State Consumer Disputes Redressal Commission
Pavitarpal Singh vs M/S Country Colonisers Pvt. Ltd. on 26 April, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 272 of 2016
Date of institution : 31.08.2016
Date of decision : 26.04.2017
Pavitar Pal Singh son of Sh. Harjit Singh, resident of H. No. 1108,
Sector 59, (Phase-V), S.A.S. Nagar, Mohali
....Complainant
Versus
1. M/s Country Colonizers Pvt. Ltd., Registered office P.O.
Rayon & Silk Mills, Adjoining Coca Cola Depot, G.T. Road,
Chheharta, Amritsar, Punjab, India-143105 through its Authorized
Signatory.
2. M/s Country Colonizers Private Limited, Corporate Office : A-
25, Mohan Cooperative Industrial, Main Mathura Road, New Delhi-
110044 through its Managing Director.
....Opposite parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Gurcharan Singh Saran, Judicial Member.
Present:-
For the complainant : Sh. Amandeep Sharma, Advocate
For opposite parties : Sh. Bikramjit Aroura, Advocate
Consumer Complaint No. 272 of 2016 2
GURCHARAN SINGH SARAN, JUDICIAL MEMBER
ORDER
Complainant has filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act), on the averments that Ops had floated their integrated residential project under the name and style of Wave Gardens, Sector 85 & 99, SAS Nagar (Mohali). Firstly, Apartment No. 003, 3 BHK + S having super area of Approx. 1990 Sq. Ft. was allotted to Inderpreet Singh and D.S. Chadha against the payments dated 18.5.2012 of Rs. 5,00,000/- and dated 10.7.2012 of Rs. 6,53,964/-. Thereafter, the complainant purchased the said apartment from abovesaid allottee and was transferred the same in his favour. Then an amount of Rs. 7,69,310/- was received from the complainant on 8.12.2012 and again an amount of Rs. 11,53,963/- was received on 22.12.2012, therefore, the construction of the project was started either on 8.2.2012 or 22.12.2012. Thereafter, apartment allottees arrangement was executed on 7.3.2013 in favour of the complainant and complainant made the payments as per demand. He paid Rs. 59,99,029.63p with Ops as per account statement dated 7.7.2016. When the complainant approached, Ops assured quality construction and handing over the possession of the unit in time. As per the agreement, the possession was to be delivered at the most upto 7.3.2016. As per Clause 5.1, the possession was to be delivered within a period of 30 months alongwith an extended period of six months from the date of execution of the agreement Consumer Complaint No. 272 of 2016 3 i.e. upto 7.3.2016. Complainant is residing in a rented accommodation and due to not providing the possession, he suffered a lot. He gathered the amount from his hard earned money and nears and dears. Due to non-completion the project and delivery of possession of the apartment, his huge amount has been blocked with Ops. He has to pay interest on the amount collected from other persons. The complainant visited the site and was shocked to see that the work is going on at a very slow pace and there is only the structure at the site. When approached Ops, no satisfactory response was given to them. Complainant served a legal notice dated 9.7.2016 upon the Ops but of no use. Alleging deficiency in service on the part of Ops, this complaint has been filed by the complainant with this Commission seeking directions against Ops as under:-
"(i) to refund the amount of Rs. 59,99,029.63p along with interest @ 12% p.a. from the date of deposits till realization.
(ii) to pay compensation in the sum of Rs. 5 lacs on account of mental tension, agony and physical harassment, to the complainant.
