State Consumer Disputes Redressal Commission
Sanjay Gupta vs M.D.Bjawa Developers Ltd. on 24 January, 2018
Daily Order 2nd Additional Bench PUNJAB STATE CONSUMER DISPUTES REDRESSAL COMMISSION, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH Consumer Complaint No.392 of 2017 Date of institution : 22.05.2017 Date of reserved : 03.01.2018 Date of decision: 24.01.2018 Sanjay Gupta son of Sh.V.P. Gupta age 43 years, resident of House No.2854, Sector 22-C, Chandigarh. .....Complainant Versus The Managing Director, Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, Distt. SAS Nagar Mohali. Presently having the Office at Sunny business Centre, Sunny Enclave, Sector 125 near KFC, 5th Floor, Kharar, Desu Majra. 2. The Manager (Sales), Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, Distt. SAS Nagar Mohali. .....Opposite parties Complaint under Section 17 of the Consumer Protection Act, 1986. Before:- Sh. Gurcharan Singh Saran, Presiding Judicial Member
Sh. Rajinder Kumar Goyal, Member Present:-
For the complainant : Sh.Pankaj Maini, Advocate For OPs : Ex-parte Rajinder Kumar Goyal, 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 2BHK Flat (900 square feet) for his personal necessity having the value of Rs.24 lacs. The agreement was entered into between the complainant and the respondent on 21.04.2011 and the complainant paid Rs.6,50,000/- on different dates. According, to the payment schedule given in the agreement the date of final payment was 28.12.2012. While executing the agreement with the complainant the date of possession was given in the end of year 2012 i.e. 28.12.2012 but OPs were not having the permission from the GMADA for setting up the residential colony in sector 117 and Sector 74 A, SAS Nagar Mohali under the name of Sunny Basant. The respondents have got the permission from GMADA authorities vide Memo No.GMADA/DTP/2014/1483 on 19.05.2014 subject to getting the approval from the other statutory bodies. As the OPs did not have any permission to establish the residential colony but they received money from the complainant which shows the action of the OPs totally actuated with malaice to defraud him and other customers from their hard earned money. The OPs adopted an unfair trade practices. The OPs miserably failed to start the project and wide LOI granted to the OPs on 19.05.2014 they could not sell the project to anyone until and unless CLU is granted. The last date given in the schedule as a final date was 28.12.2012 which mean that by that date they were to complete the project. The OPs were aware about this fact that they could not complete the project upto 28.12.2012,therefore, they did not demanded the payment of further installments from the complainant as their project had never seen the light of the day. Alleging unfair trade practice and deficiency in service by the OPs thus, the complaint seeking following directions:-
The complainant has paid Rs.6,50,000/- to the respondents from 21.04.2012 onwards. The complainant is entitled to refund Rs.6,50,000/- along with interest @ 15% per annum which comes to Rs.5 lac. The total amount payable is Rs.11,50,000/- till date.
Rs.3,50,000/- compensation for the mental agony, misleading, fraud committed with them.
Rs.1,00,000/- damages upon the respondents as the respondents have sold EWS Flats to the complainant.
2. A notice was sent to the Opposite Parties on 15.06.2017 and none has appeared on behalf of the opposite parties. Thus, the opposite parties were proceeded against ex-parte vide order dated 28.07.2017.
3. To support his contentions,the counsel for the complainant tendered into evidence affidavit of Sanjay Gupta, Complainant dated 07.11.2017 as Ex.CA along with documents, copy of agreement dated 28.06.2011 as Ex.C-1, copy of Letter of Intent dated 19.05.2014 as Ex.C-2 and close the same on behalf of the complainant.
4. We have heard counsel for the complainant and have carefully gone through the averments made in the complaint, evidence and documents on the record.
5. It has been argued by the counsel for the complainant the respondents have adopted unfair trade practice by alluring the customers to buy their flats even when they were not having the permission to accept the money from the customers.The respondents have miserably failed to start the project. As per LOI issued to the Ops on 19-05-2014 by GAMADA,they did not have any right to sell/ Transfer the property or execute any transaction with anyone without obtaining a valid license. As per agreement dated 21.04.2011, the last date given in the schedule was 28-12-2012 which means by that time the project was to be completed.The OPs were aware about this fact that they could not complete the project upto 28-12-2012 as by this time they were not having required approvals from the competent authorities to start the project. The complainant has paid Rs. 650000/- to the OP. The counsel further prayed to award compensation of Rs. 1600000 by taking action against the respondents for the willful loss by adopting unfair trade practices by the OP.
