State Consumer Disputes Redressal Commission
Puja Garg vs M/S Manohar Infrastructure & ... on 31 March, 2021
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 278 of 2019 Date of Institution : 09.12.2019 Date of Decision : 31.03.2021 Puja Garg w/o Sh.Puneet Garg, R/o H.No.117, Phase-1, Sector 55, Mohali, Punjab. ......Complainant V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its office at SCO 139-141, Sector-17-C, Chandigarh through its Directors Sh.Tarninder Singh and Sh.Narinderbir Singh. Tarninder Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., R/o House No.246, Sector 9-C, Chandigarh-160009. Narinderbir Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., R/o House No.246, Sector 9-C, Chandigarh-160009. .....Opposite parties BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MRS. PADMA PANDEY, MEMBER.
MR.RAJESH K. ARYA, MEMBER.
Present through video conferencing:
Sh.Savinder Singh Gill, Advocate for the complainant.
Sh. I.P. Singh, Advocate for the opposite parties.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT This compliant has been filed by the complainant, seeking refund of the amount paid by her to the tune of Rs.16,20,000/- for the period from 10.03.2011 to 30.03.2011 to the opposite parties towards purchase of a plot measuring 300 square yards, in the project launched by it under the name and style 'Palm Springs', New Chandigarh, Mohali, Punjab, on the ground that it neither allocated plot no. nor executed buyer's agreement nor offered possession thereof within a reasonable period of two to three years from the date of booking i.e. from 28.02.2011. It has been stated that the opposite parties did not possess requisite permissions/sanctions in respect of the project in question and the same was launched in violation of the provisions of relevant Acts, Rules etc. applicable to the projects situated in Punjab and that they were not competent to sell the plots/units in the said project before getting the project approved and also exemption under PAPR Act is granted to them.
By stating that the aforesaid act and conduct of the opposite parties amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainant.
The claim of the complainant has been contested by the opposite parties, on numerous similar grounds, inter alia, that the complainant has concealed material facts from this Commission; that she being investor, did not fall within the definition of "consumer"; that this Commission did not vest with territorial jurisdiction to entertain this complaint; that the complaint filed is beyond limitation; that the complainant was requested number of times to come forward to make remaining payment; select plot; and sign buyer agreement but she failed to do so; that the project of the opposite parties has been registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA) on 25.09.2017; that as per Section 35 of the PAPR Act, jurisdiction of Civil Court is barred to entertain and decide any question relating to matters arising there-under; that the complainant was defaulter in making payment as a result whereof number of reminders were sent in the matter; that it was not the sale of goods as such consumer complaint is not maintainable; and that time was not the essence of contract.
On merits, it has been stated that the project was approved on 22.03.2013 and the formal agreement was signed with the Government of Punjab on 14.06.2013; that thereafter some more land was added to the project, for which completion period was given upto 13.06.2018, vide supplementary agreement dated 16.06.2016 executed with the Government; that later on exemption from the applicability of provisions of the Punjab Apartment and Property Regulation Act, 1995, (PAPR Act) stood granted by the Government on 25.01.2017 and as such all the irregularities committed by the company stood compounded, as exemption granted will have retrospective effect; that delay if any in issuance of the said notification on 25.01.2017 was procedural and it will relate back from the day when the project in question had been launched by the opposite parties; that once the State Government has not held that the opposite parties had violated the provisions of PAPR Act, as such, this Commission cannot go into the said question; that the RTI information reliance whereupon has been placed by the complainant is very old and that too of some third party which cannot be relied upon by her; that on request made by the opposite parties, the Competent Authority extended completion period of the project upto 13.06.2020 and now has been further extended upto 31.12.2022, vide notification dated 30.01.2020. It has been stated that claim of the complainant seeking higher rate of interest on the deposited amount is totally unjustified. Rather, it should be as specified under Section 19 of the RERA i.e. MCLR + 2% interest or @6% p.a. as has been awarded by the Hon'ble Supreme Court in Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd. (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, and no other relief should be granted to the complainant; that due to COVID-19 also the project was hampered and the Govt. and Banks have come forward to help the builders/developers.
