State Consumer Disputes Redressal Commission
Raj Hans vs Alica Developers on 4 August, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
Consumer Complaint No.397 of 2016
Date of institution : 20.12.2016
Date of decision : 04.08.2017
Raj Hans s/o Shri Sain Dass r/o H.No.B-IV/1576, Street No.16, Nai
Abadi, Badi Paudi, Opp. Ramdev Mandir, Abohar, District Ferozepur.
.......Complainant
Versus
1. Alice Developers Pvt. Ltd., Registered Office at Basement, 6,
Community Centre, Saket, New Delhi-110 017 through its
Director.
2. Unitech Limited, SCO No.189-90-91, Sector 17-C, Chandigarh
through its Managing Director.
3. Unitech Limited, Registered Office at 6, Community Centre,
Saket, New Delhi-110 017 through its Director.
4. State Bank of India, Branch RASMECCC, Abohar Main
Branch, Abohar through its Authorized Officer.
........Opposite Parties
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Surinder Pal Kaur, Member.
Present:-
For the complainant : Shri J.S. Thind, Advocate.
For Opposite Party No.1 : Ex parte.
For Opposite Parties Nos.2&3: Ms. Vertika H. Singh, Advocate.
For Opposite Party No.4 :Ex parte.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The complainant, Raj Hans, has filed this complaint, under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, Consumer Complaint No.397 of 2016 2 "the C.P. Act") for the issuance of following directions to the opposite parties:
i) to immediately deliver the physical possession of Apartment No.402, 4th Floor, Block A, Tower A-1, in Garden Complex in Uniworld City, Sector 97, Mohali along with all the basic amenities;
ii) to pay an amount of ₹5/- per square foot per month of the super area of the apartment/flat for the period of delay in offering the possession along with interest @ 18% per annum till the physical possession of the apartment/flat;
OR
iii) to refund the amount paid by the complainant for the purchase of apartment/flat along with interest @18% per annum;
iv) to pay ₹5,00,000/-, as compensation for harassment and damages caused to the complainant;
v) to pay ₹33,000/-, as counsel fee. Facts of the Complaint:
2. Brief facts, as stated in the complaint, are that the complainant applied for apartment in Group Housing Complex 'GARDENS' to be developed by opposite party No.1 on a parcel of land measuring 8.17 acres in Sector 97, a part of Unitech land in Sectors 97, 106 and 107, Mohali known as "Uniworld City" and paid an amount of ₹3,00,000/- on 19.11.2010. The complainant was allotted Apartment No.0402 on 4th Floor, Block-A, Tower A-1, having a super area of approximately 97.55 square meters for a total sale consideration of Consumer Complaint No.397 of 2016 3 ₹27,12,000/- including basic price and external development charges, infrastructural development charges; preference location charges and car parking space, vide Sale/Apartment Allotment Agreement dated 1.2.2011. As per clause 4.a of the said Agreement, the possession of apartment was to be delivered to him within 36 months from the date of agreement dated 1.2.2011 i.e. upto 1.2.2014. The complainant paid an amount of ₹26,30,274/- to the opposite parties as per the payment schedule after obtaining loan of ₹18 lakhs from opposite party No.4 i.e. SBI. However, till the date of filing of the complaint no physical possession has been handed over to him even after the expiry of more than 5 years from the date of agreement. The complainant served legal notice dated 12.12.2014 seeking information about the status of the Project and delivery of possession of the flat. Similar notice was served upon the opposite parties on 5.7.2016; however, the opposite parties failed to give any reply. As per clause 4.C.ii of the Agreement, the complainant is entitled to penalty at the rate of ₹5/- per square foot per month of the super area of the Apartment for the period of delay in offering the possession of the above said apartment. He approached them a number of times to do the needful but of no use. These acts on their part amount to deficiency in service; as a result of which he suffered great mental and physical harassment, financial loss and humiliation.
