State Consumer Disputes Redressal Commission
Paramjit Sarao vs M/S Manohar Infrastructure And ... on 23 July, 2021
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 405 of 2018 Date of Institution : 25.10.2018 Date of Decision : 23.07.2021 Paramjit Sarao aged 55, S/o Govinder Sarao, Resident of 5772 N Rochester Rd, Oakland TWP, MI, 48306, USA through Special Power of Attorney holder Sh.Ramesh Lal Atri, aged 54 years, son of Late Sh.S.R. Atri, Resident of Flat No.188, Housefed Complex Cat 1, Sector 79, Mohali, SAS Nagar-140308. ......Complainant V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh through its Managing Director/Authorized Signatory. Tarninder Singh, Managing Director/Director, M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh Narinderbir Singh, Director M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh .....Opposite parties Present through video conferencing: Sh.Karan Nehra, Advocate for the complainant. Sh. Anil Mehta, Advocate for the opposite parties. ================================================================ Complaint case No. : 406 of 2018 Date of Institution : 25.10.2018 Date of Decision : 23.07.2021 Paramjit Sarao aged 55, S/o Govinder Sarao, Resident of 5772 N Rochester Rd, Oakland TWP, MI, 48306, USA through Special Power of Attorney holder Sh.Ramesh Lal Atri, aged 54 years, son of Late Sh.S.R. Atri, Resident of Flat No.188, Housefed Complex Cat 1, Sector 79, Mohali, SAS Nagar-140308. ......Complainant V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh through its Managing Director/Authorized Signatory. Tarninder Singh, Managing Director/Director, M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh Narinderbir Singh, Director M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh .....Opposite parties Present through video conferencing: Sh.Karan Nehra, Advocate for the complainant. Sh. Anil Mehta, Advocate for the opposite parties. ================================================================ Complaint case No. : 407 of 2018 Date of Institution : 25.10.2018 Date of Decision : 23.07.2021 Paramjit Sarao aged 55, S/o Govinder Sarao, Resident of 5772 N Rochester Rd, Oakland TWP, MI, 48306, USA through Special Power of Attorney holder Sh.Ramesh Lal Atri, aged 54 years, son of Late Sh.S.R. Atri, Resident of Flat No.188, Housefed Complex Cat 1, Sector 79, Mohali, SAS Nagar-140308. Harjot Grewal, Aged 49 years daughter of Late Sh. Jasmel Singh Gill, Resident of 14 Harry Parker Place, Everett, ONT, LOM 1J0, Canada through Special Power of Attorney Holder Sh. Ramesh Lal Atri, Aged 54 years, Son of Late Sh.S.R.Atri, Resident of Flat No. 188, Housefed Complex Category 1, Sector-79, Mohali, SAS Nagar-140308 ......Complainants V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh through its Managing Director/Authorized Signatory. Tarninder Singh, Managing Director/Director, M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh Narinderbir Singh, Director M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its Registered Office at SCO No.139-141, Sector-17-C, First Floor, Chandigarh .....Opposite parties Present through video conferencing: Sh.Karan Nehra, Advocate for the complainants. Sh. Anil Mehta, Advocate for the opposite parties. BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MRS. PADMA PANDEY, MEMBER.
MR.RAJESH K. ARYA, MEMBER.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT By this order, we propose to dispose of the aforesaid three consumer complaints. Since, the issues involved in the above complaints, except minor variations, here and there, of law and fact are the same, therefore, we are of the opinion that these complaints can be disposed of, by passing a consolidated order.
The aforesaid complaints have been filed by the complainants, seeking refund of the amount paid alongwith interest; compensation etc., as they are aggrieved of deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties because there has been an inordinate delay with regard to delivery of possession of the respective residential unit/plots booked by them, in their (opposite parties) project, for dearth of construction and development activities or in the alternative to deliver possession thereof alongwith delayed interest, compensation etc. However, the complainants have ultimately pressed their prayer with regard to refund of the amount paid alongwith interest, compensation and litigation expenses. Details with regard to the project in dispute; plots/unit booked; payments made by the complainants etc. of these complaints are given below:-
CC No. 405 of 2018 406 of 2018 407 of 2018 Project name Palm Garden, New Chandigarh, Mullanpur, SAS Nagar, Punjab Venetian Floors, New Chandigarh, Mullanpur, SAS Nagar, Punjab Palm Garden, New Chandigarh, Mullanpur, SAS Nagar, Punjab Plot/Flat booked on 23.12.2011 (plot) 23.12.2011 12.01.2012 (plot) Area of the plot/flat 250 sq.yds 1725 sq ft. (flat) 250 sq.yds Total cost 46,25,000.00 49,00,000.00 48,75,000.00 Earnest amount received at the time of booking 13,87,500.00 12,00,000.00 14,62,500.00 Amount paid as claimed in the complaint 30,06,000.00 12,00,000.00 31,68,750.00 Agreement dated Not executed Not executed Not executed Possession offered or not Not offered Not offered Not offered Delay in years More than 9 years of booking More than 9 years of booking More than 9 years of booking Allottee Original allottee Original allottee Original allottees It has been pleaded that despite the fact that substantial amount, as mentioned in the chart above, stood paid to the opposite parties, yet, neither plot nos. and flat no. were allocated nor agreements were executed between the parties nor actual physical possession thereof has been offered and delivered by the date these complaints have been filed. It has been stated that it has also come to the knowledge of the complainants that the opposite parties did not possess requisite permissions/sanctions in respect of the project in question and the same was launched in violation of the provisions of relevant Acts, Rules etc. applicable to the projects situated in Punjab. Hence these complaints.
The claim of the complainants, in all the three complaints has been contested by the opposite parties, on numerous similar grounds, inter alia, that the complainants have concealed material facts from this Commission; that the complainants being NRI are investors and did not fall within the definition of "consumer" as they had purchased two plots and a flat in the project of the opposite parties; that the power of attorney has not been provided alongwith the complaint and even otherwise the same cannot be considered without evidence of the complainants; that joint complaint bearing no.407 of 2018 is not maintainable as the complainants therein have no family relations but are friends only; that this Commission did not vest with territorial jurisdiction to entertain these complaints; that the complaints filed are beyond limitation; that the complainants were requested number of times to come forward to make remaining payment so that plot nos. and flat no. could be allocated and agreements could be got executed but they failed to do so; that the project of the opposite parties has been registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA) on 15.09.2017; that as per Section 35 of the PAPR Act, jurisdiction of Civil Court is barred to entertain and decide any question relating to matters arising there-under; that because complicated questions of facts and law are involved in these complaints, as such, the same cannot be entertained by this Commission under summary proceedings; that the complainants and witnesses are required to be cross examined; that the complainants were defaulters in making payment as a result whereof number of reminders were sent in the matter; that no prejudice has been caused to the complainants, in case, the opposite parties were not having approvals/sanctions at the initial stage of booking of the units/plots in the said project because as on date the company has obtained the same; that it was informed to the complainants that the change of land use (CLU) has been obtained in 2014; that it was not the sale of goods; that opposite parties no.2 and 3 have been wrongly impleaded in their personal capacity; and that time was not the essence of contract.
On merits, it has been stated that the project was approved on 22.03.2013 and the formal agreement was signed with the Government of Punjab on 14.06.2013; that thereafter some more land was added to the project, for which completion period was given upto 13.06.2018, vide supplementary agreement dated 16.06.2016 executed with the Government; that later on exemption from the applicability of provisions of the Punjab Apartment and Property Regulation Act, 1995, (PAPR Act) stood granted by the Government on 25.01.2017 and as such all the irregularities committed by the company stood compounded, as exemption granted will have retrospective effect; that delay if any in issuance of the said notification on 25.01.2017 was procedural and it will relate back from the day when the project in question had been launched by the opposite parties; that once the State Government has not held that the opposite parties had violated the provisions of PAPR Act, as such, this Commission cannot go into the said question; that on request made by the opposite parties, the Competent Authority extended completion period of the project upto 31.07.2019. It has been stated that claim of the complainants seeking higher rate of interest on the deposited amount is totally unjustified. Rather, it should not be more than 9% p.a. as has been awarded by the Hon'ble Supreme Court in DLF Homes Panchkula (P) Ltd. vs Sushila Devi, 2019 (Civil Appeal Nos. 2285-2330 of 2019), decided on 26 February 2019, and no other relief should be granted to the complainants.
However, ironically, it has been claimed in the replies that the opposite parties are trying to complete the project, as early as possible, as the development work is going on in full swing and work with regard to provision of basic amenities such as sewerage, water, electricity etc. is near completion and that one wing of flats have already been delivered to the customers. It has been alleged in the replies that the project was delayed on account of red-tapism in the offices of different departments of the Government and also due to the business and political rivalries and that was why; the competent authorities delayed in granting approvals/ sanctions. While applying the theory of force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God), it has been alleged that delay in delivery of possession of plots/flats occurred, also on account of shortage of building material and ban on mining by the Government concerned; that the complainants may come forward for execution of the agreements; that since the approvals are awaited from the competent authorities, as such, possession of their respective plots and flat, will be delivered thereafter. Remaining averments of the complaints have been denied.
In the rejoinder filed, the complainants reiterated all the averments contained in their respective complaints and have controverted those contained in written replies filed by the opposite parties.
The parties led evidence in support of their cases.
We have heard the contesting parties and have gone through record of the cases, including the rejoinders and written arguments filed by the parties and also the judgments provided by the opposite parties, very carefully.
First coming to the objection regarding territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant cases, record reveals that number of letters/documents have been placed on record which have been issued by the opposite parties mentioning the address of the company thereon as SCO No.139-141, First Floor, Sector 17-C, Chandigarh, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Offices at Chandigarh and personally work for gain thereat:-
In CC No.405 of 2018:-
Expression of interest dated 23.12.2011, Annexure C-1 Payment receipt dated 19.11.2014, Annexure C-5.
Letter of Intent dated 13.05.2013, Annexure C-6 in respect of the project in question has been issued by the Punjab Urban Planning and Development Authority, Punjab at SCO No.139-141, Sector 17-C, Chandigarh In CC No.406 of 2018:-
Expression of interest dated 23.12.2011, Annexure C-1 Payment receipt dated 23.12.2011, Annexure C-3.
Letter of Intent dated 13.05.2013, Annexure C-6 in respect of the project in question has been issued by the Punjab Urban Planning and Development Authority, Punjab at SCO No.139-141, Sector 17-C, Chandigarh In CC No.407 of 2018:-
Expression of interest dated 12.01.2012, Annexure C-1 Payment receipt dated 19.11.2014, Annexure C-4.
Letter of Intent dated 13.05.2013, Annexure C-6 in respect of the project in question has been issued by the Punjab Urban Planning and Development Authority, Punjab at SCO No.139-141, Sector 17-C, Chandigarh Not only as above, the said fact is further fortified when we perused the information dated 02.03.2019 placed on record by Counsel for the opposite parties, wherein the address of the Company has been mentioned as SCO No.139-141, Sector 17-C, Chandigarh-160017 only. Thus, this Commission at Chandigarh has territorial jurisdiction to entertain these complaints. Objection taken by the opposite parties in this regard stands rejected.
Now coming to the objection taken to the effect that the complainants did not fall within the definition of 'consumer', it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainants, in these complaints have purchased the plots and flat in question to indulge in 'purchase and sale of plots/flats' as was held by the Hon'ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their onus, hence we hold that the complainants are consumers as defined under the Act. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. The mere fact that the complainants have purchased three units, in the project of the opposite parties, for the future of their children or that the complainants in CC No.407 of 2018 being friends have purchased a plot therein jointly, is not a ground to shove them out of definition of consumer. In Aashish Oberai Vs. Emaar M GF Land Limited, Consumer Case N o . 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-
"....In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house.
Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose....."
Furthermore, the mere fact that the complainants are NRIs and residing in USA/Canada, is no ground to snub them out of the purview of 'consumer'. No law debars NRI and any other person sitting abroad, with roots in India, to purchase a residential property in India for his/her personal use. NRIs do come to India, every now and then. Most of the NRIs have to return to their native land. Each NRI wants a house in India. The complainants are independent persons and can purchase any house in India, in their own name-jointly or otherwise. Similar view was expressed by the Hon'ble National Commission in Smt. Reshma Bhagat & Anr. Vs. M/ s Supertech Ltd. Consumer Complaint No. 118 of 2012, decided on 04 .01. 2016. In this view of the matter, objection taken by the opposite parties stands rejected.
There is no dispute with regard to purchase of plots and flat by the complainants in the project of the opposite parties, as per the details mentioned above. There is also no dispute with regard to the fact that despite the fact that in all the three cases, in the first instance, amount equal to 30% of the total sale consideration stood received by the opposite parties from the complainants, yet, neither plots and flat nos. were allotted nor agreements were executed between the parties nor thereafter development work was completed at the project site and possession has also not been offered till date.
In all the complaints aforesaid, the complainants, through their Counsel, have submitted that the opposite parties failed to provide plots and flat nos. and agreements for signatures of the complainants, within a reasonable period after booking or even thereafter, whereas, on the other hand, the opposite parties, through their Counsel, have stated that the complainants were requested number of times by way of sending letters/reminders to come forward for allotment of respective plots/flat and execution of the agreements and make remaining payment but they failed to do so.
It may be stated here that perusal of record reveals that at the time of booking of the respective plots and flat, the opposite parties had already received an amount, which is equal to 30% of the total sale consideration, yet, there is nothing on record that thereafter agreements were even sent to the complainants for their signatures what to speak of execution thereof. Once the opposite parties, in the first instance, had already received substantial amount which was equal to 30% of the total sale consideration from the complainants, it was required of them to allot plots and flat; execute agreements under law within a reasonable period say two to three months; raise demands in accordance with the stage of development at the project site; complete the development work; obtain completion certificate from the competent authorities; and then deliver possession of the plots and flat in dispute to the complainants. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demands from the complainants by way of sending letters dated 15.05.2014, Annexure O-1, 17.02.2014, Annexure O-2 and 27.06.2014, Annexure O-3 (in CC No.405 of 2018). In all these letters not even a single word has been mentioned regarding allocation of plots and flat nos. or execution of agreements.
Furthermore, the plea taken by the opposite parties, for the first time, in their written statements to the effect that the complainants were asked number of times to come forward for allotment of plots and flat and also for execution of buyers agreements smacks their malafide intentions, as they have made candid admission in the written replies filed that still the development work is going on at the project site and that they have been granted extension from the competent authorities to complete the project. Thus, the act of raising demands and receiving substantial amounts in the respective complaints, as referred to above, in the absence of development work; without allotment of plots and flat and executing the agreements, was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite parties to execute the agreements for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -
"6. Contents of agreement of sale:- (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906) ; .........
(2) xxxxxxxxxxxxxxxx..................
(3) xxxxxxxxxxxxxxxxx..................."
The opposite parties were legally bound under law to execute the agreement and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but in these cases, the said provision has been violated. The opposite parties also cannot take shelter under the exemption certificate from the provisions of PAPR Act, which was issued in their favour only on 25.01.2017 i.e. much after booking of the plots and flat in question. It has no where been proved that the said exemption will have retrospective effect but in our considered opinion, it will have prospective effect only. The opposite parties were deficient in providing service and adopted unfair trade practice on this count.
Furthermore, to defend the objection raised by the complainants to the effect that at the time of booking of the plot and collecting money from the complainants, the opposite parties were not having requisite licences, approvals and permissions from the competent authorities, it has been stated by the opposite parties, through their Counsel, that it would not make any difference regarding the title of plots/flat(s), if the project was approved later on, as all the irregularities stood compounded when notification exempting the provisions of PAPR Act was issued in favour of the company on 25.01.2017. We do not agree with the said assertion.
In the first instance, the candid admission of the opposite parties in para no.10 (preliminary objections) of their written replies to the effect that if the State Govt. has not taken any action against the violation of terms and conditions of PAPR Act, and as such it has not caused any prejudice to the complainants in relation to the said violations, is sufficient to prove the case of the complainants. Further admission of the opposite parties in all the three complaints to the effect that the project was got approved only on 22.03.2013 leaves no doubt with the Commission to believe that that, in 2011 and 2012, money has been collected from the complainants and other prospective buyers, with animus of cheating and fraud, by launching the project and selling units/plots therein by violating the terms and conditions of PAPR Act, which act cannot be cured by obtaining the exemption from the provisions of PAPR Act, at the subsequent stage. It is settled law that a builder cannot take advantage of the situation by simply saying that the statutory approvals had not been obtained from the Government Authorities or that the same had been delayed by the competent Authorities. The builder is duty bound to ensure that before accepting the amount of booking, necessary permission/sanctions have been granted for launching the project and selling the units/plots therein. It was so said by the Hon'ble National Commission in Omaxe Limited and anr. Vs. Dr. Ambuj Chaudhary, First Appeal No. 300 of 2012, decided on 13.02.2017.