6. It is evident that in pursuance of agreement dated 28.06.2011, the complainant booked a 2 BHK BR No (680) 900 sq. ft. Flat with Sunny Enclave, Mohali Sector 74 A, 117 for a total consideration value of Rs.24,00,000/- lacs. In view of the payment schedule in the agreement the complainant paid a sum of Rs.6,50,000/-. Further LOI for setting up of a residential colony in sector 117 & 74-A SAS Nagar Mohali was issued by GMADA vide memo No. GMADA/DTP/2014/1483 dated 19/5/14 under Rule 11(3) of PAPRA Rules 1995. As per LOI condition No. XIV-
"This is only an intention to grant licence on fulfillment of above condition and does not grant any right to the promoter to sell/transfer the property or execute any transaction with any one without obtaining a valid licence".
It is evident that the transaction done by the developer as per agreement dated 28.06.2011 is in violation of the above said conditions. To initiate any project, the Op is required to follow the basic approvals as laid down under the PAPRA. For ready reference Sections 3, 4 and 6 of the PAPRA is reproduced:-
"3. General Liabilities of Promoter:-
(1) Notwithstanding anything in any other law for the time being in the force, a promoter, who develops a colony or who constructs or intends to construct a building of apartments, shall, in all transactions with persons taking or intending to take a plot or an apartment on ownership basis, be liable to give or produce, or cause to be given or produced, the information and the documents mentioned hereinafter in this section.
A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
make full and true disclosure of the nature of his title to the land on which such colony is developed or such building is constructed or is to be constructed, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
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;
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; and of the plan and specifications of the building built or to be built on the land as well as of the common areas and facilities and common services provided (including supply of electricity and water, sewerage and drainage systems, lifts, fire-fighting equipment), such plans and specifications being in accordance with the provisions of the building regulations, and approved by the authority which is required so to do under any law for the time being in force, indicating thereon what parts of the building and the appurtenant areas are intended to be kept as common areas and facilities in the case of apartments :
Provided that the number and sizes of the apartments shall conform to such building regulations, and the area of an apartment shall not exceed such limit as may be fixed by the competent authority;
display or keep all the documents, plans and specifications or copies thereof referred to in clauses (a), (b) and (c) of this sub-section at the site and in his office and make them available for inspection to persons taking or intending to take a plot or an apartment and after the association is formed, he shall furnish the association a copy of these documents and of the sanctioned plan of the building;
disclose the nature of fixtures, fittings and amenities, including the provision for one or more lifts, provided or to be provided;
disclose on reasonable notice or demand, if the promoter is himself the builder, the prescribed particulars as respects the designs and the materials to be used in construction, and, if the promoter is not himself the builder, disclose all agreements entered into by him with the architects and contractors regarding the design, materials and construction of the building;
specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
except where there are no agreements about specific plots or apartments and allotment is made by draw of lots, prepare and maintain a list of plots or apartments with their numbers, the names and addresses of the parties who have taken or agreed to take plots or apartments, the price charged or agreed to be charged therefor, and the terms and conditions, if any, on which the plots or apartments are taken or agreed to be taken;
Provided that the competent authority may direct that,-
in the case of residential apartments, if the total number of apartments is one hundred or more, ten percent of the apartments; and in the case of colony, if the total area of the colony is forty hectares or more, ten per cent of the area under residential plots and houses, be reserved for being sold or leased to such person belonging to such economically weaker section of society, in such manner and on such terms and conditions as may be prescribed;
(i) state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons who have taken or are to take the apartments;
(j) not allow person to enter into possession until an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained;
make a full and true disclosure of all outgoings, including ground rent, if any, municipal or other taxes, charges for water and electricity, revenue assessment, interest on mortgages or other encumbrances, if any;
give the estimated cost of the building and the apartments proposed to be constructed, or colony to be developed, and the manner in which escalation in such cost for valid reasons may be approved by mutual agreement ;
make a full and true disclosure of such other information and documents in such manner as may be prescribed; and give on demand and on payment of reasonable charges true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed.
4. Issuing of Advertisement or Prospectus:-
(1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication.
The advertisement or prospectus issued under sub-section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed.
The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
the promoter, if an individual;
every partner of the firm, if the promoter is a firm;
every person who is a director at the time of issue of the advertisement or prospectus, if the promoter is a company :
Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or the advertisement or prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor.
When any advertisement or prospectus includes any untrue statement, every person who authorised its issue, shall be punished with imprisonment for a term which may extend upto one year or with fine which may extend upto five thousand rupees, or, with both, unless he proves that the statement was immaterial or that he had reason to believe and did upto the time of issue of the advertisement or prospectus believe that the statement was true.
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 1908) ;
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.
The promoter shall not cancel unilaterally the agreement of sale entered into under sub-section (1) and if he has sufficient cause to cancel it, he shall give due notice to the other parties to the agreement and tender a refund of the full amount collected togetherwith interest at the rate as may be prescribed.
The agreement to be prescribed under sub-section (1) shall contain inter alia the particulars as hereunder specified in clause (a) in respect of apartments and as specified in clause (b) in respect of plots in a colony and to such agreement shall be attached the copies of the documents specified in clause (c),-
the particulars in the case of apartment,-
if the building is to be constructed, the liability of the promoter to construct the building according to the plans and specifications approved by the authority which is required so to do under any law for the time being in force;
the date by which the possession of the apartment is to be handed over to the allottee;
the area of the apartment including the area of the balconies which should be shown separately:
the price of the apartment including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the allottee of the apartment and the intervals at which the instalments thereof may be paid;
the precise nature of the association to be constituted of the persons who have taken or are to take the apartments;
the nature, extent and description of the common areas and facilities and the limited common areas and facilities, if any;
the percentage of undivided interest in the common areas and facilities and in the limited common areas and facilities, if any, appertaining to the apartment agreed to be sold, such percentage shall be the ratio of the built-up area of the apartment to the total built-up area of all the apartments;
the statement of the use for which the apartment is intended and restrictions on its use, if any;
(b) particulars in the case of plots in a colony,-
(i) the date by which the possession of the plot is to be handed over to allottee;
(ii) the area and price of the plot; and
(iii) the statement of the use for which the plot is intended and restriction on its use, if any;
(c) the copies of documents to be attached with the agreement,-
the certificate by an attorney-at-law or advocate referred to in clause (a) of sub-section(2) of section 3;
certified copy from any relevant revenue record showing the nature of the title of the promoter to the plot or the land on which the building of apartments is constructed or is to be constructed ; and the plans and specifications of the apartment as approved by the authority which is required so to do under any law for the time being in force."
According to these provisions before launching the project, the Ops shall not issue any advertisement, prospectus or offer of sale of any apartment or invite application till it completes the above referred formalities that it has been registered as a Promoter under Section 21(2) of the Act, disclose the area of the plots, price payable, layout plan, validity of the licence issued by the Competent Authority and under Section 6 that maximum 25% of the price can be accepted before entering into agreement and in the agreement, it should be clearly mentioned as to when the possession shall be delivered. In this case, the complainant has paid Rs.6,50,000/- against a consideration value of Rs.24 lacs. Wherein the OP could not receive any amount from the complainant until and unless the project is approved by the competent authority. The agreement dated 28.06.2011 is in violation of PAPRA Act and Regulations. Thus it is anunfair trade practice on the part of the OP. Therefore, complainant has a right to seek refund with interest what should be the rate of interest has been provided in Rule 17 of Punjab Apartment and Property Regulations Rules 1995 which reads as under:-
Rate of Interest on refund of advance money upon cancellation of agreement:- The Promoter shall refund 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.
7. Sequel to above we accept the complaint & direct the opposite party as under:-
to refund the amount of Rs.6,50,000/- deposited by the complainant with OP along with 12% interest from the date of deposit.
Rs.25,000/-on account of compensation for harassment and mental tension; and Rs.11,000/- as litigation expenses.
The above directions be complied within 45 days from the receipt of certified copy of the order.
08. The complaint could not be decided within the statutory period due to heavy pendency of the Court cases.
09. Copy of the order be communicated to the parties as per rules.
(Gurcharan Singh Saran) Presiding Judicial Member January 24 ,2018 (Rajinder Kumar Goyal) PK/- Member