State Consumer Disputes Redressal Commission
Punjab Urban Planning And Development ... vs Shyana Loona on 10 November, 2023
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.464 of 2022
Date of institution : 31.05.2022
Reserved On : 30.10.2023
Date of decision : 10.11.2023
Punjab Urban Planning and Development Authority, through Estate
Officer, Punjab Urban Planning and Development Authority (Bathinda
Development Authority), PUDA/BDA Complex, Bhagu Road, Bathinda.
....Appellant/OP
Versus
Shyana Loona, aged 34 years, wife of Varun Nagpal, resident of C/o
Mahesh Loona, # 4884-A, Amar Colony, Near Bus Stand, Fazilka,
District Fazilka.
....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 26.10.2021 passed by the
District Consumer Disputes Redressal
Commission, Faridkot.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present:-
For the appellant : Sh. Ishan Thakur, Advocate for Sh. L.S. Sidhu, Advocate For the respondent : Sh. Nishant Sidhu, Advocate for Sh. Avikaran Bansal, Advocate.First Appeal No.464 of 2022 2
JUSTICE DAYA CHAUDHARY, PRESIDENT Appellant/OP i.e. Punjab Urban Planning and Development Authority, through its Estate Officer has filed the present appeal under Section 41 of the Consumer Protection Act, 2019 to challenge the impugned order dated 26.10.2021 passed by the District Consumer Disputes Redressal Commission, Faridkot (in short, "the District Commission"), whereby the complaint filed by the respondent/ complainant had been allowed and the OP had been directed to refund an amount of ₹10,20,558/- along with interest at the rate of 9% per annum from the date of deposit of the amount till its realization along with compensation of ₹5,000/- and litigation expenses of ₹3,000/-
within a period of 45 days from the date of receipt of the copy of the order.
2. It would be apposite to mention here that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the respondent/complainant in the complaint filed by him before the District Commission are that the complainant had purchased a plot bearing No.620 measuring 125 sq.yds. in 'PUDA Enclave', 'Baba Farid University Site', Faridkot vide allotment letter dated 24.07.2015. The complainant had paid an amount of ₹10,20,558/- as total price of the plot and nothing remained due. The OP had promised to hand over the First Appeal No.464 of 2022 3 possession of the plot within a period of 18 months from the date of issuance of the allotment letter on completion of development works. As per the terms and conditions of the allotment letter, the OP was to provide all the amenities like water supply, sewerage connections, roads, drainage, streetlights etc. but it failed to provide all these basic amenities. The possession of the plot was not delivered to the complainant in-spite of making a number of requests. Further, it was mentioned that there was no demarcation of the plot at the site. The complainant had purchased the said plot for residential purpose but due to failure on the part of the OP in providing the requisite services, the complainant had to suffer a lot of harassment.
4. Stating to be a case of 'deficiency in service' and 'unfair trade practice' on the part of the OP, the complaint was filed with the prayer for issuance of directions to the OP to refund an amount ₹10,20,558/- so deposited along with interest at the rate of 12% per annum and also to pay compensation of ₹2 lac for causing mental agony and harassment to the complainant along with ₹50,000/- as litigation expenses.
5. Upon issuance of notice, the OP had appeared through counsel before the District Commission and filed written reply, wherein certain preliminary objections were raised stating therein that as per the terms and conditions of the allotment letter, the dispute or difference, if any, between the parties should have been referred to the First Appeal No.464 of 2022 4 Sole Arbitrator i.e. Chief Administrator, PUDA, Mohali and the Award passed by the Arbitrator was to be binding upon both the parties. Further it was mentioned that the complainant was having no cause of action to file the complaint, as there was no 'deficiency in service' in any manner. Other allegations/averments as made in the complaint were denied and it was prayed that the complaint be dismissed.
