State Consumer Disputes Redressal Commission
M/S Chandigarh Overseas Pvt. Ltd. vs Anuradha Kalia on 16 August, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Appeal No. : 257 of 2015 Date of Institution : 08.10.2015 Date of Decision : 16.08.2016 M/s Chandigarh Overseas Private Limited, through its Managing Director, Fashion Technology Park, Sohana Landra Road, Opposite Lakhnaur Cold Storage, Sector 90, Mohali, Punjab. Now at Registered Office SCO No.249, Sector 44-C, Chandigarh-160047. ......Appellant/Opposite Party No.1 V e r s u s Anuradha Kalia daughter of Sh.Rattan Chand Kalia resident of 235, Rose Park, Gulab Devi Hospital Road, Jalandhar-144008 ....Respondent/Complainant Argued by: Sh.Surjeet Bhadu, Advocate for the appellant. Sh.Vikas Kumar, Advocate for respondent. ===================================================== Appeal No. : 256 of 2015 Date of Institution : 08.10.2015 Date of Decision : 16.08.2016 M/s Greenfield Sites Management Private Limited, through its Managing Director, Fashion Technology Park, Sohana Landran Road, Opposite Lakhnaur Cold Storage, Sector 90, Mohali (Punjab). Now at SCO 18, Sector 20-D, Chandigarh. ......Appellant/Opposite Party No.2 V e r s u s Anuradha Kalia daughter of Sh.Rattan Chand Kalia resident of 235, Rose Park, Gulab Devi Hospital Road, Jalandhar-144008 ....Respondent/Complainant Argued by: Sh.Surjeet Bhadu, Advocate for the appellant. Sh.Vikas Kumar, Advocate for respondent. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT By this order, we will dispose of the aforesaid two appeals arising out of common order dated 05.12.2014, passed by District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (in short the Forum):-
S.No. Appeal No. Parties 257 of 2015 M/s Chandigarh Overseas Pvt. Ltd. Vs. Anuradha Kalia 256 of 2015 M/s Greenfield Sites Management Private Limited Vs. Anuradha Kalia Arguments, in both the appeals were heard by this Commission on 05.08.2016. Since, the appeals have been filed against the common order dated 05.12.2014, as such, legal issues involved therein, are the same. In view of above, Counsel for the parties, in both the appeals, agreed that the same (appeals) can be disposed of, by passing a consolidated judgment.
Under above circumstances, to dictate order, facts are being taken from appeal bearing no. 257 of 2015, titled as M/s Chandigarh Overseas Pvt. Ltd. Vs. Anuradha Kalia. The appellant in this case, launched a project, under the name and style of 'Fashion Technology Park', Sector 90, Mohali, which was widely publicized. The respondent purchased a design studio no.4, 5th Floor, Block A-1, measuring 100 square feet, in the said project. Price of the said unit was fixed at Rs.5 lacs, out of which, she claimed to have paid an amount of Rs.4,75,000/-. Remaining amount of Rs.25,000/- was to be paid within 10 days, from the date of receipt of offer of possession of the unit. It is on record that the Lease Agreement Annexure C-6 was also entered into between the respondent/complainant and M/s Greenfield Sites Management Private Limited on 16.05.2007 with an assured rental return of Rs.30,000/- p.a., on receipt of possession of the unit. At the same time, Developer Buyer's Agreement was also executed between the appellant and the respondent on 16.05.2007. It is an admitted fact that as per Clause 28 of the Buyer's Agreement, possession of the unit, in question, was to be delivered within 30 months, from the date of start of construction, failing which, the appellant agreed to pay penalty @Rs.50/- per square feet, per month of the super area of the unit. It is further case of the respondent that, vide letter dated 13.01.2010, she was offered buyback option of her unit @Rs.7.50 lacs, which was to be honoured by 30.06.2010. When possession of the unit was not offered; lease amount was not paid; and buyback amount was also not tendered, the complainant filed a consumer complaint before the Forum Despite deemed service, none put in appearance on behalf of the appellant, as a result whereof, it was proceeded against exparte vide order dated 17.10.2014. Thereafter, impugned order was passed on 05.12.2014.
Hence this appeal.
To show that non-appearance was not deliberate, it is only said that at the project site, the appellant was not maintaining its Office. We are not convinced with the plea taken. Taking note of magnitude of the project, in question, it is not expected that none of the employees of the appellant were present at the site. Be that as it may, it is not necessary to set aside exparte order under challenge because facts are virtually admitted in this case. Purchase of a unit by the respondent in the project launched by the appellant is not in dispute. Price of the unit; payments made; date of delivery of possession; execution of the Buyers' and Lease Agreements and buyback offer of the unit is also not disputed. It is virtually admitted at the time of arguments that the project was to be completed by 18.01.2010. It was only said that it could not be completed because of force majeure circumstances, as the contractors to whom, construction work was handed over, failed to complete the same. The matter went to the Civil Court, wherein the construction was stayed.
Only legal issues have been raised in this appeal, at the time of arguments, stating that the respondent has purchased a commercial unit in a technology park; she had agreed to lease out and selling back the same to the appellant, which proved that she is not a consumer and had made an investment, only for the purpose of gain in future.
We are not inclined to accept this argument. In M/s Chandigarh Overseas Private Limited Vs. Easow Mathew, First Appeal No.284 of 2015, decided by this Commission on 25.01.2016 , qua this very project, under similar circumstances, a similar plea was raised by the opposite parties, that the complainant therein would not fall within the definition of consumer. The plea was rejected by this Commission, by holding as under:-
6. On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the opposite parties. Defence taken by the appellant that the respondent was not a consumer was righty rejected, by observing as under:-
"As we have already observed, the complainant has specifically pleaded in his complaint that he wanted to settle a business for himself for earning his livelihood and to become an independent business owner, he agreed to purchase the said unit of 100 sq. ft. in Design Studio No.12. The complainant has also pleaded that he is a consumer as per the provisions of the Consumer Protection Act as the said unit was purchased by him for earning his livelihood. The allegations of the complainant are supported by his own affidavit. The OPs have not produced any such evidence that the complainant is a property dealer dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainant from the OPs is only 100 sq. ft. which is for small investors. Since the complainant wanted to settle a business for himself for earning his livelihood, it cannot be inferred that the said unit was purchased by him with the sole motive of earning profits. As far as the contention of the learned counsel for the OPs that the complainant is not qualified to run his unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether he was eligible under "Small Investor Scheme" or not. At this stage, such an objection is not tenable. In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon'ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer."
7. Contention of Counsel for the appellant that the respondent was not a consumer also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-
"Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
8. By noting ratio of the judgment of the Hon'ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583 , it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case, application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession of the unit. In the year 2009, when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellant on 22.06.2009, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the respondent, on 04.08.2009 vide letter Annexure C-7. On account of that act, the respondent cannot be excluded from the definition of a consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja's case (supra), that surplus funds can be invested, in such a manner, in purchasing property/unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he would fall within the definition of a consumer."
In the complaint, in para no.15, it was specifically stated by the respondent that she had purchased the unit to settle herself, through self-employment, for earning her livelihood, by opening a fashion outlet. It appears that the lease and buyback were offered only by way of security, which would not take away the respondent out of the definition of a consumer.
Reliance placed by the appellant upon ratio of judgment passed by this Commission, in Sneh Lata Singla Vs. M/s Chandigarh Overseas Pvt. Ltd., First Appeal No.39 of 2013, decided on 02.09.2013, to say that the respondent would not fall within the definition of consumer, is also liable to be rejected. In that case, the complainant had purchased a design studio, measuring 400 square feet i.e. four industrial units of 100 square feet each. She was a retired IAS Officer, earning sufficient amount towards pension. As per facts on record, in that case, she wanted to set up a large garment manufacturing unit, by employing number of persons. By noting those facts, it was said by this Commission that those units were purchased by her, not for earning her livelihood by way of self-employment but it was to be used for commercial purpose.
So far as the present case is concerned, position is altogether different. The complainant is unmarried lady. To earn her livelihood, she had purchased the unit, in question, with an intention to become an independent owner, through self-employment. She purchased a small unit of 100 square feet, to open a fashion outlet. Nothing contrary has been brought on record, to the notice of this Commission, at the time of arguments. As such, reliance placed by Counsel for the appellant, upon ratio of the aforesaid case is misplaced.
The question, whether the appellant can take shelter under force majeure circumstances for non construction of the unit and non delivery of possession thereof, for a long period of nine years, from the date of booking, also needs consideration.
This issue came up for consideration before this Commission, qua this very project in the case of Harneet Suri and another Vs. Chandigarh Overseas Private Limited, Consumer Complaint No.65 of 2016, decided on 19.07.2016. Under similar circumstances, it was observed by this Commission as under:-
"The force majeure circumstances claimed by the opposite party are; construction remained stayed for the period from 26.04.2011 to 23.08.2014, on account of dispute between the construction contractors aforesaid; shortage of construction material; and also global recession.
First coming to the plea taken by the opposite party to the effect that delay aforesaid occurred, as the construction remained stayed by the Competent Court, for the period from 26.04.2011 to 23.08.2014, on account of dispute with the construction contractors. It may be stated here that a similar plea, in respect of the same project, was taken by the builder/opposite party, in M/s Chandigarh Overseas Private Limited Vs. Easow Mathew's case (supra), which was negated by this Commission, while holding as under:-
"It was further argued by Sh.Surjeet Bhadu, Counsel for the appellant, that between the period from 26.04.2011 to 23.08.2014, construction remained stayed, on account of order passed by the Competent Court, and as such, for the said period, no liability can be fastened upon the appellant, in not completing the construction. The argument raised by Sh.Surjeet Bhadu, appears to be attractive, however, on analyzing facts of the case, we feel that it has no legs to stand.
Admittedly, as noted by the Forum, possession of the unit was to be delivered by 18.01.2010. By that time, project was not complete. If some order/stay had been passed before the said date (18.01.2010), upto the promised date i.e. 18.01.2010, benefit could have been given to the appellant. However, in the present case, default had already started, when possession of the unit was not delivered on 18.01.2010, as per promise made by the appellant. Stay on construction was imposed thereafter i.e. from 26.04.2011. In view of above, no benefit can be given to the appellant, for the said fact."
Not only this, in M/s. Utopia Projects Pvt. Ltd. Vs Shahin Bi Mulla, First Appeal No. 1227 of 2014, decided on 01.04.2015, under similar circumstances, the Hon'ble National Commission, while rejecting the plea of the builder held as under:-
"The reason given by the Developer for the delay is 'Disputes with the Contractor'. Viewed from any angle, such disputes cannot be construed to be within the ambit of 'force majure conditions'. Therefore, the Appellant cannot take umbrage under this clause"
Further plea of the appellant that delay occurred on account of shortage of construction material and also on account of global recession in the market also deserves to be rejected, in view of principle of law laid down by the Hon'ble National Commission, 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, wherein, while rejecting a similar plea of the builder, it was held as under:-
"As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity. This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in 36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders. In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party. As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such tenders. Therefore, I find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity".
xxxxxxxx xxxxxxxx Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.
Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression 'slow down' would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word 'slow down' having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project".
The principle of law laid down in the aforesaid cases is fully applicable to the facts of the present case. By making a misleading statement, that possession of the unit, in question, would be delivered latest by 18.01.2010, and by not abiding by the commitment made, while raising false grounds i.e. by taking shelter under the force majeure circumstances, referred to above, the appellant is not only deficient, in rendering service, but also guilty of indulging into unfair trade practice.
Another objection taken by the appellant, with regard to pecuniary jurisdiction of the Forum, also deserves rejection. It may be stated here, that the complainant has sought buyback amount of Rs.7.50 lacs alongwith interest @18% p.a.; penalty @Rs.50/- per square feet per month for the period of delay, alongwith interest @18% p.a.; monthly rental @Rs.30,000/- p.a.; compensation to the tune of Rs.2 lacs, for mental agony, physical harassment, deficiency in service and unfair trade practice; and cost of litigation, to the tune of Rs.25,000/-, aggregate value whereof [excluding the interest claimed] fell below Rs.20 lacs. Thus, the Forum had got pecuniary Jurisdiction, to entertain and decide the complaint.
As far as the interest claimed by the respondent, on the aforesaid amounts is concerned, it was not required to be added, to the value of the reliefs claimed, for determining the pecuniary Jurisdiction of the Forum, in view of law laid down by three Member Bench of the National Commission, in a case titled as Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), wherein it was clearly held that since rate and the period for which interest has to be allowed, is within the discretion of Consumer Foras, and that too at the stage, when the complaint is finally disposed of, as such, the same being imaginary would not be taken into consideration, at the time of filing of the same (complaint), for the purpose of determination of pecuniary jurisdiction. Not only as above, in the case of De nis Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided on 08 March 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the objection taken by the appellant, that the Forum lacked pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.
Further contention of the appellant that by awarding relief towards payment of compensation on account of delayed penalty alongwith buyback amount, double benefit has been given by the Forum, to the respondent/complainant. At the outset, argument raised appears to be attractive. When granting relief to the respondent by the Forum, vide judgment under challenge it was ordered as under:-
"i. to pay the buy-back amount of Rs.7.50 lac to the complainant.
ii. to pay the amount of Rs.50/- per sq.ft. per month of the super area w.e.f. 01.04.2010 till the refund of buy back amount (excluding the amount already paid, if any), as per Clause 28 of the agreement.
iii. to pay Rs.50,000/- as compensation for mental agony and harassment.
iv. to pay Rs.10,000/- as costs of litigation.
This order be complied with by the Opposite Parties, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.no.(i) to (iii) above shall carry interest @12% per annum from the date of this order, till actual payment, besides payment of litigation costs. "
The rights of the respondent to seek buyback amount was held to be justified and further it was said that whereof 01.04.2010 till the date of refund of buyback amount (excluding amount, if any, already paid), the respondent shall get compensation @Rs.50/- per square feet per month. We feel that the relief granted is perfectly justified. This Commission would have withdrawn the above said grant of compensation, in case on buyback amount i.e. Rs.7.50 lacs, the Forum had granted interest also, from the date, referred to above. The compensation granted rather is on the lower side than the component of interest, which could have been granted on above amount. As such, it cannot be termed as a double benefit, as projected. In view of above, no ground whatsoever is made out by the appellant, to make interference in the order under challenge.
No other point, was urged, by Counsel for the parties.
For the reasons recorded above, both the appeals are dismissed, with no order as to costs.
Certified copy of this order, be placed on file of appeal bearing no.256 of 2015 Certified copies of this order, be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
16.08.2016 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg