State Consumer Disputes Redressal Commission
Avinash Kaur vs M/S R.K.M. Housing Ltd. on 13 January, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.256 of 2015
Date of institution : 30.09.2015
Date of decision : 13.01.2017
Avinash Kaur w/o Shri Harjinder Pal Singh R/o H.No.HM-525, 1st
Floor, Phase-VII, Mohali.
.......Complainant
Versus
M/s RKM Housing Ltd. Company, Behind Chandigarh Engineering
College, Sector 112, Landran, SAS Nagar, Mohali, through its
Managing Director.
........Opposite Party
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Shri Vinod Kumar Gupta, Member
Present:-
For the complainant : Shri Sunil Toni, Advocate. For the opposite party : Shri K.S. Lang, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The complainant consumer dreamed to have a roof over her head. The home is the starting place of hopes and dreams. It is the foundation for life of a family and their children. Many a time, life takes a person to unexpected places and love of shelter brings him home, perhaps for this reason human beings hope and dream to make a home, may be it a flat or a house.
2. The complainant was allured by the tempting advertisements in newspapers, print media, gleaming hoardings offering homes and Consumer Complaint No.256 of 2015 2 brochures. We all are living in the age of advertisements. The advertisements spread before us a perfect life picture, which many times, results in disillusion and changes and withers in no time. The glittering and shiny advertisement leaves us with a feeling of resentfulness after spending a fortune for the dream house/flat. This appears to have happened with the present complainant, who ended up losing a lofty amount of her savings and experiencing harassment at the hands of opposite party. So, this complaint against the opposite party under Section 17 (1)(a)(i) of the Consumer Protection Act, 1986 for the issuance of following directions to the opposite party:-
i) to refund the payment made by the complainant amounting to Rs.19,20,000/- along with interest at the rate of 24% per annum;
ii) to pay Rs.2,00,000/-, as compensation, for harassment and mental agony; and
iii) to pay Rs.33,000/- as litigation expenses.
3. Brief facts, as stated in the complaint, are to the effect that the complainant was allotted Plot No.78 measuring 152.77 square yards in Sector 111, Mohali, by the opposite party, vide provisional allotment letter dated 21.11.2012. Memorandum of Understanding was also signed between the complainant and the opposite party on 21.11.2012. Again Memorandum of Understanding was signed between them on 23.1.2014 qua plot measuring about 150 square yards approximately at the rate of Rs.16,000/- per square yard, for a total consideration/cost of the plot of Rs.24 lakhs. The complainant Consumer Complaint No.256 of 2015 3 paid all the instalments in time i.e. Rs.19,20,000/-, which comes to 80% of the total sale consideration. As per the schedule of payment given by the opposite party, 20% of the total amount was to be given to it at the time of delivery of possession. As per the settled terms and conditions of Memorandum of Understanding, opposite party was to hand over the possession of the said plot to the complainant within a period of 18 months from 21.11.2012 or shall be entitled to get refund of amount deposited/contributed with simple interest at the rate of 10% per annum payable from the date of Memorandum of Understanding or from the date of encashment of cheques, as may be applicable. The period of 18 months time for handing over the possession of the plot to the complainant expired on 21.5.2014 and thereafter she made a number of visits to the office of the opposite party but till date neither possession has been delivered to her nor the payment which has been made to the opposite party has been refunded back along with interest as agreed. As such, she has been harassed and humiliated at the hands of the opposite party. A legal notice dated 18.8.2015 was also issued to the opposite party calling upon it to refund the aforesaid amount along with interest and compensation. However, nothing was done by the opposite party. This act and conduct of the opposite party amount to deficiency in service.
4. The complaint was contested by the opposite party by filing written reply, in which it did not deny that the complainant was allotted Plot No.78 measuring 152.77 square yards in Sector 111, Mohali by it, vide provisional allotment letter dated 21.11.2012 and Consumer Complaint No.256 of 2015 4 Memorandum of Understanding was signed between them on 21.11.2012. It also did not deny that again Memorandum of Understanding was signed between them on 23.1.2014 qua plot measuring about 150 square yards approximately at the rate of Rs.16,000/- per square yard for a total consideration/cost of the plot of Rs.24 lakh. It also did not deny that the complainant paid the amount of Rs.19,20,000/-, which comes to 80% of the total sale consideration. Denying the other allegations made in the complaint, it averred that MOU dated 23.1.2014 was executed between the parties only on the will and desire of the complainant and she approached it to contribute the funds for the plot measuring 150 square yards in Sector 112, Mohali. On her request the contributory fund for Plot No.78 in Sector 111, Mohali, was cancelled and had been transferred to Plot measuring 150 square yard in Sector 112, Mohali. So the question of any term and condition of MOU dated 21.11.2012 is not applicable in the present case. It is further averred that as per term No.3 of MOU dated 23.1.2014 it is clearly stated "Balance payment before Feb. 28/02/2014". However, she failed to comply with that term and condition. It is stated in term No.6 of MOU dated 23.1.2014 "It is agreed upon that process of allotment of plot shall start only after proper sanction/permission/licenses granted by competent authorities to the party of the First part." It requested her, vide letter dated 16.3.2015 for the payment of Rs.3 lakhs towards the development charges because GMADA was demanding balance of the EDC and license fee from it. However, she failed to pay the same and filed the present complaint only to harass and drag it in Consumer Complaint No.256 of 2015 5 false and fabricated litigation. In fact Plot No.525 in Sector 112, SAS Nagar, Mohali, is reserved for her against her contribution fund as per term No.7 of the MOU dated 23.1.2014 but it is subject to the grant of any type of licence or subject to any other necessary sanctions or permissions of the competent authority. The plot has been developed. It is nowhere mentioned in the MOU dated 23.1.2014 that the possession of the plot will be given to her within 18 months from the date of MOU dated 23.1.2014. It is not liable to refund the contributed fund with or without interest because there is no fault on its part or any deficiency in service. It also averred that the present complaint is not maintainable before this Commission and the same is barred by limitation. She has concealed the true facts and filed the present complaint only to harass it. No cause of action has arisen to her nor she has any locus standi to file the present complaint. She has not come to this Commission with clean hands and the complaint has been filed on the basis of misrepresentation to harass it. It prayed for the dismissal of the complaint with heavy costs.
5. For proving the allegations made in the complaint the complainant proved on record her affidavit Ex.C-A and documents Ex.C-1 to Ex.C-6. On the other hand, the opposite party proved on record the affidavit of its Director; namely, Kanwaljit Singh Ahluwalia, as Ex.OP-A and documents Ex.OP-1 to Ex.OP-5.
6. We have given our anxious thoughtful consideration to the contentions of the learned counsel for the parties. Consumer Complaint No.256 of 2015 6
7. It has been submitted by the learned counsel for the complainant that Memorandum of Understanding, Ex.C-3, was executed between the parties on 23.1.2014, vide which plot of 150 square yards in the future project of the opposite party was allotted to her for a total sum of Rs.24,00,000/- and a sum of Rs.19,20,000/- was taken by the opposite party. The rate of plot was fixed at Rs.16,000/- per square yard. It was further agreed that standard plot buyer's agreement shall be executed between the parties, which shall contain terms and conditions pertaining to the allotment and user of the plot. In case the future project is abandoned, or it is not in a position to reserve the developed plots within a period of 18 months, second party shall be entitled to refund of the amount deposited along with interest @ 10% per annum and in case the timely instalments are not paid, these will be recovered along with interest at the rate of 12% per annum. Even the project has not been cleared by the GMADA and the opposite party has not obtained necessary sanctions/permissions from the competent authorities for carving out a colony, inviting applications from the general public and receiving any amount from them. By doing so, the opposite party has violated the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"). By selling the plot without the requisite permissions/sanctions the opposite party adopted unfair trade practice and the complainant is entitled to the refund of the amount along with interest and is also entitled to the compensation for the harassment and mental agony suffered by her.
Consumer Complaint No.256 of 2015 7
8. On the other hand, it has been submitted by the learned counsel for the opposite party that the complainant has contributed the fund of Rs.19,20,000/- for the plot measuring 150 square yards @ Rs.16,000/- per square yard in Sector 112 as per MOU dated 23.1.2014 and that the terms and conditions of the MOU dated 23.1.2014 are applicable in the present case for all purposes. He has further submitted that it is totally false and fabricated that the opposite party is not ready with the possession of the plot and making any type of excuse or using any type of delaying tactics for handing over the possession of the plot to her. Plot No.525 in Sector 112, SAS Nagar, Mohali, is reserved for her by the opposite party against her contribution fund as per term No.7 of the MOU dated 23.1.2014 but it is subject to the grant of any type of license or subject to any other necessary sanctions or permissions of the competent authority to it. The plot has been developed. It is agreed upon between the parties as per the MOU dated 23.1.2014 that the process of allotment of plot shall start only after proper sanction/permission/license granted by competent authorities. He has further submitted that there is no delay on the part of the opposite party in delivering the possession of the plot rather the complainant has totally failed to pay the remaining contribution fund and also failed to pay the development charges as per the demand of the opposite party. It has been submitted that there is no deficiency in service on the part of the opposite party nor adoption of any unfair trade practice. A prayer for dismissal of the complaint was made.
