State Consumer Disputes Redressal Commission
Naresh Kumar vs Jalandhar Improvement Trust on 19 December, 2023
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.931 of 2022
Date of institution : 03.11.2022
Reserved on : 08.12.2023
Date of decision : 19.12.2023
Naresh Kumar aged 42 years S/o Sh. Mohinder Pal, R/o H.No.378,
VPO Kukkar Pind, Jalandhar, Punjab.
....Appellant/Complainant
Versus
Jalandhar Improvement Trust, Model Town Road, Jalandhar City,
through its Executive Officer, Jalandhar, Punjab.
.....Respondent/Opposite Party
2) First Appeal No.932 of 2022
Date of institution : 03.11.2022
Reserved on : 08.12.2023
Date of decision : 19.12.2023
Devika Khullar aged 45 years W/o Sh. Bharat Bhushan Khullar, R/o
WS-427, Banian Bazar, Basti Sheikh, Jalandhar, Punjab.
Now present address
Devika Khullar aged 45 years W/o Sh. Bharat Bhushan Khullar, R/o
H.No.19, Kamal Vihar, Gate No.1, Basti Peer Dad Leather Complex
Road, Jalandhar 144021.
....Appellant/Complainant
Versus
Jalandhar Improvement Trust, Model Town Road, Jalandhar City,
through its Executive Officer, Jalandhar, Punjab.
.....Respondent/Opposite Party
AND
3) First Appeal No.933 of 2022
Date of institution : 03.11.2022
First Appeal No.931 of 2022 2
Reserved on : 08.12.2023
Date of decision : 19.12.2023
Amit Kumar Sharma aged about 40 years S/o Late Sh. Rur Mal
Sharma, R/o EF-379, Khanna Mandir, Mandi Road, Jalandhar, Punjab.
Now present Address
Amit Kumar Sharma aged about 40 years S/o Late Sh. Rur Mal
Sharma, R/o 41, SF MIG Flat, Guru Gobind Singh Avenue, Jalandhar
City, Punjab 144001.
....Appellant/Complainant
Versus
Jalandhar Improvement Trust, Model Town Road, Jalandhar City,
through its Executive Officer, Jalandhar, Punjab.
.....Respondent/Opposite Party
Appeals under Section 41 of Consumer
Protection Act, 2019 for modification of
order dated 11.08.2020 passed by the
District Consumer Disputes Redressal
Commission, Jalandhar in C.C. No.329 of
2020.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued by:-
For the Appellant : Sh. Munish Goel, Advocate
For the Respondent : Ms. Kavita Arora, Advocate
.................................................................................. First Appeal No.931 of 2022 3 JUSTICE DAYA CHAUDHARY, PRESIDENT By this order of ours total three Appeals i.e. First Appeal No.931 of 2022, First Appeal No.932 of 2022 and First Appeal No.933 of 2022 shall be disposed off as the common questions of facts and law are involved therein and the same have been filed by the Appellants against the similar impugned orders dated 11.08.2020 passed by the District Consumer Disputes Redressal Commission, Jalandhar (in short the "District Commission") whereby the Complaints filed by the Appellants/Complainants had been partly allowed.
2. However, the facts are being extracted from First Appeal No.931 of 2022 titled as "Naresh Kumar Vs. Jalandhar Improvement Trust".
3. Briefly, the facts of the case as made out by the Complainant-Naresh Kumar in Consumer Complaint No.329 of 2020 (First Appeal No.931 of 2022) before the District Commission are that the Complainant had submitted an application for allotment of plot measuring 100 square yards by depositing 10% of the total amount as earnest money. The Complainant was allotted plot No.206-C under Vikas Scheme 94.97 Acre, Surya Enclave Extension (Jalandhar) on 06.06.2016 measuring 100 square feet on the basis of draw of lots held on 19.05.2016 at Red Cross Bhawan, Jalandhar. The Site of the area was not developed within a period two and half years and the possession thereof was to be given after execution of the Agreement of Sale which was to be executed within a period of 13 days of the allotment letter. Thereafter, the Complainant had made the Agreement First Appeal No.931 of 2022 4 with the OPs on 07.10.2016. The Complainant had also deposited all the requisite documents for registration of the application by paying necessary fee and all necessary formalities were completed within the stipulated period. The Complainant had paid the total amount of Rs.17,00,000/- to the OPs as per the requirement of the allotment letter. Neither the site was developed nor offered the possession to the Complainant even after a period of approximately four years. The Complaint was filed by the Complainant before the District Commission with the following prayers as mentioned in the Complaint:-
a) to deliver actual and physical possession of the plot bearing no.206-C under the Vikas Scheme 94.97 sq.yd. at Surya Enclave Extension allotted to the Complainant vide allotment letter dated 06.06.2016 alongwith all the facilities and development as has been advertised and agreed upon between the Complainant and the opposite party and the approved site plan within 2 months alongwith interest at the rate of 18% on the amount deposited till the date of entering of agreement to sell and all subsequent stipulated dated for delivery of possession till the actual offer and delivery of physical possession of the said plot to the Complainant.
Or in the alternative
a) To return/refund Rs.21,94,258/- paid/deposited by the Complainant as mentioned herein above alongwith interest @18% p.a. from the date of deposit up to the date of actual payment to the Complainant.
b) Award compensation/punitive damages quantified to Rs.5,00,000/- under the Act for mental tension, pain and agony and harassment caused to and suffered by the First Appeal No.931 of 2022 5 Complainant at the hands of opposite party, which is just and reasonable on arbitrary and unilaterally keeping the amount and for misfeasance in public office as stated (supra).
c) Grant cost of proceedings of the Complaint reckoned to Rs.10,000/- to the Complainant and against opposite party.
d) Grant Rs.1000/- expenses on account of fee of Rs.500/- paid for making Complaint, besides postal expenses and expenses of copying, typing and stationary etc. Any other additional or alternative relief which the Complainant is found entitled to which this Hon'ble Forum deems fit and proper to be awarded in the light of facts and circumstances of the case to tender justice.
4. Upon issuing notice to OP-Jalandhar Improvement Trust, written statements were filed wherein certain preliminary objections were raised. The averments made in the Complaint were also denied and prayer was made for dismissal of the Complaint.
5. By considering the averments made in the Complaint and reply thereof filed by the OP and also on hearing the oral arguments raised from both the sides, the Complaint was partly allowed vide order dated 11.08.2022. The relevant para 10 of the impugned order dated 11.08.2022 is reproduced as under :-
"10. In view of the above detailed discussion, the Complaint of the Complainant is partly allowed and OP is directed to handover the possession with complete all the amenities and development after removing the illegal possession of third person and proper demarcation of the land to the allottees within three months, failing which the OP is directed to refund the amount of Rs.21,94,258 with interest @9% per annum from the First Appeal No.931 of 2022 6 date of making deposits till its realization. Further, OP is directed to pay a compensation to the Complainant for mental agony and harassment caused to the Complainant, to the tune of Rs.30,000/- and litigation expenses of Rs.5000/-. The entire compliance be made within 45 days from the date of receipt of the copy of order. This Complaint could not be decided within stipulated time frame due to rush of work."
6. The Complainant being not satisfied with the order passed by the District Commission has filed the present Appeal for modification of the order passed by the District Commission.
7. Mr. Munish Goel Advocate, learned Counsel for the Appellant/Complainant has submitted that the Appellant/Complainant had deposited all the requisite/required documents for registration of the application by paying required/necessary fee and had also completed all the formalities well in time but still the OP had neither developed the site nor offered the possession even after a period of approximately four years. Learned Counsel has further submitted that the Respondent/OP had failed to hand over the possession well in time as per the terms and conditions of the Agreement. The Complainant was left with no choice except to file complaint for refund of deposited amount alongwith interest. Learned Counsel has further submitted that only the interest @9% has been awarded from the date of deposit the amount till its realization. Learned Counsel has also submitted that the District Commission passing the directions to the Respondents/OP to hand over the possession by providing all amenities and development after removing the illegal possession of third person and proper demarcation of the land to the allottees within First Appeal No.931 of 2022 7 a period of three months but still the interest had not been granted on account of delay so caused in handing over the possession. Learned Counsel has further submitted that the allotment letter was issued to the Appellant/Complainant on 06.06.2016 and the possession was required to be handed over on execution of Agreement of Sale which was executed on 07.10.2016. The Appellant was entitled to get the possession within a period of two and half years from the date of execution of Agreement. Learned counsel has further submitted that in not delivering the possession, the Appellant was also entitled for interest on deposited amount till handing over the possession @18% per annum. Learned Counsel has further submitted that the District Commission has not directed the OPs to obtain occupation and completion certificate from the competent authority and as per the Punjab Apartment and Property Regulation Act, 1995, the Respondent/OP was required to obtain completion certificate from the competent authority before offering the possession of the plot to the allottees and as such the order passed by the District Commission is required to be modified to that extent. It is also the arguments of learned Counsel for the Appellant/Complainant that the District Commission had awarded only Rs.30,000/- as compensation on account of causing mental agony and harassment and Rs.5000/- towards litigation expenses whereas the Appellant/Complainant had been suffering since 2016 and is entitled for enhancement of compensation from Rs.30,000/- to Rs.5,00,000/- and litigation expenses from Rs.5,000/- to Rs.10,000/- and also for Rs.5000/- on account of filing of the Complaint. Learned Counsel has relied upon First Appeal No.931 of 2022 8 judgments i.e. "M/s Ashoka Investment Co. Versus M/s United Towers India (Pvt.) Limited" 2022 STPL 12458 SC, "Jalandhar Improvement Trust & another Vs. Harbans Singh" F.A.997 of 2017, decided on 19.04.2023 (alongwith other bunch of cases) (NC) in support of his arguments.
8. Ms. Kavita Arora Advocate, learned Counsel for the Respondent/OP i.e. Jalandhar Improvement Trust has submitted that the order passed by the District Commission is based on proper appreciation of evidence and facts as mentioned in the Complaint. The order is well reasoned and has been passed by considering the averments made in the Complaint and the law position. No interference is required.
9. We have heard the arguments raised by learned Counsel for both the parties and have also carefully perused the impugned order passed by the District Commission and have also gone through the judgment cited by the learned Counsel for both the parties.
10. Facts relating to filing of the Complaint by the Complainant before the District Commission, reply thereof and passing of order passed by the District Commission whereby the Complaint filed by the Complainant was partly and OP was directed to handover the possession with all the amenities and development after removing the illegal possession of third person and proper demarcation of the land to the allottees within a period of three months, failing which, OP was directed to refund the deposited with interest @9% per annum from the date of deposits till its realization. The OP was also directed to pay First Appeal No.931 of 2022 9 Rs.30,000/- as compensation for causing mental agony and harassment caused to the Complainant and to pay Rs.5000/- as litigation expenses.
11. Admittedly, the Complainant was allotted plot No.206-C at the site in dispute and the development was to be completed within a period of two and half years. The possession of the plot as per the allotment letters was to be handed over on the execution of Agreement for Sale which was to be executed within a period of 30 days of the issuance of allotment letter. It is also not in dispute that the Complainant had entered into the Agreement with the OPs on 07.10.2016 and had also supplied all the required documents for the registration of the application with necessary fee and other formalities were also completed within the stipulated period as submitted by learned Counsel for the Appellant. However, the only formality which was required to be completed was to give the possession of the allotted plot with all complete amenities and ultra modern facilities. It is not in dispute that the OPs had not developed the site and no possession was offered even after a lapse of approximately four years.
12. It is relevant to mention that the OPs had failed to comply with the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, 'PAPRA'). As per Section 3 (General Liabilities of Promoter) of the PAPRA, the OP was required to disclose complete and correct disclosure of the nature of their title to the land, upon which the project was to be developed or the building was to be constructed or to disclose all encumbrances on such land, including First Appeal No.931 of 2022 10 any right, title, interest or claim of any party in or over such land. The OP was also required to give opportunity of inspection within a period of seven days notice or demand of the layout of the colony and plan of development works to be executed in the project, as approved by the prescribed authority. However, the OP had failed to comply with the provisions of Section 3 of the PAPRA.
13. As per the Section 5 (Development of land into Colony) of PAPRA, the OP was required to obtain the sanctions/permissions from the competent authority for launching and developing the project, but they had failed to produce on record any such sanctions/permissions. So, the OP had also violated the provisions of Section 5 of PAPRA.
14. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank for depositing the amount so deposited by the buyers, who intend to purchase the plots/flats/commercial space/Unit but no such evidence was brought on the record by the OP to prove that any such account was maintained by them in this regard. As such, the OP had also violated the provisions of Section 9 of the PAPRA.
15. As discussed above, the OP had failed to develop the site in time and also to give possession of the plot with complete amenities. There was no provision to give compensation to the buyer on account of delayed possession. It clearly shows that the terms and conditions of the allotment letter and the Agreement, which was to be drafted by the OP, was one-sided and are in favour of the OPs and not the buyers. It is matter of common knowledge that the buyers were not First Appeal No.931 of 2022 11 having any option but to sign on the dotted lines or pre-drafted agreements prepared by the developer/builder. Failure on the part of the OP to provide complete/effective possession of the Unit within the stipulated period amounts to 'deficiency in service'. It is also matter of common parlance that for purchasing the Flat/Plot/Unit, normally the purchasers take loans from their family members, relatives and friends or financial institutions. In some cases, the purchasers reside in rented house in the absence of timely delivery of possession. On account of delay in delivery of possession within the stipulated period, they have suffered mental agony, hardship and financial loss at the hands of the developers/builders.
16. In the case of Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon'ble Supreme Court has discussed about the extent of the jurisdiction of the Consumer Commission to award the just and reasonable compensation for causing harassment and agony suffered by a consumer.
17. Further in the case of Ghaziabad Development Authority v. Balbir Singh (2004) 5 SCC 65 (SC), the Hon'ble Supreme Court has observed as follows:
"6...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. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done.
8...... No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to First Appeal No.931 of 2022 12 determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him. Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical."
18. In another case titled as "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Geetu Gidwani Verma & Anr." II(2019) CPJ 34, it was held by the Hon'ble Supreme Court that the Builder cannot bind the flat purchaser with such one-sided contractual terms. The relevant para of the said judgment is reproduced hereunder:-
"7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 8.5.2012 are ex facie one sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. XX XX XX XX XX XX
9. We see no illegality in the impugned dated 23.10.2018 passed by the National Commission. The Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent-Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent -Flat Purchaser was entitled to be granted the relief prayed for ....."
19. It is relevant to mention that the Hon'ble Supreme Court in the case of "Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors." Civil Appeal No.5785 of 2019 decided on 11.01.2021 had First Appeal No.931 of 2022 13 awarded 9% interest on the refundable amount. The relevant portion of said judgment is reproduced as under:
"We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry. In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fair play that the Complainant is entitled to interest on the deposited amount from the date of deposit till actual realization. Therefore, the interest at the rate of 9% per annum is quite reasonable with regard to the compensation for the delay in delivery of the possession or on the refund of the deposited amount."
20. The District Commission has not awarded any interest to the Complainant for the delay in delivery of the possession in the said cases. In view of above referred judgment of the Hon'ble Supreme Court of India, the Complainant is held entitled for interest @9% per annum from the date of delivery of possession. The amount of compensation and litigation expenses so awarded by the District Commission appears to be on the lower side. Hence the order passed by the District Commission is required to be modified.
21. Similarly, in First Appeal No.932 of 2022, the Appellant/Complainant was allotted plot No.177-C measuring 100 sq. ft. under Vikas Scheme 94.97 Acre (Surya Enclave Extension), Jalandhar on 06.06.2016. The Complainant had paid the total amount towards the price of the said plot. The site was to be developed within a period of two and half years and possession was to be delivered thereafter. Neither site was developed nor OP had offered the possession. The OP had contested the Complaint by filing written reply on the similar lines as mentioned in F.A. No.931 of 2022. The District Commission had partly allowed the Complaint vide order dated First Appeal No.931 of 2022 14 11.08.2022 by issuing similar directions as mentioned in F.A. No.931 of 2022. The Appellant/Complainant has challenged the said order by way of filing First Appeal No.932 of 2022 by raising similar grounds as mentioned in F.A. No.931 of 2022.
22. Similarly, in First Appeal No.933 of 2022, the Appellant/Complainant was allotted plot No.223-C measuring 100 sq. ft. under Vikas Scheme 94.97 Acre (Surya Enclave Extension), Jalandhar on 06.06.2016. The Complainant had paid total amount towards the price of the said plot. The site was to be developed within a period of two and half years and possession was to be delivered thereafter. Neither the site was developed nor possession was delivered with all complete amenities. The OP had contested the Complaint by filing written reply on the similar lines as mentioned in F.A. No.931 of 2022. The District Commission had partly allowed the Complaint vide order dated 11.08.2022 by issuing similar directions as mentioned in F.A. No.931 of 2022. The Appellant/Complainant has challenged the said order by way of filing First Appeal No.933 of 2022 by raising similar grounds as mentioned in F.A. No.931 of 2022.
23. In view of the above discussion as well as the facts and circumstances as mentioned above, it has been proved on record that the OP had failed to complete the project in all respects and to deliver the possession of the plots/Units in dispute to the Complainants within the stipulated period. The 'deficiency in service' on the part of the OP had been proved on record. In view of judgments of the Hon'ble Supreme Court of India as referred in the said cases, we find merits in First Appeal No.931 of 2022 15 the arguments raised by learned Counsel for the Appellants/Complainants.
24. Accordingly the Appeals No.931 of 2022, 932 of 2022 and 933 of 2022 are partly allowed and the order dated 11.08.2022 passed by the District Commission are modified with the following directions to the OP :-
i) The OP is directed to deliver the vacant physical possession of the plot in question with proper demarcation complete in all respects along with 'Completion Certificate' and 'Occupation Certificate' from the concerned competent authorities and all the promised amenities subject to the payment of balance outstanding amount towards the price thereof, if any, by the Complainants without any interest or penal interest;
(ii) to execute the sale/conveyance deed and to get the same registered in the name of the Complainants, for which the expenses shall be borne by the Complainants;
(iii) to pay compensation for delay in delivery of the possession of the plot/Unit in dispute in the form of interest at the rate of 9% per annum on the amount so deposited by the Complainants from the expiry of the stipulated date of delivery of possession till the date actual delivery of possession of the plot in question; and also
(iv) to pay Rs.50,000/-, as compensation, for mental agony, tension and harassment suffered by the Complainants and Rs.10,000/-
as litigation costs;
In case the OPs fail to comply with the aforesaid directions, then in the alternative, the following directions are issued to the OP:- First Appeal No.931 of 2022 16
i) to refund the amount so deposited by the Complainants along with interest @9% per annum from the date of deposits till actual realization;
ii) to pay Rs.50,000/-, as compensation, for mental agony, tension and harassment suffered by the Complainants and Rs.10,000/- as litigation costs.
25. Since the main cases are decided, the pending applications regarding delay etc., if any, are also disposed of.
26. The Appeals could not be decided within the stipulated period due to heavy pendency of Court cases and due to pandemic of Covid-19.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER December 19, 2023 MM