Defence of Opposite Parties Nos.2 and 3:
3. In joint reply opposite parties Nos.2 and 3 did not dispute the purchase of the flat by the complainant in the manner stated in the Consumer Complaint No.397 of 2016 4 complaint. They also did not dispute that the complainant paid the amount of ₹26,30,274/-. However, it is averred that the payments made by the complainant were deposited in the designated account of the developer i.e. opposite party No.1. They denied the other allegations made in the complaint and further averred that the Buyer Agreement dated 1.2.2011 was executed between opposite party No.1 i.e. Alice Developers Pvt. Ltd. and the complainant. Unitech Limited was only a 'confirming party' to the said agreement and the same was clearly stipulated in the agreement. They had entered into a Development Agreement dated 01.12.2008 with opposite party No.1, vide which the development rights were given to that opposite party, with respect to 33.2438 acres of land and such additional land of the project, allocated vide notifications and amendments to the Development Agreement. Opposite party No.1 was to construct and complete multi storey group housing complex to be known as 'Gardens' on a part of the said land approximately 8.17 acres. That opposite party was authorized to use opposite party Nos.2 and 3-
Company Trademark and Logo for various purposes; such as, promotional, marketing, advertisements, brochures, hoardings etc. The payments were received by them on behalf of opposite party No.1 and that fact was very much in the knowledge of the complainant. It was further agreed upon between the parties that on a part of the said land approximately 8.17 acres, the Developer shall construct and complete Multistorey Group Housing Complex to be known as "Gardens". The Developer had also authorized Unitech to market, sell either itself or through its channel partners the Consumer Complaint No.397 of 2016 5 builtup/developed areas/apartments on its behalf including deposit of collected monies of marketed areas/sold units in the designated account of the developer. Therefore, opposite parties Nos.2 and 3 had limited role qua the Buyer Agreement dated 1.2.2011 and hence the grievance, if any, of the complainant regarding delay in construction work of the said flat should have been made against the developer i.e. opposite party No.1 and not against them. The complainant is merely an investor, who had invested in the flat for resale purposes. He could not resell the said property due to slump in the real estate market and, as such, he has frivolously sought this legal remedy before this Commission. As he had purchased the said flat for commercial purposes, so he does not fall within the ambit of the definition of the 'consumer' as per the Act. No cause of action has accrued to him to file the complaint and the same is not maintainable under the provisions of the C.P. Act. No deficiency in service can be attributed to them, as throughout they discharged all their services to the complainant in a bona fide manner. They also averred that this Commission has no territorial jurisdiction to entertain this complaint as the Agreement dated 1.2.2011 was executed at New Delhi and the demand for the payment had been raised from their Gurgaon Office, which has not been impleaded as a party. Even the payments were made by the complainant through cheques; which were payable at New Delhi and were deposited in their Bank account at that place itself. The facts, as narrated in the complaint, do not constitute "consumer dispute' as defined in Section 2(1) (e) of the C.P. Act. The complainant is seeking relief, which is Consumer Complaint No.397 of 2016 6 not covered under the definition of "consumer dispute". He raised issues relating to contractual matter arising out of the terms and conditions of the Agreement and the interpretation thereof and the same can be adjudicated upon only in civil proceedings. As per clause 8(b) of the Buyer's Agreement they are entitled to reasonable extension of time in handing over the possession in case of force majeure circumstances. They prayed for the dismissal of the complaint with heavy costs; being false, frivolous and vexatious.
4. Opposite parties Nos.1 and 4 were issued notices on 9.1.2017. However, in spite of service they opted not to come present and as such, they were proceeded against ex parte, vide order dated 23.2.2017.
Evidence of the Parties:
5. For proving the allegations made in the complaint, the complainant proved on record his affidavit Ex.CA and documents Ex.C-1 to Ex.C-4, including Ex.C-2/A to Ex.C-2/D. On the other hand, opposite party Nos.2 & 3 proved on record the affidavit of their Authorized Representative, Lalit Gupta, Ex.OP-2/A, and documents, Ex.OP-2/1 and Ex.OP-2/2. 6.We have carefully gone through the averments of both the sides, evidence produced by them in support of their respective averments and have heard learned counsel on their behalf.
