State Consumer Disputes Redressal Commission
Col. Jasinder Pal Singh vs Sushma Buildtech Ltd. on 16 January, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 71 of 2013 Date of Institution : 09.10.2013 Date of Decision : 16.01.2014 1. Col. Jasinder Pal Singh (Retd.) son of Sh. Rajpal Singh resident of House No.5876, Modern Housing Complex, Manimajra, Chandigarh. 2. Lt. Col. Gurpratap Singh Mahal son of Col. Jasinder Pal Singh (Retd.) son of Sh. Rajpal Singh resident of House No.5876, Modern Housing Complex, Manimajra, Chandigarh, at present House P194/3, Kaul Officer Enclave, Near Hathi Ground, Jhansi Cantt. Complainants. V e r s u s Sushma Buildtech Ltd., having its registered office at Plot No.381, Industrial Area, Phase-I, Chandigarh through its Director. Second Address: Sushma Buildtech Limited, S.C.O. 172-173, Sector 19-C (infact 9-C), Madhya Marg, Chandigarh, through its Managing Director. .....Opposite Party Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER
Argued by: Sh.
R. S. Cheema, Advocate for the complainants.
Sh.
Dinesh Madra, Advocate for the Opposite Party.
PER DEV RAJ, MEMBER.
The facts, in brief, are that the Opposite Party, which is a Builder, in its brochure, had given details of the project, launched by it, in Sushma Urban Views, located at Gazipur, NAC, Zirakpur, Tehsil Derabassi, District Mohali, Punjab. Believing the version of the Opposite Party and the sample flat shown, the complainants made up their mind to purchase apartment/flat B-701 on 7th Floor in Wing B measuring 1680 sq. ft (super area) in the said project. The complainants booked the aforesaid apartment and paid Rs.3,52,000/- being 10% of the basic sale price. They were issued letter of allotment dated 23.7.2010 (Annexure C-1). An Apartment Buyers Agreement dated 27.7.2010 (Annexure C-2) was executed between the parties. The complainants obtained a housing loan of Rs.30 Lacs from IDBI Bank, based on construction linked payment plan, which was paid to the Opposite Party, as per its demands within the stipulated time. As such, the complainants paid a total amount of Rs.37,20,000/- to the Opposite Party as per construction linked plan in total 12 installments. Apart from this amount, the complainants paid an additional amount of Rs.1,97,160/- as service tax and, as such, in total, they paid Rs.39,17,160/- to the Opposite Party vide receipts (Annexures C-4 to C-16). The complainants received letter dated 26.2.2013 from the Opposite Party whereby they were asked to take the actual possession of the booked apartment, within 15 days, after clearing all the dues and obtaining NDC from the Developer. The complainants, in response to the letter dated 26.2.2013, paid the last installment and, thus, full and final payment was made on 15.3.2013 vide receipt (Annexure C-16).
2. It was stated that, in the absence of No Dues Certificate, the staff at location of the apartment/flat refused to handover the same to the complainants. However, the staff permitted the complainants to inspect the apartment in order to see the completion. Complainant No.1 inspected the apartment in the presence of the representatives of the Opposite Party, and pointed out the defects and deficiencies to them and also requested them to rectify the same but they did not bother at all to do the needful. Complainant No.1 personally met Sh. V. S. Iyer, Assistant Manager (Sales) and Anuj Kumar Mahendru, Manager (Sales) of the Opposite Party for issuing No due Certificate and also sent letters (Annexures C-19 to C-25).
3. It was further stated that as per Clause 15 (d) of the Apartment Buyer`s Agreement dated 27.7.2010, Annexure C-2, the Opposite Party was required to handover possession of the said unit, to the complainants, within a period of twenty four (24) months, from the date of execution of the same (Agreement) but it failed to do so, and, as such, became liable to pay compensation/penalty @Rs.5/- per square feet of the super built-up area, per month, for the entire period of such delay, which comes to Rs.58,800/- (till the date of filing of the complaint).
4. It was further stated that as per letter dated 30.7.2010, regarding scheme of assured returns, the Opposite Party was required to pay to the complainants Rs.10,000/- per month till the possession was handed over to them but it did not pay the penalty as per Clause 15(d) of the agreement and also stopped paying Rs.10,000/- per month.
5. It was further stated that this was a clear cut case of allurement, harassment, concealment, misrepresentation and unfair trade practice. It was further stated that on personal meetings, the representatives told complainant No.1 that NDC would be issued and possession of the flat would be given to them provided they signed maintenance agreement first. It was further stated that a copy of the maintenance agreement (Annexure C-37), to be signed between the complainants, Opposite Party and M/s. Manhattan infra Services Pvt. Ltd. was given to the complainants and they were asked to pay Rs.80,899/- as advance maintenance charges for three years @Rs.2,000/- per month, which was in total violation of Clauses 17(b)&(c) of the Apartment Buyers Agreement, as per which, only one year advance payment of maintenance charges was to be made and that too was to be effective from the date of receipt of occupation and completion certificate from the authorities.
6. It was further stated that the possession of the apartment/flat, in question, could not be taken over due the reasons viz. NDC had not been issued, apartment was unfit for occupation because of deficiencies, already pointed out, and the Occupation and Completion Certificates from the authorities had not yet been obtained by the Opposite Party under Section 14 of Punjab Apartment and Property Regulation Act, 1995.
7. It was further stated that the complainants were paying interest @10.5% per annum, on the loan amount to the IDBI Bank, which the Opposite Party was liable to pay. It was further stated that by not handing over the possession of apartment, in question, by the stipulated date, as mentioned in the Apartment Buyer`s Agreement, Annexure C-2, referred to above, and issuing offer of possession, in respect of the same, which had a number of drawbacks and deficiencies, the Opposite Party was not only deficient, in rendering service, but also indulged into unfair trade practice. When the grievance of the complainants, 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, directing the Opposite Party, to refund Rs.55 Lacs; pay compensation, to the tune of Rs.20 lacs, for mental agony and physical harassment; pay Rs.17,58,000/- as interest, calculated @18% on the amount of Rs.39,17,160/-; pay Rs.58,800/- as penalty @Rs.5/- per sq. ft. calculated up to August 2013 and cost of litigation, to the tune of Rs.20,000/-.
8. The Opposite Party, in its written version, took up a preliminary objection that the complainants had not approached this Commission, with clean hands, and, as such, they were liable to be thrown out, at the very threshold. On merits, it was admitted that the complainants applied for the allotment of an apartment/flat, to the Opposite Party after satisfying themselves as regards the brochure, layout plan and the sample flat. It was also admitted that the complainants were allotted apartment no.B-701, 7st Floor, Wing B, measuring 1680 square feet, in the said project. Issuance of allotment letter, in respect of the apartment, in question, in favour of the complainants, was also admitted. It was also admitted that Apartment Buyers Agreement dated 27.07.2010 Annexure C-2, was executed between the parties. It was stated that as per Clause 15(d) of the said Agreement, the possession of apartment, in question, was to be delivered within 24 months, with a grace period of six months, and subject to fulfillment of the terms and conditions thereof. It was, however, denied that inspite of paying all the dues by the complainants, the Opposite Party did not issue No Dues Certificate. It was further stated that the possession of the apartment/flat, in question, was not denied by the staff of the Opposite Party for want of No Dues Certificate. It was denied that the complainants ever met Sh. V. S. Iyer or Anuj Kumar Mahendru for the issuance of No Dues Certificate. Receipt of telephonic messages dated 18.3.2013, 25.3.2013, 22.4.2013, 16.5.2013, 11.6.2013, 27.6.2013 and 8.7.2013 were denied. It was stated that in view of some shortcomings, claimed by the complainants, they refused to take possession. It was further stated that the alleged shortcomings were duly rectified by the Opposite Party but the complainants started finding faults in other things with a purpose to delay the taking of possession. It was denied that there was any architectural and technical defect in the apartment/flat, in question. It was further stated that the project was complete, and the flat, in question, was ready for occupation. It was denied that the Opposite Party did not offer the possession till date. It was further stated that all the promised facilities and amenities were in place and being used by the occupants of the complex who had shifted in their flats. It was further stated that since the Opposite Party valued their customers, so the staff had been instructed to personally attend to them and their grievances were duly redressed as depicted from letter dated 18.3.2013. It was further stated that the maintenance charges were to be paid in advance for one year @Rs.2,800/- per month and, in case, the same were paid for three years in advance then the same were payable at the discounted rate of Rs.2,000/- per month. It was further stated that the complainants did not sign the maintenance agreement. It was further stated that since the residents are using the maintenance services, so they are liable to pay for the same. It was further stated that the completion and occupation certificates have already been applied for by the Opposite Party to the concerned authorities for each and every flat, vide application (Annexure O-52) and electricity meter is being installed by the concerned Department. It was further stated that there was no delay on the part of the Opposite Party in offering the possession and, as such, neither it was liable to pay the penalty for delay nor refund the amount. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
9. The complainants, in support of their case, submitted their own affidavits, by way of evidence, alongwith which, a number of documents were attached.