2. Ops in their written statement took the preliminary submissions that this complaint is not maintainable as the complainant does not fall within the definition of consumer as defined under Section 2(1)(d) of the Act as the complainant had purchased the housing unit for commercial/investment purposes as Mr. Inderpreet Singh Chadha and D.S. Chadha were running the business of real estate i.e. Chadha Realtors Pvt. Ltd. and this fact Consumer Complaint No. 272 of 2016 4 can be transpired from their other investments in the tricity. Earlier allottees have failed to pay the due amount well within period. Thereafter, complainant moved an application for transfer of expression of interest dated 13.9.2012 and complainant had shifted its plan to subvention linked plan in place of construction linked plan. The complainant filed the present complaint to escape from their liability to pay the outstanding amount to the Ops and to wriggle out of the agreement. Total value of the apartment/unit is Rs. 81,60,125/- + service tax extra and complainant paid only Rs. 59,99,029.63p and still huge amount is outstanding against the complainant. Timely payment is the essence of the agreement for the progress of the project and by not making payments shows that he is not interested in taking the possession of the apartment. Therefore, Ops were not deficient in service. As the complainant himself is defaulter, therefore, there is no question of payment of compensation to the complainant. As per agreement, complainant was bound to pay the interest on delayed payment; complainant has not impleaded the Harjit Singh, who is necessary party in the complaint; the Commission has no territorial jurisdiction to entertain and decide the complaint: intricate questions of law and facts are involved, which cannot be adjudicated in summary procedure under the Act, therefore, the matter be relegated to the Civil Court; as per Clause No. 5.1, it was referred that the developer shall endeavour to complete the project as far as possible within 36 months. Since the State Government has failed to acquire 10% of land for Ops in terms of memorandum of agreement dated Consumer Complaint No. 272 of 2016 5 3.2.2006, therefore, the approved plan of the project shows critical areas and due to this reason laying of lines for basic services are not complete. As per Clause 5(e) of the MOA, State Government shall acquire the land under the provisions of Land Acquisition Act, 1894 and transfer the same to Ops for development but the State Government failed to do so. As per MOA dated 3.2.2006, request was made to Land Acquisition Collector, GMADA vide letter dated 19.1.2012 requesting the State Government to acquire 23.21 acres of land, which falls within the master plan of the project. The Ops made several requests to the State Government to initiate the acquisition and handover the possession to Ops to carry out development work on the same and GMADA was to provide external access roads to the project, who have failed and Ops are projecting the possession by April, 2017. Complainants failed to pay the due amount in time. With regard to non-completion of the project, there was no agreed time for mandatory completion of the project; this complaint is not maintainable before this Commission as there is an arbitration clause in the agreement; complainant had no cause of action to file the complaint against the answering respondents and that the complainant has not approached the Commission with clean hands. On merits, it was again reiterated that the unit was purchased for commercial purposes. It was also stated that in the agreement, the time agreed was not mandatory. It was only an endeavor on the part of the Ops to complete the project within the period as referred in Clause 5.1 of the Consumer Complaint No. 272 of 2016 6 agreement. It has been denied that the agreement is loaded in favour of Ops. Complaint is without merit. It be dismissed.
3. To support his contentions, the parties led their respective evidence. Complainant in his evidence has tendered affidavit of Pavitar Pal Singh as Ex. CW-1/A and documents Ex. C- 1 to C-15. On the other hand, Ops had tendered documents affidavit of Raghav Sharma as Ex. Ops/A and documents Exs. Ops/1 to 7.
4. We have heard the counsel for the parties and have carefully gone through the averments made in the complaint, written reply filed by the Ops, evidence and documents on the record.
5. A plea has been taken by the counsel for the Ops that the complainant had purchased the housing unit for commercial/investment purposes as Mr. Inderpreet Singh Chadha and D.S. Chadha were running the business of real estate i.e. Chadha Realtors Pvt. Ltd. and this fact can be transpired from their other investments in the tricity. Ops have not placed on any document on record to support their contention. When the apartment has been transferred to the complainant with the consent of Ops, now it is not Inderpreet Singh Chadha or D.S. Chadha, whose status is to be determined, we are to determine with what purpose the complainant has purchased the flat. Further Ops have not placed on the record any document showing that the complainant earlier indulged in sale and purchase of the housing property. Therefore, without such type of evidence, the plea raised Consumer Complaint No. 272 of 2016 7 by the Ops that the unit was booked for commercial purposes cannot be accepted. In case the complainant had booked the Unit with the Ops, construction services offered by the Ops are covered under the service as defined under the Act and in case they did not deliver the services as per the agreed terms then it is a consumer dispute and complainant fall under the definition of consumer. Therefore, we do not agree with the plea raised by the counsel for the Ops that the complainants are not the consumers.
