that the Opposite Parties also informed the complainants about the casting of first floor roof slab vide letter dated 28.12.2011 (Annexure OP-1/6) and likewise also informed about the stage of construction and payment of due installments vide letters dated 01.05.2012 (Annexure OP-1/7) and 05.11.2013 (Annexure OP-1/8). It was further stated that the payments of due installments were made by the complainants much after their due dates, which was evident from the payment schedule. It was further stated that, thus, the complainants defaulted from the very beginning in making payment of the due installments. It was further stated that, as on date, an amount of Rs.51,47,708/- is outstanding against the part of the complainants, which included interest on account of delayed payments. It was admitted that the complainants had only deposited an amount of Rs.41,43,774/- i.e. almost 60% of the total sale consideration of the booked unit, meaning thereby, that till date, the complainants had paid only the land value whereas the construction cost was yet to be paid by them.
11. It was further stated that the Opposite Parties could only deliver physical possession of the allotted space to the complainants subject to payment of the due installments. It was further stated that since the payment was not received, the question of handing over physical possession of the booked unit to the complainants did not arise at all. It was further stated that the bonafide of the Opposite Parties could be gauged from the photographs showing that the construction work of the project had already reached 7th floor even without getting the payment of installments from the allottees. It was further stated that, thus, there was no delay on the part of the Opposite Parties in handing over physical possession of the commercial unit to the complainants. It was further stated that, accordingly, the Opposite Parties had undertaken that the construction of the project had been in progress, as per the latest photographs and newspaper cutting dated 04.04.2015 (Annexure OP-1/9 & OP-1/10 respectively) and is likely to be completed in near future. Consequently, possession of the allotted space would be offered to the complainants.
12. It was further stated that the property, in question, had been resumed by the Chandigarh Administration vide order dated 19.09.2012 only due to non-payment of the conversion fee as earlier the property where the said commercial space had been constructed was lease hold property and the same was got converted into free hold as per the Policy of the Chandigarh Administration on payment of certain charges. It was denied that the Opposite Parties had been in default since 22.12.2009 due to non-payment of statutory dues. It was further stated that the Opposite Parties preferred an appeal against the order dated 19.09.2012 before the Financial Commissioner, which was pending for 04.05.2015. It was reiterated that the total consideration of the site, in question, had already been paid to Hindustan Uniliver Ltd. from which the Opposite Parties had purchased the site, in question and due to non-payment of conversion charges, the ownership over lease hold property rights of the Opposite Parties could not be taken away in any manner whatsoever. It was further stated that the moment, the conversion charges are paid, the site would be restored. It was denied that any type of information had been sought by the complainants from the Opposite Parties, which was not supplied. 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.
13. The complainants filed replication, wherein they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.
14. The complainants, in support of their case, submitted their joint affidavit, by way of evidence, alongwith which, a number of documents were attached.
15. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Chetan Singla, their Director, by way of evidence, alongwith which, a number of documents were attached.
16. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
17. It is evident that the complainants applied for office space, in the project of the Opposite Parties, for earning their livelihood. The construction linked plan, as per Annexure C-12 was as under:-
CONSTRUCTION LINKED PLAN Event Construction Linked Plan On Application 15% 45 Days from Application 10% On Completion of Basement Slab 10% On Completion of 2nd Floor Slab 10% On Completion of 4th Floor Slab 10% On Completion of 6th Floor Slab 15% On Completion of Brick Work 15% On Completion of Services 10% On Possession 5% of (Basic Rate + Parking + Other Charges & Maintenance Advance + Legal Charges).
18. The total sale consideration of the office space, in question, was Rs.84,30,500/-, out of which, the complainants, as is evident from Annexure C-2 (colly.) made a payment of Rs.41,43,774/- from 5.11.2010 onwards, which included a sum of Rs.6,00,000/-, paid on 5.7.2012. It is also evident from resumption order dated 19.09.2012 (Annexure C-8) that due to default in making payment of Rs.28.83 Crores by the Opposite Parties, the site, in question, on which the complainants were to be provided office space, was resumed besides ordering forfeiture of 10% of the total premium/conversion fee. The complainants have contended that after resumption of the site, the question of making further payment against the last demand raised on 5.11.2013 did not arise at all. As per the complainants, and as is evident from the contents of resumption order (Annexure C-8) the Opposite Parties had been, in fact, defaulters since 22.12.2009 due to non-payment of statutory dues.