10. The Opposite Party, in support of its case, submitted the affidavit of Pardeep Kumar, its Director, by way of evidence, alongwith which, a number of documents were attached.
11. We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
12. The Counsel for the complainants submitted that the complainants were allotted the apartment bearing No.B-701, 7th floor in Wing B measuring 1680 Sq. ft., on 23.7.2010 (Annexure C-1) at a total sale consideration of Rs.35,20,000/- which was paid in installments and service tax was extra. It was further submitted that the complainants in all paid a sum of Rs.39,17,160/- and Apartment Buyers Agreement dated 27.07.2010 (Annexure C-2) was executed. It was further submitted that as per Clause 15(d), possession was to be delivered within 24 months unless and until restrained by the circumstances beyond its contemplation and control besides the Opposite Party could take six months grace period for completing and handing over the said apartment. It was further submitted that the last installment was paid on the due date i.e. 15.3.2013 as stipulated in letter dated 26.02.2013 (Annexures C-16 and C-17). It was further submitted that when the complainants went to obtain No Dues Certificate, despite the fact that they had paid the entire amount, the same was denied. It was further submitted that the Completion and Occupation Certificates which were mandatory, were not obtained by the Opposite Party. It was further submitted that the Opposite Party did not reply to even a single letter and possession was declined. It was further submitted that the offer of possession of the apartment, for which the Opposite Party did not have the Completion and Occupation Certificates, was not legal.
13. The Counsel for the Opposite Party, submitted that interest free maintenance, security charges were payable by the complainants, and without payment of the same, No Dues Certificate could not be given. It was further submitted that there was clause in the Agreement to this effect and other builders were also charging the same. It was further submitted that the matter with regard to the issue of the Completion and Occupation Certificates was pending with the Government.
14. The basic facts viz. the allotment of apartment no.B-701 on 7th Floor in Wing B measuring 1680 sq. ft (super area), execution of Apartment Buyers Agreement dated 27.7.2010 (Annexure C-2), at Chandigarh, obtaining housing loan from IDBI and payment of Rs.39,17,160/-, including the last installment No.12 of Rs.2,65,546/- as raised vide letter dated 26.2.2013 (Annexure C-17), by the complainants to the Opposite Party, which included Rs.50,400/- towards IFMS, are admitted.
15. The first question, which arises for consideration, is, as to whether, there was any delay in offering possession of apartment, in question, to the complainant. Clause 15(d) of the Agreement, Annexure C-2, reads as under:-
15(d) The Company shall endeavour to give possession of the said Unit to the Buyer within a period of Twenty Four (24) months from the date of execution of this Agreement unless and until restrained by circumstances beyond its contemplation and control. Besides, the Company can take six months grace period for completing and handing over the said Unit to the Buyer. The Company shall hand over the said Unit to the Buyer for his occupation and use and subject to the Buyer having complied with all the terms and conditions of this Agreement. In the event of his failure to take over and/or occupy and use the said Unit provisionally and/or finally allotted within thirty (30) days from the date of intimation in writing by the Company for such occupancy, the same shall lie at his risk and cost and the Buyer on the sole discretion of the Company, shall be liable to pay compensation/holding charges @Rs.5/- per square feet of the super built-up area, per month, for the entire period of such delay. The adjustment of compensation shall be done at the time of conveying the said Unit and not earlier. The said compensation shall be a distinct charge in addition to maintenance charges and not related to any other charges as provided in this Agreement. However it is clarified that the company shall send its intimation regarding the handing over of the possession to the Buyer at his/her address which has been provided by him/her at the time of deposit of earnest money unless modified/altered by way of Courier/Registered A.D. letter and/or personal receipt of letter regarding the change of address before that at the office of the company mentioned herein
16. It is evident, from the afore-extracted Clause of the Apartment Buyers Agreement dated 27.07.2010 Annexure C-2, that the Opposite Party was to deliver possession of the apartment, in question, within 24 months (and the Opposite Party could take grace period of six months), from the date of execution of the same (Agreement). No doubt, the payment due was made by the complainant, and the possession was admittedly offered on 26.02.2013 (Annexure C-18). As the Apartment Buyers Agreement was executed on 27.07.2010 and as per Clause 15(d) of the said agreement, the possession of apartment, after adding the grace period of six months, was to be offered by the Opposite Party by 27.01.2013. However, the Opposite Party offered the same on 26.02.2013. The complainants made payment within the stipulated time limit on 15.3.2013 but the Opposite Party did not issue No Dues Certificate despite repeated visits/persuasions by the complainants, resulting into delay in possession. Thus, the possession offered on 26.2.2013 remained a paper possession only. Thus, the Opposite Party failed to deliver possession within the time stipulated in the agreement.
17. The complainants pointed out defects/shortcomings in the apartment, in question, as is evident from letter dated 18.3.2013 (Annexure C-19), written by them to the Opposite Party, that they (complainants) visited and checked the apartment on 2.3.2013 and 3.3.2013, to check its readiness and few defects were shown to Sh. Hari Krishan, representative of the Opposite Party, who agreed to repair the same. Vide letter dated 18.03.2013 (Annexure C-19), the complainants informed the Opposite Party that the apartment, in question, could not be occupied unless all other facilities were provided like electricity connections, backup power, gas pipe line, security and the common facilities were made functional. The complainants, vide letter dated 16.5.2013 (Annexure C-22), pointed out defects viz. use of sub-standard tiles used on floor, kitchen and bathroom, which were not as per demo apartment. The tiles laid were uneven, broken, chipped and of different colour, colour of cupboards and doors in the bedroom was totally different. There was no ventilation in the bathrooms and the windows provided were with fixed glazed glasses. Similar is the letter dated 11.6.2013 (Annexure C-23) followed by letter dated 8.7.2013, wherein the complainants pointed out several other defects/shortcomings. To prove their case, the complainants also furnished, in evidence, photographs (Annexures C-31 to C-36). The Opposite Party has failed to rebut the evidence placed on record by the complainants by leading any cogent and convincing evidence to prove that the defects/shortcomings pointed out by the complainants, were completely removed to the entire satisfaction of the complainants.
18. The next question, which falls for consideration, is, as to whether, the possession offered by the Opposite Party was legal physical possession or not. The Promoter of the Colony/Project was required to obtain occupation and completion certificates from the Competent Authority under Section 14 of Punjab Apartment and Property Regulation Act, 1995, as per the terms and conditions of licence granted to the Promoter under Section 5 of the Act prior to its occupation. Clause 18(d) of the Apartment Buyers Agreement, Annexure C-2, is extracted hereunder:-
18(d) The Apartment with the building in which the Apartment is, shall be subject to the provisions of Punjab Apartment Ownership Act, 1995 and/or Punjab Apartment and Property Regulation Act, 1995 (PAPRA) or any statutory enactment or modifications thereof. The common areas and facilities and the undivided interest of each Apartment owner in the common areas and facilities as specified by the Company in the declaration, which may be binding upon the Apartment owners and the Buyer agrees and confirms that his/her/their right, title, interest in the Apartment/Building shall be limited to and governed by what is specified by the Company in the said declaration. In this regard, it is made clear by the Company and fully understood by the Buyer that the declaration to be filed in compliance of the laws shall in no manner confer any right, title or interest in any lands, facilities, amenities and buildings outside the land beneath the footprint of the said Building in which the Apartment is located.
19. Section 14 of Punjab Apartment and Property Regulation Act 1995 reads as under:-
14.Occupation and completion certificate:-
(1) It is the responsibility of the promoter:-
(i) in the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate from the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and
(ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all respects as per terms and conditions of the licence granted, to him under section 5.
(2) The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate.
20. The onus to prove that the project had been completed and the area/site, in question, where the apartment of the complainants is located, had been fully developed having all the basic amenities and that the Opposite Party had all the necessary permissions, Completion and Occupation Certificates, was on the Opposite Party, but it failed to prove the same by leading any cogent and convincing evidence. Clearly, when the complainants went to the site to see progress, various works, as mentioned by them in letter dated 18.3.2013 (Annexure C-19) were not complete. There were other defects in construction as pointed out by the complainants in their letters (Annexures C-22, C-23) and photographs.
21. The legal physical possession of the flat, in question, was to be delivered, within a reasonable period, from the date of allotment, to the complainants. The possession offered to the complainant was only a paper possession. The Apartment Buyers Agreement was executed on 27.7.2010 (Annexure C-2). Even by 26.2.2013, when the offer of possession was made (Annexure C-18), to the complainants, the Opposite Party was not in possession of the completion and occupation certificates as is evident from Annexure O-52. The Opposite Party, vide letter dated 1.2.2013 (Annexure O-52), had only taken up the matter with the Estate Officer, Municipal Committee, Zirakpur for the grant of completion certificate for its project.
Clearly the possession offered was a paper possession, without obtaining the completion and occupation certificates from the appropriate authorities. There is nothing, on record, that the Competent Authority granted completion and occupation certificates to the Opposite Party in respect of the entire project or the Tower in which the apartment of the complainants is located, except NOC and Clearance Certificate for release of power load (Annexures O-55 and O-56 respectively).
22. According to Section 14(1)(ii) of the Punjab Apartment and Property Regulation Act, 1995, extracted above, the Opposite Party was required to obtain the completion and occupation certificates from the Competent Authority. Only after obtaining the completion and occupation certificates from the Competent Authority, as indicated above, legal physical possession of the apartment could be said to have been offered to the complainant. Since no completion and occupation certificates had been obtained by the Opposite Party, the offer of possession to the complainant could not be said to be legal. Since the Opposite Party failed to comply with the mandatory provisions of Section 14 of the Punjab Apartment and Property Regulation Act, 1995, before offering the possession, they committed an illegality. Such an offer of possession could certainly be said to be illegal on the face of it. The allottees, after accepting such an offer of possession of the flat, which on the face of it, was wholly and completely illegal, always ran the risk of demolition of the same, thereby putting their hard earned invested amount, in peril. One could really imagine the plight of the persons, who had deposited their hard earned money for the purchase of an apartment, but later on came to know that there was no development with regard to basic amenities at the site, there was defects in construction of the apartment, in question, and no completion and occupation certificates had been obtained by the Opposite Party, as per the provisions of relevant law. As such, the possession offered by the Opposite Party vide letter dated 26.02.2013 (Annexure C-18) was merely a paper possession and not legal physical possession and even such possession was denied on the pretext of obtaining No Dues Certificate, which the Opposite Party denied without any justified reason. The complainants could not be forced to take possession of the flat, the construction whereof had no legal sanctity. In these circumstances, the Opposite Party was deficient, in not offering the possession complete in all respects, after obtaining the completion and occupation certificates.
23. The Opposite Party, thus, on account of the aforesaid acts of omission and commission, was not only deficient, in rendering service but also indulged into unfair trade practice.
24. By offering the possession of an apartment, full of defects/shortcomings and that too in the absence of completion and occupation certificates from the competent authorities and, thereafter, by not refunding the amount, the Opposite Party was certainly deficient in rendering service. The complainants, thus, suffered immense physical harassment and mental agony, at the hands of the Opposite Party, for which, they are entitled to the refund of Rs.39,17,160/- deposited by them with the Opposite Party, alongwith interest, and compensation in the sum of Rs.1,00,000/-.
25. No other point, was urged by the Counsel for the Parties.
26. For the reasons recorded above, the complaint is partly accepted, with costs, in the following manner:-
i. The Opposite Party is directed to refund the amount of Rs.39,17,160/-, to the complainants, alongwith interest @12% per annum from the respective dates of deposits, within two months of the date of receipt of a certified copy of this order.
ii. The Opposite Party is further directed to pay compensation, in the sum of Rs.1,00,000/- for causing mental agony and physical harassment, to the complainants, within two months, from the date of receipt of a certified copy of this order.
iii. The Industrial Development Bank of India (IDBI) shall have the first charge, on the amount to be refunded, to the complainants, by the Opposite Party, to the extent, the amount is due to it, against the complainants as it (IDBI) advanced loan in their (complainants) favour for part payment of the price of flat, in question.
iv. The Opposite Party is further directed to pay cost of litigation, to the tune of Rs.11,000/-, to the complainants.
v. In case the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Party shall be liable to pay the amount mentioned in Clause (i) with interest @15% per annum, instead of 12% per annum, from the respective dates of deposits, till realization and interest @12% per annum, on the amount of compensation, mentioned in Clause (ii), from the date of filing the complaint, till realization, besides payment of costs, to the tune of Rs.11,000/-.
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.
January 16, 2014.
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[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Ad STATE COMMISSION (Consumer Complaint No.71 of 2013) Argued by: Sh.
R. S. Cheema, Advocate for the complainants.
Sh.
Dinesh Madra, Advocate for the Opposite Party.
Dated the 16th day of January, 2014 ORDER Vide our detailed order of the even date, recorded separately, this complaint, filed by the complainants, has been partly accepted with costs.
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(DEV RAJ) MEMBER (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Ad