However, ironically, it has been claimed in the reply that the opposite parties are trying to complete the project before the extended period granted to them by the competent Authorities, as the development work is going on in full swing and work with regard to provision of basic amenities such as sewerage, water, electricity etc. is near completion. It has been alleged in the reply that the project was delayed on account of red-tapism in the offices of different departments of the Government and also due to the business and political rivalries and that was why; the competent authorities delayed in granting approvals/sanctions. While applying the theory of force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God), it has been alleged that delay in delivery of possession of plot occurred, also on account of shortage of building material and ban on mining by the Government concerned; and that the complainant may come forward for allocation of plot no. and also for execution of the agreement; that the complainant will be suitably compensated for the delay caused in offering possession of the plot in question. The fact that opposite parties no.2 and 3 are Directors of the Company has not been disputed. Remaining averments of the complaint have been denied.
In the rejoinder filed, the complainant reiterated all the averments contained in the complaint and controverted those contained in written reply filed by the opposite parties.
The parties led evidence in support of their case.
We have heard the contesting parties and have gone through record of the case, including the rejoinder and written arguments filed by the complainant concerned, very carefully.
In this case, following moot questions have emerged for consideration: -
Whether this Commission has territorial jurisdiction to entertain this complaint?
Whether the complainant falls under the definition of consumer?
Whether this Commission is competent to entertain this complaint?
Whether the complaint filed is beyond limitation?
Whether time was essence of the contract?
Whether the opposite parties were competent to launch the project in the year 2011 and sell the units/plots therein to the prospective buyers, including the complainant?
Whether the exemption so granted to the opposite parties from the provision of PAPR Act could be applied retrospectively?
Whether there was any deficiency in rendering service, negligence and unfair trade practice on the part of the opposite parties?
Whether the complainant is entitled to get refund of the amount paid alongwith interest and if yes, what amount and at what rate?
First coming to the objection regarding territorial jurisdiction, it may be stated here that perusal of application form dated 28.02.2011, Annexure C-1 reveals that the same was received by the opposite parties at their Chandigarh Office i.e. SCO No.139-141, First Floor, Sector 17-C, Chandigarh. Alongwith the said application, the amount of Rs.16,20,000/- was also received by the opposite parties at the said Chandigarh Office, meaning thereby that the opposite parties were actually and voluntarily residing and carrying on their business, at the said Chandigarh Office for gain. Not only as above, the said fact is further fortified when we perused the information dated 01.10.2020 (at page 94 of the paper book) placed on record by Counsel for the opposite parties, wherein the address of the Company has been mentioned as SCO No.139-141, Sector 17-C, Chandigarh-160017 only. Thus, this Commission at Chandigarh has territorial jurisdiction to entertain this complaint. Objection taken by the opposite parties in this regard stands rejected.
As far as objection taken to the effect that the complainant did not fall within the definition of 'consumer', it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that she has purchased the plot in question to indulge in 'purchase and sale of plots' as was held by the Hon'ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their onus, hence we hold that the complainant is a consumer as defined under the Act. In this view of the matter, objection taken by the opposite parties, stands rejected.
There is no dispute with regard to purchase of plot by the complainant in the aforesaid project of the opposite parties. There is also no dispute with regard to the fact that despite the fact that substantial amount of Rs.16,20,000/- against the total sale consideration of Rs.54 lacs i.e. equal to 30%, stood received by the opposite parties from the complainant, yet, neither plot no. was allocated nor agreement was executed between the parties nor thereafter development work was completed at the project site and possession has not been offered till date.
The complainant, through her Counsel, has submitted that the opposite parties failed to provide plot no. and agreement for signatures of the complainant, within a reasonable period after booking of the plot or even thereafter, whereas, on the other hand, the opposite parties, through their Counsel, have stated that the complainant was requested number of times by way of sending letters/reminders to come forward for allotment of plot and execution of the agreement and make remaining payment but she failed to do so.
