National Consumer Disputes Redressal
Sumitesh Anand & Anr. vs Imperia Structures Ltd. & 2 Ors. on 18 December, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1973 OF 2016 1. SUMITESH ANAND & ANR. GH-10/89D, SUNDER APARTMENT, PASCHIM VIHAR, NEW DELHI-87 2. MRS. NAMITA GUPTA GH-10/89D, SUNDER APARTMENT, PASCHIM VIHAR, NEW DELHI-87 ...........Complainant(s) Versus 1. IMPERIA STRUCTURES LTD. & 2 ORS. (THROUGH ITS CMD MR. HARPREET SINGH BATRA)
A-25, MOHAN COOP. INDUSTRIAL ESTATE, NEW DELHI-110044 2. MR. BRAJINDER SINGH BATRA, JOINT MD IMPERIA STRUCTURES LTD., A-25, MOHAN COOP. INDUSTRIAL ESTATE, NEW DELHI-110044 3. SH. S.K. SHARMA IMPERIA STRUCTURES LTD., A-25, MOHAN COOP. INDUSTRIAL ESTATE, NEW DELHI-110044 ...........Opp.Party(s)
BEFORE: HON'BLE MRS. JUSTICE DEEPA SHARMA,PRESIDING MEMBER HON'BLE MR. C. VISWANATH,MEMBER
For the Complainant : Mr. Shashi Shanker, Advocate For the Opp.Party : None
Dated : 18 Dec 2019 ORDER
C. VISWANATH
The Complainants had booked a unit/flat measuring super-area 1650 sq. ft., with covered parking and remitted a sum of Rs.5,44,500/- by way of cheque bearing no. 791781 dated 30.11.2011 drawn of S.B.I. Jacob Circle, Mumbai, towards the booking amount of the said unit with the Opposite Parties. The Opposite Parties got an Apartment Buyer's Agreement signed by the Complainants for the allotment of Apartment No. D-1803, having a super area admeasuring 153.34 sq. meter (1650 sq. ft. approximately) located on 18th floor in D-Block and for allotment of a covered parking space.The basic sale price demanded by the Opposite Parties for the aforesaid allotment of Flat was Rs.54,45,000/- and total price of Rs.72,38,750/-.According to the Complaint, a total sum of Rs.16,61,542/- was paid on the date of signing of the Apartment Buyer's Agreement. As per clause 10.1 of the Apartment Buyer's Agreement, the Opposite Parties assured the Complainants that the entire construction shall be completed and possession would be given within a period of 3 years from the date of execution of the said Agreement, lest the Opposite Parties vide clause 11.4, shall refund the amounts paid with interest @9% p.a. The Complainants sought to know by various e-mails, the exact position of construction of the flat, but each time the officials of the Opposite Parties avoided answering the status of construction and instead demanded money from the Complainants, in order to put undue pressure on them. The Complainants availed home loan from S.B.I. to a tune of Rs.57,91,000/- and paid Rs.56,12,388/- to the Opposite Party.Though the Complainants paid substantial amount, the Opposite Parties did not raise the construction as per their promise and assurance, which caused immense mental tension, pain and agony to the Complainants and their family members.Aggrieved by their inaction, the Complainants sent a mail dated 03.06.2016 informing them that the first installment was received by them on 10.02.2011, besides booking amount on 30.11.2011 but the Opposite Parties have delayed the project and signed the agreement only on September, 2012. The Complainants further informed that they had been paying interest to the bank as per the schedule of payment from their hard earned money and despite lapse of more than 4 years 5 months there was no hope of getting possession of the allotted flat. The Complainants served a legal/demand notice dated 13.08.2016 calling upon the Opposite Parties to pay the Complainants a total sum of Rs.72,67,532/- alongwith interest @24% per annum and a sum of Rs.20,00,000/- against compensation for causing mental tension, pain and agony.The legal notice was duly received/acknowledged by the Opposite Parties but they did not prefer to send any reply complying with the demand of the Complainants. Hence, the Complaint was filed.
Alleging deficiency on the part of Opposite Parties, Complainantsfiled a Complaint before this Commission under Section 21 of the Consumer Protection Act, 1986, praying relief as under:-
Direct the Opposite Parties to refund the entire amount of Rs.72,67,532/- along with interest @24% per annum w.e.f. the date of termination of agreement, vide email dated 03.06.2016 till the date of filing of the present Complaint amounting to Rs.8,72,103.84/-.
Direct the Opposite Parties to pay pendentelite and future interest @24% p.a. on the aforesaid amount from the date of filing of the present Complaint till actual realization.
Restrain the Opposite Parties from cancelling/forfeiting the amount and/or any part of the same as paid by the Complainants to the Opposite Parties.
Direct the Opposite Parties to pay compensation to the tune of Rs.20,00,000/- to the Complainants for causing harassment, mental tension, pain and agony to the Complainants and their family members.
Any other and further relief which this Hon'ble Court deems fit and proper may also be awarded in favour of the Complainants and against the Opposite parties.
The Complaint was contested by the Opposite Parties contending that the Complaint was false, frivolous and devoid of any cause of action. The Complaint pertains to a commercial transaction, thus not maintainable and liable to be dismissed. It was submitted that w.e.f. 15.03.2003 section 2(d) (ii) of the Consumer Protection Act had been amended by adding words "but does not include a person who avails of such services for any commercial purpose". Various Commissions have held that high returns are never meant to be covered under the term 'exclusively for the purpose of earning livelihood by means of self-employment.' Further, in accordance with the terms and conditions agreed between the parties under the Application Form, the parties were required to resolve their disputes by referring the same to arbitration tribunal.
The present Complaint was not maintainable as it was valued at only Rs.72,67,532/- which is much below the pecuniary jurisdiction of this Commission i.e. Rs.1 Crore. The Complainant had wrongly and deliberately invoked Section 12 of the Consumer Protection Act. There was neither any deficiency in service nor any neglect on part of the Opposite Parties in performing service. It was reiterated that the Complainants after perusing the brochures and other documents executed the Booking Application Form dated 30.11.2011 and entered into a binding contract with the Opposite Parties and specifically agreed to abide by the terms and conditions stated therein. As per terms and condition of the Application Form, Complainants had agreed to limit the liability, if any, of the Opposite Parties, their employees, officers and the company expressly. The Application Form had been duly signed and filled by the Complainants at the time of booking of the Unit. The Complainants in pursuance of clause 6 of the Application Form had undertaken to limit the overall liability of the company to refund the amount paid by them after adjusting the charges due from the Complainants. The Complainants defaulted in timely payment of the amount outstanding towards 2 installments which were due on "On casting of 17th Floor" & "On casting of 20th Floor" and miserably failed to pay the outstanding amount till date. The company sent various reminders and notices for the outstanding payment of Rs.5,47,813/- but the Complainants due to reasons best known to them failed to clear their outstanding of Rs.5,47,813/-." It is admitted that as per the terms and conditions of the Application Form, the Opposite Parties shall use its best endeavors to deliver the possession of the Unit within 3 years from the date of booking with a grace period of 6 months but provided payments are received on time from the Allottees, subject to force-majeure and other reasonable delays as per the terms and conditions of the Apartment Buyer's Agreement.
It is pertinent to mention here that the construction of the Tower in which the Unit of the Complainants was allotted, was in full swing and nearing completion. The Real Estate Sector witnessed a massive slowdown due to various internal & external factors and non-payment of installment due by the Allottees also contributes to the delay in the construction of the project. The allegations levelled by the Complainants were concocted & baseless.There had been no deficiency of service on part of the Opposite Parties, as such there was no question of awarding any damages/compensation to the Complainants qua the Respondents.
Heard the Learned Counsel of the Complainants. No authorised representative of the Opposite Parties was present to argue the matter. Also carefully perused the record.
The Complainants booked apartment No. D-1803 having super area 1650 sq. ft. for a total price of Rs.72,38,750/- at IMPERIA ESFERA located in Sector 37, District Gurgaon, Haryana.The Complainants entered into an Apartment Buyer's Agreement in September 2012 with the Opposite Parties for the construction of the flat mentioned above.Though the Apartment Buyer's Agreement was signed way back in September 2012, the possession of the apartment has not been given.The Complaint was, therefore, filed in 2016.
The Opposite Parties contested the complaint on several technical grounds taken by builders in general. The Opposite Parties contended that the purchase of the residential unit was for commercial purpose and the complainants were not consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. The expression commercial purpose used in Section 2(1)(d) of the Act came up for consideration of this Commission in Kavita Ahuja Vs. Shipra Estates Ltd., CC 137 of 2010 decided on 12-02-2015 and the following view was taken:
"The expression 'commercial purpose' has not been defined in the Act and therefore, as held herein below by the Hon'ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, we have to go by the dictionary meanings, "In the absence of a definition, we have to go by its ordinary meaning 'Commercial' denotes "pertaining to commerce" (Chamber's Twentieth Century Dictionary); it means "connected with, or engaged in commerce; mercantile, having profit as the main aim" (Collins English Dictionary) whereas the word 'commerce' means "financial transactions especially buying and selling of merchandise on a large scale" (Concise Oxford Dictionary)".
6. Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity."
No evidence whatsoever has been adduced by the Opposite Parties to show that the complainants were engaged in the business of purchasing and selling houses and / or flats on a regular basis, solely with a view to make profit by their sale. Therefore, the contention that the Complainants were not consumers does not hold good.