6. Ops have raised an objection that due to force majeure circumstances, they have failed to complete the project because as per the Memorandum of Agreement dated 3.2.2006 (in short MOA), the State Government has to acquire the land but State Government failed to acquire 10% of land for Ops in terms of MOA, therefore, the approved plan of the project shows critical areas and due to this reason laying of lines for basic services is not complete. As per Clause 5(e) of the MOA, State Government shall acquire the land under the provisions of Land Acquisition Act, 1894 and transfer the same to Ops for development but the State Government failed to do so. As per MOA dated 3.2.2006, request was made to Land Acquisition Collector, GMADA vide letter dated 19.1.2012 requesting the State Government to acquire 23.21 acres of land, which falls within the master plan of the project. The Ops made several requests to the State Government to initiate the acquisition and handover the possession to Ops to carry out development work on the same and GMADA was to provide external access roads to the project, who have failed and Ops are Consumer Complaint No. 272 of 2016 8 projecting the possession by April, 2017. According to PAPRA, it is the duty of the Ops to supply the information with regard to their ownership, permission from PUDA/GMADA, licence and change of land use etc. It was for Op No. 1 that the land vested with them over which they were to launch the project. In Section 3(2) of the Act, General liability of the promoter has been explained, which are as under:-
"3. General Liabilities of Promoter:- (1) Notwithstanding anything in any other law for the time being in the force, a promoter, who develop a colony or who constructs or intends to construct a building of apartments, shall, in all transactions with persons taking or intending to take a plot or an apartment on ownership basis, be liable to give or produce, or cause to be given or produced, the information and the documents mentioned hereinafter in this section. (2) A promoter who develop a colony or who constructs or intends to construct such building of apartments shall,-
(a) make full and true disclosure of the nature of his title to the land on which such colony is developed or such building is constructed or is to be constructed, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
(b) make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land;
(c) give inspection on seven days, notice or demand,-
(i) of the layout of the colony and plan of development works to be executed in a colony as approved by the Consumer Complaint No. 272 of 2016 9 prescribed authority in the case of a colony; and
(ii) of the plan and specifications of the building built or to be built on the land as well as of the common areas and facilities and common services provided (including supply of electricity and water, sewerage and drainage systems, lifts, fire-fighting equipment), such plans and specifications being in accordance with the provisions of the building regulations, and approved by the authority which is required so to do under any law for the time being in force, indicating thereon what parts of the building and the appurtenant areas are intended to be kept as common areas and facilities in the case of apartments :
Provided that the number and sizes of the apartments shall conform to such building regulations, and the area of an apartment shall not exceed such limit as may be fixed by the competent authority;
(d) display or keep all the documents, plans and specifications or copies thereof referred to in clauses (a), (b) and (c) of this sub-section at the site and in his office and make them available for inspection to persons taking or intending to take a plot or an apartment and after the association is formed, he shall furnish the association a copy of these documents and of the sanctioned plan of the building;
xxxx xxxx xxxx (e) specify, in writing, the date by which possession of
the plot or apartment is to be handed over and he shall hand over such possession accordingly;
xxxx xxxx xxxx
(i) state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons who have taken or are to take the apartments;
(j) not allow person to enter into possession until Consumer Complaint No. 272 of 2016 10 an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained;
(k) make a full and true disclosure of all outgoings, including ground rent, if any, municipal or other taxes, charges for water and electricity, revenue assessment, interest on mortgages or other encumbrances, if any;
(l) give the estimated cost of the building and the apartments proposed to be constructed, or colony to be developed, and the manner in which escalation in such cost for valid reasons may be approved by mutual agreement ;
(m) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and
(n) give on demand and on payment of reasonable charges true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed.
4. Issuing of Advertisement or Prospectus:- (1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication.
(2) The advertisement or prospectus issued under sub-
section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, Consumer Complaint No. 272 of 2016 11 the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed.
(3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
(4) When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
(a) the promoter, if an individual;
(b) every partner of the firm, if the promoter is a firm;
(c) every person who is a director at the time of issue of the advertisement or prospectus, if the promoter is a company :
Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or
(b) the advertisement or prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c) after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor.Consumer Complaint No. 272 of 2016 12
From the above Sections, it is clear that the Ops did not fulfill the above instructions in letter and spirit, therefore, they are deficient in service and involved in unfair trade practice.
