State Consumer Disputes Redressal Commission
Smt Upma Shrivastava vs Jai Prakash Associates on 31 August, 2022
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UP C-1 Vikrant Khand 1 (Near Shaheed Path), Gomti Nagar Lucknow-226010 Complaint Case No. CC/156/2016 ( Date of Filing : 09 Jun 2016 ) 1. Smt Upma Shrivastava Gautambudh Nagar ...........Complainant(s) Versus 1. Jai Prakash Associates Gautambudh Nagar ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 31 Aug 2022 Final Order / Judgement Reserved State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint Case No.156 of 2016 Smt. Upma Shrivastav w/o Sri Pramod Srivastava, R/o H.N. 17, Comfort Chalet,Choona Bhatti, Bhopal (M.P.) ...Complainant. Versus Jaiprakash Associates Limited, Registered Office- Jaypee Greens, Sector-128, NOIDA, District, Gautam Buddha Nagar (U.P.) ...Opposite party. Present:- 1- Hon'ble Sri Rajendra Singh, Member. 2- Hon'ble Sri Vikas Saxena, Member. Sri Kushagra Dixit, Advocate for the complainant. Sri Pratul Pratap Singh, Advocate for Opposite Party. Date : 28.9.2022 JUDGMENT
Per Sri Rajendra Singh, Member- This complaint has been filed by Smt. Upma Shrivastav against Jaiprakash Associates Limited for following reliefs:
That the Hon'ble Commission may graciously be pleased to quash the cancellation letter dated 28.1.2012 of Provisional Allotment of plot no.G-024 at Jaypee Greens Sports City, Gautam Budh Nagar, (U.P.) That the Hon'ble Commission may graciously be pleased to grant 40 lacs as compensation to the complainant to meet the ends of justice from opposite party.
That the Hon'ble Commission may graciously be pleased to direct the opposite party to provide the possession over the plot no.G-024 at Jaypee Greens Sports City, Gautam Budh Nagar, (U.P.) forthwith.
That the Hon'ble Commission may please to summon the entire original records.
That the Hon'ble Commission may direct to opposite party to give Rs.1 lakh 50 thousands as cost of litigation.
That the Hon'ble Commission may direct to opposite party to give Rs.5 lacs as mental agony.
Any other order or direction which this Hon'ble Commission may deem just and appropriate under the circumstances of the case may also be passed in favour of the complainant.
Allow the cost of complaint in favour of the complainant.
In short, the brief facts of the case are that, that the instant complaint arises out of the arbitrary, unauthorized, inept, obsolete, illegal and perverse action of the opposite party in committing deficiency in providing the services hired by the complainant, persuaded by the all claims and the rosy assurances of the opposite party to provide better services.
The opposite party is a builder and offers a wide range of housing scheme to their consumers. The complainant comes within the ambit of the definition of Consumer as defined in the Consumer Protection Act, 1986 and also broadened by the Supreme Court of India with the motive to provide protection to larger number of people from the wrong practices and secure them the object enshrined in the Constitution in its true spirit.
The canon of law clearly elucidates that the housing sector/builder comes within the ambit of the services as mentioned in the Consumer Protection Act, 1986. Further the same has been extensively elaborated from time to time by the Apex court of India to accommodate the needs and requirements of the changing socio-economic scenario of the country so that the pristine object of the Consumer protection Act, 1986 in consonance with the Constitution of India is not at all frustrated.
The opposite party developing the residential colony at NOIDA in Country Homes, Jaypee Greens Sport City, District-Gautam Buddha Nagar.The representative of the opposite party Mr. Rajesh Bhardwaj approached to the complainant and offered to purchase the plot in Country Homes, Jaypee Greens Sport city, NOIDA District- Gautam Buddha Nagar.
Thereafter, the complainant applied for booking of a plot in Country Homes, Jaypee Greens Sport city, NOIDA District-Gautam Buddha Nagar and consequently the opposite party allotted a plot No. G-024 to the complainant vide allotment letter dated 22.01.2010 to the complainant.
The opposite party also issued the payment schedule and lay out plan of the site situated at Country Homes, Jaypee Greens Sport City, NOIDA District-Gautam Buddha Nagar, and it is also submitted that as per the payment schedule the complainant deposited Rs. 2 Lakhs vide cheque No. 677906 dated 03.12.2009 (Jammu and Kashmir Bank Branch-Bhopal). According to the payment schedule the complainant was required to pay total amount i.e. Rs.43,82,328/- in various phases as per payment schedule.
Thereafter the complainant paid Rs.9,00,134/- on 08.07.2010 against the payment of an amount of Rs.5,17,600/- which was due on or before 25.02.2010 and on completion of Earth Filling for the plot i.e. Rs.3,58,800/-, however as per the payment schedule the complainant was required to pay total amount of Rs.9,12,117/- (5,17,600/- which was due on or before 25.02.2010+ on completion of Earth filling for the plot i.e. Rs.3,58,800/- + interest of Rs.35,717/- but the complainant deposited only Rs.11,983/- at that time).Thereafter as per the payment schedule the complainant was required to pay Rs.5,38,200/- on completion of leveling for the plot, out of that the complainant deposited 5,14,310/- accordingly the complainant deposited Rs.23,724/- less than which was required to pay.
Thereafter on demarcation of Plot boundary, the complainant was required to pay Rs.5,38,200/- in pursuant to it, the complainant deposited Rs.5,33,057/- and remaining amount along with Rs.84,917/- total amount Rs.6,17,974.00. After deposit of excess amount, the account for the complainant became regular. As per payment schedule on completion of road work for the plotted area and on laying of electrical and water supply services for plotted area the payment was required to an amount of Rs.3,58,800.00 for each and the same has also been deposited with the opposite party and thereafter, the complainant sent an e-mail to the opposite party and asked about the details of amount of Rs.6,17,974.00 which was earlier deposited and also sought information about any due payment.
The complainant again sent the e-mails on 10-11.10.2011 to the opposite party and requested him to provide the account details. Thereafter, the opposite party sent the account statement to the complainant vide e-mail dated 12.10.2011. In the said account statement the outstanding was Rs.19,44,337.00 and the interest amount was Rs.2,48,802.00 . It is also pertinent to mention here that in the said account statement, there was no entry of deposit of Rs.6,17,974.00. Thereafter, the complainant sent another e-mail to the opposite party and asked about the entries of Rs.6,17,974.00. The opposite party sent a mail on 12.10.2012 along with amended account statement wherein the outstanding was shown as Rs.13,26,366.00 and interest of Rs.1,74,155.00.
It is relevant to submit here that from the perusal of both account statement sent by the opposite party an amount of Rs.6,17,974.00 had not been recorded in the account book in the month of February when the same was deposited and they continuously charged the interest in the said alleged dues and when the complainant made complaint and asked about the said payment then after 10 months the opposite party corrected their account books but did not correct the interest amount which was wrongly charged. There was fault of the opposite party in not making entry of the amount which has already paid and they also charged the interest against the alleged payment which was also against the terms and conditions agreed by the parties and also against the principle of natural justice.