Contentions of the Parties:
7. It has been submitted by the learned counsel for the complainant that by virtue of the facts, proved on the record by the oral and documentary evidence of the complainant, he is entitled to Consumer Complaint No.397 of 2016 7 the refund of the amount, so paid by him for purchasing the Flat, from the opposite parties and they are also liable to pay interest on that amount; besides the compensation for the mental agony, harassment and financial loss suffered by him on account of the acts on their part as detailed in the complaint and in collecting the huge amount, without developing the project and having failed to deliver the possession of the Flat within the stipulated period of 36 months.
8. On the other hand, it has been submitted by the learned counsel for opposite parties No.2 and 3 that the deficiency in service, if any, can be said to be only on the part of opposite party No.1; as, by virtue of the agreement so executed between the parties, it was that opposite party, which had sold the Flat to the complainant and received the amount, as mentioned in the complaint, towards the consideration of that Flat and it was for that opposite party itself to deliver the possession. Opposite parties No.2 & 3 were only a "Confirming Party" and, as such, no liability can be fastened to them.
Consideration of Contentions:
9. We have given our thoughtful consideration to the contentions raised by the learned counsel for both the sides.
10. At the outset it is pertinent to mention that identical matters have already been decided by this Commission in the following cases:
i) Consumer Complaint No.327 of 2015 (Balwinder Singh and another v. Unitech Limited and others) decided on 20.9.2016.
ii) Consumer Complaint No.122 of 2015 (Sh. Puneet Chugh Vs. Unitech Limited & Ors), decided on 12.09.2016; Consumer Complaint No.397 of 2016 8
iii) Consumer Complaint No.233 of 2015 (Naresh Kumar Vs. Unitech Limited & Ors), decided on 08.09.2016; and
iv) Consumer Complaint No.197 of 2015 (Vineet Sood vs. Unitech Limited & others) decided on 10.11.2016.
11. The matter in the present complaint is squarely covered by the orders passed in above said complaints, so we intend to decide the present complaints in view of orders passed in above said complaints.
12. At the time of arguments it was not disputed that the amount, as mentioned in the complaint, was paid by the complainant towards the price of the Flat. The Payment Plan was annexed with the Agreement Ex.C-1 as Annexure-B. It was not denied by the opposite parties that the payments were made as per that Payment Plan. Thus, the complainant performed his part of the contract and became entitled to the possession of the Flat. As per clause 4(a) of the Agreement, the same was to be delivered to him within 36 months of the signing of the Agreement subject to force majeure circumstances. It is an admitted fact that the same was not delivered to him within that period and it had not even been delivered till the filing of the complaint; which was filed in the year 2016. Opposite parties No.2 and 3 have tried to take plea in their written reply that there were force majeure circumstances for delay in delivery of possession. No evidence has been adduced by the opposite parties for proving any such circumstance, which can be held to be a force majeure circumstance in order to justify the delay in delivery of possession and for extension of the period so Consumer Complaint No.397 of 2016 9 mentioned in the Agreement. Opposite party No.1 chose not to put in appearance despite service and was proceeded against ex parte.
13. The present case, in view of the averments of opposite parties No.1 to 3, involves the determination of their inter-se dispute; as to what were the respective rights and liabilities of opposite parties No.1 to 3 under the agreement; who was liable to deliver the possession to the complainant; and who is liable to refund the amount, in dispute, and pay the compensation etc.? The determination of those questions involves interpretation of the Buyer's Agreement, Ex.C-1. In the agreement, opposite parties No.2 and 3 have been described as the "Confirming Party", whereas opposite party No.1 has been described as the "Developer". As per the said Agreement, opposite parties No.2 and 3 had assigned to opposite party No.1 rights with respect to 33.2438 acres of land. The most important Clauses for determining that relationship are reproduced below:
"AND WHEREAS on a part of the Said Land approx. 8.17 acres, the Developer shall construct and complete Multistorey Group Housing Complex to be known as "Gardens" (hereafter referred to as the 'Complex') AND WHEREAS in terms of Clause 4.2.2 of the said Development Agreement, Unitech has agreed to join the Developer as a confirming party in the transfer/allotment and assignment of rights in the Developed Units to the prospective purchasers of the Developed Units and also to Consumer Complaint No.397 of 2016 10 execute the Conveyance Deeds for such Developed Units in favour of such Purchasers.
