State Consumer Disputes Redressal Commission
Rabinder Singh vs Atm Estates Pvt. Ltd. on 10 October, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.354 of 2016
Date of institution : 09.11.2016
Reserved On : 25.09.2017
Date of decision : 10.10.2017
Rabinder Singh S/o Sh. Shamsher Singh, Resident of Old 1789,
Chowk Manna Singh, Amritsar and now residing at 2225, Street No.6,
Bagh Ramanand, Amritsar.
....Complainant
Versus
1. ATM Estates Private Limited, having its Registered Office at 2nd
Floor, 8/33, WEA, Karol Bagh, New Delhi-110005, through its
Managing Director/Manager/Concerned Official.
2. ATM Estates Pvt. Ltd., having its Local Office at Shubham
Enclave, NH-1, GT Road, Daburji, Amritsar, through its
M.D./Manager/Concerned Officer.
....Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member.
Present:-
For the complainant : Sh. K.P. Singh, Advocate For the opposite parties: Sh. Kuldip Sonkar, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT :
Facts of the Complaint The complainant has filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short, "the Act"), against the opposite parties, seeking following directions to them: Consumer Complaint No.354 of 2016 2
i) to refund the amount deposited by the complainant with the opposite parties i.e. ₹32,00,726/-, along with interest at the rate of 18% per annum from the dates of deposits till realization;
ii) to pay ₹15.00 Lacs, as compensation for the mental agony and harassment suffered by the complainant; and
iii) to pay ₹1.00 Lac, as litigation expenses.
Brief facts, as set out in the complaint, are that the opposite parties are builders, colonizers and developers, who had planned to set up a residential complex; comprising of penthouses, independent floors, group housing, known as "Amritsar One". The complainant contacted them for purchasing residential unit in the said project and both the parties agreed to sell/purchase one residential unit No.H-402, Fourth Floor, measuring 1650 sq.ft. of super built area of 3 bedroom in the said project. The complainant paid the booking amount of ₹3,38,498/- to them, vide cheque dated 24.05.2011. As per the payment plan, the complainant was required to pay ₹32,00,726/- till 20.09.2012, against the total price of the said unit, i.e. ₹33,00,000/-, and the balance amount was to be paid at the time of possession. The complainant paid that amount, without any delay, by February, 2012. At the time of executing the agreement, the opposite parties assured the complainant that the possession of the flat would be delivered after 24 months from the date of booking i.e. after completion of construction. However, despite the making of regular payment of instalments by the complainant, the opposite parties failed to offer/deliver the possession till the date of filing of the complaint. The agreement contains a penalty Consumer Complaint No.354 of 2016 3 clause, as per which a penalty of ₹5/- per sq.ft. per month is payable by the opposite parties, in case of their failure to deliver the possession within the stipulated period. The complainant wrote letter dated 18.04.2014 to the opposite parties, stating that they had not offered any possession and even the construction of the units was still incomplete, but to no effect. Rather, the opposite parties offered another unit No.5-C at the rate of ₹2,250/- per sq.ft. in Block K1 and K2, vide letter dated 08.05.2014, assuring to give possession by Diwali, 2014. The complainant kept on waiting and ultimately he received letter dated 30.04.2016 from the opposite parties, in which it was mentioned that they were initiating documentation with Municipal Bodies and relevant authorities, so that they could offer possession within next six months. However, neither they offered any possession to the complainant, nor refunded his amount lying deposited with them. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, which caused mental agony and harassment to him. Hence, this complaint.
Defence of the Opposite Parties
2. Upon notice, opposite parties No.1 & 2 appeared and filed reply to the complaint, in which they raised preliminary objections that the complainant has not come to this Commission with clean hands and has suppressed material facts. This Commission has no jurisdiction to adjudicate and try this complaint, as the complainant is not a 'consumer', as per the Act, because he purchased the flat, in question, for making investment and earning profit. The present Consumer Complaint No.354 of 2016 4 dispute does not fall within the definition of 'service', as per Section 2 (1) (o) of the Act, under which 'housing construction' is covered, but mere allotment of the flat is not covered. Opposite parties also made preliminary submissions that the complainant filled up advance registration form to book a flat in the upcoming project of the opposite parties and deposited a sum of ₹3,38,498/-, vide cheque dated 25.05.2011. Thereafter, he filled up application form in that regard. Both the above said documents were signed and filled up by him at their registered office at Delhi. The complainant was provisionally allotted flat No.402, H-Tower (Corner), 4th Floor, measuring 1650 sq.ft. for a total price of ₹33,00,000/-. The opposite parties issued allotment letter in this regard to the complainant, stating that any delay in making payment would attract interest. The flat buyers agreement contains elaborate terms and conditions, by which the complainant is duly bound. Despite slump in the real estate industry and subsistence of negative sentiments in the real estate market, the opposite parties have mobilized all its resources and infrastructure to complete the project in time and hand over the possession to the allottees. Despite defaults of the allottees in paying the instalments, the opposite parties have completed the entire external and internal construction of the buildings/towers and now internal fixtures and fittings work including furnishing of the flats are being done, so as to hand over the possession of the booked flats to the allottees, including the complainant. The opposite parties are competent to deliver possession to the complainant, but due to pending minor internal fixtures and Consumer Complaint No.354 of 2016 5 fittings work, they are not handing over the possession to him, just to rule out any inconvenience and hardship to him. The opposite parties carried out construction and internal sanitary/wardrobe/modular kitchen, flooring etc. with state of art material and with world class infrastructure. It was further pleaded that brick kiln industry in Punjab came to halt in the year 2012, due to orders of the Hon'ble Supreme Court and Punjab and Haryana High Court and the matter was finally resolved by the Union Ministry of Environment and Forestry in the year 2014, whereafter the brick manufacturing activity was resumed. All these circumstances contributed towards delay in completing the project of the opposite parties. Now, the opposite parties would be able to deliver physical possession of the flat to the complainant on or before April, 2017. On merits, the booking of the flat, in question, by the complainant with the opposite parties was admitted. It was pleaded that the complainant was irregular in discharging instalments and was time and again called by the opposite parties to discharge the outstanding instalments. As per clause 7 (d) of the agreement, the possession was to be delivered after 24 months of the execution of the agreement. It was further pleaded that as a goodwill gesture, the opposite parties accepted the request of the complainant to swap the allotted unit with another unit i.e. No.5-C in Block K-1 and K2. It was reiterated that the opposite parties have completed their project, subject to minor works and they would be able to deliver the possession by April, 2017. Similar other pleas, as raised in preliminary submissions, were reiterated. Other allegations levelled in the Consumer Complaint No.354 of 2016 6 complaint were denied and it was prayed that the complaint be dismissed, with exemplary costs.
Evidence of the Parties
3. To prove his claim, the complainant tendered in evidence his affidavit as Ex.C-A, along with documents Ex.C-1 to Ex.C-5.
4. On the other hand, the opposite parties tendered affidavit of Sh. Jatin Sachdeva, Director, as Ex.OP-1/A, along with documents Ex.OP-1/1 and Ex.OP-1/2.
Contentions of the Parties
5. We have heard learned counsel for the parties and have gone through the record carefully.
6. Learned counsel for the complainant vehemently contended that the opposite parties failed to complete their project and to deliver the possession of the flat, in question, within the stipulated period, as per the agreement, despite receipt of ₹32,00,726/- from the complainant against the total sale price thereof i.e. ₹33,00,000/-. Despite writing letters and personal visits of the complainant, the possession of the flat, in question, was not offered to him. Even another flat was offered by the opposite parties, vide letter dated 08.05.2014, but the possession of that flat was also not delivered as per their promise. The opposite parties grabbed the hard earned money of the complainant, with false promise to deliver the possession of the complete furnished flat. The complainant is entitled to the refund of the amount deposited by him with the opposite parties, along with interest and compensation.
Consumer Complaint No.354 of 2016 7
7. Per contra, learned counsel for the opposite parties vehemently contended that the complainant was irregular in making payment of the instalments. In-spite of slump in the real estate industry, the opposite parties have completed their project in time, so as to hand over the possession to the allottees. They have also completed the entire external and internal construction of the buildings/towers. The opposite parties are competent to deliver possession to the complainant, but due to pending minor internal fixtures and fittings work, they are not handing over the possession to him, just to rule out any inconvenience and hardship to him. The brick kiln industry in the State of Punjab came to halt, as a result of restrain orders passed by the Hon'ble Supreme Court and Punjab and Haryana High Court, which caused delay in completing the project of the opposite parties. There is no deficiency in service on their part and the complaint is liable to be dismissed.
Consideration of Contentions
8. We have given our thoughtful consideration to the rival contentions of the parties.
9. Admittedly flat No.H-402, measuring 1650 sq.ft. was allotted to the complainant by the opposite parties in their project "Amritsar One" at the rate of ₹2,000/- per sq.ft., for the total price of ₹33,00,000/-. Flat Buyers Agreement (in short, "the agreement"), Ex.C- 1, was executed between the parties on 14.07.2011 regarding the said flat. As per statement Ex.C-2, the complainant deposited a total sum of ₹32,00,726/- by 24.02.2012 with the opposite parties towards the sale Consumer Complaint No.354 of 2016 8 price of the flat, in question, and this fact has not been denied by the opposite parties in their reply. As per clause 8(d) of the agreement, the possession of the said floor after completion of constriction was to be offered to the buyer by the developer after 24 months from the date of booking, provided no change in the site plan or construction or force majeure circumstance may force the developer/seller to extend the period of construction. The developer would have an extended period of 06 months after the initial 24 months to procure all necessary occupancy certificate and other relevant documents required for a successful allotment. The agreement was executed on 14.07.2011 and the said stipulated period of 30 months (24 months and extended period of 6 months) expired on 14.01.2014 as per the averments of the complainant, there was no development at the site of the project. The opposite parties were not in a position to deliver the possession of the said flat to the complainant and, thus, they offered another flat No.5-C, 2nd Floor, Block K-1, Type "E" to the complainant, vide letter dated 08.05.2014, and assured to deliver its possession by Diwali, 2014. Perusal of letter dated 30.04.2016, Ex.C-5, issued by the opposite parties to the complainant shows that the Company was in the process of starting tilling work and initiated work order to procure modular kitchen, along with doors and windows of Type-E in Block K1 and K2. It is also mentioned therein that they were initiating documentation with Municipal Bodies and relevant authorities, so that they could offer possession within next six months. It means that on 30.04.2016, the flat allotted to the complainant was not ready to possession or even in Consumer Complaint No.354 of 2016 9 next six months thereafter. The opposite parties tendered in evidence affidavit of Sh. Jatin Sachdeva, Director, as Ex.OP-1/A, which is nothing but only the verbatim reproduction of the reply filed by them. They further tendered blank application form signed by the complainant as Ex.OP-1/1 and duly filled application form as Ex.OP- 1/2. Except this evidence, there is no other document produced by the opposite parties on the record to prove that they have completed their above named project, or that they are in position to deliver the possession of the flat earlier allotted to the complainant or the alternative flat allotted to him. The opposite parties have failed to prove that the complainant purchased the flat, in question, for earning profit. The contention of the opposite parties that this dispute is not covered under the definition of 'service', as per the Act, is not tenable as the matter relates to 'housing construction', which is duly mentioned in the definition of 'service' in the Act. In fact, the opposite parties have wrongly interpreted the same. It is not case of mere allotment of flat, but the opposite parties duly undertook to complete the construction of the flat, in question, within the stipulated period, as per the agreement. There is no document on record to show that the opposite parties are having the requisite permissions, approvals and sanctions from the competent authorities to develop/complete their above named project. The bald pleadings of the opposite parties made in their reply that the project is complete and they are in a position to deliver the possession of the flat allotted to the complainant, cannot be accepted without any evidence on the record from their side. There is also no evidence Consumer Complaint No.354 of 2016 10 on record to prove that the ban on the brick kiln activities in the State of Punjab contributed towards delay in completing the project of the opposite parties.
10. All the above facts and circumstances clearly prove that the opposite parties have not complied with the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"). As per section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to make full and true disclosure of the nature of his title to the land, on which such colony is developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days, notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with section 3 of the PAPRA.
11. As per section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission obtained from the competent authority. So, they also violated Section 5 of PAPRA.
12. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the Consumer Complaint No.354 of 2016 11 plots/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this respect. There is no evidence or pleading on record on behalf of the opposite parties in this respect. As such, the opposite parties also violated Section 9 of the PAPRA.
13. It stands proved that the opposite parties failed to hand over the possession of the flat, in question, to the complainant within the stipulated period, without any sufficient reason. The amount paid by the complainant is a deposit held by the opposite parties, in trust of complainant and it should be used for the purpose of building the plots/flats, as mentioned in Section 9 of the PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainant, are also required to be taken into consideration for awarding compensation. In addition to that he is also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by him on account of the betrayal by the opposite parties in shattering their hope of getting the plot by waiting for all this period. Consumer Complaint No.354 of 2016 12
14. From the above facts and circumstances, it is clearly proved that the opposite parties failed to deliver the possession of the flat in question to the complainant within the agreed period, without any sufficient cause. The complainant paid the huge amount to the opposite parties towards the price of the flat, in question, from his hard earned money, with a purpose to have a residential flat for his personal use, but due to non-delivery of possession during all this period of about six long years, he suffered great mental tension, hardship and harassment at the hands of the opposite parties. The complainant is entitled to the refund of the amount deposited by him, along with interest and suitable compensation.
15. The complainant has claimed refund of the deposited amount, along with interest at the rate of 18%. Hon'ble National Commission in case Kamal Sood v. DLF Universal Ltd. 2007 (3) C.P.J. 7 (NC), in similar set of circumstances, where the builder was at fault in not obtaining permission for construction in advance before issuing advertisement and collected money from customers without having any licence, ordered for refund of deposited amount along with interest at the rate of 12% per annum, besides compensation. In view of the above authority as well as Rule 17 of PAPRA, the complainant is entitled to the refund of their deposited amount, along with interest at the rate of 12% per annum.
16. In view of our above discussion, the complaint is allowed and following directions are issued to the opposite parties: Consumer Complaint No.354 of 2016 13
i) to refund ₹32,00,726/- to the complainant, along with interest at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA;
ii) to pay ₹1,00,000/-, as compensation on account of mental tension and harassment suffered by the complainant; and
iii) to pay ₹22,000/-, as litigation expenses.
17. The opposite parties are directed to comply with this order within 30 days of the receipt of certified copy of the order, failing which the compensation amount shall also carry interest at the rate of 12% per annum from the date of this order till realization.
18. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER October 10, 2017.
(Gurmeet S)