State Consumer Disputes Redressal Commission
Hargobinder Singh Gill vs Manohar Infrastructure & Consturction ... on 9 August, 2021
1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Complaint case No. : 43 of 2020
Date of Institution : 10.02.2020
Date of Decision : 09.08.2021
1. Hargobinder Singh Gill son of S.Ram Singh Gill, resident of House No.46,
Second Floor, Sector 37-A, Chandigarh.
2. Jagjit Singh son of S.Avtar Singh, resident of Mora Wale Kothe, Ward No.10,
Barnala, Punjab.
......Complainants
Versus
1. M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its registered
office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh through its
Managing Director/Authorized Signatory.
2. Tarninder Singh, Managing Director/Director, M/s Manohar Infrastructure
& Constructions Pvt. Ltd., having its registered office at SCO No.139-141,
Sector-17-C, First Floor, Chandigarh.
3. Narinderbir Singh, Director, M/s Manohar Infrastructure & Constructions
Pvt. Ltd., having its registered office at SCO No.139-141, Sector-17-C, First
Floor, Chandigarh.
.....Opposite parties
Present through video conferencing:
Sh.Sanjeev Gupta, Advocate for the complainants.
Sh.Anil Mehta, Advocate for the opposite parties.
=================================================================
Complaint case No. : 23 of 2020
Date of Institution : 15.01.2020
Date of Decision : 09.08.2021
1. Nisha Goel W/o Parvesh Goel, R/o H.No.1665, Sector 15, Panchkula-
134109.
2. Kusum Lata Garg W/o Baldev Garg, R/o M/s Gaurav Trading Co. 36, Anaj
Mandi, Pehowa.
......Complainants
Versus
1. Manohar Infrastructure & Constructions Pvt. Ltd., SCO 139-141, Sector-
17C, Chandigarh-U.T., Pin-160009, through its Manager/Authorized
Signatory/Officer-in-Charge/Director Sales & Marketing.
2. Tarninder Singh, Director, R/o H.No.246, Sector 9, Chandigarh-160009.
3. Narinderbir Singh, Director, R/o H.No.246, Sector 9, Chandigarh-160009.
Email:[email protected]
.....Opposite parties
Present through video conferencing:
Sh.Narender Yadav, Advocate for the complainants.
Sh.Anil Mehta, Advocate for the opposite parties.
=================================================================
BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.
MR.RAJESH K. ARYA, MEMBER.
2 JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT By this order, we propose to dispose of the above captioned two consumer complaints nos. 23 and 43 of 2020, since, common questions of law and facts have originated therefrom.
2. The facts necessary for disposal of consumer complaint bearing no.43 of 2020 are that both the complainants Hargobinder Singh Gill and Jagjit Singh, wanted to settle in the outskirts of city beautiful, Chandigarh. The opposite parties offered them the residential plot on free hold basis. As such, on 18.12.2011, both the complainants booked a plot measuring 300 square yards, in the project being developed by the opposite parties under the name and style 'Palm Garden', Mullanpur, New Chandigarh, Punjab. Basic sale price of the said plot was fixed at Rs.55,50,000/-. At the time of booking of the said plot, the complainants paid an amount of Rs.16,65,000/- as booking amount, which was equal to 30% of the basic sale price. Payment plan opted by the complainants is as under:-
1. With the Application 30% of BSP
2. On Confirmation of 20% of BSP + 25% EDC and Application and issuing of PLC Registration No.
3. Within 3 months of issuing of 10% of BSP + 25% EDC and Registration No. PLC
4. Within 6 months of issuing of 10% of BSP + 25% EDC and Registration No. PLC
5. Within 9 months of issuing of 10% of BSP Registration No.
6. Within 12 months of issuing 10% of BSP of Registration No.
7. On Possession 10% of BSP + 100% IFMS + 100% Additional Facilities Charges Note All Govt. Charges and Taxes as Applicable Cheque/DD in favour of Manohar Infrastructure and Constructions Pvt. Ltd.
Interest Free Maintenance Security (IFMS) Rs.100 per sq. yd.
Stamp Duty and Registration Charges will be charged as applicable at the time of registration.
Preferential Charges 1 PLC =5% per sq. yd. 2 PLC 10% per sq. yd. 3 PLC + 13% of BSP It will be one or combination of the following locations:-
Corner Locations Tow Side Open Locations Park Facing Major Road (60 Ft. & above) 3
3. Vide Annexure C-4, the complainants were directed to deposit the amount, in HDFC Bank account No.02132560002492, SCO 145-146, Sector 17-
C, Chandigarh, in the name of Manohar Infrastructure and Constructions Pvt. Ltd.
4. It has also been specifically pleaded in the complaint that at the time of booking of the said plot, the opposite parties were not having any licence issued by the competent authority, as such, they were not competent to book the plot. Apart from it, they failed to issue allotment letter and never executed buyers' agreement because they were not competent to sell a plot. Even they failed to offer possession of the plot within a reasonable period from the date of booking. When the complainants visited the project site in July 2013, there was no development and basic amenities. However, the representative of the opposite parties assured the complainants that layout plans will be sanctioned within a period of 15 days and that possession of the plot will be delivered accordingly. On 19.02.2014, the opposite parties sent expression of interest, Annexure C-3 to the complainants, wherein, it was mentioned that development is at final stage of completion. Relevant contents of the said letter are reproduced hereunder:-
'....SH. HARGOBINDER SINGH GILL SW/D SH. RAM SINGH GILL H. No. 134, Sector 9, Chandigarh, U.T. Subject:- Expression Of Interest form no:PGP-03 Dated 06 Aug 2012 Dear Sir/Madam, We are pleased to inform you that upcoming project in GMADA area being developed by Manohar Infrastructure & Constructions Pvt. Ltd. has reached final stage. We thank you all for your co-operation and expressing faith in our company, we hope that the same shall continue in future.
To ensure creation of a world class living experience for you we have hired a world renowned architect firm. This township will be a class in itself.
To proceed further on your 'Expression Of Interest we request you to deposit sum of Rs.11,10,000.00 by 28th Feb 2014. Our Site Office at Mullanpur (New Chandigarh) will be operational shortly.
You are requested to deposit your payment only at our corporate office in Sector 17-C. If you have any queries please make it convenient to meet us.
Regards Ashish Sharma MARKETING TEAM Customer Care Helpline: 0172-5033513...' 4
5. It has been stated that the complainants again visited the project site in June 2014 but still there was no development. Only some flags were installed at the site and it was found that crop was sown in the fields i.e. in the project land which was meant to be sold. The plea taken by the complainants in this regard, in para nos. 8 to 11 of their complaint is reproduced hereunder:-
8. That the complainant No. 1 further visited the office of opposite party in July, 2013 to enquire about the approval of layout as he had not received any intimation from it. It was informed by the opposite party that approval of layout is still awaited. The complainant asked the opposite party as to, how the possession can be delivered by 18.12.2013 as promised at the time of booking. Then the opposite party assured the complainant that possession of the plot will be delivered by December, 2014 and he will be duly compensated for the delay. No further installment was paid by the complainants as there was no development on the project site. During this visit also, neither allotment letter was issued nor was buyer's agreement executed. The opposite party did not inform the complainant that even CLU for the project has not been received.
9. That the complainant No.1 received a letter dated 19.02.2014 from the opposite party vide which it was intimated to him that the project has reached final stage. Vide the said letter, the opposite party further demanded an amount of Rs.1110000/-. A copy of said letter dated 19.02.2014 is attached as Annexure C-3
10. That the complainants went to the project site in June, 2014 to ascertain the fact as to whether the development has reached the final stage or not. But when the complainants seen the project site there was no development. Some flags were there at the site office. Crops were being sown on the fields. The complainants met the representative of the opposite party. The complainants expressed their anguish over the fact that during all these years they was misrepresented about the layout plan approval and the development.
Then the said representative informed the complainants that they have received the CLU recently. The complainants were shocked to hear about the said fact as they was under the impression that the opposite party had all the approvals and sanctions and only lay out approval was pending as conveyed to them. The fact of not receiving the CLU was not informed to complainants whenever they visited the office of opposite party, on earlier occasions. The said representative then tried to pacify the complainants and assured them that allotment shall be made in the month of December, 2014 and the possession will be delivered at the end of 2015. He further assured the complainants that they will be duly compensated for the delay. As the complainants were in genuine need of having the said plot, they preferred to wait for possession of the plot. The complainants were also handed over a letter in which it was specifically mentioned that the allotment shall be made in December, 2014. A copy of said letter dated nil is attached as Annexure C-4. The complainants were told to pay more amount for getting the priority allotment. In the hope of getting the allotment, complainant No.1 paid the amount for his other plot. But the complainants for their jointly purchased i.e. plot in question, chose to wait for the allotment in favor of the complainant No.1 for his independent plot. The opposite party failed to allot any plot to the complainant by December, 2014.
511. That, thereafter, the complainant No.1 contacted opposite party No.3 Mr. N.B.Singh in the month of August, 2015 who assured the complainant that allotment would be made within a period of 30 days. But the complainants did receive any allotment letter from the opposite party. The opposite party even failed to start any development at the project site. The complainant No.1 shifted to some other rented accommodation in Sector-37, Chandigarh, in November, 2015 and he duly intimate the change in address party to the opposite party by personally visiting the office of opposite party....'
6. In November 2019, the complainants were informed that the area of the project has been expanded. However, no positive steps were taken by the opposite parties to complete the project, as such, the complainants vide representation dated 20.11.2019, Annexure C-5, sought refund of the amount paid alongwith damages etc. Relevant contents of the said representation read as under:-
'From: Hargobinder Gill ([email protected]) To:[email protected];
[email protected]; [email protected] Date: Wednesday, 20 November, 2019, 09:32 pm IST Dear N.B.Singh.
I, Hargobinder Singh Gill along with Jagjit Singh (PGP-03), had booked a 300 sq yards plot in the project namely Palm Garden being developed by you in Mullanpur. We booked the said plot in the year 2011. The total sale consideration was fixed as Rs. 5550000/ calculated at the rate of Rs.18500/- per sq yards. You had assured us that possession would be delivered within 2 years. You told us that you have received all the approvals except the layout plan approval which would be approved within two months. The said price of Rs.18500/- was inclusive of all charges except EDC & PLC. We had paid an amount of Rs.1665000/- i.e. 30% of sale consideration, at the time of booking. After receiving the said amount you did not issue allotment letter to us nor was any agreement executed. Many times we visited your office for getting the allotment and for execution of agreement but to no avail. There was no development at the project site. In the year 2014, you assured to allot the plot by December, 2014 but despite that no allotment was made. Thereafter, inspite of number of visits, you failed to issue any allotment. In the year 2017 you also started demanding Rs.2000/- per sq. yards towards IDC, which were never mutually agreed between us. Till the year 2017, there was no development at the project site. In the year 2018, we had visited two times to your office for getting the allotment letter but you started demanding more money for issuing the allotment letter and for executing the buyer agreement, in clear violation of Section 6 of PAPRA and Section 13 of RERA. We refused to pay more amount to you since there was no development, no allotment was made in our favor and even agreement was not executed. In June, 2019, feeling harassed due to unfair trade practices on your part, we requested you to refund our amount along with interest. You asked us to come after 15 days, which we did but even then you failed to refund the amount. You kept us in loop for several 6 year and used our hard earned money. You increased your project area from 100 acres to around 300 acres from money collected from innocent people without giving them plots. You diverted the funds for purchasing additional land. We also came to know that you were not having any approval when you collected the money from us. You even kept the government authorities in dark, as you had not disclosed to the said authorities like GMADA, PUDA etc. while getting the approvals that you have already collected the amount from hundreds of people. You are charging hidden charges in the shape of IDC & possession charges from the people inspite of the fact that no such charges were mentioned at the time of booking. You have committed violation of various provisions of PAPRA. We have no option except to approach the appropriate authorities for taking action both civil & criminal against you and for getting the refund of amount paid by us in the year, 2011-12, Hargobinder Singh Gill & Jagjit Singh'
7. Instead of that, the entire amount of Rs.16,65,000/- deposited, alongwith interest has not been refunded by the opposite parties.
8. Similarly, in consumer complaint bearing no.23 of 2020 titled as Nisha Goel and another Versus Manohar Infrastructure & Constructions Pvt. Ltd. and others, a plot measuring 250 square yards was booked by the complainants, on 03.07.2012, in the same very project i.e. Palm Garden, on making payment of Rs.13,87,500/- against total sale consideration of Rs.46,25,000/-, and thereafter also they paid more amount and by 28.02.2014 total amount of Rs.23,12,500/- stood received by the opposite parties, yet, they neither executed buyer's agreement nor offered possession of the plot purchased by the complainants, for want of development activities and also necessary approvals and sanctions.
9. Hence, these complaints have been filed by the complainants, seeking refund of their respective amounts paid towards their respective plots, alongwith interest, compensation and litigation expenses.
10. The claim of the complainants, in both the complaints has been contested by the opposite parties, on numerous similar grounds, inter alia, that the complainants have concealed material facts from this Commission; that they did not fall within the definition of "consumer"; that because another plot has been purchased by complainant no.1 against which a consumer complaint is pending with this Commission, as such, he has purchased the said plots for commercial purposes; that in consumer complaint bearing no.23 of 2020, it has not been proved that the complainants are relatives; that this Commission did not vest with territorial jurisdiction to entertain these complaints; that the complaints filed are beyond limitation; that the complainants were requested number of times to come forward to make remaining payment so that plot nos.
7could be allocated and agreements could be executed but they failed to do so; that the project of the opposite parties has been registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA) on 25.09.2017; that as per Section 35 of the PAPR Act, jurisdiction of Civil Court is barred; that the complainants are liable to pay the EDC and IDC over and above the taxes, as applicable; that since they are disputing the payment of IDC, as such, the matter cannot be adjudicated before this Commission under summary proceedings and the complaint (CC No.43 of 2020) should be relegated to the civil court; that the complainants were defaulters in making payment as a result whereof number of reminders were sent in the matter; that no prejudice has been caused to the complainants, in case, the opposite parties were not having approvals/sanctions at the initial stage of booking of the plots in the said project because as on date the company has obtained the same and clear title of plots will be provided to them; that opposite parties no.2 and 3 have been wrongly impleaded in their personal capacity; and that time was not the essence of contract.
11. On merits, it has been stated that the project was approved on 22.03.2013 and the formal agreement was signed with the Government of Punjab on 14.06.2013; that thereafter some more land was added to the project, for which completion period was given upto 13.06.2018, vide supplementary agreement dated 16.06.2016 executed with the Government; that later on exemption from the applicability of provisions of the Punjab Apartment and Property Regulation Act, 1995, (PAPR Act) stood granted by the Government on 25.01.2017 and as such exemption granted will have retrospective effect; that in order to facilitate the completion of project, the State Government has further extended period upto 31.12.2022, vide notification dated 30.01.2020; that the opposite parties have also sought extension for completion of the project from the competent authorities, which has been granted to them and as such, they are trying to complete the development work, before the extended period granted to them; that claim of the complainants seeking higher rate of interest on the deposited amount for the period of delay is totally unjustified. Rather, it should be as specified under Section 19 of the RERA i.e. MCLR + 2% interest; that infact the complainants are entitled to interest @6% p.a. only, in view of judgment of the Hon'ble Supreme Court of India passed in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors Versus DLF Southern Homes Pvt. Ltd. Civil Appeal No. 6239 of 2019, decided on 24.08.2020; that since there are no agreements in the present cases, the complainants are entitled to interest @6% p.a. for the period of delay, starting from 15.06.2017 i.e. four years from execution of agreement with the Government because it generally takes four to 8 five years in completing the project, instead of refund of the amounts paid; that the complainants may come forward and make the remaining payment, whereafter, plot nos. will be allocated and agreements will also be executed in that regard.
12. However, ironically, it has been claimed in the replies that the development work is going on in full swing and work with regard to provision of basic amenities such as landscaping, street lights, open green spaces, sewerage, water, electricity etc. is near completion. It has been alleged in the replies that the project was delayed on account of red-tapism in different offices of the Government and also due to the business and political rivalries and that was why; the competent authorities delayed in granting approvals/sanctions. While applying the theory of force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God), it has been alleged that delay in delivery of possession of plots occurred, also on account of shortage of building material and ban on mining by the Government concerned; that due to COVID-19 also, the project got setback; and that the opposite parties are entitled to forfeit amount out of the deposited amount, as per standard format of the buyer agreement.
13. On merits, facts with regard to purchase of respective plots by the complainants,; payments made by them as mentioned in the complaints; non allocation of plot nos.; non execution of buyers' agreement(s) despite the fact that booking of the plots was made in the years 2011- 2012, respectively; non delivery of possession of the respective plots by the dates when these complaints have been filed or even thereafter; and that the project was approved for the first time only on 22.03.2013, Letter of Intent (LOI) was released in the favour of the company on 03.05.2013, CLU was granted on 31.03.2014/12.05.2014, layout plans were approved on 06.10.2015, have not been disputed by the opposite parties. Prayer has been made to dismiss the complaints with costs
14. In the rejoinder filed, the complainants reiterated all the averments contained in their complaint and have controverted those contained in written replies filed by the opposite parties. In CC No.43 of 2020, it has been stated by the complainants that the opposite parties continued to expand the project and entered into supplementary agreements with the Government and that they have collected huge amount of more than Rs.400 crores from the prospective buyers without providing them anything, meaning thereby that the amount collected by them was utilized somewhere else, rather than completing the development works and delivery of possession of the plots/units.
15. The parties led evidence in support of their cases.
916. We have heard the contesting parties and have gone through record of the cases, including the written arguments filed by the parties concerned, very carefully.
17. First coming to the objection regarding territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant cases, record reveals that application dated 06.08.2012, Annexure C-2 and Expression of interest dated 19.02.2014, Annexure C-3 (in CC No.43 of 2020) and expression of interest dated 20.02.2014, Annexure C-3 and letter dated 15.05.2014, Annexure C-4 (in CC No.23 of 2020) have been issued by the opposite parties mentioning the address of the company thereon as SCO No.139-141, , Sector 17-C, Chandigarh, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Office at Chandigarh and personally work for gain thereat and also part of cause of action arose in favour of the complainants at the said place. Not only as above, the said fact is further fortified when we perused the information dated 30.01.2021 (at page 113 of CC No.43 of 2020) placed on record by the opposite parties, wherein the address of the Company has been mentioned as SCO No.139-141, Sector 17-C, Chandigarh-160017 only. Thus, this Commission at Chandigarh has territorial jurisdiction to entertain these complaints. Objection taken by the opposite parties in this regard stands rejected.
18. Now coming to the objection taken to the effect that the complainants did not fall within the definition of 'consumer', it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainants, in these complaints, have purchased the respective plots in question to indulge in 'purchase and sale of plots/flats' as was held by the Hon'ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their onus, hence we hold that the complainants are consumers as defined under the Act. 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. Mere fact that complainant no.1 in CC No.43 of 2020 has purchased another plot, in the project of the opposite parties, for which separate consumer complaint has been filed seeking possession thereof, is not a ground to shove the complainants out of the purview of the consumers. At the same time, if the complainant alongwith her relative in CC No.23 of 2020 have purchased a plot, and on account of inordinate delay in the matter, if they have sought refund of the amount paid in 10 respect thereof, is also not a valid ground to say that the complainants in this complaint are not consumers. In 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. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose....."
In this view of the matter, objection taken by the opposite parties stands rejected.
19. There is no dispute with regard to purchase of plots by the respective complainants, in the project of the opposite parties, as per the details given above. There is also no dispute with regard to the fact that despite the fact that in both these complaints, in the first instance, amount equal to 30% of the total sale consideration stood received by the opposite parties from the complainants, yet, neither plot nos. were allotted nor buyer's agreements were executed between the parties nor thereafter development work was completed at the project site and possession has also not been offered till date. It may be stated here that perusal of record reveals that there is nothing on record to prove that agreements were even sent to the complainants for their signatures what to speak of execution thereof. Once the opposite parties, in the first instance, had already received substantial amount which was equal to 30% of the total sale consideration from the complainants, it was required of them to allocate plot nos.; execute agreements under law within a reasonable period say two to three months; raise demands in accordance with the stage of development at the project site; complete the development work; and then deliver possession of the plots to the complainants. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demand from the complainants by way of sending letters dated 19.02.2014, Annexure O-1 (in CC No.43 of 2020) and 15.05.2014, Annexure O- 3 and 30.06.2014, Annexure O-4 (in CC No.23 of 2020). In these letters, not 11 even a single word has been mentioned regarding execution of agreements. Thus, the act of raising demands and receiving substantial amounts in the respective complaints, as referred to above, in the absence of development work; without allotment of plots and executing the agreements, was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite parties to execute the agreements for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -
"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 1906) ; ......... (2) xxxxxxxxxxxxxxxx..................
(3) xxxxxxxxxxxxxxxxx..................."
20. The opposite parties were legally bound under law to execute the agreements and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but in these cases, the said provision has been violated. The opposite parties also cannot take shelter under the exemption certificate, which was issued in their favour only on 25.01.2017 i.e. much after booking of the plots in question. It has no where been proved that the said exemption will have retrospective effect but in our considered opinion, it will have prospective effect only. The opposite parties were deficient in providing service and adopted unfair trade practice on this count.
21. Now the next question which falls for determination before this Commission is, as to whether, the opposite parties were in possession of all the requisite licences, approvals and permissions, before launching the project in question, and selling the units/plots therein to the general public including the complainants or not. Admittedly, the plots in question were sold to the complainants in the years 2011 and 2012 respectively, on receipt of respective amounts equal to 30% of the total sale consideration. Thereafter, also the opposite parties kept on receiving amount and it is evident from the record that total amount of Rs.16,65,000/- for the period from 13.01.2012 to 06.08.2012 (in CC No.43 of 2020) and Rs.23,12,500/- for the period from 03.07.2012 to 28.02.2014 (in CC No.23 of 2020), stood paid by the complainants towards their respective plots.
1222. It may be stated here that when we peruse the documents Annexure C-7 and C-8 colly., (in CC No.43 of 2020, which have gone unrebutted by the opposite parties by placing on record any contrary evidence) having been issued by the competent Authorities i.e. Punjab Urban Planning and Development Authority (PUDA) and Greater Mohali Area Development Authority (GMADA), which are the controlling authorities of the opposite parties, it reveal that application for setting up the residential project in question, wherein respective plots of the complainants are located, was moved by the opposite parties before the competent Authority, for the first time on 16.09.2011. Thereafter, proposal of the project was considered by the screening committee on 21.02.2013 and the project was approved by the Government, for the first time only on 22.03.2013, whereas, on the other hand, the plots in question were sold to the complainants in the years 2011-2012. Furthermore, in condition no.3 (iii) v) of the Letter of Intent (LOI) dated 03.05.2013 it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. Relevant part of the said condition of LOI is reproduced hereunder:
"v. ....The project shall not be advertised/launched and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption u/s 44 of PAPR Act 1995 is issued by the State Govt...."
It is further evident from the said documents that Change of Land Use (CLU) was approved by the Department of Town and Country Planning, Punjab, for the first time on 31.03.2014 and layout plan was approved only on 06.10.2015. It is also evident from the contents of notification dated 25.01.2017, that the opposite parties got the layout plans revised on 21.10.2015.
It was further, in a very clear manner, stated in condition no.6 of the said LOI that it does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid approvals & requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development. Relevant part of condition no.6 of the said LOI is reproduced hereunder:-
'..This LOI is only a letter of intent issued by Punjab Urban Planning & Development Authority in its capacity as Nodal Agency and does not confer any right to the Promoter/Developer to sell/transfer the property or execute any transactions with anyone without obtaining valid 13 approvals & requisite notification/order under Section 44 of PAPR Act, 1995, to be issued by the Department of Housing & Urban Development...' Similar condition is found mentioned in the agreement dated 14.06.2013, having been executed between the State Govt. of Punjab (The Governor of Punjab, through The Chief Administrator PUDA) and the opposite parties, wherein, in condition no.ix, it has been mentioned as under:-
'....The project shall not be advertised /launched and no money will be collected from General Public for allotment of land/plot /flat/any space till such time the layout plans/Zoning plans are cleared by the Competent Authority and exemption u/s 44 of PAPRA is issued by the Govt...'.
Bare perusal of the aforesaid conditions of the LOI and also the agreement dated 14.06.2013 aforesaid, clearly barred the opposite parties to advertise/launch the project and collect money from general public for allotment of land, plot etc. without the approval of layout and zoning plans (which in the present cases has been finally approved only on 21.10.2015) and also exemption under section 44 of PAPR Act is issued by the State Govt. (which in the present cases has been issued only on 25.01.2017). It is further evident from the said documents that permission for solid waste water, sewage storm and water disposal was granted to the opposite parties on 06.07.2015; NOC from Punjab Pollution Control Board was obtained on 01.12.2015; permission for construction of houses was obtained on 18.01.2016; environment clearance was obtained on 03.06.2016; NOC by electricity board was obtained on 15.03.2017.
Thus, perusal of the documents, referred to above, reveals that not even a single permission had been obtained by the opposite parties in the years 2011-2012, when the project in question was launched and plots were sold therein to the complainants as well as other prospective buyers. Even the Certificate of Registration as Promotor, which qualified the opposite parties for obtaining licence under PAPR Act was obtained by them on 27.06.2014 only i.e. after more than 2 years from the date of selling respective plots to the complainants
23. Collecting money from the perspective buyers and selling the project, without obtaining the required permissions and sanctions is an unfair trade practice on the part of the project proponent. It was so said by the Hon'ble National Commission, in a case titled as M/s Ittina Properties Pvt. Ltd. & 3 Ors. Vs. Vidya Raghupathi & Anr., III (2018) CPJ 12 (NC). Relevant part of the said order reads as under:-
"................This Commission in Brig. (Retd.) Kamal Sood Vs. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed 14 that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.
It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.09.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency............"
Surprisingly, the Government of Punjab, Department of Housing and Urban Development (Housing II Branch) i.e. the competent Authority was well aware of the fact that the project has been launched and plots/units have been sold to the general public starting from the year 2011-2012 itself, without necessary approvals/permissions and huge money has been collected and usurped by the opposite parties from the innocent buyers, yet, it did not hear the aggrieved consumers before granting exemption to the project on 25.01.2017 from the provisions of PAPR Act. It cannot be assumed that the said project was launched by the opposite parties and the competent authorities were not aware of illegal activities, happening in their territory. As such, the said act of the competent authorities is against the principles of natural justice; fair play and not binding on the complainants and other prospective buyers. If the competent Authorities failed to take any action under relevant Rules and Regulations against the company, no benefit can be taken out there-from by the opposite parties, in these complaints filed by the complainants under Consumer Protection Act, for deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties.
24. The aforesaid fact leaves no doubt with this Commission to hold that the project in question was launched in complete violation of the relevant rules and regulations and money was collected from the complainants and other buyers with the animus of cheating. The opposite parties have violated conditions of the LOI and agreement referred to above, with impunity. It appears that the opposite parties thought that their money and power gave them the right to ignore the law with impunity and, as such, launched the project and sold the plots/units therein, starting from the years 2011-2012, when they were not even the owners of the land underneath the said project. It is therefore held that by launching and selling the project before 25.01.2017, i.e. the date when the said exemption was granted to the opposite parties from the provisions of PAPR Act and also before obtaining other necessary permissions/approvals 15 referred to above, the opposite parties indulged into unfair trade practice, which act needs to be deprecated.
25. However, to defend the contention raised by the complainants to the effect that at the time of booking of the plot and collecting money from the complainants, the opposite parties were not having requisite licences, approvals and permissions from the competent authorities, it has been stated by the opposite parties, that it would not make any difference regarding the title of plots/flat(s), if the project was approved later on, as all the irregularities stood compounded when notification exempting the provisions of PAPR Act was issued in favour of the company on 25.01.2017. We do not agree with the said contention. In the first instance, the candid admission of the opposite parties in para no.27 and 35 (preliminary objections in CC No.43 of 2020) of their written reply to the effect that if the State Govt. has not taken any action against the violation of terms and conditions of PAPR Act, and as such it has not caused any prejudice to the complainants in relation to the said violations, is sufficient to prove the case of the complainants. Further admission of the opposite parties in both these complaints to the effect that the project was got approved only on 22.03.2013; leaves no doubt with this Commission to believe that in 2011 and 2012, money has been collected from the complainants and other prospective buyers, with animus of cheating and fraud, by launching the project and selling units/plots therein by violating the terms and conditions of PAPR Act, which act cannot be cured by obtaining the exemption from the provisions of PAPR Act, at the subsequent stage.
26. Now coming to non-offering of possession of the respective plots to the complainants, it may be stated here that the opposite parties in their written reply in para no.16 (in CC No.43 of 2020) and para no.13 (in CC No.23 of 2020), have very candidly admitted that development work at the project site is still going on and that basic amenities such as roads, electricity, sewerage, landscaping etc. are near completion. However, except some photographs, perusal of which too reveal that still a lot of work is pending to be done at the project site, no other cogent and convincing evidence has been placed on record, to prove that the development is at the advance stage and that basic amenities such as roads, electricity, sewerage etc. are near completion, as stated in the replies. Infact contrary stands have been taken by the opposite parties in their written replies. In para no.16 (in CC No.43 of 2020) and para no.13 (in CC No.23 of 2020), referred to above, it has been stated that the development work is near completion, whereas in para no.15 (in CC No.43 of 2020 of preliminary objections), it has been stated that the competent authorities have given extension to the company for completion of the project and that the 16 development work will be completed before that. Further, in para no.32 of written reply in CC No.43 of 2020, the opposite parties have stated that they are trying to complete the project as early as possible, as development is at full swing. Burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/opposite parties. It was so said by the Hon'ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. However, in the present cases, perusal of contents of the written replies filed by the opposite parties, reveal that self-contradictory pleas have been taken with regard to delay in offer of possession of the plots in question to the complainants. In some paragraphs it has been stated that delay took place in offering possession because there was delay on the part of the Government Departments in sanctioning approvals/permissions/notification regarding exemption aforesaid; due to shortage of construction material etc. etc. whereas, on the other hand, it has also been stated that since more land was added to the project, as such, permission was sought from the competent Authorities for extension of time for completing the project in question.
As such, perusal of contents of replies filed by the opposite parties clearly go to show that they were not serious in completing the project wherein the plots in question were sold to the complainants and are now taking bald excuses for causing delay, just with a view to defeat the genuine claim of the complainants. Under these circumstances, it is held that the opposite parties by neither allocating plots nos.; nor executing agreements within the stipulated period or thereafter; nor completing the development work even by the date when these complaints were filed; and by not delivering possession of the plots till date, despite the fact that the same were booked as far as back in 2011- 2012, indulged into unfair trade practice and were also negligent and deficient in providing service.
27. To wriggle out of the allegations leveled by the complainants, with regard to inordinate delay in delivery of possession of the plots in question, the opposite parties have stated that delay in completing the project occurred on account of force majeure circumstances having been faced by the company i.e. due to COVID-19 the project got setback; ban on mining by the State Govt. resulted into shortage of building material; and delay in approvals by the competent authorities concerned, due to red-tapism and business rivalries.
First coming to delay in approvals on the part of the Govt. Departments, it may be stated here that not even a single letter has been placed on record by the opposite parties showing that they ever reported the competent Authorities concerned that there is delay on their part in granting 17 sanctions/approvals or releasing notification dated 25.01.2017, in respect of the project in question or that any such letter, by which they have given notice to the said Authorities that in case the needful is not done in a prescribed time, the Company shall move to the appropriate platform of law, in the matter. As such plea taken by the opposite parties in this regard stands rejected.
Now coming to the plea regarding shortage of construction material like sand etc. it may be stated here that nothing has been placed on record by the opposite parties to prove that they were unable to procure the said construction material, in adequate quantity. There is no evidence of the opposite parties having invited tenders for supply of construction material and there being no response to such tenders. A similar plea with regard to shortage of building material as a cause for delay in delivery of possession of the plots/units was taken by a builder before the Hon`ble National Consumer in Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), decided on 14 Aug 2015, which was rejected and the complaint was allowed in favour of the complainants.
As far as plea taken with regard to COVID-19 is concerned, it may be stated here that the said pandemic took place in India in March 2020, when lockdown was executed. However, lockdown which took place in March 2020 due to COVID-19, has no relation whatsoever, with the inordinate delay in the matter, as the plots in question had been purchased by the complainants, in both the complaints, as far as back in 2011-2012. In this view of the matter, no help therefore can be drawn by the opposite parties, in this regard. Thus, in the present cases, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God etc.) as a result whereof, delay in handing over possession of the plots occurred. Plea taken by the opposite parties, in this regard, therefore stands rejected.
28. As far as reliance placed by Counsel for the opposite parties on Notification dated 30.01.2020, (Annexure O-9) is concerned, to say that the company got extension to complete the project in question, it may be stated here that we have gone through the said Notification and found that the validity of licences of only the colonies for which outstanding dues of EDC etc. have been deposited by way of post dated cheques in compliance to Government notification dated 28.11.2019, were deemed to have been extended upto 31.12.2022. It has nowhere been mentioned in the Notification dated 30.01.2020, that the builders/developers who have adopted unfair trade practice and are deficient in providing service by not delivering possession of the plots/units within the reasonable period after booking, for want of development 18 works, despite receiving substantial amount from the buyers and on the other hand were interested only in expanding the project land, are also covered under the said notification. As such, no help can be drawn by the opposite parties from the said notification, as far as the present cases are concerned.
29. As per settled principle of law laid down by the Hon'ble Supreme Court of India, in the cases, where no agreement has been executed by the builder after booking of the plot/unit, then the reasonable period of two to three years has to be taken into account for completion of the construction and development activities and delivery of possession to the allottees/buyers thereof. Since, in the present cases also, no agreements have been executed between the parties, as such; possession of the plots in question should have been delivered to the complainants by the opposite parties, within a maximum period of three years from the respective dates of booking thereof i.e. latest by 17.12.2014 (in CC No.43 of 2020 booking date being 18.12.2011) and 28.06.2015 (in CC No.23 of 2020 booking date being 29.06.2012) which have not been done so far and still the opposite parties are seeking more time. In the present cases, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God etc.) as a result whereof, delay in handing over possession of the plots occurred. Under these circumstances, plea taken by the opposite parties to the effect that since there were no agreements executed between the parties, as such, time was not the essence of contract, being devoid of merit, stands rejected.
30. Now we will deal with the objection taken by the opposite parties to the effect that in the face of provision of Section 35 of the PAPR Act, jurisdiction of this Commission is barred to entertain these complaints arising out in respect of the plots in question. It may be stated here that in the present cases, the opposite parties were legally bound to allocate plot nos. and execute agreements within a reasonable period from the date of bookings and then deliver possession of the plots in question to the complainants, which they failed to do so and, as such, the nature of such transaction is covered by the expression 'service'. Our this view is supported by the principle of law laid down in Narne Construction P. Ltd., etc. etc. Vs. Union of India and Ors. Etc., II (2012) CPJ 4 (SC). Furthermore, because it is an undisputed fact that the opposite parties neither allocated plot nos.; nor executed buyer agreements; nor delivered possession of the plots purchased by the complainants and no cogent and convincing reason has been given for the same, as such, it can very well be said that there is a denial of service to the complainants on the part of the opposite parties, for a very long time, for which the complainants were at liberty to avail 19 remedy by way of filing these consumer complaints, seeking refund of respective amounts paid, alongwith other reliefs, available to them, under law. In view of above findings, we can safely say that the provisions of PAPR Act will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the builder/developer. Since, these complaints involve the consumer dispute and the same are maintainable before this Commission, as such, objection taken in this regard by the opposite parties stands rejected.
31. In the present cases, not even an iota of evidence has been placed on record, whereby, the complainants were ever contacted by the opposite parties to come for execution of buyers' agreement. As stated above, once the opposite parties have already received substantial amount of more than 30% of the total sale consideration, they were duty bound to allocate plot nos. and also execute buyer agreements but they miserably failed to do so. Thus, the said inaction on their part, which constitutes deficiency in service, negligence and unfair trade practice, cannot be used as a tool against the complainants to say that they (complainants) did not come forward for allocation of plot nos. and execution of agreements. It cannot be expected and also not feasible that the buyer has to keep on visiting the office or the project site, every month, with a request to the developer for allocation of plot no. and also for execution of agreement, once he has complied his part, by making the required payment. On the other hand, it is the builder/developer, to issue letter(s) for allocation of plot no., execution of agreement and date of delivery of possession of the unit/plot by sending offer of possession letter. In this view of the matter, plea taken by the opposite parties to the effect that the complainants failed to contact them for allocation of plot nos. or for execution of agreements, being devoid of merit, stands rejected.
32. Under above circumstances, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if there is no agreement, within a reasonable period say two to three years from the date of booking, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon'ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon'ble Supreme Court of India in the case titled as Pioneer Urban Land & 20 Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also in Fortune Infrastructure Versus Trevor D' Lima & Ors. (2018) 5 SCC 442. In the present cases also, since there has been an inordinate delay in the matter, and still the opposite parties are not sure as to by which date construction and development activities will be completed and possession of the respective plots will be delivered to the complainants, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest @12% p.a. from the respective dates of deposits in view of decision rendered by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment and also by the Hon'ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 and Anil Kumar Jain & Anr Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23rd Dec 2019, wherein interest @12% p.a. was awarded to the complainant, on the amounts to be refunded to them from the respective dates of deposits; that will meet the ends of justice.
33. The opposite parties have placed reliance on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana's case (supra), to say that since in this case, the Hon'ble Supreme Court of India has awarded interest @6% p.a., as such, this Commission cannot grant interest beyond that, in the present cases also. We do not agree with the contention raised for the reasons recorded hereinafter. It may be stated here that we have gone through the contents of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana's case (supra) and found that, in the first instance, the said order has been passed with regard to compensation for delay in offering possession of the units therein, and also, over and above the interest rate of 6% p.a. the penalty amount as mentioned in the agreement has also been ordered to be paid to the complainant by the builder. Since, in the present cases, the complainants have sought refund of the amounts paid towards their respective plots, as such, reliance placed by the opposite parties on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana's case (supra) is misplaced.
34. Now the question arises, as to whether, the opposite parties are entitled to forfeit any amount, out of the amount deposited by the complainants or not. It may be stated here that since fault if any lies on the part of the opposite parties, as they miserably failed to deliver possession of the plots in question, till date, despite the fact that the same had been purchased as far as back in 2011-2012, for dearth of construction and development activities at the 21 project site and still they are not in a position to do so, which act amounts to deficiency in providing service, negligence and adoption of unfair trade practice on their part, as they have been using the substantial amount paid by the complainants since long, without providing them anything, as such, they are not entitled to forfeit any amount. The opposite parties in the present cases want to have the cake and eat it too. It clearly shows the high-handedness of the opposite parties towards the poor consumers like the complainants. Plea taken by the opposite parties in this regard, as such, stands rejected.
35. As far as objection taken to the effect that the complaints filed are beyond limitation, it may be stated here that since it is an admitted fact that possession of the plots in question has not been delivered even by the dates when these complaints have been filed before this Commission or even thereafter, for want of development activities, as explained above, as such, objection taken with regard to limitation is not sustainable in view of principle of law laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action, in favour of the allottee/buyer. As such, objection taken in this regard is rejected.
36. Furthermore, the opposite parties also cannot wriggle out of their liability, by saying that delay took place on account of the reason that the complainants defaulted in making remaining payment; in view of principle of law laid down by the Hon'ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date or within a reasonable period where no agreement is executed, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon'ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. In the instant cases also, if the complainants after making payment of substantial amounts, referred to above, did not make remaining payment when they came to know that the project has been launched without obtaining necessary approvals/sanctions from the competent Authorities; there was no development at the project site and also there was gross violation on the part of the opposite parties, of the provisions of Section 6 22 of PAPR Act, in not getting the agreements executed, they were right in not making further payments. Objection taken in this regard stands rejected.
37. As far as plea taken by the opposite parties to the effect that the complainants may now come for execution of agreements and possession of the plots in question, it may be stated here that this plea would have been considered, in case, the complainants had pressed their prayer with regard to possession of their respective plots. Since, the complainants have pressed their prayer with regard to refund of the amount paid alongwith interest, compensation etc., such a plea taken by the opposite parties could not be accepted and is accordingly rejected. At the same time, it is also held that since, the complainants have sought refund of the amount paid alongwith interest etc., and this Commission has also held that they are entitled to refund of the amount paid alongwith interest, as such, plea raised by the opposite parties, with regard to payment of IDC stands rejected, having been rendered infructuous.
38. As far as objection taken to the effect that opposite parties no.2 and 3 have been wrongly impleaded in their personal capacity, it may be stated here that these persons, in our considered opinion, are holding such important positions in the Company, where they are directly involved with the decision- making process in the Company and will be jointly and severally liable alongwith the Company, for all the acts done. Similar view was taken by the Hon'ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017. As such, objection taken in this regard stands rejected.
39. For the reasons recorded above, these complaints are partly accepted with costs, in the following manner:-
In CC No.43 of 2020, the opposite parties, jointly and severally, are directed as under:-
i) Refund the amount of Rs.16,65,000/- to the complainants, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.16,65,000/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
ii) As stated above, when the plot in question was sold to the complainants on 18.12.2011, the opposite parties were not having 23 licence to launch the project and sell the plots/units therein.
Besides this, the opposite parties have grossly violated the terms and condition of the LOI dated 03.05.2013 and the agreement dated 14.06.2013 (Annexure C-7 colly.) having been executed with the Govt. of Punjab, whereby they were specifically restrained to advertise/launch the project and collect money from general public for allotment of land, plot etc. without the approval of layout and zoning plans. Besides this, the opposite parties were also restrained to advertise/launch the project and collect money from general public for allotment of land, plot etc. before grant of exemption under section 44 of PAPR Act by the State Govt. (which in the present case has been issued only on 25.01.2017). As such, the act of the opposite parties by collecting money from the innocent buyers including the complainants, in the absence of licence, approval of layout and zoning plans and exemption under section 44 of PAPR Act, amounts to adoption of unfair trade practice and deficiency in providing service, which has certainly caused tremendous mental agony and harassment to the complainants, for which we assess the compensation/damages @15% p.a. of the total deposited amount of Rs.16,65,000/-. This amount comes to Rs.2,49,750/- to be paid by the opposite parties, to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.2,49,750/- shall carry interest @9% p.a. from the date of passing of this order, till realization.
iii) Pay litigation expenses of Rs.50,000/- to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.50,000/- shall carry interest @9% p.a. from the date of passing of this order, till realization.
In CC No.23 of 2020, the opposite parties, jointly and severally, are directed as under:-
i) Refund the amount of Rs.23,12,500/- to the complainants, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.23,12,500/- shall carry 3% penal interest i.e. 15% 24 p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
ii) In this case also, the act of opposite parties in collecting money from the innocent buyers including the complainants, in the absence of licence, approval of layout and zoning plans and exemption under section 44 of PAPR Act, amounts to adoption of unfair trade practice and deficiency in providing service, which has certainly caused mental agony and harassment to the complainants, for which we assess the compensation @15% p.a. of the total deposited amount of Rs.23,12,500/-. This amount comes to Rs.346875/- to be paid by the opposite parties, to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.346875/- shall carry interest @9% p.a. from the date of passing of this order, till realization.
iii) Pay litigation expenses of Rs.50,000/- to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 50,000/-
shall carry interest @9% p.a. from the date of passing of this order, till realization.
40. However, it is made clear that in case the complainants, in any of the complaints above, have availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of their respective plots, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants against their respective plots.
41. Before parting this judgment, it is significant to mention here that, as stated above, in para no.13 of the rejoinder filed in CC No.43 of 2020, it has specifically been stated by the complainants that the opposite parties continued to expand the project and entered into supplementary agreements with the Government of Punjab and that they have collected huge amount of more than Rs.400 crores from the prospective buyers, without providing anything, meaning thereby that the amount so collected by them was utilized by the opposite parties, rather than delivery of possession of the plots/units. Relevant contents of para no.13 of the rejoinder is reproduced hereunder:-
'Rather it continued to expand the project and enter into supplementary agreements with the government. As per the statement (Annexure C-8) furnished by the opposite party in its reply submitted in the previous consumer complaints (CC No. 503 of 2017) filed by the consumers before this Hon'ble commission, it has been specifically stated by the opposite party that it has collected over Rs.422 crores from the general public and at the time of submitting the application for mega project, it was stated by the opposite party 25 that it was having 103 acres of land and Rs.319.75 crores for funding the project. Apart from having Rs.319.75 crores for financing the project, the opposite party has also collected over Rs.422 crores from the general public. It is clear that the opposite party has diverted the said amount for purchase of additional land. The hard earned money of the consumers have been utilized by the opposite party for the expansion of various projects being developed by the opposite party. At the time of submitting the application for mega project, it was stated by the opposite party that it has its own sources to fund the project and if it has its own sources then why the opposite party collected money from the people in violation of provisions of PAPRA and used the said money in other projects or for expansion of project. As per the application dated 12.09.2011 for approval of Mega project submitted by the opposite party, it has been mentioned at S.No. 8 under the heading means of finance "Self through reserve capital, profits accruing to other companies of the group, term loans by Bank/financial institutions' The aforesaid averments have not been rebutted by the opposite parties by filing rejoinder or by way of placing on record any other evidence. From the bare perusal of Annexure C-8 i.e. Statement of Investment/Expenditure incurred till 31.07.2017 in terms of the Promotor's Capital, Debt and Allottees contribution transpires as under:-
1. Capital 812,052,972
2. Debt --
3. Customer advances 4,229,088,666 Total 5,041,141,638 STATEMENT OF PROJECTED INVESTMENT/EXPENDITURE W.E.F AUGUST 2017 TO JUNE 2018. IN TERMS OF THE PROMOTER'S CAPITAL, DEBT AND ALLOTTEE CONTRIBUTION
1. Capital 20,000,000
2. Debt 500,000,000
3. Customer Dues 923,800,000 Total 1,443,800,000
42. Furthermore, on the request of Counsel for the complainants, we have gone also through the record of consumer complaint bearing no.503 of 2017 titled as Ashok Shreedhar Vs. M/s Manohar Infrastructure and Constructions Pvt. Limited and ors. decided by this Commission on 26.03.2018, and found therein that the opposite parties themselves have placed on record the same chart relating to statement of investment/expenditure incurred till 31.07.2017 and August 2017 to June 2018, in terms of the promoters capital, 26 debt and allottees contribution, as has been placed on record by the complainants in the present case. Thus, it is very much clear from Annexure C- 8 that the opposite parties have collected Rs.422,90,88,666/- from the prospective buyers upto 31.07.2017, but their names have not been disclosed before this Commission.
43. The Consumer Protection Act was enacted with the object to provide better protection of interests of the consumer and for that purpose Consumer Commissions have been established.
44. As stated above, in the Letter of Intent (LOI) dated 13.05.2013 and also the agreement dated 14.06.2013 executed between the opposite parties and the Government of Punjab, (through The Chief Administrator PUDA), it has been specifically stated that the opposite parties shall not advertise/launch the project and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption u/s 44 of PAPR Act 1995 is issued by the State Government. Thus, the opposite parties were not competent to collect money from the prospective buyers including the complainants on the pretext of booking a plot/flat but they violated all the relevant rules/notifications/instructions/terms and conditions of the LOI and agreement referred to above and have collected an amount of Rs.422,90,88,666/- from the allottees of the plots/units.
45. In the peculiar circumstances of this case, this Commission is of the view that for protection of the interests and rights of the consumers, an inquiry is required to be conducted in the matter, by the Chief Town Planner, Punjab and Chief Administrator, PUDA, Punjab, SAS Nagar, Mohali, jointly, with regard to collection of Rs.422,90,88,666/- aforesaid by the opposite parties. At the same time, an independent inquiry is also required to be conducted by the Income Tax Commissioner, Chandigarh, in the matter.
46. As such, the Chief Town Planner, Punjab; Chief Administrator, PUDA, Punjab, SAS Nagar, Mohali; and the Income Tax Commissioner, Chandigarh are requested to conduct an inquiry and furnish their report on following points:-
Inquiry to be conducted by the Chief Town Planner, Punjab; Chief Administrator, PUDA, Punjab, SAS Nagar, Mohali, jointly;
i. How much amount has been collected by the opposite parties- M/s Manohar Infrastructure & Constructions Pvt. Ltd., from the prospective buyers in respect of the project in question, starting from the year 2011 till 25.01.2017 i.e. the 27 date when notification with regard to exemption under PAPR Act was issued in favour of the opposite parties? ii. Where and for which purpose, the said collected amounts have been utilized by the opposite parties?
iii. What were the number of plots allocated to the opposite parties for selling the same to the general public? iv. Whether there was any excess sale of number of plots than the plots actually approved and in existence at the project site/sale inventory of the opposite parties? v. Whether any legal action has been taken against the opposite parties for selling the plots/flats in question to the general public, by violating the terms and conditions of the CLU dated 03.05.2013 and also the agreement dated 14.06.2013, referred to above?
Inquiry to be conducted by the Income Tax Commissioner, Chandigarh:-
i. How much amount has been collected by the opposite parties- M/s Manohar Infrastructure & Constructions Pvt. Ltd., from the prospective buyers in respect of the project in question, starting from the year 2011 till 25.01.2017?
ii. How and in which manner, the amounts collected during the period aforesaid have been utilized by the opposite parties?
iii. Whether the amounts so collected by the opposite parties for the period from 2011 till 25.01.2017 have been accounted for and reflected in their Annual Income Tax returns, during the said period?
47. However, in the meanwhile i.e. till the disposal of inquiry aforesaid, we restrain the opposite parties-M/s Manohar Infrastructure & Constructions Pvt. Ltd. to transfer, alienate or create third party interests in the project/properties in favour of any person in any manner, except without prior permission of this Commission.
48. Certified copies of this order be sent to Chief Town Planner, Punjab and Chief Administrator, PUDA, Punjab, SAS Nagar, Mohali, and Income Tax Commissioner, Chandigarh, for submission of inquiry report, in the matter, within a period of three months from the date of receipt thereof.
49. However, it is made clear that the period of inquiry of three months aforesaid, will have no bearing on the period for compliance of the directions given by this Commission to the opposite parties, in paragraph no.39 above. However, application on this issue shall run separately, before this Commission.
2850. Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case file.
51. The files be consigned to Record Room, after completion. Pronounced.
09.08.2021 Sd/-
[JUSTICE RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(RAJESH K. ARYA) MEMBER Rg.