It may be stated here that perusal of record reveals that despite the fact that substantial amount of Rs.16,20,000/-, which is equal to 30% of the total sale consideration stood received from the complainant by 30.02.2011, yet, there is nothing on record that thereafter agreement was even sent to the complainant for signature what to speak of execution thereof. Once the opposite parties, in the first instance, had already received substantial amount which was equal to 30% of the total sale consideration from the complainant, it was required of them to allot plot; execute agreement under law within a reasonable period say two to three months; raise demands in accordance with the stage of development at the project site; complete the development work; obtain completion certificate from the competent authorities; and then deliver possession of the plot in dispute to the complainant. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demands from the complainant by way of sending letters dated 12.02.2014 and 24.07.2015.
Furthermore, the plea taken by the opposite parties, for the first time, in their written statement to the effect that the complainant was asked number of times to come forward for allotment of plot and also for execution of buyer's agreement smacks their malafide intentions, as they have made candid admission in the written reply filed that still the development work is going on at the project site and now as per Notification dated 30.01.2020, they are liable to complete the same by 31.12.2022. Thus, the act of raising demands and receiving substantial amount from the complainant, in the absence of development work; without allotment of plot and executing the agreement was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite parties to execute the agreement for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -
"6. Contents of agreement of sale:- (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906) ;
Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots.
(2) xxxxxxxxxxxxxxxx..................
(3) xxxxxxxxxxxxxxxxx..................."
The opposite parties were legally bound under law to execute the agreement and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but in this case, the said provision has been violated. The opposite parties also cannot take shelter under the exemption certificate from the provisions of PAPR Act, which was issued in their favour only on 25.01.2017 i.e. much after booking of the plot in question. It has no where been proved that the said exemption will have retrospective effect but in our considered opinion, it will have prospective effect only. The opposite parties were deficient in providing service and adopted unfair trade practice on this count.
Furthermore, to defend the objection raised by the complainant to the effect that at the time of booking of the plot and collecting money from the complainant the opposite parties were not having requisite licences, approvals and permissions from the competent authorities, it has been stated by the opposite parties, through their Counsel, that it would not make any difference regarding the title of plots, if the project was approved later on, as all the irregularities stood compounded when notification exempting the provisions of PAPR Act was issued in favour of the company on 25.01.2017. We do not agree with the said assertion.
In the first instance, the candid admission of the opposite parties in their written reply to the effect that if the State Govt. has not taken any action against the violation of terms and conditions of PAPR Act, and as such it has not caused any prejudice to the complainant in relation to the said violations, is sufficient to prove the case of the complainant. Further admission of the opposite parties in para no.19 of the preliminary objections to the effect that the project was got approved only on 22.03.2013 leaves no doubt with the Commission to believe that that, in 2011, money has been collected from the complainant and other prospective buyers, with animus of cheating and fraud, by launching the project and selling units/plots therein by violating the terms and conditions of PAPR Act, which act cannot be cured by obtaining the exemption from the provisions of PAPR Act, at the subsequent stage. It is settled law that a builder cannot take advantage of the situation by simply saying that the statutory approvals had not been obtained from the Government Authorities or that the same had been delayed by the competent Authorities. The builder is duty bound to ensure that before accepting the amount of booking, necessary permission/sanctions have been granted for launching the project and selling the units/plots therein. It was so said by the Hon'ble National Commission in Omaxe Limited and anr. Vs. Dr. Ambuj Chaudhary, First Appeal No. 300 of 2012, decided on 13.02.2017.
The another valid reason with this Commission to hold that the money has been collected from the complainant and other prospective buyers, with animus of cheating and fraud, which act cannot be cured by obtaining the exemption dated 25.01.2017 from the provisions of PAPR Act, at the subsequent stage, is the contents of Letter of Intent (LOI) dated 03.05.2013 which was granted in favour of the opposite parties in respect of the project in question. In condition no.v) of the said LOI 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...." .
