State Consumer Disputes Redressal Commission
Ruchi Gupta vs Pearls Infrastructure Projects Ltd. on 15 June, 2017
CC No.278 of 2015 1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
1.
Consumer Complaint No.278 of 2015
Date of Institution : 19.10.2015
Date of Decision : 15.06.2017
1. Ruchi Gupta W/o Sanjay Gupta, r/o H.No.5776, Sector 38
West, Chandigarh.
2. Sanjay Gupta s/o Late Sh.Rameshwar Dass R/o H.No.5776,
Sector 38 West, Chandigarh.
....Complainants
Versus
1. Pearls Infrastructure Projects Ltd., S.C.O. No.6, Sector 69,
Mohali through its Director, Sh.Kanwaljit Singh Toor.
2. PACL Ltd., Registered Office : 22nd, 3rd Floor, Amber Tower,
Sansar Chand Road, Jaipur, through its Managing Director,
Gurmeet Singh.
.....Opposite parties
2.
Consumer Complaint No.288 of 2015
Date of Institution : 05.11.2015
Date of Decision : 15.06.2017
1. Ruchi Gupta W/o Sanjay Gupta, r/o H.No.5776, Sector 38
West, Chandigarh.
2. Sanjay Gupta s/o Late Sh.Rameshwar Dass R/o H.No.5776,
Sector 38 West, Chandigarh.
....Complainants
Versus
1. Pearls Infrastructure Projects Ltd., S.C.O. No.6, Sector 69,
Mohali through its Director, Sh.Kanwaljit Singh Toor.
2. PACL Ltd., Registered Office : 22nd, 3rd Floor, Amber Tower,
Sansar Chand Road, Jaipur, through its Managing Director,
Gurmeet Singh.
.....Opposite parties
Complaint under Section 17(1)(a)(i) of
Consumer Protection Act, 1986
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member
Present:-
For the complainants : Sh.S.S.Gill, Advocate For opposite party No.1: Sh.Anuj Kohli, Advocate For opposite party No.2: Ex-parte CC No.278 of 2015 2 HARCHARAN SINGH GURAM, MEMBER The above referred Consumer Complaints are being decided by this common order, as common questions of law and facts are involved in both the complaints. The facts are taken from Consumer Complaint No.278 of 2015.
2. The complainants Ms.Ruchi Gupta wife of Sanjay Gupta and Sh.Sanjay Gupta son of Late Sh.Rameshwar Dass have filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short, 'the Act').
3. The relevant brief facts of the case as averred in the complaint are that the complainants as co-applicants purchased plot No.1794, measuring 250 sq. yards in Pearls City, Sector 100, Mohali, township of the opposite parties in resale from Sh.Harinder Pal Singh, i.e. the original allottee, for basic sale price of Rs.62,50,000/- and they also paid Rs.35,000/- plus Rs.4,326/- as service tax on Club Membership. It was averred that opposite party No.2 is the Company which acquired and purchased the land in Sector 100 for the development of township known as Pearls City and opposite party No.1 is the company with whom opposite party No.2 has entered into a project management agreement for the project management and supervision of developments in the said township. The Plot Buyer's Agreement was executed between them and opposite party No.1 on 23.12.2011. It was averred that they have made full and final payment towards the said plot and opposite party No.1 had acknowledged the full and final payment from them. As per clause 10 of the Buyer's Agreement the opposite parties were required to CC No.278 of 2015 3 deliver the possession of the plot within three years from the date of signing of the Plot Buyer's Agreement i.e. within three years from 23.12.2011. It was averred that the complainants purchased the said plot for her daughter Rishti Gupta who was minor at the time of purchase of the same. The opposite parties issued offer of possession after a delay of 9 months from the stipulated date i.e. on 22.09.2015. It was averred that the letter of possession was merely a paper possession as the opposite parties have not taken completion certificate from the competent authorities nor completed all the development works on the site. On receipt of letter for offering of possession from the opposite parties, the matter was taken up by them with the opposite parties through e-mails. It was pleaded that the opposite parties promised to provide Club facility in Sector 100 as per brochure. Later on it was informed that Sectors 100 and 104 would have a common Club and the said club is being developed in Sector 104 which would take time to be built up completely. It was further averred that they were also informed that the water tank supplying water would be built in Sector 104 and the same would be catering to 100 also. It was pleaded that Club was still not developed in Sector 100 and the opposite parties had already charged from