AND WHEREAS the Developer has also authorized Unitech to market, sell either itself or through its channel partners, the built-up/developed areas/Apartments on its behalf including deposit of collected monies of marketed areas/sold units in the designated Account of the Developer.
2.n. Design and specifications:
(i) That at the time of taking over the possession of the Apartment, the Apartment Allottee (s) shall satisfy himself about the design, specifications etc. of the Apartment. The Apartment Allottee (s) after taking possession of the Apartment shall have no claim against Unitech or the Developer in respect of any item of construction or work in the Apartment, which may be said not to have been done or carried out or completed or for any alleged non-compliance of design, specification, building material etc.
4.a Delivery of Possession:
(i) That subject to the Apartment Allottee (s) complying with various terms and conditions of this agreement and other requirements as indicated by the Developer, the possession of the Apartment is proposed to be offered to the Apartment Allottee (s) within 36 months of signing of these presents, Consumer Complaint No.397 of 2016 11 subject to Force Majeure circumstances and upon registration of Sale Deed provided all amounts due and payable by the Apartment Allottee(s) under this Agreement have been paid within the stipulated period. It is, however, understood between the parties that various Apartments shall be ready and shall be completed in phases and handed over to the Apartment Allottee (s) accordingly.
8.b Force Majeure:
That, however, if the handing over of possession of the Apartment is delayed for reasons of "Force Majeure" or circumstances beyond the control of the Developer or because of any notice or order of the Government, including slow down strike, civil commotion or by reason of war, enemy or terrorist action or an act of God, delay in the grant of completion/occupation certificate by the Government and/or any act of public or competent authority, the Developer shall be entitled to a reasonable extension of time in the agreed date for delivery of possession of the Apartment."
A minute perusal of these Clauses makes it clear that the delivery of possession of the Flat was not the exclusive liability of opposite party No.1, but opposite parties No.1 to 3 were liable, jointly and severally. However, as per clause 4.c. (ii) of the Agreement, Ex.C1, the compensation at the rate of ₹5/- per square foot per month of the Consumer Complaint No.397 of 2016 12 super area of the Flat for the period of delay in offering the possession beyond the period of 36 months was to be paid by opposite party No.1. Opposite parties No.2 and 3 have pleaded in para no.5 on merits of their reply that the entire amount paid by the complainant was deposited in the designated account of opposite party No.1. That fact was duly proved by Lalit Gupta by making a deposition to that effect in para 11 of his affidavit Ex.OP-2/A. Such a fact was required to be proved by documentary evidence but no such document was proved on the record and in the absence of any document and merely on the basis of the statement of Lalit Gupta it cannot be concluded that the amounts so paid by the complainant were passed over to opposite party No.1. So far as opposite party No.4 is concerned, the complainant had only obtained loan from it for making payment to opposite parties Nos.1 to 3. Therefore, opposite party No.4 is not deficient in service and this complaint is dismissed against it. Hence only opposite parties Nos.1 to 3 are jointly and severally liable.
14. Admittedly the complainant was allotted the Flat in question, vide Apartment Allotment Agreement dated 1.2.2011 (Ex.C-1) for total sale consideration of ₹27,12,000/- and he paid ₹26,30,274/- in all, vide receipts Ex.C-2 (Colly) from his own pocket and also by obtaining loan from opposite party No.4-SBI. As per Clause 4.a of the said Agreement, the possession of the Flat/Apartment was to be offered to the complainant within 36 months of signing of the same i.e. upto 1.2.2014. However, till date there is no progress in the project; rather opposite parties Nos.1 to 3 have stopped Consumer Complaint No.397 of 2016 13 construction. There is no possibility of the delivery of possession of the Flat/Apartment in question, complete in all respects to the complainant in near future. Therefore, no useful purpose will be served by ordering the delivery of possession of the Flat/Apartment to the complainant.
15. This act on the part of opposite parties Nos.1 to 3 in collecting huge amounts from the prospective buyers under the guise of raising multi-storey structure and to give the possession of the apartments/flats therein by the stipulated date and not raising those structures at all and to use the huge money, so collected by it, clearly amounts to unfair trade practice. On account of that unfair trade practice, the complainant has certainly faced harassment and agony, as his hope to have a flat/apartment stood shattered. Had opposite parties Nos.1 to 3 not adopted such an unfair trade practice, he might have invested this money with some other developer and might have got the apartment/flat by now.
16. As per section 3 (General Liabilities of Promoter) of the Punjab Apartment and Property Regulation Act, 1995 (in short, PAPRA"), opposite parties Nos.1 to 3 were required to make full and true disclosure of the nature of their title to the land, on which such colony is to be developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days' notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the Consumer Complaint No.397 of 2016 14 prescribed authority in the case of a colony. However, opposite parties Nos.1 to 3 failed to comply with section 3 of the PAPRA.
17. As per Section 5 (Development of land into Colony) of PAPRA, opposite parties Nos.1 to 3 were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they also violated Section 5 of PAPRA.
18. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the apartments/flats, but no evidence has been led on the record by opposite parties Nos.1 to 3 to prove that any account has been maintained by them in this respect. There is no evidence or pleading on record on behalf of opposite parties Nos.1 to 3 in this respect. As such, they also violated Section 9 of the PAPRA.
19. Opposite parties Nos.1 to 3 had been collecting huge amounts from the buyers for the development of the project. The amount received from the complainant-buyer was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. Opposite Parties Nos.1 to 3 are not to play the game at the cost of others. When they insist upon the performance of the promise by the consumers, they are to be bound by the reciprocal promises of performing their part of the agreement. They have failed to comply with the aforementioned provisions of PAPRA, while launching and promising to develop their project. Thus, the delay in not delivering the possession of Flat within Consumer Complaint No.397 of 2016 15 the agreed period amounts to deficiency in service on their part, for which the complainant is to be suitably compensated.
20. The C.P. Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The complainant has made payment of almost full amount to opposite parties Nos.1 to 3 with the hope to get the possession of the Unit/Flat in a reasonable period. The circumstances clearly show that opposite parties Nos.1 to 3 made false statement of facts about the goods and services i.e. allotment of Unit/Flat and delivery of possession in a stipulated period. The act and conduct of opposite parties Nos.1 to 3 is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainant. Had the complainant not invested his money with opposite parties Nos.1 to 3, he would have invested the same elsewhere. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the plot/unit/flat/apartment within a reasonable period.
The complainant cannot be made to wait indefinitely to get possession of the Unit/Flat booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that opposite parties Nos.1 to 3 i.e. builder knew from the very beginning that they had not complied with the provisions of the PAPRA and Rules framed thereunder and would not be able to deliver the possession within the stipulated period, thus by misrepresentation induced the complainant to book the Unit/Flat, due to which the Consumer Complaint No.397 of 2016 16 complainant has suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainant is a deposit held by opposite parties Nos.1 to 3 in trust of complainant and it should be used for the purpose of building the Apartments/Flats, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainant, are also required to be taken into consideration for awarding compensation. In addition to that he is also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by him on account of the betrayal by opposite parties Nos.1 to 3 in shattering his hope of getting the Unit/Flat by waiting for all this period. Therefore, the non-construction/non- delivery of possession of the Flat/Unit in question in-spite of the payment of substantial amount by the complainant not only amounts to deficiency in service but also adoption of unfair trade practice on the part of opposite parties Nos.1 to 3. Since there is no likelihood of completion of the Project and handing over of possession of the Flat Consumer Complaint No.397 of 2016 17 in question in near future, therefore, the complainant is entitled to refund of the amount deposited by him along with interest and compensation.
21. In view of above discussion, this complaint is allowed against opposite parties Nos.1 to 3 and dismissed against opposite party No.4. The following directions are issued to opposite parties Nos.1 to 3:-
i) to refund the amount of ₹26, 30,274/- to the complainant along with interest at the rate of 12% per annum from the different dates of deposits till the date of actual payment;
ii) to pay ₹2,00,000/-, as compensation for harassment, mental
tension and agony; and
iii) to pay ₹22,000/- as costs of litigation.
22. Opposite parties Nos.1 to 3 shall comply with the order within two months of the receipt of certified copy thereof, failing which the compensation amount shall also carry interest at the rate of 12% per annum from the date of this order till realization.
23. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (SURINDER PAL KAUR) MEMBER August 04, 2017 Bansal