State Consumer Disputes Redressal Commission
Harjit Singh Anand vs M/S Manohar Infrastructure & ... on 18 January, 2021
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 117 of 2020 Date of Institution : 02.07.2020 Date of Decision : 18.01.2021 Harjit Singh Anand S/o Sh.Avtar Singh R/o H.No.3445, Sector 71, S.A.S. Nagar, Mohali, Punjab-160062. ......Complainant V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its office at SCO 139-141, Sector-17-C, Chandigarh through its Directors Sh.Tarninder Singh and Sh.Narinderbir Singh. Tarninder Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., having office at SCO 139-141, Sector-17-C, Chandigarh. Narinderbir Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., having office at SCO 139-141, Sector-17-C, Chandigarh. .....Opposite parties Present through video conferencing: Sh.Savinder Singh Gill, Advocate for the complainant. Sh. I.P. Singh, Advocate for the opposite parties. ================================================================ Complaint case No. : 118 of 2020 Date of Institution : 02.07.2020 Date of Decision : 18.01.2021 Kawaljit Kaur W/o Sh.Harjit Singh Anand R/o H.No.3445, Sector 71, S.A.S. Nagar, Mohali, Punjab-160062. ......Complainant V e r s u s V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Ltd., having its office at SCO 139-141, Sector-17-C, Chandigarh through its Directors Sh.Tarninder Singh and Sh.Narinderbir Singh. Tarninder Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., having office at SCO 139-141, Sector-17-C, Chandigarh. Narinderbir Singh, Director of M/s Manohar Infrastructure & Constructions Pvt. Ltd., having office at SCO 139-141, Sector-17-C, Chandigarh. .....Opposite parties Present through video conferencing: Sh.Savinder Singh Gill, Advocate for the complainant. Sh. I.P. Singh, 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 two consumer complaints. Since, the issues involved in the above complaints, except minor variations, here and there, of law and facts 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 respective complainants, who are infact husband and wife, 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 plots booked by them, in their (opposite parties) project, for dearth of construction and development activities. Details with regard to the project in dispute; plots booked; payments made by the complainants etc. of these complaints are given below:-
CC No. 117 of 2020 118 of 2020 Project name Palm Springs, Mullanpur, New Chandigarh, Punjab Palm Springs, Mullanpur, New Chandigarh, Punjab Plot booked on 17.01.2011 20.01.2011 Area of the plot 350 sq. yds 250 sq. yds Total cost 6125000.00 4375000.00 Earnest amount received at the time of booking 1837500.00 1312500.00 Amount paid as claimed in the complaint 3666250.00 (correction of amount got done by way of moving application which was allowed vide order dt. 18.12.2020 by this Commission) 2844250.00 Agreement dated Not executed Not executed Possession offered or not Not offered Not offered Delay in years More than 9 years from the date of booking More than 9 years from the date of booking Allottee Original allottee Original allottee It has been pleaded that despite the fact that substantial amount, as mentioned in the chart above, stood paid to the opposite parties, yet, actual physical possession of the plots purchased by the complainants has not been 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. It has been stated that, initially, the complainant in CC No.117 of 2020 had booked three plots in the project of the opposite parties launched by them under the name and style "Venetian City", for the future prospects of his children and grandchildren being an oldest family but due to financial constraints, the amounts paid against those three plots were adjusted in the two plots, one in the name of the complainant and another in the name of his wife, out of which these complaints have arisen.
By stating that the aforesaid act and conduct of the opposite parties, in both the complaints, amount to deficiency in providing service and adoption of unfair trade practice, these complaints have been filed by the complainants.
The claim of the complainants, in both the 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 they being investors, did not fall within the definition of "consumer" as they had booked 5 plots with the opposite parties and later on they cancelled 3 plots meaning thereby that they are in a habit of sale and purchase of properties for speculative purposes; 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; select plot; and sign buyer agreements 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 25.09.2017; 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 disputed questions of facts and law are involved in these complaints, as one of the payments of Rs.1,23,750/- and also Rs.1,76,750/- allegedly paid in the respective complaints are disputed and no receipts thereof have been placed on record, as such, the same cannot be entertained by this Commission; that the complainants were defaulters in making payment as a result whereof number of reminders were sent in the matter; 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 13.06.2020 and now has been further extended upto 31.12.2022. It has been stated that claim of the complainants seeking higher rate of interest on the deposited amount is totally unjustified. Rather, it should be as specified under Section 19 of the RERA i.e. MCLR + 2% interest or @6% p.a. as has been awarded by the Hon'ble Supreme Court in Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd. (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, 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 i.e. within the extended period, 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 occurred, also on account of shortage of building material and ban on mining by the Government concerned; that possession of the plots were to be delivered within a period of 5 years from the date of booking; that due to COVID-19 also the development at the projects was hampered and the Govt. and Banks have come forward to help the builders/developers; and that the complainants may come forward for execution of the agreements and taking over possession of their respective plots. The fact that opposite parties no.2 and 3 are Directors of the Company has not been disputed. Remaining averments of the complaints have been denied.
During pendency of consumer complaint bearing no.117 of 2020, the complainant moved an application bearing no.594 of 2020 stating therein that the amount paid by him has been wrongly mentioned as Rs.18,37,500/- in the relief clause instead of Rs.36,66,250/-, as such, amendment in that regard was sought to be made by him, which was allowed vide order dated 18.12.2020.
In the rejoinder filed, the complainants, in both the complaints have reiterated all the averments contained in their respective complaints and have controverted those contained in written replies filed by the opposite parties, in the respective cases.
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 party concerned, very carefully.
In these cases, following moot questions have emerged for consideration: -
Whether this Commission has territorial jurisdiction to entertain these complaints?
Whether the complainants fall under the definition of consumer?
Whether this Commission is competent to entertain these complaints?
Whether the complaints filed are time barred?
Whether time was essence of the contract?
Whether there was any deficiency in rendering service, negligence and unfair trade practice on the part of the opposite parties?
Whether the complainants are entitled to get refund of the amount paid alongwith interest and if yes, what amount and at what rate?
First coming to the objection regarding territorial jurisdiction, it may be stated here that perusal of payment receipts dated 10.03.2015 in the sum of Rs.4,80,000/- and 10.03.2015 in the sum of Rs.12,25,000/- (in CC No.117 of 2020) and payment receipts dated 10.03.2015 in the sum of Rs.8,75,000/- and 10.03.2015 in the sum of Rs.4,80,000/- (in CC No.118 of 2020) have been issued by Chandigarh Office of the Company i.e. Manohar Infrastructure and Constructions Pvt. Ltd., SCO No.139-141, First Floor, Sector 17-C, Chandigarh, meaning thereby that the opposite parties were actually and voluntarily residing and carrying on their business, at the said Chandigarh Office for gain. Not only as above, the said fact is further fortified when we perused the information dated 05.10.2020 (at page 98 and 99 of the paper books) placed on record by Counsel for the opposite parties, in both the consumer complaints 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.
As far as 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 both the complaints have purchased the plots in question to indulge in 'purchase and sale of plots' 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, in the first instance, the complainants have purchased three plots for the future of their children and grandchildren or that they have purchased two plots thereafter after cancelling the allotment of aforesaid three plots, 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....."
In this view of the matter, objection taken by the opposite parties, stands rejected.
There is no dispute with regard to purchase of plots 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 both the 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 plot nos. were allotted nor agreements were executed between the parties nor thereafter development work was completed at the project site and possession has not been offered till date.
In both the complaints aforesaid, the complainants, through their Counsel, have submitted that the opposite parties failed to provide plot nos. and agreements for signatures of the complainants, within a reasonable period after booking of the plots 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 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, the opposite parties had already received an amount of Rs.18,37,500/- in CC No.117 of 2020 and Rs.13,12,500/- in CC No.118 of 2020, 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; 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 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 i.e. 11.02.2014 (in CC No.117 of 2020) and 11.02.2014 and 31.07.2015 (in CC No.118 of 2020). In these letters not even a single word has been mentioned regarding plots nos. or 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 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 now as per Notification dated 30.01.2020, they are liable to complete the same by 31.12.2022. 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 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) ;
Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots.
(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 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, 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.32 (preliminary objections in CC Nos.117 and 118 of 2020) 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 para no.21 of the preliminary objections in both the 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, 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.
Now coming to non-offering of possession of the plots to the complainants, it may be stated here that the opposite parties in their written reply in para nos.11 (in preliminary objections) of both the 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 (most of which pertain to the flats), 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. 11 of both the complaints, referred to above, it has been stated that the development work is near completion, whereas in para no.32 (preliminary objections) in both the complaints, it has been stated that as per notification dated 30.01.2020 issued by the Govt. of Punjab, the period of completion of the project has been extended upto 31.12.2022. 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 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 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 plot 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, despite the fact that the same were booked as far as back in 2011, 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, in any of the complaints above, as such; possession of the plots 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 16.01.2014 in CC No.117 of 2020 booking date being 17.01.2011 and 19.01.2014 in CC No.118 of 2020 booking date being 20.01.2011, which have not been do so far and still the opposite parties are seeking more time and infact till 2022. 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 occurred. As such, plea taken by the opposite parties, in this regard, is 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 disputed questions of facts and law are allegedly contained therein, it may be stated here that these are the simple cases of non allotment of plot 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 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. No doubt, in CC No.117 of 2020, the complainant has claimed that he has paid an amount of Rs.36,66,250/- and in CC No.118 of 2020 the complainant has claimed that she has paid an amount of Rs.28,44,250/-. However, when we peruse the documents of CC No.117 of 2020 it is found that the complainant in this complaint has been able to prove the payment made only to the extent of Rs.35,42,500/- and there is no record wherefrom it could be revealed that the remaining amount of Rs.1,23,750/- has also been paid by him. In case, the said amount was paid by him in cash, as claimed by the complainant, then certainly he would have been issued receipt in that regard, but the same has not been placed on record despite the fact that opportunity was available with him to do so, especially when the said fact was challenged by the opposite parties. Similar is the case in CC No.118 of 2020, as the complainant has failed to place on record the payment receipt in respect of the amount paid by her to the tune of Rs.1,76,750/- in cash out of Rs.28,44,250/- to the opposite parties. Under these circumstances, it is held that the complainants have paid an amount of Rs.35,42,500/- in CC No.117 of 2020 and Rs.26,67,500/- in CC No.118 of 2020 only to the opposite parties towards price of their respective plots. However, liberty shall remain with the complainants, in both the complaints, to recover the said amount from the opposite parties, if later on, they are able to prove the payment of the amounts in dispute, under the platform of law available to them. Thus, because of this petty dispute, which has been resolved by this Commission in the manner explained above, the complaints cannot be relegated to the civil court. Objection taken 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 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 plot nos.; execute agreements and then deliver possession of the plots in question to the complainants, and the nature of such transactions is covered by the expression 'service'. Our this 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 cases (supra). Relevant part of Haryana Agricultural Marketing Board cases (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 alloted plot nos.; nor executed buyers agreement; nor delivered possession of the plots purchased by 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 both the 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 on 06.10.2020, 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. 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 within a reasonable period of three years after booking of the plots in question or even by October 2020 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 execution of agreement and also for taking over possession of the plots, 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 development will be completed and possession of the plots will be delivered to the complainants and on the other hand still they are saying that the time period for completion of the project could be upto 2022, 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 principle of law laid down 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, in the respective complaints, that will meet the ends of justice.
