National Consumer Disputes Redressal
Gaurav Mutneja vs Greater Mohali Area Development ... on 14 February, 2022
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 598 OF 2018 (Against the Order dated 10/03/2017 in Complaint No. 140/2016 of the State Commission Punjab) 1. GAURAV MUTNEJA S/O. SH. VINEY KUMAR MUTNEJA T/O. FLAT NO 123, BLOCK-D, BOLLYWOOD HEIGHTS-2 PEER MUCHELLA ZIRAKPUR PUNJAB ...........Appellant(s) Versus 1. GREATER MOHALI AREA DEVELOPMENT AUTHORITY & ANR. THROUGH ITS CHIEF ADMINISTRATOR ROOM NO. 102, PUDA BHAWAN SECTOR 62 SAS NAGAR MOHALI PUNJAB 2. THE ESTATE OFFICER (HOUSING ) GREATER MOHALI AREA DEVELOPMENT AUTHORITY ROOM NO 251 PUDA BHAWAN SECTOR 62 SAS NAGAR MOHALI PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER For the Appellant : For the Appellant : Mr. Gaurav Mutneja, In person For the Respondent : For the Respondents : NEMO Dated : 14 Feb 2022 ORDER The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (for short "the Act") by the Appellant/Complainant assailing the Order dated 10.03.2017 passed by the State Consumer Disputes Redressal Commission, Punjab at Chandigarh (hereinafter to be referred to as the "State Commission") in Complaint No. 140/2016, whereby the Complaint filed by the Complainant was allowed and the Opposite Parties/Respondents herein, Greater Mohali Area Development Authority and its Estate Officer (Housing) {hereinafter to be referred to as the "GMADA"} were directed to pay interest @8% compounded annually on a sum of ₹63,30,750/- from the date of deposit till payment after deducting the amount already paid to the Complainant. The GMADA were further directed to pay ₹2,00,000/- as compensation for mental harassment and ₹21,000/- as litigation cost to the Complainant.
Brief facts of the case leading upto the present Appeal are that the GMADA floated a Housing Scheme under the name and style as "Purav Premium Apartments" for construction of 4500 Flats in Sector 88, S.A.S. Nagar (Mohali) on 12.12.2011. Vide Application No. 49056 dated 01.01.2012, the Complainant applied for allotment of Type-3 (Category-A) Flat for a total Sale Consideration of ₹69,00,000/- and accordingly paid a sum of ₹6,90,000/- along with application. Complainant was declared a successful Allottee in the draw of lots held on 20.03.2012 and Vide Letter of Intent (hereinafter referred to as the "LOI") dated 22.05.2012, Complainant was allotted a Type-3 (Category A) Flat in the Purav Premium Apartments. To ensure the timely payment towards the Sale Consideration, Complainant raised Housing Loan of ₹55,00,000/- from Punjab Gramin Bank, Mohali with interest @10.75% per annum compounded on monthly basis. According to the Complainant, he had made payment of ₹63,30,750/- to the GMADA towards the total Sale Consideration on various dates.
As per Clause 3 (II) of the LOI, possession of the Apartment was proposed to be handed over to the Complainant within 36 months from the date of issuance of LOI, meaning thereby, the possession was supposed to be handed over to the Complainant on or before 22.05.2015, failing which the Allottee was entitled to withdraw from the Scheme by moving the requisite application before the Estate Officer and the GMADA was under an obligation to refund the deposited amount along with 8% interest compounded annually.
Factually, GMADA failed to deliver the possession of the Flat to the Complainant within the stipulated period of 36 months and thus the Complainant moved the requisite application on 01.06.2015 before the Estate Officer of GMADA seeking refund of the deposited amount along with interest @8% p.a. annually compounded which came to ₹80,36,375.47 upto 31.07.2015. Resultantly, Complainant was handed over a Cheque bearing No. 117753 dated 11.09.2015 for an amount of ₹64,10,582/- after deducting the service tax of ₹21,321/- and TDS of ₹11,239/-. Complainant made various representations including Demand Letter/Notice dated 12.10.2015, seeking payment of interest at the rate at which the Complainant had availed Housing Loan, however neither any reply was furnished by the Opposite Parties nor the interest was paid.
Having no other legal recourse left, Complainant filed Consumer Complaint No. 140 of 2016 before the State Commission seeking deficit interest of ₹31,17,284/- along with further interest @12% p.a. and costs.