Consumer Complaint No.256 of 2015 8
9. The admitted position is that the complainant was provisionally allotted Plot No.78 measuring 152.77 square yards in Sector 111, Mohali and on her request the contributory funds of Plot No.78 in Sector 111, Mohali were transferred to Plot measuring 150 square yard in Sector 112, Mohali. She purchased this Plot measuring 150 square yards at the rate of Rs.16,000/- per square yard from the opposite party for a total sale consideration of Rs.24,00,000/- and Memorandum of Understanding in respect of the same was signed between the parties on 23.1.2014 (Ex.C-3). In the MOU (Ex.C-3) it is mentioned that the acquired land is lying in Sector 111-112 where they contemplate to develop residential colony. It is also admitted that the complainant has deposited Rs.19,20,000/- out of the total sale consideration and the delivery of possession of the plot was to be made by the opposite party within 18 months from the date of Memorandum of Understanding. However, the possession of the plot was not delivered till the filing of the complaint. In the written reply the opposite party itself averred that the possession could not be delivered to the complainant as neither any license was issued to it nor necessary sanctions or permissions of the competent authority.
10. The only question to be decided in the present complaint is, as to whether the opposite party is competent to carve out a colony and allot plot to the complainant without getting licence, necessary sanctions/permissions from the competent authorities? According to Section 2(n) of PAPRA, "development works" means internal development works and external development works. According to Consumer Complaint No.256 of 2015 9 Section 3 of Chapter II, the promoter is liable to do as under in a Colony to be developed by it (relevant extract):-
3.General liabilities of promoter.-(1) xx xx xx xx (2) A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
(a) 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, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
xxxx xxxxx xxxxx xxxx
(c) given inspection on seven days, notice or demand,-
xxxx xxxxx xxxxx xxxx
(i) 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; and xxxx xxxxx xxxxx xxxx
(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
xxxx xxxxx xxxxx xxxx Consumer Complaint No.256 of 2015 10
(j) not allow persons to enter into possession until an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained ;
Further according to Section 4(1) of the PAPRA, no promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such plot to make advances or deposits, unless:-
"(a) the promoter holds a certificate of registration under sub-
section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication. (2) xxxx xxxx xxxx xxxx (3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3."
According to Section 5 of the PAPRA, it is provided as under:-
"5.(1) Any promoter, who desires to develop a land into a colony, shall make an application in the prescribed form alongwith the prescribed information and with the prescribed fee to the competent authority for grant of permission for the Consumer Complaint No.256 of 2015 11 same and separate permission will be necessary for each colony.
(2) On receipt of the application under sub-section (1), the competent authority, after making enquiry into the title to the land, extent and situation of the land, capacity of the promoter to develop the colony, layout of the colony, conformity of the development of the colony with the neighbouring areas, plan of development works to be executed in the colony and such other matters as it may deem fit, and after affording the applicant an opportunity of being heard and also taking into consideration the opinion of the prescribed authority, shall pass an order, in writing, recording reasons either granting or refusing to grant such permission.
(3) Where an order is passed granting permission under sub-
section (2), the competent authority shall grant a licence in the prescribed form, after the promoter has furnished a bank guarantee equal to twenty five percent of the estimated cost of the development works certified by the competent authority and the promoter has undertaken to enter into an agreement in the prescribed form for carrying out completion of development works in accordance with the conditions of the licence so granted.
(4) The licence granted under sub-section (3) shall be valid for a period of three years and will be renewable from year to year on payment of prescribed fee."
Consumer Complaint No.256 of 2015 12Section 9 of the PAPRA relates to the maintenance of accounts of the sums taken by promoters and the same reads as under:-
"9. Accounts of sums taken by promoters.- The promoter shall maintain a separate account in any scheduled bank of sums taken by him from persons intending to take or who have taken apartments or plots, as advance, towards sale price or for any other purpose, or, deposit, including any sum so taken towards the share capital for the formation of a co-operative society or a company, or towards the outgoings (including ground rent, if any, municipal or other local taxes, charges for water or electricity, revenue assessment, interest on mortgages or other encumbrances, if any, stamp duty and registration fee for the agreement of sale and the conveyance); and the promoter shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes including for the construction of apartments and, in the case of colonies, for meeting the cost of development works, and shall on demand, in writing, by the competent authority make full and true disclosure of all transactions in respect of that account and shall not utilize for any other purpose the amounts so collected for a particular purpose."
