State Consumer Disputes Redressal Commission
Ashutosh Bhatia vs M/S Rps Infrastructure Ltd. on 31 October, 2022
C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution: 05.05.2017
Date of hearing: 17.08.2022
Date of Decision: 31.10.2022
COMPLAINT CASE NO.- 864/2017
IN THE MATTER OF
MR. ASHUTOSH BHATIA,
S/O MR. H.G. BHATIA
R/O H.NO. 528, SECTOR-19,
FARIDABAD, HARYANA - 121002.
(Through: Mr. Sagar Bhatia, Advocate)
...Complainant
VERSUS
M/S R.P.S. INFRASTRUCTURE LTD
1117-1120, 11TH FLOOR, TOWER B,
DLF TOWERS,
JASOLA DISTRICT CENTRE,
NEW DELHI-110025
(Through: Mr. Praphull Sinha , Advocate)
...Opposite Party
ALLOWED PAGE 1 OF 15
C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
Present: None for the parties.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
1. The present complaint has been filed by the Complainant before this commission alleging deficiency of service and unfair trade practice on the part of Opposite Party and has prayed the following reliefs:
a) that the Impugned Notice Of Final Demand Dated 03.12.2013 as issued by the OP- company to the complainant for making payment be declared as null and void and not binding on the complainant in any manner;
b) that the Impugned Cancellation Of Allotment Of Flat Notice Dated 15.07.2016 issued by the Respondent be held ex-facie illegal, wrong, baseless, unfair, arbitrary and null and void and not binding on the complainant in any manner;
c) directing the OP-company to Hand Over the Possession of the Unit/Flat No. T-05/1407 in Tower Bluebeech-05 in Savana Project as allotted to the complainant immediately after executing the conveyance deed;
d) directing the OP to pay interest @18% on amount of Rs 37,500/- illegally charged for open parking space.
e) directing the OP to pay the complainant amount alongwith interest as per calculations of para 15 above less any amount as may be allowed by the Hon'ble Commission under head EEC and FFC.
f) directing the OP to refund alongwith interest thereon @18% per annum on the amount charged/received on account of EEDC and VAT after taking the undertaking/BG/FD marked with lien of the company for encashment and payment to the respective departments as and when liability arises and demand raised by the departments;
ALLOWED PAGE 2 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022
g) directing the OP to pay an interest at the rate of 18% per annum on the amount deposited (i.e. Rs. 20,78,175/-) by the complainant to the company from 03.12.2013 for illegally withholding the possession and use of the said flat by the complainant;
h) Cost of the Complaint may be passed and awarded in favour of the complainant and against the OP;
i) any other relief or compensation etc. as this Hon'ble Commission may deem fit under the circumstances and untoward conduct of the OP, physical and mental harassment may kindly be passed in favour of the complainant and against the Opposite Party.
2. Brief facts necessary for the adjudication of the present complaint are that on 10.08.2006, Complainant booked a 2 BHK flat with the Opposite party in the project „Savana‟, situated at Sector-88, Greater Faridabad after depositing a sum of Rs.2,12,500/-. The Complainant was allotted a flat bearing No. T-5/BB-5/1407 having a super area of 1250 Sq. ft vide Allotment Letter dated 24.10.2006. Thereafter, a Flat Buyer Agreement was executed between the parties on 16.05.2007. As per the Flat Buyer Agreement dated 16.05.2007, the Opposite Party had to handover the possession of the said flat within 36 months from the date of execution of the said agreement. However, the Opposite Party offered the possession of the said flat vide their letter dated 03.12.2013 therewith raising a final demand of Rs.5,22,865/- under various heads. The Opposite Party demanded exaggerated amount from the Complainant towards the final demand moreover, delayed in handing over the possession of the said flat to the Complainant.
