State Consumer Disputes Redressal Commission
Deepak Madan Lal Kansal vs Emerging India Housing Corporation ... on 12 June, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 774 of 2017 Date of Institution : 01.11.2017 Date of Decision : 12.06.2018 Prabhjot Kaur W/o Sh.Kultej Verma, permanent resident of H.No.19, Ranjit Enclave, Ashoka Nursery, Kunjpura Road, Karnal. Kultej Verma S/o Sh.Raj Kumar Verma, permanent resident of H.No.19, Ranjit Enclave, Ashoka Nursery, Kunjpura Road, Karnal. ......Complainants V e r s u s M/s Emerging India Housing Corporation (P) Ltd., SCO No.46-47, First Floor, Sector 9-D, Chandigarh, through its Managing Director/Director/Authorized Signatory. Sh.Gurpreet Singh Sidhu, Director of M/s Emerging India Housing Corporation (P) Ltd., SCO No.46-47, First Floor, Sector 9-D, Chandigarh Sh.Sushil Kumar, Director of M/s Emerging India Housing Corporation (P) Ltd., SCO No.46-47, First Floor, Sector 9-D, Chandigarh. ..... Opposite Parties. Argued by: Sh.Savinder Singh Gill, Advocate for the complainants. Sh.Goldy Jakhar, Advocate for the opposite parties. ====================================================== Complaint case No. : 702 of 2017 Date of Institution : 25.09.2017 Date of Decision : 12.06.2018 Deepak Madan Lal Kansal S/o Sh.Madan Lal Kansal R/o Plot No.40, 12-C, Lilashah Nagar, Gandhi Dham, District Kutch, Gujarat. ......Complainant V e r s u s Emerging India Housing Corporation Private Limited, Head Office at SCO No.139-141, Sector 17-C, Chandigarh, through its Director, Sh.Gurpreet Singh Sidhu. Sh.Gurpreet Singh Sidhu, Director, Emerging India Housing Corporation Private Ltd., Regd. Office at B-57, Lower Ground, South Extension Part-2, New Delhi 110049. ..... Opposite Parties. Argued by: Sh.Ravinder Pal Singh, Advocate for the complainant. Sh.Goldy Jakhar, Advocate for the opposite parties. Complaints under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR.DEV RAJ, MEMBER.
MRS.PADMA PANDEY, MEMBER.
JUSTICE JASBIR SINGH (RETD.), PRESIDENT By this order, we propose to dispose of the aforesaid two consumer complaints. Arguments were heard in common, in the above cases, as the issues involved therein, except minor variations, here and there, of law and facts are the same. In the said complaints, refund of the deposited amount, alongwith interest, compensation etc. has been claimed by the complainant(s). At the time of arguments, 25.05.2018, it was agreed between the contesting parties, that, in view of above, both the complaints can be disposed of, by passing a consolidated order.
Under above circumstances, to dictate order, facts are being taken from consumer complaint bearing no.774 of 2017 titled as Prabhjot Kaur and anr. Vs. M/s Emerging India Housing Corporation (P) Ltd., and ors. Allured by glossy advertisements issued by the opposite parties, the complainants booked/purchased a flat, in their project named 'Emerging Heights-III", Sector 115, Greater Mohali, Kharar-Landran Road, Punjab, for which they initially paid an amount of Rs.3,50,000/- vide receipt dated 14.06.2012. Total price of the unit was fixed at Rs.35,85,150/-. Allotment Letter/ Agreement was signed between the parties on 30.10.2012. As per demand raised by the opposite parties, the complainants paid an amount of Rs.24,51,914/-, vide receipts Annexure C-2 colly., in the following manner:-
S.No. Date Amount (in Rs.) 14.06.2012 350000.00 28.08.2012 1730923.00 01.05.2015 370991.00 Total 2451914.00 As per terms and conditions of the Allotment Letter/Agreement, the complainants were offered construction linked payment plan. Further, it was promised that possession of the built-up unit, in a developed project will be delivered within a period of 36 months, from the date of booking. Clause 12 of the Allotment Letter/Agreement reads thus: -
"That the possession of the Unit is proposed to be delivered by the COMPANY to the Allottee in 36 (Thirty-Six) months' time from the date of booking/ allotment once all necessary approvals and sanctions have been obtained from Sanctioning authority, whichever is later, subject however, to force majeure circumstances and reasons beyond the control of the COMPANY. If the completion of the said project is delayed by reason of non-availability of steel and/or cement or other building materials, or water supply or electric power slow down, strike or due to civil commotion or by reason of war or enemy action or earthquake or any act of God or if non delivery is as a result of any act, notice, order, rule or notification of the Govt. and any other public or Competent Authority or for any reason beyond the control of the COMPANY, then in any of the aforesaid event, the COMPANY shall be entitled to a reasonable extension of time for delivery of possession of the unit."
