National Consumer Disputes Redressal
Emaar Mgf Land Limited & Anr. vs Amit Puri on 30 March, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 250 OF 2014 (Against the Order dated 03/03/2014 in Complaint No. 92/2013 of the State Commission Chandigarh) 1. EMAAR MGF LAND LIMITED & ANR. THROUGH ITS AUTHORISED SIGNATORY, ECE HOUSE, 28 KASTURBA GANDHI MARG, NEW DELHI- 2. EMAAR MGF LAND LIMITED, THROUGH ITS AUTHORISED SIGNATORY, SCO 120-122, SECTOR-17-C, CHANDIGARH -160017 ...........Appellant(s) Versus 1. AMIT PURI S/O. GIAN CHAND PURI, R/O. 2 CHATTERTON CRT, BRAMPTON, UNTARIO, LGW 351, CANADA, ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MR. VINAY KUMAR, MEMBER HON'BLE MRS. M. SHREESHA, MEMBER For the Appellant : For the Appellants : Mr. Amit Mahajan, Advocate with Mr. Adhish Srivastava, Advocate Ms. Neha Jain, Advocate Mr. Amartyo Biswas, Advocate For the Respondent : For the Respondent : Mr. Rajeev Ranjan Kumar,Advocate Dated : 30 Mar 2015 ORDER This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), has been preferred by a Colonizer, questioning the correctness and legality of order dated 03.03.2014, passed by the State Consumer Disputes Redressal Commission, UT, Chandigarh (for short "the State Commission") in Complaint Case No. 92/2013. By the impugned order, the State Commission, while partly allowing the Complaint, preferred by the Respondent/Complainant, has directed the Appellants to pay to him : (i) as refund, an amount of ₹34,66,535/-, deposited by the Complainant with them, along with interest @ 12% p.a., from the respective dates of deposits; (ii) interest @ 12% p.a., on the amount of ₹5,39,086/-, already refunded to the Complainant, from the respective dates of deposit, till the respective dates of refund; (iii) a compensation of ₹1,50,000/-, for causing mental agony and physical harassment to him as also towards escalation in prices in the real estate; (iv) ₹20,000/- as cost of litigation. It has been further directed that in case the payment of amounts, mentioned at (i), (ii) and (iii) above is not made within a period of 45 days from the date of receipt of a certified copy of its order, then the Appellants shall be liable to pay the amount mentioned at (i) above with interest @ 15% p.a., instead of 12% p.a., from the respective dates of deposits, till realization; interest @ 15% p.a. on the amount mentioned at (ii) above, from the respective dates of deposit to the respective dates of refund; and interest @ 12% p.a. on the amount of compensation mentioned at (iii) above, from the date of filing the complaint, till realization, besides payment of litigation costs, to the tune of ₹20,000/-.
2. Succinctly put, the facts leading to the filing of the Appeal are that sometime in the year 2007, the Complainant, a Non-Resident Indian (NRI), had applied for registration of a residential plot in the project, named and styled as "Mohali Hills", to be developed by the Appellants in Sectors 105, 108 and 109, Augusta Park, Mohali Hills, SAS Nagar, Punjab. On allotment of Plot No. 279, admeasuring 300 sq. yards @ ₹11,500/- per sq. yard (for a total consideration of ₹40,50,354/-) in Sector-109, by 09.05.2007, the Complainant deposited the amounts demanded as per the schedule mentioned in the aforesaid application, in addition to a sum of ₹10,35,000/- deposited at the time of booking. In respect of the said allotment, a Plot Buyer's Agreement was executed between the parties on 04.07.2007. As per Clause (8) of the said Agreement, subject to force majeure conditions and reasons beyond the control of the Appellant, the possession of the plot was to be delivered to the Complainant within a period of two years from execution of the said Agreement, but not later than three years. Although the Scheme postulated development of Sectors, 105, 108 and 109 together, Sector 109, in which the plot was allotted to the Complainant, was not developed at all, as according to the Complainant, no land was available for carving out the plots. Having waited for almost five years, at the request of the Complainant, vide email dated 29.03.2012, the Appellants relocated him in Sector 108 by allotting plot No. 33, Block-MLU in the said Sector, which was claimed to be a developed Sector. An amended Agreement, in continuation of the Plot Buyer's Agreement dated 04.07.2007, was entered into between the parties on 06.07.2012, amending certain clauses of the earlier Agreement. Although Clause (5) of the Amended Agreement refers to replacement of earlier Annexure-I, setting out the payment plan, but it appears that as the entire sale consideration had already been paid by the Complainant, much prior to execution of the Amended Agreement, no fresh payment plan had been annexed therewith. On the contrary, as the alternate plot allotted in Sector 108 was not preferential, and the Complainant had deposited a total sum of ₹40,05,621/- with the Appellants for a preferential plot in Sector 109, a sum of ₹5,39,086/-, comprising ₹1,28,000/- on account of difference of extra development charges and ₹4,11,086/- charged towards Preferential Location Charges (PLC), was refunded to him in February 2013. The said refund was made without any interest. The Amended Agreement clearly covenants that "save and except what is agreed, under this Amended Agreement, all other clauses and provisions of the Buyer's Agreement shall remain unchanged and thus Amended Agreement shall be read as a part and parcel of the Buyer's Agreement". Thus, Clause 8 of the Agreement dated 04.07.2007 remained unaffected and binding on both the parties. The said Clause reads as follows:
"8. Subject to Force Majeure conditions and reasons beyond the control of the Company, the Company shall endeavor to deliver possession of the Plot to the Allottee within a period of 2 (Two) years from the date of execution of this Agreement, but not later than 3 (Three) years. In the event that the possession of the Plot is likely to be delayed for reason of any force majeure event or any other reason beyond the control of the Company including government strike or due to civil commotion or by reason of war or enemy action or earthquake or any act of God or if non delivery is as a result of any act, notice, order, rule or notification of the Govt. and any other public or Competent Authority or for any reason beyond the control of the Company, then in any of the aforesaid events, the Company shall upon notice claiming force majeure to the Allottee be entitled to such extension of time till the force majeure event persists or the reason beyond the control of the Company exists. In the event that the Company fails to deliver possession of the Plot without existence of any force majeure event or reason beyond the control of the Company within a maximum period of 3 (Three) years from the date of execution of this Agreement, the Company shall be liable to pay to the Allottee, a penalty of the sum of Rs.50/- (Rupees Fifty only) per sq. yds. per month for such period of delay beyond 3 (Three) years from the date of execution of this Agreement." (Emphasis supplied)
3. As noted above, in terms of the said Clause, possession of the plot was to be delivered to the Complainant within a maximum period of three years from the execution of agreement dated 04.07.2007 i.e. by 03.07.2010. It is not the case of the Appellants that the said period was got extended by issuing notice to the Complainant pleading force majeure or any other conditions envisaged in the Clause and, therefore, on the expiry of three years on 03.07.2010, the Complainant became entitled to penalty @ ₹50/- per sq. yard per month from the said date.
4. The case of the Complainant was that despite several requests, through personal visits and telephonic messages, the Appellants failed to deliver physical possession of the allotted plot. On one of his personal visits to the site he discovered that there was no development in Sector 108 as well, and as a matter of fact he was given to understand by the representatives of the Appellants that possession of the plot could not be delivered because of non-development in the area. Alleging unfair trade practice and deficiency in service on the part of the Appellants because of their failure to deliver possession of even the alternate plot, which was to be delivered latest by July 2010, the Complainant filed a complaint before the State Commission on 27.11.2013, inter alia, praying for refund of the amount deposited by him with the Appellants, i.e. ₹34,66,535/-, along with interest @ 24% p.a. from the respective dates of deposits till the date of realization, as also compensation of ₹10,00,000/- towards physical and mental harassment, besides litigation expenses.
5. The Complaint was contested by the Appellants on diverse grounds, including its maintainability on the plea that the Complainant being an NRI, he had purchased the plot for resale and hence he was not a "consumer" within the meaning of the Act. On merits, it was averred that having signed the Amended Agreement in the year 2012, the question of handing over of possession of plot in the year 2009 or 2010 did not arise. It was also asserted that the Complainant was to get possession of the plot allotted in Sector 108 in the year 2015 and, therefore, the Complaint was pre-mature.
6. On consideration of the evidence adduced by the parties, the State Commission has repelled all the preliminary objections raised by the Appellants. As regards the date of delivery of possession, the State Commission has observed that in view of Clause-7 in the Amended Agreement, dated 06.07.2012 which provides "that the Allottee agrees and undertakes the terms and conditions of Buyer's Agreement shall apply to the allotment of the Alternate plot pari pasu and the same are sacrosanct, save and except to the extent amended and agreed under the Amended Agreement", there was no change in the date of delivery of possession, as agreed to in the earlier Agreement, dated 04.07.2007. It has been observed that the possession of the plot having not been delivered till 27.11.2013 i.e. the date of filing of the Complaint, the cause of action did arise in favour of the Complainant to seek refund of the amounts deposited by him along with interest and compensation. Finally, the State Commission has held that by not delivering physical possession of a fully developed residential plot to the Complainant even after the receipt of entire consideration therefor, the Appellants were not only deficient in rendering service but they also indulged in unfair trade practice. Consequently, the State Commission has partly allowed the complaint and issued the afore-noted directions. Hence, the present First Appeal.
7. Mr. Amit Mahajan, Learned counsel appearing for the Appellants submitted that since the Plot Buyer's Agreement clearly stipulates that in case there is any delay in handing over of possession of plot, the Complainant would be entitled to compensation @ ₹50/- per sq. yds. per month, the State Commission erred in directing refund of the amount deposited by the Complainant as also the interest and compensation towards harassment and escalation in price of plot. It was strenuously urged that an alternate plot, having been allotted to the Complainant at his own request, he was estopped from seeking refund of the amount deposited. Feebly, the plea that the Complainant's complaint filed in the year 2013 was pre-mature because on execution of Amended Agreement in the year 2012, the period for delivery of possession of the plot stood extended by a further period of three years i.e. till 2015, was also raised.
8. We are of the opinion that the Appeal is devoid of any substance. It is trite that the word 'Compensation' is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. Explaining the general meaning and amplitude of the word 'Compensation' in the context of the Act, in Lucknow Development Authority Vs. M.K. Gupta - (1994) 1 SCC 243, the Hon'ble Supreme Court observed as follows:-
" The word 'compensation' is again of very wide connotation. It has not been defined in the Act. According to dictionary, it means, 'compensating or being compensated; thing given as recompense;'. In legal sense it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Commission has been vested with the jurisdiction to award value of goods or services and compensation it has to be construed widely enabling the Commission to determine compensation for any loss or damage suffered by a consumer which in law is otherwise included in wide meaning of compensation. The provision in our opinion enables a consumer to claim and empowers the Commission to redress any injustice done to him. Any other construction would defeat the very purpose of the Act. The Commission or the Forum in the Act is thus entitled to award not only value of the goods or services but also to compensate a consumer for injustice suffered by him." (Emphasis supplied)
9. Endorsing the said observations, in Ghaziabad Development Authority Vs. Balbir Singh - (2004) 5 SCC 65, the Supreme Court held that the provisions of the Act enable a Consumer to claim and empower the Commission to redress any injustice done. A Consumer Fora is entitled to award not only value of goods or services but also to compensate a consumer to injustice suffered by him. However, sounding a note of caution to the effect that the compensation cannot be awarded in all cases on a uniform basis or at a uniform rate, the Court has observed that loss has to be determined by the Fora keeping in view a number of factors like loss of rent which could have been earned if possession had been delivered or the rent a consumer had to pay because of non-delivery of possession on time etc. Emphasizing that compensation in a case where delivery of possession is being directed would be different from a case where only refund of amount is being directed, the Hon'ble Court observed thus :-
" That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher."
10. Bearing in mind the aforestated broad principles for determining the question of award of compensation and interest to the Complainant, we may now advert to the facts at hand. In the instant case, indubitably, the Complainant had deposited full consideration amounting to ₹40,05,621/- with the Appellants from time to time towards the cost of the plot, in terms of Plot Buyer's Agreement dated 04.07.2007, in the hope that he will get a plot either in Sector 109, as initially booked or in Sector 108, as an alternate allotment on or before 04.07.2010, but it was not to be. It is not in dispute that even Sector 108 was not developed when the Complainant filed the complaint in the year 2013. Even at this juncture, it is candidly admitted that the development work is likely to be completed "shortly". Therefore, the question for consideration is whether in view of the stipulation in the Buyer's Agreement for payment of penalty @ ₹50/- per sq. yd. per month for the delay in delivery of possession, the Complainant was precluded from claiming refund of the amount(s) deposited by him as consideration for the plot and compensation for depriving him of the possession by the committed timeframe. We have no hesitation in holding that if the developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternate plot. Clause 8 comes into play only when an allottee is prepared to wait for possession. Nonetheless, the waiting period cannot be endless. At the cost of repetition, we may reiterate that in the event of a developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the developer against allotment. Therefore, in our view the plea of the Appellants that since the agreement provides for compensation @₹50/- per sq. yd. per month for the delayed period of delivery, neither any compensation for the delay nor interest on the amount deposited can be awarded, is absolutely untenable and deserves to be outrightly rejected.
11. We are in complete agreement with the State Commission that non-delivery of legal physical possession of the fully developed allotted plot to the Complainant, after receipt of full consideration thereof, tantamounts to deficiency in rendering service as also unfair trade practice on the part of the Appellants and therefore, the Complainant was entirely justified in praying for refund of the amount deposited with interest for withholding the money for over seven years.
12. The stand of the Appellants that on execution of Amended Agreement dated 06.07.2012, the scheduled period of delivery of possession of plot stood extended by a further period of three years, is also bereft of any merit. As already stated above, Clause 7 of the Amended Agreement makes it abundantly clear that, save and except what was agreed, under the Amended Agreement, all other terms and conditions in Agreement dated 04.07.2007 remained intact and therefore, the stipulated date of possession of even the alternate plot remained unchanged. In that view of the matter, the question of the complaint being pre-mature also did not arise.
13. As regards the question of award of interest on the amount(s) deposited by the Complainant, on the point, the State Commission has observed as follows:-
"The complainant was deprived of his hard earned money, on the basis of misleading information given by the Opposite Parties, that he would be handed over the legal physical possession of the residential plot, in question, by the stipulated date, but they failed to do so. The complainant, was, thus, caused financial loss. The hard earned money of the complainant was utilized by the Opposite Parties, for a sufficient longer period. Had this amount been deposited by the complainant, in some bank, or had he invested the same, in some business, he would have earned handsome returns thereon. In case of delay, in deposit of installment(s), the Opposite Parties were charging compound interest (quarterly) @ 15% P.A., as is evident from Clause 3 of the Plot Buyer's Agreement dated 04.07.2007 Annexure C-1. Under these circumstances, in our considered opinion, if interest @ 12% P.A., on the amount, deposited by the complainant, and part amount, already refunded to him, from the respective dates of deposits, is granted, that will serve the ends of justice."
14. In our view, the factors taken into consideration by the State Commission for awarding more than reasonable rate of interest @ 12% p.a. when award of interest @ 18% p.a. under similar circumstances has been upheld by the Hon'ble Supreme Court, are cogent and therefore, no interference on the point is warranted.
15. Similarly, having failed to deliver possession of a developed plot or refund the money received, for almost 8 years, undoubtedly tremendous mental agony and physical harassment was caused to the Complainant. Under the stated circumstances, award of a petty amount of ₹1,50,000/- as compensation cannot be said to be unreasonable by any standard.
16. For the aforegoing reasons, the Appeal being bereft of any merit, must fail. It is dismissed accordingly with costs, quantified at ₹25,000/-. The statutory deposit of ₹35,000/- shall stand transferred to the Consumer Welfare Fund.
17. The amount deposited by the Appellants in this Commission, in terms of order dated 06.05.2014, shall be released to the Respondent/Complainant forthwith. The balance amount, as awarded by the State Commission, shall be paid by the Appellants to the Complainant, within four weeks of the date of receipt of a copy of this order.
mukesh/ar/Yd ......................J D.K. JAIN PRESIDENT ...................... VINAY KUMAR MEMBER ...................... M. SHREESHA MEMBER