Surprisingly, the Government of Punjab, Department of Housing and Urban Development (Housing II Branch) i.e. the competent Authority was well aware of the fact that the project has been started without permissions and huge money has been collected and usurped by the opposite parties from the innocent buyers, yet, it did not hear the aggrieved consumers before granting exemption to the project on 25.01.2017 from the provisions of PAPR Act. As such, the said act of the competent authority is against the principles of natural justice; fair play and not binding on the complainants and other prospective buyers. If the competent Authorities failed to take any action under relevant Rules and Regulations against the company, no benefit can be taken out there-from by the opposite parties, in these complaints filed by the complainants under Consumer Protection Act, for deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties.
It is very significant to mention here that another valid reason with this Commission to hold that the money has been collected from the complainants and other prospective buyers, with animus of cheating and fraud, which act cannot be cured by obtaining the exemption dated 25.01.2017 from the provisions of PAPR Act, at the subsequent stage, is the contents of Letter of Intent (LOI) dated 03.05.2013, Annexure C-6 which was granted in favour of the opposite parties in respect of the project in question. In condition no.v) of the said LOI it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. Relevant part of the said condition of LOI is reproduced hereunder:
"v. ....The project shall not be Advertised/launched and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption u/s 44 of PAPR Act 1995 is issued by the State Govt...." .
It is further evident from the contents of said LOI that application for setting up the residential project was moved by the opposite parties before the competent Authority, for the first time on 16.09.2011 and project was approved only on 22.03.2013. Thus, in the present case, despite the fact that vide condition no.v) of LOI aforesaid, it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. (which in the present case has been issued only on 25.01.2017), yet, the opposite parties violated the same and launched the project and starting selling the plots/flats therein, starting from 2011, when they were not even the owners of the land underneath the said project. It is therefore held that by launching and selling the project before 25.01.2017, i.e. the date when the said exemption was granted to the opposite parties from the provisions of PAPR Act, they indulged into unfair trade practice and the said practice needs to be deprecated.
Now coming to non-offering of possession of the plots and flat to the complainants, it may be stated here that the opposite parties in their written reply in para nos.17 and 18 (in preliminary objections) of all these complaints, have very candidly admitted that development work at the project site is still going on and that basic amenities such as roads, electricity, sewerage, landscaping etc. are near completion. However, except some photographs, perusal of which too reveal that still a lot of work is pending to be done at the project site, no other cogent and convincing evidence has been placed on record, to prove that the development is at the advance stage and that basic amenities such as roads, electricity, sewerage etc. are near completion, as alleged in the replies. Infact contrary stands have been taken by the opposite parties in their written replies. In para nos.17 and 18 of these complaints, referred to above, it has been stated that the development work is near completion, whereas in para no.17 only (in CC No.405 of 2018 of preliminary objections), it has been stated that the competent authorities have given extension to the company for completion of the project. Burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/opposite parties. It was so said by the Hon'ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. At the same time, perusal of contents of the written replies filed by the opposite parties, reveal that self-contradictory pleas have been taken with regard to delay in offer of possession of the plots and flat in question to the complainants. In some paragraphs it has been stated that delay took place in offering possession because there was delay on the part of the Government Departments in sanctioning approvals/permissions; due to shortage of construction material etc. etc. whereas, on the other hand, it has also been stated that since more land was added to the project, as such, permission was sought from the competent Authorities for extension of time for completing the project in question.
As such, perusal of contents of replies filed by the opposite parties clearly go to show that they were not serious in completing the project wherein the plots and flat in question were sold to the complainants and are now taking bald excuses for causing delay, just with a view to defeat the genuine claim of the complainants. Under these circumstances, it is held that the opposite parties by neither allotting plots and flat nos.; nor executing agreements within the stipulated period; nor completing the development work even by the date when these complaints were filed; and by not delivering possession of the plots and flat, despite the fact that the same were booked as far as back in 2011-2012, as mentioned in the chart above, indulged into unfair trade practice and were also negligent and deficient in providing service.
At the same time, it is also held that plea taken by the opposite parties to the effect that delay took place in offering possession because there was delay on the part of the Govt. Departments to sanction approvals/ permissions; shortage of construction material etc. does not carry out any weight for the reasons recorded hereinafter.
First coming to delay in approvals on the part of the Govt. Departments, it may be stated here that not even a single letter has been placed on record by the opposite parties showing that they ever reported the Govt. Authorities concerned that there is a delay on their part in granting sanctions/approvals in respect of the project in question on account of business rivalries or red-tapism or that any such letter, by which they have given notice to the said Authorities that in case the needful is not done in a prescribed time, the Company shall move to the appropriate platform of law, in the matter.
Now coming to the plea regarding shortage of construction material, it may be stated here that nothing has been placed on record by the opposite parties to prove that they were unable to procure the said construction material, in adequate quantity. There is no evidence of the opposite parties having invited tenders for supply of construction material and there being no response to such tenders. A similar plea with regard to shortage of building material as a cause for delay in delivery of possession of the plots/units was taken by a builder before the Hon`ble National Consumer in Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), decided on 14 Aug 2015, which was rejected and the complaint was allowed in favour of the complainant.
As per settled principle of law laid down by the Hon'ble Supreme Court of India, in the cases, where no agreement has been executed by the builder after booking of the plot/unit, then the reasonable period of two to three years has to be taken into account for completion of the construction and development activities and delivery of possession to the allottees/buyers thereof. Since, in the present cases also, no agreement has been executed between the parties, as such; possession of the plots and flat in question should have been delivered to the complainants by the opposite parties, within a maximum period of three years from the respective dates of booking thereof i.e. latest by 22.12.2014 (in CC No.405 of 2018 booking date being 23.12.2011), 22.12.2014 (in CC No.406 of 2018 booking date being 23.12.2011) and 11.01.2015 (in CC No.407 of 2018 booking date being 12.01.2012) which have not been done so far and still the opposite parties are seeking more time. In the present cases, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God etc.) as a result whereof, delay in handing over possession of the plots and flat occurred. Under these circumstances, plea taken by the opposite parties to the effect that time was not the essence of contract being devoid of merit, stands rejected.
Now coming to the objection taken by the opposite parties with regard to jurisdiction of this Commission and maintainability of these complaints, on the ground that complicated questions of facts and law are allegedly contained therein, it may be stated here that these are the simple cases of non allotment of plots and flat nos.; non-execution of agreements under the provisions of Section 6 of the PAPR Act within the reasonable time; non obtaining of necessary approvals before launching the project in question; and non-delivery of possession of plots and flat to the complainants by the opposite parties within a reasonable period from the date of bookings, thereby causing financial loss, mental agony and harassment to the complainants. The acts, omissions and commissions on the part of the opposite parties amount to deficiency in providing service as well as negligence and adoption of unfair trade practice. There is no disputed document on record, which requires any cross examination of the complainants or any witnesses. Plea taken by the opposite parties in this regard therefore stands rejected.
An objection was also raised by the opposite parties to the effect that in the face of registration of the project under the RERA in the year 2017 or Section 35 of the PAPR Act, jurisdiction of this Commission is barred to entertain these complaints arising out in respect of the plots and flat in question located in the said project. First coming to the registration of project under RERA, it may be stated here that the same does not merit acceptance, in view of the ratio of law laid down by the Hon'ble Supreme Court of India in C ivil Appeal No. 3581-3590 of 2020, M/s Imperia Structures Ltd. Vs. Anil Patni and another, decided on 02.11.2020, wherein it was held that the provisions of RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any consumer complaint. Relevant part of the said order reads as under:-
24. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.
25. Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force. 26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called "consumers" within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.
*27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee , it was held by this Court:- "The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. *(See Bharat Bank Ltd. V. Employees and Nahar Industrial Enterprises Ltd. vs. Hong Kong & Shanghai Banking *Corpn . On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint..."
This view has been reiterated by the Hon'ble Supreme Court of India in Civil Appeal No. 5785 of 2019, Ireo Grace Realtech Pvt. Ltd. Versus Abhishek Khanna & Others, decided on 11.01.2021.