them for Club membership in advance whereas as per Clause 18 of Plot Buyers Agreement, it was their discretion to become the members of the Club but they were not given any option to exercise their discretion. It was pleaded that the said project is in the name of opposite party No.2 which was already having dispute with Securities and Exchange Board of India (SEBI) for collecting money from investors by running Collective Investment Scheme (CIS) and has CC No.278 of 2015 4 been ordered by SEBI vide its order dated 22.08.2014 to return the amount of Rs.49,100/- crore to the investors within three months from the date of attachment, otherwise recovery proceedings would be started against them. It was averred that the order passed by the Securities and Appellate Tribunal (SAT) against the opposite parties were upheld in favour of the SEBI vide its order dated 02.09.2015. It was further pleaded that SEBI also imposed fine of Rs.7,269 crores vide its order dated 02.09.2015 on opposite party No.1. The accounts of the opposite parties have been seized by the Government authorities. They purchased the plot in a bonafide manner and were not aware of the activities of the promoter, who indulged in such activities and stated that the entire land held by opposite parties No.1 & 2 stands attached by the SEBI. It was pleaded that a RTI application was filed by them in May, 2015 seeking information from GMADA as to whether the builder would be able to deliver the possession without completing the developmental works. The reply received from GMADA, stated that the Builder cannot offer possession without completing the development works. It was pleaded that opposite party No.1 while marketing the project Pearls City did not disclose the fact that the land belongs to opposite party No.2, which was into a business of collecting money from the public by unauthorized way. On coming to know of attachment of property of the opposite parties, they have an apprehension that the plots purchased by them also stands attached under the SEBI order, as such, they would not be able to get the possession of the plot from opposite parties. Accordingly, they have filed their consumer complaint in this Commission and sought directions to be issued CC No.278 of 2015 5 against the opposite parties in view of the above circumstances; to refund the total amount of Rs.66,01,826/- paid by them; to pay Rs.5,00,000/- as compensation on account of mental agony and harassment; to pay Rs.1,00,000/- as litigation expenses alongwith interest at the rate of 9% per annum from the date of deposit till realization and any other relief which this Commission deems fit and proper in their favour.
4. Upon notice, opposite party No.1 filed their written statement through Sh. Harvinder Singh, Officer Marketing, Pearls Infrastructure Projects Ltd. being the authorized person to pursue the litigation on behalf of the opposite party No.1. As per the preliminary objections, the complaint has been contested on the ground that the complaint is not maintainable in the present form. The complainants have got no cause of action to file the instant complaint against them. The complainants are not covered under the definition of consumer under the Consumer Protection Act, 1986 as they purchased the plot for investment purpose and for earning profits and the present complaint filed against the opposite parties is mis-conceived and not maintainable. The complainants have not approached the Commission with clean hands and have held back true and material facts from the Commission. They have put forth a concocted story in order to win over the sympathy of the Commission. The present complaint has been filed by the complainants just to wriggle out from their contractual liabilities. The controversy involved in the complaint is of disputed, complicated questions of facts and law which can be decided only by way of detailed evidence and pleadings and cannot be adjudicated in a summary manner and the matter be referred to a CC No.278 of 2015 6 Civil Court. The Commission do not have requisite jurisdiction to entertain the present complaint as per Clause 29 of the terms and conditions of the Buyers Agreement, which was duly signed by both the parties which states that any dispute arising out of this agreement would be referred to the sole arbitrator appointed by the promoter in accordance with the provisions of Arbitration and Conciliation Act, 1996 as amended from time to time.
