State Consumer Disputes Redressal Commission
Wing Commander Tejveer Singh vs Parasvnath Developers Ltd. on 12 March, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 627 of 2017
Date of Institution : 28.07.2017
Date of Reserve : 06.03.2018
Date of Decision : 12.03.2018
1. Wing Commander Tejveer Singh S/o Sh. Ram Kishan, Now
R/o QMQ 106/4, Officers Enclave, 13 BRD, Pinto Park, Palam,
Delhi Cantt., New Delhi 110010
2. Dolly Devgan W/o Wing Commander Tejveer Singh s/o Sh.
Ram Kishan, Now R/o QMQ 106/4, Officers Enclave, 13 BRD,
Pinto Park, Palam, Delhi Cantt., New Delhi 110010
....Complainants
Versus
1. Parsvnath Developers Ltd., Corporate Office at 6th Floor,
Arunachal Building, 19, Barakhamba Road, New Delhi - 110 001
through its Managing Director.
2. Parsvnath Developers Ltd., King Citi Township, Rajpura
Ambala Road, Near Shambhu Barrier, Rajpura, Distt. Patiala,
Punjab, PIN 140401
....Opposite parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainants : Sh. R.P. Singh, Advocate
For the opposite parties: Sh. Satpal Dhamija, Advocat e
Consumer Complaint No. 627 of 2017 2
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
Complainants have filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that Ops came up with a project under the name and style of 'Parsvnath King City' on G.T. Road, Rajpura, Punjab in which they offered to sell 2/3 BHK flats. Complainant No.1 at that time was posted at Patiala and decided to settle down in and around Patiala after retirement as complainant No. 1 was working with Indian Air Force, accordingly, with an intention to buy residential flat for their own residential purposes after retirement, they agreed to purchase 3 BHK residential flat comprising 1580 sq. ft. bearing No. G-02 in Tower No. 12 with basic price of Rs. 19,53,275/-. Alongwith application, a sum of Rs. 75,000/- vide cheque No. 000214 dated 14.2.2008 drawn on State Bank of India, Jodhpur was sent, which was duly acknowledged by the Ops under receipt No. S0067984 dated 18.2.2008. On 29.2.2008, another sum of Rs. 1,20,328/- was deposited vide cheque bearing No. 000215 dated 29.2.2008 drawn on SBI, which was acknowledged by Ops vide receipt No. S0069143 dated 3.3.2008. Thereafter, buyer's agreement was executed between the parties. As per Clause 10(a) of the agreement, it was agreed that the construction of the flat is likely to be completed within a period of 36 months, extendable by another 6 months from the date of commencement Consumer Complaint No. 627 of 2017 3 of construction on receipt of sanctioned building plan etc. However, the construction was started in the year 2007 itself but Ops had constructed only one tower consisting 10 flats. Thereafter, Ops left the construction of the remaining towers in between. Complainant on 9.7.2017 had clicked some photographs showing date and time of clicking. The complainant had chosen down payment plan and the complainants have made the following payments:-
S. No. Particulars Amount (in Rs.)
1. Installment + Car Parking vide DD No. 11,71,280/-
226267 dated 12.5.2008 (Indian
Overseas Bank)
2. Installment vide pay order No. 000222 2,00,000/-
Dated 14.5.2008 (State Bank of India)
3. Installment vide pay order No. 000223 1,04,610/-
Dated 14.5.2008 (State Bank of India)
In this way, the complainant had paid in all a sum of Rs. 16,71,218/- to Ops till date out of the total sale consideration of Rs. 20,03,275/-, out of which Rs. 19,53,275/- Basic + Rs. 50,000/- Car Parking. As per Clause 10(c) of the agreement, in case there is delay in construction of the flat then Ops will pay penalty @ Rs. 5/- per sq. ft. per month till the date of possession. However, Ops failed to pay compensation to the complainants as agreed in the agreement. It was further mentioned that the complainants had taken a housing loan from AFGIS (Air Force Group Insurance Society) to the tune of Rs. 12 Lacs and had regularly paid all the installments every month @ Rs. 10,038/- out of his salary from April 2008 to October 2016 and the balance loan amount of Rs. 9,16,813/- was paid vide SBI cheque No. 564494 dated 7.11.2016. In this way, they paid a sum of Rs. 7,50,727/- as interest. The Consumer Complaint No. 627 of 2017 4 complainants kept on sending numerous correspondences by way of registered letters, emails, personal visits and telephone to know the date of possession and progress of the project but no satisfactory reply was ever given by the Ops. Even the complainants requested the Ops to adjust his amount in any other project, which is complete or near completion but even then nothing was offered. No explanation was given by the Ops why they stopped the construction. The Hon'ble U.T. State Commission in a judgment reported as 2013(2) CPJ 7 "Anita Rani Vs. Parsvnath Developers Pvt. Ltd." allowed refund of the deposited amount and penalty @ Rs. 10/- per sq. ft. per month and in the appeal, this penalty order was remained intact. Further the Hon'ble National Commission in 2015(1) CLT 552 "Puneet Malhotra Vs. Parsvnath Developers Ltd." hold that if the seller is charging interest from the buyer @ 24% p.a., it should have no hesitation to pay the similar interest. Alleging deficiency in service on the part of Ops, this complaint has been filed by the complainants against the Ops seeking following directions:-
i) The Opposite Party be directed to refund the amount of Rs. 16,71,218/- to the complainants from the respective dates of deposit along with interest @ 24% p.a.