The Opposite Parties appeared before the State Commission and denied the contents of the Complaint further stating that the Complaint is liable to be dismissed since amount paid by the Complainants towards the purchase of Apartment, had already been refunded inconsonance with Clause 3(ii) of the Letter of Intent after deducting the Service Tax and TDS. It was submitted that the Complainant was paid interest @ 8% beyond 36 months from the date of issuance of LOI for the period from 22.05.2015 to 10.08.2015 as per the decision taken by the Chief Administrator, GMADA on 23.06.2015.
Having perused the material available on record and after appreciating the evidence led by the parties, the State Commission came to the conclusion that the GMADA was deficient in service in not handing over the possession of the Apartment to the Complainant within the stipulated time and the Complainant was entitled for the relief as noted above. The State Commission observed as under:-
"6. It is an admitted fact that possession was not offered to the complainant within 36 months, therefore, he is entitled to interest @ 8% compounded annually. The Ops have refunded a sum of Rs. 64,10,582/-, however, account statement has not been attached alongwith the cheque issued to the complainant. The counsel for the complainant has placed on the record calculation calculating interest amount @ 12%. The agreed rate of interest is 8% compounded annually but as per the written reply, they have calculated the interest beyond 36 months. Whereas as per Rule 17 of 'Punjab Apartment and Property Regulation Rules, 1995' framed under PAPRA Act, 1995, it has been provided that the promoter shall refund full amount collected from the prospective buyers under sub-section (1) of Section 6 together with interest thereon @ 12% p.a., payable from the date of receipt of the amount so collected till the date of repayment. Even the regulations framed under the PAPRA also speak that the interest is to be paid from the date of receipt of the amount. Three years were given for completion of the flats. In case the flats were not completed within that period and complainant under the term of LOI was entitled for refund and he had applied for refund, then that 3 years period is not to be deducted and the complainant will be entitled to interest from the date of deposit till the date of payment. In similar matter in Complaint No. 183 of 2015 of this Commission titled as "Priyanka Nayyar Vs. GMADA" of the same scheme, the complaint was allowed with the direction to Ops to pay interest @ 8% p.a. compounded annually along with Rs.2 lacs as compensation on account of non-construction of the flats within the prescribed period and enforce the complainant to go for litigation and pay Rs. 21,000/- as litigation expenses. That order has been upheld by the Hon'ble National Commission in First Appeal No. 1456 of 2016 titled as "Greater Mohali Area Development Authority versus Priyanka Nayyar", decided on 22.12.2016, rate of interest and compensation was justified on the ground that the complainant had taken a loan on 10.75% from a bank. Similar is the present case, therefore, the refund paid by the OP is not a complete refund. So far as pecuniary jurisdiction is concerned, it has been decided by the Hon'ble National Commission in Consumer Complaint No. 97 of 2016 "Amrish Kumar Shukla & Ors. Versus Ferrous Infrastructure Pvt. Ltd." wherein it was held that value of the goods or services is to be taken and not the value or cost of removing the deficiency in service is to be considered for the purpose of determining the pecuniary jurisdiction. The value of the services offered by Ops is Rs. 69 Lacs, which comes within the pecuniary jurisdiction of this Commission.
7. Another plea has been taken by the counsel for the complainant that a sum of Rs. 21,321/- has been deducted on account of service tax and Rs.11,239/- on account of TDS. Service Tax is to be paid by the complainant in case services were rendered by Op. In case no services were rendered then Ops were not entitled to deduct the Service Tax. It was argued by the counsel for the Op that in case Service Tax has been paid by the Op then the complainant can claim the service tax from the Department but no such document has been placed on the record by Ops to show that service tax was deposited with the Government. In case it was deposited, only depositor will have a right to get a refund".
Dis-satisfied with the Order passed by the State Commission, the GMADA preferred First Appeal No. 1330 of 2017 before this Commission. Vide Order, dated 01.03.2018, the said Appeal was partly allowed by this Commission observing as under:-
" The main ground on which legality and correctness of the said order is questioned is that the State Commission was not justified in awarding compensation of ₹2,00,000/- in addition to interest @ 8% computed annually on the amount deposited by the Complainant, i.e., ₹63,30,750/- and further the objection now being raised on behalf of the Complainant that the Appellants are not entitled to deduct the Income-tax at source (TDS) and Service Tax on the amounts directed to be paid to the Complainant, is misplaced, inasmuch as the said deductions have been made strictly as per the provisions of the statutes.