According to Section 14(ii) :-
"in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development Consumer Complaint No.256 of 2015 13 works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5."
Then Rules were framed under Section 45 of the PAPRA; namely, Punjab Apartment and Property Regulation Rules, 1995 (in short, "the Rules") and according to Rules 7, 8 & 17 of these Rules , it has been provided as under:-
"7. Disclosure regarding registration and licence - The promoter shall disclose the number of his certificate of registration granted under sub-section (2) of section 21 and, in the case of a colony, also the validity of licence issued under sub-section (3) of section 5 and display the certificate of registration and the licence so granted at a conspicuous place in his office and make it available for inspection to the persons taking or intending to take an apartment or a plot in the colony and to a person authorized by the competent authority.
8. Supply of copies of documents. - The promoter on demand shall supply true copies, on payment of reasonable charges, of the following documents, namely :-
(a) Title deed of land, certificate of the attorney at-law or an advocate of not less than seven years standing, referred to in clause (a) of sub-section (2) of section 3 and copies of the advertisement issued under section 4;
(b) Copy of the consent of the land owner, if the land does not belong to the promoter as referred to in clause (a) of sub-
section (2) of section 3;
Consumer Complaint No.256 of 2015 14
(c) Design of apartment, agreement with an architect and a contractor, referred to in clause (f) of sub-section (2) of section 3;
(d) Copy of occupation certificate referred to in section 14; and
(e) Certificate of registration granted under sub-section (2) of section 21 and in case of colony, the permission granted under sub-section (2) of section 5.
17. Rate of interest on refund of advance money upon cancellation of agreement.- The promoter shall refund full amount collected from the prospective buyers under sub- section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
11. The perusal of the above provisions of PAPRA and Rules, the opposite party was required to be registered and to get the licence to develop the Colony under above referred provisions but no copy of the licence issued by the competent authority to develop the colony has been placed on the record. This licence is required under Rule 13 of the Rules and its renewal as per Rule 14 of the Rules. According to Section 4 of the PAPRA, no Promoter shall issue an advertisement or receive the application under it if he holds a certificate of registration under Section 21(2) or a copy of the advertisement or prospectus is filed in the office of the competent authority and the advertisement or prospectus shall be made available for inspection in the office of the promoter. No copy of the Consumer Complaint No.256 of 2015 15 advertisement or prospectus has been placed on the record of this case under which applications were received by the opposite party for allotment of the plots under that scheme. Under Section 5(2), layout of the colony is to be submitted to the competent authority. The opposite party had placed on the record just one letter Ex. OP-3 written by the Chief Town Planner, Punjab, Chandigarh in the name of the opposite party to deposit charges of CLU and other charges so that its application for CLU can be considered. CLU charges of Rs. 3,61,64,000/- alongwith SIF charges of Rs. 18,08,200/- were required to be deposited to proceed further for approval of the Change of Land use. The opposite party has failed to place on record any document like receipt etc. to show in which manner the amounts of the CLU and SIF charges were deposited with the Chief Town Planner, which clearly shows that even the layout plan has not been approved by the Chief Town Planner, Punjab. No copy of the CLU and layout plan duly sanctioned by the Chief Town Planner has been placed on the record by the opposite party. According to Section 4(2) of the PAPRA, the opposite party was not entitled to receive the applications till the CLU and layout plan of the colony regarding the development works and validity of the licence is there but the opposite party has not placed any such document on the record. Therefore, the opposite party has not complied with the basic provisions under the PAPRA and Rules made thereunder before inviting the applications.
12. Even the basic documents with regard to the title of the property where the colony is to be developed have not been placed Consumer Complaint No.256 of 2015 16 on the record or consent of the land owner, if the property does not belong to the Promoter. Copy of occupation certificate, as referred to, in Section 14 and Certificate of Registration granted under Section 21 of the PAPRA have also not been placed on the record. If it has not obtained any occupation certificate, then under Section 2(j), it cannot allow the persons to enter the possession until Occupation Certificate is given by the Competent Authority. Then in the MOU Ex. OP-3, no date has been fixed or even in the terms and conditions, it has not been fixed by which date the possession will be delivered, which was required to be a part of the terms and conditions as per Section 2(g) of the PAPRA. Therefore, the opposite party has been taking all the money from the complainant without complying with the basic requirements as required under PAPRA. Therefore, in view of the above, it is clear that the opposite party has not complied with even the basic provisions of the PAPRA and Rules and forced her to deposit the aforesaid amount. In this way, the opposite party has befooled the complainant by extorting money from her. There is no development work either internal or external. The opposite party has taken the money, did not deliver the possession, did not obtain the necessary certificate from the competent authorities to develop the colony, NOC from the concerned Departments with regard to the development internal as well as external. Even layout plan is not approved so far. Learned counsel for the opposite party was unable to tell anything about the basic compliance of the PAPRA & Rules before inviting the applications and after inviting the application. No such document is Consumer Complaint No.256 of 2015 17 on the record as referred to above. In these circumstances, the opposite party has violated the various provisions of the PAPRA and the Rules framed thereunder and issued advertisement without having any land with it. It could not have issued such an advertisement or allot plot or even receive any amount from general public. It has not maintained any separate account as required under Section 9 of the PAPRA, as the amount given by the allottee herein the complainant was trust money and can only be used for the purpose of development of the plot.
13. In support of his contentions, the complainant has referred to the Consumer Case No. 77 of 2008 "Satinder Pal Singh Bawa & Anr. v. M/s Sahara India Commercial Co. Ltd." decided on 11.8.2015 in which the Hon'ble National Commission has allowed compensation of Rs. 2 lacs on account of delay in delivery of possession and Rs. 50,000/- as cost of litigation.
14. Since the opposite party failed to supply the documents and also failed to put any document before this Commission, an adverse inference has to be drawn against the opposite party that it is not having any sanction from the Government, other concerned departments . It has also not obtained any permission of "Change of Land Use" (CLU), nor the title over the khasra numbers.
15. The Consumer Protection Act came into existence in the year 1986 and it is one of the benevolent piece of legislation in India to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. There is not even an iota of evidence led by the opposite party to Consumer Complaint No.256 of 2015 18 rebut the averments made in the complaint. In these circumstances, an adverse inference has been to be drawn against the opposite party. The evidence on the record clearly shows deficiency in service on the part of the opposite party, as it went on accepting the instalments, without bothering to complete the project as agreed upon between the parties. It appears that just to fleece the innocent consumers, they had made misleading advertisement in violation of the provisions of Sections 3, 4 and 5 of the PAPRA. The Government is not even taking any action against the private builders, although there are provisions of registration of FIR and cancellation of their licenses under section 25 of the PAPRA. The act and conduct of the opposite party amount to deficiency in service and unfair trade practice.
16. In the present case opposite party-builder knew from the very beginning that it had not complied with the provisions of PAPRA and the Rules framed thereunder, would not be able to provide plot and deliver possession within stipulated period of 18 months. Thus by misrepresenting induced the complainant, who is a lady to book the plot due to which the complainant suffered mental agony and harassment. The complainant lady who was hoping for a roof over her head has suffered injury. The complainant paid the substantial amount to the opposite party with the hope of getting the plot in a reasonable time but till date there is no hope of the same specifically when the opposite party has not provided to her the document of title over the land and the location of the place where the plots are to be carved out. The opposite party made false statement of facts about Consumer Complaint No.256 of 2015 19 the goods and services i.e. allotment of plot in stipulated period. This act and conduct of the opposite party is clear case of misrepresentation and deception which resulted into injury and loss of opportunities to the complainant. Had complainant would not have invested with the opposite party she would have invested her money elsewhere. There is escalation in the price of construction material also. The builders in India have similar strategies to sell houses/plots .The complainant has suffered loss as discussed above, so the complainant deserves suitable compensation, which we quantify in a lump sum as ₹2,00,000/.
17. Under Rule 17 of the Rules, interest payable on the amount has been specifically mentioned at the rate of 12% per annum in case of cancellation. If neither plot is provided nor it is cancelled, certainly such persons are also entitled to interest at the rate of 12% per annum.
18. In view of the discussion made above, this complaint is allowed and following directions are issued to the opposite party:-
i) to refund the amount of ₹19,20,000/- along with interest at the rate of 12% per annum from the dates of deposit of different amounts till the date of actual payment;
ii) to pay ₹2,00,000/- as compensation on account of harassment and mental agony suffered by her; and
iii) to pay ₹20,000/-, as litigation costs.
The compliance of this order shall be made by the opposite party within one month from the date of receipt of the certified copy of this order and failing that it shall also be liable to pay interest on the Consumer Complaint No.256 of 2015 20 compensation amount of ₹2,00,000/- at the rate of 12% per annum from the date of this order till the date of payment.
19. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (VINOD KUMAR GUPTA) MEMBER January 13, 2017 Bansal