It was also contended by the opposite parties that since the agreements between the parties contained an arbitration clause, arbitration and not a complaint before this Commission was the appropriate remedy. We, however, find no merit in this contention. As provided in Section 3 of the Consumer Protection Act, the provisions of this Act are in addition to the other remedies available to a consumer. The availability of arbitration as a remedy, therefore, does not debar the complainant from approaching a consumer court in a case of deficiency in the services rendered to him by the service provider or adoption of unfair trade practices. This issue came up for consideration of the Hon'ble Supreme Court in National Seeds Corporation Vs. M. Madhusudhan Reddy & Anr. (2012)2 SCC 506 and after taking into consideration the provisions of the Section 8 of the Arbitration Act of 1996 and the Section 3 of the C.P. Act it was held that the plain language of Section 3 of the C.P. Act makes it clear that the remedy available in the Act is in addition to and not in derogation of the provisions of any other law for the time being in force.The Hon'ble Supreme Court has also held that the complaint filed by a consumer before the consumer fora would be maintainable, despite there being an arbitration clause in the agreement to refer the dispute to the Arbitrator. In view of the above referred authoritative pronouncement of the Hon'ble Supreme Court, which was later followed by a three members bench of this Commission in DLF Ltd. Vs. Mridul Estate Pvt. Ltd., R.P. No.412 of 2011 decided on 13-05-2013, the aforesaid contention advanced by the Opposite Parties is rejected.
It was contended by the Opposite Parties that since the cost of the flat was less than Rupees one crore, this Commission lacked pecuniary jurisdiction to entertain the complaint. The contention of Opposite Parties was that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/-.In our view, the interest claimed by the flat Buyer's in such a case represents not only the interest on the capital borrowed or contributed by them, but also includes compensation on account of appreciation in the land value and increase in the cost of construction, apart from loss of opportunity to acquire a residential flat at a particular price. The cost of the flat alongwith interest claimed comes within the pecuniary jurisdiction of this Commission.
The Opposite Parties contended that the construction of the tower in which the unit of the Complainant was allotted was in full swing and nearing completion when massive slow down due to various reasons.As per the Apartments Buyer's Agreement, it is mentioned that "If, however, the completion of the said Building/said Complex is delayed by reasons of non-availability of steel and/or cement or other building materials, or water-supply or electric power or slow down strike or due to dispute with the construction agency(ies) employed by the Developer/Company, lock-out or civil commotion, by reason of war or enemy action or terrorist action or earthquake or any act of God or if non-delivery for possession is as a result of any Act, Notice, Order, Rule or Notification of the Government and/or any other Public or Competent Authority or due to delay in grant of completion/occupation certificate by any Competent Authority or if competent authority(ies) refuses, delays, withholds, denies the grant of necessary approvals for the said Apartment/said Building/said plot for any amenities, facilities intended to be created therein or if any matters, issues relating to such approvals, permissions, notices, notifications by the competent authority(ies) become subject matter of any suit/writ before a competent court or for any other reasons beyond the control of the Developer/Company then the intending Allottee(s) agrees that the Developer/Company shall be entitled to the extension of time for delivery of possession of the said Apartment....".It is seen that neither any new legislation was enacted nor any existing rule, regulation or order was amended stopping, suspending or delaying the construction of the complex in which the apartments were agreed to be sold to the Complainants.There was no evidence of any lock-out or strike by the labour at the site of the project.There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Apartments Buyer's Agreement.This contention of the Opposite Parties, therefore, has no substance.
The Complainants made payments on various dates.The Complainants stated that they remitted a sum of Rs.5,44,500/-, vide cheque dated 30.11.2011, while booking of the flat.At the time of signing of Apartments Buyer's Agreement they paid further sum of Rs.11,17,042/-.The Complainants also availed the housing loan from SBI to the tune of Rs.57,91,000/-, out of which the Complainants paid Rs.56,12,388/-.Despite lapse of several years and having paid substantial amount, the Complainants have not got possession of the allotted flat.According to the Apartment Buyer's Agreement the delivery of the apartment was to be given within 3 years from the date of execution of this Agreement.In case of failure to deliver possession of the apartment by the due date, i.e., within three years from the date of execution of the Agreement, the Developer would be liable to refund the amount paid by the allottee with simple interest @9% p.a. for the period such amount was lying with the Developer.
In view of above and having given thoughtful consideration to all the contentions and evidence placed on record, we direct the Opposite Party No.1 to refund the amount paid by the Complainants to the Opposite Party No.1 towards the allotment of the apartment, alongwith compensation in the form of simple rate of interest @9% p.a. with effect from the date of each payment, till the date of refund with compensation.The Opposite Party No.1 shall also pay Rs.25,000/- towards cost of litigation to the Complainants.Payment in terms of this order shall be made within three months from today. Since Opposite Party No.2 & Opposite Party No.3 are Directors of Opposite Party No.1, which is a company, a juristic person, they are not personally liable for the act of the company.
......................J DEEPA SHARMA PRESIDING MEMBER ...................... C. VISWANATH MEMBER