State Consumer Disputes Redressal Commission
Vir Bhan Garg vs Ireo Fiveriver Pvt. Ltd. on 9 April, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 747 of 2017 Date of Institution : 25.10.2017 Date of Decision : 09.04.2018 Vir Bhan Garg s/o Sh. Babu Ram R/o House No.330, Sector-2, Panchkula. ......Complainant V e r s u s Ireo Fiveriver Private Limited through its Managing Director, SCO No.6-8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh. The Regional Manager, Ireo Fiveriver Private Limited, SCO No.6-8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh. ...... Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by:
Sh. Abhineet Taneja, Advocate for the complainant.
Sh. Rohit Tanwar, AGM (Legal) of the Opposite Parties.
PER DEV RAJ, MEMBER The facts, in brief, are that the complainant booked one plot in the project of Opposite Party No.1, under the name and style of 'IREO FIVE-RIVER', Tehsil Kalka, Panchkula, Haryana, by paying an amount of Rs.3,50,000/-, in the year 2010. He was allotted Plot bearing No.U18, Type-E, measuring 155 sq. yards in the said project vide allotment letter dated 08.09.2011 (Annexure C-2). It was further stated that an agreement dated 03.10.2011 w.r.t. plot measuring 155 sq. yards at the basic sale price of Rs.20,000/- per sq. yard, was executed between the parties and, as such, the basic sale price of the plot, in question, was fixed at Rs.31,00,000/-. In compliance to the payment plan opted, the complainant, in all, paid an amount of Rs.20,65,000/- as per detail given in Paras 4 to 6 of his complaint. The amount paid by him included demand qua enhanced EDC, to which the complainant objected to.
2. It was further stated that as per Clause 11 of the Agreement, the physical possession of the plot was to be offered within 24 months, which expired on 02.10.2012. It was further stated that the aforesaid period could be extended by another six months, which also expired on 02.04.2013, however, the Opposite Parties failed to offer physical possession within the said stipulated period.
3. It was further stated that the Opposite Parties did not start the development work at the site even after receiving the huge amount from the complainant and other allottees. It was further stated that layout plan of the area, wherein the plot was allotted to the complainant, was not even sanctioned/approved, when the plot, in question, was allotted. It was further stated that the complainant paid all the installments without any delay. It was further stated that despite numerous visits and innumerable calls to the Opposite Parties, the Opposite Parties failed to give any affirmative response to the complainant. It was further stated that the construction of the project at the site is far from completion and no development is going on. It was further stated that left with no other alternative, the complainant claimed refund of the deposited amount vide legal notice dated 24.06.2017 (Annexure C-11) but to no avail.
4. It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the opposite parties, to refund the amount of Rs.20,65,000/-, alongwith interest @18% p.a., from the dates of deposits till actual realization; pay compensation to the tune of Rs.10,00,000/-, for mental agony and harassment; Rs.5,00,000/- on account of escalation in cost of construction; Rs.2,00,000/- as punitive damages and Rs.35,000/- as litigation expenses.
5. Upon notice, appearance was put by the Counsel on behalf of both Opposite Parties No.1 & 2, however, written statement was filed only on behalf of Opposite Party No.1, stating that there is no Regional Manager of Opposite Party No.1 and being legal entity, Opposite Party No.1 acts through its duly authorized signatories. It was further stated that Opposite Party No.2 is not personally liable for the acts of Opposite Party No.1. It was further stated that that in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was further pleaded that since the plot, in question, was purchased by the complainant for commercial purpose i.e. for investment purpose and not for personal use, as such, he did not fall within the definition of consumer. It was further pleaded that the consumer complaint was not maintainable, as the matter relates to an agreement to sell/purchase of a plot i.e. of immovable property. It was further pleaded that the complainant did not buy any goods and there was no promise to provide any service, as alleged. It was further stated that compensation under Section 14(1)(d) could be awarded if any loss or injury is suffered by the consumer due to negligence of Opposite Party No.1. It was further pleaded that jurisdiction issues be decided as preliminary issues and only thereafter, decision be taken on merits.
6. On merits, while admitting the factual matrix of the case, it was stated that the complainant was very much aware of the unforeseen delays caused due to the act of the Governmental authorities. It was stated that Opposite Party No.1 did not raise demands for the period of delay in construction. It was further stated that Opposite Party No.1 was very honest and kept on updating the status of the project to the complainant. As regards handing over of possession, it was stated that Clause 11 of the agreement has to be read in its entirety and not selectively. It was further stated that the combined reading of Clause 11 would make it abundantly clear that period of offering possession was to travel beyond 30 months with payment of liquidated damages till the possession is actually offered. It was further stated that only statutory requirement in terms of Section 7 of Haryana Development and Regulation of Urban Areas Act, 1975 is grant of Licence to develop and the said License was granted by the authorities vide Licence No.28 of 2010 on 23.03.2010 to Opposite Party No.1 i.e. much prior to the receipt of booking amount from the complainant, which was followed by execution of the agreement.
7. It was further stated that Opposite Party No.1 cannot be held guilty of delaying the project. It was further stated that the delay occurred due to time consumed in obtaining various approvals from the Authorities on account of imposition of fresh conditions, which were not part of license or the LOI. It was further stated that before the recommendation of grant of NOC from National Wife Life Board on 14.03.2015, there was no occasion for Opposite Party No.1 to commence the development work at site. It was further stated that the development and construction work at the site commenced after 13.04.2015. It was further stated that Opposite Party No.1 applied well in time for obtaining various approvals for commencing the work. It was further stated that Forest Clearance was granted on 17.12.2009, which was revalidated but later, the condition of obtaining NOC from NBWL was imposed while granting the environment clearance on 15.04.2014. Various NOCs/clearances like Airport Clearance, Ground Water Board permission Licene No.28 for 169.864 Acre, No.55 for 10.594 acres and No.74 for 18.343 acres were granted on 26.02.2010, 19.08.2011, 23.02.2010, 01.08.2013 and 01.08.2013 respectively. It was further stated that lay out for entire project was revised on 14.10.2013, environment clearance was granted on 15.04.2014 and NOC from Pollution Control Board was granted on 02.05.2014. It was further stated that due to pendency of grant of NOC from National Wild Life Board, the development work at the site could not be commenced prior to April 2015.
8. It was further stated that while granting environment clearance on 15.04.2014, fresh condition was imposed, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015.
9. In other words, the opposite parties have tried to convince this Commission, that the delay in commencement of development work and offering possession of the plot to the complainant occurred, not on account of delay in grant of necessary regular approvals, in routine, but was due to the fact that fresh conditions were imposed by the Competent Authorities, and as such, the intervening circumstances were totally beyond their control. It was further stated that all the events mentioned above, were beyond the control of Opposite Party No.1, and as such, the development at the project site could not be commenced till April 2015. It was further stated that the mutual rights and liabilities of the parties are governed by the agreement and it was specifically agreed that in case of force majeure circumstances, the period of delivery of possession shall stand extended automatically to the extent of the delay caused due to force majeure circumstances. It was further stated that the delay in start of development works at site was neither intentional nor deliberate rather was a result of force majeure circumstances.
10. It was further stated, that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
11. The parties led evidence, in support of their case.
12. We have heard Sh. Abhineet Taneja, Advocate, Counsel for the complainant and Sh. Rohit Tanwar, AGM (Legal) of the Opposite Parties and, have gone through the evidence and record of the case, carefully.
13. The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause No.33 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this Commission in case titled 'Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator's fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, it is admissible to an Arbitrator to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-
"26. To decide above said question, it is necessary to reproduce the provisions of Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;
"3. Act not in derogation of any other law.--
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
33. The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
34. Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
Same is the ratio of judgment of a three Judges Bench of the National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017.
Against the aforesaid order passed by the larger Bench of the Hon'ble National Consumer Disputes Redressal Commission, New Delhi, M/s Emaar MGF Land Limited filed Civil Appeal No.(s) 23512-23513 of 2017 in Hon'ble Supreme Court of India, which were also dismissed.
In view of the above, the plea taken by Opposite Party No.1, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.
14. The next question that falls for consideration, is, as to whether, the complainant is a speculator or not. No doubt, to defeat claim of the complainant, an objection was raised by Opposite Party No.1, to the effect that the complainant, being an investor, had purchased the plot, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined under Section 2(1)(d) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainant is a property dealer and is indulged in sale and purchase of property, on regular basis. Thus, in the absence of any cogent evidence, in support of the objection raised by Opposite Party No.1, mere bald assertion to that effect, cannot be taken into consideration. It may be stated here that in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Consumer Disputes Redressal Commission, New Delhi, that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs. Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as "Aashish Oberai Vs. Emaar MGF Land Limited", Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-
"In the case of the purchase of the house 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 fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015."
The principle of law, laid down, in the aforesaid cases is fully applicable to the present case. The objection raised, being devoid of any substance, stands rejected.
15. The next question that falls for consideration, is, as to whether, since the complainant sought enforcement of the Agreement, in respect of the immovable property, only a Civil Court can decide the complaint, and as such, consumer complaint was not maintainable. It may be stated here, that the complainant hired the services of Opposite Party No.1, for purchasing the plot, in question, in the manner, referred to above. According to Clause 11 of the Agreement, subject to force majeure conditions and reasons, beyond the control of Opposite Party No.1, it was to deliver physical possession of the plot, within a maximum period of 30 months, as explained above, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.4. Section 2 (1) (o) of the Act, defines service as under:-
"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service"
From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act provides an alternative remedy. Even if, it is assumed that the complainant has remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by him, as he falls within the definition of 'consumer', as stated above. In this view of the matter, the objection of Opposite Party No.1, in this regard, being devoid of merit, must fail, and the same stands rejected.
16. The next question, that falls for consideration, is, as to within which period, possession of the plot, in question, was to be delivered to the complainant. As stated above, according to Clause 11.1 of the Agreement dated 03.10.2011, subject to force majeure conditions/reasons, beyond the control of Opposite Party No.1, it was to deliver physical possession of the plot, within a period of 30 months i.e. 24 months plus (+) 6 months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.4 i.e. latest by 02.04.2015. It is also evident, from the combined reading of Clauses 11.1, 11.2 and 11.3 of the Agreement that possession was to be delivered within maximum period of 42 months of the execution thereof. Period of 42 months expired on 02.04.2015. Thus, the complainant became entitled to opt for termination of the allotment/Agreement, and seek refund of the actual paid up installments made against the plot, in question.
17. Admittedly, possession of the plot, in question, has not been delivered by Opposite Party No.1 to the complainant till the date, the instant complaint was filed or even till date. In the written version, Opposite Party No.1, frankly admitted, that possession of the plot, in question, could not be offered to the complainant, for want of construction and development work at the site, on account of the reasons beyond their control i.e. on account of force majeure circumstances. In this regard, it was submitted that Opposite Party No.1 had already obtained licence No.28 of 2010, from the Haryana Government, Town and Country Planning, on 23.03.2010, to launch the project, in question, in 169.864 acres of land, yet, despite that, various new/fresh conditions/objections were imposed/raised by the Competent Authorities.
18. The force majeure circumstances, which have been claimed by Opposite Party No.1, for not starting development and construction work at the site till April 2015 i.e. (i) imposition of fresh condition by the Directorate of Town & Country Planning, (DTCP) Haryana, to obtain NOC from the Irrigation Department, before starting the construction work; and (ii) Licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was eventually granted on 15.04.2014, subject to additional condition, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015 etc., have already been dealt with, in detail, by this Commission in case titled 'Mrs. Tejasvini Vs. M/s Ireo Fiveriver Private Limited & Anr.', Complaint Case No.513 of 2017, decided on 05.03.2018. Paras 24, 25 and 27 to 33 of the said judgment reads thus:-
"24. First coming to the plea taken by the opposite parties, to the effect that delay aforesaid occurred on account of fresh condition, imposed by the Directorate of Town & Country Planning, (DTCP) Haryana, vide letter dated 16.03.2011, to obtain NOC from the Irrigation Department, before starting the construction work, it may be stated here that bare perusal of letter dated 16.03.2011 (Annexure OP-45, at page 307 of the file), clearly goes to reveal that it was not a fresh condition imposed by the DTCP, Haryana, but, on the other hand, it was a violation on the part of the opposite parties, pointed out by the said Department, in not obtaining NOC from the Irrigation Department, which was a mandatory requirement, before undertaking construction activities at the site. As such, vide letter dated 16.03.2011, Annexure OP-45, the opposite parties were directed to obtain the same, before carrying out any earthwork or construction work of any kind, at the site. However, it is also an admitted case that the opposite parties applied to the Irrigation Department for issuance of NOC, vide letter dated 23.02.2012, Annexure OP-47, without getting their project hydraulically studied, as a result whereof, their request was rejected, and after getting the needful done, NOC was finally granted on 20.03.2013, Annexure OP-56. The opposite parties cannot say that obtaining of NOC from the Irrigation Department and also getting their project hydraulically studied from some premier Institute, were new/fresh conditions imposed by the Authorities, as a result whereof, the delay aforesaid, occurred. Had these been the new/fresh conditions imposed by the Government Authorities, then it has not been clarified by the opposite parties, as to how and why, the project of DLF, which is adjacent to the project, in dispute, had obtained the said NOC after adopting due procedure, reliance whereupon had been placed by them (opposite parties), in letter dated 09.03.2012 Annexure OP-49 (at page 313 of the file). The delay, therefore, is attributable to the opposite parties, as they failed to adopt proper procedure timely, for getting NOC from the Irrigation Department, at the appropriate time, as had been done by the DLF. No help therefore, can be drawn by Counsel for the opposite parties, on this count.
25. The second plea taken by the opposite parties, to the effect that licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was not cleared by the Department, as the area was situated in a squatted small pockets, and also on ground of non-grant of NOC aforesaid, by the Irrigation Department, is bereft of merits, in view of the findings, given above by this Commission, wherein, it was held that fault, if any, was attributable on the part of the opposite parties, in not obtaining NOC, after adopting due procedure at the appropriate time. Infact, the complainant was given to understand that the opposite parties were to develop a residential colony on certain pieces of land admeasuring 169.864 acres. While Licence for 169.864 acres was granted on 23.03.2010, Annexure OP-5, approval of layout plans were granted only on 02.08.2013 (Annexure OP-12).
26. xxxxxx.
27. Coming to the fourth plea taken by the opposite parties, that while giving approval vide letter dated 15.04.2015, by the Environment Department, for developing a land measuring 169.864 acres, the Authorities, vide letter dated 12.06.2012, had imposed an additional condition, that the development work shall be commenced, only after obtaining NOC from the Standing Committee of the National Board of Wild Life (NBWL), which was ultimately obtained on 24.04.2015, resulting into delay of project, it may be stated here that perusal of contents of Licence No.28 of 2010 Annexure OP-5, issued by the Haryana Government, in respect of the project, in question, clearly goes to show that the same was issued subject to conditions mentioned therein, out of which at sr. no. (h), in a very a clear-cut manner, directions were given to the opposite parties, that they shall obtain approval/NOC from the Competent Authorities, to fulfill the requirements of notification no.195 of 19.01.2009, issued by the Ministry of Environment and Forests, Govt. of India, before starting the development works in the colony. Not only this, at sr.no.i), it was also made clear to the opposite parties, to seek approval from the Competent Authority, under the Punjab Land Preservation Act, 1990, or any other statute applicable at site, before starting the development works, if required. Thus, reading of the said conditions makes it very clear that licence was granted to the opposite parties, for launching the said project, subject to the conditions that they were to obtain prior approvals/sanctions from all the Departments concerned including the National Board of Wild Life (NBWL), but they miserably failed to do so.
28. Not only this, it is very significant to mention here that perusal of contents of letter dated 12.06.2012 (Annexure OP-20), reliance whereupon has been placed by the opposite parties, to say that delay aforesaid occurred also on the ground that fresh condition was imposed by the Environment Authorities, clearly goes to reveal that, there is nothing sort of that, but, on the other hand, vide the said letter, it was intimated to the opposite parties by the Secretary State Expert Appraisal Committee, Haryana, that since the project proponent (opposite parties) did not possess licence of the area for which it had submitted application for Environment Clearance and also that it (project proponent) had not supplied the land details and collaboration/development agreement with the licence holders, approved layout plan and area statement of each licence holder, duly signed by the DTCP, as such, clearance in that regard cannot be given. Thus, it was not a fresh condition imposed by the Authorities concerned, but were the shortcomings observed by the said Committee, on the part of the opposite parties, which were required to be fulfilled before issuance of the Environment Clearance. No help therefore, can be drawn by the opposite parties, on this count too.
29. As far as the plea taken by the opposite parties, regarding delay in sanction of final lay-out plans by the Competent Authorities, is concerned, it may be stated here the same also does not merit acceptance. It was the bounden duty of the opposite parties to get approved the final layout plans, in respect of the project, in question before launching it, and only, thereafter, accept booking amount from the customers. The complainant including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. Further more, various other permissions/approvals and also the applications sent in respect of obtaining the same pertains to the years 2013 to 2015 i.e. after the date of execution of agreement. If the opposite parties chose to accept booking, on the basis of provisional sanction of the layout plan, without obtaining all necessary approvals and clearances from the Competent Authorities, they are to be blamed themselves, for the delay, and not the purchasers of units. The documents placed on record, are sufficient to prove that there was lapse on the part of the opposite parties, themselves. Had all the permissions been taken by the opposite parties well in advance, revision of layout plans, at a later stage, and delay could have been easily avoided. The purchaser(s) of a plot, cannot be penalized, by postponing the possession or registration of the unit. Similar view was taken by the National Commission in a case titled as M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17th Dec 2015. As such, the plea raised by the opposite parties, in this regard, also stands rejected.
30. It is also very significant to mention here that the licence was granted to the opposite parties, to launch the project, in question, subject to obtaining all the necessary approvals/sanctions from the Competent Authorities. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken, in getting such permissions, could have been contemplated by the builder, before issuing the brochure/executing agreement. As such, it was the bounden duty of the opposite parties, to obtain the requisite permissions or sanctions, referred to above, in the first instance, and, thereafter, recover/accept the consideration money from the purchaser of the flats/plots, but they failed to do so. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/sanctions/licence to allot plot or to construct building/apartments, invites offers and collects money from the buyers. Sequence of events, referred to above, clearly goes to prove that the opposite parties, were clearly deficient in rendering service and indulged into unfair trade practice. If the possession of plot, as also the construction of the building/apartment is delayed, because of the reasons referred to above, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances. It is settled law that a builder is bound to obtain all the necessary approvals/sanctions before launching and selling the project.
31. The aforesaid pleas taken by the opposite parties, claiming force majeure circumstances, referred to above, also deserve rejection, in the face of case titled as Ramesh Chander and another Vs. M/s IREO Fiveriver Private Limited, CC No.99 of 2014, decided on 29.04.2015, qua this very project, decided by the State Commission, Haryana, Panchkula. In that case also, almost similar excuses were given by the opposite party, for not starting development at the site and non-delivery of possession of the unit, to the purchasers, which were rejected by the State Commission, Haryana, Panchkula, by observing as under:-
"It is not disputed that the builder floated the project and they were bound to obtain all the permissions before they invite applications from public. The builder cannot raise plea that for want of certain clearances, the possession of the plot could not be delivered. When the builder invited the applications and collected huge amount from the public, they cannot delay the allotment/possession of the plot for awaiting clearances. Thus, delay/breach, if any, was on the part of the builder. The builder has not even remotely alleged any default on the part of the complainants"
32. First Appeal No.473 of 2015 filed against that order by the opposite party before the National Commission, New Delhi, was dismissed as withdrawn, vide order dated 22.07.2015.
33. Even otherwise, there is nothing on record, to show that at any stage, when the project was going to be delayed, difficulties now propagated were brought to the notice of the purchasers. On the other hand, without obtaining necessary approvals/sanctions from the Competent Authorities, which were mandatory to be obtained, as mentioned in the Licence dated 2010, referred to above, the opposite parties, with a view to grab money from the gullible customers, including the complainants, gave misleading information in the Agreement dated 27.06.2011 at Clause 'A' stating that "The Company is well and sufficiently entitled to develop a residential colony on certain pieces of land admeasuring 169.864 acres". Whereas, admittedly, development work at the site could not be undertaken by the opposite parties till April 2015, on account of the reasons that they failed to obtain mandatory permissions/sanctions from the Competent Authorities. In the present case, deficiency in providing service and adoption of unfair trade practices on the part of the opposite parties, was writ large, which fact has been proved on record, as has been discussed above, in detail, while referring the related documents. Thus, it has been proved on record, that the matter was not effectively taken up by the opposite parties, with the Government Authorities, to expedite the sanctions etc., so that construction/development at the project could be started. The opposite parties, thus, hurriedly sold units, in their project to the complainant and other allottees and have utilized the money of complainant for years. Perusal of written statement filed by the opposite parties, clearly goes to reveal that the opposite parties, have tried to shift their fault of delay aforesaid, on the shoulders of the Competent Authorities, by saying that there was delay on their part, in not giving timely permissions/sanctions/NOCs and also that new/fresh conditions were imposed by them, at later stage. The opposite parties cannot wriggle out of their liability, on the grounds indicated above, which have not been proved. It is, therefore, held that by not starting the development and construction work at the site and also by not handing over possession of the unit, to the complainant by the stipulated date, mentioned in the Agreement, and even as on today, there was a material violation, on the part of the opposite parties, for which, they are required to be put at naught."
In view of above, in this case also, it is held that by not starting the development and construction work at the site and also by not handing over possession of the plot, to the complainant by the stipulated date, mentioned in the Agreement, and even as on today, there was a material violation, on the part of the opposite parties.
19. The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.20,65,000/- deposited by him. It is an admitted fact and has also been held above by this Commission, that Opposite Party No.1 has not been able to deliver possession of the plot, in question, for want of complete development, construction and basic amenities, without existence of any force majeure circumstances. Even as on today, firm date of delivery of possession of the plot, in question, could not be given to the complainant. The complainant, cannot be made to wait for an indefinite period, for delivery of actual physical possession of the plot. On account of act and conduct of Opposite Party No.1, hopes of the complainant to have his own house, were shattered. Opposite Party No.1 has failed to perform its part of the Agreement. The act in not handing over possession in time, as per the Agreement, is a material deficiency, in providing service on the part of Opposite Party No.1. It (Opposite Party No.1), therefore, has no right, to retain the hard-earned money of the complainant, deposited towards price of the plot, in question. This Commission in case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, relying upon the judgments rendered by the Hon'ble National Commission, ordered refund to the complainant while holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.
It was clearly stated by the National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. Further in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015 decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder while holding as under:-
"I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant cannot be compelled to accept the offer of possession at this belated stage and, therefore, is entitled to refund the entire amount paid by him alongwith reasonable compensation, in the form of interest."
In view of the above, it is held that since there was a material violation on the part of Opposite Party No.1, in not handing over possession of the plot by the stipulated date, the complainant is entitled to refund of the amount deposited, alongwith interest and compensation by way of filing the instant complaint.
20. It is to be further seen, as to whether the complainant is entitled to interest on the amount deposited alongwith interest, if so, at what rate? It is an admitted fact that an amount of Rs.20,65,000/- was paid by the complainant, to the opposite parties. The said amount has been used by Opposite Party No.1, for its own benefit. There is no dispute that for making delayed payments, Opposite Party No.1 was charging heavy rate of interest @15% p.a. as per Clause 7.2 of the Agreement, for the period of delay in making payment of installments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court) , (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). The complainant has made a prayer for refund of the amount deposited, alongwith interest @15% p.a., till realization. In our considered view, the request made for, by the complainant, @18% p.a. is on the higher side. If interest @13% p.a., on an amount of Rs.20,65,000/-, is granted, that will meet the ends of justice.(Above rate of interest is less than the rate of interest charged by Opposite Party No.1 for delayed payment i.e. 15% P.A.). Therefore, the complainant is held entitled to refund of the deposited amount alongwith interest @13% p.a. (simple) from the dates of respective deposits.
21. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, on account of mental agony and physical harassment, and injury caused to him, by not delivering physical possession of the plot to him, by Opposite Party No.1, by the promised date in the Agreement i.e. by 02.04.2014. Opposite Party No.1, in its written statement, has contended that in absence of any allegation by the complainant that he suffered loss, compensation under Section 14(1)(d) of the Act cannot be granted. In the complaint in hand, the complainant has specifically prayed for compensation of Rs.10 Lacs on account of mental agony and harassment apartment from Rs.5 Lacs on account of escalation in cost of construction and Rs.2 Lacs as punitive damages. The complainant purchased the plot, with the hope to have a roof over his head alongwith family members but his hopes were dashed to the ground. Possession of plot, in question, has not been offered to the complainant. The complainant, thus, underwent a lot of mental agony and harassment, on account of the acts of omission and commission of Opposite Party No.1. Had the possession been offered to the complainant by the date stipulated in the Agreement i.e. 02.04.2014, he would have been in a position to utilize the same. Delay of more than four years in delivering possession is a clear act of deficiency on the part of Opposite Party No.1 and loss to the complainant. However, compensation in the sum of Rs.10 Lacs claimed by the complainant is on the higher side. Considering all facts including the fact that the complainant has been granted interest @13% per annum on the amount deposited, compensation, on account of mental agony and harassment, caused to the complainant, if granted, to the tune of Rs.1,25,000/- shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,25,000/-.
22. Since, there is no Regional Manager in Opposite Party No.1 - Company, therefore, the complaint against Opposite Party No.2 is liable to be dismissed.
23. No other point, was urged, by the Counsel for the parties.
24. For the reasons recorded above, this complaint is partly accepted, with cost against Opposite Party No.1 only. Opposite Party No.1 is held liable and directed as under:-
To refund the amount of Rs.20,65,000/- to the complainant, alongwith interest @13% p.a. (simple) from the respective dates of deposits, within a period of 45 days, from the date of receipt of a certified copy of this order.
(ii) To pay an amount of Rs.1,25,000/- as compensation for mental agony, physical harassment, deficiency in rendering service and unfair trade practices and Rs.22,000/-, as cost of litigation, to the complainant, within a period of 45 days from the date of receipt of a certified copy of the order.
(iii) In case, the payment of amount, mentioned in Clause (i), is not made, within the stipulated period, then Opposite Party No.1, shall be liable to pay the amount mentioned in Clause (i) above, with interest @15% (simple), from the date of default i.e. after expiry of 45 days period, till realization and amount(s) mentioned in Clause (ii) above, with interest @13% (simple) from the date of filing the complaint till realization.
25. In case, the complainant, has availed loan facility from a financial institution(s), it is made clear that the said Institution shall have the first charge on the amount payable, to the extent, the same is due against the complainant.
26. The complaint against Opposite Party No.2 stands dismissed with no order as to cost.
27. Certified Copies of this order be sent to the parties, free of charge.
28. The file be consigned to Record Room, after completion.
Pronounced 09.04 .201 8.
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT [DEV RAJ] MEMBER [PADMA PANDEY] MEMBER Ad