7. As per the averments on the record, the complainant had purchased Apartment No. 003, Tower Erica, Type 3 BHK + S having super area of Approx. 1990 Sq. Ft. As per account summary Ex. C-2 dated 12.4.2016, Ops have received a sum of Rs. 59,99,029.63p. Once there was tripartite agreement, on disbursement of loan in favour of the complainant then Ops were to intimate the stage of the construction to financial institution to make further payments. However, Ops have placed payment demand notice/letter Ex. Ops-3, in which an amount of Rs. 7,69,310/- was demanded from the complainants but not from the financial institution. In case they had reached further stage of construction then they were required to make a reference to financial institution as per subvention plan, who could have checked the stage of the construction and then they could disburse the balance amount. In case they have already paid a sum of Rs. 59,99,029.63p then they could disburse the remaining payment also, in case they had completed the stage of the construction. It seems that the stage of construction was not there, therefore, they did not refer the letter to financial institution and accordingly, the payment was not made.
8. As per Clause 5.1 of the apartment allottee(s) arrangement Ex. C-1, it has been provided as under:- Consumer Complaint No. 272 of 2016 13
"5.1 Subject to Clause 5.2 and further subject to all the Allottee(s) of the said "Apartment" in the "Said Project"
making timely payment, the Developer shall endeavor to complete the development of "Said Project" in general and the said "Apartment" in particular as far as possible within 30 (thirty) months along with an extended period of (6) six months from the date of execution of this Apartment Allottee(s) Arrangement and/or from the date of start of construction of Group Housing named as "Wave Gardens"
which is later."
This agreement was executed on 7.3.2013. In case the construction had started before the date of agreement then 36 months are to be counted from the date of construction. There was one Board displayed by the Op No.1 at the site in which date of construction has been referred as 16.10.2012 and date of completion as 15.10.2014. In case 16.10.2012 is taken as date of start of the construction then three years are to be counted and not two years. However, payment is to be made according to the construction. In case Op No. 1 failed to complete the construction as stipulated then Op No. 1 cannot compel the complainant to make the balance payment. Op No. 1 has not sticked to its schedule as given in the agreement then the complainant has a right to ask for the refund. Counsel for the complainants has made a reference to the judgment of the Hon'ble National Commission II (2014) CPJ 131 "PUDA versus Kanwalpreet Singh" that in case there is delay in handing over the possession, it amounts to Consumer Complaint No. 272 of 2016 14 deficiency in service and refund order can be passed. A reference has also been made to I (2017) CPJ 513 (NC) "Neha Suri versus Unitech Reliable Project Pvt. Ltd." In that case, the possession of the flat was not given as agreed. It amounts to deficiency in service. Amount deposited alongwith interest was ordered to be refunded. Similar order was passed in I (2017) CPJ 113 "Vishal Issar v. Park Wood Developers Pvt. Ltd.". This Commission has already held in Consumer Complaint No. 164 of 2016 "Harmit Singh Arora versus M/s Country Colonisers Private Limited", decided on 2.2.2017 against the same opposite party that in case possession of the apartment has not been given as agreed then it amounts to deficiency in service and that the complainants are not bound to pay further payments when the project is not coming at the site and refund alongwith interest was ordered. The present complaint is also on the similar facts.
9. No other point was argued.
10. In view of the above, we accept the complaint and direct Ops as under:-
(i) to refund the amount of Rs. 59,99,029.63p deposited by the complainant with Ops alongwith interest @ 12% minus pre-EMI interest already paid by Ops to financial institution.
(ii) pay Rs. 2,00,000/- on account of compensation and mental tension; and
(iii) Rs. 21,000/- as litigation expenses.
The above directions be complied within 45 days from the receipt of certified copy of the order.
Consumer Complaint No. 272 of 2016 15
11. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
12. Order be communicated to the parties as per rules.
(JUSTICE PARAMJEET SINGH DHALIWAL)
PRESIDENT
April 26, 2017. (GURCHARAN SINGH SARAN)
as JUDICIAL MEMBER