5. On merits, the averments of the complaint in Paras No.1 to 3 are admitted. They denied the contentions raised by the complainants in their para No.4 and pleaded that as per the Buyer's Agreement there was no definite period to deliver the possession of the plot within three years i.e. from the date of signing of Plot Buyer's Agreement dated 23.12.2011 rather it was to be delivered subject to the fulfillment of terms and conditions of the Plot Buyer's Agreement. It was pleaded that complainants did not purchase the said plot for their daughter, rather the said plot was purchased by them in resale for earning profits and for commercial purposes. It denied the averments of the complainants that merely paper possession of the plot was offered to them when no development work stands completed at the site. They denied the averments regarding the construction of Club in Sector 104 which would be a common Club for both Sectors 100 and 104. It was pleaded that from the beginning it was crystal clear that Sector 100 and 104 was an integrated township and the amenities would be common like Club. They denied the averments that the complainants were not given the option to exercise their discretion for opting out for Club Membership rather they themselves opted for getting the Club Membershp and were not CC No.278 of 2015 7 forced by them and vehemently denied all the averments as pleaded in the complaint and prayed for dismissal of the complaint.
6. Notice was issued to opposite party No.2 on 19.05.2016 but it did not come present before this Commission and was proceeded against ex-parte vide order dated 22.07.2016.
7. Both the parties were given opportunities to lead their evidence in support of their averments. For proving the allegations made in the complaint, the complainant proved their affidavits as Ex.CA & Ex.CB and documents Ex.C-1 to C-21. On the other hand, opposite party No.1 proved on record the affidavit of its Assistant Manager as Ex.OP-1/A and documents Ex.OP-1/1 to Ex.OP-1/5 and Mark A.
8. We have heard the arguments of learned counsel for complainants and opposite party No.1.
9. Learned counsel for the complainant argued that the Managing Director, namely Sh.Nirmal Singh Bhangu of the Pearls Group stands arrested and is in the Jail. He further argued that the Hon'ble Supreme Court has directed the Securities Exchange Board of India (in short "SEBI") to take possession of all the assets of the Group Companies of Sh.Nirmal Singh Bhangu. He further argued that the stand of the opposite party No.1 is that they are not in position to deliver the possession of the plot, the same cannot be accepted in view of the order passed by the Hon'ble Supreme Court on 26.02.2013 in Civil Appeal No.6753 & 6754 of 2004 filed by SEBI titled "SEBI Vs. PACL India Limited and others" which was decided in favour of the SEBI against the present opposite parties. They do not have any authority to allot the property to the present complainants. CC No.278 of 2015 8 He further argued that SEBI released a press release PR No.98/2014 dated 26.08.2014, wherein it is stated that the properties of all the Group Companies of PACL stand attached. He further argued that the amount deposited by the complainants be ordered to be refunded.
10. On the other hand, learned counsel for the opposite party No.1 argued that the Buyers agreement was entered into between the complainant and Pearls Infrastructure Projects Limited and as per this agreement under Clause 29, this Commission has no power to decide the complaint and needs to be relegated to the Sole Arbitrator. He further argued that Pearls Infrastructure Projects Limited is a promoter and had purchased the land measuring 500 acres approximately in Sector 100 and 104 of SAS Nagar, Mohali. It was further contended that they have all the necessary approvals and documents as mentioned in Buyers agreement i.e. CLU permissions from the competent authority for an area measuring 174.79 acres situated in Sector 100, Mohali. It was further averred that the entire project is going on smoothly and they are in a position to handover the possession of the plot to the complainants even at this stage. He argued that as per the terms of the Plot Buyer's Agreement opposite party No.1 was only an adviser to PACL for the execution of the project launched by them It was argued that in the capacity of an Advisor they cannot be held liable for any account of deficiency in service qua the plot in question.
11. In order to decide the present controversy in hand regarding whether the Commission has the powers to decide the CC No.278 of 2015 9 matter or it needs to be referred to the arbitrator as argued by the learned counsel for the opposite parties?
12. So far as the contention of the learned counsel for the opposite party No.1 with regard to the existence of clause 29 in the Buyer's Agreement is concerned, the remedy available under the Act is an additional remedy and the matter is no more res-integra. Hon'ble Supreme Court in Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233 and in Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
13. Recently, it was held by the Hon'ble National Commission, in Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016, as under:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, CC No.278 of 2015 10 constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
In view of the above, objection raised by counsel for the opposite party No.1 that matter is required to be referred to the sole arbitrator is without any merit and is fallacious hence rejected.
14. In order to decide the controversy in hand whether Pearls Infrastructure Projects Ltd. was only an Advisor or it can be held liable for any deficiency in service or not?
15. The Hon'ble National Commission in Revision Petition No.2697 of 2016 titled as M/s Pearls Infrastructure Project Ltd. Vs. Varun Mahajan have decided this controversy as under:-
"Having glanced thorough the Plot Buyer Agreement and other related documents, which include the receipts issued by the Petitioner acknowledging receipt of money from the Complainant, we are unable to persuade ourselves to agree with the Learned Counsel. It is true that in the said Agreement, there is a reference to the arrangement between PACL and the Petitioner, but the CC No.278 of 2015 11 said Agreement is not a tri partite Agreement between PACL, the Petitioner and the Complainant, inasmuch as it has not been signed by PACL even as a Confirming Party let. A plain reading of the said Agreement leaves no scope for doubt that there was privity of contract between the Complainant and PACL. Admittedly, not only the booking of the flat was at the instance of the Petitioner, the payments towards the cost of the plot were also being received by the Petitioner against its own receipts. The mere fact that the amounts received from the Complainant were being deposited in an escrow account, maintained for execution of the project, Christened as "Pearls City" the first name of the Petitioner Company, in our view, does not absolve the Petitioner from its liability under the Plot Buyer's Agreement entered into by the Complainant with the Petitioner only."
Thus, it is abundantly clear from the above that both the opposite parties are liable for deficiency in service jointly and severally.
16. So far as the contention of the learned counsel for opposite party No.1 that the complainants have purchased two plots in the same Township and, as such, they have purchased the Plot for commercial purpose and they do not fall within the definition of 'consumer', is concerned, there is nothing on record that the complainants purchased the plot in question for commercial purpose. Thus, in the absence of any cogent evidence in support of the objection raised by the learned counsel for opposite party No.1, mere bald assertion i.e. simply saying that the complainant is neither a consumer nor the end user of the plot and same have been booked by him for commercial purpose, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai CC No.278 of 2015 12 Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, it was held by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the Hon'ble National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only this, recently in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the Hon'ble National Commission negated the plea taken by the builder, while holding as under:-
"In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house.CC No.278 of 2015 13
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Moreover, the complainants themselves have stated in their complaint that they purchased two plots for their personal use/self-living as well as for family members consisting daughter. The complainant, thus, falls within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by learned counsel for opposite party No.1, therefore, being devoid of merit, is rejected.
17. It would be apposite to refer to the relevant provisions of Punjab Apartment and Property Regulation Act, 1995 (in short, PAPRA"), which are as follows:
3. General Liabilities of Promoter:-
(1) Notwithstanding anything in any other law for the time being in the force, a promoter, who develops a colony or who constructs or intends to construct a building of apartments, shall, in all transactions with persons taking or intending to take a plot or an apartment on ownership basis, be liable to give or produce, or cause to be given or produced, the information and the documents mentioned hereinafter in this section.
(2) A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
(a) make full and true disclosure of the nature of his title to the land on which such colony is developed or such building is constructed or is to be constructed, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
(b) make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land;
(c) give inspection on seven days, notice or demand,-
(i) of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony; and
(ii) of the plan and specifications of the building built or to be built on the land as well as of the common areas and facilities and common services provided (including supply of electricity and water, sewerage and drainage systems, lifts, CC No.278 of 2015 14 fire-fighting equipment), such plans and specifications being in accordance with the provisions of the building regulations, and approved by the authority which is required so to do under any law for the time being in force, indicating thereon what parts of the building and the appurtenant areas are intended to be kept as common areas and facilities in the case of apartments :
Provided that the number and sizes of the apartments shall conform to such building regulations, and the area of an apartment shall not exceed such limit as may be fixed by the competent authority;
(d) display or keep all the documents, plans and specifications or copies thereof referred to in clauses (a), (b) and (c) of this sub-section at the site and in his office and make them available for inspection to persons taking or intending to take a plot or an apartment and after the association is formed, he shall furnish the association a copy of these documents and of the sanctioned plan of the building;
(e) disclose the nature of fixtures, fittings and amenities, including the provision for one or more lifts, provided or to be provided;
(f)disclose on reasonable notice or demand, if the promoter is himself the builder, the prescribed particulars as respects the designs and the materials to be used in construction, and, if the promoter is not himself the builder, disclose all agreements entered into by him with the architects and contractors regarding the design, materials and construction of the building;
(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
(h) except where there are no agreements about specific plots or apartments and allotment is made by draw of lots, prepare and maintain a list of plots or apartments with their numbers, the names and addresses of the parties who have taken or agreed to take plots or apartments, the price charged or agreed to be charged therefor, and the terms and conditions, if any, on which the plots or apartments are taken or agreed to be taken;
Provided that the competent authority may direct that,-
(i) in the case of residential apartments, if the total number of apartments is one hundred or more, ten percent of the apartments; and
(ii) in the case of colony, if the total area of the colony is forty hectares or more, ten per cent of the area under residential plots and houses, be reserved for being sold or leased to such person belonging to such economically weaker section of society, in such manner and on such terms and conditions as may be prescribed;
(i) state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons who have taken or are to take the apartments;
(j) not allow person to enter into possession until an occupation certificate required under any law is duly given by CC No.278 of 2015 15 the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained;
(k) make a full and true disclosure of all outgoings, including ground rent, if any, municipal or other taxes, charges for water and electricity, revenue assessment, interest on mortgages or other encumbrances, if any;
(l) give the estimated cost of the building and the apartments proposed to be constructed, or colony to be developed, and the manner in which escalation in such cost for valid reasons may be approved by mutual agreement ;
(m) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and
(n) give on demand and on payment of reasonable charges true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed.
4. Issuing of Advertisement or Prospectus:-
(1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication.
(2) The advertisement or prospectus issued under sub-
section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed. (3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
(4) When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
(a) the promoter, if an individual;
(b) every partner of the firm, if the promoter is a firm;
(c) every person who is a director at the time of issue of
the advertisement or prospectus, if the promoter is a company :
CC No.278 of 2015 16
Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or
(b) the advertisement or prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c) after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor. (5) When any advertisement or prospectus includes any untrue statement, every person who authorised its issue, shall be punished with imprisonment for a term which may extend upto one year or with fine which may extend upto five thousand rupees, or, with both, unless he proves that the statement was immaterial or that he had reason to believe and did upto the time of issue of the advertisement or prospectus believe that the statement was true.
5. Development of Land into Colony:
(1) Any promoter, who desires to develop a land into a colony, shall make an application in the prescribed form alongwith the prescribed information and with the prescribed fee to the competent authority for grant of permission for the same and separate permission will be necessary for each colony.
(2) On receipt of the application under sub-section (1), the competent authority, after making enquiry into the title to the land, extent and situation of the land, capacity of the promoter to develop the colony, layout of the colony, conformity of the development of the colony with the neighbouring areas, plan of development works to be executed in the colony and such other matters as it may deem fit, and after affording the applicant an opportunity of being heard and also taking into consideration the opinion of the prescribed authority, shall pass an order, in writing, recording reasons either granting or refusing to grant such permission.
(3) Where an orders is passed granting permission under sub-section (2), the competent authority shall grant a licence in the prescribed form, after the promoter has furnished a bank guarantee equal to twenty five percent of the estimated cost of the development works certified by the competent authority and the promoter has undertaken to enter into an agreement in the prescribed form for carrying out completion of development works in accordance with the conditions of the licence so granted.
(4) The licence granted under sub-section (3) shall be valid for a period of three years and will be renewable from CC No.278 of 2015 17 year to year on payment of prescribed fee.
(5) The promoter shall enter into agreement undertaking to pay proportionate development charges for external development works to be carried out by the Government or a local authority.
(6) The competent authority shall determine the proportion in which, and the time within which, the estimated development charges referred to in sub-section (5) shall be paid to the State Government, or the local authority, as the case may be.
(7) The promoter shall carry out and complete the development of the land in accordance with the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (Central Act 33 of 1976) and other laws for the time being in force. (8) The promote shall construct or get constructed at his own cost schools, hospitals, community centres and other community buildings, on the land set apart for this purpose or transfer such land to the State Government either free of cost or upon payment of actual cost of developed land, as decided by the State Government, which shall be at liberty to transfer such land to any local authority or any person or institution on such terms and conditions as it may deem fit:
Provided that if, having regard to the amenities which exist or are proposed to be provided in the locality, the competent authority is of the opinion that it is not necessary to provide one or more of such amenities, it may exempt the promoter from providing such amenities, either wholly or in part, on such terms and conditions as it may deem fit.
(9) The promote shall, where the total area of the colony is forty hectares or more, reserve upto ten per cent of the area under residential plots and apartments as the competent authority may direct, for being sold or leased to such persons belonging to such economically weaker sections of society, in such manner and on such terms and conditions, as may be prescribed.
(10) The promoter shall carry out all directions issued by the competent authority for ensuring due compliance of the execution of the layout and the development works therein and to permit the competent authority or any officer authorised by it to inspect such execution.
(11) The promoter shall be responsible for the maintenance and up keep of all roads, open spaces, public parks and public health services until the date of transfer thereof, free of cost to the State Government or the local authority.
(12) In the event of the promoter contravening any provisions of this Act, or rules made thereunder or any conditions of the licence granted under sub-section (3) the competent authority may, after giving an opportunity of being heard, cancel the licence and enforce the bank guarantee furnished by the promoter under the said sub-section(3). (13) When a licence is cancelled under sub-section (12), CC No.278 of 2015 18 the competent authority may itself carry out or cause to be carried out the development works, and after adjusting the amount received as a result of enforcement of bank guarantee, recover such charges as the competent authority may have to incur on the said development works from the promoter and the allottees in the manner prescribed as arrears of land revenue.
(14) The liability of the promoter for payment of development charges referred to in-sub section (13) shall not exceed the amount the prompter has actually recovered from the allottees less the amount actually spent on such development works, and that of the allottees shall not exceed the amount which they would have to pay to the promoter towards the expenses of the said development works under the terms of the agreement of sale or transfer entered into between them:
Provided that the competent authority may, recover from the allottees with their consent, an amount in excess or what may be admissible under the aforesaid terms of agreement of sale or transfer.
(15) Notwithstanding anything contained in this Act, after development works have been carried out under sub-section (13), the competent authority may, with a view to enabling the promoter, to transfer the possession of, and the title to, the land to the allottees within a specified time, authorise the promoter by an order to receive the balance amount, if any, due from the allottees after adjustment of the amount which may have been recovered by the competent authority towards the cost of the development works and also transfer the possession of, and the title to, the land to the allottees within aforesaid time and if the promoter fails to do so, the competent authority shall on behalf of the promoter transfer the possession of, and the title to, the land to the allottees on receipt of the amount which was due from them. (16) After meeting the expenses on development works under sub-section (13), the balance amount shall be payable to the promoter.
6. Contents of Agreement of Sale:-
(1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act no.
16 of 1908) ;
CC No.278 of 2015 19Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots. (2) The promoter shall not cancel unilaterally the agreement of sale entered into under sub-section (1) and if he has sufficient cause to cancel it, he shall give due notice to the other parties to the agreement and tender a refund of the full amount collected togetherwith interest at the rate as may be prescribed.
(3) The agreement to be prescribed under sub-section (1) shall contain inter alia the particulars as hereunder specified in clause (a) in respect of apartments and as specified in clause
(b) in respect of plots in a colony and to such agreement shall be attached the copies of the documents specified in clause
(c),-
(a) the particulars in the case of apartment,-
(i) if the building is to be constructed, the liability of the promoter to construct the building according to the plans and specifications approved by the authority which is required so to do under any law for the time being in force;
(ii) the date by which the possession of the apartment is to be handed over to the allottee;
(iii) the area of the apartment including the area of the balconies which should be shown separately:
(iv) the price of the apartment including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the allottee of the apartment and the intervals at which the instalments thereof may be paid;
(v) the precise nature of the association to be constituted of the persons who have taken or are to take the apartments;
(vi) the nature, extent and description of the common areas and facilities and the limited common areas and facilities, if any;
(vii) the percentage of undivided interest in the common areas and facilities and in the limited common areas and facilities, if any, appertaining to the apartment agreed to be sold, such percentage shall be the ratio of the built-up area of the apartment to the total built-up area of all the apartments;
(viii) the statement of the use for which the apartment is intended and restrictions on its use, if any;
(b) particulars in the case of plots in a colony,-
(i) the date by which the possession of the plot is to be handed over to allottee;
(ii) the area and price of the plot; and
(iii) the statement of the use for which the plot is intended
and restriction on its use, if any;
(c) the copies of documents to be attached with the
agreement,-
(i) the certificate by an attorney-at-law or advocate referred to in clause (a) of sub-section(2) of section 3;
(ii) certified copy from any relevant revenue record CC No.278 of 2015 20 showing the nature of the title of the promoter to the plot or the land on which the building of apartments is constructed or is to be constructed ; and
(iii) the plans and specifications of the apartment as approved by the authority which is required so to do under any law for the time being in force.
9. Accounts of sums taken by promoter:- The promoter shall maintain a separate account in any scheduled bank of sums taken by him from persons intending to take or who have taken apartments or plots, as advance, towards sale price or for any other purpose, or, deposit, including any sum so taken towards the share capital for the formation of a co- operative society or a company, or towards the outgoings(including ground rent, if any, municipal or other local taxes. charges for water or electricity, revenue assessment, interest on mortgages or other encumbrances, if any, stamp duty and registration fee for the agreement of sale and the conveyance); and the promoter shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes including for the construction of apartments and, in the case of colonies, for meeting the cost of development works, and shall on demand, in writing, by the competent authority make full and true disclosure of all transactions in respect of that account and shall not utilize for any other purpose the amounts so collected for a particular purpose.
12. Refund of Amount:-If the promoter,-
(a) fails to give possession, in accordance with the terms of his agreement, of a plot or an apartment duly completed by the date specified, or any further date agreed to by the parties; or
(b) for reasons beyond his control and of his agents, is unable to give possession of the plot or the apartment by the date specified, or the further agreed date; the promoter shall be liable on demand, but without prejudice to any other remedies to which he may be liable, to refund the amounts already received by him in respect of that plot or apartments with simple interest at the rate as may be determined by the competent authority from the date the promoter received the sums till the date the amounts and interest thereon is refunded, and the amounts and the interest shall be a charge on the land on which a plot is to developed, or a building is or was to be constructed and the construction, if any, thereon shall be subject to any prior encumbrances.
18. Thereafter, Punjab Apartment and Property Regulation Rules, 1995 were framed under Section 45 of the PAPRA and according to Rules 7, 8 & 17 thereof, it has been provided as under:-
"7. Disclosure regarding registration and licence - The promoter shall disclose the number of his certificate of CC No.278 of 2015 21 registration granted under sub-section (2) of section 21 and, in the case of a colony, also the validity of licence issued under sub-section (3) of section 5 and display the certificate of registration and the licence so granted at a conspicuous place in his office and make it available for inspection to the persons taking or intending to take an apartment or a plot in the colony and to a person authorized by the competent authority.
8. Supply of copies of documents. - The promoter on demand shall supply true copies, on payment of reasonable charges, of the following documents, namely :-
(a) Title deed of land, certificate of the attorney at-law or an advocate of not less than seven years standing, referred to in clause (a) of sub-section (2) of section 3 and copies of the advertisement issued under section 4;
(b) Copy of the consent of the land owner, if the land does not belong to the promoter as referred to in clause (a) of sub- section (2) of section 3;
(c) Design of apartment, agreement with an architect and a contractor, referred to in clause (f) of sub-section (2) of section 3;
(d) Copy of occupation certificate referred to in section 14; and
(e) Certificate of registration granted under sub-section (2) of section 21 and in case of colony, the permission granted under sub-section (2) of section 5.
17. Rate of interest on refund of advance money upon cancellation of agreement.- The promoter shall refund full amount collected from the prospective buyers under sub- section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
19. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainant-buyer amounting to `66,01,826/- was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. It is not to play the game at the cost of others. When it insists upon the performance of the promise by the consumers, it is to be bound by the reciprocal promises of performing its part of the Agreement.
20. The Consumer Protection Act came into being in the year 1986. It is one of the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation CC No.278 of 2015 22 cannot be overlooked and its object is not to be frustrated. There is not an iota of evidence led by the opposite parties to rebut the averments made in the complaint by way of authenticated documentary evidence. The complainant has made payment of substantial amount to the opposite parties with the hope to get the possession of the plot in a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and construction in a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainant. Had the complainants not invested their money with the opposite parties, they would have invested the same elsewhere. There is escalation in the price of construction also. The complainants have suffered loss, as discussed above. The builder is under obligation to deliver the possession of the developed plot within a reasonable period. The complainants cannot be made to wait indefinitely to get possession of the plot booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builder knew from the very beginning that it had not complied with the provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period, due to which the complainants have suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainants is a deposit held CC No.278 of 2015 23 by the opposite parties in trust of complainants and it should be used for the purpose of developing the plots, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainants for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainants, are also required to be taken into consideration for awarding compensation. In addition to that they are also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by them on account of the betrayal by the opposite parties in shattering their hope of getting the plot by waiting for all this period.
21. Under Section 12 of the PAPRA read with Rule 17 of the Rules framed thereunder, reproduced above, if the amount is to be refunded, it is to be refunded along with interest at the rate of 12% per annum.
22. The next point of controversy is whether the opposite parties are still having the land in their possession or not? Whether the same stands attached as per the directions given by the Hon'ble Supreme Court in favour of SEBI? We have examined the order passed by the Hon'ble Supreme Court dated 26.02.2013 passed in Civil Appeal Nos. 6753 & 6754 of 2004 filed by SEBI titled "SEBI Vs. PACL India Limited and Others" has allowed these appeals. The CC No.278 of 2015 24 SEBI vide its detailed order dated 26.08.2014, has attached the entire group holdings and, as such, all the properties belonging to the Group Companies stands merged / attached in a detailed order passed by the SEBI.
23. Sequel to the above, we are of the opinion that opposite parties are not be in a position to provide or the possession of the plot in question to the complainants, in view of attachment of their properties by SEBI. The complainants cannot wait for indefinite period.
24. In view of the above discussion, the complaint is allowed and the following directions are issued to the opposite parties:-
i) to refund the amount of `66,01,826/- along with interest at the rate of 9% per annum from the different dates of deposit of different amounts till the date of actual payment;
ii) to pay `5,00,000/-, as compensation for the harassment and mental agony suffered by him; and
iii) to pay `50,000/-, as cost of litigation.
Consumer Complaint No.288 of 2015
25. In Consumer Complaint No.288 of 2015, the complainant purchased a plot No.162, measuring 250 sq. yards in Pearls City, Sector 100, Mohali, vide Buyer's Agreement dated 20.12.2011 as Ex.C-2. Basic Sale Price of the plot was Rs.65,00,000/- and also paid Rs.35,000/- plus Rs.4,326/- as Service Tax on Club Membership. As per version of the complainants they have paid CC No.278 of 2015 25 Rs.62,14,326/- and prayed for the refund of the said amount alongwith interest and compensation.
26. The opposite parties took the same defence as taken by them in Consumer Complaint No.278 of 2015.
27. The complainants, in support of the fact that he deposited total amount of Rs.62,14,326/-, is relying upon the Receipts Ex.C-3 to Ex.C-22 which are the documents issued by the opposite parties.
28. In view of the discussion held in Consumer Complaint No.278 of 2015, Ruchi Gupta & Anr. Vs. Pearls Infrastructure Projects Ltd. & Anr. This complaint is also allowed and following directions are issued to the opposite parties:-
i) to refund the amount of `64,14,326/- along with interest at the rate of 9% per annum from the different dates of deposit of different amounts till the date of actual payment;
ii) to pay `5,00,000/-, as compensation for the harassment and mental agony suffered by him; and
iii) to pay `50,000/-, as cost of litigation.
29. The opposite parties shall make compliance of this order within one month from the date of receipt of the certified copy of this order.
30. If the opposite parties would fail to comply with the order in the complaint within the stipulated period, then the amount of compensation awarded, vide this order in the complaint shall carry interest at the rate of 9% per annum from the date of this order till realization.
CC No.278 of 2015 26
31. The complaints could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER June 15, 2017 parmod