19. The Opposite Parties, no doubt, wrote communications to the complainants for payment of installments on 4.4.2011, 17.8.2011, 28.12.2011 and 01.01.2012 but the same, as is evident from their contents, were sent to remind them (complainants), who after receipt of the same, also deposited the amount/s.
20. The principal question, that falls for consideration is, as to whether the complainants are consumers as defined under the Consumer Protection Act, 1986. The Opposite Parties took a specific objection that since the complainants were already having a booth in Chandigarh (Annexure OP-1/13), they (complainants) are not consumers as defined in Section 2(1)(d) of the Act. The Opposite Parties placed reliance on judgments in cases titled Smt. Madhu Saigal & Anr. Vs. M/s Omaxe Buildhome Pvt. Ltd. and another, Consumer Complaint No.270 of 2013 decided by the National Commission on 20.03.2014; Saavi Gupta and Anr. Vs. M/s. Omaxe Azorim Developers Pvt. Ltd. & 3 Ors., Consumer Complaint No.208 of 2012, again decided by the National Commission on 01.10.2012, Monstera Estate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd., 2010 (4) CPJ (NC) 299; Richa & Co. Vs. Dlf Universal Ltd. & Anr, 2012 (4) CPJ (NC) 597; Chilukuri Adarsh Vs. Ess Ess Vee Constructions, 2012 (3) CPJ (NC) 315; Jag Mohan Chhabra & Anr. Vs. DLF Universal Ltd., IV (2007) CPJ 199 (NC) and M/s Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. and another, 2010 (4) CPJ (SC) 38.
21. The size of the existing booth is too meagre, and the office space booked viz. 885 sq. ft. is also not huge in which the complainants could run commercial activity on a large scale and, therefore, by no stretch of imagination, it could be said that the complainants did not fall within the definition of consumers. There is also nothing, on record, that the complainants booked the office space to earn huge profits.
22. In Smt. Madhu Saigal & Anr. Vs. M/s Omaxe Buildhome Pvt. Ltd. and another's case (supra), the agreement was for the construction of two showrooms, which obviously related to commercial purpose. In Saavi Gupta and Anr. Vs. M/s. Omaxe Azorim Developers Pvt. Ltd. & 3 Ors.'s case (supra), the complainants booked four properties with the Opposite Parties including pent house, and complainant No.1 was shown as the owner of all the four houses, which was definitely to earn profit. In Monstera Estate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd.'s case (supra), the complainant was a Private Limited Company and was nominated for allotment of showroom space ad-measuring 3237 sq. ft. The National Commission held that even if Private Limited Company was treated as 'person', purchase of space could not be for earning its livelihood by means of self-employment within the meaning of the explanation and purchase of space was for commercial purpose. In Richa & Co. Vs. Dlf Universal Ltd. & Anr.'s case (supra), wherein the complainant had made an application for allotment of 24798 sq. ft. of office/retail space, the National Commission held that the transaction of booking of commercial/business space by the complainant, was for a commercial purpose within the meaning of Section 2(1)(d) of the Act and, therefore, the complaint was not a consumer. In Chilukuri Adarsh Vs. Ess Ess Vee Constructions's case (supra), the agreement entered into between the parties was for the construction of two showrooms, which obviously related to commercial purpose and the National Commission held the complainant not falling within the definition of consumer. In Jag Mohan Chhabra & Anr. Vs. DLF Universal Ltd.'s case (supra), the ground, first and second floors in Town Houses and apartment No.308B in Hamilton Court were purchased by the complainants for earning profits and transaction was relatable to commercial purpose. The National Commission held that the complainants were not consumers within the meaning of Section 2(1)(d) of the Act and the complaint itself was not maintainable under the Act. In M/s Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. and another's cases, (supra), the facts were relating to breach of special Policy condition, by the complainant by not disclosing each and every consignment before it had left the factory premises. Thus, the judgments relied upon by the Counsel for the Opposite Parties, in the aforesaid cases, are of no help to the Opposite Parties as the same are distinguishable on facts from those involved in the instant case.
23. The mere fact that the complainants were running their profession activities from a commercial booth measuring 6" x 9" i.e. 6 Sq. Yards proves that the complainants had limited space to earn their livelihood. With the passage of time, the requirement of complainants has increased and if they have booked commercial space measuring 885 Sq. ft. with the Opposite Parties, that was apparently to meet their increased requirements and the same, in our considered opinion, was clearly to earn livelihood. It is not the case where the complainants are already having adequate space and they invested to expand their business to earn huge profits. As per the explanation appended to clause (ii) of Section 2(d) of the Act 'commercial purpose' does not include use by a person of goods bought and used by him/her, and services availed of by him/her exclusively, for the purpose of earning livelihood, by means of self-employment. It is not the value of the goods, that matters, but the purpose to which the goods bought and put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of the Parliament abundantly clear that the goods bought, must be used, by the buyer himself, by employing himself, for earning his livelihood. In view of the aforesaid position, the complainants, in our considered opinion, fall within the definition of consumer under the Consumer Protection Act, 1986.
24. The next question, which falls for consideration, is, as to whether, the complainants defaulted in making the payments as per the construction linked plan. No doubt, the Opposite Parties wrote letters dated 4.4.2011, 17.8.2011, 28.12.2011 and 01.05.2012 (Annexures OP-1/4, OP-1/5, OP-1/6 and OP-1/7) but the same were sent in routine reminding the complainants to deposit the due installments. In none of these communications, there was any protest attributing any default to the complainants. The complainants had made a total payment in the sum of Rs.41,43,774/- during the period from 15.11.2010 to 05.07.2012.
25. The next question, which falls for consideration, is, as to whether the Opposite Parties were deficient in rendering service and indulged into unfair trade practice by not issuing the allotment letter and by not executing the Apartment Buyer Agreement of the allotted commercial space as per the conditions of application and asking for payment of the remaining installments and not refunding the amount deposited by the complainants, in view of the fact that the site in question, where the space was to be constructed, stood resumed on 19.09.2012. It is evident, on record, that the complainants made payment to the tune of 50% viz. Rs.41,43,774/-. The amount of installment, which the complainants did not pay, was raised by the Opposite Parties vide their letter dated 05.11.2013 (Annexure OP-1/8) and the site, in question, stood resumed on 19.09.2012 besides forfeiture of 10% of total premium/conversion fee. Mere filing of an appeal against the resumption order did not mean that the title of the site, in question, stood restored to the Opposite Parties. It is evident from Condition No.4 of the application form (Annexure OP-1/2) that the Opposite Parties were to issue an allotment letter and also execute Apartment Buyer Agreement but the same was not complied with. The aforesaid condition, being relevant, is extracted hereunder:-
"4. If the Application is accepted by the Company, the Applicant/s will be sent a communication to that effect by way of an Booking letter and thereafter upon further payment of another 10% of the total cost, the company shall issue an Allotment Letter (hereinafter referred to as "the said Allotment Letter"), and thereafter, Apartment Buyer Agreement of the allotted Commercial Space (hereinafter referred to as "the said Apartment") will be executed between the Company and the Applicant/s."
Thus, when the site, in question, was resumed, the Opposite Parties were not legally entitled to raise other demands and they were required to refund the amount already deposited by the complainants. This clearly amounted to deficiency, in rendering service, and indulgence into unfair trade practice on part of the Opposite Parties. No doubt, Condition No.11 of the application form, stipulated that 20% of the Basic Sale Price could be forfeited by the Opposite Parties in the event of complainants withdrawing from the scheme, but the same could not be invoked in the instant case as the Opposite Parties were deficient not only in issuing allotment letter and executing Apartment Buyer Agreement but they also did not have clear title to the site, in question, on which, the office space was to be constructed. The aforesaid acts amounted to deficiency and indulgence into unfair trade practice by the Opposite Parties.
26. The complainants have certainly suffered physical harassment and mental agony, for which, they need to be suitably compensated. In our considered opinion, compensation in the sum of Rs.1,00,000/- would be just and adequate, to meet the ends of justice.
27. No other point, was urged, by the Counsel for the parties.
28. For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Parties are jointly and severally held liable and directed in the following manner:-
(i) To refund the amount of Rs.41,43,774/-to the complainants, alongwith interest @9% per annum, from the respective dates of deposits, till realization, within a period of 45 days, from the date of receipt of a certified copy of this order.
(ii) To pay an amount of Rs.1,00,000/- (Rupees One Lac only), to the complainants, as compensation for mental agony and physical harassment, within a period of 45 days from the date of receipt of a certified copy of the order.
(iii) To pay cost of litigation, to the tune of Rs.15,000/- to the complainants.
(iv) In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @12% per annum, instead of 9% P.A., from the respective dates of deposits, till realization and amount mentioned in Clause (ii) above, with interest @12% per annum from the date of default, besides payment of litigation cost, to the tune of Rs.15,000/-.
29. Certified Copies of this order be sent to the parties, free of charge.
30. The file be consigned to Record Room, after completion.
Pronounced May 20, 2015.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Sd/-
[PADMA PANDEY] MEMBER Ad