3. Thereafter, the Complainant firstly approached the Permanent Lok Adalat, Faridabad on 08.01.2014, where matter was at first pending, and time was given to both the parties for reconciliation but there was no satisfactory outcome from it. Thereafter Hon‟ble ALLOWED PAGE 3 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 Lok Adalat asked desired clear amounts from the Complainant in relief asked for and allowed the Complainant to withdraw the petition and file a revision petition vide order dated 17.06.2015. Further, the Complainant filed a revision petition on 19.06.2015 which was dismissed on the ground that the exhaustive evidence cannot be allowed before the Hon‟ble Lok Adalat. Thereafter, the Complainant filed a suit for Declaration and Mandatory Injuction before the Hon‟ble Civil Court, Faridabad on 17.11.2015 wherein the Hon‟ble Civil Court allowed the application filed by the Opposite Party under Section 8 of the Arbitration and Conciliation Act, 1996 stating that the Flat Buyer Agreement contained an arbitration clause. Furthermore, the Complainant filed a consumer complaint before the Hon‟ble Consumer Dispute Redressal Forum, Faridabad on 20.07.2016 which was again dismissed citing lack of jurisdiction vide order dated 24.03.2017. The Complainant received Cancellation of Allotment Letter for the said flat dated 15.07.2016.
4. Aggrieved by this, the Complainant asked the Opposite Party to withdraw illegal demands and to pay compensation alongwith interest for the delay in handing over the possession of the said flat but was of no avail.
5. The Opposite Party has contested the present case and has raised preliminary objections as to the maintainability of the complaint case. The counsel for the Opposite Party submitted that the present complaint is barred by limitation period. He further submitted that this commission does not have territorial jurisdiction to adjudicate the matter as the flat in question is situated at Faridabad. He further contended that the Complainant ought to have availed the remedy of arbitration as per the arbitration clause in the Flat Buyer ALLOWED PAGE 4 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 Agreement. The counsel for the Opposite Party submitted that the Complainant is not a „consumer‟ under the Consumer Protection Act, 1986 as the Complainant has invested the money for commercial purposes and for profit. He further submitted that the Complainant has defaulted in making due payments as per the payment plan opted by the Complainant and therefore, the booking of the Complainant was cancelled vide letter dated 15.07.2016. Pressing the aforesaid objections, the counsel appearing on behalf of the Opposite Party prayed that the complaint should be dismissed.
6. The Complainant and Opposite Party has duly filed their evidence by way of affidavits and written arguments.
7. We have perused the material available on record and heard the counsel for the Complainant.
WHETHER THE PRESENT COMPLAINT IS BARRED BY LIMITATION UNDER THE CONSUMER PROTECTION ACT, 1986?
8. The first question raised by the Opposite Party that the present Complaint is barred by limitation as the possession of the flat was offered on 03.12.2013 by the Opposite Party and the present complaint has been filed after 2 years. To deal with this issue, we deem it appropriate to refer to Section 24A of the Consumer Protection Act, 1986:
(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in ALLOWED PAGE 5 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period: Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.
9. Analysis of the above statutory provision, it is clear that complaint before the Consumer Commission has to be filed within 2 years from the date when the cause of action arises. Returning to the facts of the case, it is observed that Opposite Party sent the allotment cancellation letter on 15.07.2016 and the cause of action arises after the allotment cancellation letter was sent to the Complainant and the complaint has been filed in the year 2017. Therefore, the Complaint is treated to have been filed within the limitation period.
WHETHER THIS COMMISSION HAS THE JURISDICTION TO DECIDE THE PRESENT COMPLAINT?
10. The counsel for the Opposite Party submitted that this Commission has no territorial jurisdiction to decide the present complaint as the property in question is situated at Faridabad.
11. The jurisdiction of consumer commissions to entertain cases of this nature has been settled via array of judgments. We tend to rely on the dicta of Hon‟ble Supreme Court in Narne Construction P. Ltd., etc. v. Union Of India and Ors. Etc., reported at AIR 2012 SC 2369, wherein it was held that:
"when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the ALLOWED PAGE 6 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act and any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers".
12. The Hon‟ble National Commission in the case of Rohit Srivastava v. Paramount Villas Pvt. Ltd. reported at 2017 SCC OnLine NCDRC 1198, has held as under:
"Having heard learned Counsel for the parties at some length, we are of the opinion that the order cannot be sustained. It is not in dispute that the Registered Office of Opposite Party No. 1 Company is situated in Delhi, i.e., within the territorial jurisdiction of the State Commission at Delhi and therefore, in the light of clear provision contained in Section 17(2)(a), which stipulates that a Complaint can be instituted in a State Commission, within the limits of whose jurisdiction, the Opposite Party actually carries on business. In view of the said provision, we have no hesitation in coming to the conclusion that since the Registered Office of the first Opposite Party is situated in Delhi, the State Commission did have the territorial jurisdiction to entertain the Complaint. In the light of the said provision, in our view, it was open to the Complainant to choose the Forum to file the Complaint, which on the second occasion he decided to file before the State Commission at Delhi."
ALLOWED PAGE 7 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022
13. Relying on the above settled law, there is no iota of doubt that this Commission has the jurisdiction to entertain the cases relating to allotment agreement including delay in handing over possession of the said flat, as compensation for delay in handing possession is sought due to the deficient services of the Opposite Party and not for any other reason. Moreover, the Opposite Party has a registered office at 1117-1120, DLF Towers, Jasola District Center, New Delhi-110025, till which, the jurisdiction of this commission extends. Therefore, this Commission is fully empowered to adjudicate the present consumer complaint and is not paralyzed due to the want of territorial jurisdiction. WHETHER THE EXISTENCE OF ARBITRATION CLAUSE IN THE ALLOTMENT LETTER BARRED THE JURISDICTION OF THIS COMMISSION?
14. The next preliminary objection raised by the Opposite Party is that since there exists an arbitration clause in the Flat Buyer Agreement, the parties should be referred to arbitration. To deal with this issue, we deem it appropriate to refer to Emaar MGF Land Limited vs. Aftab Singh reported at I (2019) CPJ 5 (SC), wherein the Apex court has held as under:-
"55. We may, however, hasten to add that in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration. It is only the case where specific/special remedies are provided for and which are ALLOWED PAGE 8 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration."
15. The Hon‟ble Apex Court has put to rest the controversy relating to the existence of arbitration clauses in the allotment letter/apartment buyer agreement etc. as is evident from the relevant paragraph of Emaar MGF Land Limited (supra). In the present case also, the Complainant has opted for the special remedies provided under the Consumer protection Act, 1986 therefore, this commission can refuse to relegate the present case to the arbitration. Hence, this commission is authorized to adjudicate the case and the existence of an arbitration clause in the Flat Buyer Agreement does not affect the jurisdiction of this Commission.
WHETHER COMPLAINANT FALL IN THE CATEGORY OF „CONSUMER‟ UNDER THE CONSUMER PROTECTION ACT, 1986
16. The Opposite Party contended that the Complainant is not a "Consumer" as defined under the Consumer Protection Act, 1986 as they invested the money to earn profit, which amounts to commercial purpose. To resolve this issue, we deem it appropriate to refer to Section 2 (1) (d) of Consumer Protection Act, 1986:
"Section 2(1)(d) Consumer" means any person who- i. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include ALLOWED PAGE 9 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 a person who obtains such goods for resale or for any commercial purpose; or ii. hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose] Explanation - For the purpose of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment;
17. From, the above explanation to the statutory provision, it flows that commercial purpose does not include if it is for the purpose of earning his livelihood by means of self-employment.
18. It is imperative to refer to the dicta of the Hon‟ble National Commission in CC-1122/2018 titled Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. decided on 01.11.2019, wherein, the Hon‟ble National Commission has held as under:
"19. The contention of the Learned Counsel that the said Flats were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainant have purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. The Opposite Parties failed to ALLOWED PAGE 10 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 discharge their onus and we hence hold that the Complainant are 'Consumers' as defined under Section 2(1)(d) of the Act."
19. From the aforesaid dicta of the Hon‟ble National Commission, it flows that it is for the Opposite Party to prove that the flat purchased was for commercial purpose, by way of some documentary proof and a mere bald statement is not sufficient to raise adverse inference against the Complainant.
20. In the present case, the Opposite Party has merely made a statement that the Complainant purchased the flat for commercial purpose and on perusal of the record before us, we fail to find any material which shows that the Complainant has booked the said Space for Commercial purpose and for gaining profit. Mere allegation, that the purchase of the space is for commercial purpose, cannot be the ground to reject the present consumer complaint. Consequently, the objection raised on behalf of the Opposite Party is answered in the negative.
WHETHER THE OPPOSITE PARTY IS DEFICIENT IN PROVIDING ITS SERVICES TO THE COMPLAINANT
21. The main question for consideration before us is whether the Opposite Party is actually deficient in providing its services to the Complainant by not delivering the flat in question within the stipulated period.
22. The Opposite Party contended that the Complainant failed to make the payments prescribed as per the construction linked payment plan opted, despite service of various reminder letter dated 16.01.2008, 04.03.2008, 18.12.2008, 20.05.2014, 11.08.2014, 28.01.2015, 09.12.2015 and final reminder dated 08.06.2016 ALLOWED PAGE 11 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 towards the outstanding dues. However, the Complainant failed to comply with the payment plan. Therefore, the Opposite Party vide letter dated 15.07.2016, cancelled the allotment of the said flat and forfeited the 15% of Basic Sale Price amount which was already received by the Opposite Party.
23. Moreover, the Opposite Party submitted that the delay in handing over the possession was due to the Authorities like DGTCP, HUDA and other concerned Authorities failed to perform their obligations towards the granting of licenses which includes external development works, external/sector roads, sewer, water, electricity, etc as a result of which the progress of the said Savana Project got affected.. The counsel for Opposite Party further submitted that possession was offered to the Complainant after receiving the said licenses, completion of the construction work and thereafter receiving the occupation certificate from concerned authorities on 16.07.2013. However, clause 14 of the Flat Buyer Agreement nowhere prescribes the extension of time period in case of delay in getting the respective certifications from concerned authorities. Further, it is pertinent to mention here that the clause 14 of the said Agreement clearly mention about the compensation/damages which is to be calculated @ Rs. 5/-per sq. ft. per month in case of delay beyond the six months from the prescribed period of 36 months.
24. Further, on perusal of record, as per Clause 13 of the Flat Buyer Agreement dated 16.05.2007 entered into by both the contesting parties, it reflects that the Opposite Party was bound to give the possession of flat within 36 months from the date of execution of ALLOWED PAGE 12 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 the said Agreement. However, the possession for the said flat was offered vide letter dated 03.12.2013.
25. At this stage, we deem it appropriate to refer to the case of Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:
"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression 'service' in Section 2(1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers ALLOWED PAGE 13 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation.
26. Relying on the above settled law, we are of the considered view that the Opposite Party is deficient in providing its services to the Complainant as the Opposite Party has given false assurance to the Complainant with respect to the time for delivery of possession of the flat in question. Be that as it may, the fact remains that admittedly the Complainant has paid an amount of Rs.19,32,810/-.
27. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party to refund the entire amount paid by the Complainant i.e. Rs.19,32,810/- along with interest as per the following arrangement:
A. An interest @ 6% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till 31.10.2022 (being the date of the present judgment);
B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party pays the entire amount on or before 31.12.2022;
C. Being guided by the principles as discussed above, in case the Opposite Party fails to refund the amount as per the aforesaid clause (A) on or before 31.12.2022, the entire amount is to be refunded along with an interest @ 9% p.a. calculated from the date on which each installment/payment ALLOWED PAGE 14 OF 15 C/864/2017 MR. ASHUTOSH BHATIA VS M/S R.P.S. INFRASTRUCTURE LTD. D.O.D.: 31.10.2022 was received by the Opposite Party till the actual realization of the amount.
28. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to pay a sum of:
A. Rs. 1,00,000/- as cost for mental agony and harassment to the Complainant; and B. The litigation cost to the extent of Rs. 50,000/-.
29. Applications pending, if any, stand disposed of in terms of the aforesaid judgment.
30. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
31. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) Pronounced On:
31.10.2022 ALLOWED PAGE 15 OF 15