It is pertinent to submit here that in spite to rectify their own faults, the opposite party sent a threatening letter to the complainant for cancellation of the plot and asked for payment of Rs.13,26,363.00 to the complainant vide notice dated 17.11.2011. In pursuant to the notice dated 17.11.2011 the complainant deposited a sum of Rs.13,20,000.00 through RTGS in the account of the ICICI Bank of opposite party on 14.12.2011 and the complainant asked several times about the interest but the opposite party did not inform about the charges of interest and therefore, the complainant did not deposit interest amount.
Even after receiving the amount of Rs.13,20,000.00 the opposite party cancelled the allotment of plot no.G-24 at Jaypee Greens, Sports City, Gautam Budh Nagar (U.P.) vide letter dated 28.1.2012 wherein it has been stated by the opposite party that the complainant failed to pay the outstanding dues and the breaches committed by the complainant and it was also stated by the opposite party that they have forfeited the amount deposited by the complainant. After payment of Rs.13,20,000.00 the complainant deposited entire principal amount against the plot in question.
Thereafter, the complainant sent several e-mails to the opposite party and sought information that under which circumstances the said cancellation letter has been sent to the complainant but the opposite party did reply to the complainant. The conduct and action of the opposite party is completely against the principles of natural justice and also gross deficiency in providing services.
The opposite party forfeited the amount deposited by the complainant without any rhyme and reason and which was completely against the terms and conditions agreed by the parties.
The husband of the complainant is Government doctor and out of their savings they booked the said plot and subsequently from the help of husband the complainant deposited the principal amount against the said plot. The complainant shocked after receiving the cancellation letter dated 27.10.2012 however, she has deposited the principal amount before issuance of the said letter.
It is also relevant to submit here that after receiving the cancellation letter dated 27.1.2012 the complainant faced mental agony and undergone for medical treatments only because of the grave deficiency of service committed by the opposite party. The opposite party had cancelled the allotment of the plots of the complainant in an arbitrary, mechanical and absolutely illegal manner. To the utter shock and dismay of the complainant, the opposite party has failed erroneously to act in concurrence with the tenets of laws and fair services and as per the agreement as such the complainant is put to adverse situation and the legitimate rights and interests of the complainant has been prejudiced at the behest of the opposite party without any rhyme and reason.
It is submitted that the said action on the part of the respondent bank/its authorities is not only an illegal act but it is also serious misconduct, negligence and grave deficiency in service of the respondent and on the basis of which coercive measures are being taken against the complainant. The opposite party had adopted corrupt practices absolutely abhorring the mutually agreed terms and conditions of the agreement.
The opposite party has committed monumental error in altering the terms and condition, mutually agreed, unilaterally without intimating the complainant candidly without bothering to inform the complainant. The complainant has been succumbed to unprecedented circumstances due to the negligent and misconduct of the opposite party absolutely in contravention with the law of the land and contrary to the rule of law.
The complainant has at many times brought to the notice of the opposite party the illegalities done in the account of the complainant by altering the terms and conditions of the agreement unilaterally and creating a new agreement in sheer emasculation of the original agreement the new unilateral agreement cannot be enforced against the complainant when the complainant has not given its consent for the same. The complainant has dragged the attention of the opposite party again and again towards their innumerous irregularities and illegalities for which the complainant is being reprimanded.
The opposite party has unnecessarily adopted deceptive and unfair practices to demean the status of the complainant in the society in sheer disrespect for the tenets of law and in conflict with the RBI guidelines which are mandatory in nature, and the banks are under obligation to abide by it. The opposite party has adopted the measures which are not only against the legal proposition but also nugatory to the social acceptance, where the name and reputation of a person is of indispensable importance thereby the said builder has exhausted the trust and faith reposed in it in a slip shoddy manner. Certainly the act of the opposite party tantamount to mischief for harassing, moreover it will be significantto enumerate that the conduct of the opposite party is very deceitful and suspicious since after making a representation also in this regard it has not been intentionally corrected merely to cause mental agony to the complainant.
The respondent has malafidely and mischievously issued the cancellation notice to harm and malign the reputation and goodwill of the complainant instead the opposite party should have been cautious and vigilant enough to discharge the public duty entrusted upon it in a fair and legal manner. The complainant tried his best to get the anomalies rectified from the opposite party by making oral as well as written representations at several occasions but all went in vain and the opposite party are still bent upon to cause irreparable loss and injury to the legitimate rights and interests of the complainant in a mechanical manner. The complainant fails to understand as to why the opposite party are adamant to whittle down the canon of laws in dealing with the matter of the complainant and curtailing the rights of the complainant in sheer abuse of the rights granted to it and making the remedy available farce. The act of the opposite party cannot be justified at any cost and moreover it is inept in the social and legal frame of our country where the reputation of oneself is still of paramount relevance and now the opposite party cannot be allowed to frazzle the same for no rhyme and reason.
The essence of the Consumer Protection Act, 1986 is to protect the rights and interests of the consumer from being mutilated or twisted at the behest of the opposite party, and if at this point of time this Hon'ble Commission does not take the cognizance of the matter, then certainly the complainant will suffer huge irreparable loss which will also result in trivialization of the concept of law and justice. The preamble, object and the provision of the Consumer Protection Act, clearly establish the mandate of the legislature and the intention of the legislature is to safeguard the rights and interests of the complainant otherwise the protection granted under this Act will reduce to a mere illusory object.
The objectionable act of the opposite party should be whittled down otherwise legal frame work and the purpose of the Consumer Protection Act, 1986 will be negated and the object of the Act will be frustrated making mockery of the judicial proceedings of this courts and majesty of this Hon'ble Commission. A bare perusal of the Consumer Protection Act will render the significance of the Act which is to strengthen the consumers against the corrupt practices and provide them better facilities as contemplated but the opposite party has itself deviated from the settled and admitted banking practices to theutter shock of the complainant.
The Apex Court has clearly propounded that "the jurisdiction of Consumer Forum has to be construed liberally so as to bring many cases under it for their speedy disposal ....the court speaking on the jurisdiction of the Consumer Fora held that the provisions of the said act are required to be interpreted as broadly as possible and the fora/courts would also have jurisdiction to adjudicate upon lis....... The court has gone upto saying that if two different fora have the jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the subject of the Consumer Forum to adjudicate upon the dispute could not be negated....."
The conduct of the opposite party is very suspicious as the opposite party is duty bound to act in accordance with the law of the land but the opposite party has flagrantly flouted the tenets of law, against the entrusted public duty and is accountable for its working so that the democratic structure of our country does not collapse at the behest of an individual whims and fancies. Moreover, the complainant has legitimately expected transparency and accountability in the working of the opposite party with its dealings and transactions but unfortunately the action of the respondent has engraved a lacuna and has accrued a major set back to the status of the complainant.
The complainant has failed to get substantial response from the respondent herein the facts mentioned in the preceding paras has inflicted torture and mental agony which he is not at all worthy of, thereby the complainant seeks the timely intervention of this Hon'ble Commission for safeguarding and securing the rights and redressal of his genuine grievances.