The opposite parties have also placed reliance on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra), to say that since in this case, the Hon'ble Supreme Court of India has awarded interest @6% p.a., 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 Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra) and found that, in the first instance, the said order has been passed with regard to compensation for delay in offering possession of the units therein and also over and above the interest rate of 6% p.a. the penalty amount as mentioned in the agreement has also been ordered to be paid to the complainants by the builder. Since, in the present case, the complainants have sought refund of the amount paid, as such, reliance placed by the opposite parties on Wg. Cdr. Arifur Rahman Khan and Aleya Sultana 's case (supra) is misplaced.
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 in question has not been delivered even by the dates when these complaints had been filed before this Commission or 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.
In their replies filed, the opposite parties also submitted that since the Govt. of Punjab has given extension to all the projects in Punjab and other States for completion thereof, as such, time was not to be considered as essence of the contract. We do not agree with the submission made for the reasons recorded hereinafter. Firstly, we have gone through the contents of Notification dated 30.01.2020, Annexure -O-8 (in CC No.117 of 2020), issued by the Govt. of Punjab whereupon reliance has been placed by the opposite parties to say that they were granted extension till 31.12.2022 for completion of the project and found that the validity of licences of only the colonies for which outstanding dues of EDC etc. have been deposited by way of post dated cheques in compliance to Government notification dated 28.11.2019, were deemed to have been extended upto 31.12.2022. Secondly, we have also gone through the letter dated 25.09.2018 (Annexure O-10) placed on record in CC No.117 of 2020, which clearly shows that extension if any for completion of development works has been granted only in respect of additional land added by the opposite parties in the said project and not for the area where the plots in dispute are located, which had already been sold to the complainants long back in the year 2011, as mentioned in the chart above. It has nowhere been mentioned in the letter dated 25.09.2018 (Annexure O-10) or Notification dated 30.01.2020, Annexure-O-8, that the builders/developers who have adopted unfair trade practice and are deficient in providing service by not even allotting plot nos. and executing buyer agreements despite receiving substantial amount from the buyers as far as back in 2011; launched the project and sold the units therein without obtaining approvals from the competent Authorities and have cheated their customers, are also covered under the said extension for completion of the project. As such, no help can be drawn by the opposite parties from the letters aforesaid, as far as the present cases are concerned.
As stated above, it is well settled law that when there is no specific date provided to the buyer in respect of delivery of possession of the plot/unit or there is no agreement executed between the parties, then a reasonable period of two to three years for the same, from the date of booking has to be taken into consideration. Our view is supported the judgment passed by the Hon'ble Supreme Court of India in Fortune Infrastructure case (supra). Thus, objection taken by the opposite parties to the effect that time was not to be considered as essence of the contract stands 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 in view of principle, referred to above, laid down by the Hon'ble Supreme Court in Haryana Urban Development Authority (supra). 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 possession of the plots in question, it may be stated here that this plea would have been considered, in case, the complainants had sought possession of their respective plots. Since, the complainants are entitled to refund of amount paid alongwith interest, in view of the reasons stated above, such a plea taken by the opposite parties could not be accepted and is accordingly rejected.
For the reasons recorded above, both the complaints are partly accepted with costs, in the following manner:-
In CC No.117 of 2020, the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.35,42,500/- to the complainant, alongwith interest @12% p.a., without deducting any TDS, 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. 35,42,500/- 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.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.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.
In CC No.118 of 2020, the opposite parties, jointly and severally, are directed as under:-
Refund the amount of Rs.26,67,500/- to the complainant, alongwith interest @12% p.a., without deducting any TDS, 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. 26,67,500/- 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.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.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, 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.
Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case file.
The files be consigned to Record Room, after completion.
Pronounced.
18.01.2021 Sd/-
[RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Sd/-
(RAJESH K. ARYA) MEMBER Rg.