State Consumer Disputes Redressal Commission
Silver City Housing & Infrastructure ... vs Sonal Khurana on 13 March, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Appeal Case
No.
:
358 of 2011
Date of Institution
:
22.12.2011
Date of Decision
:
13.03.2012
Silver City Housing & Infrastructure Ltd., H.No.89,
Sector 8-A, Chandigarh
through its Managing Director.
Appellant
V E R S U S
Sonal Khurana son of Sh. J.C.Khurana, resident of House
No.36/1B, Ram Nagar, Behind DAV College,
Ambala City.
....Respondent.
Appeal U/s 15 of Consumer Protection
Act, 1986
BEFORE: JUSTICE
SHAM SUNDER, PRESIDENT.
MRS. NEENA SANDHU,
MEMBER.
Present: Sh.Sandeep Bhardwaj, Advocate for the appellant Sh.Ram Kuamr Singla, Advocate for the respondent.
PER JUSTICE SHAM SUNDER, PRESIDENT This appeal is directed against the order dated 11.11.2011, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only), vide which it accepted the complaint, and directed the Opposite Party (now appellant) to refund the amount of Rs.13,80,000/- to the complainant (now respondent) alongwith interest @ 18% p.a., from the respective dates of deposit, till realization, alongwith Rs.15,000/- as costs of litigation, within one month, from the date of receipt of a certified copy.
2. The facts, in brief, are that the complainant booked one flat bearing No.235-D(4th floor) at Village Bhankarpur, M.C.Dera Bassi, District Mohali in Category A-2, Block A-1 with car parking (having super covered area of 1641.54 sq. ft. approx.) , for a total sum of Rs.18.40 lacs, vide agreement dated 27.01.2006. The complainant deposited 75% of the total price i.e. Rs.13.80 lacs, with the Opposite Party, within a span of about 11 months, after getting the flat financed from HDFC Bank. The possession of the flat was assured, to be handed over to the complainant, within two years, from the date of agreement. It was stated that when no demand was raised by the Opposite Party for 4th installment, the complainant after waiting for a sufficiently long time, visited the site, and was surprised to see that no construction work was going on, at the spot.
The complainant was told that, due to some mismanagement, and shortage of labour, the construction work was not going on, and the same would be completed shortly. It was further stated that despite receiving the substantial amount from the complainant, the Opposite Party, failed to complete the construction, as per the terms and conditions of the agreement. After waiting for a sufficiently long time, ultimately, the complainant served a legal notice dated 12.2.2011 upon the opposite party, asking for the refund of entire deposited amount alongwith interest, but to no avail. It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, he filed a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only).
3. The Opposite Party, in its written version, stated that the complainant was allotted apartment No.235D,4th Floor, Cat.A-2, Block-A-I and an agreement, to this effect, was executed between the parties on 27.01.2006. It was further stated that the construction work could not be completed, in time, because of the stay Order, passed by the Honble High Court, on 30.1.2007, in Civil Writ Petition No.18632 of 2005, titled as Dharam Chand and another Vs. State of Punjab and others. It was further stated that, the said stay, was later on, vacated by the Honble High Court, vide order dated 1.5.2008. It was further stated that thereafter, the Punjab Pollution Control Board, vide letter No.MHL/NOC/2008/F-83 dated 19.09.2008, issued No Objection Certificate. It was further stated that, thereafter, the construction work of the project was started.
It was further stated that the construction activity, was in full swing, at the site. It was further stated that the construction work could not be completed, on account of the circumstances, beyond the control of the Opposite Party, and, as such, it was entitled to extension of time, according to Clause 23 of the agreement, aforesaid. It was, however, admitted that the first, second and third installments amounting to Rs.13.80 lacs, towards the part price of apartment, were paid by the complainant. It was further stated that, since the complainant, stopped making payment of the remaining installments, after November,2006, and, as such, he was not entitled to the refund of amount and compensation, as he failed to adhere to the payment schedule. It was further stated that the possession shall be delivered to the complainant, as per the terms and conditions of the agreement. It was further stated that the complainant, did not fall within the definition of consumer, as he agreed to purchase the apartment, in question, for commercial purpose. It was further stated that, as the complainant, did not approach the District Forum, with cleans hands, he was liable to be thrown out, at the threshold, on this ground alone, but it (District Forum) failed to do so. It was further stated that, according to the arbitration clause, contained in the agreement aforesaid, in case of dispute, between the parties, the matter could be referred to the Arbitration.
He further submitted that, as such, the District Forum had no jurisdiction to entertain and decide the complaint. It was further stated, that neither there was any deficiency, in rendering service, on the part of the opposite party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
4. The parties led evidence, in support of their case.
5. After hearing the Counsel for the parties, and, on going through the evidence and record, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order.
6. The Counsel for the appellant, at the very outset, submitted that the apartment, in question, was agreed to be purchased, by the complainant, with a view to get handsome returns and generate profits, and, as such, he did not fall within the definition of a consumer. The submission of the Counsel for the appellant, in this regard, does not appear to be correct. In para no.3 of the complaint, the complainant stated that he was in need of his own accommodation nearby Chandigarh, so he booked the flat, in question, for his residence. In para no.11of the complaint, the complainant also stated, that he raised loan from HDFC Bank for taking the accommodation to avoid rent, on the assurance of the Opposite Party, that the same was a time bound project, but it failed to fulfill the terms and conditions of the agreement dated 27.1.2006. From these averments, made, in the complaint, it could not be said that the apartment agreed to be purchased, by the complainant, was for commercial purpose, with a view to generate profits. The complainant is not a property dealer. There is no evidence, on record, that he agreed to purchase the apartment, for the sale thereof, to earn profits. There is also, no evidence, on record, that the complainant intended to run some commercial activity, in the apartment, with a view to earn profits. The complainant, in our opinion, agreed to purchase the apartment, for the purpose of his own residence, or with an intention to provide residence, to his children. If an apartment is agreed to be purchased by the complainant, for his own residence, or with an intention to provide accommodation for residence, to his wards, it could not be said that such an activity, falls within the definition of a commercial activity. Admittedly, it was a housing project, in which the complainant, agreed to purchase an apartment. If a person agrees to purchase an apartment, in a residential project, the only inference, which can be drawn, is that, it is for the purpose of his residence, or residence of his parents or wards. The complainant, therefore, fell within the definition of a consumer. The submission of the Counsel for the appellant, being devoid of merit, must fail, and the same stands rejected.
7. It was next submitted the Counsel for the appellant, that the Consumer Fora, U.T., Chandigarh, had no territorial jurisdiction, to entertain and decide the complaint. He further submitted that the property, in question, is situated at Dera Bassi, District SAS Nagar (Mohali), Punjab. It may be stated here, that in para No.23 of the complaint, it was in clear-cut terms, mentioned by the complainant, that the Office of the opposite party, was at Chandigarh.
It was further stated, in this paragraph, by the complainant, that the agreement between the parties was also signed at Chandigarh. The complainant, in his evidence, by way of affidavit, also testified, in this regard. No doubt, in reply to para No.23 of the complaint, it was stated by the opposite party, that the averments, contained in this para, were wrong and denied. No evidence, in this regard, was produced by the opposite party. A copy of ledger account, for the period from 1.4.1998 to 31.3.2011 showing payment made by Sonal Khurana complainant is at pages 47 & 48 of the District Forum file. In this document, the address of the office of the Opposite Party is mentioned as House No.89, Sector-8A, Chandigarh. Further on the letters R2,R3,R4 and R6 written to the complainant, by the Opposite party, its Registered Office is stated to be at House No.89, Sector-8A, Chandigarh. Since, the installments towards part price of the apartment, were paid at Chandigarh and the Registered Office of the opposite party, is at Chandigarh, cause of action to file the complaint arose at Chandigarh.
The District Fora, U.T., Chandigarh, thus, had the territorial Jurisdiction, to entertain and decide the complaint. The submission of the Counsel for the appellant, in this regard, being devoid of merit, is rejected.
8. It was next submitted by the Counsel for the appellant, that since the complainant, stopped making payment of the remaining installments, after November,2006, towards the price of apartment, he committed breach of the terms and conditions of the agreement dated 27.1.2006, and, thus, he was not entitled to the refund of amount, with interest. Agreement dated 27.01.2006, a copy of which is placed at page 41 of the District Forum file, was executed, between the parties. The total price of the apartment was Rs.17,20,000/-, and cost of the car parking area was Rs.50,000/-. Out of Rs.17,70,000/-, the complainant, deposited Rs.13,80,000/- i.e. more than 75% of the price. It means that substantial amount was deposited, by the complainant, out of the sale consideration of apartment. He stopped making further payment of installments, when he found that there was no progress, in construction, at the spot. According to the agreement dated 27.01.2006, 5th installment of 5%, was to be paid on 31.07.2007, when the possession of apartment was to be delivered to the complainant. By 31.07.2007, not even a brick had been laid, at the spot, what to speak of raising construction. The opposite party did not adhere to the time schedule. Even till the institution of the complaint, on 15.3.2011, no progress, in the construction of the project, had been achieved. Under these circumstances, it is to be determined, as to whether, the complainant, was liable to make payment of further installments. In our considered opinion, since there was no progress, in construction, at the site, the complainant was not liable, to make payment of further installments. In Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), no development work was carried out, at the site. Thus, the payment of further installments, was stopped by the complainant. It was, under these circumstances, held that the builder could not be allowed to take shelter, under the agreement clause, to usurp the money, deposited by the complainant. It was further held that the builder cannot forfeit the entire money, paid by the complainant, on account of his own fault, in not carrying out the development work. Ultimately, the Honble National Commission, ordered the refund of amount with interest. The principle of law, laid down in Prasad Homes Private Limited`s case (supra), is fully applicable to the facts of the instant case. Under these circumstances, it could not be said that the complainant was at fault. On the other hand, the opposite party, was at fault, in not raising the construction. The complainant, could not wait indefinitely, just at the whims and fancies of the builder. Neither the complainant has been handed over possession of apartment, even after the lapse of more than 5 years of the execution of agreement, nor the refund of amount was made to him. The complainant was, thus, entitled to the refund of amount. The District Forum, was right, in holding so. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected.