At this stage it is pertinent to submit that section 2(1)(c) of the Consumer Protection Act, 1986 defines 'as complaint' and section 2(1)(o) defines 'service' and section 2(1)(r) defines 'unfair trade practice' and which are being reproduced herein under for the convenience of the this Hon'ble Commission:
Section 2(1)(c) "Complaint" means any allegation in writing made by a complainant that-
an unfair trade practice or a restrictive trade practice has been adopted by (any trader or service provider ;
[the goods bought by him or agreed to be bought by him] suffer from one or more defects;
[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;
a trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price-
Fixed by or under any law for the time being in force;
displayed on the goods or any package containing such goods;
displayed on the price list exhibited by him by or under any law for the time being in force;
(d) agreed between the parties;
(v) goods which will be hazardous to life and safety when used, are being-offered for sale to the public-
(a) in contravention of any standard relating to safety of such goods as required to be complied with, by or under any law for the time being in force;
(b) if the trader could have known with due diligence that the goods so offered are unsafe to the public;
(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety;
with a view to obtaining any relief provided by or under this Act;
Section 2(1)(0)'Service' means service of any description which is made available to potential (users and includes the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 2[housing construction] entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
Section 2(1)(r) 'Unfair trade practice' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;-
(1) the practice of making any statement, whether orally or in writing or by visible representation which,-
(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
(ii) falsely represents that the services are of a particular standard, quality or grade;
(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof:
Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;
(viii) makes to the public a representation in a form that purports to be-
a warranty or guarantee of a product or of any goods or services; or
(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, If such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;
(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or 'are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally. in the relevant market unless it is clearly specified to be .the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;
(x) gives false or misleading facts disparaging the goods, services or trade of another person. (continued) It is worth a mention that the scheme of law as manifest from the above provisions of Consumer Protection Act, 1986 is intended to outlaw practices which are deceptive or otherwise unfair to consumers. The Consumer courts are empowered by the above provisions to protect consumers from deceptive business practices because as a practical matter, the law as it relates to fraud and misrepresentation does not give adequate protection to consumer/investors. The type of projections, it is submitted can be attacked by the consumer/investors, is one by which the 'projections' 'representation' is designed to make prospective purchasers believe that they would be getting a 'great deal'. The consumer must get what he is told. Whereby any method whatsoever, a belief is created in the minds of the consumer as to some quality or utility of services and they actually fall short of this standards, this will be unfair to the consumer.
It is also relevant to submit here that the said plot was booked in Bhopal and the complainant was also resides at Bhopal therefore, the complainant preferred a complaint case before ld. District Forum, Bhopal against the deficiency of the opposite party at Bhopal and thereafter, on the ground of territorial jurisdiction, without entering in to merit ld. District Forum, disposed the said complaint vide order dated 29.12.2012. Thereafter, the complainant filed a complaint case before the ld. District Forum, Gautam Buddha Nagar where the territorial jurisdiction was vested and thereafter, ld. District Forum, Gautam Budda Nagar passed on order dated 18.4.2018 for return of the said complaint in view of the appeal no.196 of 2014,Gurubax Singh Bains vs. M/s Omaxe decided on 13.10.2014 passed by Hon'ble NCDRC, wherein it has been decided that ld. Forum is not having power to decide the complaint vide order dated 18.4.2016, which are not having pecuniary jurisdiction more than Rs.20,000.00 and admittedly in the present case the worth of the plot was Rs.43,83,328.00 and in the present case the complainant sought Rs.40,000.00 as compensation the said prayer cannot be granted by the District Forum.
In view of the facts, circumstances and reasons stated in preceding paras with substantial reasoning, logic and justification, it is expedient and necessary in the interest of justice, equity and fair play the complainant seeks the intervention of this Hon'ble Commission for safeguarding the legitimate rights and interest of the complainant and this Hon'ble Commission may graciously be pleased to stay forthwith the entire proceedings being initiated against the complainant in an arbitrary and illegal manner.
In the light of aforesaid facts and substantial reasons stated hereinabove, the complainant has been unnecessarily dragged into this avoidable and vexatious litigation by the opposite party/its authorities due to various acts of omission and commission committed by them against the complainant and consequently the complainant has necessarily incurred litigation costs to which he is lawfully and otherwise entitled to receive the same from the opposite party which has been monetarily assessed to the tune of Rs.40 lacs and litigation cost of Rs.1,50,000.00 against the opposite party to meet the end of justice.
The opposite party has filed their reply wherein at the outset it is submitted that the instant complaint under reply herein is completely devoid of merits and has been filed with the sole motive to harass the respondents herein, abuse the process of law and to extort benefits from the respondent herein which cannot be countenanced in any manner whatsoever. The contents of complaint are hereby denied, save and except which are categorically admitted hereinafter.
It is noteworthy that the main prayer made before this Hon'ble Commission is for quashing the cancellation letter dated 28.01.2012 cancelling the Provisional Allotment of plot no G-024 Jaypee Greens Sports City, Gautam Buddh Nagar. The Instant prayer is infructous as the opposite party never cancelled the allotment and never gave effect to the said cancellation letter. Also subsequently the Opposite Party offered the possession of the said plot to the Complainant vide offer of Possession letter dated 28.03.2012 The opposite party had not given effect to the said Cancellation Letter at the request of the complainant herein. The facts as brought outs paras 2 & 3 above are sufficient to show that there is no cause of action warranting the filing of the instant complaint. It is submitted that there is no deficiency in service on the part of respondent and the respondent has not indulged in any unfair trade practices herein as alleged or otherwise. It is submitted that the Complainant herein has failed to fulfill her contractual obligations to pay the demands as per the agreed payment plan on time and thus, has herself committed breach of her contractual obligations. Thus, the purported grievance of complainant raised in the complaint is baseless, devoid of merit and is infact tainted with malafides.
It is also stated that complainant herein has booked a plot of land in the sub project Country Homes for speculating in the real estate market. Therefore, the complainant is not a consumer as defined in section 2(d) of the consumer protection act, 1986 and the present complaint is liable to be dismissed on this ground alone.
Brief factual background of the instant dispute is being provided herein below for the kind consideration of this Hon'ble commission.
The respondent herein launched a project being "Country Homes" at Jaypee Greens Sports City, Gautam Budh Nagar (UP) (hereinafter referred as "the said project") wherein it interalia proposed to allot premium plots to its prospective buyers.
The complainant herein approached the respondent and submitted an application dated 08.01.2010 seeking allotment of one plot in the said project of the respondent. At the time of booking of the plot, the complainant paid a sum of Rs.2,00,000 as the booking amount and agreed to pay further balance as and when the same were to become due and payable. Clauses 2, 6 & 7 of the undertaking given by the complainant attached with the said application read as under:
"2. In the event of the company agreeing to provisionally allot the said premises to me/us,I/we agree to pay further installments of the consideration and all other dues as stipulated in the application/provisional allotment letter/the payment plan or as may be varied in accordance with the standard terms and conditions failing which the provisional allotment shall be treated as cancelled and earnest money paid by me/us shall stand forfeited in favour of the JPSK.
