State Consumer Disputes Redressal Commission
Silver City Housing & Infrastructure ... vs Kanwar Jasbir Singh Kapur on 15 February, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Appeal Case
No.
:
250 of 2011
Date of Institution
:
19.09.2011
Date of Decision
:
15.02.2012
Silver City Housing &
Infrastructure Ltd., H.No.89, Sector 8-A, Chandigarh
through its Managing Director Sh. Rajat Kakar.
Appellant
V E R
S U S
1.
Kanwar Jasbir Singh Kapur Son of Late
Sh.Gurdial Singh Kapur.
2.
Amarjit Singh Kapur S/o Late Sh.Gurdial
Singh Kapur.
Both residents
of House No.1, Sector 8-A, Chandigarh.
....Respondents.
Appeal U/s 15 of Consumer Protection
Act, 1986
BEFORE: JUSTICE SHAM
SUNDER, PRESIDENT.
MRS.
NEENA SANDHU, MEMBER.
SH.JAGROOP SINGH MAHAL, MEMBER Present: Sh.Sandeep Bhardwaj, Advocate for the appellant Sh.Vishal Aggarwal, Advocate for the respondents.
PER JUSTICE SHAM SUNDER, PRESIDENT This appeal is directed against the order dated 29.7.2011, 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.14,77,500/- to the complainants(now respondents) 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 complainants, being allured by the rosy pictures, projected by the opposite party, about their upcoming Housing Project Silver City Themes, entered into an agreement dated 24.1.2006 (Annexure C1)with it, for the purchase of Apartment No. 206B IInd Floor, Category A-2,Block A-V with car parking (later on replaced with Apartment No.190-C, 3rd Floor, Cat.A-2, Block-A-III on 3.10.2008) for a total sum of Rs.18.50 lacs. The total super covered area of the apartment was 1641.54 sq.ft. approximately, with car parking area measuring 112 sq.ft. The sale consideration was to be paid, in five instalments. The last instalment was to be paid on 31.7.2007. It was stated that the complainants deposited Rs.14,77,500/- against the total sale consideration of Rs.18.50 lacs. It was further stated that possession of the flat was promised, to be handed over, to the complainants latest by December,2007. It was further stated that despite receipt of the substantial amount from the complainants, the opposite party, failed to complete the construction, as per the terms and conditions of the agreement and the project was going on, at an extremely slow pace.
There was no sign of its completion in the near future, and, as such it was impossible to complete the project within the stipulated period i.e. by December,2007. It was further stated that on being asked as to when, the project would be completed and possession would be handed over, the opposite party put off the complainant on lame excuses. The complainants sent letter dated 27.4.2010 (Annexure C4) to the opposite party requesting it, either to handover possession of apartment, or return the money alongwith interest, but the opposite party did not pay any heed to their request. Ultimately, they served a legal notice dated 3.9.2010 (Annexure C5) upon the opposite party, calling upon it, to refund the entire 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 complainants, was not redressed, left with no alternative, they filed a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only).
3. In its reply, the opposite party, stated that the complainants had opted to replace their earlier allotted flat with apartment No.190-C, 3rd Floor, Cat.A-2, Block-A-III for a sum of Rs.18.50 lacs and an agreement, to this effect, was executed between the parties on 24.01.2006. 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, they were entitled to extension of time, according to Clause 23 of the agreement annexure C-1. It was, however, admitted, that the first, second and third installments, towards the part price of apartment, were paid by the complainants.
It was further stated that, since the complainants, stopped making payment of the remaining installments after August,2006, and, as such, they were not entitled to the refund of amount and compensation, as they failed to adhere to the payment schedule. It was further stated that the possession shall be delivered to the complainants, as per the terms and conditions of the agreement. It was further stated that the complainants, did not fall within the definition of consumer, as they agreed to purchase the apartment, in question, for commercial purpose. It was further stated that, as the complainants, did not approach the District Forum, with cleans hands, they were 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 Annexure C1, agreement, 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 complainants, with a view to get handsome returns and generate profits, and, as such, they 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.4 of the complaint, the complainants stated that the respondent projected that the housing project was an excellent opportunity, for investment, as well as for residence and convinced the complainants, for investing their hard earned money. In para no.7 of the complaint, the complainants also stated, that they invested the money, on the assurance of the Opposite Party, that the same was a time bound project. From these averments, made, in the complaint, it could not be said that the apartment agreed to be purchased, by the complainants, was for commercial purpose, with a view to generate profits. The complainants are not property dealers. There is no evidence, on record, that they agreed to purchase the apartment, for sale thereof, to earn profit. There is also, no evidence, on record, that the complainants intended to run some commercial activity, in the apartment, with a view to earn profit. The complainants, who are senior citizens of above 80 years of age, in our opinion, agreed to purchase the apartment, for the purpose of their own residence, or with an intention to provide residence, to their children. If an apartment is agreed to be purchased by the complainants, for their own residence, or with an intention to provide accommodation for residence, to their 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 complainants, 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. In para nos.4 and 7 of the complaint, the complainants only elucidated the assurances, which were given by the representative of the opposite party. Under these circumstances, it cannot be said, by any stretch of imagination, that the complainants, agreed to purchase the apartment, for sale thereof, or for running commercial activity therein, to generate profit. The complainants, therefore, fall within 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 in SAS Nagar (Mohali), Punjab. It may be stated here, that in para No.25 of the complaint, it was in clear-cut terms mentioned by the complainants, that the Registered Office of the opposite party, was at Chandigarh.
