State Consumer Disputes Redressal Commission
Ashish Khanna vs Parsvnath on 1 February, 2013
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH. Complaint Case No. 69 of 2012 Date of institution: 07.12.2012 Date of decision : 01.02.2013 Ashish Khanna son of Late Sh.Subhash Khanna, resident of House No. C-78(Ground Floor), Kirti Nagar, New Delhi-85. Complainant Versus 1. Parsvnath Developers Limited, SCO No.1, Ist Floor, Sector-26, Madhya Marg, Chandigarh, through is Managing Director. Second address: Parsvnath Developers Limited, Registered & Corporate Office, at 6th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi - 110001. 2. Chandigarh Housing Board, Plot No.8, Jan Marg, Sector-9, Chandigarh through its Chairman. Opposite Parties. Complaint U/s 17 of Consumer Protection Act,1986. For the complainant : None For Opposite Party No.1 : Sh.Aftab Singh, Advocate, proxy for Sh.Ashwani Talwar, Advocate For Opposite Party No.2: Sh.Jai Singh Brar,Advocate CORAM: Justice Sham Sunder(Retd), President Mrs.Neena Sandhu, Member
Per Justice Sham Sunder (Retd), President The facts, in brief, are that Opposite Party No.1 had widely advertised its project of a township in the name of Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh, envisaging sale of residential units to be developed and constructed by it, on the land of Opposite Party No.2. Opposite Parties No.1 & 2 entered into Development Agreement dated 6.10.2006, wherein, it was agreed that the Developer i.e. Opposite Party No.1 would develop the land and construct thereon the project comprising residential, commercial and other related infrastructure in accordance with the detail provided in the Development Agreement. Opposite Party No.1 had even constructed a sample flat at the site enabling the public to take decision in purchasing the same. It was also stipulated that the construction of the residential units was likely to be completed within a period of 36 months, from the date of signing the Development Agreement, which was signed on 6.10.2006. The complainant, alongwith his father (now deceased), impressed by the brochure, applied for allotment of residential unit of one bedroom, one drawing/dining room, kitchen, toilet etc. having 740 sq.ft. area i.e. equivalent to 68.746 mtrs. in the project of the Opposite Parties namely Parsvnath Prideasia by paying Rs.2,57,000/- on 21.9.2007, vide cheque No.285488 dated 21.9.2007 drawn on HDFC Bank, towards basic price at the time of booking. The application of the complainant was accepted and he was allotted flat No.G01,in Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh, vide allotment letter dated 11/15.10.2007 , copy whereof is Annexure C2. It was stated that the total basic price of the flat was Rs.51,43,000/- and the payment plan was construction linked. It was further stated that according to the said payment plan, the complainant deposited another sum of Rs.2,57,000/-, vide receipt dated 31.10.2007, and Rs.10,72,000/- vide receipt dated 6.12.2007, copies whereof are Annexure C3 & C4 respectively. In this way, 30% of the basic price of flat was paid. Flat Buyer Agreement dated 7.4.2008 was entered into amongst the parties, copy whereof is Annexure C5. It was further stated that the complainant visited the site and found that the Opposite Parties failed to construct the flats and even the foundation was not laid at the site.
It was further stated that the complainant wrote a letter on 10.9.2009 requesting the Opposite Parties to refund the amount alongwith interest as there was no progress of the project and the same was delayed for unlimited period. However, no reply was received. The complainant again wrote letter on 5.1.2011 to the Opposite Parties, copy whereof is Annexure C6, but to no avail. It was further stated that the Opposite Parties were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainant, 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, claiming refund of the amount of Rs.15,86,000/- alongwith SBI Term Deposit interest from the date of respective deposits till realization as per Clause 9(d) of the Agreement; compensation as per Clause 9
(c)of the Agreement @ Rs.10/- per sq. ft of the super area i.e.740 sq. ft. per month ; compensation of Rs.3.00 lacs for mental agony besides Rs.22,000/- as litigation costs.
2. Opposite Party No.1, in its written version, admitted the factual matrix of the case, that the complainant was allotted a flat with super area of 740 square feet, in the aforesaid project, at a basic price of Rs.51,43,000/-. It was also admitted that a Flat Buyer Agreement was executed amongst the complainant, and the Opposite Parties on 7.4.2008. It was also admitted that the complainant deposited Rs.15,86,000/-. It was, however, stated that after the execution of the Development Agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to Opposite Party No.1, by the Chandigarh Housing Board Opposite Party NO.2. It was further stated that, when Opposite Party No.1, was fencing the land, possession whereof was delivered to it, for the development of project, a dispute arose, as the Haryana Government, claimed ownership, with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to Opposite Party No.1, but it was discovered to be the land of the Forest Department. It was further stated that, as per Article 2.2.2, period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same. It was further stated that, as per Article 4.2.1. of the Development Agreement dated 6.10.2006, executed between the Developer and the Chandigarh Housing Board, it was agreed between the parties that 30% of the revenues received in the Escrow Account shall be transferred to a designated bank of Opposite Party No.2 and correspondingly the balance 70% shall be transferred to the account of the Developer. Consequently, the liability of the Developer and the Chandigarh Housing Board, in case of refund, was corresponding to the above agreed arrangement of receipts also.
It was further stated that the complainant did not deposit all the instalments and, as such, violated the provisions of Clause 5(a) of the Flat Buyer Agreement. It was further stated that in case of cancellation, a sum of Rs.2,57,150/, being 5% of the basic price was to be forfeited. It was further stated that after deducting the said amount of Rs.2,57,150/- from the deposited amount of Rs.15,86,000/-, the remaining amount works out to be Rs.13,29,700/-, which shall be refunded to the complainant, as per the provisions of Clause 5(a) of the Agreement dated 7.4.2008. It was further stated that the dispute between the Opposite Parties, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Fora was barred. It was denied that Opposite Party No. 1 was deficient, in rendering service, and indulged into unfair trade practice. The remaining averments were denied, being wrong.
3. Opposite Party No.2 was duly served for 24.1.2013, but no authorized representative put in appearance, on its behalf, as a result whereof it was proceeded against ex parte and the complaint was adjourned to 30.1.2013 for arguments. On 30.1.2013, the Counsel for Opposite Party No.2 put in appearance, filed vakalatnama and joined proceedings.
4. The complainant, in support of his case, led evidence by way of his own affidavit, alongwith which, a number of documents were attached.
5. Opposite Party No.1, filed the affidavit of Sh.Prehlad Kumar Jain, President, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi, by way of evidence, and also attached a number of documents therewith.
6. When the complaint was fixed for arguments on 30.1.2013, none put in appearance, on behalf of the complainant.
7. We have heard the Counsel for the Opposite Parties, and have gone through the evidence, and record of the case carefully.
8. The first question, that arises for consideration, is, as to within which period, the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainant and his father (now deceased) applied for the allotment of a flat, and they were allotted the same. They deposited Rs.15,86,000/-, in instalments, towards the price of flat, according to construction linked payment plan, as admitted by the Opposite Parties. Clause 9(a) of the Flat Buyer Agreement dated 7.4.2008 annexure C5/ R-1/2, referred to above, which is relevant, for answering the question, posed, at the outset of this paragraph, reads as under ;
Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.
9. The plain reading of Clause 9(a) of the Flat Buyer Agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of signing the Development Agreement dated 06.10.2006 annexure R1/1. The time could be extended, in terms of the Development Agreement, dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the Developer. Opposite Party No.1 admitted, in its written reply, that, in the first instance, possession of the entire project land, claimed to be unencumbered, was handed over to it by Opposite Party No.2, and when the fencing was being done, the Haryana Govt. raised a dispute, with regard to the ownership of a portion of the same. It is the case of Opposite Party No.1, that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to it, the same was discovered to be that of the Forest Department. No evidence was, however, produced by Opposite Party No.1, in this regard. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the Developer, that the delay was caused, in the construction of residential units. The Developer also could not take shelter of force majeure clause. No document was produced by Opposite Party No.1, that any restriction was imposed by any Court or Authority, upon it, as a result whereof, it could not raise construction of residential units, in time. Even, it was not proved, that there was delay in the grant of environmental clearance. Opposite Party No.1, without first confirming the clear title of the entire land, over which the project, was to be developed, started booking the flats, and allotting the same, to the prospective buyers, by fleecing them of huge amounts, and making misleading statement, that the construction of residential units, will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Party No.1, thus, indulged into unfair trade practice. It is, therefore, held that the construction of residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009.
10. The next question, that arises for consideration, is, as to whether the complainant is entitled to the refund of amount, deposited by him, with interest or not ? Clause 9(d) of the Flat Buyer Agreement, which is relevant, to answer this question, reads as under;
9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.
11. The complainant deposited the amount towards part payment of the price of flat, in the hope of getting its possession, within a period of 36 months from 6.10.2006, but he found that till 10.9.2009, not even a single brick, had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainant could not wait for an indefinite period. The only option with the complainant, in such circumstances, was to ask for the refund of amount and accordingly he wrote letter dated 5.1.2011 Annexure C6 seeking refund of the deposited amount. The plain reading of Clause 9(d) extracted above, reveals that if the Developer, for, whatever the reasons may be, fails to deliver the possession of residential unit to the buyer, the Developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable on the date of refund. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount immediately, with interest, as provided under Clause 9(d) of the Agreement, referred to above. The Opposite Parties are held liable to refund the amount of Rs.15,86,000/- to the complainant, with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above.
12. Coming to the submission of the Counsel for Opposite Party No.1, that since there was breach of Clause 5(a) of the Flat Buyer Agreement, by the complainant, he was only entitled to the refund of the remaining amount, deposited by him, after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument, advanced by the Counsel for Opposite Party No.1, is misconceived. Clause 5(a) of the aforesaid Agreement dated 7.4.2008, reads as under ;
5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.
13. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the Agreement, and if the payment, was not made, within the stipulated period or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in the payment of instalments, or of any other term and condition of the Agreement, aforesaid, on the part of the complainant, or not ? It was proved, as also admitted by the Opposite Party, that the payment of instalments was made by the complainant, from time to time, as and when the same fell due.
There was no delay, in making payment of the part price of flat, through instalments, on the part of the complainant. Since, after the expiry of period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainant was not required to deposit the amount of remaining instalments. The complainant had, thus, asked for the refund of amount. There was also no breach of any other term and condition of the Agreement, referred to above, on the part of the complainant. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainant was, thus, entitled to the refund of entire amount, deposited by him, with interest, as held above. The submission of the Counsel for the Opposite Parties ,in this regard, being without merit, must fail, and the same stands rejected.
14. The next question, that arises for consideration, is, as to whether, the complainant is entitled to compensation, for not handing over possession to him, as per the terms and conditions of the Agreement C5/R-1/2 dated 7.4..2008, referred to above, and for causing physical harassment and mental agony, or not ? Clause 9 ( c ) of the Agreement, referred to above, which is relevant for answering the question, reads as under
:
9(c) In case of possession of the built up area is not offered to the Buyer within a period of 36 months or extended period as stipulated in sub-clause (a) above the Buyer shall be entitled to receive from Developer compensation @ Rs.107.60 per sq.mtr (Rs.10/- per sq.ft) of the super area of the unit per month and to no other compensation of any kind. In case the Buyer fails to clear his account and take possession of the unit within30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @ 107.60 per sq.mtr. (Rs.10/- per sq.ft) of the super area of the unit per month in addition to the liability to pay interest to the sellers and other consequences of default in payment.
15. The possession of the flat was not offered, to the buyer, within a period of 36 months from 6.10.2006. As stated above, even till date, not even a single brick, has been laid, at the spot. In these circumstances, as per Clause 9( c) of the aforesaid Agreement, the complainant became entitled to compensation @107.60 per sq.mtr (Rs.10/- per sq.ft. ) of the super area of the unit, per month. The language of Clause 9(c) is unambiguous and clear. The parties executed the Agreement, aforesaid with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No compensation, beyond the terms and conditions, contained in Clause 9 ( c) of the aforesaid Agreement, could be claimed by the complainant. It is, thus, held that the complainant is entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009, the last date of completion of the project, till the actual payment was made to him.
In this view of the matter, the compensation claimed to the tune of Rs.3 lac for mental agony & physical harassment, cannot be granted to him.
16. Coming to the submission of Counsel for Opposite Party No.1, that since the remedy for settlement of dispute, by way of arbitration, has already been availed of, by the Opposite Party, in accordance with clause 18 of the Escrow Agreement dated 1.6.2007 Annexure R1/3 executed between them, the complaint under Section 17 of the Consumer Protection Act,1986 was barred, it may be stated here, that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be made, which reads as under ;
3.Act not in derogation of any other law.
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being, in force.
The mere fact that the remedy of arbitration, which was provided, in the Agreement dated 1.6.2007 annexure R1/3, has already been availed of by the Opposite Parties , that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for Opposite Party No.1, being devoid of merit, must fail, and same stands rejected.
17. For the reasons, recorded above, the complaint is partly accepted with costs of Rs.5000/- , in the following terms ;
(i)Parsvnath Developers Limited and the Chandigarh Housing Board are held liable jointly and severally to refund the amount of Rs.15,86,000/- deposited by the complainant alongwith interest at the SBI Term Deposit rate, as applicable on the date of refund, with effect from the respective dates of deposits, till actual realization, as provided by Clause 9(d) of the Flat Buyer Agreement.
(ii) The liability, as indicated, in Clause(i) above, shall be apportioned between the Opposite Parties, in the ratio of 70% and 30% respectively( in other words Opposite Party No.1 shall pay 70% amount and Opposite Party No.2 shall pay 30% amount as indicated in clause(i) above) in terms of article 4.2.1 of the Development Agreement dated 6.10.2006 and Clause 9(d) of the Flat Buyer Agreement dated 7.4.2008.
(iii)Parsvnath Developers Limited Opposite Party No.1, shall also pay compensation, for not offering the built up flat within 36 months @ Rs.107.60 per sq. mtr (Rs.10/- per sq.ft) of the super area of the unit, per month, from 6.10.2009( the last date of completion of the project being 5.10.2009) till actual payment to the complainant is made, as provided by Clause 9( c) of the Flat Buyer Agreement dated 7.4.2008.
(iii)The aforesaid directions shall be complied with, by the Opposite Parties , within 30 days, from the date of receipt of a copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a, on the aforesaid payable amounts, from the date of default, till realization, besides costs.
18. The Flat Buyer Agreement was executed, in favour of the complainant and his father.
The father of the complainant has already died. Nothing was brought, on record, by the complainant, that his father left any other legal heir. The other legal heirs of the deceased father of the complainant, if any, could claim their share from him(complainant), in the event of refund, as per their entitlement, as the complaint has been filed only by him(complainant).
19. Certified Copies of this order be sent to the parties, free of charge.
20. The file be consigned to the Record Room.
Sd/-
Announced (JUSTICE SHAM SUNDER)(Retd) February 1,2013 President Sd/-
( NEENA SANDHU) *Js Member STATE COMMISSION Complaint case NO.69/2012 Present: None for the complainant.
Sh.Aftab Singh, Advocate, proxy for Sh.Ashwani Talwar, Advocate for Opposite Party No.1.
Sh.Jai Singh Brar, Advocate for Opposite Party No.2.
Dated:
ORDER Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted with costs, in the manner, depicted therein.
(Neena Sandhu) (Justice Sham Sunder) (Retd) Member President