6. I/ we have seen and understood the scheme of development, tentative plans/other documents, at Jaypee greens sports city and I/We also agree to abide by all the terms and conditions of YEA or any other statutory or civic authority to which the JPSK and consequently, the applicant, is subject to or any other condition which the company/JPSK may prescribe.
7. I/we agree & undertake to pay further installments without any formal demand by the company in accordance with the schedule of payments attached herewith or with the provisional allotment letter (including maintenance deposit/advance/charges and other charge as may be prescribed by the company/JPSK) to be issued by the company accepting my/our candidature for provisional allotment."
Pursuant to the above, the respondent herein issued a provisional allotment letter date 22.01.2010 allotting a plot of land being unit reference no. G-024 in said project of the respondent admeasuring 200.00 sq. mtrs.(239.20sq. yards.) (hereinafter referred as "the said plot") in favor of the complainant herein. It is also relevant to mention herein that the said provisional allotment letter dated 22.01.2010 had specific payment plan which is agreed by and between the parties herein as under:
Stage Amount (in Rs.) Amount already received 200000 On or before 25.2.2010 517600 On completion of earth filing for the plot 358800 On completion of leveling for the plot 538200 On demarcation of plot boundary 538200 On laying of services (drainage and sewage) for the plotted area 478400 On completion of road work for the plotted area 358800 On laying of electrical and water supply services for the plotted area 574080 On offer of possession 818248 Total 4382328 As per standard terms and conditions, timely payment of installments dues was the essence of agreement and as per the more particularly described in clause 9.1.5 as if the cancellation by the company was a cancellation by the allottee as described in clause 9.1.5. The terms of the clause 5.5 should not be construed to prejudice the rights of the company to take any other actions against the allottee as it may deem appropriate under applicable law.
"5.6 ...Notwithstanding anything stated herein and without prejudice to the company's right to cancel the allotment/ provisional allotment or to refuse to execution of the indenture of conveyance by JPSI, as provided herein and without, in any manner condoning any delay in payment of consideration and other dues, the allottee shall be liable to make payment of simple interest at the rate of 18% per annum, which at this juncture is considered to be fair representation of rates in respect of loan/borrowing of the company/JPSI and the same will accordingly be subject to change in accordance with change in prevailing lending/ borrowing rates, on the outstanding amounts of consideration and other dues from the due date(s)upto their payment or cancellation of the allotment/provisional allotment. The payments made by the allottee shall first be adjudged against the interest and/or any other penalty, if any due from the allottee to the company under the terms herein and the balance available, if any shall be appropriated against the installment(s) due from allottee under the standard terms and conditions and the allotment/provisional allotment letter."
Standard Terms and Conditions, failure of the allottee to make payments regularly, entitled respondent to terminate the provisional allotment and appropriate the earned money and recover any amount due alongwith interest. Some of the relevant payment clauses are reproduced herein below for ready reference:
3.1 The applicant/allottee shall make all such payments of consideration and other charges at such times and as detailed in this application form/provisional allotment letter, without any requirement for the company to send out any notice or intimation to the application/allottee. All payments by the applicant/allottee are required to be made by demand drafts or by cheques payable at New Delhi/ Noida/Greater Noida.
5.5 ...The timely payment of consideration other dues as more particularly described in the application form and these standard terms and conditions are an essential prerequisite to the execution of the indenture of conveyance. The allottee hereby agrees and understands that notwithstanding anything stated hereinabove, failure of the allottee to comply with the terms of payment of the consideration shall entitle the company terminate the allotment/provisional allotment, refuse to execute the indenture of conveyance and appropriate the earnest money. The company shall, upon cancellation, be free to deal with the said premises in any manner, whatsoever, at its sole discretion. The amount(s) if any, paid over and above the earnest money is refundable to the allottee by the company without any interest thereon in the manner as ...(not written).
After issuing the provisional allotment letter dated 22.1.2010, the respondent herein carried out the development work in the project for handing over the possession to the allottees. However, the complainant herein grossly defaulted in making payments as per the payment plan and after making a payment of Rs.22,32,418.00, the complainant failed to make any further payment to the respondent herein despite several reminders/demand notices.
In view of the said gross default on the part of the complainant herein, the respondent was constrained to issue a notice for cancellation dated 17.11.2011, duly served whereby the complainant was put to notice to make payments of amounts due within a period of 30 days failing which the provisional allotment was to be cancelled.
It is further relevant to mention herein that despite the aforesaid notice of cancellation dated 17.11.2011, the complainant herein failed to make payments as per the demand made by the aforesaid notice. Accordingly on basis of default made by the complainant and due to the failure of the complainant to fulfill her contractual obligations, regarding aforesaid notice dated 17.11.2011, the respondent cancelled her provisional allotment vide its cancellation letter dated 28.1.2012. However, at the request of the complainant the letter of cancellation was not given effect, as has been mentioned hereinabove. Subsequently the complainant was provided an updated statement of account of the unit wherein all payments received had been entered. The complainant was also provided with the calculation interest due to be paid on account of delayed payments.
In the above factual background, it is evident that there is no deficiency in service and any such unfair trade practices have been made on the part of the respondent herein as alleged or otherwise. Further, it was the complainant herein who had defaulted on her contractual obligations and therefore, she cannot seek any remedy from this Hon'ble Commission. It is submitted that the respondent herein has always acted in a completely professional manner keeping in mind the best interests of its customers and has always tried to help the customers in every possible manner.
It is, therefore, submitted that the respondent herein has acted in complete good faith and has carried quality work as promised, in the said plot of land of the complainant herein as well. It is wrong to allege that the respondent has not been performing its contractual part as per the standard terms and agreement of the project or there is any deficiency in service as alleged or otherwise.
The complainant herein has deliberately suppressed material facts in his complaint and has made false allegations against the respondent herein. It is therefore, evident that he has not approached this Hon'ble Commission with clean hands and therefore, the instant complaint is liable to be dismissed.
In view of above, it is evident that the respondent has always acted in a bonafide manner and has acted in a professional and efficient manner keeping the best interests of its consumer in sight. It is therefore, incorrect to allege that the respondent has committed deficiency in service, misrepresentation or it lured the complainant. On the other hand, it is the complainant who had filed the instant complaint as an afterthought, raising completely false and specious allegations in order to launch malicious prosecution against the respondent herein and to extort illegal benefits on the basis of the same. Such illegal design of the complainant is clearly an abuse of the process of law and is liable to be rejected.
In view of above, it is prayed that this Hon'ble Commission may be pleased to dismiss the complaint under reply being devoid of merits, with exemplary costs.
We have heard ld. Counsel for the complainant Sri Kushagra Dixit and ld. Counsel for the opposite party Sri Pratul Pratap Singh and perused the entire record.
We have seen the provisional allotment letter dated 22.01.2010 issue by Jaiprakash Assciates Limited in which it has been stated "reference your application number JPSK -CH -143 dated 08.01.2010 for provisional allotment of the plot of land at Jaypee Greens Sports City, Gautam Budh Nagar and your agreeing to abide by the standard terms and conditions for allotment of the said plot, referred to in the aforesaid application form (the "Standard Terms and Conditions), we have pleasure in provisionally allotting one plot of land bearing Unit Reference Number G-024 at Jaypee Greens Sports City, Gautam Budh Nagar located as per "Location Plan" enclosed herewith As Annexure-1 and having approximate plot area of 200 m² (239.20 yd²) for a consideration of Rs.4,066,400/-."
Rs.2 lakhs has been paid on 03.12.2009 to the opposite party. Thereafter at different times, amounts were given to the opposite party by the complainant . It is also clear that the complainant sent emails to the opposite party for providing the account details on which the opposite party sent the account statement to the complainant vide email dated 12.10.2021 disclosing the outstanding amount as Rs.1,944,337/- and interest as Rs.241,802/- and it was found that in this account of the statement the entry of Rs.617,974/- was missing. The complainant again sent an email regarding it and thereafter the opposite party replied vide email that the outstanding is Rs.1,326,366/ and interest Rs.174,155/. It means that the complainant has deposited Rs.2,740,160/ which is more than 50% of the consideration amount. The opposite party also sent a letter to the complainant on 17.11.2011 asking the complainant to deposit Rs.1,326,363/and thereafter the complainant deposited Rs.1,320,000 / through RTGS in the account of ICICI Bank of the opposite party on 14.12.2011. In spite of depositing such huge amounts, the opposite party vide letter dtd 28.01.12 cancelled the allotment of plot number G-24, Jaypee Greens Sports City, Gautam Budh Nagar. So it is clear that on the date of cancellation the entire basic amount of the plot has already been deposited by the complainant.
In the Provisional Allotment Letter DTD 22.01.2010 the opposite party has written "subject to the Standard Terms and Conditions, the possession of the said plot is expected to be delivered you within the period of 12 (twelve) months here of." So the promised period for handing over the possession of the land was 12 months. It means the possession of the plot was to be handed over on 21 January 2011. Now it is clear that in this case the default is opposite party in not delivering the possession of the said plot within the promised date and it is deficiency of service as well as unfair trade practice.
Now we first consider about the clause 10.09 of the application form in which it has been written "Dispute Resolution - any and all disputes arising out of or in connection with or invitation held to shell so far as possible, in the first instance of, the amicable settled between the company/JPSK and the applicant. In the event of disputes, claim and/or differences not be amicably resolved such disputes shall be referred to soar arbitrator of a person nominated for the purpose by the chairman of the company." Now the opposite party has stated that this dispute should have been referred to the arbitrator and this commission has no jurisdiction to try this case. So in this regard we have 2C the object of the Consumer Protection Act.
What are the main objectives of consumer protection act?
The Consumer Protection Act, came into existence and implemented in 1986, provides Consumer Rights to prevent consumers from fraud or specified unfair practices. It safeguards and encourages and gives an opportunity to consumers to speak against insufficiency and flaws in goods and services. If traders, manufacturers and distributors follow any foul trade, this act protects their rights as a consumer.
On which products are these right applicable?
This Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered.
Objectives of consumer protection act To Provide better and all round protection to consumer.
To Provide machinery for the speedy redressal of the grievances.
To Create framework for consumers to seek redressal.
To Provide rights to consumers.
To Safeguarde rights of Consumers.
Let us know more about the rights and responsibilities of consumer Consumer Rights Listed below are the Rights of the Consumer Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.
Consumer Responsibilities Responsibility to be aware - A consumer has to be careful of the safety and quality of products and services before purchasing.
Responsibility to think independently- Consumer should be well bothered about what they want and need and hence make independent choices.
Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want Responsibility to complain- It becomes the consumer's responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.
The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers' disputes and for matters connected therewith (Preamble).
The Act Inter alia, seeks to promote and protect the rights of consumers such as --
(1) right to be protected against marketing of goods which are hazardous to life and property;
(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
(3) right to be assured, wherever possible, access to variety of goods at competitive prices;
(4) right to be heard and to assured that customers' interests will receive due consideration at appropriate forums.
(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and (6) Right to consumer education The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.
The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.
Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers' grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.
The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.
Extent of Consumer Protection:
While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt. Ltd. v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.
Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate itin accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.
The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act. Whenever there is clash between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.
Somewhat similar situation aroused in front of Supreme Court in the case of Aftab Singh and Others v. Emaar MGF Land Limited and Another ( Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017)[1]. In this case the Supreme Court cleared out the battle between arbitration and the statutory remedy when it comes upon solving the consumer disputes, which also upheld the decision of the National Consumer Disputes Redressal Commission (NCDRC). In this case, the apex body for the consumer dispute in India (NCDRC) ruled in the favor of the statutory remedy over the arbitration.
CONSUMER PROTECTION ACT (CPA) The beneficial legislation of Consumer Protection Act aims at reducing the grievances of the all classes of customers by providing them the preferential treatment. According to the Consumer Protection Act, the consumer dispute is the entity where the consumer/ customers have been given the convenient safeguards against ample exploitation like bad customer service, faulty goods or any unfair trade practices. The interest of the customers is protected by setting up, the three tier quasi-judicial consumer Redressal machinery which are at national, state and district levels as per section 9 of Consumer Protection Act. The Consumer Protection Act, 1986 (CPA) has been enacted in light of certain concerns related to public policy and the benefit of consumer.
RELATIONSHIP BETWEEN ARBITRATION ACT AND CPA In India, people are least aware with the consumer's rights and lags behind having low general understanding of arbitration as dispute resolution mechanism. The arbitration clause can curtail the grounds on which the consumers can raise the disputes, whereas on the other side the consumer protection act may grant the consumer various grounds on which he can file the complaint which may not be otherwise permitted in the standard form agreement having the arbitration clause.
Arbitration has equal bargaining powers and the resources at hand which makes it private, efficacious, and timely form of dispute resolution. Whereas in case of consumer disputes, the case is different, where they are exposed to the standard form agreements making them submit to the unfair or the repressive terms. They are several times made part of the one-sided arbitration clause, which is drafted keeping in mind the interest of one party only.
These days Indians are shifting to the online purchasing platform and being ignorant of not checking the agreements which makes them to be covered under the blanket provision and end up being the party to the arbitration. This makes less options opened for the consumer to resort to the statutory remedies which in turns endangers the interest of the consumers. This may also build the hostile market against the e-commerce in India. It may have the adverse effect not only on the Indian economy but also on the e-commerce giants who aims at invest in the growing market.
CONSUMER COURT AS A SPECIAL COURT It was held in the case of Aftab Singh v Emaar MGF Land Limited & Anr., that the provisions of the arbitration act does not apply to the consumer courts, as they are the special courts set up for the public purpose. In this case, the group of the home owners filed the complaint against Emaar MGF Land Private Limited (Builder) before NCDRC. The complaint was filed for the non-delivering the plots to the buyers as per the Buyers' Agreement. The builder filed the application under section 8 of the Arbitration and Conciliation Act, on the basis of the arbitration agreement made between the parties which was mentioned there in the Buyer's Agreement.