At the outset, we may note that during the pendency of this Appeal, the entire amount directed to be paid by GMADA to the Complainant in terms of the afore-extracted directions, except the element of TDS and Service Tax already stands paid to the Complainant. This fact has been recorded by the Executing Court in its order dated 14.11.2017 in Execution Application being EA/102/17. In the said order, while observing that the only pending dispute between the parties - the Judgement Debtor and decree-holder, was with regard to the Service Tax and TDS, there is not even a remote indication that the amounts released to the Complainant by the Appellants were subject to the final outcome in the present Appeal.
In that view of the matter, the controversy surviving for our consideration in this Appeal is whether GMADA was justified in deducting Service Tax and TDS at the time of making payment to the Complainant in terms of the order impugned in the present Appeal?
We find that the said issue was raised on behalf of the Complainant before the State Commission. The State Commission disposed of the said issue observing thus :
"Another plea has been taken by the counsel for the complainant that a sum of Rs.21,321/- has been deducted on account of service tax and Rs.11,239/- on account of TDS. Service Tax is to be paid by the complainant in case services were rendered by OP. In case no services were rendered then OPs were not entitled to deduct the Service Tax. It was argued by the counsel for the OP that in case Service Tax has been paid by the OP then the complainant can claim the service tax from the Department but no such document has been placed on the record by OPs to show that service tax was deposited with the Government. In case it was deposited, only depositor will have a right to get a refund."
It is evident from the afore-extracted observations that there is no final finding on the issue in the impugned order and the same has been kept open, depending upon the applicability of the relevant statutory provisions and the availability of the documents for deposit of the said amounts. In the absence of any conclusive finding on the said deductions and in the light of the above observations, the issue can be examined by the Executing Court with reference to the relevant statutory provisions and production of relevant documents. Consequently, we do not find any illegality in the afore-noted observation in the impugned order on the question of deductibility of the two taxes, warranting interference. Consequently, the Appeal fails and is dismissed accordingly.
However, before parting, we may note that in the absence of any material on record indicating the circumstances under which the compensation, as directed by the State Commission, was paid by the Appellants to the Complainant, the said payment shall not be treated as a precedent in other similar cases. We also clarify that having regard to the afore-stated circumstances, we have also not expressed any final opinion on the quantum of the compensation awarded by the State Commission.
The Appeal stands disposed of in the above terms, leaving the parties to bear their own costs."
Consequently, the Complainant is before us vide the present First Appeal questioning the correctness of the Order dated 10.03.2017 passed by the State Commission. The present First Appeal has been filed by the Complainant with an inordinate delay of 338 days. The main ground offered by the Complainant justifying the inordinate delay of 338 days in filing the present First Appeal, in the Application seeking condonation of delay, is as under:-
" That being a lay man the Complainant joined the proceeding of Appeal No. 1330 of 2017 filed by the Respondents on 16.06.2017 at NCDRC and was permitted to file written submissions, along with copies of applicable State Law and Rules and Regulations, on 30.01.2018, in apprehension that he may get relief and compensation by way of interest will be increased from 8% to 12% as prayed in the Complaint as well as laid down in the State Law (PARA 1995), whereas the Hon'ble Commission dismissed the appeal on 01.03.2018 (certified copy of orders dated 01.03.2018 received on 13/03/2018) but the written submissions made by the Complainant were neither considered nor commented upon and no order has been passed on the issue of awarding of enhanced compensation by way of interest @ 12% as prayed in the written submissions."
10. In our view, the explanation furnished by the Appellant for condonation of inordinate delay of 338 days is wholly unsatisfactory. It cannot be believed that the Complainant was not aware about the consequences of not filing the First Appeal after passing the impugned order by the State Commission on 10.03.2017. As such, the present First Appeal is time barred and liable to be dismissed on this sole ground.