Now coming to the objection raised to the effect that in the face of Section 35 of the PAPR Act, this Commission is not competent to entertain these complaints, it may be stated here that in the present cases, the opposite parties were legally bound to allot plots and flat nos.; execute agreements and then deliver possession thereof to the complainants, and the nature of such transactions is covered by the expression 'service'. Our view is supported by the principle of law laid down in Narne Construction P. Ltd., etc. etc. Vs. Union of India and Ors. Etc., (supra) II (2012) CPJ 4 (SC) and Haryana Agricultural Marketing Board Vs. Bishamber Dayal Goyal and Ors., Civil Appeal No. 3122 of 2006, decided on March 26, 2014. Relevant part of Haryana Agricultural Marketing Board case (supra) is reproduced hereunder:-
".......We would reiterate that the statutory Boards and Development Authorities which are allotting sites with the promise of development, are amenable to the jurisdiction of consumer forum in case of deficiency of services as has already been decided in U.T. Chandigarh Administration & Anr. v. Amarjeet Singh & Ors.[1]; Karnataka Industrial Areas and Development Board v. Nandi Cold Storage Pvt. Ltd.[2]. This Court in Narne Construction (P) Ltd. v. Union of India [3] referred to its earlier decision in Lucknow Development Authority v. M.K. Gupta [4] and duly discussed the wide connotation of the terms "consumer" and "service" under the consumer protection laws and reiterated the observation of this Court in Lucknow Development Authority v. M.K. Gupta (supra) which is provided hereunder :
"5. In the context of the housing construction and building activities carried on by a private or statutory body and whether such activity tantamounts to service within the meaning of clause (o) of Section 2(1) of the Act, the Court observed: (LDA case, SCC pp. 256- 57, para 6):
"...when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and the other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act...."
Furthermore, because it is an undisputed fact that the opposite parties neither allotted plots and flat nos.; nor executed buyers agreement; nor delivered possession thereof to the complainants within a reasonable period of three years aforesaid, or even thereafter and no cogent and convincing reason has been given for the same, as such, it can very well be said that there is a denial of service to the complainants on the part of the opposite parties, for which the complainants were at liberty to avail remedy by way of filing these consumer complaints. Our this view is supported by the principle of law laid down in Lucknow Development Authority Vs. M.K.Gupta, Civil Appeal No.6237 of 1990, decided on 5.11.1993, wherein the Hon'ble Supreme Court held that where the developer is at fault in not delivering possession of an immovable property, the act so amounts to denial of service, and consumer complaint is maintainable before the Consumer Fora.
In view of above findings, we can safely say that the provisions of the RERA and PAPR Act will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the builder/developer. Since, these complaints involve the consumer dispute and the same are maintainable before this Commission, as such, objection taken in this regard by the opposite parties stands rejected.
From the peculiar facts and circumstances of these cases, it transpire that the opposite parties were not competent to sell plots or flats and to collect money from the complainants and other prospective buyers, starting from 2011 itself, as far as the present project is concerned. Since not even a single document has been placed on record by the opposite parties to counter the allegations leveled by the complainants, it can very well be said that the project in question was launched and units/plots therein were sold to the innocent buyers, in complete violation of the mandatory requirements as per Law, just with a view to grab money from them. The opposite parties being under dominating position kept on pressuring the complainants to make further payment under the misleading information, just with a view to extract the remaining amount and kept them under confusion, by way of sending notices. Still, in the replies filed by the opposite parties, in these complaints, it has been candidly admitted that the landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works are near completion. These replies have been filed by the opposite parties in 2019 wherein, they are still saying that landscaping, electricity lines, internal roads, street lighting, open green spaces, sewerages and other development works at the project site are near completion and that they are trying to complete the same as early as possible. This candid admission of the opposite parties itself leaves no scope for it to say that they were not ready with the delivery of possession of the plots and flat within a reasonable period of three years after booking thereof or even by the year 2019, when replies in these complaints were filed and as such, it can safely be said that the letters aforesaid reliance whereupon has been placed by the opposite parties to say that the complainants were asked number of times to come for allotment of plots and flat nos. and execution of agreements, were sent just with a view to cause further financial loss to the complainants by usurping the remaining amount. The cases of the complainants are proved from the admission made by the opposite parties themselves. Under these circumstances, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if there is no agreement, within a reasonable period say two to three years from the date of booking, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon'ble National Commission i n Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon'ble Supreme Court of India in the case titled a s Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also i n Fortune Infrastructure Versus Trevor D' Lima & Ors. (2018) 5 SCC 442 . In the present cases also, since there has been an inordinate delay in the matter, and still the opposite parties are not sure as to by which date construction and development activities will be completed and possession of the plots and flat will be delivered to the complainants and on the other hand still they are not sure as to by which date the same will be completed, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest @12% p.a. from the respective dates of deposits in view of decision rendered by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment and also by the Hon'ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 and Anil Kumar Jain & Anr Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23rd Dec 2019, wherein interest @12% p.a. was awarded to the complainant, on the amounts to be refunded to them from the respective dates of deposits; that will meet the ends of justice.
