State Consumer Disputes Redressal Commission
Chanchal Singh vs Alice Developers Pvt. Ltd. on 22 February, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 393 of 2017
Date of Institution : 22.05.2017
Date of Reserve : 12.02.2018
Date of Decision : 22.02.2018
Chanchal Singh son of Mehar Singh, resident of House No. 734-
U.E. Road, Phase-II, Ward No. 42, Dugri, Ludhiana.
....Complainant
Versus
1. Alice Developers Pvt. Ltd., Site Office at Gardens Uniworld
City (Sector 97), SAS Nagar.
2nd Address
Regd. Office : Basement 6, Community Centre, Saket, New Delhi -
110017, through its Director/M.D.
2. Unitech Limited, Site Office at Gardens Uniworld City (Sector
97), SAS Nagar.
2nd Address
SCO No. 189-90-91, Sector 17-C, Chandigarh through its
Director/M.D.
3rd Address
6, Community Centre, Saket, New Delhi - 110017
....Opposite parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Consumer Complaint No. 393 of 2017 2
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainant : Sh. Naveen Bawa, Advocate
For opposite party No.1: Ex.-parte.
For opposite party No.2: Ms. V.H. Singh, Advocate
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
Complainant has filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that the complainant booked one apartment/flat No. 0702 on 7th Floor, Block-C, Tower C-1 having super area of approximately 97.55 sq. meters in the Mega Township of Ops to be known as Uniworld City, Sector 97, Mohali for a total sale consideration of Rs. 31,84,500/-. Ops had issued the allotment letter of flat No. C-1-07-0702 vide its letter dated 27.8.2011. It included external development charges, infrastructural development charges, internal services, such as laying of roads, sewerage within the peripheral limits of the complex, water, storm water, drainage, roads, electricity, horticulture etc. Lateron buyers agreement dated 13.10.2011 was executed between the parties. At the time of entering into the buyer's agreement a sum of Rs. 3,05,000/- was paid to the Ops vide cheque No. 255285 dated 22.7.2011. Accordingly, the complainant further paid a sum of Rs. Consumer Complaint No. 393 of 2017 3 3,20,689/- vide cheque No. 255293 dated 10.11.2011, a sum of Rs. 3,24,815/- vide cheque No. 255306 dated 24.1.2012 and total agreed sum of Rs. 9,50,504/- stand paid by the complainant to the Ops. The complainant paid regular installments to the Ops as per the agreed payment plan but there are no signs of any development even in the near future. After awaiting the agreed period of 3 years, the complainant requested the Ops vide letter dated 5.1.2015 to refund the amount paid by them but till date the amount so received has not been refunded by the Ops. Then the complainant was constrained to issue the legal notice dated 1.6.2015. Inspite of receipt of the legal notice, amount was not refunded. Alleging deficiency in services on the part of Ops, this complaint has been filed by the complainant against the Ops and seeking following directions to Ops:-
a) Pay/refund a sum of Rs. 9,50,504/- so received by the opposite parties from the complainant alongwith its interest @ 18% per annum from the date of deposit of above amount till filing of the complaint.
b) Grant damages to the extent of Rs. 5,00,000/- for the highly negligent, deficient service, illegal & unlawful acts and for the harassment, stress strain and mental agony.
c) To pay compensation as per quantum to be decided by this Hon'ble Forum as explained above.
d) Pay future interest @ 18 per annum from the date of filing of the complaint for unlawfully withholding the amount Consumer Complaint No. 393 of 2017 4 w.e.f. August, 2011 on sum of Rs. 6,50,504/- till realization of the amount.
e) To pay the litigation charges of Rs. 33,000/-
f) Pass any other orders or directions deemed appropriate in the facts and circumstances of the case.
2. Upon notice, Op No. 2 appeared whereas Op No. 1 did not appear and vide order dated 26.7.2017, Op No. 1 was proceeded ex-parte.
3. Op no. 2 in its written reply filed through Mr. Lalit Gupta, Legal Executive of the Ops taking preliminary objections that this Commission does not have the territorial jurisdiction to adjudicate upon the present complaint as buyer's agreement was executed between the parties at New Delhi; the payment was made by the complainant to the Gurgaon Office and from there the payment receipts were issued; the complainant is not a consumer as defined under Section 2(1)(d) of the Act as the complainant is a permanent resident of Ludhiana and had no valid reason to buy a property at Mohali, therefore, flat was booked only for the investment purposes; there is no consumer dispute in view of the facts of the complaint and the issues relates to contractual matter as per terms and conditions of the agreement, therefore, the same can only be adjudicated before the Civil Court and that liability to construct the flat was of Alice Developers Pvt. Ltd. i.e. Op No. 1 and this Op had a limited role in the said project. Buyer's agreement was executed between Op No. 1 and the complainant wherein it was clearly mentioned that Alice Developers Pvt. Ltd. is the developer and Consumer Complaint No. 393 of 2017 5 Unitech Limited is the confirming party. Op No. 2 assigned to Op No. 1 the development rights with respect to 33.2438 acres of land and such additional land of the project allocated vide modifications in the development agreement. Approximately of an area of 8.17 acres, Op No. 1 was to construct a complete multi storey group housing complex known as 'Gardens'. Op No. 1 further authorized to use the Unitech Trade Mark 'Unitech Corporate Logo' for various purposes such as promotional, marketing, advertisements, brochures, hoardings etc., which were to be released and published with respect to the developed units and trade mark licence agreement dated 9.5.2009 was executed between Op No. 1 and Op No. 2 and Op No. 2 had authorized to sell either itself or through its channel partners, the built up / developed area / apartments on its behalf including deposit of collected monies of marketed area. The Clause No. 1(a) of the buyer's agreement clearly stipulates that the developer is Alice Developers Pvt. Ltd. As per Clause 2(a) of buyer's agreement, it was also stipulated that in pursuance of the allotment of the said apartment to the allottee, the apartment allottee had agreed to pay to the developer a sum of Rs. 31,84,500/- towards the consideration of the said apartment within a time frame of 36 months of signing of the buyer's agreement, therefore, there is no liability upon Op No. 2. On merits, booking of the flat and execution of buyer's agreement is a matter of record. With regard to responsibility towards the construction, it was again reiterated that it was the responsibility of Op No. 1 as per the averments made in the preliminary objections. In case there is a Consumer Complaint No. 393 of 2017 6 delay to raise the construction of the flat within a period of 36 months, according to Clause 4(c) (ii) the developer is liable to pay the delay charges @ Rs. 5/- per sq. ft. per month of the super area. There is no deficiency in service on the part of Ops. Complaint against this Op is without merit, it be dismissed.
4. The parties were allowed to lead their respective evidence in support of their complaint. Complainant in his evidence has tendered affidavit of Chanchal Singh Ex. C-A and documents Exs. C-1 to C-7. On the other hand, Op No. 2 has tendered affidavit of Lalit Gupta, Auth. Rep., Unitech Ltd. as Ex. Op-2/A and documents resolution dt. 19.6.2015 as Ex. Op-2/1 and trade mark licence dated 9.5.2009 Ex. Op-2/2.
5. We have heard the counsel for the parties and have carefully gone through the pleadings of the parties, evidence and documents on the record and have heard the counsel for the parties.
6. Op No. 2 in its written reply has taken the objection that this Commission does not have territorial jurisdiction to adjudicate this complaint as the agreement to sell was executed between the parties at New Delhi and payments were received by Gurgaon office. No doubt that the agreement to sell was issued by New Delhi office of the Ops or the receipts were issued by the Ops from Gurgaon office, but it has not been explained from where the payments were made to the Ops. Moreover, the property is located at Mohali and there are averments that before booking of the unit and during the completion of the project, the complainant had Consumer Complaint No. 393 of 2017 7 visited the site at Mohali, therefore, a part of cause of action has arisen at Mohali, which is within the territorial jurisdiction of this Commission. According to Clause 17(2)(c) of the Act, in case a part of cause of action has arisen within the territorial jurisdiction of this Commission then this Commission has territorial jurisdiction to entertain this complaint. This preposition was not rebutted by the counsel for the Ops and it is an admitted fact that property is located within the territorial jurisdiction of this Commission, therefore, we do not see any merit in the objection raised by the counsel for the Ops and hold that this Commission has territorial jurisdiction to entertain this complaint.
7. The next objection taken by the Op No. 2 is that the complainant is not a consumer and that dispute in question is not a consumer dispute. A plea has been taken by the counsel for the Ops that the complainant had booked a flat for resale purposes but due to slump in the market, he could not resale the same or that he is a permanent resident of Ludhiana, therefore, he is not in a need of any flat at Mohali. In case the complainant has any plot or house at Ludhiana, it does not debar the complainant to have any other property at Mohali. However, in case the complainant is not trading in real estate, then it cannot be said that he is not a consumer. In this regard, we are fortified by the judgment 2017(3) CLT 459 "Pranab Basak versus Suhas Chatterjee". In that case, two flats were booked by the complainant and a plea was taken that the complainant had booked these flats for investment purposes. It was observed by the Hon'ble National Commission that unless it is Consumer Complaint No. 393 of 2017 8 established that the complainant is dealing in sale and purchase or his real intention in booking the flat was to sell the same on profit, on appreciation of the value of the real estate. The Ops have failed to place on the record any document that previously the complainant was trading in real estate. In the absence of those findings, we do not agree with the plea taken by the counsel for the Ops that the complainant had booked the flat for investment purposes.
8. It has been argued by the counsel for Op No. 2 that the dispute is not covered under the definition of consumer dispute, therefore, the matter be referred to the Civil Court. In case we go through the pleadings of the parties, the complainant had booked one residential flat with Ops and had paid agreed amount of Rs. 9,50,504/-. Apartment Allotment Agreement is there and Op No.2 has failed to deliver the possession within the time frame mentioned in the agreement. It is only the interpretation of agreement and then to see whether there is any deficiency in service on the part of Ops. We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission and the matter needs to be referred to the Civil Court. The benches of this Commission are headed by retired High Court Judges/retired District & Session Judges, who have long experience at their back and are fully competent to decide such like matters. In this regard, we are fortified by the judgment of "Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi", 2002(6) SCC 635 wherein it was held that Consumer Complaint No. 393 of 2017 9 'the State Commission and District Forum are headed by retired High Court Judges and officers 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'. Further reference can be made to "Shiv Kumar Agarwal versus Arun Tandon and another", 2007(2) CLT 287, decided by the Hon'ble National Commission. 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. Therefore, we are of the opinion that this Commission is fully competent to decide this complaint and no cause of action is made out to refer the case to the Civil Court.
9. The complainant apart from his own affidavit has placed on the record Ex. C-1 Allotment Letter dated 27.8.2011 vide which flat No. 0702, Block No. C1 at Gardens, Sector 97 for a total sale consideration of Rs. 31,84,500/- was allotted in favour of the complainant. Then buyer's agreement dated 13.10.2011 was executed. According to Clause 4.a(i), the possession of the apartment was proposed to be offered within a period of 36 months of singing of this agreement i.e. upto 12.10.2014, the possession was to be delivered. According to the complainant, he has paid a sum of Rs. 9,50,504/-, however, no payment schedule has been given by the Ops. Therefore, without payment schedule on the Consumer Complaint No. 393 of 2017 10 record, it cannot be said that complainant has not paid the payments as per the schedule specifically when Op No. 1 has not appeared and Op No. 2 has not taken the objection that the payments were delayed by the complainant. Therefore, the possession could not be delivered within time. After expiry of 3 years, an application Ex. C-6 was filed by the complainant for refund of the amount deposited as the Ops has failed to offer the flat but Ops have not placed on the record any document vide which any further payment was demanded by the Ops and not paid by the complainant.
10. The main plea taken by Op No. 1 is that this agreement is between the complainant, Alice Developers and Unitech Limited (Op No. 2) and the project was to be developed by Op No. 1 and that Op No. 2 was just a confirming party but the payment receipts Exs. C-3, C-4 and C-5 shows that the payments were received by Op No. 2. Therefore, once the Op No. 2 has received the payment, then Op No. 2 cannot take a plea that there is no liability even if the project was to be developed by Op No. 1 as per authorization given by Op No. 2. When payments were received by Op No. 2, then both the Ops are vicariously liable to deliver the flat within the agreed time and in case possession has not been delivered then the complainant is entitled to the refund. A reference has been taken from the judgment of the Hon'ble National Commission reported as II (2014) CPJ 131 "PUDA versus Kanwalpreet Singh"
that in case there is delay in handing over the possession, it amounts to deficiency in service and refund order can be passed. A Consumer Complaint No. 393 of 2017 11 reference has also been made to I (2017) CPJ 513 (NC) "Neha Suri versus Unitech Reliable Project Pvt. Ltd." In that case, the possession of the flat was not given as agreed. It amounts to deficiency in service. Amount deposited alongwith interest was ordered to be refunded. Similar order was passed in I (2017) CPJ 113 "Vishal Issar v. Park Wood Developers Pvt. Ltd.". This Commission has already held in Consumer Complaint No. 164 of 2016 "Harmit Singh Arora versus M/s Country Colonisers Private Limited", decided on 2.2.2017 against the same opposite party that in case possession of the apartment has not been given as agreed then it amounts to deficiency in service and that the complainants are not bound to pay further payments when the project is not coming at the site and refund alongwith interest order was ordered. Therefore, we are of the opinion that there is deficiency in services on the part of Ops and in case the construction is not completed within the agreed time then the complainant has a right to withdraw from the scheme and to seek the refund.
11. It has been further argued by the counsel for the Ops that according to Clause No. 4.c, in case there is delay in delivery of the possession then the Ops are liable to pay the penalty as per Clause 4.c(ii) i.e. @ Rs. 5/- per sq. ft. per month of super area for the period of delay in offering the possession of the said apartment. Whereas it has been contended by the counsel for the complainant that in case of late payment, the Ops are claiming interest @ 18% then similar treatment be given to the complainant. It is one sided agreement and in case of default on the part of complainant, he Consumer Complaint No. 393 of 2017 12 has to pay 18% interest whereas Ops are to pay just 3%. This question has been dealt in detail by the Hon'ble National Commission in CC No. 427 of 2014 "Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd." decided on 8.6.2015 wherein the Hon'ble National Commission observed as under:-
"However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyer's Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer's Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer's Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. Consumer Complaint No. 393 of 2017 13 I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer's Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment.
It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer's Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is Consumer Complaint No. 393 of 2017 14 able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word "including" before the words "any of the following practices".
The same view was upheld by the Hon'ble National Commission in CC No. 347 of 2014, "Swarn Talwar & Ors. Vs. Unitech Ltd." decided on 14.8.2015. A reference has also been made to the judgment of the Hon'ble Supreme Court in "K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board", C.A. No. Consumer Complaint No. 393 of 2017 15 6730-6731, decided on 19.9.2012. In that case, the District Forum has allowed interest @ 12% p.a. and its appeal was dismissed by the State Commission as well as the Hon'ble National Commission and after relying upon the judgment of "Ghaziabad Development Authority Vs. Balbir Singh", (2004) 5 SCC 65, the interest @ 18% per annum on the deposited amount was allowed alongwith Rs. 50,000/- as compensation. Against the judgment of the Hon'ble National Commission in "Swarn Talwar & Ors. Vs. Unitech Ltd.", C.C. No. 347 of 2014 (supra), Op preferred the appeal before the Hon'ble Supreme Court i.e. Civil Appeal No. 35562 of 2015, decided on 11.12.2015 and passed the order as under:-
"We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference.
The Civil Appeal is dismissed."
12. However, it was further observed by the Hon'ble National Commission in another judgment 2017(3) CLT 520 (NC) "Ankur Goswami versus Supertech and another" wherein the Hon'ble National Commission observed that this clause in the allotment letter would be applied to the case where allottee is seeking possession of the flat and where allottee is not seeking refund of the amount. However, in the present case, the allottee is seeking the refund, therefore, the penalty @ Rs. 5/- per sq. ft. will not be applicable. Further under Rule 17 i.e. Rate of Interest on Consumer Complaint No. 393 of 2017 16 refund of advance money upon cancellation of agreement of Punjab Apartment and Property Regulation Rules, 1995, it has been provided as under:-
"17. Rate of Interest on refund of advance money upon cancellation of agreement. - The promoter shall refund full amount collected from the prospective buyers under sub- section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
In the above rule it has been observed to refund the amount alongwith interest @ 12% p.a. In number of similar complaints, we have allowed the interest @ 12% p.a. i.e. Consumer Complaint No. 386 of 2016 "Meenakshi Puri versus Country Colonizers Pvt. Ltd. & Ors.", decided on 28.11.2017 and 'Consumer Complaint No. 3 of 2017 "Lt. Gurnur Singh Mahiwal & Anr. Versus M/s Country Colonisers Pvt. Ltd. & Ors.", decided on 4.1.2018. Therefore, to be just and reasonable, the complainant will be entitled to interest @ 12% on the deposited amount.
13. No other point was argued.
14. Sequel to the above, we allow the complaint and direct Ops as under:-
(i) to refund a sum of Rs. 9,50,504/- to the complainant alongwith interest @ 12% from the various dates of deposit till actual payment;
Consumer Complaint No. 393 of 2017 17
(ii) Ops are directed to pay a sum of Rs. 50,000/- as compensation on account of mental and physical harassment suffered by the complainant.
(iii) Ops pay Rs. 21,000/- towards litigation expenses. The above directions be complied by the Ops within a period of 45 days from the date of receiving of the copy of the order, failing which the complainant shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
15. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
16. The counsel for the parties/parties are directed to collect free certified copy of the order from the office of the Commission within a period of 15 days from the date of pronouncement.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER February 22, 2018.
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