State Consumer Disputes Redressal Commission
Mani Ram Garg vs Greater Mohali Area Development ... on 12 January, 2018
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
Consumer Complaint No.678 of 2017
Date of institution : 10.08.2017.
Date of decision : 12.01.2018.
Mani Ram Garg, son of Sh.Rameshwar Dass, resident of 65 A, Anaj
Mandi, VPO-Dhand, District Kaithal, Haryana.
.......Complainant.
Versus
1. The Greater Mohali Development Authority through Chairman,
PUDA Bhawan, Sector 62, Mohali (Pb.).
2. Chief Administrator, Greater Mohali Area Development
Authority, Room No.102, PUDA Bhawan, Sector-62, Phase-
VII, SAS Nagar, Punjab.
3. Estate Officer (H), Greater Mohali Area Development Authority,
PUDA Bhawan, Sector 62, SAS Nagar, Punjab.
........Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member
Present:-
For the complainant : Shri Karan Nehra, Advocate. For the opposite parties : Shri Anuj Kohli, Advocate.
MRS.KIRAN SIBAL, MEMBER The complainant, Mani Ram Garg, has filed this complaint under Section 17 of the Consumer Protection Act, 1986 (in short, "C.P. Act") for the issuance of following directions to the opposite parties (in short "OPs") :-Consumer Complaint No.678 of 2017 2
a) to refund the entire/total consideration of `60,44,439/- paid by the complainant to the opposite parties with an interest @ 12% per annum;
b) to pay the compensation of `2,00,000/- to the complainant for the mental agony and physical harassment; and
c) to pay a sum of `50,000/- as litigation charges.
Facts of the Complaint:
2. Brief facts, as averred in the complaint, are that the complainant applied for residential apartment Type 2 i.e. 2 BHK with super area of 1571 square feet in the Apartment No.701, Tower-5, Block-D, Floor-6, Purab Premium Apartments in General Category at Sector 88, SAS Nagar vide application No.12911. He had paid `5,50,000/- as EMD against which the OPs issued an acknowledgement receipt No.12911. The allotment of flat was to be made by way of draw of lots. The OPs conducted the draw of lot on 19.03.2012 and complainant was the successful allottee. The OPs issued Letter of Intent dated 21.05.2012 for allotment of a Type 2 Residential Apartment. The letter of intent stipulated the payment schedule and other terms and conditions. As per Letter of Intent (LOI) dated 21.05.2012, the possession was to be handed over by the OPs within a period of 36 months from the date of draw. The date of offer of possession was altered from 18.03.2015 i.e. 36 months after the date of drawing of lots to 20.05.2015. The complainant deposited an additional amount of `11,00,000/- on 22.06.2012 in terms of Clause 2.1 of the allotment letter.
Subsequently, he made all the payments as per the payment Consumer Complaint No.678 of 2017 3 schedule under Clause 2.1 of the Letter of Intent. He had deposited the entire consideration of Rs.60,44,439/- along with the earnest money as per the agreed terms and conditions between the parties and the same is evident vide payment receipts dated 22.11.2012, 21.05.2013, 27.12.2013, 21.08.2014, 21.01.2015, 21.05.2015 and 30.12.2015. The entire amount had been deposited with the OPs under Plan B in the Allotment Letter in clause 2.1, 2.2 & 2.3 and in cases of delayed payments penal interest of 18% per annum was paid by him. The OPs earlier displayed information on their website dated 05.08.2015 that the OPs shall deliver the possession by December, 2015. He received a letter dated 28.06.2016 whereby the OPs have illegally altered the date of handing over the possession from the date as stipulated in the Letter of Intent i.e. 20.05.2015 to 28.07.2016, which is 30 days after the issuance of Letter of Possession. The aforesaid conduct of the OPs tantamounts to patent unfair trade practices. Thereafter, the complainant again visited the site of flat/apartment in order to inspect the same. But he found out that the work of the premises had not been completed the flat and the entire project was not fit for residence or even occupation. In fact, the super structure had not been constructed by the OPs, the paint work, flooring, toilets, other essential and basic amenities were not available at site and the OPs were just finding a way to save themselves from making the payment on account of delay, interest and compensation. It was further submitted that the lifts were not in operation, the building premises were in bad shape and the same were not fit for possession. Even the occupation Consumer Complaint No.678 of 2017 4 certificate had not been obtained by the OPs from the competent authorities. Further the surrounding/common area of the premises had not been maintained properly and the facilities were not in order. There was no electricity/water meter installed at the premises. It was further submitted that the premises were not in a livable condition and hence, the said offer of possession was not valid and has no value in the eyes of law. The complainant served a letter dated 16.07.2016 to OPs, to express his discontentment on the services provided by the OPs and rejected the offer of possession of the flat, made to him, vide letter dated 28.06.2016. He further demanded the refund of the entire deposited amount along with interest from the date of deposit till its realization, within 15 days from the date of receipt of the legal notice along with compensation in view of mental agony and harassment suffered by him. It was further relevant to submit that the project had not been completed till date and a valid completion certificate had not been obtained by the OPs till date. This Commission had categorically given its finding in the matter titled as Amitoz Pal Singh versus GMADA in CC No.167 of 2016 decided on 10.03.2017, that the project is not complete and hence, the letter of offer of possession issued by the OPs is illegal and not sustainable in the eyes of law. It was also stated that as per prospectus, total covered area was indicated as 1366 Sq. meter however in the possession letter it was showing as 1353.56 sq.m and thereby the OPs had reduced 12.44 sq.m. without any approval or consent from allottees/complainant. Further the OPs had advertised that the project would be in 117 acres land, but Consumer Complaint No.678 of 2017 5 now it had been reduced to 37 acres without any consent from allottees. After getting money from allottee, they had sold most of the land to third party. The towers, which were supposed to be separated as per original layout, had been joined together resulting in great risk of privacy and security. As per terms of offer laid down in the brochure, facility of Indoor swimming pool, lawn tennis, skating ring, indoor badminton, Table Tennis courts were to be made available from/on the first day of possession as the matter of right but facilities have not been made available/operational. Hence, OPs had violated the terms and conditions of the agreement and scheme, as they had failed to complete the entire work of the flats within stipulated time and the same is still pending. OPs to cover up their material irregularities have been misleading the consumers. Further the entire matter of mismanagement and incompletion of the project had been widely covered in the media. Many RTI applications and the subsequent appeals had been filed by the similarly situated and aggrieved consumers of the OPs. Alleging deficiency in service and adoption of unfair trade practice on the part of the opposite parties, the present complaint has been filed by the complainant for issuance of aforementioned directions to them.
Defence of the Opposite Parties:
3. The OPs appeared and filed their written statement contending that there is no deficiency in service or adoption of unfair trade practice on the part of the opposite parties. As per clause 21 in the allotment letter and offer of possession letter dated 28.06.2016, any dispute or difference, which may arise in any manner touching or Consumer Complaint No.678 of 2017 6 concerning the allotment shall be referred to the Sole Arbitrator i.e. Chief Administrator, GMADA or any person appointed/nominated by him as Arbitrator and his decision will be final and binding on the parties under the provisions of "Arbitration and Conciliation Act, 1996". The complaint involves disputed and complicated questions of fact and law and the same cannot be adjudicated in a summary manner by this Commission. The complainant has not approached this Commission with clean hands. He had applied for allotment of the apartment in question only for speculative purpose and for resale. As such, he is not a 'consumer' qua the opposite parties as defined under the C.P. Act. Various paras of the complaint have been denied for want of knowledge. However, the amount deposited by the complainant on various dates has been admitted. It was also admitted that the complainant was issued letter of intent on
21.5.2012 and complainant had deposited 95% of the price of the allotted price as per the terms and conditions of Letter of Intent. Thereafter, vide letter No.28871 dated 28.06.2016, the complainant was issued allotment letter and offer of possession letter. As per condition No.5 of the allotment letter, the complainant was required to take the physical possession of the apartment within 30 days from the issue of allotment letter. On merits, it was admitted that the complainant had applied for the said apartment and the same was allotted to him. It was submitted that the OPs endeavored to diligently complete the development work and had duly complied with the conditions of the brochure providing various facilities along with basic amenities in consonance with the terms of the brochure. Consumer Complaint No.678 of 2017 7 It was submitted that as per LOI, the possession was to be delivered within 36 months from the date of the LOI. The OPs proposed to build 4500 flats and as per draw of lots held by OPs on 20.03.2012 around 4300 applicants were held successful. However, only 1075 successful applicants were found eligible and accordingly, OPs proposed to build 1620 flats. However, during the execution of the project, approx. 400 allottees have defaulted in making due payments and approx. 75 allottees opted for refund of their money. It was further submitted that the condition regarding possession was subject to timely payment of dues by all the allottes as default by even a single allottee affects the completion schedule. Moreover, the OPs had already invested in the construction of the flats as numbering draw of the apartments was held on 5&6th January, 2016 and the offer of possession letter dated 28.06.2017 had already been issued to the complainant. All other averments were categorically denied as alleged by the complainant and the OPs prayed for dismissal of the complaint, being devoid of any merits. Evidence of the Parties:
4. In order to prove his case, the complainant has tendered in evidence his affidavit as Ex.CA and documents Ex.C-1 to Ex.C-11 and Mark A&B. On the other hand, the opposite parties has tendered in evidence the affidavit of their Estate Officer (Housing) Mahesh Bansal as Ex.OPA and document Ex.OP-1.
5. We have carefully gone through the averments of the parties and the evidence produced by them in respect of those averments.
We have also heard learned counsel for both the sides. Consumer Complaint No.678 of 2017 8 Contentions of the Parties:
6. Learned counsel for the complainant argued on the similar lines as mentioned in the complaint. The sum and substance of the arguments of the learned counsel for the complainant is that complainant applied for residential apartment Type 2 i.e. 2 BHK with super area of 1571 square feet in the Apartment No.701, Tower-5, Block-D, Floor-6, Purab Premium Apartments in General Category at Sector 88, SAS Nagar vide application No.12911. He paid Rs.60,44,439/-, the total sale consideration of the flat. The possession of the flat was to be delivered within 36 months from the date of issuance of LOI, complete in all respect. But till date, no essential and basic amenities are available at site, the premises are not in a livable condition and as such offer of possession is not valid.
The complainant, being aggrieved with the unfair trade practice and acts of the OPs, has demanded refund of the entire deposited amount along with interest. Learned counsel for the complainant has relied upon the following judgments in support of his contentions :-
i) Sh.Amit Goyal Vs. The Estate Officer, GMADA, in Consumer Complaint No.388 of 2017, vide order dated 01.01.2018.
ii) Priyanka Nayyar Vs. GMADA & Anr., in Consumer Complaint No.183 of 2015, vide order dated 09.09.2016.
iii) Amitoz Pal Singh Vs. GMADA & Ors, in Consumer Complaint No.167 of 2016, vide order dated 10.03.2017.
7. Per contra, it was vehemently argued by the learned counsel for the opposite parties that vide letter No.28871 dated 28.06.2016, Consumer Complaint No.678 of 2017 9 the complainant was already issued allotment letter and offer of possession letter. As per condition No.5 of the allotment letter, the complainant was required to take the physical possession of the apartment within 30 days from the issue of allotment letter. In view of the same, it can not be said that there was any deficiency in service or unfair trade practice on the part of the OPs as offer of possession had already been made to the complainant. The learned counsel for the OPs vehemently denied all other allegations raised in the complaint and prayed for dismissal of the complaint. Consideration of Contentions:
8. We have given our thoughtful consideration to the contentions raised before us by the learned counsel for both the sides.
9. First of all, we would like to address the preliminary objeciton raised by the OPs that as per the arbitration clause in the agreement, the matter between the parties is to be referred to the Arbitrator, it is relevant to mention that it has been held by the Hon'ble Supreme Court in many judgments that Section 3 of the Consumer Protection Act, 1986 makes it clear that remedy available under the Act to the consumer is in addition to and not in derogation of the provisions in any other law for the time being in force. Hence, the Consumer Fora are not bound to refer the matter to the Arbitrator, despite there being an arbitration clause in the agreement. Accordingly, this objection of the OPs is rejected.
10. In Section 3 of PAPRA, 'General liabilities of the promoter' have been explained, which are as under:-
"3. General Liabilities of Promoter:-Consumer Complaint No.678 of 2017 10
(1) Notwithstanding anything in any other law for the time being in the force, a promoter, who develops a colony or who constructs or intends to construct a building of apartments, shall, in all transactions with persons taking or intending to take a plot or an apartment on ownership basis, be liable to give or produce, or cause to be given or produced, the information and the documents mentioned hereinafter in this section.
(2) A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
(a) make full and true disclosure of the nature of his title to the land on which such colony is developed or such building is constructed or is to be constructed, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
(b) 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;
(c) give inspection on seven days, notice or demand,-
(i) of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony; and
(ii) of the plan and specifications of the building built or to be built on the land as well as of the common areas and facilities and common services provided (including supply of electricity and water, sewerage and drainage systems, lifts, fire-fighting equipment), such plans and specifications being in accordance with the provisions of the building regulations, and approved by the authority which is required so to do under any law for the time being in force, indicating thereon what parts of the building and the appurtenant areas are intended to be kept as common areas and facilities in the case of apartments :
Provided that the number and sizes of the apartments shall conform to such building regulations, and the area of an apartment shall not exceed such limit as may be fixed by the competent authority;
(d) display or keep all the documents, plans and specifications or copies thereof referred to in clauses (a), (b) and (c) of this sub-section at the site and in his office and make them available for inspection to persons taking or intending to take a plot or an apartment and after the association is formed, he shall furnish the association a copy of these documents and of the sanctioned plan of the building;
(e) disclose the nature of fixtures, fittings and amenities, including the provision for one or more lifts, provided or to be Consumer Complaint No.678 of 2017 11 provided;
(f)disclose on reasonable notice or demand, if the promoter is himself the builder, the prescribed particulars as respects the designs and the materials to be used in construction, and, if the promoter is not himself the builder, disclose all agreements entered into by him with the architects and contractors regarding the design, materials and construction of the building;
(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
(h) except where there are no agreements about specific plots or apartments and allotment is made by draw of lots, prepare and maintain a list of plots or apartments with their numbers, the names and addresses of the parties who have taken or agreed to take plots or apartments, the price charged or agreed to be charged therefor, and the terms and conditions, if any, on which the plots or apartments are taken or agreed to be taken;
Provided that the competent authority may direct that,-
(i) in the case of residential apartments, if the total number of apartments is one hundred or more, ten percent of the apartments; and
(ii) in the case of colony, if the total area of the colony is forty hectares or more, ten per cent of the area under residential plots and houses, be reserved for being sold or leased to such person belonging to such economically weaker section of society, in such manner and on such terms and conditions as may be prescribed;
(i) state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons who have taken or are to take the apartments;
(j) not allow person to enter into possession until an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained;
(k) make a full and true disclosure of all outgoings, including ground rent, if any, municipal or other taxes, charges for water and electricity, revenue assessment, interest on mortgages or other encumbrances, if any;
(l) give the estimated cost of the building and the apartments proposed to be constructed, or colony to be developed, and the manner in which escalation in such cost for valid reasons may be approved by mutual agreement ;
(m) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and
(n) give on demand and on payment of reasonable charges true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed.Consumer Complaint No.678 of 2017 12
Further Section 4 of PAPRA provides as follows:
4. Issuing of Advertisement or Prospectus:-
(1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication.
(2) The advertisement or prospectus issued under sub-
section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed.
(3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
(4) When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
(a) the promoter, if an individual;
(b) every partner of the firm, if the promoter is a firm;
(c) every person who is a director at the time of issue of
the advertisement or prospectus, if the promoter is a company :
Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or
(b) the advertisement or prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c) after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of Consumer Complaint No.678 of 2017 13 plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor. (5) When any advertisement or prospectus includes any untrue statement, every person who authorised its issue, shall be punished with imprisonment for a term which may extend upto one year or with fine which may extend upto five thousand rupees, or, with both, unless he proves that the statement was immaterial or that he had reason to believe and did upto the time of issue of the advertisement or prospectus believe that the statement was true."
In the present complaint, the opposite parties have not produced any evidence to prove that they have complied with the provisions of Sections 3 and 4 of PAPRA in letter and spirit, by making full and true disclosure of the nature of their title to the land on which such colony is developed or such building is constructed. There is also no evidence on record to prove that, before allotment of the unit, in question, to the complainants, they were made aware about the change in the project design and it has been alleged that the OPs have not displayed the alleged certificates etc. By not complying with the above said provisions of PAPRA, the opposite parties are certainly guilty of rendering deficient services and adopting unfair trade practice.
11. Further, as per Section 9 of PAPRA, it has been provided as under :-
"The promoter shall maintain a separate account in any scheduled banks of sums taken by him from persons intending to taken or who have taken apartments or plots, as advance, towards sale price of for any other purpose, or ,deposit, including any sum so taken towards the share capital for the formation of a co-operative society or a company, or towards the outgoings(including ground rent, if any, municipal or other local taxes. charges for water or electricity, revenue assessment, interest on Consumer Complaint No.678 of 2017 14 mortgages or other encumbrances, if any, stamp duty and registration fee for the agreement of sale and the conveyance ; and the promoter shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes including for the construction of apartments and, in the case of colonies, for meeting the cost of development works, and shall on demand, in writing, by the competent authority make full and true disclosure of all transactions in respect of that account and shall not utilise for any other purpose the amounts so collected for a particular purpose."
12. It stands proved that the opposite parties failed to hand over the possession of the unit, in question, to the complainant within the stipulated period, without any sufficient reason. The amount paid by the complainant is a deposit held by the opposite parties, in trust of complainants and it should be used for the purpose of building the plots/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.
13. Further, as per Section 12 of PAPRA, it has been provided as under :-
"If the promoter.-
(a) fails to give possession, in accordance with the terms of his agreement, of a plot or an apartment duly completed by the date specified, or any further date agreed to by the parties; or
(b) for reasons beyond his control and of his agents, is unable to give possession of the plot or the apartment by the date specified, or further agreed date; the promoter shall be liable on demand, bit without prejudice to any other Consumer Complaint No.678 of 2017 15 remedies to which he may be liable, to refund the amounts already received by him respect of that plot or apartments with simple interest at the rate as may be determined by the competent authority from the date the promoter received the sums till the date the amounts and interest thereon is refunded, and the amounts and the interest shall be a charge on the land on which a plot is to developed, or a building is or was to be constructed and the construction, if any, thereon shall be subject to any prior encumbrances."
14. As per Rule 17 of the "Punjab Apartment and Property Regulation Rules, 1995, framed under Section 45 of PAPRA, it has been provided as under:-
17. Rate of interest on refund of advance money upon cancellation of agreement.- The promoter shall refund full amount collected from the prospective buyers under sub-
section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
15. Perusal of receipts Ex.C-4 (Colly) shows that a sum of Rs.60,44,439/- was deposited by the complainant with the OPs on different dates. The complainant has averred in Para No.6 of the complaint that he paid a sum of Rs.60,44,439/- with the OPs towards the price of the unit. However, as mentioned above, the OPs failed to deliver the possession of the unit, in question, to the complainant within the stipulated period, without any sufficient cause and, thus, the complainant is entitled to the refund of the amount deposited by them, along with interest and compensation.
16. In view of our above discussion, the complaint is allowed and the following directions are issued to the opposite parties:
i) to refund the amount of Rs.60,44,439/- along with interest at the rate of 12% per annum from the respective various dates of payment till realization, as per Rule 17 of PAPRA;Consumer Complaint No.678 of 2017 16
ii) to pay Rs.1,00,000/-, as lump sum compensation for the mental agony, harassment and towards litigation expenses.
17. The opposite parties 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.
18. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
19. Since there is shortage of postal stamps in this Commission, therefore, the parties through their counsel are directed to receive free certified copies of the order by hand and it is the responsibility of the learned counsel for the parties to inform them accordingly.
(JUSTICE PARAMJEET SINGH DHALIWAL)
PRESIDENT
January 12, 2018 (MRS. KIRAN SIBAL)
Lb/- MEMBER