The opposite parties have placed reliance on DLF Homes Panchkula (P) Ltd. vs Sushila Devi, decided on 26 February, 2019 (Civil Appeal Nos. 2285-2330 of 2019 (@ SLP(C) NOS.928-930, 932-938, 940-967 and 969-976 of 2019), to say that since in this case, the Hon'ble Supreme Court of India has awarded interest @9% p.a., on the amount so refunded therein, as such, this Commission cannot grant interest beyond that, in the present cases also. We do not agree with the contention raised for the reasons recorded hereinafter. It may be stated here that we have gone through the contents of DLF Homes Panchkula (P) Ltd.`s case (supra) and found that the order passed therein, with regard to award of interest @9% p.a. on the amount to be refunded, was on the ground that all the parties agreed that the appeal be disposed of in terms of the directions issued by the Supreme Court of India in Himanshu Arora's case (Civil Appeal Nos. 11097- 11138 of 2018, decided on 19.11.2018), wherein also, the parties did not raise any objection with regard to grant of interest @9% p.a., aforesaid. Whereas in the present cases the complainants have prayed that they be granted interest, as sought for by them in their complaints, as the deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties is writ large. Under these circumstances, plea taken by the opposite parties in this regard, stands rejected.
As far as objection taken to the effect that the complaints filed are beyond limitation, it may be stated here that since it is an admitted fact that possession of the plots and flat in question has not been delivered even by the dates when these complaints had been filed before this Commission or even thereafter, for want of development activities, as explained above, as such, objection taken with regard to limitation is not sustainable in view of principle of law laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action, in favour of the allottee/buyer. As such, objection taken in this regard is rejected.
Furthermore, the opposite parties also cannot wriggle out of their liability, by saying that delay took place on account of the reason that the complainants defaulted in making remaining payment, in view of principle of law laid down by the Hon'ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date or within a reasonable period where no agreement is executed, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon'ble National Commission, i n Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. In the instant cases also, if the complainants after making payment of substantial amounts, referred to above, did not make remaining payment when they came to know that the project has been launched without obtaining necessary approvals/sanctions from the competent Authorities; there was no development at the project site and also there was gross violation on the part of the opposite parties of the provisions of Section 6 of PAPR Act, in not getting the agreements executed, they were right in not making further payments . Objection taken in this regard stands rejected.
As far as plea taken by the opposite parties to the effect that the complainants may now come for execution of agreements and could wait possession of the plots and flat till final approvals are received by the company, it may be stated here that this plea would have been considered, in case, the complainants had pressed their prayer with regard to possession of their respective units. Since, the complainants have pressed their prayer with regard to refund of the amount paid alongwith interest, compensation etc., such a plea taken by the opposite parties could not be accepted and is accordingly rejected.
As far as objection taken to the effect that opposite parties no.2 and 3 have been wrongly impleaded in their personal capacity, it may be stated here that these persons, in our considered opinion, are holding such important positions in the Company, where they are directly involved with the decision-making process in the Company and will be jointly and severally liable alongwith the Company, for all the acts done. Similar view was taken by the Hon'ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017. As such, objection taken in this regard stands rejected.
For the reasons recorded above, these complaints are partly accepted with costs, in the following manner:-
In CC No.405 of 2018, the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.30,06,000/- to the complainant, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 30,06,000/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.1,50,000/- to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.1,50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
In CC No.406 of 2018, the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.12,00,000/- to the complainant, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 12,00,000/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.1,50,000/- to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.1,50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
In CC No.407 of 2018, the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.31,68,750/- to the complainants, alongwith interest @12% p.a., without deducting any TDS as this interest is granted as compensation, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 31,68,750/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.1,50,000/- to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.1,50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
However, it is made clear that in case the complainants, in any of the complaints above, have availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of their respective plots/flat, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants against their respective plots/flat.
Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case files.
The files be consigned to Record Room, after completion.
Pronounced.
23.07.2021 Sd/-
[RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Sd/-
(RAJESH K. ARYA) MEMBER Rg.