State Consumer Disputes Redressal Commission
Surinder Kaur Palha vs Shourya Towers Pvt. Ltd. on 7 December, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
Consumer Complaint No.364 of 2016
Date of institution : 22.11.2016
Reserved on : 22.11.2017
Date of decision : 07.12.2017
1. Surinder Kaur Plaha w/o Harminder Singh Plaha r/o
LERKEVEIEN-2D, OSLO, 1053, NORWAY at present
Kartarpur, District Jalandhar through G.P.A. Joginder Singh s/o
Mohan Singh, resident of Surjan Singh Street, Kartarpur,
Jalandhar.
2. Harminder Singh Plaha s/o Jaswant Singh Plaha r/o
LERKEVEIEN-2D, OSLO, 1053, NORWAY at present
Kartarpur, District Jalandhar.
.......Complainants
Versus
1. SHOURYA TOWERS PVT. LTD., B-111, Sector 5, NOIDA-
201301 U.P. and 78-B, Sector D-2, GROUP-II, DDA FLAT,
KONDLI GHAROLI, MAYUR VIHAR, PHASE-III, DELHI-96
through its Chairman/Auhorised Director.
2. NITISHREE INFRASTRUCTURE Ltd., having its registered
office at B-111, SECTOR-5, NOIDA-201 301 U.P.
3. NITISHREE INFRASTRUCTURE LTD. having its Site Office at
SHOURYA GREEN, SURYA ENCLAVE, AMRITSAR BYE-
PASS.
........Opposite Parties
Consumer Complaint No.364 of 2016 2
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member
Present:-
For the complainants : None.
For the opposite parties : Shri Ramnik Gupta, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The complainants, Surinder Kaur Plaha and Harminder Singh Plaha, who are husband and wife, have filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, "C.P. Act") through their General Power of Attorney; namely, Joginder Singh son of Shri Mohan Singh, for the issuance of following directions to the opposite parties:-
i) to refund ₹25,75,413/- to the complainants along with interest at the rate of 18% per annum from 1.1.2010 till realization;
ii) to pay ₹6,54,925/- as liquidated damages @ ₹5/- per square foot along with interest at the rate of 18% per annum from 1.1.2010 till realization;
iii) to pay ₹3,00,000/- as compensation on account of mental tension, agony, inconvenience, harassment and travelling expenses; and
iv) to pay ₹1,00,000/- as cost of litigation.
Facts of the Complaint:
2. Brief facts, as stated in the complaint, are that the complainants are Non-Resident Indians and are permanent Consumer Complaint No.364 of 2016 3 residents of Norway. The pleaded case of the complainants is that they were settled in Norway for the last so many years and as such, they were desirous of having their own house in Punjab especially in Jalandhar as they wanted to spend fag end of their life in homeland.
In the year 2008 the complainants came across an advertisement published by the opposite parties regarding the construction of Flats at Surya Enclave, Jalandhar under the Project known as 'SHOURYA GREENS' and also known as 'LOTUS TOWERS' at Surya Enclave, Jalandhar. Being allured by the advertisements the complainants booked a 3 BHK flat measuring 1955 square feet at Lotus Towers also known as 'SHOURYA GREENS' and deposited the requisite amount of consideration for the allotment. Vide letter dated 7.1.2009 the allotment letter was issued asking the complainants to enter into an Agreement, which was signed on 8.1.2009. As per the terms of the Agreement, construction of the said Apartment in Residential Complex will be completed and possession will be delivered by the end of December 2009. It was also one of the terms of the Agreement that in case of delay in handing over the possession of the flat the complainants will be entitled to ₹5/- per square foot per month to them on the basis of area of the flat as liquidated damages. The complainants had fully complied with the terms and conditions of the Agreement and paid an amount of ₹25,75,413/-, as demanded by the opposite parties from time to time. However, the opposite parties did not abide by the terms and conditions of the Agreement as well as oral assurances and did not hand over possession of the flat by the end of December 2009 and even till the date of filing of the Consumer Complaint No.364 of 2016 4 complaint. When enquiries were made it was found that there was no progress on the site. Thereafter letter dated 12.11.2013 was received whereby further amounts were demanded by the opposite parties without completing the construction and without any progress at the spot. The complainants called the opposite parties a number of times from Norway but no satisfactory reply was given. Even brother of complainant No.2 also visited the office of the opposite parties 5-6 times but they dilly-dallied the matter on one pretext or the other. Being frustrated from the false assurances of the opposite parties, the complainants especially came to India in the month of July 2015 after spending lakhs of rupees and visited the office of the opposite parties but were astonished to find that flats had not been constructed at the spot and only false assurances were being given from time to time. It is also pleaded that the complainants are also entitled to liquidated damages in view of clause 9 of the Agreement. The complainants visited the office of the opposite parties and requested for delivery of possession of the flat in question, complete in all respects or to refund the entire amount along with interest at the rate of 18% per annum along with liquidated damages but they refused to do so. The complainants received letter dated 17.6.2015 from the opposite parties that the construction was to resume on 22.7.2015, which clearly shows that the opposite parties are not adhering to the terms and conditions of the Agreement in-spite of getting the substantial amount deposited from the complainants against the price of the flat in question. Alleging deficiency in service and adoption of unfair trade practice, Consumer Complaint No.364 of 2016 5 the complainants filed the present complaint for issuance of the aforementioned directions to the opposite parties. Defence of the Opposite Parties:
3. Upon notice joint reply was filed through authorized representative of the opposite parties taking preliminary objections that the case can be referred to the arbitrator as per the terms of the Agreement. The complainants have entered into Buyer's Agreement with the opposite parties and as per clause 43 of the said Agreement the matter can only be settled through arbitration and not by deciding the present complaint. Reference to various judgments has been made. The complaint seeking refund with interest and damages is not maintainable. ₹4,11,268/- is still outstanding against the complainants and they are defaulters and as such they are not entitled to claim any relief. The contract between the parties is a reciprocal contract and cannot be enforced in the manner by filing the complaint since the complainants failed to pay the amount due.
The complainants could only seek refund of the amount with 8% interest by serving a notice within 90 days for terminating the agreement and in the present case it is the specific allegation of the complainants that the possession was to be delivered by the opposite parties by December 2009 as per the Agreement and even if the grace period of three months is added to the said due date then the possession was required to be given by March 2010. Therefore, the complaint seeking the refund of the amount deposited could have been filed only upto March 2012 and not beyond that but the present complaint having been filed in the year 2016 is certainly Consumer Complaint No.364 of 2016 6 beyond the period of limitation of two years as provided under the C.P. Act. The dispute raised in the present complaint is complex in nature, which needs detailed scrutiny of various technical aspects since the unsubstantiated allegations have been raised by the complainants, which cannot be decided in summary manner under the C.P. Act. The opposite parties in order to prove their case invariably require to produce witnesses, to cross-examine and re- examine the complainants and their witnesses. The Improvement Trust Jalandhar has granted rights to the opposite parties to develop residential housing project and for said purpose the Improvement Trust, Jalandhar entered into agreement dated 5.8.2005 under "Public Private Partnership' with them. In para no.5 on merits, it is submitted that booking of flat, issuance of Allotment Letter, execution of the Buyer's Agreement and payment made by the complainants are matter of record. It is also admitted that there is a clause in the Agreement for payment of ₹5/- per square foot per month of the total area of the flat for the delayed period as liquidated charges. Denying all other averments made in the complaint, a prayer for dismissal of the complaint was made.
Evidence of the Parties:
4. In order to prove their case, the complainants tendered in evidence affidavit of their GPA Joginder Singh son of Mohan Singh as Ex.CA along with documents Ex.C-1, Ex.C-1/A, Ex.C-1/B, Ex.C-2 to Ex.C-6. On the other hand, the opposite parties tendered the affidavit of their authorized person, Parveen Chand Mishra, as Ex.OP-A and documents Ex.RW-1 to Ex.RW-4.Consumer Complaint No.364 of 2016 7
5. We have carefully gone through the averments of the parties and the evidence produced by them in support of those averments.
We have also heard learned counsel for the opposite parties as none appeared on behalf of the complainant.
Contentions of the Opposite Parties:
6. Besides oral arguments the opposite parties also submitted written arguments. It was argued by the learned counsel for the opposite parties that the present complaint, affidavit in support of the complaint and affidavit tendered in evidence by alleged attorney;
namely, Joginder Singh son of Mohan Singh is not maintainable as there is no provision for leading evidence for and on behalf of the complainants. The Attorney cannot replace the party for adducing evidence. The vakalatnama is not signed by aforesaid Joginder Singh in the capacity of attorney of the complainants and the said vakalatnama does not bear the signatures of the Advocate and as such, deemed to have not been accepted by the Advocate. An amount of ₹4,11,268/- is still outstanding against the complainants and the opposite parties sent repeated demand notices to them to pay the same, vide letters dated 12.9.2016, 13.10.2016 and 7.1.2017 but the complainants failed to pay the said amount. Therefore, the complainants have acquired the status of the defaulters and they are not entitled to claim any relief by way of present complaint. It was further argued that this Commission has no jurisdiction as per clause 43 of the Agreement. The complaint is hopelessly time barred as the cause of action, if any, accrued to the complainants on 8.1.2009 and the complaint has been filed after Consumer Complaint No.364 of 2016 8 more than two years. The opposite parties carried out construction at project site and time and again approached the Trust for the purpose of taking various approvals as per terms and conditions contained in the Agreement dated 5.8.2005. In process of construction and completion of project they filed revised plans for 20 towers on 17.12.2007, however, despite of taking all proactive steps to complete the construction, Trust failed to clear approvals on time which has caused delay in completion of the project. The opposite parties made various representations to the Trust for expeditious completion of formalities but due to delay tactics of the Trust the project was delayed which is not attributable to negligence of the opposite parties at all. The flat of the complainants is near to completion and ready to hand over provided the payment as due and demanded is made by the complainants before claiming the possession. The complaint is nothing but gross abuse of process of law. The present complaint is filed by the complainants by suppressing material facts and also by distorting actual facts of the case. Entire complaint is nothing but pressure tactics adopted by them to exert pressure on them and an escape route to wriggle out of their contractual obligations. The complaint is false and frivolous and is of such nature which requires extensive trial. Thus, the matter needs to be adjudicated by the Civil Court, if any, as it is well settled that Consumer Forum cannot divulge into dispute which requires adjudication of complicated question of fact. In the last it is argued that the agreement entered between the parties is subject to arbitration clause and relied upon the judgments of the Hon'ble Consumer Complaint No.364 of 2016 9 Supreme Court of India in "Hindustan Petroleum Corpn. Ltd. v. Pinkcit Midway Petroleums", III(2003) CLT 17 (SC) and "Agri. Gold Exim Ltd. v. Sri Lakshmi Knits & Wovens & Ors." I(2007) CLT 310, in which the Hon'ble Supreme Court has taken consistent view that existence of arbitration clause makes it mandatory for judicial authority to refer parties to arbitration as Section 8 of the Arbitration and Conciliation Act, 1996, is peremptory in nature. He prayed that there is no merit in the present complaint and the same is liable to be dismissed.
Consideration of Contentions:
7. We have given our thoughtful consideration to the arguments raised by the learned counsel for the opposite parties as none appeared on behalf of the complainants.
8. So far as the arbitration clause 43 in the Agreement dated
8.1.2009, Ex.C-1 is concerned, this point has already been discussed exhaustively and decided by this Commission in M.A. No.1587 of 2015 in Consumer Complaint No.73 of 2015 (Jatinder Pal Singh & Anr. Vs. M/s Bee Gee Builtech & Anr.) decided on 08.03.2017 and, after discussing various judgments of the Hon'ble Supreme Court and National Commission, it was held that the remedy, provided under Section 3 of C.P. Act is an independent and additional remedy and existence of an arbitration clause in the agreement to settle disputes through arbitration will not debar the Consumer Fora, to entertain the complaint, filed by the consumer.
9. Recently also, the Larger Bench of the Hon'ble National Commission, vide order dated 13.07.2017, passed in Consumer Consumer Complaint No.364 of 2016 10 Complaint No.701 of 2015 titled as "Aftab Singh Versus EMAAR MGF Land Limited & Anr held that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Therefore, the aforesaid objection raised by the opposite parties in the present case is rejected.
