Sunil Kumar vs Bajwa Developers Ltd. on 11 July, 2017

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State Consumer Disputes Redressal Commission

Sunil Kumar vs Bajwa Developers Ltd. on 11 July, 2017

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
            PUNJAB, CHANDIGARH.

1)                   First Appeal No.155 of 2017

                           Date of institution :   06.03.2017
                           Date of decision :      11.07.2017

1.

Sunil Kumar son of Sh. Sarda Ram, aged 33 years, resident of Village Chahiya, Post Office and District Gurdaspur.

2. Som Nath Son of Sh. Sarda Ram, resident of Village Chahiya, Post Office and District Gurdaspur.

....Appellants/Complainants Versus

1. The Managing Director, Bajwa Developers Limited, SCO No.17- 18, Sunny Enclave, Desu Majra, District S.A.S. Nagar, Mohali, now shifted to Sunny Enclave, Sector 125, near KFC, 5th Floor, Kharar, Desu Majra, District S.A.S. Nagar, Mohali.

2. The Manager (Sales), Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, District S.A.S. Nagar, Mohali, now shifted to Sunny Enclave, Sector 125, near KFC, 5th Floor, Kharar, Desu Majra, District S.A.S. Nagar, Mohali.

....Respondents/Opposite Parties 2) First Appeal No.156 of 2017 Date of institution : 06.03.2017 Date of decision : 11.07.2017

1. Arvinder Singh S/o Sh. Kulwant Singh, aged 52 years, R/o House No.399, Phase 1, SAS Nagar, Mohali.

2. Mohinder Singh S/o Sh. Kulwant Singh, R/o House No.399, Phase 1, SAS Nagar, Mohali.

....Appellants/Complainants Versus

2. The Manager (Sales), Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, District S.A.S. Nagar, Mohali, now First Appeal No.155 of 2017 2 shifted to Sunny Enclave, Sector 125, near KFC, 5th Floor, Kharar, Desu Majra, District S.A.S. Nagar, Mohali.


                                          ....Respondents/Opposite Parties

3)                            First Appeal No.157 of 2017

                                   Date of institution :    06.03.2017
                                   Date of decision :       11.07.2017

Diksha Jagota daughter of Sh. Prem Dass Jagota, aged 40 years, R/o House No.452, Sector 71, SAS Nagar, Mohali.

....Appellant/Complainant Versus

....Respondents/Opposite Parties First Appeals against the orders dated 24.01.2017 of the District Consumer Disputes Redressal Forum, S.A.S. Nagar, Mohali.

Quorum:-

Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Present:-

For the appellants : Sh. Pankaj Maini, Advocate For the respondents : Sh. Sukaam Gupta, Advocate for Sh. Manoj Vashishtha, Advocate.

JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT :

This order will dispose of the above mentioned three First Appeals filed by the appellants/complainants against the similar orders dated 24.01.2017 passed by District Consumer Disputes Redressal Forum, S.A.S. Nagar, Mohali (in short, "the District Forum"), as the First Appeal No.155 of 2017 3 facts and the questions of law involved in these appeals are the same. The facts of the cases are verbatim and the appeals have been filed against the same opposite parties by the appellants/complainants, for enhancement of compensation. The facts are taken from First Appeal No.155 of 2017.

2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.

Facts of the Complaint

3. Brief facts are that the complainants filed the complaint, under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act"), before the District Forum, on the averments that they booked 2 BHK flat (BR No.445) 2045, measuring 900 sq.ft. (approx.), having value of ₹25,00,000/- with the opposite parties. The agreement was entered between them on 18.04.2011 and the complainants paid ₹6,75,000/- on different dates. As per payment schedule given in the agreement, the date of final payment was 23.12.2012. The complainants paid first instalment of ₹1,00,000/- on 18.04.2011; ₹4,75,000/- on 21.06.2011; and ₹50,000/- on 26.06.2011. They further paid ₹50,000/- to the opposite parties. At the time of executing the agreement, the opposite parties had given date of possession in the end of 2012, although they were not having the permissions from GMADA authorities for setting up residential colony in Sectors 74-A and 117, SAS Nagar, Mohali under the name of "Sunny Basant". They got permission from GMADA only on 19.05.2014, subject to getting approval from the other statutory bodies. In fact, they had no First Appeal No.155 of 2017 4 permission to establish the residential colony under the provisions of law. As per letter dated 19.05.2014 issued by GMADA, vide memo No.GMADA/DTP/2014/1483, letter of intent was issued, subject to fulfillment of other requirements mentioned in that letter. After receipt of ₹6,75,000/-, the opposite parties never demanded further payments from the complainants, as they knew that they were not having requisite permissions or sanctions from the competent authorities to set up the said project. It can also be presumed that they have no permission from Fire Safety Department, Sanitary Department, Electricity Department and Water Works Department. They received huge amount from the complainants, without providing the basic facilities in the project. The opposite parties failed to deliver possession of the flat, in question, by the agreed period. They failed to lay even a single brick at the site. The opposite parties even sold the flat to the complainants, which was earmarked for EWS category, but received the amount from them under general category. The CLU was granted to the opposite parties on 19.05.2014. They could not sell the flat to anyone, until and unless the CLU was granted. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, due to which the complainants suffered mental tension and harassment. Accordingly, the complainants approached the District Forum, seeking issuance of following directions to the opposite parties:

i) to refund ₹6,75,000/-, along with interest at the rate of 24% per annum, which comes to ₹7,50,000/- (approximately), totaling ₹14,25,000/-;

First Appeal No.155 of 2017 5

ii) to pay ₹2,75,000/-, as compensation for mental agony caused to the complainants; and

iii) to award punitive damages to the tune of ₹2,00,000/- to the complainants, for not having requisite permissions by the opposite parties.

Defence of the Opposite Parties

4. Upon notice, opposite parties appeared before the District Forum and filed reply to the complaint, raising preliminary objections that the District Forum has no jurisdiction to try the complaint, as the transaction between the complainants and the opposite parties is purely sale agreement of flat for total sale consideration of ₹25,00,000/-. The complainants failed to deposit the second instalment, despite extension of time. They committed default in making payment of instalments and, thus, the amount deposited by them is liable to be forfeited. No cause of action has arisen to the complainants to file this complaint. No legal notice was issued to the opposite parties before filing the complaint. The complainants are not 'consumers', as per the Act, as they booked the flat for speculative purpose, by selling the same for benefits. They were well aware that the approvals of the project were under process and it would take time for getting the same. If the approvals were not received, then they would be entitled for refund only and no interest/compensation would be given to them. The LOI was received on 19.05.2014 from GMADA. On merits, it was pleaded that no date of handing over of possession was provided in the agreement. The opposite parties have obtained First Appeal No.155 of 2017 6 the CLU from GMADA and the work at the site is in progress. The possession of the flat would be handed over, as and when the construction would be completed. Similar other pleas, as raised in preliminary objections, were reiterated and it was prayed that the complaint be dismissed.

Finding of the District Forum

5. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, partly allowed the complaint, vide order dated 24.01.2017, directing the opposite parties to refund the deposited amount of ₹6,75,000/- and to pay ₹25,000/-, as compensation on account of mental agony and deficiency in service on their part and to pay ₹5,000/-, as litigation costs. Dissatisfied with the order of the District Forum, the appellants/complainants have come in this appeal, for enhancement of compensation.

Contentions of the Parties

6. I have heard learned counsel for the parties and have carefully gone through the records of the case.

7. Learned counsel for the complainants vehemently contended that the complainants purchased the flat, in question, from the opposite parties for ₹25,00,000/- and agreement Ex.C-1 was executed between the parties. They admittedly deposited ₹6,75,000/- with the opposite parties. However, the opposite parties failed to complete the project, as they have no requisite licenses or permissions First Appeal No.155 of 2017 7 to develop their project. The possession of the flat was assured to be delivered in the end of 2012, but the opposite parties failed to complete the project/flat by that period. GMADA issued letter dated 19.05.2014 to the opposite parties to fulfil certain requirements to get approved their project, but they failed to comply with that letter. On account of failure of the opposite parties to complete the project/flat, the complainants are entitled to refund of the amount deposited by them, along with interest. However, the District Forum has not awarded any interest on the deposited amount. When the opposite parties themselves defaulted in not completing the project, the complainants were justified in not making further payment of instalments to them. The complainants are entitled to the refund of the deposited amount, along with interest at the rate of 24% per annum.

8. Per contra, learned counsel for the opposite parties argued that there is no deficiency in service on the part of the opposite parties. The complainants themselves failed to perform their part of the agreement, by not paying the instalments by the due dates. No date of possession was ever committed. The timely payment was the essence of the contract, but the complainants failed to comply with the terms and conditions of the agreement. The complainants were well aware that the approvals of the project were under process and if the approvals were not received, then they were to be entitled for refund of the deposited amount, without any interest thereon. The District Forum has ordered for refund of the deposited amount. Since the complainants were defaulter in not making payment of further First Appeal No.155 of 2017 8 instalments, so they are not entitled to any interest on that amount. The appeal is liable to be dismissed.

Consideration of Contentions

9. I have given thoughtful consideration to the rival contentions of the parties.

10. Admittedly, the complainants purchased 2 BHK flat (BR No.445), measuring 900 sq.ft., for consideration of ₹25,00,000/- from the opposite parties and agreement Ex.C-1 was executed between the parties on 26.06.2011. Against the sale consideration, the complainants deposited ₹6,75,000/, as per agreement Ex.C-1. As per the complainants, the possession of the flat was agreed to be delivered in the end of 2012, whereas as per the version of the opposite parties, no date of handing over of possession was specified. It is pertinent to mention here that the flat, in question, was sold to the complainants, vide agreement dated 26.06.2011, whereas the permission to set up residential colony was given by GMADA to the opposite parties, vide letter dated 19.05.2014 Ex.C-2 and that too subject to getting approval from other statutory bodies. The fact remains that the opposite parties agreed to sell the flat and received the amount of ₹6,75,000/- from the complainants, without having any permission to set up the residential colony from the competent authorities in the year 2011.

11. The opposite parties placed on record affidavit of Sh. Jarnail Singh Bajwa as Ex.OP-1/1 and except that affidavit, no other documents was produced by them in support of their defence. As already said above, the flat in question was agreed to be sold, vide First Appeal No.155 of 2017 9 agreement dated 26.06.2011. The opposite parties were not having any Promoter Registration Certificate and CLU for developing the project at the time of entering into agreement to sell with the complainants.

12. All the above facts and circumstances clearly prove that the opposite parties have not complied with the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"). As per section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to 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, 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. They were also required to give inspection on seven days, notice or demand 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. However, the opposite parties failed to comply with section 3 of the PAPRA.

13. As per section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they also violated Section 5 of PAPRA.

14. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the First Appeal No.155 of 2017 10 amount deposited by the buyers, who intend to purchase the plots/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this respect. There is no evidence or pleading on record on behalf of the opposite parties in this respect. As such, the opposite parties also violated Section 9 of the PAPRA.

15. Further, as per Section 12 of the PAPRA, if the builder fails to deliver possession of the plot/apartment by the specified date, then the builder is liable to refund the amount deposited by the buyer with interest.

16. As per Rule 17 of the "Punjab Apartment and Property Regulation Rules, 1995, framed under Section 45 of the PAPRA, 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."

17. The opposite parties had been collecting huge amounts from the buyers for the development of the project. The amount received from the complainants-buyers was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. The opposite parties are 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 their part of the agreement. The opposite First Appeal No.155 of 2017 11 parties have failed to comply with the aforementioned provisions of PAPRA, while launching and promising to develop their project. Thus, the delay in not completing the flat within the agreed period amounts to deficiency in service on the part of the opposite parties, for which the complainants are to be suitably compensated.

18. The Consumer Protection Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The complainants have made payment of substantial amount to the opposite parties with the hope to get the possession of the flat in a reasonable period. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of flat and delivery of possession in a stipulated period. 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 complainants. 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 builder is under obligation to deliver the possession of the plot/unit/flat within a reasonable period. 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 they had not complied with the provisions of the PAPRA and Rules and would not be able to complete the flat and to deliver the possession within the stipulated First Appeal No.155 of 2017 12 period, thus by misrepresentation induced the complainants to book the flat, 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 by the opposite parties in trust of complainants and it should be used for the purpose of building the flat, 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 flat by waiting for all this period. The District Forum only ordered for refund of the amount deposited by the complainants, but no interest on that amount has been awarded. When the opposite parties themselves defaulted in not completing the project within the stipulated period, the complainants were not supposed to First Appeal No.155 of 2017 13 make payment of further instalments to the opposite parties, that too when the opposite parties were not having the requisite licenses, permissions and approvals for setting up their project. Sufficient compensation and litigation expenses have been awarded by the District Forum in favour of the complainants. The compensation has been awarded by the District Forum on account of the mental agony and harassment suffered by the complainants due to the deficiency in service on the part of the opposite parties. The interest can be awarded on the deposited amount, as the opposite parties retained the said amount with them, without taking any steps to complete their project and to hand over the possession of the flat, in question, to the complainants.

19. The complainants have claimed refund of ₹6,75,000/- along with interest at the rate of 24% (approximately ₹7,50,000/-). Hon'ble National Commission in case Kamal Sood v. DLF Universal Ltd. 2007 (3) C.P.J. 7 (NC), in similar set of circumstances, where the builder was at fault in not obtaining permission for construction in advance before issuing advertisement and collected money from customers without having any licence, ordered for refund of deposited amount along with interest at the rate of 12%, besides compensation. In view of the above authority as well as Rule 17 of PAPRA, the complainants are entitled to the refund of his deposited amount, along with interest at the rate of 12%.

20. Accordingly, the appeal is allowed and the impugned order passed by the District Forum is modified to the extent that the opposite First Appeal No.155 of 2017 14 parties shall refund the amount of ₹6,75,000/-, along with interest at the rate of 12% per annum from the respective dates of deposits till realization, as per Rule 17 of PAPRA. Except, this modification, the remaining part of the impugned order is upheld.

First Appeal No.156 of 2017

21. Similarly, in First Appeal No.156 of 2017 (Arvinder Singh & Anr. v. The Managing Director, Bajwa Developers Limited & Anr.), the complainants booked 2 BHK flat (BR No.446) 2046, measuring 900 sq.ft. (approx.), having value of ₹25,00,000/- with the opposite parties. The agreement was entered between them on 18.04.2011 and the complainants paid ₹6,75,000/- on different dates. As per payment schedule given in the agreement, the date of final payment was 23.12.2012. The complainants paid first instalment of ₹1,00,000/- on 18.04.2011; ₹4,75,000/- on 18.06.2011; and ₹50,000/- on 26.06.2011. They further paid ₹50,000/- to the opposite parties. At the time of executing the agreement, the opposite parties had given date of possession in the end of 2012, although they were not having the permission from GMADA authorities for setting up residential colony in Sectors 74-A and 117, SAS Nagar, Mohali under the name of "Sunny Basant". They got permission from GMADA only on 19.05.2014, subject to getting approval from the other statutory bodies. In fact, they had no permission to establish the residential colony under the provisions of law. As per letter dated 19.05.2014 issued by GMADA, vide memo No.GMADA/DTP/2014/1483, letter of intent was issued, subject to fulfillment of other requirements mentioned in that letter. The First Appeal No.155 of 2017 15 opposite parties even sold the flat to the complainants, which was earmarked for EWS category, but received the amount from them under general category. The possession was not delivered within the stipulated period. Accordingly, the complainants approached the District Forum, seeking following directions to the opposite parties:

i) to refund ₹6,75,000/-, along with interest at the rate of 24% per annum, which comes to ₹7,50,000/- (approximately), totaling ₹14,25,000/-;

ii) to pay ₹2,75,000/-, as compensation for mental agony caused to the complainants; and

iii) to award punitive damages to the tune of ₹2,00,000/- to the complainants, for not having requisite permissions by the opposite parties.

22. The opposite parties filed reply to the complaint, on the similar lines of their reply as given in First Appeal No.155 of 2017.

23. The District Forum, after considering the evidence of the parties and hearing learned counsel on their behalf, partly allowed the complaint, vide order dated 24.01.2017, directing the opposite parties to refund the deposited amount of ₹6,75,000/- and to pay ₹25,000/-, as compensation on account of mental agony and deficiency in service on their part and to pay ₹5,000/-, as litigation costs. Dissatisfied with the order of the District Forum, the appellants/complainants have come in this appeal, for enhancement of compensation.

24. In view of the reasons and discussions held in First Appeal No.155 of 2017 (Sunil Kumar & Anr. v. The Managing Director, Bajwa First Appeal No.155 of 2017 16 Developers Limited & Anr.), the First Appeal No.156 of 2017 (Arvinder Singh & Anr. v. The Managing Director, Bajwa Developers Limited & Anr.) is allowed and the impugned order is modified to the extent that the opposite parties shall refund the amount of ₹6,75,000/-, along with interest at the rate of 12% per annum from the respective dates of deposits till realization, as per Rule 17 of PAPRA. Except, this modification, the remaining part of the impugned order is upheld. First Appeal No.157 of 2017

25. Similarly, in First Appeal No.157 of 2017 (Diksha Jagota v. The Managing Director, Bajwa Developers Limited & Anr.), the complainant booked 1 BHK flat (BR No.1881), measuring 450 sq.ft. (approx.), having value of ₹12,00,000/- with the opposite parties. The agreement was entered between them on 26.08.2012. As per payment schedule given in the agreement, the date of final payment was 28.04.2014. The complainant paid first instalment of ₹3,00,000/- towards the sale consideration of the flat. At the time of executing the agreement, the opposite parties had given date of possession in the end of 2014, although they were not having the permission from GMADA authorities for setting up residential colony in Sectors 74-A and 117, SAS Nagar, Mohali under the name of "Sunny Basant". They got permission from GMADA only on 19.05.2014, subject to getting approval from the other statutory bodies. In fact, they had no permission to establish the residential colony under the provisions of law. As per letter dated 19.05.2014 issued by GMADA, vide memo No.GMADA/DTP/2014/1483, letter of intent was issued, subject to First Appeal No.155 of 2017 17 fulfillment of other requirements mentioned in that letter. The opposite parties even sold the flat to the complainant, which was earmarked for EWS category, but took the amount from her under general category The possession was not delivered within the stipulated period. Accordingly, the complainant approached the District Forum, seeking following directions to the opposite parties:

i) to refund ₹3,00,000/-, along with interest at the rate of 24% per annum, which comes to ₹2,40,000/- (approximately), totaling ₹5,40,000/-;

ii) to pay ₹5,00,000/-, as compensation for mental agony caused to the complainant; and

iii) to award punitive damages to the tune of ₹4,60,000/- to the complainant, for not having requisite permissions by the opposite parties.

26. The opposite parties filed reply to the complaint, on the similar lines of their reply as given in First Appeal No.155 of 2017.

27. The District Forum, after considering the evidence of the parties and hearing learned counsel on their behalf, partly allowed the complaint, vide order dated 24.01.2017, directing the opposite parties to refund the deposited amount of ₹3,00,000/- and to pay ₹25,000/-, as compensation on account of mental agony and deficiency in service on their part and to pay ₹5,000/-, as litigation costs. Dissatisfied with the order of the District Forum, the appellant/complainant has come in this appeal, for enhancement of compensation.

First Appeal No.155 of 2017 18

28. In view of the reasons and discussions held in First Appeal No.155 of 2017 (Sunil Kumar & Anr. v. The Managing Director, Bajwa Developers Limited & Anr.), the First Appeal No.157 of 2017 (Diksha Jagota v. The Managing Director, Bajwa Developers Limited & Anr.) is allowed and the impugned order is modified to the extent that the opposite parties shall refund the amount of ₹3,00,000/-, along with interest at the rate of 12% per annum from the date of deposit till realization, as per Rule 17 of PAPRA. Except, this modification, the remaining part of the impugned order is upheld.

29. The opposite parties shall comply the order passed in all the appeals within 30 days of the receipt of certified copy of the order.

(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT July 11, 2017.

(Gurmeet S)

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State Consumer Disputes Redressal Commission

Sunil Kumar vs Bajwa Developers Ltd. on 11 July, 2017