State Consumer Disputes Redressal Commission
Neeta Bajaj vs M/S Manohar Infrastructure And ... on 27 December, 2023
1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Complaint case No. : 41 of 2023
Date of Institution : 10.05.2023
Date of Decision : 27.12.2023
1] Neeta Bajaj wife of Sh. Amar Bajaj.
2] Gaurav Bajaj son of Sh. Amar Baaj.
Resident of House No.4A, 2nd Floor, Block 2, Sohi Towers, Baltana,
Zirakpur, Punjab.
...Complainants
Versus
1] M/s Manohar Infrastructure & Constructions Pvt. Ltd, having its
registered office at SCO No.139-141, Sector 17-C,First Floor, Chandigarh
through its Managing Director/Authorised Signatory.
2] Tarninder Singh, Managing Director/Director, M/s Manohar
Infrastructure & Constructions Pvt. Ltd, having its registered office at
SCO No.139-141, Sector 17-C,First Floor, Chandigarh.
3] Narinderbir Singh, Director, M/s Manohar Infrastructure &
Constructions Pvt. Ltd, having its registered office at SCO No.139-141,
Sector 17-C,First Floor, Chandigarh.
4] Greater Mohali Area Development Authority through Chief
Administrator/Administrator, PUDA Bhawan, Sector 62, SAS Nagar,
Punjab.
.....Opposite Parties
BEFORE: SH. RAJESH K. ARYA, PRESIDING MEMBER
SH. PREETINDER SINGH, MEMBER ARGUED BY:-
Sh. Sanjeev Gupta, Advocate for the complainants.
Sh. Simranjit Singh Sidhu, Advocate for opposite parties No.1 to 3. Sh. Sandeep Bhardwaj, Advocate for opposite party No.4 - GMADA.
PER RAJESH K. ARYA, PRESIDING MEMBER Brief facts:
The complainants booked a plot measuring 250 sq. yards for residential purposes in the locality, namely, 'Palm Springs' falling in the project
- 'The Palm' being developed by opposite parties No.1 to 3, @ ₹17,000/- per sq. yards, on the assurance that possession of the said plot would be handed over within 2 years as layout plan had already been submitted to the competent authorities for approval. At the time of booking the said plot, the complainant 2 paid an amount of ₹12,75,000/- being 30% of the sale consideration, which was fixed as ₹42,50,000/- excluding EDC and PLC charges. The complainant thereafter paid an amount of ₹8,50,000/- to opposite parties No.1 to 3 vide cheque dated 30.07.2013, thus, making it ₹21,25,000/- i.e. 50% of the sale consideration. It has further been stated that after getting the said amount, opposite parties No.1 to 3 did not issue the plot number and issued acknowledgement dated 19.08.2013, wherein they arbitrarily and illegally incorporated the condition of paying IDC & other charges. It has further been stated that vide letter dated 01.05.2014, opposite parties No.1 to 3 informed the complainants that they have received the CLU for the project, meaning thereby that they were not having the CLU at the time of booking the plot. It has further been stated that opposite parties No.1 to 3 continued to demand more money for issuing the allotment letter and in the said hope, the complainants paid further sum of ₹6,37,500/- vide cheque dated 14.07.2015, thus making it 65% of the sale consideration. It has further been stated that opposite parties No.1 to 3 compelled the complainants to pay ₹5 Lakhs towards 50% of EDC & IDC, which the complainants paid on 19.01.2016, thus by January 2016, the complainants had already paid an amount of ₹32,62,500/- to opposite parties No.1 to 3.
2] It has further been stated that instead of issuing the allotment letter and executing the agreement, opposite parties No.1 to 3 further misrepresented the complainants vide letter dated 03.03.2016 by giving false information that development of plots was in progress but on visiting the project site, the complainants were surprised to see that there was no development. It has further been stated that opposite parties No.1 to 3 issued plot No.1074 to the complainants after getting the signatures of the complainants in the standard performa drafted/prepared by them and arbitrarily incorporated the condition of paying the IDC & PLC therein. 3] It has further been stated that the said plot No.1074 was already hypothecated to opposite party No.4 - GMADA, which opposite parties No.1 to 3 did not disclose and rather without commencing any development, they continued to demand more money on the pretext of executing the agreement. It has further been stated that the complainants requested many times the opposite parties No.1 to 3 to get the hypothecated plot released from GMADA but inspite of giving false assurances, they continued to send demand letters without there being any development at the plot site. It has further been stated that unless & until the plot is dehypothecated, the agreement could not be executed and as such, the complainants did not pay more money. It has further been stated that opposite parties No.1 to 3 have failed to get the plot dehypothecated till date.3
4] It has further been stated that without getting the plot dehypothectaed from opposite party No.4 and without getting the agreement executed as per mutually agreed sale consideration, opposite parties No.1 to 3 issued a show cause cancellation notice in respect of plot No.1074, vide its letter dated 28.03.2023. On receiving the said notice, the complainants visited the office of opposite parties and asked them to dehypothecate the plot and execute the agreement. The complainants also assured to pay the entire sale consideration after the dehypothecation of the plot but the opposite parties No.1 to 3 refused to get the plot dehypothecated and threatened to cancel the plot in question. It has further been stated that the complainants, in order to avoid arbitrary cancellation of the plot, paid an amount of ₹19,87,500/- through bank transfer on 20.04.2023 and thus, in total, paid an amount of ₹52,50,000/-i.e. 100% BSP @₹ 17000/- per sq. yards, EDC @₹2000/- per sq. yards & IDC @ ₹2000/- per square yards. Since the entire sale consideration was paid by the complainants, the complainants vide email dated 21.04.2023 informed the opposite parties about the deposit of ₹19,87,500/- and further requested the opposite parties No.1 to 3 to refrain from cancelling the plot. It has further been stated that opposite parties No.1 to 3 did not reply to the said email till date. It has further been stated that the complainants also submitted a complaint to the police authorities. Opposite parties No.1 to 3 sent one statement of accounts along with the said show cause notice, vide which they raised the demand of possession charges, IDC, PLC, & penal interest which is not payable by the complainants. The said charges have been demanded only with the purpose to usurp more money from the complainants. It has further been stated that opposite parties No.1 to 3 without getting the plot dehypothecated, completing the development works and without obtaining the Completion certificate, are asking the complainants to take the possession. 5] It has further been stated that recently, the complainants came to know that opposite parties No.1 to 3 were not having any authority to collect any money when they received the amount from the complainants as they had not even applied for the approvals and sanctions. It has further been stated that as per the terms and conditions of approvals, they could not collect any money from general public until exemption u/s 44 of PAPRA is received. The said exemption was granted on 25.01.2017 that too for part of the land. It has further been stated that before getting the exemption u/s 44 of PAPRA, opposite parties No.1 to 3 had already collected around 500 crores from public in lieu of giving them plots/floors/spaces.
6] It has further been stated that till date, opposite parties No.1 to 3 have failed to complete the development in the area/locality where the plot of the complainants is located as there are only fields. It has further been stated that opposite parties No.1 to 3 have not even commenced any development at 4 the said project location and till date, they have failed to provide basic amenities required before handing over the possession of the plot in question to the complainants.
7] It has further been stated that opposite parties No.1 to 3 were not having a single approval when the plot was sold to the complainants and further, IDC is not being charged by the Punjab Government. It has further been stated that the complainants are only liable to pay that amount which is payable as per the booking application form dated 26.02.2011 i.e. BSP @ ₹17000/- per sq yards, EDC. Apart from that, no other charges are payable by the complainants. It has further been stated that the complainants have already paid ₹52,50,000/-.
8] It has further been stated that opposite parties No.1 to 3 had sold the plot in question in violation of Section 6 of Punjab Apartment and Property Regulation Act, 1995 as it was incumbent upon them to execute buyer's agreement on accepting the application for purchase of plot and they have committed unfair trade practices by not offering Buyer's agreement in a reasonable time. It has further been stated in view of aforesaid provision, opposite party No.1 to 3 could not accept more than 25% of the sale consideration as booking amount but they received 30% of the sale consideration at the time of booking without executing any agreement of sale and thereafter continued to receive the money from the complainants without issuing the allotment letter & executing the agreement. It has further been stated that opposite parties No.1 to 3 had assured the complainants at the time of booking that the possession of the plot would be handed over by 25.02.2013 i.e. within a period of 2 years from the date of booking but they have been unable to deliver the possession of the plot in question even after about 10 years from the date of booking.
9] Alleging that all the above actions on the part of opposite parties No.1 to 3 tantamount to deficiency in service besides breach of trust, the complainants, by way of present complaint, have sought following directions to opposite parties No.1 to 3 in the relief clause:-
Relief claimed:
A. to handover the actual physical possession of plot bearing No.1074, after completing all the development works and after obtaining the completion certificate & pay interest @12% p.a. for causing delay in delivery of possession of the plot, to be calculated from 25.02.2013 till the date of handing over the actual physical possession of the said plot.
B. to refund the IDC of ₹5 Lakhs along with interest @12% p.a., since IDC was paid by the complainants under protest in order to avoid arbitrary cancellation of the plot in question.5
C. to execute the agreement, as per mutually agreed terms and conditions which were fixed at the time of booking and as per the payment plan provided at the time of booking and not to charge any other charges, apart from the sale consideration mutually fixed at the time of booking.
D. not to charge PLC, since the plot No.1074 does not fall in any of the preferential locations mentioned in the payment plan and further not to charge possession charges mentioned in the statement of accounts (Annexure C-9).
E. to dehypothecate the plot bearing No. 1074 (relief claimed against all the opposite parties including opposite party No.4 - GMADA). F. pay a sum of ₹20,00,000/- towards damages for the physical and mental torture, agony, discomfort and undue hardships caused to the complainant as a result of deficiency in services and indulging into unfair & deceptive trade practices on the part of opposite parties No.1 to 3, as also escalation in prices & ₹1,10,000/- to the complainants towards the cost of litigation.
Reply of opposite parties No.1 to 3.
10] While contesting the complaint on merits, opposite parties No.1 to 3 - M/s Manohar Infrastructure & Construction Pvt. Ltd., in their reply have raised certain preliminary objections to the effect that the complainants are investors and not consumers under Section 2(7) of Consumer Protection Act, 2019 as they purchased the plot for reselling in the open market for profit; that the complaint is liable to be dismissed on the ground for deliberate and willful suppression and the complainants are guilty of suppressio veri and suggestion falsi; that this Commission has no pecuniary jurisdiction as the complainant have paid an amount of ₹32,62,500/- only against the total cost of ₹56,75,000/- and they have deliberately created the jurisdiction by paying an amount of ₹19,87,500/- through bank transfer on 20.04.2023; that the complaint is barred by arbitration clause of the agreement; that this Commission has no jurisdiction to adjudicate the complaint relating to a dispute of a real estate project in view of Section 79 of the Real Estate (Regulatory and Development) Act, 2016 and that the complaint is also barred by the provisions of Punjab Apartment and Property Regulations Act, 1995.
11] On merits, it has been specifically denied that opposite party No.1 demanded IDC from the complainants; failed to issue allotment letter; the complainants had paid 50% of the consideration by 01.05.2014. However, it has been admitted only to the extent that ₹32,62,500/- was paid till 19.01.2016. It has further been stated that opposite parties already made requisite application for grant of partial completion certificate before the appropriate authority, which has not been granted as yet. It has further been 6 stated that all demands are made as per the agreement. It has further been stated that the complainants never visited the site a single time and it is incorrect that the plot is hypothecated to opposite party No.4 - GMADA. It has further been stated that the complainants never replied to any of the communications sent by opposite parties No.1 to 3 regarding execution of buyer agreement and are taking shelter of hypothecation to hide their own default. It has further been stated that the complainants had not made any payment or any communication since 19.01.2016 and when they received the cancellation notice, they immediately made payment of ₹19,87,500/- to suit their case. It has been admitted that the complainants have paid an amount of ₹52,50,000/-. It has further been stated that the possession was offered to the complainants in time on 19.10.2019 with almost all the basic amenities and also the request for grant of completion certificate was timely filed by opposite parties No.1 to 3. It has further been stated that opposite parties No.1 to 3 never demanded IDC from the complainants and sent timely updates to the complainants about the development in the project and have been requesting them to visit the project site but the complainants avoided the same. It has further been stated that almost entire project has been developed and all the basic amenities are put in place except few which are currently under development and shall be made available to project allottees shortly for use and enjoyment. It has further been stated that opposite parties No.1 to 3 have proper authority to launch the project and collect money in lieu of plots allotted. Alleging no deficiency in rendering service or unfair trade practice on their part, opposite parties No.1 to 3 prayed for dismissal of the complaint. Reply of opposite party No.4 - GMADA.
12] In its reply, opposite party No.4 - GMADA has stated that it is an inter-se dispute between the complainants and opposite parties No.1 to 3 and opposite party No.4 i.e. GMADA is neither a promoter nor developer for the project in question and as such the present complaint against opposite party No. 4 is not maintainable and the same is liable to be dismissed. It has further been stated that opposite parties No.1 to 3 got approved its Mega Housing Project of 103 acres in Villages Mullanpur Garibdas, Dhanauran and Mastgarh, Distt. S.A.S. Nagar from the Empowered Committee headed by Hon'ble Chief Minister, Punjab in its meeting held on 22.03.2013 and after the said approval, Letter of Intent indicating the concessions granted to opposite parties No.1 to 3 by the Government was issued by the Nodal Agency (PUDA) vide Memo No.PUDA/MHP/2013/3918 dated 03.05.2013 (Ex. OP-4/1). It has further been stated that thereafter an agreement was signed by opposite parties No.1 to 3 with the Government of Punjab, Department of Housing and Urban Development on 14.06.2013 (Ex.OP-4/2) and subsequently, Supplementary Agreement dated 12.12.2014 (Ex.OP-4/3) for an additional area of 36.77 acres 7 was executed by Promoter with the Government of Punjab as per which implementation period of this Mega Housing Project was also extended up-to 13.06.2018. It has further been stated that thereafter, Supplementary Agreement dated 16.06.2016 (Ex. OP-4/4 ) for an additional area of 94.60 acres was executed by the Promoter with the Government of Punjab and vide notification no.18/7/2017-5hg2/431 dated 25.01.2017 (Ex. OP-4/5) issued by Government of Punjab, Department of Housing and Urban Development, an area of 109.58 acres (out of total net planned area of 120.99 acres) of this Housing Mega Project of this Promoter was granted exemption from the provisions of Punjab Apartment and Property Regulation Act, 1995 subject to the terms and conditions contained therein. It has further been stated that the layout plan of this Mega Housing Project has been approved by the Office of Chief Town Planner, Punjab and letter issued vide Endst. no. PUDA- Mega/2023/279 dated 20.04.2023 by PUDA regarding Extension of implementation period of Mega Housing Project "The Palm" in villages Mastgarh, Dhanoura& Mullanput, New Chandigarh, Distt. S.A.S. Nagar has been annexed as Ex. OP-4/6. It has further been stated that till date, the Promoter (M/s Manohar Infrastructure & Constructions Pvt. Ltd.) has not obtained Completion Certificate or Partial Completion Certificate from the Competent Authority-cum-Chief Administrator of GMADA by completing Development Works of its Mega Housing Project "The Palm" situated at Mullanpur, New Chandigarh. It has further been stated that there is no deficiency in service and unfair trade practice on the part of Opposite Party No. 4 (GMADA) and prayer for dismissal of the complaint has been made. Rejoinder:
13] The complainants filed rejoinder to the reply of opposite parties No.1 to 3 wherein they reiterated all the averments contained in the complaint and controverted those contained in said reply.
14] The parties led evidence in support of their cases. 15] We have heard the contesting parties and have gone through the entire record of the case.
16] Objection : Complainant is not a consumer:-
First we deal with the objection taken by opposite parties No.1 to 3 to the effect that the complainants are investors and not consumers under Section 2(7) of Consumer Protection Act, 2019 as they purchased the plot for reselling in the open market for profit. It may be stated here that there is nothing on the record that the complainants are property dealers and deal in the sale and purchase of property, on regular basis, and as such, the plot, in question was purchased by them by way of investment with a view to resell the same as and when there was escalation in the prices thereof. On the other hand, the complainants in Para 2 of the complaint have specifically stated that 8 they booked the plot for residential purposes. It is significant to mention here that a person cannot be said to have purchased a plot for a commercial purpose only by proving that he has purchased more than one house or plot. Separate plots may be purchased by a person for the individual use of his family members. A person may buy two or three houses, if the requirement of his family cannot be met in one house. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. Since the opposite parties has levelled allegations against the complainants, the onus lay upon them, to place on record, documentary evidence in that regard, which they failed to do so. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the Hon'ble National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ
316. Not only as above, under similar circumstances, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, the Hon'ble National Commission, while rejecting similar plea raised by the builder, observed as under:-
" In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra &Ors. Vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015."
The principle of law laid down in the aforesaid cases is fully applicable to the present case. The complainants thus fall within the definition of a 'consumer', as defined under the Act. Such an objection taken by opposite parties No.1 to 3 being devoid of merit is rejected.
917] Objection : Complaint is liable to be dismissed as the complainants are guilty of suppressio veri and suggestion falsi:
So far as this objection is concerned, it may be stated here that from bare perusal of the record, we do not find any suppression of truth on the part of the complainants, which is suggestive of falsehood. Therefore, this objection stands rejected.
18] Objection : Pecuniary Jurisdiction:
As regards the objection raised that this Commission has no pecuniary jurisdiction as the complainants have paid an amount of ₹32,62,500/- only against the total cost of ₹56,75,000/- and they have deliberately created the jurisdiction by paying an amount of ₹19,87,500/- through bank transfer on 20.04.2023, it may be stated here that admittedly, an amount of ₹56,75,000/- stood paid by the complainants to opposite parties No.1 to 3. Opposite parties No.1 to 3 cannot bifurcate the total amount so paid by the complainants just to challenge the pecuniary jurisdiction of this Commission. Since the consideration paid by the complainants exceeds ₹50 Lakhs, therefore, the present complaint is very much within the pecuniary jurisdiction of this Commission. The objection raised in this regard stands rejected.
19] Objection : This Commission has no jurisdiction as the dispute relates to a real estate project in view of Section 79 of the Real Estate (Regulatory and Development) Act, 2016.
As regards this objection, it may be stated here that the same does not merit acceptance, in view of the ratio of law laid down by the Hon'ble Supreme Court of India in Civil Appeal No. 3581-3590 of 2020, M/s Imperia Structures Ltd. Vs. Anil Patni and another, decided on 02.11.2020, wherein it was held that the provisions of RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any consumer complaint. This view has been reiterated by the Hon'ble Supreme Court of India in Civil Appeal No. 5785 of 2019, Ireo Grace Realtech Pvt. Ltd. Versus Abhishek Khanna & Others, decided on 11.01.2021. As such, this objection also stands rejected.
20] Objection : Complaint is barred by the provisions of Punjab Apartment and Property Regulations Act, 1995.
So far as this objection is concerned, it may be stated here that in view of law settled by Hon'ble Supreme Court, in case Kishori Lal Vs. Chairman, Employees' State Insurance Corporation, 2007(5) Recent Apex Judgments (R.A.J.) 68, in Para 17 that "....The trend of the decisions of this Court is that the jurisdiction of the Consumer Forum should not and would not be curtailed unless there is an express provision prohibiting the Consumer 10 Forum to take up the matter which falls within the jurisdiction of civil court or any other forum as established under some enactment. The Court had gone to the extent of saying that if two different fora have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the power of the Consumer Forum to adjudicate upon the dispute could not be negated.", the objection raised is not sustainable in the eyes of law and the same stands rejected.
Observations/findings of this Commision:
21] Now coming to the merits of the case, the grouse of the complainants, in nutshell, is that opposite parties No.1 to 3 were not having the requisite license and approvals at the time of booking Plot No.1074 measuring 250 sq. yards and as such, they could sell the plot/flat/any space without obtaining any license or till an exemption is granted under Section 44 of the PAPRA Act; there was violation of Section 6 of PAPRA, 1995 on their part; they even could not continue to receive the money from the complainants without issuing the allotment letter and executing the agreement; the plot in question is not complete in all respects and is not ready for delivery of possession and opposite parties No.1 to 3 are not in possession of the partial completion certificate. On the other hand, opposite parties No.1 to 3 have refuted the said allegations of the complainants, yet, without support of any documentary evidence.
Whether opposite parties No.1 to 3 were competent to advertise/launch the project and collect money from general public for allotment of land, plot etc. at the time of booking the plot by the complainants or not?
22] Coming to this issue as to whether opposite parties No.1 to 3 were competent to advertise/launch the project and collect money from general public for allotment of land, plot etc. at the time of booking the plot by the complainants, it may be stated here that this issue has recently been decided by this Commission in Appeal No.19 of 2023 titled 'Gursangat Singh Vs. M/s Manohar Infrastructure & Constructions Private Limited & Ors.' decided by this Commission on 01.12.2023, wherein in Para 19, this Commission observed as under:-
"15. It may be stated here that when we peruse the following documents placed on record by the respondents/builder alongwith appeal no.26 of 2023 having been issued by the competent Authorities i.e. Punjab Urban Planning and Development Authority (PUDA) and Greater Mohali Area Development Authority (GMADA), which are the controlling authorities of the respondents/builder, it reveals as under:-11
a. Letter of Intent (LOI) for the project in question was issued by the Punjab Urban Planning and Development Authority on 03.05.2013, wherefrom it is coming out that application for setting up the residential project was moved by the respondents/builder before the competent Authority, for the first time on 16.09.2011.
Thereafter, proposal of the project was considered by the screening committee on 21.02.2013 and the project was approved by the Government, for the first time only on 22.03.2013.
b. Furthermore, in condition no.3 (iii) v) of the Letter of Intent (LOI) dated 03.05.2013 it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. Relevant part of the said condition of LOI is reproduced hereunder:
"v.....The project shall not be advertised/launched and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption u/s 44 of PAPR Act 1995 is issued by the State Govt...."
c. Furthermore, in condition no.6 of the said LOI it was clearly mentioned that it does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid approvals & requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development. Relevant part of condition no.6 of the said LOI is reproduced hereunder:-
'..This LOI is only a letter of intent issued by Punjab Urban Planning & Development Authority in its capacity as Nodal Agency and does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid approvals & requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development...' d. Similar condition is found mentioned in the agreement dated 14.06.2013, having been executed between the State Govt. of Punjab (The Governor of Punjab, through The Chief Administrator 12 PUDA) and the respondents/builder, wherein, in condition no. (6) ix, it has been mentioned as under:-
'....The project shall not be advertised /launched and no money will be collected from General Public for allotment of land/plot /flat/any space till such time the layout plans/Zoning plans are cleared by the Competent Authority and exemption u/s 44 of PAPRA is issued by the Govt...'.
e. Change of Land Use (CLU) was approved by the Department of Town and Country Planning, Punjab, for the first time on 31.03.2014 only.
16. Thus, from perusal of the aforesaid documents, it is clearly established that the respondents/builder was not competent to advertise/launch the project and collect money from general public for allotment of land, plot etc. in the year 2011, or even by 2017 i.e. before exemption under section 44 of PAPR Act is issued by the State Govt. (which in the present case has been issued only on 25.01.2017), i.e. not even a single permission had been obtained by the respondents/builder in the year 2011, when the project in question was launched. Even the Certificate of Registration as Promoter, which qualified the respondents/builder for obtaining licence under PAPR Act was obtained by them on 27.06.2014 only i.e. after more than 2 ½ years from the date of selling plot to the complainant. Collecting money from the perspective buyers and selling the project, without obtaining the required permissions and sanctions is an unfair trade practice on the part of the project proponent. It was so said by the Hon'ble National Commission, in a case titled as M/s Ittina Properties Pvt. Ltd. & 3 Ors. Vs. Vidya Raghupathi & Anr., III (2018) CPJ 12 (NC). Relevant part of the said order reads as under:-
"................This Commission in Brig. (Retd.) Kamal Sood Vs. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.
It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.09.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency............"13
Surprisingly, the Government of Punjab, Department of Housing and Urban Development (Housing II Branch) i.e. the competent Authority was well aware of the fact that the project has been launched and plots/units have been sold to the general public starting from the year 2011 itself, without necessary approvals/permissions and huge money has been collected and usurped by the respondents/builder from the innocent buyers, yet, it did not hear the aggrieved consumers before granting exemption to the project on 25.01.2017 from the provisions of PAPR Act. It cannot be assumed that the said project was launched by the respondents/builder and the competent authorities were not aware of illegal activities, happening in their territory. As such, the said act of the competent authorities is against the principles of natural justice; fair play and not binding on the complainant and other prospective buyers. If the competent Authorities failed to take any action under relevant Rules and Regulations against the company, no benefit can be taken out there-from by the respondents/builder against deficiency in providing service, negligence and adoption of unfair trade practice on their part."
23] Therefore, in the instant case also, opposite parties No.1 to 3 were not competent to advertise/launch the project in the year 2011 or in the year 2013 when complainants booked the plot in question or even by 2017 i.e. before exemption under section 44 of PAPR Act is issued by the State Govt., which was issued only on 25.01.2017. As such, it is established that not even a single permission had been obtained by opposite parties No.1 to 3 in the year 2011, when the project in question was launched.
Show Cause Notice dated 28.03.2023, Annexure C-9, not justified:-
24] As regards the contention that without getting the agreement executed as per mutually agreed sale consideration, opposite parties No.1 to 3 issued a show cause cancellation notice in respect of provisional allotment of plot No.1074, vide its letter dated 28.03.2023, Annexure C-9, it may be stated here that that though opposite parties No.1 to 3 have stated that since complainants defaulted in making further payment, as such, cancellation letter dated 28.03.2023 was issued, yet, on the other hand, it has been vehemently contended by the Counsel for the complainants that further payments were not made because neither final allotment letter in respect of plot was issued nor agreement was got signed nor there was any development at the project site.
Not issuing final allotment letter and not executing agreement 25] Coming to the final allotment letter and agreement, it may be stated here that not even a single cogent and convincing evidence has been 14 placed on record by opposite parties No.1 to 3 to prove that they even sent final allotment letter or agreement to the complainants for signatures or that the complainants were ever called to their office for the same. Under these circumstances, bald stand taken by opposite parties No.1 to 3 that the complainants failed to sign the agreement despite asking them, cannot be taken into consideration.
Whether, project in question is ready and Completion Certificate obtained by the Builder?
26] Opposite parties No.1 to 3 have failed to place on record any cogent evidence to prove that the project in question was ready by March 2023, when cancellation letter was issued by them to the complainants. It is settled law that onus to prove the stage and status of construction and development work at the project site and that all the permissions/approvals including completion certificates have been obtained in respect thereof, is on the builder/developer. It was so said by the Hon'ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present case, as stated above, opposite parties No.1 to 3/builder have failed to place on record even an iota of convincing evidence to prove that by the year 2020 or even by the date of filing the consumer complaint before the District Commission, the project was complete in all respects. Had the development/construction activities been completed or about to complete, then it was for opposite parties No.1 to 3, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/ construction activities are completed or not, but they miserably failed to do so. Mere placing on record some photographs of the project site showing that some flats have been constructed or that some development work is being carried out now, are of no use to the respondents/builder. Under these circumstances, if the complainants stopped the payment, they cannot be termed as defaulters, in view of law laid down by the Hon'ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date or reasonable period, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon'ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development and construction work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser.15
27] Not only above, it may be stated here that vide order dated 03.10.2023, this Commission directed the Chief Administrator, Greater Mohali Area Development, SAS Nagar, Punjab to visit the spot i.e. Plot No.1074, measuring 250 sq. yards in the project "The Palm", New Chandigarh to verify as to whether the same is complete in all respects and is ready for delivery of possession and also to verify as to whether opposite parties No.1 to 3 have applied for partial completion certificate or not. In compliance to the said directions, Counsel for opposite party No.4 - GMADA submitted report dated 16.11.2023, wherein it has been stated that opposite party No.4 constituted a team of DTP (L), GMADA, DE (C-2), DE (PH-2) and DE (Electrical) as well as SDE (Building), GMADA, who visited the site i.e. Plot No.1074, measuring 250 sq. yards in the project "The Palm", New Chandigarh on 26.10.2023. Paras 4 and 5 of this report, being relevant, are extracted hereunder:-
"4. That during the visit, it was found that the development works relating to civil, public health and electrical works are not complete at site and the same are still going on. Photographs of the site where Plot No.1074, measuring 250 sq. yards, in the project "The Palm", New Chandigarh is situated as per approved Layout Plan are annexed herewith as Annexure R1 and R2.
5. That it is pertinent to mention here that the Promoter (M/S Manohar Infrastructure & Constructions Pvt. Ltd.) vide application dated 18-02-2020 had applied for Partial Completion Certificate of an area of 42.58 acres falling in this project under the Completion Policy dated 02-09-2014 but due to non completion of requisite formalities by this promoter, Partial Completion Certificate could not be issued. Thereafter vide memo no. 2362 dated 22-09-2022, the Promoter was advised to apply for Partial Completion Certificate under the new Completion Policy dated 05-07- 2021, however, the Promoter has not applied for the Partial Completion Certificate/Completion Certificate under the new policy date 05-07-2021 till date. It is submitted that the Promoter has not obtained Partial Completion Certificate or Completion Certificate from the competent authority of GMADA after completing development works of in Mega Residential Project "The Palm", New Chandigarh."
28] Bare perusal of aforesaid report of GMADA clearly proved that firstly the development works relating to civil, public health and electrical 16 works are not complete at site and are still going on and secondly, the Promoter has not obtained Partial Completion Certificate and final Completion Certificate from the competent authority of GMADA after completing development works of in Mega Residential Project "The Palm", New Chandigarh. Therefore, in our considered view, the act of opposite parties No.1 to 3 to collect the money before getting all the necessary approvals for the project and not issuing allotment letter or executing buyer's agreement and at the same time issuing show cause notice for cancelling the plot in question, certainly proves deficiency in service and their indulgence in unfair trade practice. It is held that the complainants are entitled to get delivery of possession of the plot in question in the project of opposite parties No.1 to 3. Thus, by issuing cancellation letter dated 28.03.2023, Annexure C-9, opposite parties No.1 to 3 indulged into unfair trade practice and as such the same stands quashed.
Whether charging of IDC to the tune of ₹5 Lakhs is justified in the absence of final Completion Certificate?
29] In this regard, it may be stated here that the complainants have paid an amount of ₹5 Lakhs towards IDC and it is their case that opposite parties No.1 to 3 compelled them to pay ₹5 Lakhs towards 50% of EDC & IDC, which they paid on 19.01.2016. It has been stated that in the absence of final Completion Certificate, opposite parties No.1 to 3 could not charge any IDC. It is already proved on record that opposite parties No.1 to 3 have not obtained Partial Completion Certificate and final Completion Certificate from the competent authority i.e. opposite party No.4 - GMADA after completing development works of in Mega Residential Project "The Palm", New Chandigarh"
and the development works relating to civil, public health and electrical works are not complete at site and are still going on. Therefore, in the absence of Partial Completion Certificate/final Completion Certificate and complete development at the site where the plot of the complainants is situated, opposite parties No.1 to 3 cannot charge IDC from the complainants at this stage. In our concerted view, opposite parties No.1 to 3 are liable to refund the IDC to the complainants alongwith interest and the same shall be payable by the complainants as and when final completion certificate is obtained by opposite parties No.1 to 3 and possession, complete in all respects, is delivered. Issue with regard to PLC:
30] As far as demand of PLC is concerned, it may be stated here that there is no document on record which shows that the plot of the complainants is preferentially located. However, in the interest of justice, it is held that in case, at the time of delivery of actual physical possession of the plot, if it is found that the plot in question is preferentially located, then the complainants 17 shall be liable to pay the same as per payment plant, Annexure C-1 otherwise not.
Compensation for delay in offer and delivery of possession of plot:- 31] Now the question which arises for consideration is, as to what amount of compensation, the complainants are entitled to get, for the period of delay in delivery of possession of the plot. It may be stated here that it a matter of common parlance that for purchasing the unit/plot, the purchasers take loans from their family members, relatives and friends or financial institutions. In some cases, the purchasers live on rent in the absence of timely delivery of possession. Admittedly, in the present case, agreement has not been executed by opposite parties No.1 to 3 till date, despite the fact that entire amount of ₹52,50,000/-i.e. 100% BSP @₹17000/- per sq. yards, EDC @₹2000/- per sq. yards & IDC @ ₹2000/- per square yards stood received from the complainants. It is well settled law that to ascertain the period/date by which possession should be handed over to the allottee in the absence of execution of agreement, should be maximum three years from the date of booking. It was so said by the Hon'ble Supreme Court of India in Fortune Infrastructure Versus Trevor D' Lima & Ors. (2018) 5 SCC 442 and by the Hon'ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. Thus, on account of delay in actual delivery of possession within a reasonable period of three years i.e. latest by 25.02.2014 from the date of application dated 26.02.2011 (as in the present case, agreement has not been executed between the parties) the complainants suffered mental agony, hardships and financial loss. In DLF Homes Panchkula Pvt. Ltd. Versus Himanshu Arora, Civil Appeal No. 11097 of 2018, decided on 19 November, 2018 under similar circumstances, the Hon'ble Supreme Court of India has upheld the order of the Hon'ble National Commission awarding interest @9% p.a. for the period of delay in delivery of possession. Relevant part of the said order is reproduced hereunder:-
"......8. Having regard to the above submission, we indicated to the learned Counsel appearing on behalf of the flat purchasers that it would be appropriate if the interest as ordered by NCDRC at 9% per annum is made payable over the period which was determined by the Order of the SCDRC. There is no objection by the flat purchasers to the aforesaid modification being made. Even otherwise, we are of the view that such a modification would be required in the interests of justice since it was the appellants who had questioned the Order of the SCDRC before the NCDRC.18
9. In the above facts and circumstances, we confirm the direction of the NCDRC that the appellants shall pay interest @ 9 per cent per annum. However, the period over which interest shall be payable will be in conformity with the Order passed by the SCDRC...."
Thereafter also, similar rate of interest i.e. 9% p.a. was granted by the Hon'ble Supreme Court in DLF Homes Panchkula (P) Ltd. Versus Sushila Devi, Civil Appeal Nos.2285-2330 of 2019, decided on 26 February, 2019, by making reference to the earlier order passed by it in Himanshu Arora's case (supra).
32] In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022 also, the Hon'ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-
"......Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today....."
In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon'ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered. As such, in the present case, the complainants deserve just and fair compensation for the period of delay in delivery of possession to them by opposite parties No.1 to 3. In our considered opinion, if we grant interest @9% p.a. to the complainants on the entire amount deposited by them, after expiry of reasonable period of three years from the date of booking of the plot till delivery of possession thereof, that will meet the ends of justice.
Decision of this Commission:-
33] For the reasons recorded above, the complaint is partly accepted against opposite parties No.1 to 3 and they (opposite parties No.1 to 3), jointly and severally are directed as under:-
i. To execute Buyers Agreement in respect of plot No.1074 measuring 250 square yards in the project in question i.e. "Palm Springs" as per RERA guidelines within a period of 30 days from the date of receipt of certified copy of this order. However, it is made clear that 19 the date of possession shall be deemed to be 25.02.2014 as discussed above.
ii. To hand over physical possession of plot No.1074 measuring 250 square yards in the project in question i.e. "Palm Springs", @₹17,000/- per square yard, complete in all respects, after obtaining completion certificate, and free of any hypothecation, to the complainants, within a period of 2 months from the date of receipt of a certified copy of this order.
iii. To pay compensation by way of interest @9% p.a. on the entire amount deposited by the complainants, for the period of delay i.e. after the expiry of period of three years from application dated 26.2.2011 i.e. from 26.02.2014 till 31.12.2023 in one go, within a period of 30 days from the date of receipt of a certified copy of this order, failing which, thereafter it shall be liable to pay penal interest @ 12% p.a. on the entire accumulated amount of compensation (26.02.2014 to 31.12.2023), from the date of default till this entire accumulated amount of compensation is paid to the complainants.
iv. To pay compensation by way of interest @9% p.a. on the entire amount deposited by the complainants, w.e.f. 01.01.2024, onwards (per month), by the 10th of the following month to the complainants till possession of the plot question is actually delivered, as ordered above.
v. To refund the amount of IDC alongwith interest @6% p.a. from the date of receipt thereof, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, this amount shall carry interest @9% p.a. from the date of default till realization.
vi. To pay compensation of Rs.1 lac for causing mental agony and physical harassment to the complainants on account of deficiency in providing service and adoption of unfair trade practice and also cost of litigation to the tune of Rs.50,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, these amounts shall carry interest @9% p.a. from the date of default till realization.
34] However, the complaint against opposite party No.4 - GMADA is dismissed with no order as to cost.
35] Pending applications, if any, stand disposed of accordingly.
2036] Certified copies of this order be sent to the parties, free of charge, forthwith.
37] File be consigned to Record Room after completion. Pronounced 27.12.2023.
(RAJESH K. ARYA) PRESIDING MEMBER (PREETINDER SINGH) MEMBER Ad 21 STATE COMMISSION (Complaint Case No.41 of 2023) Argued by:-
Sh. Sanjeev Gupta, Advocate for the complainants.
Sh. Simranjit Singh Sidhu, Advocate for opposite parties No.1 to 3. Sh. Sandeep Bhardwaj, Advocate for opposite party No.4 - GMADA.
Dated 27.12.2023
ORDER
Vide our detailed order of even date, recorded separately, this complaint has been partly accepted against opposite parties No.1 to 3. However, the complaint against opposite party No.4 - GMADA has been dismissed with no order as to cost.
(PREETINDER SNGH) (RAJESH K. ARYA)
MEMBER PRESIDING MEMBER
Ad