State Consumer Disputes Redressal Commission
Puja Aggarwal vs M/S Ireo Fiveriver Pvt. Ltd, on 30 June, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 106 of 2016 Date of Institution : 18.03.2016 Date of Decision : 30.06.2016 Puja Aggarwal wife of Sh.Anup Aggarwal Rajeev Gupta son of Sh.Sohan Lal Gupta Both residents of House No.218, Sector 10, Panchkula, Haryana. ......Complainants V e r s u s M/s IREO Fiveriver Pvt. Ltd., Corporate Office at SCO No.6-8, 1st and 2nd Floors, Sector 9D, Chandigarh-160009, through its Authorized Signatory Ms.Sunaina Minhas daughter of Maj.Arbinder Singh. M/s IREO Fiveriver Pvt. Ltd., Registered Office at 305, 3rd Floor, Kanchan House, Karampura Commercial Complex, New Delhi-110015, through its Authorized Signatory, Ms.Sunaina Minhas daughter of Maj.Arbinder Singh. ....Opposite Parties Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: MR. DEV RAJ, PRESIDING MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by: Sh.Narender Yadav, Advocate for the complainants. Sh.Ramnik Gupta, Advocate for the opposite parties. PER MR.DEV RAJ, PRESIDING MEMBER
The facts, in brief, are that M/s S.S. Associates, applied to the opposite parties, for allotment of a residential plot, in a project, launched by them, under the name and style of 'FIVE-RIVER', Sectors 3,4 and 4A, Pinjore-Kalka Urban Complex, Panchkula, Haryana, for which, it paid an amount of Rs.9,25,000/-, towards booking amount. Receipt dated 15.10.2010, Annexure C-2, in this regard was issued by the opposite parties. Consequently, M/s S.S. Associates was allotted plot no.S-35, measuring 370.76 square yards, @Rs.25,000/- per square yard, in the said project. Later on, vide letter dated 25.05.2011 Annexure C-3, the plot, in question, was renumbered as S-64, on account of revision in layout plan. Plot Buyer's Agreement (in short the Agreement) Annexure C-4, in respect of the said plot, was executed between M/s S.S. Associates and the opposite parties, on 24.06.2011. Basic sale price of the plot was fixed at Rs.92,69,000/-. Apart from that, the allottee(s) was/were also required to pay Rs.4100/- per square yard, towards External Development Charges (EDC), Rs.525/- per square yard, towards Infrastructure Development Charges (IDC) and Rs.350/- per square yard, towards Interest Free Maintenance Security (IFMS). As per payment plan Annexure-I, the allottee was required to make 95% payment of the total sale consideration, till completion of WBM, from the date of booking, of the plot. Balance amount of 5% of the total sale consideration was to be paid on offer of possession of the plot. Thereafter, another amount of Rs.13,92,250/- was paid by M/s S.S. Associates, on 26.08.2011, vide receipt Annexure C-5. In this manner, in all, an amount of Rs.23,17,250/- towards part price of the plot, in question, was received by the opposite parties.
It was stated that the said plot, was, thereafter, purchased by the complainants, from M/s S.S. Associates. The complainants submitted all the necessary documents to the opposite parties, for transfer of the said plot, in their favour. Ultimately, on completion of all the formalities, vide transfer letter dated 03.01.2014 Annexure C-6, plot, in question, was transferred in the name of the complainants, by the opposite parties. All the necessary documents were endorsed in favour of the complainants and they became the owner of the said plot.
It was further stated that as per Clause 11.1 of the Agreement, after development, physical possession of the plot was to be delivered to the complainants within 24 months, with grace period of 6 months i.e. not later than 30 months, from the date of execution of above Agreement i.e. on or before 23.12.2013, failing which, they were liable to pay delayed compensation @Rs.50/- per square yard, per month for the period of delay.
It was further provided in Clause 11.3 of the Agreement, that, in case, possession of the plot was not delivered, beyond a period of 12 months, from the end of grace period i.e. from 23.12.2013 i.e. within maximum period of 42 months of the execution thereof, the complainants became entitled to opt for termination of the allotment/Agreement, and seek refund of the actual amount paid. The amount so, was to be refunded by the opposite parties, within a period of 90 days, on receipt of intimation in respect of the same.
It was further stated that possession of the plot was not delivered to the complainants, by the stipulated date. It was further stated that when after making payment of substantial amount of Rs.23,17,250/- towards part price of the plot, in question, possession of the plot was not delivered to the complainants, they visited the site, and found that there was no development.
It was further stated that the complainants approached the opposite parties, through every possible means, with a request to complete the development work and deliver possession of the plot, complete in all respects, but they failed to do so. Even the request made by the complainants for making refund of the amount deposited, was not acceded to, by the opposite parties. To the contrary, even in the absence of development work at the site, the opposite parties raised another demand of Rs.19,19,048.20Ps. vide letter dated 21.04.2015, on the pretext that development work had commenced at the site. It was further stated that on account of inordinate delay, in handing over possession of the plot, in question, the complainants lost interest therein and sought refund of the amount deposited, vide email 26.07.2015 followed by reminders dated 09.08.2015 and 21.08.2015 Annexure C-9 colly., but the opposite parties failed to do so. Even legal notice dated 05.12.2015 Annexure C-10 colly., served upon the opposite parties, did not yield any result.
It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the opposite parties, to refund the amount of Rs.23,17,250/-, alongwith interest @18% p.a., from the respective dates of deposits till realization; pay delayed compensation @Rs.50/- per square yard, per month, for the period of delay, alongwith interest @18% p.a.; compensation, to the tune of Rs.20 lacs, for deficiency in rendering service, adoption of unfair trade practice, causing mental agony and physical harassment; and cost of litigation, to the tune of Rs.70,000/-.
Upon notice, reply was filed by the opposite parties, wherein, it was pleaded that in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was further pleaded that this Commission has got no territorial Jurisdiction, to entertain and decide the complaint, in the face of Clause 36 of the Agreement, whereby, the parties, by way of Agreement, excluded the jurisdiction of all other Courts, except at Panchkula. It was further pleaded that since the plot, in question, was purchased by the complainants for commercial purpose i.e. for investment purpose, as such, they did not fall within the definition of consumer. It was further pleaded that the consumer complaint was not maintainable, as the matter relates to an agreement to sell/purchase of a plot i.e. of immovable property. It was further pleaded that consumer complaint was not maintainable, and only a Civil Court, could adjudicate the dispute, in question. It was further pleaded that there was no promise to provide any service, as alleged. The contract was only to sell a plot i.e. piece of land to the complainants. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits.
On merits, it is admitted that the complainants had purchased the plot, in question, from the opposite parties, in the manner, referred to above. It was stated that possession of the plot was to be delivered within 30 months, from the date of execution of the Agreement, plus 12 months more, against payment of delayed penalty amount, i.e. after 42 months, subject to completion of all the obligations by the complainants, contained in the terms and conditions of the same (Agreement) and not otherwise.
It was further stated that development and construction activities could not be started on account of force majeure circumstances. To say so, reliance was placed on Clause 1 of the Agreement, which reads thus:-
"Force Majeure" shall mean any event beyond the reasonable control of the Company or Confirming Parties by itself or in combination with other events or circumstances which cannot (i) by the exercise of reasonable diligence, or (ii) despite the adoption of reasonable precautions and/or alternative measures, have been prevented, or caused to have been prevented, and which impairs or adversely affects the Company's/Confirming Parties' ability to perform its obligation under this Agreement, and which events and circumstances shall include but not be limited to a) acts of God, i.e. fire, drought, flood, earthquake, epidemics, natural disasters or deaths or disabilities; b) explosions or accidents, air crashes and shipwrecks; c) strikes of lock outs, industrial dispute; d)non-availability of cement, steel or other construction material due to strikes of manufactures, suppliers, transporters or other intermediaries or otherwise; e)war and hostilities of war, riots or civil commotion; f) non-grant, refusal, delay, withholding, cancellation of any approval from any governmental authority or imposition of any adverse condition or obligation in any approvals from any governmental authority, including any delay beyond the control of the Company/ Confirming Parties in issuance of the Completion Certificate and/or any other approvals/certificate as may be required; g) any matter, issues relating to grant of approvals/ permissions, notices, notifications by the Competent Authority becoming subject matter of any suit/writ before a Court of law; h) the promulgation of or amendment in any law, rule or regulation or the issue of any injunction, court order or direction from any governmental authority that prevents or restricts the Company/Confirming Parties from complying with any or all the terms and conditions as agreed in this Agreement; i) economic recession; j) any event or circumstances analogous to the foregoing.
It was further stated that the opposite parties had obtained licence No.28 of 2010 Annexure OP-9, from the Haryana Government, Town and Country Planning, on 23.03.2010, to launch the project, in question, yet, they suffered various fresh conditions/objections, imposed/raised by the Competent Authorities, as a result whereof, development work could not be commenced till April 2015. It was further stated that, in the first instance, the main root cause for delay in development and construction activities at the site was that, vide letter dated 16.03.2011, a fresh condition was imposed by the Directorate of Town & Country Planning, (DTCP) Haryana, upon the opposite parties, not to carry out earth work/ construction at the site, without obtaining NOC from the Irrigation Department. Thereafter, when the opposite parties applied to the Irrigation Department, for the said NOC, instead of acceding their request, a fresh condition was imposed upon them, to get the project hydraulically studied, from a premier institute, which was ultimately got done by them (opposite parties), from IIT Roorkee. Finally, NOC was granted on 20.03.2013 i.e. after delay of about two years. It was further stated that, on receipt of the said NOC, the opposite parties, immediately submitted the same to the Competent Authorities, on 21.03.2013, for issuance of requisite licenses. It was further stated that this was the second main reason, for delay, in development and construction activities. It was further stated that the third reason for delay aforesaid, was that the Licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was not cleared by the Department, as the area was situated in a squatted small pockets, and also on ground of non-grant of NOC aforesaid, by the Irrigation Department.
It was further stated that not only this, the Hon'ble Supreme Court of India, in the case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, granted stay and issued directions to the State of Haryana and its functionaries, not to undertake any further construction on the land, in question. The said stay order was vacated on 12.12.2012. It was further stated that this was also one of the reasons, for delay, in development and construction activities.
It was further stated that, parallelly, while permissions and approvals were being sought from the Irrigation Department, Haryana, other requisite permissions and approvals were simultaneously being sought from the State Level Environment Impact Assessment Authority, Haryana, vide application dated 18.04.2012, for developing a land measuring 169.864 acres and LOI of 18.343 and 10.594 acres. However, the Environment Authorities, vide letter dated 12.06.2012, raised objection that the opposite parties did not possess licence for entire land, which was finally considered by the Environment Department and eventually clearance was granted on 15.04.2014, subject to imposition of additional condition, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015.
Further, after execution of the Agreement, road circulation plan of the Sector, wherein the project is situated, was changed on 22.11.2011. The opposite parties were directed to amend the layout plans accordingly, which were submitted within a month. However, its approval-in-principal was given only on 02.08.2013 and was confirmed on 14.10.2013. It was further stated that, even revision of layout plans, was delayed, on account of the NOC aforesaid, issued by the Irrigation Department, at a belated stage.
In other words, in para no.6 (at page 30 of the written statement), the opposite parties have tried to convince this Commission, that the delay in commencement of development work and offering possession of the unit(s) to the allottee(s), including the complainants occurred, not on account of delay in grant of necessary regular approvals, in routine, but was due to the fact that fresh conditions were imposed by the Competent Authorities, and as such, the intervening circumstances were totally beyond their control, which never expected the said compliances, for obtaining the necessary approvals and permissions, from the State Government. It was further stated that all the events mentioned above, were beyond the control of the opposite parties, and as such, the development at the project site could not be commenced till April 2015.
It was further stated that since the Agreement had been signed on 24.06.2011, yet, the complainants knowing fully well that development at the site had not commenced till the end of year 2013, even then they purchased the said unit, and as such, at this stage, they cannot claim that they had suffered losses on account of delay, in handing over possession of the unit, in question. It was further stated that after the commencement of development work, the complainants were asked to make payments, towards the said unit, by sending demand notice, followed by several reminders but they failed to do so. Receipt of legal notice was admitted. It was further stated, that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
In the rejoinder filed, the complainants reiterated all the averments contained in the complaint, and repudiated those, contained in written version of the opposite parties.
The parties led evidence, in support of their case.
We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint or not. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act, 1986, is required to be made, which reads as under;
"3.Act not in derogation of any other law.--
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of arbitration Clause, in the Agreement, would not oust the Jurisdiction of this Commission, in view of the provisions of Section 3 of the Act. Similar principle of law, was laid down, in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi III (1996) CPJ 1 (SC) and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. III (2003) CPJ 9 (SC). Recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
In view of the above, and also in the face of ratio of judgments, referred to above, the arguments raised by the Counsel for the opposite parties, stands rejected.
The next question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain and decide the complaint, or not. According to Section 17 of the Act, a consumer complaint could be filed by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident, that almost all the payment receipts, placed on record, were issued by the Chandigarh Office of the opposite parties, as the same bore the address "SCO 6-7-8, Sector 9-D, Chandigarh". Not only this, it is further evident, that the Buyer's Agreement Annexure C-4 was executed between the allottee and the opposite parties, at Chandigarh (at page 64 of the file). Since, as per the documents, referred to above, a part of cause of action, arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
No doubt, to defeat the claim of the complainants, an objection was raised by the opposite parties, that this Commission has got no territorial Jurisdiction, to entertain and decide the complaint, in the face of Clause 36 of the Agreement, as the parties, by way of Agreement, excluded the jurisdiction of all other Courts, except at Panchkula. It may be stated here that, for determining the territorial jurisdiction, to entertain and decide the complaint, the Consumer Foras are bound by the provisions of Section 11 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors.-I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of jurisdiction, by way of an agreement, between the parties, could not be made applicable, to the consumer complaints, filed before the Consumer Foras, as the Foras are not the Courts. It was further held, in the said case, that there is a difference between Section 11 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. Further, in Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)=VII (2011) SLT 371, the principle of law, laid down was that the restriction of jurisdiction to a particular Court, need not be given any importance in the circumstances of the case. In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D. Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the jurisdiction of the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the jurisdiction of a particular Court/Forum, and limiting the jurisdiction of a particular Court/Forum, could not be given any importance and the complaint could be filed, at a place, where a part of cause of action arose, according to Section 11 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to the instant case. In these circumstances, such a Clause contained in the Agreement, therefore, could not exclude the jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to the complainants, to file the complaint. At the same time, it is also held in the face of case Ethiopian Airlines Vs Ganesh Narain Saboo's (supra), decided by the Supreme Court of India, the judgment titled as M/s Taneja Developers and Infrastructure Limited Vs. Gurpreet Singh and another, First Appeal No.33 of 2014, decided on 25.02.2016, by the National Commission, reliance whereupon has been placed by Counsel for the opposite parties, to support his contention, that this Commission has no territorial jurisdiction, shall not hold the field. The objection taken by the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
The next question that falls for consideration, is, as to whether, the complainants are speculators or not. No doubt, to defeat claim of the complainants, an objection was raised by the opposite parties, to the effect that the complainants, being investors, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, they would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainants are the property dealers and are indulged in sale and purchase of property, on regular basis. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., Consumer Complaint No.137 of 2010, decided on 12.02.2015, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavita Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the plot, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta , Revision Petition No. 3861 of 2014, decided on 26.08.2015.
No doubt, in support of his contentions, Counsel for the Opposite Parties placed reliance on M/s. TDI Infrastructure Pvt. Ltd. Vs. Rajesh Jain, Revision Petition No.1628 of 2015 decided by the National Commission on 01.12.2015; M/s. TDI Infrastructure Pvt. Ltd. Vs. Rajesh Jain, Revision Petition No.1627 of 2015 decided by the National Commission on 01.12.2015; Mehmooda Sheikh Vs. M/s Distinct Infrastructure Ltd. & 3 Ors., Revision Petition No.2962 of 2015 decided by National Commission on 14.3.2016 alongwith which, connected Revision Petitions Nos.2963 of 2015 to 2970 of 2015 were also decided. In so far as M/s. TDI Infrastructure Pvt. Ltd. Vs. Rajesh Jain's cases are concerned, the same being distinguishable on facts, are of no help to the Opposite Parties, as in these cases, the complainant was asked to show the present status of the property owned by him and what steps he was going to take to shift to Delhi but the story remained unclear despite explanations. The facts of Mehmooda Sheikh Vs. M/s Distinct Infrastructure Ltd. & 3 Ors's case (supra) are also distinguishable, as in that case, the complainants were allotted nine plots. The National Commission in Para 8 and 9 observed that had the intentions of the petitioners/complainants been fair, she/he would have purchased the same in his/her individual name that too 4 to 5 plots only. Thus, the facts of the cases, reliance whereupon has been placed by Counsel for the opposite parties, being completely different, from the facts of the present, case, no help therefrom, can be drawn by him. The complainants, thus, fall within the definition of 'consumer', as defined under Section 2(1)(d) of the Act.
The next question that falls for consideration, is, as to whether, since the complainants sought enforcement of the Agreement, in respect of the immovable property, only a Civil Court can decide the complaint, and as such, consumer complaint was not maintainable. It may be stated here, that the complainants hired the services of the opposite parties, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite parties, they were to deliver physical possession of the unit, within a maximum period of 30 months, as explained above, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.3. Section 2 (1) (o) of the Act, defines service as under:-
"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service"
From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC), the National Commission, it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of consumer, as stated above. In this view of the matter, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
The next question, that falls for consideration, is, as to within which period, possession of the unit, in question, was to be delivered to the complainants. As stated above, according to Clause 11.1 of the Agreement dated 24.06.2011, subject to force majeure conditions/reasons, beyond the control of the opposite parties, they were to deliver physical possession of the unit, within a period of 30 months i.e. 24 months plus (+) 6 months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.3 i.e. latest by 23.12.2013. It is also evident, from the combined reading of Clauses 11.1, 11.2 and 11.3 of the Agreement that possession was to be delivered within maximum period of 42 months of the execution thereof. Period of 42 months expired on 23.12.2014. Thus, the complainants became entitled to opt for termination of the allotment/Agreement, and seek refund of the actual paid up installments made against the unit, in question.
Admittedly, possession of the unit, in question, has not been delivered by the opposite parties to the complainants till the date, the instant complaint was filed or even till date. In the written version, the opposite parties, frankly admitted, that possession of the unit, in question, could not be offered to the complainants, for want of construction and development work at the site, on account of the reasons beyond their control i.e. on account of force majeure circumstances. In this regard, it was submitted that the opposite parties had already obtained licence No.28 of 2010 Annexure OP-9, from the Haryana Government, Town and Country Planning, on 23.03.2010, to launch the project, in question, in 169.864 acres of land, yet, despite that, various new/fresh conditions/objections were imposed/raised by the Competent Authorities.
The force majeure circumstances, which have been claimed by the opposite parties, for not starting development and construction work at the site till April 2015 are:-
Firstly, fresh condition, vide letter dated 16.03.2011, was imposed by the Directorate of Town & Country Planning, (DTCP) Haryana, to obtain NOC from the Irrigation Department, before starting the construction work. However, when the opposite parties applied to the Irrigation Department, for the said NOC, instead of acceding to their request, another fresh condition was imposed upon them, to get the project hydraulically studied, from a premier institute, and finally, after doing the needful, NOC was granted only on 20.03.2013 i.e. after delay of about two years.
Secondly, licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was not cleared by the Department concerned, as the area was situated in a squatted small pockets, and also on ground of non-grant of NOC aforesaid, by the Irrigation Department.
Thirdly, in the meantime, the Hon'ble Supreme Court of India, in the case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, granted stay and issued directions to the State of Haryana and its functionaries, not to undertake any further construction on the land, in question. The said stay order was vacated on 12.12.2012.
Fourthly, while requisite permission and approvals were simultaneously being sought from the State Level Environment Impact Assessment Authority, Haryana, vide application dated 18.04.2012, for developing land measuring 169.864 acres and LOI for 18.343 acres and 10.594 acres land, the Environment Authorities, vide letter dated 12.06.2012, raised objection that the opposite parties did not possess the licence for entire land, which was finally considered by it (Environment Department) and eventually clearance was granted on 15.04.2014, subject to additional condition, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015.
Fifthly, after execution of the Agreement, road circulation plan of the Sector, where the project is situated, was changed on 22.11.2011, as a result whereof, the layout plans have to be got revised.
First coming to the plea taken by the opposite parties, to the effect that delay aforesaid occurred on account of fresh condition, imposed by the Directorate of Town & Country Planning, (DTCP) Haryana, vide letter dated 16.03.2011, to obtain NOC from the Irrigation Department, before starting the construction work. It may be stated here that bare perusal of letter dated 16.03.2011 Annexure OP-27 (at page 203 of the file), clearly goes to reveal that it was not a fresh condition imposed by the DTCP, Haryana, but, on the other hand, it was a violation on the part of the opposite parties, pointed out by the said Department, in not obtaining NOC from the Irrigation Department, which was a mandatory requirement, before undertaking construction activities at the site. As such, vide letter dated 16.03.2011, Annexure OP-27, the opposite parties were directed to obtain the same, before carrying out any earthwork or construction work of any kind, at the site. However, it is also an admitted case that the opposite parties applied to the Irrigation Department for issuance of NOC, vide letter dated 23.02.2012, Annexure OP-12, without getting their project hydraulically studied, as a result whereof, their request was rejected, and after getting the needful done, NOC was finally granted on 20.03.2013, Annexure OP-29. The opposite parties cannot say that obtaining of NOC from the Irrigation Department and also getting their project hydraulically studied from some premier Institute, were new/fresh conditions imposed by the Authorities, as a result whereof, the delay aforesaid, occurred. Had these been the new/fresh conditions imposed by the Government Authorities, then it has not been clarified by the opposite parties, as to how and why, the project of DLF, which is adjacent to the project, in dispute, had obtained the said NOC after adopting due procedure, reliance whereupon had been placed by them (opposite parties), in letter dated 23.02.2012 Annexure OP-12 (at page 186 of the file), written to the Irrigation Department. The delay, therefore, is attributable to the opposite parties, as they failed to adopt proper procedure timely, for getting NOC from the Irrigation Department, at the appropriate time, as had been done by the DLF. No help therefore, can be drawn by Counsel for the opposite parties, on this count.
The second plea taken by the opposite parties, to the effect that licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was not cleared by the Department, as the area was situated in a squatted small pockets, and also on ground of non-grant of NOC aforesaid, by the Irrigation Department, is bereft of merits, in view of the findings, given by this Commission, in para no.25 above, wherein, it was held that fault, if any, was attributable on the part of the opposite parties, in not obtaining NOC, after adopting due procedure at the appropriate time. Infact, the complainants were given to understand that the opposite parties were to develop a residential colony on certain pieces of land admeasuring 169.864 acres. While Licence for 169.864 acres was granted on 23.03.2010, Annexure OP-9, Letter of Intent (LOI) for land measuring 18.343 acres, which was in addition to 169.864 acres, was issued on 31.12.2010, as is evident from Annexure OP-11 and approval of layout plans were granted only on 02.08.2013.
So far as third plea taken by the opposite parties, regarding grant of stay by the Hon'ble Supreme Court of India, in a case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, is concerned, it may be stated here that admittedly, the said stay was granted on 19.04.2012 and was vacated on 12.12.2012. Otherwise also, the said stay was not specific to the opposite parties. Directions were issued to the Government only, not to undertake construction on the land in question. At the maximum taking a stay order, as an order to the opposite parties/builder(s) also, benefit of only about 08 months period (stay granted on 19.04.2012 and vacated on 12.12.2012) can be given and not beyond that. Even if there was no stay, the opposite parties in absence of approvals/clearances were not in a position to start development. This plea too, taken by the opposite parties, in support of their contentions, has no legs to stand and is rejected out rightly.
Coming to the fourth plea taken by the opposite parties, that while giving approval vide letter dated 15.04.2015, by the Environment Department, for developing a land measuring 169.864 acres and LOI of 18.343 and 10.594 acres, the Authorities, vide letter dated 12.06.2012, had imposed an additional condition, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015, resulting into delay of project, it may be stated here that perusal of contents of Licence No.28 of 2010 Annexure OP-9, issued by the Haryana Government, in respect of the project, in question, clearly goes to show that the same was issued subject to following conditions mentioned therein, out of which at sr. no. (h), in a very a clear-cut manner, directions were given to the opposite parties, that they shall obtain approval/NOC from the Competent Authorities, to fulfill the requirements of notification no.195 of 19.01.2009, issued by the Ministry of Environment and Forests, Govt. of India, before starting the development works in the colony. Not only this, at sr.no.i), it was also made clear to the opposite parties, to seek approval from the Competent Authority, under the Punjab Land Preservation Act, 1990, or any other statute applicable at site, before starting the development works, if required. Thus, reading of the said conditions makes it very clear that licence was granted to the opposite parties, for launching the said project, subject to the conditions that they were to obtain prior approvals/sanctions from all the Departments concerned including the National Board of Wild Life (NBWL), but they miserably failed to do so.
Not only this, it is very significant to mention here that perusal of contents of letter dated 12.06.2012 Annexure OP-19, reliance whereupon has been placed by the opposite parties, to say that delay aforesaid occurred also on the ground that fresh condition was imposed by the Environment Authorities, clearly goes to reveal that, there is nothing sort of that, but, on the other hand, vide the said letter, it was intimated to the opposite parties by the Secretary State Expert Appraisal Committee, Haryana, that since the project proponent (opposite parties) did not possess licence of the area for which it had submitted application for Environment Clearance and also that it (project proponent) had not supplied the land details and collaboration/development agreement with the licence holders, approved layout plan and area statement of each licence holder, duly signed by the DTCP, as such, clearance in that regard cannot be given. Thus, it was not a fresh condition imposed by the Authorities concerned, but were the shortcomings observed by the said Committee, on the part of the opposite parties, which were required to be fulfilled before issuance of the Environment Clearance. No help therefore, can be drawn by the opposite parties, on this count too.
As far as the plea taken by the opposite parties, regarding delay in sanction of final lay-out plans by the Competent Authorities, is concerned, it may be stated here the same also does not merit acceptance. It was the bounden duty of the opposite parties to get approved the final layout plans, in respect of the project, in question before launching it, and only, thereafter, accept booking amount from the customers. The complainants including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite parties chose to accept booking, on the basis of provisional sanction of the layout plan, without obtaining all necessary approvals and clearances from the Competent Authorities, they are to be blamed themselves, for the delay, and not the purchasers of units. The documents placed on record, are sufficient to prove that there was lapse on the part of the opposite parties, themselves. Had all the permissions been taken by the opposite parties well in advance, revision of layout plans, at a later stage, and delay could have been easily avoided. The purchaser(s) of a plot, cannot be penalized, by postponing the possession or registration of the unit. Similar view was taken by the National Commission in a case titled as M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17th Dec 2015. As such, the plea raised by the opposite parties, in this regard, also stands rejected.
It is also very significant to mention here that the licence was granted to the opposite parties, to launch the project, in question, subject to obtaining all the necessary approvals/ sanctions from the Competent Authorities. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken, in getting such permissions, could have been contemplated by the builder, before issuing the brochure/executing agreement. As such, it was the bounden duty of the opposite parties, to obtain the requisite permissions or sanctions, referred to above, in the first instance, and, thereafter, recover/accept the consideration money from the purchaser of the flats/plots, but they failed to do so. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/sanctions/licence to allot plot or to construct building/apartments, invites offers and collects money from the buyers. Sequence of events, referred to above, clearly goes to prove that the opposite parties, were clearly deficient in rendering service and indulged into unfair trade practice. If the possession of plot, as also the construction of the building/apartment is delayed, because of the reasons referred to above, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances. In Kamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC), a similar plea regarding non-grant of various sanctions, approvals and certificates in respect of the DLF project, by the Government concerned, resulting into delay in delivery of possession of the unit, was raised by the Builder. However, the National Commission in that case, while brushing aside the said plea of the builder, observed and held as under:-
"The main questions which require consideration in the appeal are--
(i) Can a builder give alluring advertisement promising delivery of possession of the constructed building/flat to the purchaser/ consumer within the stipulated time, and, subsequently, on his failure, turn around and contend that as governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan, were not given, the delay in construction should not be the ground for grant of compensation to the consumer? And,
(ii) Secondly, whether the consumer should suffer by paying escalation cost due to such delay?
2. In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.
3. Secondly, in such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so, escalation cost is required to be borne by the builder."
The principle of law, laid down in the aforesaid case, is fully applicable to be present case. In this view of the matter, the plea of the opposite parties, to this effect, also stands rejected. The pleas taken by the opposite parties, claiming force majeure circumstances, referred to above, also deserve rejection, in the face of case titled as Ramesh Chander and another Vs. M/s IREO Fiveriver Private Limited, CC No.99 of 2014, decided on 29.04.2015, qua this very project, decided by the State Commission, Haryana, Panchkula. In that case also, almost similar excuses were given by the opposite party, for not starting development at the site and non-delivery of possession of the unit, to the purchasers, which were rejected by the State Commission, Haryana, Panchkula, by observing as under:-
"It is not disputed that the builder floated the project and they were bound to obtain all the permissions before they invite applications from public. The builder cannot raise plea that for want of certain clearances, the possession of the plot could not be delivered. When the builder invited the applications and collected huge amount from the public, they cannot delay the allotment/possession of the plot for awaiting clearances. Thus, delay/breach, if any, was on the part of the builder. The builder has not even remotely alleged any default on the part of the complainants"
First Appeal No.473 of 2015 filed against that order by the opposite party before the National Commission, New Delhi, was got dismissed as withdrawn, vide order dated 22.07.2015.
Even otherwise, there is nothing on record, to show that at any stage, when the project was going to be delayed, difficulties now propagated were brought to the notice of the purchasers. On the other hand, without obtaining necessary approvals/sanctions from the Competent Authorities, which were mandatory to be obtained, as mentioned in the Licence dated 2010, referred to above, the opposite parties, with a view to grab money from the gullible customers, including the complainants, gave misleading information in the Agreement dated 24.06.2011, at Clause 'A' stating that "The Company is well and sufficiently entitled to develop a residential colony on certain pieces of land admeasuring 169.864 acres". Whereas, admittedly, development work at the site could not be undertaken by the opposite parties till April 2015, on account of the reasons that they failed to obtain mandatory permissions/sanctions from the Competent Authorities. In the present case, deficiency in providing service and adoption of unfair trade practices on the part of the opposite parties, was writ large, which fact has been proved on record, as has been discussed above, in detail, while referring the related documents. Thus, it has been proved on record, that the matter was not effectively taken up by the opposite parties, with the Government Authorities, to expedite the sanctions etc., so that construction/development at the project could be started. The opposite parties, thus, hurriedly sold units, in their project to the complainants and other allottees and have utilized the money of complainants for years. Perusal of written statement filed by the opposite parties, clearly goes to reveal that the opposite parties, have tried to shift their fault of delay aforesaid, on the shoulders of the Competent Authorities, by saying that there was delay on their part, in not giving timely permissions/ sanctions/NOCs and also that new/fresh conditions were imposed by them, at later stage. The opposite parties cannot wriggle out of their liability, on the grounds indicated above, which have not been proved. It is therefore held that by not starting the development and construction work at the site and also by not handing over possession of the unit, to the complainants by the stipulated date, mentioned in the Agreement, and even as on today, there was a material violation, on the part of the opposite parties, for which, they are required to be put at naught.
The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.23,17,250/- deposited by them. It is an admitted fact and has also been held above by this Commission, that the opposite parties have not been able to deliver possession of the unit, in question, for want of complete development, construction and basic amenities, without existence of any force majeure circumstances. Even as on today, firm date of delivery of possession of the unit, in question, could not be given to the complainants. The complainants, cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. However, on account of act and conduct of the opposite parties, hopes of the complainants to have their own house, were shattered. The opposite parties have failed to perform their part of the Agreement. The act in not handing over possession in time, as per the Agreement, is a material deficiency, in providing service on the part of the opposite parties. It was clearly stated by the National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), that when the promoter/builder violates material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. In the instant case also, as stated above, possession of the unit has not been offered till date. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are, thus, entitled to get refund of amount deposited by them. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.
Whether the complainants are entitled to interest on the amount deposited alongwith interest, if so, at what rate? It is an admitted fact that an amount of Rs.23,17,250/- was paid by the complainants, to the opposite parties. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest @15% p.a. as per Clause 7.2 of the Agreement, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court) , (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). The complainants have made a prayer for refund of the amount deposited, alongwith interest @18% p.a., till realization. In our considered view, the request made for, by the complainants, @18% p.a. is on the higher side. If interest @13% p.a., on an amount of Rs.23,17,250/- from the respective dates of deposits, till realization, is granted, that will meet the ends of justice. (Above rate of interest is less than the rate of interest charged by the Opposite Parties for delayed payment i.e. 15% P.A.).
No doubt, the Counsel for the complainants submitted that the complainants are also entitled to compensation @Rs.50/- per square yard, for the period of delay in delivery of possession of the unit. It may be stated here that it has been held above that the complainants cannot be made to wait for an indefinite period, for delivery of possession of the unit, at the whims and fancies of the opposite parties, as such, they are entitled to the refund of amount deposited alongwith interest and compensation. Had the complainants sought possession of the unit, in question, the matter would have been different. In those circumstances, it would have been held that the complainants are entitled to penalty/ compensation, for the period of delay, besides delivery of possession; compensation for mental agony and physical harassment, as also litigation expenses. In this view of the matter, the contention of the Counsel for the complainants, in this regard, being devoid of merit, must fail, and the same stands rejected.
No other point, was urged, by the Counsel for the parties.
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-
To refund an amount Rs.23,17,250/- to the complainants, alongwith interest @ 13% P.A., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.
To pay cost of litigation, to the tune of Rs.50,000/- to the complainants.
The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite parties, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, they shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @15% p.a. instead of interest @13% p.a. from the respective dates of deposits onwards, and interest @15% p.a, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
However, it is made clear that, in case, the complainants have availed loan facility from any financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
Certified copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
30.06.2016 Sd/-
(DEV RAJ) PRESIDING MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.