10. Similarly the territorial jurisdiction of this Commission cannot be restricted by adding few lines in the Agreement that all disputes shall be settled in the territorial jurisdiction of Delhi as the project is situated in Jalandhar. The payments were also made at Jalandhar and correspondence was also made at that place. Therefore, this Commission has got the territorial jurisdiction to entertain and decide this complaint and this plea of the opposite parties is also rejected.
11. Another objection taken by opposite parties is that complicated question of law and facts are involved, therefore, the matter be relegated to the civil court. In case we go to the background of the case, on opening of the scheme by the opposite parties the complainant had opted for the flat and despite making the substantial payment, the opposite parties delayed delivery of possession. It is a simple of case of purchasing of a flat by the complainants from the opposite parties. The Benches in the State Commission and the District Forums are headed by the Retired High Court Judges and retired District and Sessions Judges, who have very good experience at their back and are fully competent to adjudicate this type of matters and the evidence is complete, therefore, we are of Consumer Complaint No.364 of 2016 11 the opinion that the Commission has the competency to decide the complaint and the same is not required to be relegated to the civil court. Reference can be made to the law laid down by the Hon'ble National Commission in "Shiv Kumar Aggarwal Versus Arun Tandon and another", 2007 (2) CLT 287. In that case a plea that case involves complicated questions of fact and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled- Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. When both the parties have completed their evidence then it is not proper to relegate the matter to the Civil Court and the District Forum should have decided the matter. Therefore, we do not agree with the plea of the opposite parties that matter in dispute cannot be decided before the Consumer Fora or that it should be relegated to the Civil Court. A reference can be made to the judgment of the Hon'ble Supreme Court in the case of "Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi", 2002 (6) SCC 635 in which it has been observed as under:-
"the State Commission and District Forum are headed by retired High Court Judges and Officer of District Judge level and in our view, this is not such a case which cannot be decided by the 'Consumer Fora' after obtaining evidence and if need be after getting an expert opinion.
If the evidence is complete then matter can be decided by the Consumer Fora."Consumer Complaint No.364 of 2016 12
12. Next objection taken by the opposite parties is that the complaint is barred by limitation. The flat was booked in the year 2009 and allotment letter was issued on 7.1.2009 and the possession was to be delivered in the end of December 2009 but it was not delivered till the date of filing of the complaint. Hon'ble National Commission in "Navin Sharma (Dr. ) & others v. Unitech Reliable Projects Pvt. Ltd. & Anr." 2016(2) CLT 457 has held that unless or until the complainants get possession of the flats, they have got continuous cause of action. In para 8 of the said judgment it has been observed by the Hon'ble National Commission as under:-
"8. The first submission made by the counsel for the opposite party was that the case is barred by time. This argument was raised merely for the sake of cavil. It is now well settled that unless or until the complainants get the possession of the flats, they have got continuous cause of action. This view finds support from this authority reported in "Raghava Estates Ltd. v. Vishnupuram Colony Welfare Association"
Special Leave to Appeal (Civil) No.35805 of 2012, decided on 07.12.2012."
Therefore we are of the opinion that the complaint so filed by the complainants is within limitation.
13. It is next argued that the complaint, affidavit in support of the complaint and affidavit tendered in evidence by the alleged attorney; namely, Joginder Singh son of Mohan Singh is not maintainable as there is no provision for leading the evidence for and on behalf of the complainants. So far as this contention of the opposite parties is Consumer Complaint No.364 of 2016 13 concerned, in the very first para of this complaint it has been stated that the complainants are NRIs and are permanent residents of Norway and are filing the present complaint through their lawful attorney; namely, Joginder Singh son of Mohan Singh, resident of Sujan Singh Street, Kartarpur, Jalandhar. Once the complaint has been filed through the attorney then the attorney holder can do every act as per the attorney. He is also competent to tender his affidavit and evidence. Therefore, there is no merit in this objection of the opposite parties and the same is hereby rejected.
14. Coming to the facts of the case, admittedly the complainants booked the flat in question with the opposite parties for a total sale consideration of ₹29,53,425/- i.e. Basic Sale Price of ₹27,65,176/-, Other Charges of ₹1,64,775/- and IFMS of ₹23,475/- and paid a sum of ₹25,75,413/- towards the price of the flat in question, which comes to 90% of the total price of the flat in question and the balance 10% was payable at the time of delivery of possession. Agreement between the parties was executed on 8.1.2009 Ex.C-1 and as per clause 9 thereof, the possession of the flat in question, complete in all respects, was to be delivered by the opposite parties to the complainants by the end of December 2009 with a grace period of three months, subject to the delays due to non-availability of construction materials and labour etc. It is not the case of the opposite parties that there was delay due to non-availability of construction materials and labour etc. However, the same has not been delivered to the complainant till today even after the lapse of more than 8 years. There is no progress at the site in question and Consumer Complaint No.364 of 2016 14 the project is lying abandoned. There is no possibility of delivery of possession of the flat in question to the complainants in near future. Therefore, this act of the opposite parties not only amounts to deficiency in service but also adoption of unfair trade practice on their part.
15. As per Section 3 (General Liabilities of Promoter) of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"), the opposite parties were required to make full and true disclosure of the nature of their title to the land, on which such colony is to be developed or such building is constructed or is to be constructed, 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. They were also required to give inspection on seven days' notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with Section 3 of the PAPRA.
16. As per Section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they also violated Section 5 of PAPRA.
17. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/apartments/flats, but no evidence has been led on the record Consumer Complaint No.364 of 2016 15 by the opposite parties to prove that any account has been maintained by them in this respect. There is no evidence or pleading on record on behalf of the opposite parties in this respect. As such, the opposite parties also violated Section 9 of the PAPRA.
18. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainants-buyers was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. They are not to play the game at the cost of others. When they insist upon the performance of the promise by the consumers, they are to be bound by the reciprocal promises of performing their part of the Agreement.
19. By executing the Agreement Ex.C-1 and receiving the amount more than ₹25,000/- the opposite parties violated the provisions of PAPRA. They were not competent to execute the Agreement in respect of the flat and to receive different amounts. These acts on the part of the opposite parties amount to adoption of unfair trade practice. In these circumstances the complainants are entitled to the refund of the amount so paid by them. The opposite parties cannot withhold their amount and are liable to refund the same along with interest.
20. The C.P. Act came into being in the year 1986. It is one of the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. There is not an iota of evidence led by the opposite parties to rebut the averments made Consumer Complaint No.364 of 2016 16 in the complaint by way of authenticated documentary evidence. The complainants have made payment of substantial amount to the opposite parties with the hope to get the possession of the Flat in a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and construction in a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainants. Had the complainants not invested their money with the opposite parties, they would have invested the same elsewhere. There is escalation in the price of construction also. The complainants have suffered loss, as discussed above. The builder is under obligation to deliver the possession of the flat within a reasonable period. The complainants cannot be made to wait indefinitely to get possession of the flat booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builder knew from the very beginning that they had not complied with the provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period, thus by misrepresenting induced the complainants to book the flat, due to which the complainants have suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainants is a deposit held by the Consumer Complaint No.364 of 2016 17 opposite parties in trust of complainants and it should be used for the purpose of developing the flats, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainants for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainants, are also required to be taken into consideration for awarding compensation. In addition to that they are also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by them on account of the betrayal by the opposite parties in shattering their hope of getting the flat by waiting for all this period.
21. Under Section 12 of the PAPRA read with Rule 17 of the Rules framed thereunder, if the amount is to be refunded, it is to be refunded along with interest at the rate of 12% per annum.
22. Since the complainants are seeking refund of the money, therefore, the liquidation charges cannot be awarded. However, the same will take care by the interest being paid on the amount so deposited by the complainants.
23. In view of our above discussion, the complaint is allowed and the following directions are issued to the opposite parties: Consumer Complaint No.364 of 2016 18
i) to refund the amount of ₹25,75,413/- to the complainants, along with interest at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA; and
ii) to pay ₹80,000/-, as compensation for mental harassment and agony suffered by the complainants including litigation expenses.
24. The opposite parties shall comply with the order within 30 days of the receipt of certified copy thereof, failing which the compensation amount of ₹80,000/- shall also carry interest at the rate of 12% from the date of this order till realization.
25. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER December 07, 2017 Bansal