In a way, it was committed that possession of the unit will be delivered by 29.10.2015. It is further the case of the complainants that till the time of filing this complaint, they did not receive any offer of possession of the unit. It is stated that the complainants were eager to take possession of the unit, however, they were put off, on one pretext or the other. To say so, reliance was placed upon interse communication carried out between the parties, through emails Annexure C-3 colly. It was admitted that as per terms and conditions of the agreement, the opposite parties continued to pay GRI @Rs.9,364/- per moth upto 14.09.2014. Thereafter, nothing was paid to them. The complainants, in all, received an amount of Rs.3,27,740/-. To say so, reliance has been placed on statement of account Annexure C-4 colly., issued by the office of the opposite parties. It was stated that when possession of the unit was not offered: and it transpired that construction at the spot was not complete, compelled under circumstances, the complainants filed this complaint seeking refund of amount paid with interest, compensation etc. Upon notice, joint reply was filed by the opposite parties. It was stated that the complainants are speculators; they have purchased the unit, in question, for earning profits, after selling the same in open market. They are the owners of a house, address whereof has been mentioned in headnote of this complaint. It was pleaded that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was alleged that rate of interest claimed is on the higher side and that the complainants would not fall within the definition of a consumer. It was averred that the complainants have sought interest and compensation, which could not be granted simultaneously. It was further pleaded that opposite parties no.2 and 3 have been wrongly impleaded as parties to the complaint, in their personal capacity. The complaint has been filed with malafide intentions just on surmises and conjectures, which needs to be dismissed.
On merits, payment of amount towards price of the said unit, as alleged by the complainants is not controverted. Payment of monthly compensation in the shape of GRI aforesaid, upto 14.09.2014 was admitted. It was stated that once the said monthly compensation has been received by the complainants, they cannot seek interest on the amount deposited, for that period. It was pleaded that the Registered Office of the opposite parties has not been made a party to the complaint.
It was averred that possession of the unit, in question, was to be delivered within a period of 36 months, from the date of booking/allotment, once all necessary approvals and sanctions have been obtained from the Sanctioning authority, whichever is later, subject to force majeure circumstances and reasons beyond the control of the Company, as such, the complaint having been filed in November 2017 is premature. The complaint is bad for misjoinder/non-joinder of necessary parties. It was contended that the tower in which the unit of the complainants is situated is complete. The opposite parties are in possession of all necessary permissions/sanctions, in respect of the project, in question. It was pleaded that Local Commissioner may be appointed to inspect the site in question, in order to bring out true facts, regarding development work. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and repudiated those contained in written version of the opposite parties.
The contesting parties led evidence in support of their case.
We have heard the contesting parties, and have gone through the evidence, and record of both the cases, carefully.
First, we will deal with the objection, raised by the opposite parties, that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.
This objection has been raised in the written statement filed by the opposite parties, by placing reliance on Clause 36 contained in the allotment letter/agreement. It may be stated here that this issue has already been dealt with, by this Commission, in a case titled as 'Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon'ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013), Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), and held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon'ble Supreme Court of India, which was dismissed vide order dated 13.02.2018.
In this view of the matter, objection raised by the opposite parties stands rejected.
The next question, that falls for consideration, is, as to whether, the complainants are speculators, and that they have purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, they would not fall within the definition of consumers, as defined by Section 2 (1) (d) (ii) of the Act, as alleged by the opposite parties. It may be stated here that there is nothing, on record to show that the complainants are the property dealers and are indulged in sale and purchase of property, on regular basis. In para no.1 of the complaint, supported by their affidavits, it has been specifically stated by the complainants that the unit, in question was purchased by them, for the residential purpose of their daughter. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only as above, under similar circumstances, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-
" In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015."
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties in their written reply, therefore, being devoid of merit, is rejected.
It is not in dispute that when the unit, in question, was sold on 06.06.2012, not even a single permission was available with the opposite parties. In a very clandestine and clever manner, it is mentioned in Clause 12 of the allotment letter/agreement that period of 36 months for delivery of possession of the unit, will start from the date of booking/ allotment, once all necessary approvals and sanctions have been obtained from the Sanctioning authority. This clause of the opposite parties, in itself, is an evidence against them, to say that when the project was launched; unit was sold to the complainants; substantial payment had been received from them; allotment letter/agreement had been executed, they were not in possession of the necessary permissions/sanctions.
A similar question, in respect of the very same project, as to whether, the opposite parties have launched and sold the project, without obtaining necessary approvals and sanctions, fell for determination before this Commission, in a case titled as Sukhdev Singh Sidhu Vs. M/s Emerging India Housing Corporation and anr., consumer complaint no.454 of 2016 decided on 25.01.2017. In that case also, the opposite parties have placed reliance on the same documents, as have been placed on record in the present case also i.e. environment clearance dated 05.06.2015; clearance from Fire Department dated 10.02.2015; No Objection Certificate (NOC) from Punjab Pollution Control Board, dated 23.04.2015; Certificate dated 05.12.2012 regarding technical approval of the project by the Govt.; NOC dated 10.04.2015 for discharge of sewerage treated water; NOC dated 03.07.2014 from the Government of India, Ministry of Defence/Raksha Mantralaya; and NOC dated 08.07.2014 from Air Headquarters, New Delhi. Under those circumstances, it was held by this Commission that the project, in question, was marketed and sold before getting necessary approvals/permissions, which is an unfair trade practice. Relevant part of the said order reads thus: -
"Besides as above, it has also come out from the record that the opposite parties had not obtained necessary approvals and sanctions from the Competent Authorities, before launching and selling the project, in question. Admittedly, the unit, in question was booked by the complainant in the year 2011 and the same was provisionally allotted to him, vide letter dated 18.04.2012. However, perusal of the record placed by the opposite parties themselves reveals that environment clearance for construction of flats, in the said project was issued by the Competent Authority, only on 05.06.2015; clearance from Fire Department was given on 10.02.2015; No Objection Certificate (NOC) from Punjab Pollution Control Board, was issued on 23.04.2015; Certificate regarding technical approval of the project by the Govt. was issued on 05.12.2012; NOC for discharge of sewerage treated water was issued on 10.04.2015; NOC from the Government of India, Ministry of Defence/Raksha Mantralaya was issued only on 03.07.2014; and NOC from Air Headquarters, New Delhi, was issued on 08.07.2014. Thus, it is clearly proved by way of documents, referred to above, that the project was marketed, launched and sold before getting approvals/sanctions from the Competent Authorities, which is an unfair trade practice, on the part of the opposite parties. Similar view was expressed by the National Commission in Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016."
In the present case also, by launching the project, in question, and selling the units therein, without obtaining necessary approvals/sanctions from the competent Authorities, the opposite parties, violated the provisions of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which amounted to unfair trade practice. Under similar circumstances, wherein, the builder has launched and sold the project, before obtaining permissions, the National Commission in a case titled as Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016, has held as under:-
"We are unable to persuade ourselves to agree with the ld. counsel. While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-
If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.
We are in complete agreement with the view taken by the State Commission. "
Not only as above, another similar question, in respect of the same project, as to whether, the opposite parties possessed all the requisite permissions, to launch the project, in question, and sell the units therein or not, fell for determination before this Commission in the case titled as Roshan Kumar and another Vs. Emerging India Housing Corporation Ltd. and another, consumer complaint no. 252 of 2017, decided on 11.01.2018. This Commission held as under:-
"The next question that falls for consideration, is, as to whether, the opposite parties possessed all the requisite permissions, to launch the said project and sell the units therein or not. It may be stated here that the complainants, in their complaint, have taken a specific stand that the booking of the unit, in question, was done by them, in the project of the opposite parties, on the allurements made by them (opposite parties) vide brochure Annexure C-1, wherein it was, in clear-cut terms mentioned that the project, in question, was approved by the Punjab Government, whereas, infact no permission/approval was taken by them, for the same. In support of their contention, the complainants have placed on record, letters dated 21.03.2016 Annexure C-14 and 22.03.2016 Annexure C-15 i.e. the information obtained under RTI Act, 2005, from the Senior Town Planner, PUDA and GMADA, respectively. Not only us, anyone will be shocked, on going through the information supplied by the said Competent Authorities. It has been very candidly intimated vide the said letters that not even a single case with regard to launching of the project namely M/s Emerging Heights-III, Sector 115, Greater Mohali, has been dealt with by the Competent Authorities and that no licence or approval has been granted to the opposite parties, for launching the said project by the Government concerned. It is also very pertinent to add here that in reply to para no.15 of the complaint, wherein the complainants, while relying upon the said information, have alleged that the opposite parties have not obtained permissions from the Govt. concerned to launch the said project, they (opposite parties) in their reply, have stated 'that the contents of para no.15 of the complaint are either matter of record or are denied for want of any specific knowledge'. The admission of the opposite parties in the first part is sufficient for this Commission, to come to the conclusion that the complainants are legally right to seek refund of the amount paid by them, towards price of the said unit. The opposite parties gave a misleading information to the general public including the complainants, just with a view to grab hard earned money of the gullible buyers, that the project launched by them, has been got approved from the Punjab Government. The documents placed on record indicate that when project was marketed and sold, not even a single permission was available with the project proponent/opposite parties. Even nothing has been produced on record by the opposite parties, that, as on today, they are in possession of necessary approvals/ sanctions to launch the said project. To launch the project, without getting necessary permissions/approvals, would amount to unfair trade practice."
In the present case also, as stated above, there is a complete violation of the provisions of the PAPRA and the said violation amounts to adoption of an unfair trade practice, which is glaring and vivid on the part of the opposite parties and needs to be deprecated.
Under above circumstances, the plea taken by the opposite parties, with vehemence, to the effect that since it was clearly mentioned in Clause 12 of the allotment letter/ agreement that possession of the unit, will be handed over within a period of 36 months' time from the date of booking/ allotment, once all necessary approvals and sanctions have been obtained from Sanctioning authority, being devoid of merit, must fail and the same stands rejected. The opposite parties cannot be allowed to take benefit, out of their wrong doings.
Now coming to the plea taken by the opposite parties, to the effect that the tower, in which the flat is located, is ready, it may be stated here that not even a single convincing document has been placed on record, by the opposite parties to prove that the unit is ready to be handed over to the complainants and that the development at the project is complete in all respects. It is not in dispute, that the complainants were offered construction linked payment plan and they have paid an amount of Rs.24,51,914/-, when this complaint was filed. It was their specific case that possession of the unit, in question, was not delivered to them, which was to be delivered by 29.10.2015. It is well settled law that the onus to prove that the project has been completed and the area/site, in question, is fully developed, is on the builder/opposite parties. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present case, it is very strange that not even a single document has been placed on record, by the opposite parties, in respect of the unit, in question, to prove that its construction is complete and they are actually ready for offer and delivery of possession of the same. In case, the unit is ready and all the development activities had been undertaken at the project site, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development and construction activities, had been undertaken and completed at the site or not, but they failed to do so. At the same time, the opposite parties were also required to produce on record, a copy of the occupation and partial/final Completion Certificates (if obtained), having been issued by the Competent Authorities, which could be said to be best evidence, to prove their case, but they miserably failed to do that also. Even at the time of arguments, no reply was given by Counsel for the opposite parties, when he was asked as to by which date, actual physical possession can be given to the complainants, after obtaining occupation and partial/completion certificates. He was silent on this. The plea raised by the opposite parties, that they are ready with the unit to be delivered to the complainants, and that too in the absence of any documentary evidence, has no legs to stand and is accordingly rejected.
Once it has been proved that the opposite parties are not in a position to deliver possession of the unit, in question, even as on today, as such, there is no question, to appoint any Local Commissioner, to apprise this Commission, as to whether the project is complete and that the opposite parties are in a position to deliver actual physical possession of the unit, complete in all respects or not.
Sequence of events narrated above, clearly reveal that by not delivering possession of the unit, in question, by the stipulated date, the opposite parties have committed a material violation. It is settled law that when there is a material violation on the part of the builder, in not handing over possession of units/plots by the stipulated date, the purchaser is not bound to accept the offer, even if the same is made at a belated date (in the present case not offered) and on the other hand, can seek refund of amount paid. It was so held by the National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held as under:-
"I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest."
Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No. 59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same."
Further, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, under similar circumstances, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
However, in the present case, the position is worst, as the opposite parties have not even offered possession of the unit, what to speak of delay in delivery thereof. The complainants cannot be made to wait, for an indefinite period for delivery of possession of the unit. Under above circumstances, it is held that since there was a material violation on the part of the opposite parties, in not offering and handing over possession of the unit, in question, even till date, as such, the complainants are entitled to get refund of amount paid by them.
It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the complainants. It has been proved on record that an amount of Rs.24,51,914/- was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest @18% p.a. (as per Clause 6 of the Allotment Letter/agreement, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014. In view of above, the complainants are certainly entitled to refund of the amount paid, after deduction of Guaranteed Rental Income (GRI) already received by them, for some period, from the opposite parties.
At the same time, the opposite parties are also liable to compensate the complainants, for inflicting mental agony, physical harassment and financial loss to them.
It was submitted by the Counsel for the opposite parties, that the interest and compensation could not be granted simultaneously. He further submitted that interest granted also amounted to compensating the complainants. The submission of the Counsel for the opposite parties does not appear to be correct. The words interest and compensation are sometimes used interchangeably and, on other occasions, they have distinct connotation. Interest in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, interest is understood to mean the amount, which one has contracted to pay for use of borrowed money. In whatever category interest in a particular case may be put, it is a consideration, paid either for the use of money, or for forbearance in demanding it, after it has fallen due, and, thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable. The interest is being granted, to the complainants, for improper and illegal retention of the amount deposited by them, with the opposite parties, for a long time. Had the amount been refunded to the complainants, immediately, when the project had not taken off, for want of the requisite permissions, required for launching the same, they would have invested the same, in some business or deposited the same in the bank, as a result whereof, they would have got interest thereon. For financial loss, which the complainants incurred, this Commission, as such, has decided to grant interest, on the amount deposited, which could be said to be just, fair and reasonable. The submission of Counsel for the opposite parties, being devoid of merit, stands rejected.
Now coming to grant of compensation for mental agony, physical harassment and financial loss caused to the complainants, it may be stated here that according to Section 14(d) of the Act, 1986 the Consumer Foras can grant compensation, to the complainant. The word compensation is again of very wide connotation. It has not been defined, in the Act. According to the dictionary, it means, compensating or being compensated, thing given as recompense. In legal sense, it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Consumer Foras have been vested with the jurisdiction to award value of goods or services and compensation, it has to be construed widely enabling the Consumer Foras, to determine compensation, for any loss or damage suffered by a consumer, which in law is otherwise, the wide meaning of compensation. The provision, in our opinion, enables a consumer to claim and empowers the Consumer Fora to redress any injustice done to him. The Commission or the Forum in the Act, is, thus, entitled to award not only the value of the goods or services, but also to compensate the consumers for injustice suffered by them. In this case, substantial amount of Rs.24,51,914/- was deposited with the opposite parties. The complainants booked the unit, in the hope of getting its possession within the stipulated period. Their hopes were dashed to the ground, when they saw that there was no development activity, at the spot, and even necessary permissions had not been obtained by the opposite parties for carrying out construction and development, before they collected money from the prospective buyers. The complainants, thus, were caused physical harassment and mental agony, by the opposite parties. In Paramvir Singh Vs P.H. Houses Pvt. Ltd., Revision-Petition No.2779 of 2010 decided on 11.5.2011 decided by the National Commission, in similar circumstances, when possession of the unit was not given by the builder to the complainant for a long period, refund of the amount deposited by him with interest @15% and the compensation were granted. The principle of law, laid down in Paramvir Singh's case (supra) is fully applicable to the facts of the instant case. This Commission, is, thus, well within its right, to grant interest, as well as compensation simultaneously. The submission of the Counsel for the opposite parties, being devoid of merit, must fail, and the same stands rejected.
As far as the objection regarding impleading of opposite parties no.2 and 3, in their personal capacity, in this consumer complaint, is concerned, we do not agree with the objection raised. It is not the case of the opposite parties that the above-named persons are not their Managing Director and Director. As such, these two persons are holding such important positions in the Company, where they are directly involved with the decision-making process in the Company. A similar controversy arose for determination before the Hon'ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017, wherein, it was held as under:-
"From the material on record, it is evident that the OP-2 is the Chairman of the Company whereas the OP-3 is the Chief Executive Officer-cum-M.D. of the said company. Evidently, these two persons are holding such important positions in the Company, where they are directly involved with the decision-making process in the company. By virtue of their office, they can directly influence any decision regarding relief to be granted to the complainant, as asked for in the consumer complaint. It is held, therefore, that the State Commission has rightly dismissed the interim application, rejecting the plea of the appellants to delete the name of OP-2 & OP-3 from the array of parties. The impugned order passed by the State Commission is, therefore, upheld and the appeal is ordered to be dismissed with no order as to costs."
In view of above, objection raised by Counsel for the opposite parties stands rejected.
As far as the objection regarding non-impleading of Registered Office in this consumer complaint is concerned, it may be stated here that there are ample documents on record, which reveal that the complainants were dealing directly with Corporate Office of the opposite parties at Chandigarh, of which, opposite parties no.2 and 3 are the Managing Director and Director, respectively. Once, the payments in respect of the unit, in question, were made at the said Corporate office at Chandigarh; all the correspondence took place between the parties, with the said Office, as such, objection taken in this regard, being devoid of merit, stands rejected.
In this view of the matter, it cannot be said that the complaint was bad for misjoinder/non-joinder of necessary parties.
In so far as connected consumer complaint no.702 of 2017 is concerned, it is case of total betrayal on the part of the opposite parties. It is on record of this case that the complainant booked a plot measuring 150 square yards, on looking at glossy advertisements, in the project opposite parties, highlighting good picture of the project, namely Emerging Valley, at Landran-Banur Road, Punjab, for total amount of Rs.20,62,500/-. On 06.09.2011, the complainant booked above said plot, by paying an amount of Rs.6,18,750/- and he was issued receipt bearing no.00722 Annexure C-2 of the even date, with a promise that buyer's agreement/allotment letter will be offered for signing in a short time thereafter. However, nothing was done. Many visits paid by the complainant to the project site indicated that there was no development; further despite requests made, buyer's agreement was not offered for signing; and allotment letter was also not issued. The complainant came to this Commission seeking refund of amount paid, by way of filing consumer complaint bearing no.188 of 2017. He was directed to approach the opposite parties first, by issuing legal notice and then take legal recourse to seek refund of the amount paid. Thereafter, it appears that legal notice was sent to the opposite parties on 12.06.2017 Annexure C-4, giving details of above said facts, however, no response was given by them (opposite parties).
Upon notice, in the said connected case, reply was filed by the opposite parties, wherein, payments made by the complainant were not denied. However, it was said that possession was offered during pendency of this complaint. All other objections which were taken in the earlier petition, were also taken in this case. It was stated that Change of Land Use (CLU) qua the project land was issued by the Competent Authority on 04.07.2013.
After going through all the facts and issues discussed in earlier part of this judgment, we are of the considered opinion that the complainant is entitled to refund of amount paid, alongwith interest. In this case also, there is nothing on record to show all permissions were available with the opposite parties, when the project in question, was sold and even thereafter. Position in this case, as stated above, is worst, as even the buyer's agreement was not offered to the complainant for signing. In this case, there is nothing on record, which can incline this Commission to give any findings, in favour of the opposite parties. At the time of arguments also, Counsel for the opposite parties failed to show any valid licence to develop the project, in question. It may be stated here that earlier also, a consumer complaint, in respect of the same project i.e. Emerging Valley Pvt. Ltd. was filed by one Jaswinder Singh (Jaswinder Singh Vs Emerging Valley Private Limited and others, consumer complaint no. 531 of 2017, decided on 14.05.2018) before this Commission. In that case, Jaswinder Singh had purchased a plot in the said project, yet, possession thereof was not delivered to him. In that case, he placed on record an RTI information 20.06.2017, supplied by Greater Mohali Area Development Authority (GMADA) i.e. the competent Authority, wherein, it was intimated that the said Company (Emerging Valley Pvt. Ltd.), had applied to get licence to develop a colony. Letter of Intent (LOI) was issued, but, since the promoter failed to fulfill the conditions contained in the said LOI, licence was not issued to it. It was further made clear in the said RTI information that that the promoter was not competent to sell any plot/flat etc. As such, this Commission while going through the facts of that case, ordered refund of the amount paid, alongwith interest compensation, etc., vide order dated 14.05.2018. Relevant part of the order passed in Jaswinder Singh's case (supra) are reproduced here under:-
"...................It is further case of the complainant that even then, when possession was not delivered, he became suspicious and went to the site and was surprised to see that there was no development at all. To his query, as to when possession of the plot will be delivered, no satisfactory reply was given. The complainant came across RTI information supplied by Greater Mohali Area Development Authority (GMADA) i.e. the competent Authority. The said information was sought by a similar located allottee, qua Emerging Valley project launched by the opposite parties. The said Authority, vide letter dated 20.06.2017 Annexure C-7, intimated that opposite party no.1 had applied to get licence to develop a colony. Letter of Intent (LOI) was issued. Because the promoter failed to fulfill the conditions contained in the said LOI, licence was not issued to it. It was further said vide the said letter, that the promoter was not competent to sell any plot/flat etc. Translated copy of the said letter reads thus:-
"GREATER MOHALI AREA DEVELOPMENT AUTHORITY, PUDA BHAWA, SECTOR 62, S.A.S. NAGAR (Town Planning and Licensing Shakha) To Sh.Manvir Singh Home No.447, Type-2, Punjab Mandi Board Complex Sector 66, S.A.S. Nagar Letter No.STP/GMADA/A-2/2016/1866 Dated 20/06/2017 Subject: Sh.Manvir Singh (File No.10919) through RTI Act, 2005 for information (Diary No.465 dated 05.06.2017) The information sought Regarding the above subject, it is stated that M/S Emerging Valley Private Limited applied for setting up a colony at Village Nogiari district SAS Nagar and for taking up the license in this office but the promoter of the colony could not fulfil the conditions of letter of intent, the licence was not issued to the promoter. The promoter of the colony cannot sell a plot, flat and boths without taking the license.
Sd/- Administrative Office Licensing GMADA, S.A.S. Nagar Endorsement No.GMADA STP/2016 dated
copy of the above is hereby sent to Administrative officer (Coordination) SAS Nagar with reference to his letter No.1222 dated 08/06/2017 for information."
Thereafter, again the complainant visited the office of the opposite parties but failed to get any positive response, qua delivery of possession of the plot.
2. xxxxxxxxxxxxxx................
3. xxxxxxxxxxxxxx.................
4. xxxxxxxxxxxxxx................
5. xxxxxxxxxxxxxx................
6. We have heard the contesting parties, and have gone through the evidence, and record of the case, carefully and are of the considered opinion that this complaint deserves to be allowed. It is true that provisional letter in respect of initially allotted plot, measuring 200 square yards, was issued in favour of the complainant on 10.06.2015, Annexure C-2 and in the said letter, a commitment was made to hand over possession of the plot, within a period of three years i.e. upto June 2018. Before exhausting the entire period of three years, this complaint has been filed by the complainant. However, as is reflected in earlier part of this order, even as on today, licence to develop colony i.e. for the project under question, is not available with the opposite parties, as such, it will not be justified to ask the complainant to wait till the end of three years. It is apparent on record that one of the similar situated allottee sought information under the RTI Act, 2005, from the GMADA, as to whether any licence is available with opposite party no.1 to develop the project, in question or not. In the answer, vide letter dated 20.06.2017, it was specifically stated that after issuance of LOI, when the builder failed to fulfill necessary conditions, no licence was granted to it. The promoter was not competent to develop a colony and sell plots, flats etc., in the said project. Opposite parties no.1 and 2 placed on record some documents as Annexures with the affidavit and an attempt has been made to show that some permissions were available with the builder, to raise the said project, however, in the face of letter dated 20.06.2017 issued by the GMADA, such contention cannot be accepted.
At the time of arguments also, Counsel for opposite parties no.1 and 2 failed to show any valid licence to develop the project, in question. He only placed reliance on the documents attached with the said affidavit. Those documents came up for consideration, in a similar case, titled as Jarnail Singh Vs. Emerging Valley Private Limited, complaint case no.37 of 2017, decided on 23.05.2017 and this Commission observed as under:-
"Thereafter, during pendency of this complaint, the opposite party moved an application, to place on record some more documents Annexure R-4 to R-11, which was allowed on 06.04.2017, subject to payment of costs. Those documents are taken on record. Perusal of those documents indicate that when the project, in dispute, was launched, not even a single approval granted by the Competent Authorities, was available with the opposite party. Subject to many conditions, CLU was granted on 04.07.2013 and thereafter, in continuation to the said letter, another letter was issued on 23.09.2013 Annexure R-5. As per conditions imposed, before starting the development in the project, it was necessary for the opposite party to get licence, as per terms and conditions of The Punjab Apartment and Property Regulation Act, 1995 (PAPRA). NOC from Punjab Pollution Control Board (PPCB) was to be obtained before start of development. Other permissions like environmental in terms of Notification dated 14.09.2006; NOC from the Forest Department etc., were also to be got issued. Document Annexure R-6 indicates that to make arrangements for treatment and disposal of sewerage, communication was sent by the GMADA, only on 20.11.2015. As per information supplied through document Annexure R-7, it was indicated that some land falling in the project was mutated, in the name of the opposite party, in the year 2015. Perusal of photographs placed on record Annexure R-11, also makes it very clear that within the project only, wherein an alternative unit was offered, the development/construction appears to be incomplete. The facts brought on record by the opposite party itself, make out a case in favour of the complainant. It is admitted in the written statement itself and also at the time of arguments by Counsel for the opposite party that in the project, when the unit was initially sold to the complainant in the year 2012, construction had not started at all.
Without discussing anything further, on the basis of this admission itself, it can safely be said that the opposite party was guilty of providing deficient service to the complainant and refund of the amount deposited, can be ordered accordingly.
Be that as it may, it is on record that there is nothing to show that any permission was available with the opposite party when project was sold in the year 2012. To launch the project, without getting necessary permissions/approvals, would amount to unfair trade practice. Similar view was expressed by the National Commission in a case titled as Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016. In that case, it was held as under:-
"We are unable to persuade ourselves to agree with the ld. counsel. While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-
If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.
6. We are in complete agreement with the view taken by the State Commission. "
The principle of law, laid down in the aforesaid case, is fully applicable to the present case. In view of above, it can safely be said that by adopting unfair trade practice, the project was sold/launched. "
7. In view of above fact, the complaint filed, cannot be termed as premature. The complainant has virtually been duped. The project was sold by the opposite parties, without getting approvals/licence. Such an act would amount to unfair trade practice. It may be stated here that earlier also, against the same Company/(Emerging Valley Pvt. Ltd.), in Naveen Goel and another Vs. Emerging Valley Private Limited, consumer complaint bearing no.218 of 2015, decided by this Commission on 17.02.2016, it was held as a matter of fact that when the project was sold, even Change of Land Use (CLU) was not in the hands of the opposite party. Even Letter of Intent (LOI) was released thereafter. First Appeal bearing no.278 of 2016 filed against the order dated 17.02.2016, was dismissed, in limine, by the National Commission, vide order dated 18.04.2016.
In view of above, the complainant is entitled to get refund of the amount paid by him."
In view of above, it is held that, in connected case no.702 of 2017, offering possession of the plot, vide letter dated 28.11.2017 i.e. during pendency of the complaint, is nothing but a tactics adopted by the opposite parties, to evade their liability, especially in the face of RTI information referred to and discussed above. As such, it is held that, in this case also, the complainant is entitled to refund of the amount paid, alongwith interest and compensation.
No other point, was urged, by the contesting parties.
For the reasons recorded above, both the complaints are partly accepted, with costs, as under:-
In consumer complaint no.774 of 2017, the opposite part ies, jointly and severally, are directed as under:-
To refund the amount of Rs.24,51,914/- to the complainants, alongwith interest @12% p.a., from the respective dates of deposits onwards, after deducting the amount already received by them, towards Guaranteed Rental Income (G.R.I.).
To pay compensation, in the sum of Rs. 1 (one) lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.22,000/- to the complainants.
The payment of awarded amounts, in the manner mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) thereafter shall carry penal interest @15% p.a., instead of @12%, from the date of default, after deducting the amount already received by them, towards Guaranteed Rental Income (G.R.I.). and interest @12 % p.a., on the amounts mentioned at sr.nos.(ii) and (iii) from the date of filing of this complaint, till realization.
In consumer complaint no.702 of 2017, the opposite part ies, jointly and severally, are directed as under: -
To refund the amount of Rs.6,18,750/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.30,000/- , for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.11,000/- to the complainant.
The payment of awarded amounts, in the manner mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) thereafter shall carry penal interest @15% p.a., instead of @12%, from the date of default and interest @12 % p.a., on the amounts mentioned at sr.nos.(ii) and (iii) from the date of filing of this complaint, till realization.
However, it is made clear that, if the complainants, in any of the complaint above, have availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed on connected case file.
The file be consigned to Record Room, after completion.
Pronounced.
12.06.2018 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. :
702 of 2017 Date of Institution :
25.09.2017 Date of Decision :
12.06.2018 Deepak Madan Lal Kansal S/o Sh.Madan Lal Kansal R/o Plot No.40, 12-C, Lilashah Nagar, Gandhi Dham, District Kutch, Gujarat.
......Complainant V e r s u s Emerging India Housing Corporation Private Limited, Head Office at SCO No.139-141, Sector 17-C, Chandigarh, through its Director, Sh.Gurpreet Singh Sidhu.
Sh.Gurpreet Singh Sidhu, Director, Emerging India Housing Corporation Private Ltd., Regd. Office at B-57, Lower Ground, South Extension Part-2, New Delhi 110049.
..... Opposite Parties.
Argued by: Sh.Ravinder Pal Singh, Advocate for the complainant.
Sh.Goldy Jakhar, Advocate for the opposite parties.
Complaints under Section 17 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.
MR.DEV RAJ, MEMBER.
MRS.PADMA PANDEY, MEMBER.
JUSTICE JASBIR SINGH (RETD.), PRESIDENT Vide our separate detailed order of the even date, recorded in consumer complaint bearing no.774 of 2017 titled as Prabhjot Kaur and anr. Vs. M/s Emerging India Housing Corporation (P Ltd., and ors., this complaint has been partly accepted with costs.
Certified copy of the order passed in consumer complaint bearing No. 774 of 2017 shall also be placed on this file.
Certified copies of this order, alongwith the main order passed in consumer complaint bearing No. 774 of 2017, be sent to the parties, free of charge.
The file be consigned to Record Room, after completion Sd/- Sd/- Sd/- (DEV RAJ) MEMBER (JUSTICE JASBIR SINGH (RETD.)) PRESIDENT (PADMA PANDEY) MEMBER Rg.