6. By considering the contents of the complaint and reply thereof filed by the OP, the complaint was allowed by the District Commission vide impugned order dated 26.10.2021. The relevant portion of said order as mentioned in Para-11 is reproduced as under:
"11 It is observed that there is no dispute regarding allotment of plot in question and even there is no denial of the fact that complainant has deposited entire sale consideration towards the costs of plot to OP, but OP have been deficient in fulfilling their promise of completion of development work. Moreover, OP have not produced on record any document or letter showing the fact that they ever informed complainant to take possession of plot in question. On the contrary, complainant has produced sufficient and cogent evidence to prove his pleadings, authenticity of which cannot be ignored. Therefore, in these circumstances, complainant is entitled for refund of entire amount deposited by him to OP alongwith interest. Hence, complaint in hand is hereby allowed. Opposite Party is directed to refund the amount of Rs.10,20,558/- to complainant alongwith interest at the rate of 9% per anum from date of deposit of payment till the date of realization of refund of the amount. Opposite Party is further directed to pay Rs.5,000/-to complainant as compensation for harassment and mental agony suffered by him besides Rs.3,000/- as litigation expenses. Compliance of this order be made within 45 days from the date of receipt of copy of this order. Copy of the order be supplied to parties free of cost as per law. File be consigned to the record room."
7. Said order dated 26.10.2021 passed by the District Commission has been challenged by the appellant/OP by way of filing the present appeal by raising a number of arguments. First Appeal No.464 of 2022 5
8. There was a delay of 151 days in filing of the appeal. Misc. Application No.782 of 2022 was filed for condonation of delay, which was supported by an affidavit. Said application was allowed vide order dated 02.06.2022 and the delay in filing of the appeal was condoned but subject to costs of ₹10,000/- to be deposited in the Consumer Legal Aid Account of this Commission within a period of 4 weeks.
9. Advocate Ishan Thakur, proxy for Mr. L.S. Sidhu, learned counsel for the appellant/OP has submitted that the District Commission while allowing the complaint had not taken into consideration a material fact that a public notice was got published in the Newspaper 'Daily Ajit' on 29.11.2017, whereby the allottees were informed that the development works at the site had already been completed and the allottees could take possession of their respective plots within a period of 10 days of the publication of notice in the Newspaper, failing which it was to be presumed that the possession of the same had already been delivered to the allottees like the complainant. However, the complainant had never approached the OP and even did not exercise the option as per Clause-10 of the allotment letter. Further it was also mentioned that in case the complainant was interested in taking refund of the amount, he should have moved/filed an application before the competent authority and the amount could have been refunded after deducting 10% of the amount so deposited. However, the complainant had also not exercised the said option. First Appeal No.464 of 2022 6 Learned counsel has further submitted that the impugned order passed by the District Commission is contrary to the terms and conditions of the allotment letter, as it was the fault of the complainant not to approach the competent authority for refund of the amount. Learned counsel has also submitted that the development works at the site had already been completed within the stipulated period as per the terms and conditions of the allotment letter and there was no 'deficiency in service' on the part of the OP. The District Commission has not taken into consideration the order dated 12.02.2020 passed by the Hon'ble National Commission in the case titled as Chief Administrator, Punjab Urban Developers Authority & Anr. v. Manju Chauhan, whereby the rate of interest was reduced from 12% to 6% per annum. However, the District Commission has awarded the interest at the rate of 9%. Therefore, the impugned order is liable to be set aside.
10. Advocate Nishant Sidhu, proxy for Mr. Avikaran Bansal, learned counsel for the respondent/complainant has submitted that the order passed by the District Commission is well reasoned and the same is based on proper appreciation of the evidence available on the record and no interference is required.
11. We have heard the arguments raised by learned counsel for the parties. We have also carefully perused the impugned order First Appeal No.464 of 2022 7 passed by the District Commission and all other relevant documents available on the file.
12. Facts regarding filing of the complaint by the complainant before the District Commission, reply thereto filed by the appellant/OP, allowing of said complaint and thereafter filing of the present appeal by the appellant/OP are not in dispute.
13. As far as the preliminary objection raised by the appellant/OP is that as per Arbitration Clause in the allotment letter, the matter between the parties was to be resolved through arbitration. It is relevant to mention here that the Larger Bench of the Hon'ble National Commission vide order dated 13.07.2017 passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh v. EMAAR MGF Land Limited & Anr., has held that an Arbitration Clause in the afore-stated kind of Agreements between the complainant(s) and the Builder cannot circumscribe the jurisdiction of a Consumer Fora/Commission notwithstanding the amendments made to Section 8 of the Arbitration Act, 1996. The Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed against the said order of the Hon'ble National Commission was also dismissed by the Apex Court, vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017 filed against the above said order dated 13.02.2018 was also dismissed by the Hon'ble Supreme Court, vide First Appeal No.464 of 2022 8 order dated 10.12.2018. Therefore, the existence of an Arbitration Clause in the allotment letter is not a bar to resolve the dispute between the parties by the Consumer Commission.
14. As far as the other objection of the appellant/OP as raised in its reply regarding limitation is concerned, admittedly the complainant had paid the entire sale price of the plot, in question, to the OP but neither the legal and actual possession of the plot with complete development/infrastructure had been delivered to him till date nor the amount so deposited by him had been refunded.
15. It is now well settled that in such cases, in the absence of the delivery of possession or refund of the amount, there is a continuous cause of action. Hon'ble National Commission in the case of "Navin Sharma (Dr.) & others v. Unitech Reliable Projects Pvt. Ltd. & Anr." 2016(2) CLT 457 has held that unless or until the complainants are given possession of the flats, they have a continuous cause of action. Para 8 of the said judgment is relevant, which is reproduced 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."First Appeal No.464 of 2022 9
16. In another case Satish Kumar Pandey & Anr. v. M/s Unitech Ltd. 2015 (3) CPJ 440 (NC), the Hon'ble National Commission has held in Para-17 as follows:
"17. It was next contended by the learned counsel for the respondent that since the last date stipulated in the buyers agreement for giving possession of the flat to them expired more than two years ago, the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. It is now settled legal proposition that failure to deliver possession being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers can always approach a Consumer Forum. It is only when the seller flatly refuses to give possession that the period of limitation prescribed in Section 24A of the Consumer Protection Act would begin to run. In that case, the complaint has to be filed within two years from the date on which the seller refuses to deliver possession of the flats to the complainants at any point of time and, therefore, the cause of action continues to subsist in favour of the complainants. Reliance in this regard may be placed upon the decision of the Hon'ble Supreme Court in Meerut Development Authority v. M.K. Gupta IV (2012) CPJ 12, where the Hon'ble Supreme Court held that in such a case the buyer has a recurrent cause for filing a complaint for non-delivery of possession of the plot."
17. In the present case also, since neither the actual and legal possession with complete development/infrastructure has been delivered nor the amount deposited by the complainant has been refunded till date, so in view of the ratio of the law laid down in the above noted judgments, it is a continuous cause of action and the complaint filed by the complainant was within the period of limitation.
18. Now coming to the merits of the case, admittedly the complainant was allotted plot bearing No.620 (Park Facing) measuring 125 sq.yds. The tentative price of the plot was fixed as ₹9,37,125/-. The complainant had paid total amount of ₹10,20,558/- to the OP. As per Clause-10 of the allotment letter (Ex.C-2), the possession of the First Appeal No.464 of 2022 10 plot was to be delivered on completion of development works at the site within 18 months from the date of issuance of the allotment letter. However, the OP had failed to deliver possession of the plot to the complainant within said period. Even the basic and agreed amenities were not provided at the site.
19. The stand taken by the OP is that the development works had already been completed at the site and a notice was got published in the Newspaper 'Daily Ajit', whereby the allottees, including the complainant, were called upon to take the possession of their respective plots. It is relevant to mention that in case the possession was ready in all respects at that time, the OP could have issued separate/individual notice to the complainant to take the possession, but it was not done, for which an adverse inference is to be drawn against the OP. Furthermore, in the absence of cogent and convincing evidence available on record about the completion of development works with the basic amenities in the scheme area, it cannot be said that the project of the OP was/is complete in all respects.