It is further evident from the contents of said LOI that application for setting up the residential project was moved by the opposite parties before the competent Authority, for the first time on 16.09.2011 and project was approved only on 22.03.2013. It is also evident from information dated 23.05.2016 supplied by Chief Town Planner, Punjab, that Change of Land Use was approved for the first time on 31.03.2014 and layout plan was approved only on 06.10.2015. It is also evident from the contents of notification dated 25.01.2017 aforesaid that thereafter also, the opposite parties got the layout plans revised on 21.10.2015. Thus, in the present case, despite the fact that vide condition no.v) of LOI aforesaid, 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, (which in the present case has been approved only on 21.10.2015) and also 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), yet, the opposite parties violated the same and launched the project and starting selling the plots therein, starting from February 2011, when they were not even the owners of the land underneath the said project. It is therefore held that by launching and selling the project before 25.01.2017, i.e. the date when the said exemption was granted to the opposite parties from the provisions of PAPR Act, they indulged into unfair trade practice and the said practice needs to be deprecated.
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 opposite parties 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. As such, the said act of the competent authority 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 opposite parties, in this complaint filed by the complainant under Consumer Protection Act, for deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties.
Now coming to non-offering of possession of the plot to the complainant, it may be stated here that the opposite parties in their written reply in para no.9 (in preliminary objections) have very candidly admitted that development work at the project site is still going on and that basic amenities such as roads, electricity, sewerage, landscaping etc. are near completion. However, except some photographs (most of which pertain to the flats), perusal of which too reveal that still a lot of work is pending to be done at the project site, no other cogent and convincing evidence has been placed on record, to prove that the development is at the advance stage and that basic amenities such as roads, electricity, sewerage etc. are near completion, as alleged in the reply. Infact contrary stands have been taken by the opposite parties in their written reply. In para no.9, referred to above, it has been stated that the development work is near completion, whereas in para no.16 (preliminary objections), it has been stated that as per notification dated 30.01.2020 issued by the Govt. of Punjab, the period of completion of the project has been extended upto 31.12.2022. Burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/opposite parties. 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. At the same time, perusal of contents of the written reply filed by the opposite parties, reveal that self-contradictory pleas have been taken with regard to delay in offer of possession of the plot in question to the complainant. In some paragraphs it has been stated that delay took place in offering possession because there was delay on the part of the Government Departments in sanctioning approvals/ permissions; due to shortage of construction material etc. etc. whereas, on the other hand, it has also been stated that since more land was added to the project, as such, permission was sought from the competent Authorities for extension of time for completing the project in question.
As such, perusal of contents of reply filed by the opposite parties clearly go to show that they were not serious in completing the project wherein the plot in question was sold to the complainant and are now taking bald excuses for causing delay, just with a view to defeat the genuine claim of the complainant. Under these circumstances, it is held that the opposite parties by neither allotting plot no.; nor executing agreement within the stipulated period; nor completing the development work even by the date when this complaint was filed; and by not delivering possession of the plot, despite the fact that the same was booked as far as back in 2011, as mentioned above, indulged into unfair trade practice and were also negligent and deficient in providing service.
At the same time, it is also held that plea taken by the opposite parties to the effect that delay took place in offering possession because there was delay on the part of the Govt. Departments to sanction approvals/ permissions; shortage of construction material etc. does not carry out any weight for the reasons recorded hereinafter.
First coming to delay in approvals on the part of the Govt. Departments, it may be stated here that not even a single letter has been placed on record by the opposite parties showing that they ever reported the Govt. Authorities concerned that there is a delay on their part in granting sanctions/approvals in respect of the project in question on account of business rivalries or red-tapism or that any such letter, by which they have given notice to the said Authorities that in case the needful is not done in a prescribed time, the Company shall move to the appropriate platform of law, in the matter.
Now coming to the plea regarding shortage of construction material, it may be stated here that nothing has been placed on record by the opposite parties to prove that they were unable to procure the said construction material, in adequate quantity. There is no evidence of the opposite parties having invited tenders for supply of construction material and there being no response to such tenders. A similar plea with regard to shortage of building material as a cause for delay in delivery of possession of the plots/units was taken by a builder before the Hon`ble National Consumer in Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), decided on 14 Aug 2015, which was rejected and the complaint was allowed in favour of the complainant.
As per settled principle of law laid down by the Hon'ble Supreme Court of India, in the cases, where no agreement has been executed by the builder after booking of the plots/units, then the reasonable period of two to three years has to be taken into account for completion of the construction and development activities and delivery of possession to the allottees/buyers thereof. Since, in the present case also, no agreement has been executed between the parties, as such; possession of the plot in question should have been delivered to the complainant by the opposite parties, within a maximum period of three years from the date of booking i.e. latest by 27.02.2014 booking date being 28.02.2011, which have not been do so far and still the opposite parties are seeking more time and infact till 2022.
As far as plea taken with regard to COVID-19 is concerned, it may be stated here that the said pandemic took place in India 2020, when lockdown was executed. However, lockdown which took place in 2020 due to COVID-19, has no relation whatsoever, with the inordinate delay in the matter, as the plot in question had been purchased by the complainant as far as back in 2011. Thus, the opposite parties cannot take benefit of any subsequent event like COVID-19 which happened after a huge period of more than 8 years of the booking of the said plot. In this view of the matter, no help therefore can be drawn by the opposite parties, in this regard.
As far as plea taken by Counsel for the opposite parties to the effect that delay occurred because the company suffered financial constraints on account of imposition of GST as well as demonetization, it may be stated here that such a plea also has no legs to stand, in view of decision rendered by the Hon'ble National Commission, in Puneet Malhotra Vs Parsvnath Developers Ltd., consumer complaint No. 232 of 2014, decided on 29.01.2015, wherein under similar circumstances, it was observed as under:-
"As regards the default of the Contractor, impact of demonetization and implementation of GST, to cause delay on account of shortage of cash for payment to the labour, shortage of labour and material, no documents have been placed on record by the Opposite Party to show that it could not get adequate work force or sufficient building material to complete the construction of the Project within the time stipulated in the Allotment Letter. There is no evidence that the building material or the manpower not being available in the market. There may be a cash crunch for few days, but payments can always be made by direct transfer to the labour or to the materials supplier, through their Bank accounts. It cannot be accepted that the Contractor was unable to make payment to the labour or to the materials supplier since option was available to the Contractor to transfer the payments in the Bank accounts of the labour and materials supplier. Therefore, it cannot be accepted that due to default on the part of the Contractor, demonetization or implementation of GST, the Opposite Party could not arrange adequate labour or building material required for timely completion of the Project".
Furthermore, it is not the case of the opposite parties that the project was to be developed, in the first instance, from their own pocket/sources and after completing the development activities, the plots were to be sold to the general public, on making payment by them in future. Thus, in this view of the matter, in the present case, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God etc.) as a result whereof, delay in handing over possession of the plot occurred. As such, plea taken by the opposite parties in this regard, is rejected.
Now coming to the objection taken by Counsel for the opposite parties to the effect that in the face of registration of the project under the RERA in the year 2017 or Section 35 of the PAPR Act, jurisdiction of this Commission is barred to entertain this complaint arising out in respect of the plot in question located in the said project. First coming to the registration of project under RERA, 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 C ivil 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. Relevant part of the said order reads as under:-
24. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.
25. Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force. 26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called "consumers" within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.
*27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee , it was held by this Court:- "The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. *(See Bharat Bank Ltd. V. Employees and Nahar Industrial Enterprises Ltd. vs. Hong Kong & Shanghai Banking *Corpn . On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any 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.
Now coming to the objection raised to the effect that in the face of Section 35 of the PAPR Act, this Commission is not competent to entertain this complaint, it may be stated here that in the present case, the opposite parties were legally bound to allot plot no.; execute agreement and then deliver possession of the plot in question to the complainant, and the nature of such transactions is covered by the expression 'service'. Our this view is supported by the principle of law laid down in Narne Construction P. Ltd., etc. etc. Vs. Union of India and Ors. Etc., (supra) II (2012) CPJ 4 (SC) and Haryana Agricultural Marketing Board cases (supra). Furthermore, because it is an undisputed fact that the opposite parties neither alloted plot no.; nor executed buyers agreement; nor delivered possession of the plot purchased by the complainant within a reasonable period of three years aforesaid, or even thereafter and no cogent and convincing reason has been given for the same, as such, it can very well be said that there is a denial of service to the complainant on the part of the opposite parties, for which she was at liberty to avail remedy by way of filing this consumer complaint. Our this view is supported by the principle of law laid down in Lucknow Development Authority Vs. M.K.Gupta, Civil Appeal No.6237 of 1990, decided on 5.11.1993, wherein the Hon'ble Supreme Court held that where the developer is at fault in not delivering possession of an immovable property, the act so amounts to denial of service, and consumer complaint is maintainable before the Consumer Fora.
In view of above findings, we can safely say that the provisions of the RERA and PAPR Act will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the builder/developer. Since, this complaint involves the consumer dispute and the same is maintainable before this Commission, as such, objection taken in this regard by the opposite parties stands rejected.
From the peculiar facts and circumstances of this case, it transpire that the opposite parties were not competent to sell plots or flats and to collect money from the complainant and other prospective buyers, starting from 2011 itself, as far as the present project is concerned. The project in question was launched and units/plots therein were sold to the innocent buyers, in complete violation of the mandatory requirements as per Law, just with a view to grab money from them because as stated above, the opposite parties were not authorized to advertise the project in question and sell the plots/units therein, till the time, exemption under PAPR Act is obtained by them after getting the layout and zonal plans approved. In the present case, exemption under the PAPR Act has been obtained by the opposite parties only on 25.01.2017, whereas, the plot in question has been sold to the complainant in the year 2011 itself. The opposite parties being under dominating position kept on pressuring the complainant to make further payment under the misleading information, just with a view to extract the remaining amount and kept them under confusion, by way of sending notices. Still, in the reply filed by the opposite parties, it has been candidly admitted that the landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works are near completion. This reply has been filed by the opposite parties in October 2020, wherein, they are still saying that landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works at the project site are near completion. This candid admission of the opposite parties itself leaves no scope for it to say that they were not ready with the delivery of possession of the plot within a reasonable period of three years after booking of the plot in question or even by October 2020 when reply in this complaint was filed. The case of the complainant is proved from the admission made by the opposite parties themselves. Under these circumstances, we are of the considered opinion that we cannot make the complainant to wait for an indefinite period, in the matter on the ground that she will be compensated for the period of delay in delivery of possession of the plot by the company. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if there is no agreement, within a reasonable period say two to three years from the date of booking, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon'ble National Commission i n Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon'ble Supreme Court of India in the case titled a s Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also i n Fortune Infrastructure Versus Trevor D' Lima & Ors. (2018) 5 SCC 442 . In the present case also, since there has been an inordinate delay in the matter, and still the opposite parties are not sure as to by which date development will be completed and possession of the plot will be delivered to the complainant and on the other hand still they are saying that the time period for completion of the project could be upto 2022, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest @12% p.a. from the respective dates of deposits in view of principle of law laid down by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited, that will meet the ends of justice.
The opposite parties have also placed reliance on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra), to say that since in this case, the Hon'ble Supreme Court of India has awarded interest @6% p.a., as such, this Commission cannot grant interest beyond that, in the present case also. We do not agree with the contention raised for the reasons recorded hereinafter. It may be stated here that we have gone through the contents of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra) and found that, in the first instance, the said order has been passed with regard to compensation for delay in offering possession of the units therein and also over and above the interest rate of 6% p.a. the penalty amount as mentioned in the agreement has also been ordered to be paid to the complainant by the builder. Since, in the present case, the complainant has sought refund of the amount paid, as such, reliance placed by the opposite parties on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra) is misplaced.
As far as objection taken to the effect that the complaint filed is beyond limitation, it may be stated here that since it is an admitted fact that possession of the plot in question has not been delivered even by the date when this complaint had been filed before this Commission or thereafter, for want of development activities, as explained above, as such, objection taken with regard to limitation is not sustainable in view of principle of law laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action, in favour of the allottee/buyer. As such, objection taken in this regard is rejected.
Counsel for the opposite parties while placing reliance on Notification dated 30.01.2020, (Annexure O-9) and 25.09.2018 (Annexure O-11) also submitted that since the Govt. of Punjab has given extension to all the projects in Punjab and other States for completion thereof, as such, time was not to be considered as essence of the contract. We do not agree with the submission made for the reasons recorded hereinafter. Firstly, we have gone through the contents of Notification dated 30.01.2020, (Annexure O-9) issued by the Govt. of Punjab whereupon reliance has been placed by the opposite parties to say that they were granted extension till 31.12.2022 for completion of the project and found that the validity of licences of only the colonies for which outstanding dues of EDC etc. have been deposited by way of post dated cheques in compliance to Government notification dated 28.11.2019, were deemed to have been extended upto 31.12.2022. Secondly, we have also gone through the letter dated 25.09.2018 (Annexure O-11), which clearly shows that extension if any for completion of development works has been granted only in respect of additional land added by the opposite parties in the said project and not for the area where the plot in dispute is located, which had already been sold to the complainant long back in the year 2011. It has nowhere been mentioned in the letter dated 25.09.2018 or Notification dated 30.01.2020, that the builders/developers who have adopted unfair trade practice and are deficient in providing service by not even allotting plot nos. and executing buyer agreements despite receiving substantial amount from the buyers as far as back in 2011; launched the project and sold the units/plots therein without obtaining approvals from the competent Authorities and have cheated their customers, are also covered under the said extension for completion of the project. As such, no help can be drawn by the opposite parties from the letters aforesaid, as far as the present cases are concerned.
As stated above, it is well settled law that when there is no specific date provided to the buyer in respect of delivery of possession of the plot/unit or there is no agreement executed between the parties, then a reasonable period of two to three years for the same, from the date of booking has to be taken into consideration. Our view is supported the judgment passed by the Hon'ble Supreme Court of India in Fortune Infrastructure case (supra). Thus, objection taken by the opposite parties to the effect that time was not to be considered as essence of the contract stands rejected.
Furthermore, the opposite parties also cannot wriggle out of their liability, by saying that delay took place on account of the reason that the complainant defaulted in making remaining payment, in view of principle 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 within a reasonable period where no agreement is executed, 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, i n Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. In the instant case also, if the complainant after making payment of substantial amount, referred to above, did not make remaining payment when she came to know that the project has been launched without obtaining necessary approvals/sanctions from the competent Authorities; there was no development at the project site and also there was gross violation on the part of the opposite parties of the provisions of Section 6 of PAPR Act, in not getting the agreement executed, she was right in not making further payments in view of principle, referred to above, laid down by the Hon'ble Supreme Court in Haryana Urban Development Authority (supra). Objection taken in this regard stands rejected.
As far as plea taken by the opposite parties to the effect that the complainant may now come for execution of agreement and for possession of the plot in question, it may be stated here that this plea would have been considered, in case, the complainant had sought possession of her plot. Since, the complainant is entitled to refund of amount paid alongwith interest, in view of the reasons stated above, such a plea taken by the opposite parties could not be accepted and is accordingly rejected.
For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.16,20,000/- to the complainant, alongwith interest @12% p.a., without deducting any TDS, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 16,20,000/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/- to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
However, it is made clear that in case the complainant, has availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of the plot in dispute, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainant.
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
31.03.2021 Sd/-
[RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Sd/-
(RAJESH K. ARYA) MEMBER Rg.