It was further stated, in this paragraph, by the complainants, that the installments, towards the part price of the apartment, were paid at Chandigarh, and the Managing Director of the opposite party, was residing at Chandigarh. Kanwar Jasbir Singh Kapur, complainant no.1, in his evidence, by way of affidavit, also testified, in this regard. No doubt, in reply to para No.25 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. 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 complainants, stopped making payment of the remaining installments, after August,2006, towards the price of apartment, they committed breach of the terms and conditions of the agreement dated 24.1.2006 annexures R4/C1, and, thus, they were not entitled to the refund of amount, with interest. Annexure C-1, copy of the agreement dated 24.01.2006, was executed, between the parties. The total cost of the apartment was Rs.18,50,000/-, and cost of the car parking area was Rs.50,000/-. Out of Rs.19,00,000/-, the complainants, deposited Rs.14,77,500/- i.e. more than 75% of the price. It means that substantial amount was deposited, by the complainants, out of the sale consideration of apartment. They stopped making further payment of installments, when they found that there was no progress, in construction, at the spot. According to C-1/R4 agreement dated 24.01.2006, 5th installment of 5%, was to be paid on 31.07.2007, when the possession of apartment was to be delivered to the complainants. 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 01.11.2010, no progress, in construction of the project, had been achieved. Under these circumstances, it is to be determined, as to whether, the complainants, were liable to make payment of further installments. In our considered opinion, since there was no progress, in construction, at the site, the complainants were 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 complainants were at fault. On the other hand, the opposite party, was at fault in not raising the construction. The complainants, could not wait indefinitely, just at the whims and fancies of the builder. Neither the complainants have been handed over the possession of apartment, even after the lapse of more than 5 years of the execution of agreement, nor the opposite party adhered to the time schedule of delivery of possession, as per the agreement C-1/R-4, nor the refund of amount was made to them. Under these circumstances, the complainants were entitled to the refund of amount. The District Forum, was, thus, 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 R4/C-1, 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 letter dated 17.01.2006 (Annexure R-6), 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-10, the order dated 30.01.2007, was vacated. There is nothing, on record, that from 24.01.2006, when C-1 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 the 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 vide Annexure R-3, 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-11 dated 19.09.2008 is the No Objection Certificate which was granted by the Punjab Pollution Control Board, Patiala.
Even in Annexure R-13 dated 19.5.2009, addressed to the complainants, it was stated that the possession would be delivered, in a span of 12 to 15 months. As stated above, the complaint was filed on 1.11.2010 and by that time, the possession of apartment, had not been delivered to the complainants. It is evident from annexure R-8 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 original agreement annexure C-1, dated 24.01.2006, 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 24.01.2006, when the agreement annexure C-1, 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 C-1. 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, thus, right, in holding that the complainants were entitled to the refund of amount deposited by them. The District Forum, was also 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 complainants, 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 complainants, or not. Since, the Honble High Court, granted stay of operation of Annexure R-6 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 complainants, 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 dispute, by way of arbitration, has been provided as per Clause 30 of the agreement annexure C1, 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 28.1.2006 annexure C1/R4, 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, are directed to refund the amount of Rs.14,77,500/-, to the complainants, 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.
February 15, 2012 Sd/-
[JUSTICE SHAM SUNDER] PRESIDENT Sd/-
[NEENA SANDHU] MEMBER Sd/-
[JAGROOP SINGH MAHAL] MEMBER Js STATE COMMISSION (Appeal No.250 of 2011) Argued by: Sh.Sandeep Bhardwaj, Advocate for the appellant Sh.Vishal Aggarwal, Advocate for the respondents.
Dated the 15th day of February, 2011 ORDER Vide our detailed order of even date, recorded separately, this appeal has been partly accepted, with costs and the impugned order has been modified, in the terms depicted therein.
(NEENA SANDHU) MEMBER (JUSTICE SHAM SUNDER) PRESIDENT (JAGROOP SINGH MAHAL) MEMBER