20. It is also relevant to refer the "Objects and Functions" given under Section 28 of the Punjab Regional and Town Planning & Development Act, 1995; which are reproduced as under:
28. Objects and Functions of the Authority:-
(1) The objects of the Authority shall be to promote and secure better planning and development of any area of the State and for that purpose the Authority shall have the powers to acquire by way of purchase, transfer, ex-change or gift or to hold, manage, plan, develop and mortgage or otherwise dispose of land or other property or to carry out First Appeal No.464 of 2022 11 itself or in collaboration with any other agency or through any other agency on its behalf, building, engineering, mining and other operations to execute work in connection with supply of water, disposal of sewerage, control of pollution and other services and amenities and generally to do anything with the prior approval or on direction of the State Government, for carrying out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing provisions, the Authority itself or in collaboration with any other agency or through any other agency on its behalf,-
(i) if so required by the State Government or the Board, take up the works in connection with the preparation and implementation of Regional Plans, Master Plans and New Township Plans and town improvement schemes;
(ii) undertake the work relating to the amenities and services to be provided in the urban areas, urban estates, promotion of urban development as well as construction of houses;
(iii) promote research, development of new techniques of planning, land development and house construction and manufacture of building material;
(iv) promote companies, association and other bodies for carrying out the purposes of the Act ; and
(v) perform any other function which are supplemental, incidental or consequential to any of the functions referred to in this sub-section or which may be prescribed."
21. On perusal of the "Objects and Functions" as reproduced above, it is clear that Punjab Urban Planning and Development Authority (PUDA) has been floating Schemes for setting up developed colonies for general public in various cities in the State of Punjab. Before undertaking such a Scheme, PUDA is required to prepare a proper Scheme, in accordance with the provisions of the Punjab Regional and Town Planning & Development Act, 1995. All the financial implications and other things should have been taken care by PUDA while launching the said scheme. After considering the pros and cons, the Scheme is required to be launched by the development authority being a public authority. By considering/seeing all the terms and conditions of the Scheme, the complainant had applied for allotment of a plot. However, the OP had failed to complete the First Appeal No.464 of 2022 12 development works within the agreed period and without any sufficient reason. This act of the OP has caused mental agony and harassment to the complainant.
22. It is also relevant to mention that the Hon'ble Punjab and Haryana High in the case of Ram Kishan & Anr. v. State of Haryana & Ors. CWP No.4108 of 2016 decided on 22.11.2016 had issued strict directions to the States of Punjab and Haryana for launching the Schemes without proper guidelines and for not completing the same as per the time schedule. The relevant portion of said judgment as mentioned in Para-9 is reproduced as under:
"9. Before parting with the order, it is observed that this court is flooded with huge litigation of such like disputes, where allotments of plots/booth sites, commercial sites, have been made by the respective Governments of the States of Punjab and Haryana, including their Corporations; government undertakings, like HUDA and PUDA, without completing the development works and providing all basic amenities and facilities. Such action of the Government is not only a disadvantage to the Government itself, but also to the public at large, who has to indulge in litigation and spend valuable time of their lives, hard earned money and energy in the courts for years. The time has now come that such type of actions of the Government to allot sites without making the same litigation free and without completing the development works and providing all basic amenities and facilities, have to be curbed down, because such actions lead to multifarious litigation wasting precious time and energy of the court, which can be utilised in disposal of some genuine litigation. Such casual approach of the concerned officers has to be dealt with severely. Therefore, Chief Secretaries of the States of Punjab and Haryana as well as Adviser to Administrator, Union Territory, Chandigarh, are hereby directed to ensure that no government site or site through any government agency shall be offered by way of allotment, auction or otherwise, until and unless the same is completely litigation free, i.e. without any encumbrance etc., and is fully developed, provided with all basic amenities. Moreover, all the allottees have to be treated on parity without any discrimination, because every citizen of this country before Government functionaries is equal before it."
23. In compliance of the aforesaid order passed by the Hon'ble Punjab and Haryana High Court, a meeting was held on 02.01.2017, in First Appeal No.464 of 2022 13 which Chief Secretary, Government of Punjab; Addl. Chief Secretary, Government of Punjab; Chief Administrator, PUDA, SAS Nagar; Addl. Secretary, Local Govt. Department, Punjab; and General Manager, Estate, Punjab Mandi Board were present. After consideration, the following decisions were taken:
"After consideration, it has been decided to frame policy according to the directions issued by the Punjab and Haryana High Court. As under, following policy will be applicable to all the departments i.e. Local Govt., Punjab Mandi Board, PUDA and all other Special Authorities, PSIEC, Colonization Department and other agencies where the lands are being sold after planning:
1. Chunk Site: Chunk site will be sold on "as is where is" basis". The Authority/Department making this sale will have to ensure that proper connectivity or availability of basic amenities i.e. water supply, sewerage, roads, parking etc. are available. In case such provision has to be made entirely by the purchaser, it must be mentioned specifically at the time of sale.
2. Sale by Auction of Booth, SCO, SCF and other commercial sites, where development is to be done by the auctioning authority:- in such cases the auctioning authority will ensure that no site should be put to auction until and unless all the basic amenities i.e. water supply, sewerage, roads, parking & provision of proper Electronic connection is made available at site.
3. In case the site to be sold through draw of lots of the inviting application from public, the following policy must be followed:-
(i) Application must be invited only when the land is free from all encumbrances.
(ii) After the receipt of application with 10% of the sale price, the draw of lots will be held by the Authority/Deptt. In such cases after payment of 25% of the condition price, the LoI/Allotment letter will be issued to the successful applicant and no interest must be charged till the possession of that plot is given to the Allottee.
(iii) No possession in such cases must be given to allottee until and unless all the basic amenities i.e. water supply, sewerage, Roads, parking etc. wherever required is made.
(vi) The department Authority will duty bound to complete all the development works at site in shortest period possible not extending more than 18 months. In case of 18 months is elapsed and the possession in not handed over to the allottees, simple interest which of 12% will be provided to the allottee on the 25% amount which has been deposited by the Allottee with the Authority/Deptt.First Appeal No.464 of 2022 14
All the conditions will be mentioned in the Brochure. As mentioned above it has been decided that Hon'ble Punjab and Haryana High Court be informed about the above said terms and conditions and further necessary action be taken to notify this policy according to the direction issued by the Punjab and Haryana High Court."
24. On perusal of above facts and the reasons as mentioned above, it is apparent that the issue of launching plot/house allotment schemes by the Urban Development Authorities without preparing the proper guidelines and without completing the development activities had already been dealt with by the Hon'ble High Court and aforesaid decisions were taken to minimize the litigation in such like cases.
25. The other stand taken by the OP is that in case the OP was unable to deliver the possession within the stipulated period, the allottee was having the right to withdraw from the scheme by moving an application to the Estate Officer and in that case the competent authority could have refunded the amount after deducting 10% of the deposited amount. It is relevant to mention that it was the fault of the OP in not delivering the possession of the plot within the stipulated period with complete development works and basic amenities. There is no cogent and convincing evidence on record to prove that the development works were completed and the basic amenities were provided within the stipulated period. Therefore, for the fault of the OP, the complainant/allottee cannot be penalized.
First Appeal No.464 of 2022 15
26. As far as the reliance of learned counsel for the appellant on the judgment of case Manju Chauhan (supra) wherein the rate of interest was reduced from 12% to 6% is concerned, it is relevant to mention that the Hon'ble Supreme Court in the case of Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors. Civil Appeal No.5785 of 2019 decided on 11.01.2021 has awarded 9% interest on the refundable amount. Therefore, the rate of interest i.e. 9% as awarded by the District Commission is quite reasonable. The judgment relied upon by learned counsel for the appellant/OP is distinguishable and is not applicable to the facts and circumstances of the present case.
27. In view of the above discussion as well as the facts and circumstances as mentioned above, the 'deficiency in service' on the part of the OP has been clearly proved on record. The order passed by the District Commission is based on proper appreciation of the evidence available on the record and no interference is required.
28. Accordingly, finding no force in the contentions raised by learned counsel for the appellant, the appeal is dismissed and the impugned order dated 26.10.2021 passed by the District Commission is upheld.
29. Since the main case has been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
First Appeal No.464 of 2022 16
30. The appellant had deposited a sum of ₹25,000/- at the time of filing of the appeal. Said amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith. The respondent/complainant may approach the District Commission for the release of the same and the District Commission may pass appropriate order in this regard in accordance with law.
31. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER November 10, 2023.
(Gurmeet S)