It was argued by the petitioner that the remedies provided under the Consumer Protection Act are not in exclusion of the existing laws, but are in addition to it, which has been sated in the case of National Seed Corporation Limited v M. MadhusudhanReddy( (2012) 2 SCC 506 ) . It was also argued that the consumer protection act is the piece of the legislation which intends to confer the benefits and it is the, for which the purpose should be advanced. Therefore, regardless of having entered into the arbitration clause, the consumer can invoke the section 3 of the Consumer Protection Act and bring the complaint to the consumer forum( Skypak Couriers Ltd. Vs. Tata Chemicals Ltd)[3].
The builder pleaded that the Consumer Courts act as the 'judicial authority' within the scope of section 8 of the Arbitration and Conciliation Act and therefore if there is any valid clause entered between the parties, then the consumer courts can refer the parties to the arbitration. And hence according to the act the consumer courts are obliged to bring the case for the arbitration, irrespective of the High Court and Supreme Court decisions. The NCRDC's full bench ruled that the arbitration act does not bars the consumer court's jurisdiction relying on the Supreme Court's judgement in the case of Booz Allen Hamilton Inc v. SBI Home Finance Ltd(2011) 5 SCC 532), which provided the country with the disputes that are not arbitrable. In this case, Supreme Court, came with the 7 categories of the disputes that are not arbitrable [5].
The commission also relied on the Supreme Court judgement in the case of A. Ayyasamy v. A Paramasivam(2016)10 SCC 386 ;N. Radhakrishnan v. Maestro Engineers) that the dispute will not be arbitrable if the civil court's jurisdiction has been exclusively given to a tribunal or the special court. The Consumer Courts were made to create an organized system for dispute between the people who possess the unequal power i.e. the consumer and the large corporations. The commission also pointed out the section 2(3) of the Arbitration and Conciliation Act which refers to the situations where the special categories of disputes are protected from being referred to the arbitration. Therefore this provision protects the Consumer disputes. The court concluded that if the court allows party to go for the arbitration and being in favor of the builder, it will defeat the goals and the main purpose of the Consumer Protection Act.
THE CONDITIONS PRIOR AND POST 2015 AMENDMENT TO SECTION 8 OF ARBITRATION AND CONCILIATION ACT Section 8 of the Arbitration and Conciliation Act states that the judicial authority can instruct the parties to go for arbitration in the case when there exists the arbitration clause in the arbitration agreement. It does not bars oust the jurisdiction of the Consumer Court, it will continue to hold and enjoy the jurisdiction irrespective of presence of an arbitration clause in the agreement.
The Supreme Court contented that there was no legislative intent of the amended provisions of the section 8(1) in the Arbitration and Conciliation Act, so as to override the other statutes which have the specific remedies. Neither it intends to make disputes related to trusts, criminal law, tenancy, telecom, family law, IPR, etc, as the arbitrable subject and to against the judgment of A Ayyasamy v A Parasivam & Ors.(2016) 10 SCC 729 ) and Booz Allen Hamilton Inc. v SBI Home Finance Limited &Ors.(2011) 5 SCC 532 ) Supreme Court analyzed the situations prior to 2015 Amendment, related to referring the consumer disputes to arbitration. Supreme Court referred to the judgments prior 2015 which had the settled law in cases of Fair Air Engineering Pvt. Ltd & Anr. V N K Modi (1996) 6 the SCC 385), National Seeds Corporation Limited v Madhusudhan Reddy & Anr (2012) 2 SCC 506) and Rosedale Developers Private Limited V Aghor Bhattacharya & Ors (2018) 11 SCC 337). These cases held that even if the dispute arise from the contract having the arbitration clause, it will not impede the parties to resort to file a complaint before the consumer forum under Consumer Protection Act. All of the judgements had the rationale that provision of section 3 of Consumer Protection Act states that "the provision is in addition to, and not in the derogation of any other law for the time being in force."
The Supreme Court acknowledged the 2015 amendment which restricted the power of any judicial authority to refuse to refer the dispute to arbitration under section 8(1) and appointment of arbitrator under section 11(6A) and also acknowledged the fact that it invalidated the earlier precedent in the case of Sukanya Holding (P) Ltd v Jayesh H Pandya & Anr.( 2003) 5 SCC 531) Supreme Court considering section 2(3) of the arbitration act, states that the Part I of the arbitration act shall not affect any other law for the time being in force, by virtue of which certain disputes may not be submitted to the arbitration. Supreme Court stated that the legislative intent of 2015 Amendment was never to override section 2(3) of the Arbitration Act and other statute which offers the public remedy like that of CPA.The Supreme Court in 1994 already held that CPA is a beneficial legislation which provides the economical and expeditious remedies to the aggrieved consumer in the case of Lucknow Development Act V M K Gupta(1994) 1 SCC 243).
Referring to all of the above cases, the Supreme Court in this case affirmed that the decision given by NCDRC is valid and stated that the consumer dispute are the subject matter where the dispute cannot be referred to arbitration as it pertains to rights in rem (public rights). It comes under the ambit of the non-arbitrable dispute defined under Booz Allen and Ayyasamy case. The disputes are non-arbitrable in disputes related to criminal laws, tenancy, trusts, family law, telecom, IPR, insolvency and winding up, and in certain cases, fraud.
CONCLUSION AND CRITICS OF THE CASE It can be ensured with the judgment that consumers who have lesser bargaining power than that of the service providers shall not be pushed towards the relatively cumbersome process of the arbitration where there can be other more affordable and efficacious low public law remedies available. The CPA is a special legislation which has the public law remedies dealing with the rights under the umbrella of "right in rem" which has been espoused by Booz Allen. The case had many critics for it, as it was delivered during the course of time, when India has been continuously focusing upon the survival and the supremacy of the arbitration proceeding over litigation in the Indian dispute resolution. And it was the major reason that it appeared for some of the people as a diversion from the object of Indian arbitration system to be an arbitration-friendly hub. This also draws our attention towards the fact that the arbitration shall be made a more consumer-friendly method of dispute resolution. It is because of this judgment that people were able to depict the heightened element of the public interest consumer dispute in India.
[1]Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017 [2](2012) 2 SCC 506 [3]Skypak Couriers Ltd. Vs. Tata Chemicals Ltd [4](2011) 5 SCC 532 [5]Vimal Kishore Shah v Jayesh Dinesh Shah (2016) 8 SCC 788 [6] (2016)10 SCC 386 ;N. Radhakrishnan v. Maestro Engineers [7](2016) 10 SCC 729 [8](2011) 5 SCC 532 [9](1996) 6 the SCC 385 [10] (2012) 2 SCC 506 [11](2018) 11 SCC 337 [12](2003) 5 SCC 531 [13](1994) 1 SCC 243 So it is clear that The Consumer Protection Act is a special type of act and even if there is a clause of arbitrator in the application form, it will not oust the jurisdiction of the consumer courts. So this court has jurisdiction to try the case.