11. Even, on merits, we do not find any substance in the present Appeal. The gist of the arguments of the Appellant is that though the Hon'ble State Commission in its order dated 10.03.2017 has observed that as per Rule 17 of Punjab Apartment and Property Regulation Rules, 1995 framed under PARA Act, 1995, it has been provided that the Promoter shall refund amount collected from the prospective buyers, together with interest @12% p.a payable from the date of receipt of the amount so collected till the date of repayment, it has failed to grant the same relief to the Complainant. It is further submitted that the terms and conditions as mentioned in the Letter of Intent, are unilateral, unreasonable and amounting to unfair trade practice since as per Clause 23, sub clause (ii), delay in payment of instalments results in cancellation of allotment, however delay can be condoned by charging 18% interest, on the contrary, as per clause 3, sub clause (ii), the Opposite Parties are liable to pay only 8% interest p.a. for causing delay in handing over timely possession. In Catena of the judgments, the Hon'ble Supreme Court as well as this Commission has held that the terms of the Letter of intent are arbitrarily, unfair and unjust. It is further argued that the Order as passed by the Chief Administrator, GMADA directing interest to be paid @8% after 36 months from the date of Letter of Intent till date of refund was completely unilateral, without any basis and in violation of the law laid down and the Statutory Provisions of PAPRA Act, which amounts to misuse of Administrative Powers, thereby causing mental agony, harassment and financial loss to the Appellant along with other Allottees. The Appellant has placed reliance upon plethora of judgments wherein 12% interest has been awarded by the State Commission in similar circumstances.
per contra, GMADA has submitted that the present Appeal is only an afterthought and is liable to be dismissed on the ground of limitation and also being devoid of any merit. It is further submitted that the Respondent Authority is a Statutory Body constituted under Section 29 of the Punjab Regional and Town Planning and Development Act, 1995 for the development of the land for housing and that the Project in question is exempted from provisions of the PAPRA Act, 1995.
13. Further, the GMADA has placed strong reliance upon the decision of the Hon'ble Supreme Court in the case of Vijay Gupta Vs. the Estate Officer (H), Greater Mohali Area Development Authority - Civil Appeal No. 6060 of 2016 decided on 20.02.2019 whereby the Hon'ble Apex Court has affirmed the interest @8% per annum on the amount refunded by the GMADA in the similar circumstances and it was also held that the due on account of service tax are statutory dues.
14. As observed above, there is no dispute that the Complainant had already been paid the entire amount by the GMADA in compliance of the Order dated 10.03.2017 passed by the State Commission. However, we find merit in the contention of the GMADA that the present First Appeal is an only afterthought. It is an admitted fact that on GMADA being failed to deliver the possession of the Flat within the stipulated time, the Complainant/Appellant herein has moved an application before the Estate Officer, GMADA for refund of the amount deposited by him, along with interest @8% compounded annually in terms of Clause 3 (II) of LOI. In para 10 of the Complaint, it has been mentioned that "the Complainant, in terms of Clause 3 (II) of Ownership and Possession of LOL, moved an application on 01.06.2015 for refund of the total amount of ₹63,30,750/- deposited by him with GMADA along with interest @8% p.a. with annual compounding. Along with his Application dated 01.06.2015 seeking refund of entire deposited Amount, the Complainant has submitted the calculation sheet computing the interest @8% annually compounding which comes to ₹80,36,375.47 (Annexure 5 of the Complain). As such, it is clear that at the time of applying the Complainant has not sought interest @ 12% in terms of the provisions of PAPRA Act, 1995.
Further, the Hon'ble Supreme Court in Vijay Gupta's case (Supra) has held as under:-
" Both the buyer and GMADA are in appeal.
During the course of the hearing, it is not in dispute that the order for refund, together with interest at the rate of 8% per annum compounded annually, has been complied with and the payment has been made to the buyer.
GMADA has pressed the appeal insofar as the direction for refund of service tax and the other dues is concerned, including the payment of litigation expenses and compensation quantified at Rs 1 lakh.
The buyer, in appeal, has sought enhancement of the interest which has been awarded.
Insofar as the appeal of GMADA is concerned, we are of the view that the NCDRC was not justified in directing refund of the service tax. The dues on account of service tax are statutory dues. Hence, there was no reason to issue a direction for refund of the statutory dues. Similarly, since the buyer has already been paid interest at the rate of 8% per annum compounded annually, a further direction for payment of litigation charges and compensation was not required.
Insofar as the appeal by the buyer is concerned, we are of the view that having regard to the terms of the agreement between the parties, the direction for payment of interest at the rate of 8% per annum compounded annually is justified and no further enhancement has to be made.
Under the circumstances, we partly allow the appeal filed by GMADA and direct that apart from the payment of interest at the rate of 8% per annum compounded annually (which admittedly has been effected, together with the refund of the principal), no further directions were necessary. The rest of the directions contained in the order passed by the NCDRC shall stand set aside. The appeal filed by the buyer shall stand dismissed."
16. In the light of aforesaid discussion, we are of the considered opinion that the present First Appeal is devoid of any merit and consequently, the Appeal is dismissed without any order to costs.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER