State Consumer Disputes Redressal Commission
Raksha Devi vs Yellow Stone Builders Pvt. Ltd. on 10 June, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 99 of 2016 Date of Institution : 15.03.2016 Date of Decision : 10.06.2016 Raksha Devi W/o Satpal Verma, R/o #916, Sector - 4, Panchkula. ......Complainant. Versus 1. Yellow Stone Builders Pvt. Ltd., SCO No.123-124, 3rd Floor, Sector 17-C, Chandigarh through its Managing director. 2. Sukhm Infrastructure Pvt. Ltd., SCO No.123-124, 3rd Floor, Sector 17-C, Chandigarh through its Managing director. 3. Yellow Stone Landmark Info City, Site Office, Sector 66-A, Near Railway Station, S.A.S. Nagar, Mohali through its Managing Director. .... Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986 BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER Argued by: Sh. Gaurav Bhardwaj, Advocate for the complainant.
Ms. Harpriya Khaneka, Advocate for the Opposite Parties. PER DEV RAJ, MEMBER
The facts, in brief, are that the Opposite Parties floated a scheme for industrial plots of 275 sq. yards under the name and style of 'Yellow Stone Land Mark Info City' in Sector 66-A, Mohali. The total cost of the unit was Rs.35,24,950/-. The complainant and her husband jointly submitted application for allotment of the unit. The sole purpose of booking was that the husband of the complainant and the complainant herself are earning their livelihood through a joint business, as per partnership deed (Annexure C-2) from a rented accommodation vide rent deed (Annexure C-3) in village Haripur, Panchkula and their son is doing some private job. The possession of the unit, in question, was assured to be handed over within 18 months. The complainant deposited Rs.4,00,000/- as registration amount on 5.6.2012 (Annexure C-1). Thereafter, the complainant paid the following amounts to the Opposite Parties:-
Sr. No. Amount paid (Rs.) Date
1.
3,00,000.00 11.06.2012
2. 2,00,000.00 11.06.2012
3. 90,000.00 11.06.2012
4. 7,90,000.00 27.06.2012 & 28.06.2012
2. Allotment of the unit, in question, was made in favour of the complainant vide allotment letter dated 27.06.2012 (Annexure C-14). IT/Industrial Plot Buyer's Agreement was executed between the complainant and the Opposite Parties on 25.09.2012 (Annexure C-15). The basic sale price of the unit, in question, was Rs.24,75,000/- i.e. @Rs.9,000/- per sq. yard and the additional charges i.e. 10% of the basic sale price of corner plot, 10% of basic sale price for 60 feet road and 5% of the basic price for plot being opposite to park and other charges were to be paid by the complainant.
3. Thereafter, the complainant deposited an amount of Rs.3,09,375/- on 1.10.2012 vide receipt (Annexure C-16). Subsequently, due to some personal problems, two cheques given by the complainant got bounced, as a result whereof, her allotment was cancelled by the Opposite Parties. Thereafter, the complainant gave a request letter dated 11.09.2013 for restoration of her unit, which was accepted by the Opposite Parties and the unit was restored. A letter dated 11.09.2013 was issued by the Opposite Parties, intimating that the next installment would fall due on start of internal development. The complainant further deposited two installments of Rs.3,09,375/- each on 26.04.2014 and 01.09.2014. Thus, the complainant paid a total sum of Rs.29,68,075/- to the Opposite Parties, out of which, Rs.3,09,375/- were refunded by them and Rs.26,58,700/- are still lying deposited with the Opposite Parties.
4. It was further stated that despite payment of Rs.26,58,075/-, there was no development at the site and there is no hope of getting possession in the near future. Ultimately, the complainant sent written request dated 02.02.2016 (Annexure C-27) to the Opposite Parties, requesting for refund of her deposited amount alongwith interest but to no avail. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service, as also, indulgence into unfair trade practice.
5. 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, seeking directions to the Opposite Parties to refund the amount of Rs.26,58,700/- alongwith interest @18% per annum from the date of deposit till actual realization; pay Rs.5,00,000/- as compensation for deficiency in service, unfair trade practice & mental agony suffered by the complainant and Rs.55,000/- as litigation expenses.
6. The Opposite Parties, in their written statement, took up a specific preliminary objection that the complainant does not fall within the definition of a 'consumer' as defined in the Act as the plot, in question, was booked by the complainant with the sole purpose of running a business i.e. commercial usage.
7. On merits, it was admitted that Opposite Parties No.1 and 2 are the builders and developers and are developing township at Sector 66-A, Mohali under the name of Yellowstone Landmark Info City i.e. Opposite Party No.3. It was denied that any scheme was floated for industrial plots. It was stated that on the contrary, the complainant, being desirous of purchasing an IT/Industrial Plot, herself approached the Opposite Parties and got booked an IT/Industrial Plot of 275 sq. yards for total sale consideration of Rs.36,24,950/-. It was stated that as per the complainant's own admission, she booked the plot for the sole purpose of running the business of their Partnership Firm i.e. business of Electronics and Electricals, as is clearly evident from Partnership Deed (Annexure C-2). It was further stated that as per the said Partnership Deed, the complainant is shown as 50% partner in the Partnership Firm, alongwith her husband. It was further stated that perusal of cheques (Annexures C-4 to C-6) clearly showed that the sale consideration of the plot was being paid primarily out of the accounts maintained for the Partnership Firm i.e. M/s Usha Electronics. The factum of execution of IT/Industrial Plot Buyer's Agreement dated 25.09.2015 (Annexure C-15) was admitted by the Opposite Parties.
8. It was further stated that the development works at the project were being carried out as per schedule. It was further stated that at present, the laying of unmetalled roads, electrical cables and laying of drainage pipes etc. has been completed. However, on account of certain delays in grant of approval to the revised layout plan by the appropriate authority, which has been a consequence of a dispute regarding payment of external development charges to GMADA by the Opposite Parties, the matter is pending adjudication before the Hon'ble Punjab and Haryana high Court in Civil Writ Petition, which is now at the stage of final adjudication. Receipt of letter/notice or communication dated 2.2.2016 claiming refund by the complainant has been denied by the Opposite Parties. It was further stated that the Opposite Parties were neither deficient, in rendering service, nor indulged into unfair trade practice. The remaining averments, made in the complaint, were denied.
9. The complainant filed rejoinder by way of her own affidavit, wherein she reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Parties.
10. The complainant, in support of her case, submitted her own affidavit, by way of evidence alongwith a number of documents.
11. The Opposite Parties, in support of its case, submitted affidavit of Sh. Tejinder Singh Bhatia, their Managing Director by way of evidence.
12. We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
13. It is evident from record that against registration letter dated 04.06.2012 for allotment of an IT/ITES/Industrial Plot in Sector 66-A, SAS Nagar, Mohali, the complainant was allotted IT/Industrial Plot at Sector 66-A, having an area of 275 sq. yards vide allotment letter dated 27.06.2012 (Annexure C-14). IT/Industrial Plot Buyer's Agreement was executed between the parties on 25.09.2012 (Annexure C-15 colly.). The basic sale price of plot, in question, was Rs.24,75,000/- excluding additional charges as defined in Clause 2(a) of the Agreement. Undisputedly, the complainant paid an amount of Rs.26,58,700/- to the Opposite Parties against the price of the unit, in question. The complainant opted for Development Linked Installment Plan, Annexue - I, (at Page 28 of the file).
14. To defeat claim of the complainant, an objection raised by the Opposite Parties that the complainant, being investor, had booked the unit for the sole purpose of running the business of her Partnership Firm i.e. business of Electronics and Electricals, as is clearly evident from Partnership Deed (Annexure C-2). It was further stated that as per the said Partnership Deed, the complainant is shown as 50% partner in the Partnership Firm, alongwith her husband. It was further stated that perusal of cheques (Annexures C-4 to C-6) clearly showed that the sale consideration of the plot was being paid primarily out of the accounts maintained for the Partnership Firm i.e. M/s Usha Electronics. Reliance was placed on case titled Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO) Vs. Diksha Enterprises through Partner Sh. Puneel Kumar Aggarwal, MANU/CF/0082/2010, decided by the Hon'ble National Commission on 09.07.2010.
15. The complainant in Para 2 of her complaint has specifically averred that the sole purpose of booking was that the husband of the complainant and the complainant herself are earning their livelihood through a joint business, as per partnership deed (Annexure C-2) from a rented accommodation vide rent deed (Annexure C-3) in village Haripur, Panchkula. The complainant further averred that she also wanted her son, who is doing some private job, to join their business. The case Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO) Vs. Diksha Enterprises through Partner Sh. Puneel Kumar Aggarwal (supra), being distinguishable on facts, as is evident from Paras 4 to 7 extracted hereunder, is of no help to the Opposite Parties:-
"4. It is clear from this provision that after the Amendment Act 62 of 2002, which came into effect from 15th of March, 2003, any person who buys any goods or avails any service for a consideration, if it relates to a commercial purpose, except on the ground of earning his livelihood by means of self employment, would not fall within the definition of a 'consumer' and, therefore, any such dispute would not be a consumer dispute and the consumer fora would have no jurisdiction to entertain any complaint for such dispute.
5. In the case in hand, the respondent-complainant in his complaint states that he applied for an industrial plot of 4000 square meters for the purpose of setting of a factory for manufacturing S.O. Dyes. For proper adjudication of the matter, it is necessary to refer to the definition of 'factory', which as per section 2(m) of the Factories Act reads as under:-
"factory" means any premises including the precincts thereof
(i) ....
(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on.
6. Further, the 'manufacturing process' is defined under Section 2(k) of the Factories Act, which reads as under :-
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or ...
(ii) ...
(iii) ...
(iv) ...
(v) ...
7. A plain reading of these provisions make it clear that the intention of the respondent-complainant is far from earning any livelihood by self-employment but is purely intended to set up a manufacturing unit to earn profit. Thus, it is clear beyond any pale of doubt that the service obtained even for a consideration from the petitioner is for a commercial purpose and the dispute does not fall within the domain of consumer fora."
In the aforesaid case, the complainant had applied for a plot of 4000 sq. meters for the purpose of setting of a factory for manufacturing of S.O. Dyes and in a factory, twenty or more workers could be employed. The size of plot in that case was also huge i.e. 4000 sq. meters as against 275 sq. yards in this case.
16. It may be stated here that the Hon'ble Supreme Court of India in Laxmi Engineering works Vs. P.S.G. Indusrial Institute, 1995 SCC (3) 583. In Paras 10, 12 & 18, the Hon'ble Apex, Court, held, inter-alia, as under:-
"10. ......The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood.
12. .....The National Commission appears to have been taking a consistent view that where a person purchases goods "with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit" he will not be a "consumer" within the meaning of Section 2(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion-- the expression "large-scale" is not a very precise expression--the Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression "commercial purpose"--a case of exception to an exception. Let us elaborate; a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others' work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for "commercial purpose", would not yet take the purchaser out of the definition of expression "consumer". If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a "consumer". In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self employment, for earning his livelihood, it would not be treated as a "commercial purpose" and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood. A few more illustrations would serve to emphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions "used by him", and "by means of self-employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words..."
18. We must, therefore, hold that ...... (ii) .....Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case."
17. The Hon'ble Apex Court clearly held that if such a buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer. In the instant case also, the complainant, with joint venture/assistance of her husband, is running a business of Electronics and Electricals, in terms of a partnership firm in the name of M/s Usha Electronics, to earn livelihood and she has clearly disclosed this fact in her complaint. The complainant and her husband are running their business from rented premises and certainly, they needed space of their own to run their existing business. The IT/Industrial plot, measuring 275 sq. yards booked was, thus, for a bonafide purpose of earning livelihood. This is not a case that the complainant booked the plot to undertake the business on a large scale by employing number of persons. As per the specific averment, the business was to be carried out by the complainant, her husband and son to earn livelihood. In view of the law settled by the Hon'ble Apex Court in Laxmi Engineering works Vs. P.S.G. Indusrial Institute's case (supra), the complainant clearly falls within the definition of a 'consumer' as defined in Section 2(1)(d) (ii) of the Act. Therefore, this sole objection raised by the Opposite Parties, being devoid of merit, stands rejected.
18. The question, which now falls for consideration, is, as to whether there was delay in offering possession, and whether the complainant is entitled to refund of the amount deposited by her with interest or not. Clauses 7 a., b. & c. of Agreement, being relevant, are extracted hereunder:-
"7. a. Development of the said IT/Industrial Plot(s) is likely to be completed within a tentative period of 18 months from the date of its Agreement.
b. the Sellers on completion of development shall issue a final call notice to the Buyer, who shall remit all dues within 30 days thereof and take possession of the Unit. The Buyer shall be liable for payment of all taxes, levies, assessments and maintenance charges from the dates these are levied/made applicable, irrespective of the fact that the Buyer has not taken possession of the Unit or has not been enjoying benefit of the same.
c. In case, possession of the unit is not offered to the Buyer within a period of 18 months or extended period of six months after the tentative period of 18 months as stipulated above, the buyer shall be entitled to receive from the Developer compensation @Rs.12/- (Rupees Twelve Only) per sq. yard of the 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 within 30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @Rs.8/- per sq. yard of the area of the Unit per month in addition to the liability to pay interest to the Sellers and other consequences of default in payment."
As is apparent from the afore-extracted clauses, the Opposite Parties were to offer possession of the unit, in question, to the complainant within the stipulated period of 18 months from the date of the Agreement, plus extended period of six months, which expired on 25.03.2014. Even till date, despite lapse of more than 2 years of the promised date of possession i.e. 25.3.2014, the possession of the unit, in question, has not been offered or delivered to the complainant by the Opposite Parties. There is nothing on record, wherefrom it can be ascertained that possession of the unit, in question, was ever offered by the Opposite Parties to the complainant. The Opposite Parties, in their written statement have stated that the possession could not be offered on account of certain delays in grant of approval to the revised layout plan by the appropriate authority, which has been a consequence of a dispute regarding payment of external development charges to GMADA by the Opposite Parties, which is pending adjudication before the Hon'ble Punjab and Haryana high Court in Civil Writ Petition and is at the stage of final adjudication. Thus, for the litigation pending, the complainant cannot be made to wait for indefinite period for getting possession of the unit, in question. The complainant vide letter dated 02.02.2016 (Annexure C-27) sought refund of her deposited amount alongwith interest and the said letter was sent through Courier vide receipt (Annexure C-28). It may be stated here that National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), held that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. In Shri Satish Kumar Pandey and another Vs. M/s Unitech Limited's &Ors., Consumer Complaint No.427 of 2014 decided on 8.6.2015 , the agreement between the flat buyers and the developers, M/s. Unitech ltd. for payment of compensation on account of delay in completion of the construction of the apartment was fixed at the rate of Rs.5 per sq. ft. per month of the Super Area. In the aforesaid case, it was contended on behalf of the developers that the complainants were entitled only to the agreed quantum of compensation for the period the project was delayed. Rejecting the said contention, the National Commission in Para 12, inte-ralia, held as under:-
"12........The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation, which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r)(1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r)(1) of the Act are inclusive and not exhaustive, as would be evident from the use of word "including" before the words "any of the following practices"
Thus, in view of law laid down in Emaar MGF Land Limited and another Vs. Dilshad Gill's case (supra), the complainant is entitled to refund of Rs.26,58,700.00. It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.26,58,700/- was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the Opposite Parties, for their own benefit. It may be stated here that as per Clause 4 c. of the Agreement (Annexure C-15), the Opposite Parties could charge interest @18% per annum on the amount due for the period in default. It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014. In view of above, the complainant is certainly entitled to get refund of the amount deposited by her, to the tune of Rs.26,58,700/- alongwith simple interest @15% from the respective dates of deposits till realization.
19. The next question, which falls for consideration, is, as to whether, the complainant is entitled to any compensation or not. The complainant deposited her hard earned money, in the hope that she, her husband and son will have a premises of their own to carry on their business to earn livelihood. As already discussed above, possession of the unit, in question, has not been delivered by the Opposite Parties till date meaning thereby that there has been further delay of more than 2 years from the proposed date for offering possession. On account of non-delivery of possession of the unit, in question, by the stipulated date and by not refunding the amount to her (complainant), the Opposite Parties have been deficient in rendering service and, therefore, for the acts of omission and commission of the Opposite Parties, and escalation in prices, complainant needs to be suitably compensated. In our considered opinion, compensation in the sum of Rs.2,00,000/- if granted, would be just and adequate, to meet the ends of justice.
20. No other point, was urged, by the Counsel for the parties..
21. For the reasons, recorded above, the complaint is partly accepted, with costs against the Opposite Parties and they are held, jointly and severally, liable and directed in the following manner:-
(i) To refund the amount of Rs.26,58,700/-alongwith simple interest @15% per annum, to the complainant, from the respective dates of deposits, till realization, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @18% per annum, instead of 15% per annum, from the date of default till actual payment;
(ii) To pay an amount of Rs.2,00,000/- (Rupees Two Lacs only), to the complainant, as compensation for deficiency in rendering service by the Opposite Parties and escalation in prices, within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @15% per annum from the date of default till actual payment;
(iii) To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @15% per annum from the date of default till actual payment.
22. However, it is made clear that in case, the complainant has availed loan facility from any financial institution(s), such an institution shall have the first charge on the amount to be refunded, to the extent, the same is due to be paid by the complainant to such a financial institution.
23. Certified Copies of this order be sent to the parties, free of charge.
24. The file be consigned to Record Room, after completion.
Pronounced June 10, 2016.
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT [DEV RAJ] MEMBER [PADMA PANDEY] MEMBER