We have seen the written statement of the party in para 13, the opposite party has stated "it is further relevant to mention herein that, despite the aforesaid notice of cancellation dated 17.11.2011, the complainant herein failed to make payments of as per the demand made by the aforesaid notice. Accordingly on the basis of default made by the complainant and due to failure of the complainant to fulfil her contractual obligations, regarding aforesaid notice dated 17.11.2021, the respondent cancelled her provisional allotment vide its cancellation letter dated 28.01.12."
Further it is stated by the opposite party, "however at the request of the complainant the Letter of Cancellation was not given effect, as has been mentioned here in above. Subsequently the complainant was provided and updated statement of account of the unit wherein all payments received had been entered. The complainant was also provided with the calculation interest due to be paid on account of delayed payments."
It clearly shows that the letter of cancellation was threatening letter and that too was to extort money from the complainant and surprisingly the cancellation letter was issued after the due date of delivery of possession in which the opposite party failed. What interest has been paid by the opposite party to the complainant for such delay to deliver the possession? It is surprising that no offer of delivery of possession has ever been offered till now or there is no document showing the execution of the sale deed. In addition to it there is no copy of completion certificate and occupancy certificate or NOC's of the fire department, Civil Action Department, Pollution Control Department has been filed. So it is clear that no possession has been given by the opposite party to the complainant till now.
The Hon'ble Supreme Court in CIVIL APPEAL NO(S). 3533-3534 OF 2017 M/S. FORTUNE INFRASTRUCTURE (NOW KNOWN AS M/S. HICON INFRASTRUCTURE) & ANR. VS TREVOR D'LIMA & ORS. (Judgment March 12 , 2018 ) has held:
In the above-mentioned case Hon'ble Supreme Court also held regarding payment of compensation or quantum of compensation as follows:
"15. Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/complainants is entitled to ?"
Further the Hon'ble Supreme Court has held regarding payment of compensation:
"18. This Court in Ghaziabad Development Authority v. Balbir Singh, (2004) 5 SCC 65, has observed that there is no fixed formula for fixing damages in the following manner '8. However, the power and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above, what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on finding of loss or injury and has to correlate with the amount of loss or injury. Thus, the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard-and-fast rule can be laid down, however, a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him. Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury, both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore, the compensation in such cases would necessarily have to be higher. ... We clarify that the above are mere examples. They are not exhaustive. The above shows that compensation cannot be the same in all cases irrespective of the type of loss or injury suffered by the consumer." (emphasis supplied) In this case the opposite parties have not committed any layout plan or any letter showing that they did any work towards acquiring the said land for the construction of the project. The cause of action in this case is continuing cause of action because the unit has not been allotted to the complainant within a reasonable time of three years and the complainant has requested many times to the opposite parties to allot the unit. After a period of three years, everyday cause of action is arising. The complainant is a consumer and he paid consideration for the allotment of a unit. Till 2022 the complainant did not get the possession of his flat for which he deposited total amount after procuring loan from various persons. The present case witnesses the fact that the unit has not been allotted to the complainant till date. This is a clear case of deficiency of service and unfair trade practice.
In Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan, (2019) 5 SCC 725, there was a delay of almost two years in obtaining an occupancy certificate after the date stipulated in the ABA. As a consequence, there was a failure to provide possession of the flat to the purchaser within a reasonable period. This Court dwelt on the terms of the ABA under which the builder was entitled to charge interest at 18 per cent per annum for the delay in payment of instalments by the purchaser. On the other hand, the failure to provide possession on the part of the developer was subject to a grace period of twelve months followed by a termination notice of ninety days and a further period of ninety days to the developer to effect a refund. Adverting to these clauses, the court noted:
"6.4. A perusal of the apartment buyer's agreement dated 8-5- 2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4(ii) of the agreement entitles the appellant builder to charge interest @18% p.a. on account of any delay in payment of instalments from the respondent flat purchaser. Clause 6.4(iii) of the agreement entitles the appellant builder to cancel the allotment and terminate the agreement, if any instalment remains in arrears for more than 30 days. On the other hand, as per Clause 11.5 of the agreement, if the appellant builder fails to deliver possession of the apartment within the stipulated period, the respondent flat purchaser has to wait for a period of 12 months after the end of the grace period, before serving a termination notice of 90 days on the appellant builder, and even thereafter, the appellant builder gets 90 days to refund only the actual instalment paid by the respondent flat purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the appellant builder is liable to pay interest @9% p.a. only. Another instance is Clause 23.4 of the agreement which entitles the appellant builder to serve a termination notice upon the respondent flat purchaser for breach of any contractual obligation. If the respondent flat purchaser fails to rectify the default within 30 days of the termination notice, then the agreement automatically stands cancelled, and the appellant builder has the right to forfeit the entire amount of earnest money towards liquidated damages. On the other hand, as per Clause 11.5(v) of the agreement, if the respondent flat purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the agreement thereafter, and shall be bound by the provisions of the agreement."
Hon'ble Justice Indu Malhotra speaking for the Court noted:
"6.8. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the agreement dated 8-5-2012 are ex facie one-sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder." The Court observed that in these circumstances, the flat purchasers could not be compelled to obtain possession which was offered almost two years after the grace period under the agreement had expired. Hence, the NCDRC was held to have correctly awarded interest at the rate of 10 percent per annum.
The decision of this Court in Dhanda Case, 2019 SCC On Line SC 689 has been relied upon by learned Senior Counsel appearing on behalf of the developer as elucidating the principle that where a flat buyers agreement stipulates a consequence for delayed possession, exceptional and strong reasons must be established before the forum constituted under the Act of 1986 awards compensation in addition to what has been contractually agreed. In Dhanda's case, the SCDRC issued a direction for handing over physical possession of the residential unit to the complainant and for execution of a sale deed. In addition, compensation was awarded by way of interest at the rate of 12 per cent per annum with effect from twelve months after the stipulated date under the agreement. In an appeal by the developer, the NCDRC directed that the rate of interest for a house building loan for the corresponding period in a scheduled nationalised bank would be appropriate and if a floating rate of interest was prescribed, the higher rate of interest should be taken for the computation. A sum of Rs.1 lac per annum from the date for handing over possession to the actual date of possession was regarded as appropriate in the facts of the case. In that case under the terms of the buyer's agreements, possession was to be delivered within twenty-four months of the execution of the agreement i.e. 10 February 2013 - failing which the developer was liable to pay compensation at the rate of Rs.10 per square foot per month for the delay. The developer contended that construction activities were delayed as a result of an injunction granted by this Court over a period of eight months and consequently sought an extension of the period for handing over possession by one year. Alternatively, the developer offered to refund the money deposited with interest at 9 per cent per annum. Construction of 258 independent floors was completed while about 1,500 units were nearing completion. In two sets of Civil Appeals which came up before this Court earlier, agreed terms were arrived at providing for the award of interest at 9 per cent per annum from the date of deposit till refund. While considering the order of the NCDRC, this Court observed:
"16. The District Forum under the Consumer Protection Act, 1986 is empowered inter-alia to order the opposite party to pay such amount as may be awarded as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party including to grant punitive damages. But the forums under the Act cannot award interest and/or compensation by applying rule of thumb. The order to grant interest at the maximum of rate of interest charged by nationalised bank for advancing home loan is arbitrary and no nexus with the default committed. The appellant has agreed to deliver constructed flats. For delay in handing over possession, the consumer is entitled to the consequences agreed at the time of executing buyer's agreement. There cannot be multiple heads to grant of damages and interest when the parties have agreed for payment of damages at the rate of Rs. 10/- per sq. ft. per month. Once the parties agreed for a particular consequence of delay in handing over of possession then, there has to be exceptional and strong reasons for the SCDRC/NCDRC to award compensation at more than the agreed rate."
Now the interest may be 6% to 10% in favour of the allottees if they have not been given possession of the flat/plot within promised or within a reasonable time. The complainant has deposited the entire agreed cost of the flat before June 2009. Now it is the duty and obligation of the opposite party to deliver the possession within stipulated time but they failed to do so.
In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC).These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 34 of 2013- Jasleen Viswanathan & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. & Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. & Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. & Anr.; 86 of 2010- Priyanka Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 101 of 2011- Mohd. Aslam Khan & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 130 of 2012- Dr. Sunil Kr. Singh & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 49 of 2012- Neera Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. & Anr.; 87 of 2010- Syed Gufran Ali Alvi & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. & Anr.; 175 of 20130- Umesh Chandra Dixit & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 97 of 2011- Pravin Kumar Goel & Anr. Vs. Parsvnath Developers Ltd. & Anr. which complaints were partly allowed.
The Hon'ble NCDRC held that:
"Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses.
The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate complaints before State Commission. Aggrieved by the order of Hon'ble State Commission, these appeals preferred before Hon'ble National Consumer Disputes Redressal Commission.
Hon'ble NCDRC discussed various case laws and after hearing the parties held, "Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under Section 2 (nnn) of Consumer Protection Act and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under Section 2(nnn) of Consumer Protection Act. "
"Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10 ( c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession. "
Against this judgment, parties went to Hon'ble Supreme Court. The judgment of Hon'ble Supreme Court is:-
In Nalin Bhargava vs. Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon'ble Supreme Court held:-
"Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc. It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahoty would insist that there should be imposition of costs as compensation.
Mr. Sachin Datta, learned senior counsel appearing for the developer has raised objections with regard to imposition of costs.
Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say "cost", we mean costs alone and nothing else."
These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of "The Merchant of Venice" The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer "a pound of flesh" as collateral against a loan. These acts of builders also remind us the age of Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers, so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages. Now in the background of all the facts and also the facts of the present case, we will also discuss something more.
Now in the present case it is crystal clear that the opposite party has shown deficiency of service and unfair trade practice and tried to extort money by way of sending letter for cancellation and thereafter keeping it pending. It is called jugglery, fraud, cheating etc. on the one hand they had kept the hard earned money of the complainant for so many years with them and in spite of that without calculating the interest accrued on the deposited amount of the complainant, the opposite party was continuously demanding extra money from the complainant. After perusing all the documents and pleadings we are of the opinion that in this case the complainant has proved the deficiency of service and unfair trade practice on the part of the opposite party. So the complainant are entitled for the following relief in this case.
The complainant is entitled to get the possession of the plot no G-024 , Jaypee Greens Sports City , Gautam Budh Nagar and execution of the sale deed within a period of eight weeks from the date of judgement of this complaint case with completion certificate and occupancy certificate along with NOC's of fire department, civil aviation department, pollution control Department and other relevant departments. If the delivery of possession and execution of sale deed has not been done within eight weeks, the opposite parties shall pay ₹ 1 lakh per month after eight weeks till the delivery of possession and execution of sale deed.
The complainant is entitled to get Rs.20,000/- per month as compensation from 21.01.2012 till the date of delivery of possession and execution of the sale deed and it shall be paid within eight weeks from the date of judgement of this complaint case otherwise the opposite party shall pay interest at a rate of 10% on this amount.
The complainant is entitled to get interest at a rate of 10% from the date of respective deposits of his amounttill the date of delivery of possession and execution of sale deed and it shall be paid within eight weeks from the date of judgment of this complaint case.
The complainant is entitled to get Rs.1.5 Lacs in view of the Hon'ble Supreme Court judgment as damages.
The complainant is entitled to get Rs.30 lakhs as compensation towards mental agony, torture, depression and harassment from the party to be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this case, the complainant shall be entitled to get interest at a rate of 10% after eight weeks from the date of judgement of this complaint case.
No amount of any kind whatsoever it may be shall be charged from the complainant by the opposite party and the payment of court fee shall also be bore by the opposite party. The complaint case is decided accordingly.
ORDER The opposite party is directed to hand over the possession of plot number G-024, Jaypee Greens Sports City, Gautam Budh Nagar to the complainant along with execution of sale deed within eight weeks from the date of judgement of this complaint case with completion certificate and occupancy certificate along with NOC's of fire department, civil aviation department, pollution control Department and other relevant departments. If the delivery of possession and execution of sale deed has not been done within eight weeks, the opposite parties shall pay Rs.1 lakh per month after eight weeks till the delivery of possession and execution of sale deed.
The opposite party is directed to pay Rs.20,000 per month as compensation from 21.01.2012 to the complainant till the date of delivery of possession and execution of sale deed and it shall be paid within eight weeks from the date of judgment of this complaint case otherwise the opposite party shall pay interest at a rate of 10% on this amount after the expiry of eight weeks from the date of judgment of this complaint case.
The opposite party is directed to pay Rs.1.5 Lacs to the complainant in view of the Hon'ble Supreme Court judgment as damages within eight weeks from the date of judgment of this complaint case otherwise the opposite parties shall pay interest at a rate of 10% after the expiry of eight weeks from the date of judgment of this complaint case till the date of actual payment.
The opposite party is directed to pay Rs.30 lakhs to the complainant as compensation towards mental torture, agony, depression and all the illegal activities done by him within eight weeks from the date of judgment of this complaint case otherwise the opposite party shall pay interest at a rate of 10% per annum after expiry of eight weeks from the date of judgment of this complaint case till the actual payment of this amount.
The opposite party shall pay interest at a rate of 10% to the complainant from the date of respective deposits made by the complainant towards opposite party, within eight weeks from the date of judgment of this complaint case otherwise the opposite party shall pay interest at a rate of 15% per annum after expiry of eight weeks from the date of judgment of this complaint case till the actual payment of this interest.
No amount whatsoever it may be shall be charged by the opposite party from the complainant including stamp duty for execution of sale deed. The opposite parties shall also bear the amount of court fee/stamp papers to be needed for registration of the sale deed.
All the decreetal amount and reliefs shall be paid within eight weeks from the date of judgment of this complaint case otherwise the opposite parties shall pay interest as mentioned above. If it is not paid within eight weeks from the date of judgment of this complaint case, the complainant shall be entitled to present Execution proceedings before this court at the cost of the opposite party.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh) Member Presiding Member Judgment dated/typed signed by us and pronounced in the open court. Consign to the Record Room. (Vikas Saxena) (Rajendra Singh) Member Presiding Member Dated September 2022. JafRi, PA II Court 2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER