National Consumer Disputes Redressal
Yash Pal Marwaha vs Pushpa Builders Ltd. And Anr. on 5 September, 2005
ORDER
P.D. Shenoy, Member
1. This is a case wherein a builder promised a Non-Resident Indian (NRI) to allot a deluxe residential flat in Krishna block in the year 1989, in the complex of Pushpa Aakash Apartments to be built exclusively for NRIs, which was never built. Ultimately, the purchaser was offered a flat in 'KAVERI' block in an unfinished condition, which, till today, is not finished and it does not have a completion certificate from the Competent Authority i.e., Ghaziabad Development Authority.
2. Heard Mr. B.S. Mor, learned Counsel for the complainant and Dr. J.C. Batra, learned Senior Counsel for the opposite parties.
Case of the complainant:
3. The complainant, Shri Yash Pal Marwaha, a Non-Resident Indian (NRI) residing in United Kindom, has filed this complaint through his duly appointed true and lawful General Power of Attorney. It is the say of the complainant that M/s. Pushpa Builders Ltd., (Builder), opposite party, during the years 1988-89, attracted the citizens of India by colourful and attractive advertisements about its having purchased land on freehold basis in Vaishali, District Ghaziabad (U.P.) for constructing high-rise apartments known as Pushpa Akash Apartments with five blocks namely 'GANG A', 'YAMUNA', 'GODAVARI', 'KAVERI' and 'Saraswati' and for the NRIs 'NRI EXCLUSIVE' deluxe apartments with special features at considerably higher rates in the name of 'KRISHNA' block. In the month of July, 1989, the complainant booked and secured allotment of fla t No. F-7 at a cost of 44,156. The complainant went on paying instalments for this flat. Suddenly the opposite party unilaterally and arbitrarily offered to allot another apartment No. B5SC4 lower FF in 'Kaveri' block meant for the Indians only, through a letter vide reference PBL/NRI/11723 dated 3.12.1991 stating the same to be a final allotment. The complainant immediately got the offer of allotment of the alternate apartment repudiated through his Solicitor based in U.K., London, and demanded refund of money with interest within a period of 30 days. Around this very aforesaid period itself, there was a rumour that the entire project stood abandoned due to the involvement of Shri V.K. Soin, CMD of the opposite party, in a murder case which was found to be true and correct later on vide judgment and order dated 28.8.1997 passed by the Additional Sessions Judge, New Delhi. However, as the substantial amount for the flat was paid by the complainant, the complainant had no option but to accept the allotment of inferior flat in 'KAVERI' block.
4. Finally, the sale deed was executed on 14.3,1992 after about 3 years from the date of booking and original allotment of the flat in the form of mechanically published small register. The builder symbolically handed over the incomplete and unauthorized flat in an uninhabitable condition to the complainant on 14.3.1994 and the complainant was promised that all the amenities/facilities mentioned in the brochures, handbills and handouts would be provided soon. The situation is almost the same even today as was in the year, 1994.
5. The 'KAVERI' block in which the flat in question is situated has not yet been notified as complete by the statutory authority i.e., Proforma opposite party No. 2 herein and the opposite party No. 1 has not been able to get a 'Completion Certificate' from the said concerned statutory authority i.e., the Ghaziabad Development Authority, Ghaziabad. It has been alleged that he said Authority has cancelled the very site plan of the project/building in question and an affidavit has been filed in the Hon'ble High Court of Allahabad by the said Authority in this respect. The opposite party No. 1, on the one hand, having failed to complete the building and make available the promised amenities/facilities; on the other in the guise of the sale agreement, used to send maintenance bills year after year from 1994.
6. Further in the complaint lodged before the police Shri V.K. Soin, M.D. of M/s. Pushpa Builders unequivocally also agreed to charge for the common maintenance, etc. @ 50% of rates mentioned in the agreement dated 14.3.1992 w.e.f. the beginning of the year of the actual and physical occupation by the complainant or his wife as the case may be in their respective flats subject to the availability of the amenities/facilities promised in the advertisements, brochure, handouts and hand bills and also as stipulated in the sale agreement itself. He also promised that facilities as promised shall be made available within a year or so. In view of the said compromise/settlement dated 25.2.2000, the matter was closed with the liberty to initiate any proceedings for any Civil or Criminal action against he opposite party No. 1 as and when advised, desired and considered proper and appropriate. Consequently, the company rightly did not send any bill of maintenance in the years, 2000 and 2001 in view of the above settlement. All of a sudden, without any rhyme or reason, the opposite party No. 1 shot letters of demand of Rs, 5,78,757 for one portion B5 and Rs. 1,85,800 for another portion C4, both the portions of the same flat in April, 2002 on account of common maintenance, etc. to the complainant in U.K. followed by other arbitrary and uncalled for communications, backtracking from the settlement arrived at on 25,2.2000 before the police authorities.
7. Opposite party No. 1 did not stop there and in highly arbitrary and discriminatory manner invoked Clause 29 of the Sale Agreement in a whimsical manner by sending the notices pf termination dated 20.4.2002 of the gale Agreement dated 14.3.1992. Further it is pointed out that opposite party No. 1 has already been directed by this Commission to refund the entire amount paid by some of the buyers along with 18% interest and also pay the compensation in two exactly similar and identical O.P. No. 60/1994 and O.P. No. 215/1996 pertaining to the same premises/building in the complex of Pushpa Akash Apartments, Vaishali, Ghaziabad vide orders dated 21.6.1996 and 28.9.2001 respectively. It is noted here that the later case is reported in II (2002) CPJ 83 (NC), wherein the reference of the former case is also duly given. However, the complainant being not a member of the M/s Pushpa Builders Flat Buyers Association (Regd.) could not know about the aforesaid orders earlier, passed on the respective complaints of the aforesaid Association (Regd.). The complainant could know only about a year back from Ms. Kusum Singh, his wife's General Attorney who happens to reside in the same 'KAVERI' block m the same complex and who herself only knew through the notices of Termination of Agreements for the flats of some of the buyers, affixed on the doors of their flats by the opposite party No. 1 referring the particulars of the aforesaid litigation.
Submission by learned Counsel Mr. Mor for the complainant:
8. Mr. Mor during arguments submitted that in this case deficiency of service is proved. He quoted headnote of the earlier judgment of this Commission in Original Petition No. 215 of 1996-Pushpa Builders Flat Buyers Association v. Pushpa Builders Ltd., wherein it was held that builder had failed to deliver possession as per promise. The Commission also held that:
we see a continued cause of action. We are even otherwise inclined to condone the delay, if any, keeping in view the facts and circumstances of the case.
9. He submitted that only technical possession of the incomplete building was taken and if the complainant had not taken possession then it would have resulted in not having a flat in hand at all. He submitted that before the Sub-Inspector, Sh. V.K. Sharma, Police Station, Kalkaji on 25.2.2000, the respondent has admitted that since he could not provide the flat in Krishna Appt. (Tower) and could not provide promised amenities/facilities, he shall try his best to provide all facilities/amenities similar to those in Krishna tower within the shortest possible time and would complete the construction work of Kaveri which was half-built,
10. The builder was silent, He did not take any action to complete the building but unilaterally in the year, 2002 terminated the agreement.
Notice for termination of Agreement--
Since you have committed default and have failed to comply with the notice of demand dated 2.4.2002, the company in exercise of its power under Section 29 of the Sale Agreement dated 14.3.1992, hereby terminates the said Agreement and cancels the allotment of Unit No. B-5, Lower First Floor, Kaveri Block in project Pushpa Akash Apartments and you are called upon to hand over the vacant and the peaceful possession of the said premises on 27.4.2002 at time 2.30 p.m.
11. Mr, Mor submitted that even today the building is incomplete and he has asked Ghaziabad Development Authority (GDA) to clarify whether there is a sanctioned plan for this Kaveri building and whether completion certificate has been issued. Mr. Mor further submitted that the building Kaveri does not have a sanctioned plan which has currency today and it does not have a completion certificate and hence legally no one can stay there.
Submission by learned Counsel for the opposite parties:
12. Senior Counsel for the O.Ps., Dr. J.C. Batra submitted that husband and wife bought two sets of flats wherein the husband has sold his flat to Mr. B.S. Mor, Advocate, AM-165, Shalimar Bagh, New Delhi. Mr. Mor did not apply for mutation and did not pay arrears. He has filed general power of attorney which has been executed abroad but this has to be registered within three weeks before a Collector of Stamps in India, otherwise it is invalid. Letter of the complainant talks about two flats. He is not a consumer at all. He is only a purchaser or power of attorney of the consumer and he cannot file any complaint. He submitted that general power of attorney does not make Mr. Mor a consumer. It only authorizes him to sell/transfer the said property to any other person, to apply and take conveyance deed/sale deed, get electricity connection, etc. but it does not authorize him to file a consumer complaint.
13. Mr. Batra quoted a judgment of the National Commission. He read the first head-note in II (2002) CPJ 83 (NC), Pushpa Builders Flat Buyers Association v. Pushpa Builders Ltd., O.P. Nos. 215 of 1996 and326/200C decided on 28.9.2000 and said that the complaint is barred by limitation. If he became the c wrier in 1999 how can he file original complaint in 2003? flats were taken possession of in 1992 and complaint under Consumer Protection Act was filed in 2003. As far as the dispute regarding ma intenance charges is concerned, arbitration proceedings are already pending and in which Mr. Mor is actively participating and making submissions, filing documents, etc. Hence he cannot opt for two remedies simultaneously. He quoted the letter dated 6th September, 2002 of the Sole Arbitrator addressed to Shri Yashpal Marwah through Attorney, Shri Balbir Singh Mor informing him about granting opportunity to file reply on or before the next date of hearing on 20.9.2002 at 4.00 p.m. He concluded by submitting that the complainant cannot have three remedies: (a) criminal complaint; (b) arbitration; and (c) under Consumer Protection Act.
Findings:
(a) The first issue before us is that the possession of the flat was taken by the complainant as long back as 1992 so how can he file a complaint more than a decade later? There are two causes of action which are clear in this case:
(i) The cause of action that arose on 25/28.2.2000 when the opposite party admitted the deficiency of service on their part and promised to rectify the same at the shortest time but not done, Hence, the cause of action is a continuous one and still subsisting.
(ii) Further the latest cause of action arose on 20.4.2002 when the builder terminated the sale agreement itself.
This was also answered by Mr. Mor stating that cause of action is a continuous one as the building has not been completed and it is not possible for the complainant or his power of attorney to reside there as is evident from the response from the G.D.A. Mr. Mor had written a letter on 13.4.2004 to the Vice-chairman, Ghaziabad Development Authority, (G.D.A.) requesting it to'clarify the following:
(1) Whether M/s. Pushpa Builders Ltd. gave a notice in writing regarding the completion of the developments of Pusha Aakash Apartments according to the approved plan to obtain a completion certificate from you? If yes, whether the completion certificate has been issued to M/s. Pushpa Builders Ltd.?
(2) Whether the allottees of the flats in the building can authorisedly live in/stay?
(3) Whether sanction plan of the building is still valid or expired?
G.D.A. replied on 10.6.205 as follows:
Please refer to your letter dated 13.4.2005 addressed to the Vice-Chairman, Ghaziabad Development Authority, Map of M/s. Pushpa Builders was sanctioned by the Authority on certain Khasra numbers of village Hasanpur Bhawapur. The desired informations relating to the map are as under:
(1) The application for the completion certificate on the aforesaid sanctioned map has not yet been submitted by the builder.
(2) Prior to the issuance of the completion certificate of construction, the occupancy in the building is not permissible.
(3) The aforesaid map of the building was sanctioned on 21.5.1989 which was sanctioned for three years.
It is crystal clear from this response that the map of the building was sanctioned on 25.5.1989 but sanction was not renewed after three years. Completion certificate of construction has not been submitted by the builder hence occupancy is not permissible.
Apart from the aforesaid aspect it is proved on record that the building is still not completed and made inhabitable. For this purpose, the complainant has rightly relied upon the previous litigation by the other two flat allottees as well as the report submitted by the Local Commissioner, Mr. D.P. Gupta in the two proceedings on Original Petition No. 60 of 1994 and also by the High Court in Company Petition No. 120 of 1994. ' Hence "the cause of action, in the facts of the present case is continuous. Accordingly the complaint is not time-barred.
(b) The next issue to be decided is whether the complainant can approach Consumer For when he has already filed a complaint before the police. The complainant did approach the Police Authorities because he was pressurized to pay the maintenance charges for an incomplete building and this issue was sorted, out by them can be seen, from the following extracts of the statement recorded before the Sub-Inspector, Kalkaji, which is reproduced below:
Mr. V.K. Soin was given the complainant and after going through the complaint he admitted that he had defaulted as per agreement and made assurance to his clients, as to he could not make Krishna tower owning to own personal problem and involvement in a serious case. Mr. V.K. Soin also admitted that he shall compensate the applicant by providing another house and remit the balance amount which will occur as a difference between KRISHNA and KAVERI Appt. Since Kaveri flats are provided to Indians at a lower cost he also promised that he shall charge maintenance and other expenses of his physical occupation and will also charge 50% maintenance in future.
SHO, Kalkaji has endorsed on this document in the following words:
I have gone through the report submitted by S.I. V.K. Sharma and heard the parties concerned in detail. Both the parties have reconciled their matter mutually and amicably, Therefore, no police action is required.
This was finalized on 25.2.2000. Further there is no bar to pursue a remedy under the Consumer Protection Act in any case wherein the complainant had approached the Police Authorities for a temporary relief.
(c) The third issue to be decided is whether pending arbitration proceeding is a bar for entertaining a consumer complaint?
Arbitration proceedings were initiated by the Opposite Party, that too with regard to maintenance charges only. As against this, the present complaint is filed for refund of the entire amount paid by the complainant with interest, compensation and cost. The cause of action in both the proceedings, is entirely different. Hence, the contention that because the arbitration proceedings are pending, there is a bar for entertaining this complaint is without any substance.
In any case, Section 3 of the Consumer Protection Act, makes the position clear. It reads thus:
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.
Supreme Court in the case of Fair Air Engineers Pvt. Ltd. and Anr. v. N.K. Modi reported in II (1996) CPJ 13 (SC) : (1996) 6 SCC, 384 (Civil Appeal No. 11459 of 1996), decided on August 20,1996, held that "though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provision of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise than those given in the Act.
(d) A connected issue raised by learned Senior Counsel, Dr. Batra is that Mr. Mor has no authority to file a complaint before the Consumer Fora. It is useful in this connection to go through the following paragraph of the general power of attorney signed by Shri Yash Pal Marwah on 8.10.2002:
To look after, superintend, protect my legal rights and interest in the said property and to file/defend all kinds of suits, appeals, complaints, applications, etc. and to verify the pleading; to compromise and compound the same, to appear herself as an advocate and to engage any pleader, lawyer and advocate, to represent me at all stages in all judicial/quasi-judicial proceedings and in all Courts -- Civil/Criminal, etc., to submit written replies, counter affidavits, counter claims, to submit application for execution of decree and to do all other acts, deeds and things in connection thereto and to appoint any other attorney and to delegate power to him....
It is clear from the above that Mr-Mor had authority to file this complaint.
Further, Mr, Mor produced records to show that GPA has been registered in India.
(e) The next question to be decided is. whether there was deficiency in service on the part of the builder? It is clear from the records of the case and the submissions made by the learned Counsel that undisputedly the complainant had booked a flat in his name in Krishna Apartments in Pushpa Aakash Apartments after going through attractive brochures and advertisements. A perusal of the brochures indicates the following:
A Non Resident Indian's Dream:
Details of the Project
4. multistoreyed buildings in which the first Block will be exclusively planned for NRIs comprising 21 floors with 224 Apartments. You will be having a choice of 2 Bed Rooms, 3 Bed Rooms, 4 Bed Rooms and also the Pent Houses on terrace.
Central with High Business Potential That's where PBL has always constructed and promoted. Complexes, on selected fast selling locations.
300% Appreciation in three years That's how much the market value of PBL's Prime Properties have shot up. Affording its Investors manifold profits, and naturally this Prime Complex with its distinct advantages cannot be expected to be any exception.
The Invisible distinctions:
1. Free Hold Site.
2. Government approved
3. No objection Certificate The Visible. Distinctions:
Twenty-one storeys high (the tallest building). Now you can look down upon everyone.
Just 14% ground coverage: the rest is all lunch green, land scaped gardens, parking and recreational areas and fresh air a scarce commodity in city living. Say no to smog and pollution.
White Marble Flooring--In the lobby staircases, common corridors as well as the DD rooms, bathrooms and kitchen of your apartment. White glazed tiles up to roof height in all bathrooms and kitchens. White cement with white marble chips flooring in all bedrooms units.
May be later people shall start calling it Aakash Mahal.
Large airy rooms Ample parking areas A club and recreation centre with tennis and badminton courts International size swimming pool Community Hall in the complex Mini shopping centre Parks and Playgrounds for the children A specially designed jogging track A reception and lounge on the ground floor An Aesthetic maintenance free permanent external finish High speed 13 passengers modern elevators Innovative Distinctions Modern security system Modern Fire Fighting system Stand by generator sets Central Garbage/wastage chutes Central Telephone exchange Central Video system The complainant, an NRI, was asked to pay the money for the flat in instalments which he has complied with. Copies of the receipts have been produced before us and are in the paper book which have not been disputed by the learned Counsel for the builder. Mr. Mor has a legal power of attorney to pursue the case as per the records submitted before us. The Krishna Apartments was not built at all. Instead, complainant was offered a flat in Kaveri Apartments which is inferior to 'Krishna'. The complainant through his Solicitor at London protested against this. As there was information that builder was arrested on a murder charge, the complainant to save his hard earned money accepted the allotment of a flat in 'Kaveri' and took technical possession of the same though it was not complete. Hence, we conclude that there is clearly a deficiency of service on the part of the builder.
(f) Some other purchasers of the flats in the same apartments built by the same builder had approached this Commission in Original Petition No. 215/1996 -- Pitshpa Builders Flat Buyers Association v. Pitshpa Builders Ltd. (supra), wherein this Commission observed as under:
Even otherwise, flats were to be developed in 1991, they were not ready as late as 1995. We have also on record O.P. 326/2000 wherein a report from a Commission in this case appointed by the Company Judge to ascertain the status of flats is quite revealing. There is scaffolding on site, work is going on in upper floors, dampness was noticed on the walls of bed rooms, etc. until repairs were carried out any permanent remedial measure are taken, it cannot be considered habitable. He has concluded in the absence of basic facilities of electricity, sewage and lift as also because of dampness observed in the flats, it is difficult to expect the flat owners to inhabit in the residential complex at present. This report is of as late as November 24,1999. We see a continued cause of action. We are even otherwise inclined to condone the delay, if any, keeping in view the facts and circumstances of the case. We also find the ground to be untenable.
Therefore, this Commission in the above case, finally observed as under:
In the light of discussion above, we find a clear deficiency on the part of respondent in rendering service to the complainants. The complaint is allowed. The respondent is directed to refund amount deposited by each of the fifteen flat purchasers along with rate of interest @ 18% from the respective dates of payment till the repayment is made within a period of three months.
15. Earlier in Original Petition No. 60/1994--Pushpa Bnilders Flat Buyers Association v. Pitshpa Builders Ltd. and Ors. II (1996) CPJ 212 (NC), for the same apartment similar observation and reliefs were granted.
16. These orders have become final, and there is no reason to take a different view. The reason being purchase of flat today would be much more higher than the rate prevailing in 1989, and the rate of interest would take care of compensation awardable in such cases of unjustifiable breach of contract.
17. In this case, the complainant was living abroad. He was not a member of Pushpa Builders Flat Buyers Association. The complainant has only taken technical possession of the incomplete building. That the building is incomplete has been certified by the Local Commissioner, Shri D.P. Gupta, Retired Director General, Road Development, Ministry of Surface Transport. Sanctioned plan of the building had expired and the builder had not secured renewal of the plan from the Competent Authority, i.e. GDA and he has not submitted completion certificate.
18. Therefore, we arrive at the conclusion that a gullible NRI has been lured to buy a flat in an apartment exclusively meant for NRIs through grandiose advertisements and brochures but the builder failed to build the same and allotted him an alternative inferior flat which he accepted under mental duress. Therefore, he is entitled to refund of the amount equivalent in Indian rupees from the date of deposit with 12% interest till the date of payment. Accordingly, the builder is directed to pay rupee equivalent of $ 44, 156 from the dates of deposit with 12% interest till date of payment. The complainant shall hand over the possession of the Flat in question to the opposite party No. 1. We also order cost assessed at Rs. 25,000 to be paid to the complainant by the respondent No. 1.
The original complaint is allowed accordingly.