ii) The Opposite Party be directed to pay to the complainants the amount of penalty on account of delay in possession Rs. 5,60,900/- @ Rs. 5/- per sq. ft.
i.e. Rs. 7,900/- per month (1580x5) from 1.9.2011 till refund (calculated till 1.7.2017, 71 months). Consumer Complaint No. 627 of 2017 5
iii) The Opposite Party be directed to pay Rs. 7,50,727/-
as interest amount which complainant No. 1 has paid to the AFGIS on the loan amount of Rs. 12,00,000/- till date.
iv) The Opposite Party be directed to pay to the
complainants an amount of Rs. 10,00,000/- as
compensation for causing mental tension, harassment, undue hardship and agony due to deficiency in providing the service, alongwith Rs. 2,00,000/- as cost of present litigation.
v) Any other relief this Hon'ble Commission may deem fit, be awarded in favour of the complainants and against the Opposite parties.
2. Upon notice, Ops appeared and filed their written reply through Mr. Ajay Kashyap, Authorized Representative giving background of the case stating that 3 BHK flat bearing No. T-12- G02 measuring 1580 Sq. ft. in the project of Ops, namely, 'Parsvnath Castle' at Rajpura was booked vide booking application form dated 14.2.2008 with basic cost of the flat was Rs. 18,17,000/- and the complainants opted for down payment plan alongwith 12% rebate and thereafter, buyer's agreement was executed. The complainants sought permission to mortgage the flat to get a loan with the Financer, which was allowed and tripartite agreement dated 4.4.2008 was executed between the complainants, Ops and the Financer. In Clause No. 10(a) of the flat buyer's agreement, it has been stated that the flat is likely to be completed within a Consumer Complaint No. 627 of 2017 6 period of 36 months to be extendable by further 6 months from the date of commencement of the construction, subject to receipt of approvals including sanctions of the building plan, environmental clearances etc. and force majeure conditions and in case of non- completion of the project within the stipulated time, Ops had undertaken to pay penalty @ Rs. 5/- per month under Clause 10(c) of the agreement. Till date, the complainants have paid a sum of Rs. 16,71,218/-. The flat of the complainant was re-numbered to T12A-G02 due to certain changes in the original layout plan. Whenever any enquiries were made by the complainants, it was intimated that every effort is being made to handover the possession at the earliest. Certain preliminary objections were taken that complaint has been filed without any justifiable cause; complaint is baseless, vexatious, therefore, not maintainable. The complainants have prayed for relief of refund, which should be claimed in a suit for damages and recovery, therefore, consumer complaint is not maintainable; this Commission does not have the pecuniary jurisdiction to try and entertain the present complaint and that the complicated questions of law and facts are involved, which cannot be addressed in the summary procedure, therefore, the matter be relegated to the Civil Court. On merits, the averments stated in the background of the case were reiterated. Against the judgment of Ravinder Kumar Bajaj Vs. Parsvnath Developers Ltd., appeal has been filed before the Hon'ble National Commission and in case 'Puneet Malhotra Vs. Parsvnath Developers Ltd.', no interest @ 24% p.a. was allowed by the Hon'ble National Consumer Complaint No. 627 of 2017 7 Commission. In case there is delay, then penalty can be paid as per Clause 10(c) of the buyer's agreement, therefore, it was denied that there is any unfair trade practice or deficiency in service on the part of Ops. Complaint is without merit, it be dismissed.
3. The parties were allowed to lead their respective evidence in support of their complaint. Complainants in their evidence has tendered affidavit of Wg. Cdr. Tejveer Singh as Ex. C-A and documents Ex. C-1 to C-6D and Mark-A to Mark-E whereas due to non deposit of the costs, evidence of Ops is closed vide order dated 26.2.2018.
4. We have heard the counsel for the parties and have carefully gone through the pleadings of the parties, evidence and documents on the record.
5. In the written reply, an objection has been taken by the counsel for the Ops that the complainants have sought a relief for refund for which suit of damage or recovery should have been filed and it is not a consumer dispute. In case the services of the Ops were availed for getting constructed flat from the Ops for which consideration to the tune of Rs. 16,71,218/- has been paid and in case the Ops have failed to deliver the possession of the flat within the specified time. The construction services come under the "service" as defined under Section 2(1)(o) of the Act and in case there is any deficiency in service on the part of Ops, then it is a consumer dispute. In case there is any deficiency in services on the part of Ops then the complainant has a right to get back money deposited alongwith compensation and interest as determined by Consumer Complaint No. 627 of 2017 8 the Consumer Fora, therefore, we do not agree with the plea raised by the counsel for the Ops that it is not a consumer dispute.
6. Another objection has been taken that the Commission does not have the pecuniary jurisdiction. According to Section 17 of the CP Act, pecuniary jurisdiction of this Commission is from Rs. 20 Lacs to Rs. 1 Crore. As per buyer's agreement, basic sale price of the flat has been mentioned as Rs. 19,53,275/-. A sum of Rs. 16,71,218/- has been deposited with the Ops from 18.2.2008 onwards and interest has also been claimed alongwith the compensation and certainly the amount exceeds Rs. 20 Lacs and less than Rs. 1 Crore, therefore, we are of the opinion that this case falls within the pecuniary jurisdiction of this Commission.
7. Another objection taken by the Ops with regard to complicated questions of law and facts involved, therefore, the matter be referred to the Civil Court. In case we go through the pleadings of the parties, the complainants booked 3BHK flat with Ops and had paid a sum of Rs. 16,71,218/-. In this case, there is no complicated question of law and facts involved as it is only the interpretation of documents and then to see whether there is any deficiency in service on the part of Ops. We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission. The benches of this Commission are headed by retired High Court Judges/retired District & Session Judges, who have long experience at their back and are fully competent to decide such like matters. In this regard, we are fortified by the judgment of "Dr. J.J. Merchant and others Consumer Complaint No. 627 of 2017 9 Vs. Shrinath Chaturvedi", 2002(6) SCC 635 wherein it was held that 'the State Commission and District Forum are headed by retired High Court Judges and officers of District Judge level and in our view, this is not such a case which cannot be decided by the 'Consumer Fora' after obtaining evidence and if need be after getting an expert opinion'. Further reference can be made to "Shiv Kumar Agarwal versus Arun Tandon and another", 2007(2) CLT 287, decided by the Hon'ble National Commission. In that case a plea that case involves complicated questions of fact and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled - Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. Therefore, we are of the opinion that this Commission is fully competent to decide this complaint and no cause of action is made out to refer the case to the Civil Court.
8. As per the evidence of the complainant on record, apart from their own evidence in the form of affidavit of complainant No. 1 Ex. C-A, which is as per the lines of the complaint, they have placed on the record receipts Ex. C-1, Ex. C-2, Ex. C-5, Ex. C-5A and Ex. C-5B, showing various amounts deposited by the complainant, otherwise in the written reply, it has been admitted by the Ops that a sum of Rs. 16,71,218/- was deposited by the complainants with the Ops. The complainants have placed on the record various letters Ex. C-6 to C-6D vide which request has been made to deliver the possession but the Ops did not respond to it. Consumer Complaint No. 627 of 2017 10 Except the written reply, no evidence has been tendered by the Ops on the record. According to Clause 10(a), the possession was to be delivered within 36 months, extended by 6 months from the date of commencement of construction on receipt of sanction of the building plans, revised building plans and approvals of all concerned authorities including the Fire Service Deptt., Civil Aviation Deptt. Traffic Deptt., Pollution Control Deptt., as may be required for commencement and carrying on construction. This is a vague clause, otherwise, according to Section 3 of the PAPRA, it is required to give a specific outer date within which the flat will be delivered to the complainant. In case it is subject to various other things, which may not be complete even upto date then it is violation of the PAPRA, otherwise, we can take 42 months from the date of execution of the agreement between the parties, which was executed on 10.3.2008 and 42 months completed upto September, 2011 and now we are in 2018 and till date there is no response what is the fate of the flat to be given to the complainants. In case the possession is not delivered within the agreed time, it amounts to deficiency in services, it is so held by the Hon'ble National Commission in case reported as II (2014) CPJ 131 "PUDA versus Kanwalpreet Singh" that in case there is delay in handing over the possession, it amounts to deficiency in service and refund order can be passed. A reference has also been made to I (2017) CPJ 513 (NC) "Neha Suri versus Unitech Reliable Project Pvt. Ltd." In that case, the possession of the flat was not given as agreed. It amounts to deficiency in service. Amount deposited alongwith Consumer Complaint No. 627 of 2017 11 interest was ordered to be refunded. Similar order was passed in I (2017) CPJ 113 "Vishal Issar v. Park Wood Developers Pvt. Ltd.".
9. Now the next question arises what will be the rate of interest or the penal amount over and above the fixed period. It has been argued by the counsel for the complainant that it should be as per agreement but in the case of refund, this position has been examined by the Hon'ble National Commission in number of judgments. For reference, we can refer the judgment of the Hon'ble National Commission in CC No. 427 of 2014 "Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd." decided on 8.6.2015 wherein the Hon'ble National Commission observed as under:-
"However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Consumer Complaint No. 627 of 2017 12 Buyer's Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer's Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer's Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer's Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment.
It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound Consumer Complaint No. 627 of 2017 13 interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer's Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as Consumer Complaint No. 627 of 2017 14 would be evident from the use of word "including" before the words "any of the following practices".
The same view was upheld by the Hon'ble National Commission in CC No. 347 of 2014, "Swarn Talwar & Ors. Vs. Unitech Ltd." decided on 14.8.2015. A reference has also been made to the judgment of the Hon'ble Supreme Court in "K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board", C.A. No. 6730-6731, decided on 19.9.2012. In that case, the District Forum has allowed interest @ 12% p.a. and its appeal was dismissed by the State Commission as well as the Hon'ble National Commission and after relying upon the judgment of "Ghaziabad Development Authority Vs. Balbir Singh", (2004) 5 SCC 65, the interest @ 18% per annum on the deposited amount was allowed alongwith Rs. 50,000/- as compensation. Against the judgment of the Hon'ble National Commission in "Swarn Talwar & Ors. Vs. Unitech Ltd.", C.C. No. 347 of 2014 (supra), Op preferred the appeal before the Hon'ble Supreme Court i.e. Civil Appeal No. 35562 of 2015, decided on 11.12.2015 and passed the order as under:-
"We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference.
The Civil Appeal is dismissed."
Therefore, we are of the opinion that in case the flat was not delivered within time and the complainants have asked for the Consumer Complaint No. 627 of 2017 15 refund, then penal clause in the agreement will not be applicable and the complainants shall be entitled to interest on the deposited amount.
10. What should be the rate of interest? It has been referred in Rule 17 of the PAPRA, 1995 i.e. Rate of Interest on refund of advance money upon cancellation of agreement, in which it has been provided as under:-
"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."
Accordingly, the complainant will be entitled to interest @ 12% p.a. on the deposited amount. We are of the opinion that this rate of interest is quite reasonable rate of interest. In number of similar complaints, we have also allowed the interest @ 12% p.a. i.e. Consumer Complaint No. 386 of 2016 "Meenakshi Puri versus Country Colonizers Pvt. Ltd. & Ors.", decided on 28.11.2017 and 'Consumer Complaint No. 3 of 2017 "Lt. Gurnur Singh Mahiwal & Anr. Versus M/s Country Colonisers Pvt. Ltd. & Ors.", decided on 4.1.2018.
11. No other point was argued.
12. Sequel to the above, we allow the complaint and direct the Ops as under:-
Consumer Complaint No. 627 of 2017 16
(i) to refund a sum of Rs. 16,71,218/- to the complainants alongwith interest @ 12% from the various dates of deposit till actual payment;
(ii) Ops are directed to pay a sum of Rs. 50,000/- as compensation on account of mental and physical harassment suffered by the complainants.
(iii) pay Rs. 21,000/- towards litigation expenses. The above directions be complied by the Ops within a period of 45 days from the date of receiving of the copy of the order, failing which the complainants shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
13. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
14. The counsel for the parties / concerned parties are directed to collect free certified copy of the order from the office of the Commission within a period of 15 days from the date of pronouncement.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER March 12, 2018.
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