9. It was next submitted by the Counsel for the appellant, that the construction could not be undertaken, due the circumstances, beyond the control of the opposite party. He took shelter under Clause 23 of the agreement dated 27.1.2006, in support of his contention, which reads as under:-
The allottees agree that sale of Apartment/dwelling unit is subject of force majeure clause which interalia include delays on account of non availability of steel and/or other building materials, or water supply or electric power or slow down strike or due to a dispute with construction agency employed by the company/promoter civil commotion, militant action or by reasons beyond the control of the company/promoter and in any of the aforesaid events the company/promoter shall be entitled to a reasonable corresponding extension of the time of the delivery of possession of the said Apartment/dwelling unit on account of force majeure circumstances. The company/promoter as a result of such contingency arising reserves the right to alter or vary the term and conditions of allotment or if the circumstances beyond the control of the company/promoter so warrant the company/promoter may suspend the scheme for such period as it may consider expedient and no compensation of any nature whatever can be claimed by the allottee for the period of delay/suspension of scheme. Inconsequence of the company/promoter abandoning the scheme the company/promoter liability shall be limited to the refund of the amount paid by the allottee without any interest or compensation whatsoever.
10. The High Court of Punjab & Haryana in Civil Writ Petition No.18632 of 2005 titled as Dharam Chand and another Vs. State of Punjab and others, vide order dated 30.01.2007, stayed the operation of the letter dated 17.01.2006 (Annexure R-11), vide which the Punjab Pollution Control Board laid down the guidelines for setting up colonies by the Promoters. Vide order dated 01.05.2008 Annexure R-15, the order dated 30.01.2007, was vacated. There is nothing, on record, that from 27.01.2006, when this agreement, was executed, between the parties, upto 29.01.2007, no objection was obtained, from the Punjab Pollution Control Board, and the construction activity, was undertaken, by the opposite party, though there was no stay, during this period. The stay, as stated above, was vacated on 01.05.2008. There is also, no document, on record, to show that from 02.05.2008, until the filing of complaint, any construction was carried out, by the opposite party, at the site. Even if, the period of stay aforesaid, is excluded, the opposite party, was required to undertake construction of the project, before the stay was granted, and after the same was vacated. When there was no progress, in construction, even after the vacation of stay, left with no alternative, the complainants had to ask for the refund of amount. The circumstances, before 30.01.2007 and after 01.05.2008, were not beyond the control of the opposite party, as a result whereof, the construction activity could not be undertaken.
Even the permission for raising construction, vide letter dated 03.01.2006 Annexure R-9, by Nagar Council Dera Bassi, Patiala, was granted subject to fulfillment of certain conditions. It is not known, as to whether, those conditions were fulfilled by the opposite party, or not. Annexure R-16 dated 19.09.2008 is the No Objection Certificate which was granted by the Punjab Pollution Control Board, Patiala.
Even in Annexure R-4 dated 7.12.2009, addressed to the complainant, it was stated that the possession would be delivered, in the last quarter of 2010 and the complainant was asked to visit the site to see the sample flat. As stated above, the complaint was filed on 15.3.2011 and by that time, the possession of apartment, had not been delivered to the complainant. It is evident from annexure R-13 dated 02.04.2007, that No Objection Certificate from Pollution angle, was refused to the opposite party. It was clearly mentioned, in this document, that on 22.02.2007, at the time of site visit, it was found that the construction was started by the Promoter, without obtaining the no objection certificate. It means that, at the time, the agreement, dated 27.01.2006, was executed, between the parties, No Objection Certificate from the Punjab Pollution Control Board had not been obtained by the opposite party. In Kamal Sood Vs. DLF Universal Ltd. reported as III(2007) CPJ-7 (NC), it was held that a builder should not 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 purchasers of the flats/building. The ratio of law, laid down, in the aforesaid case, is squarely applicable, to the facts and circumstances of the instant case. As stated above, from 27.01.2006, when the agreement, was executed, between the parties, upto 29.01.2007, and from 02.05.2008 onwards, there was no legal hitch, in the way of the opposite party, to raise construction. The opposite party, therefore, could not take shelter under the force majeure Clause 23 of the agreement. Under these circumstances, it could not be said, that the construction activity could not be undertaken, wholly, on account of the circumstances, beyond the control of the opposite party. The District Forum, was right, in holding that refusal, on the part of the opposite party, to refund the amount, amounted to deficiency in service. The District Forum was also right, in holding that the opposite party, by not obtaining No Objection Certificate from the Punjab Pollution Control Board, Patiala, before collecting money, from the complainant, and the other prospective buyers, indulged into unfair trade practice. The findings of the District Forum, in this regard, being correct, are affirmed.
11. The next question, that arises for consideration, is, as to whether, for the period, during which the stay order granted, by the Punjab & Haryana High Court, was operative, and the construction activity could not be undertaken, interest could be granted to the complainant, or not. Since, the Honble High Court, granted stay of operation of Annexure R-11 dated 17.01.2006, on 30.01.2007, and vacated the same on 01.05.2008, no liability of interest, could be fastened upon the opposite party, for that period. It was, on account of the circumstances, beyond the control of the opposite party, to raise construction, during this period. Under these circumstances, it is held that the complainant, shall only be entitled to interest from the respective dates of deposits, upto 29.01.2007 and then from 02.05.2008, till the realization of amount. The order of the District Forum, deserves to be modified to this extent.
12. It was next submitted by the Counsel for the appellant that interest granted by the District Forum @ 18% p.a., is unfair, unjust and arbitrary. In our opinion, the interest granted by the District Forum @ 18% p.a., is on the higher side. The interest, if reduced to 9% P.A, could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification.
13. Coming to the submission of the Counsel for the appellant , that since the remedy for settlement of disputes, by way of arbitration, has been provided as per Clause 30 of the agreement aforesaid, executed between the parties, the jurisdiction of the District Forum was barred, it may be stated here, that the same does not merit acceptance. 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 fact that the remedy of arbitration, has been provided, in the agreement dated 27.1.2006, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law, was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for the appellant, being devoid of merit, must fail, and same stands rejected.
14. For the reasons, recorded above, the appeal is partly accepted, with costs quantified at Rs.5000/-, and the impugned order is modified, in the following manner:-
i) The Appellant/Opposite Party, is directed to refund the amount of Rs.13,80,000/-,to the complainant, alongwith interest @ 9% per annum (instead of 18% P.A. granted by the District Forum), from the respective dates of deposits, till realization (excluding the period, from 30.01.2007 to 01.05.2008, during which, the stay granted by the Punjab & Haryana High Court remained operative).
ii) The other directions given, and reliefs granted, by the District Forum, subject to the aforesaid modification, shall remain unaltered.
15. Certified Copies of this order be sent to the parties, free of charge.
16. The file be consigned to the Record Room, after completion Pronounced.
March 13, 2012 sd/-
[JUSTICE SHAM SUNDER] PRESIDENT Sd/-
[NEENA SANDHU] MEMBER Js STATE COMMISSION (Appeal No.358 of 2011) Argued by: Sh.Sandeep Bhardwaj, Advocate for the appellant Sh.Ram Kumar Singla, Advocate for the respondent.
Dated the 6th day of March, 2011 ORDER In the Agreement dated 27.1.2006, the name of the person who was allotted apartment is written Mrs.Sonal Khurana W/o Sh.J.C.Khurana, whereas, in the heading of the complaint, as also in the heading of the appeal, name of the person, who was allotted apartment, is written Sonal Khurana Son of Sh.J.C.Khurana.
The Counsel for the parties have submitted that, on account of typographical mistake in the Agreement dated 27.1.2006, the name of the allottee was written as Mrs.Sonal Khurana wife of Sh.J.C.Khuraa. He further submitted that actually the name of the allottee is Sonal Khurana son of Sh.J.C.Khurana, which was correctly mentioned, in the heading of the complaint, as also in the heading of the appeal and it be read as such.
Arguments heard.
Reserved for orders.
Neena Sandhu Justice Sham Sunder Member President