State Consumer Disputes Redressal Commission
Satish Kumar vs Chandigarh Royale City Promoters Pvt. ... on 12 January, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 242 of 2015 Date of Institution : 14.10.2015 Date of Decision 12.01.2016 Satish Kumar son of Sh. Kishan Chand, resident of House No.3147/1, Sector 28-D, Chandigarh. ......Complainant V e r s u s Chandigarh Royale City Promoters Pvt. Ltd., Main Office, Royal Estate, Zirakpur, District SAS Nagar, Mohali, through its MD. Chandigarh Royale City Promoters Pvt. Ltd., Registered Office SCO 189-90, Sector 35-C, Chandigarh, through its MD/Authorized Signatory. .... Opposite Parties Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER
MRS. PADMA PANDEY, MEMBER Argued by:Sh.Vaibhav Narang, Advocate for the complainant.
Sh.Subhash Chander Sharma, Advocate for the Opposite Parties.
JUSTICE JASBIR SINGH (RETD.), PRESIDENT.
The facts, in brief, are that, in the month of April 2011, the opposite parties had published a brochure, stating that integrated township is going to be developed by them, in the name and style of "Chandigarh Royale City", on Zirakpur-Patiala road. Allured by rosy picture given in the said brochure, the complainant intended to purchase a plot measuring 200 square yards. As such, he paid an amount of Rs.4 lacs on 15.04.2011, vide receipt Annexure C-2, to the opposite parties. The complainant was assured that expression of interest will be got signed from him, within few weeks. However, the said document was issued only on 23.04.2011 (Annexure C-3). Total price of the plot was fixed at Rs.19 lacs inclusive of Internal Development Charges (IDC), External Development Charges (EDC) and other charges. After signing expression of interest, the complainant paid an amount of Rs.4 lacs on 05.07.2011. An assurance was given that Plot Buyer's Agreement (in short the Agreement) will be put up for his signatures, in near future. Orally he was intimated that plot No.395 has been allotted to him. The complainant again paid an amount of Rs.4 lacs on 07.11.2011. Agreement was not presented by the opposite parties, for signatures of the complainant. However, the complainant was made to pay another amount of Rs.4 lacs, to the Opposite Parties, on 25.09.2012. The complainant insisted that let Buyer's Agreement be signed first and thereafter, he will make further payment towards the said plot. By that time, substantial amount, towards price of the plot, stood deposited with the opposite parties. In a very biased manner, one-sided Agreement was put for signatures and under pressure and on fear of losing his money, it was signed by the complainant on 07.01.2014. An arbitrary stipulation was added in the said Agreement i.e. Clause 14, to the effect that possession of the plot would be delivered within 24 months (6 months + 6 months)from the date of execution of the same (Agreement). The complainant was threatened that, in case, he failed to sign the Buyer's Agreement, his 20% amount of the total cost of plot i.e. Rs.3,80,000/- will be forfeited.
Thereafter, an arbitrary demands of Rs.2,99,500/- alongwith delayed interest thereon @21% p.a. i.e. Rs.74,564/- and Rs.2,95,250/- alongwith delayed interest thereon @21% p.a. i.e. Rs.1,17,380/- were made by the opposite parties, vide letters dated 09.01.2014 dated 25.02.2014 respectively. Under pressure, the complainant deposited an amount of Rs.2,95,250/- vide receipt dated 29.05.2014 (Annexure C-11 colly.). He received an offer of possession, in respect of the plot, in question, vide letter dated 10.10.2014 (Annexure C-12), without any development at the site. The complainant paid another amount of Rs.1,11,492/- on 18.11.2014. By the end of November 2014, the complainant had paid the entire sale consideration of plot i.e. Rs.20,06,742/- including payment of interest towards delayed payment charges.
It was stated that there is no development at the site and actual physical possession has not been handed over to the complainant. It was promised in the brochure that the opposite parties are going to develop a township in 200 acres of land, containing facilities and amenities like landscaped gardens, lush green parks, jogging tracks, leisure club, senior citizens corner, single entry secured campus, gymnasium, water bodies as well as indoor games facilities etc. At the spot, project was developed only for 78 acres of land, depriving the complainant of all the facilities, which was promised in the brochure, Annexure C-1 issued by the opposite parties. It further came to the notice of the complainant that an unfair trade practice has been adopted by the opposite parties, to float township, without getting any permission from the Competent Authority. False promises were made, which were not kept. When project was advertised, permission has not been granted to the opposite parties by the authorities. It was further said that there was violation of Section 6 of the Punjab Apartment and Property Regulation Act, 1995, (in short the PAPRA Act), by accepting more than 25% of the basic sale consideration of plot, before execution of the Buyer's Agreement. By stating as above, prayer has been made to order refund of amount of Rs.20,06,742/- alongwith interest, compensation and cost of litigation.
Upon notice, reply was filed by the opposite parties stating that this Commission has no territorial jurisdiction, to entertain and decide the present complaint. Buyer's Agreement was executed at the site of the project, which is situated outside Chandigarh and further allotment letter was issued, from the said place. It was further stated that the project, where plot of the complainant was carved out, is complete and many allottees have preferred to take possession and raise construction on the plots purchased. A positive stand has been taken that the complainant is not a consumer, as he has purchased the plot, in dispute, for earning profits, in future. Execution of Agreement, on 07.01.2014 was admitted. Possession of plot was to be delivered in three years from the date of execution of Agreement. It was averred that the date of possession of plot has not yet arrived, and, as such, the complaint filed is premature. Rather, possession of the plot was offered to the complainant. However, it is not denied that the Agreement was signed after more than two years, from the date of signing the document i.e. expression of interest. It is also not disputed that the entire sale consideration towards the plot, including delayed interest and club charges stood paid by the complainant. It was averred that the complaint was not maintainable, as an Arbitration Clause, existed, in the Agreement, and, in case of any dispute, the matter was to be referred to the Arbitration. The remaining averments were denied, being wrong.
The complainant, in support of his case, submitted his own affidavit, by way of evidence, alongwith which, a number of documents were attached.
The opposite parties, in support of their case, submitted an affidavit of Anoop Kumar Sharma, their authorized person, by way of evidence, alongwith which, a number of documents were attached.
We have heard Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
First, we shall deal with the contention of Counsel for the complainant that huge amount was received by the opposite parties, in contravention to the provisions of PAPRA Act. To say so, reliance has been placed upon Section 6 (1) of the PAPRA Act, which reads thus:-
"6. Contents of agreement of sale:-
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 for 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."
Perusal of afore-extracted Section 6 (1) of the PAPRA Act, reveals that it is mandatory that before execution of the Buyer's Agreement, more than 25% amount towards plots/units cannot be received by a builder. It is further mandatory that Agreement be signed immediately after draw of lots. In the present case, it is an admitted fact that the price of the plot was fixed at Rs.19 lacs. Expression of interest was signed on 23.04.2011. Buyer's Agreement was offered for execution on 07.01.2014. By that time, the complainant had paid more than Rs.16 lacs, out of Rs.19 lacs of price of the plot. By the month of November 2014, whole consideration including club charges towards the plot stood paid. Nothing was offered in lieu thereto. Above act of the opposite parties violates the mandatory provisions of Section 6 (1) of the PAPRA Act, amounts to unfair trade practice.
Not only as above, in the brochure, it is specifically stated that the project known as Chandigarh Royale City will be developed in 200 acres of land. 60% of the land will be kept open for green cover. Township has been planned as per principles laid down by the legendary Town Planner and Architect Lee Corbusier, who had planned Chandigarh city.
Reading of brochure shows that many rosy promises like lush green park with jogging tracks, elevated landscaped gardens, water elements, splash pool aquatic plant, covered sitting areas for senior citizens, shaded and open gazebo, ample parking space, intercom security system, leisure club, theme parks, etc. were promised to be provided. It is case of the complainant that nothing of the sort was provided, as promised. The project is being developed only in an area of 78 acres. The project was floated, without obtaining necessary permissions, from the Competent Authority, i.e. Greater Mohali Area Development Authority (GMADA). Sanction was granted only on 31.12.2012. Licence was to expire on 22.04.2013. It has been said so, by placing reliance upon document Annexure C-14 i.e. information downloaded from website of Punjab Urban Development Authority (PUDA). Above act of the opposite parties could also be termed as an unfair trade practice. By making unreliable promises and accepting applications, alongwith huge amount, from the purchasers before even getting the permissions to float the project from the Competent Authorities, is nothing, but an act of cheating.
Furthermore, Agreement for signing was not offered within reasonable time i.e. say one or two months, from the date of signing expression of interest on 23.04.2011, it (Agreement) was got signed only on 07.01.2014 i.e. after more than two years, by which date, the complainant had already paid Rs.16 lacs, out of Rs.19 lacs, towards price of the plot. This act of not offering Agreement, for signing, within reasonable time i.e. say one of two months, from the date of signing expression of interest on 23.04.2011, also amounts to unfair trade practice and deficiency in providing service, on the part of the opposite parties, to the complainant. Similar view was taken by this Commission, in consumer complaint bearing No.147 of 2015, titled as Sh.Dharam Pal Gupta Vs. M/s Emaar MGF Land Ltd. and ors., decided on 13.10.2015, wherein it was held as under:-
"Opposite Parties No.1 and 2 are, thus, guilty of unfair trade practice, by not offering the execution of Buyer's Agreement, within a reasonable time, say within a month or two after allotment of the plot. Above action was deceptive and needs to be deprecated".
Contention of Counsel for the complainant that the Agreement was signed by the complainant under duress, appears to be correct. In the expression of interest, there is a penalty Clause, in case, booking is got cancelled. May be out of that fear, the Agreement was signed by the complainant. Thereafter, remaining amount was also paid by the complainant to the opposite parties, totaling 100% of the price of plot, including club membership and other charges. They still were not satisfied and raised unreasonable demands, by writing letters, to hand over possession of the property in dispute. Thus, as stated above, the opposite parties were deficient, in providing service, and adopted unfair trade, on this count too.
Contention of Counsel for the opposite parties that the complaint is premature and be dismissed, is liable to be rejected. No doubt, in the Agreement, which was signed on 17.01.2014, as per Clause 14, total three years were fixed to deliver possession of the plot and the said date has not yet arrived. However, in view of the findings given above, regarding indulgence of unfair trade practice by the opposite parties and deficiency in providing service, no relief can be granted to the opposite parties.
Agreement appears to have been signed under duress, terms and conditions whereof, are one sided i.e. favourable to the opposite parties. Under similar circumstances, a similar view has been taken by the Hon'ble National Commission, in a case titled as Prasad Homes Private Limited Vs. E. Mahender Reddy & Ors. I (2009) CPJ 136 (NC), wherein, it was clearly held that a builder cannot be allowed to take shelter under Agreement clause, to usurp money deposited by complainants, as the Agreement clause is heavily loaded in his (builder) favour and against purchasers and such Agreement, clearly amounts to unfair trade practice. In that case, refund of deposited amount alongwith interest directed by Fora below, was upheld. The principle of law, laid down, in Prasad Homes Private Limited's case (supra), is clearly applicable to the present case. In view of above peculiar facts and circumstances, as also the judgment of the Hon'ble National Commission, referred to above, the said Agreement cannot be enforced against the complainant, in this case.
Further contention of Counsel for the opposite parties that this Commission is not having territorial jurisdiction, is also liable to be rejected. It is stated by Counsel for the opposite parties that the Agreement was signed at the site, situated at Village Karala, which falls in District Mohali. No transaction took place within the territorial jurisdiction of this Commission, as such, the complaint is liable to be dismissed.
On perusal of the file, we feel that the arguments raised by Counsel for the opposite parties, in this regard, are fallacious. Payment receipts issued and the demand letters raised from time to time, by the opposite parties clearly shows that the same were issued by Corporate Office of the opposite parties, i.e. from SCO No.44, Sector 20-C, Chandigarh. On account of these receipts/letters, it is stated that a cause of action has arisen in favour of the complainant, to file this complaint in this Commission. Otherwise also, under similar circumstances, factum of adopting unfair trade practice and deficiency in providing service qua this very project, against the opposite parties in this complaint, had attained finality. C onsumer complaint bearing No.39 of 2015, titled as Seema Nagpal Vs. M/s Chandigarh Royale City Promoters Pvt. Ltd. and others, was filed by another intending purchaser, against the opposite parties i.e. the same builder in the present complaint. In that case also, the complainant had purchased a plot in the project, in dispute. When possession was not delivered to her, in time, above complaint was filed. After noting contentions of both the parties, it was decided against the opposite parties, on 04.05.2015. Relevant portion of the order reads thus:-
"20. It is evident from the registration form that at the time of launching the project in June 2011, the Opposite Parties did not have the necessary permissions/approvals, from the Competent Authorities. As is evident, they even did not have the permission for Change of Land Use (CLU). The same for an area measuring 77.87 Acres falling in village Karala, Tehsil Derabassi, Distt. Mohali for residential purposes was accorded vide Chief Town Planner, Punjab's Memo No.8782 CTP(PB) SP.432(M) dated 28.11.2011 (Annexure R-4) with reference to the Opposite Parties application dated 21.11.2011. The complainant submitted application for allotment on 3.6.2011. Thus, when the Opposite Parties launched the project, they had not even applied for the change of land use permission. It is further borne out, from the letter dated 05.01.2012 (Annexure R-6) that the Punjab Pollution Control Board wrote to the Administrative Officer (licencing), GMADA for considering the case of the project of Opposite Parties, for grant of licence under Section 5 of Punjab Apartment & Property Regulation Act, 1995 (hereinafter for short to be referred as PAPRA 1995). However, the licence to develop a residential colony was granted to the Opposite Parties by GMADA vide Licence bearing No.LDC-10/2012 (Annexure R-16) on 31.12.2012 and Letter of Intent was issued vide Memo No.GMADA/ CTP/2012/250 dated 03.08.2012 (Annexure R-13). The Opposite Parties launched the project without obtaining the necessary permissions and approvals.
21. The Opposite Parties started booking the residential plots, and duping the innocent customers of their hard earned money, much earlier to the grant of approval to their project by GMADA through licence dated 31.12.2012. According to law, they could not start the booking of residential plots, and obtain money from the innocent consumers, before actually the licence and all the permissions and sanctions had been granted to them, by the Competent Authorities. In Kamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC), it was held that a builder should not collect money, from the prospective buyers, without obtaining the required permissions, such as zoning plan, layout plan, schematic building plan etc. It is the duty of the builder, to obtain the requisite permissions or sanctions, such as sanction of construction etc., in the first instance, and, thereafter, recover the consideration money from the purchasers of the flats/buildings. The ratio of law, laid down in the aforesaid case, is squarely applicable to the facts and circumstances of the instant case. If the bookings are made and the booking amount is collected, before obtaining the necessary sanctions, permissions, licences and without getting the necessary approvals, the same amounted to indulgence into unfair trade practice, on the part of the builder. Since the Opposite Parties failed to comply with the condition referred to above, as stipulated in the Expression of Interest (Annexure C-1), it was their bounden duty to refund the amount, paid by the complainant, alongwith the prevailing bank interest.
22. Not only this, even the provisional allotment letter dated 06.05.2014 (Annexure C-9) in respect of Plot No.1110 was issued in favour of Mrs. Seema Nagpal, complainant, after a gap of more than 03 years, from the date of Expression of Interest (Annexure C-1). The Opposite Parties even did not mention anything regarding execution of Plot Buyer's Agreement in their written statement, what to talk of placing the same on record. On the other hand, the Opposite Parties by raising different, illegal and unjustified demands, indulged into unfair trade practice. Clearly there was no transparency in the whole process. Undoubtedly, the act of the Opposite Parties, in the absence of requisite permissions/approvals from the Competent Authority, amounted to deficiency, in rendering service and indulgence into unfair trade practice."
The facts of the present case are squarely covered to the ratio of judgment passed by this Commission in the above case.
The next objection, raised by the opposite parties, is regarding non-maintainability of the consumer complaint, in view of existence of Arbitration Clause No.38 in the Agreement.
With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Act is made, which reads as under;
"3. Act not in derogation of any other law.--
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of an Arbitration Clause, in the Agreement, would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act. Similar principle of law, was laid down, in Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233. Not only this, recently also, a similar view was taken by the National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013. Vide that judgment many Revision-Petitions were decided. Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/ Opposite Party challenged that order in the Hon'ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013), the Hon'ble Supreme Court of India, while dealing with various judgments, observed that the same (judgments) have no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction can be exercised by a Consumer Fora or not. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act, is mandatory, cannot lead to an inference that the Consumer Fora is bound to refer disputes to the Arbitral Tribunal. In this view of the matter, the objection of the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
To defeat claim of the complainant, an objection was also raised by Counsel for the opposite parties that since the unit in question was purchased by the complainant, by way of investment, to gain huge profits, by selling the same, as and when there is escalation in prices, as such, he did not fall within definition of consumer, as provided under Section 2 (1) (d) of the Act. This objection does not carry any weight, and is liable to be rejected.
It is specifically stated by the complainant that he needs possession of the plot in question, for his personal use and approached the opposite parties a number of times. On the other hand, there is nothing, on the record, that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. Recently, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, 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. The principle of law, laid down, in Kavita Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the plot, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, falls within the definition of 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by Counsel for the opposite parties, being devoid of merit, is rejected.
No other point, was urged, by Counsel for the parties.
For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally directed, as under:-
To refund the amount of Rs.20,06,742/- to the complainant, alongwith simple interest @ 15% p.a. (less than 18% p.a. and 21% p.a., with quarterly rests, charged by the opposite parties in case of delayed payments, as per Clause 13 of the Agreement), from the respective dates of deposits onwards, within 2 months, from the date of receipt of a certified copy of this order.
To pay compensation, in the sum of Rs.1.50 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices, within 2 months, from the date of receipt of a certified copy of this order.
To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant, within 2 months, from the date of receipt of a certified copy of this order.
In case, the payment of awarded amounts at sr.no. (i) and (ii), is not made, within the stipulated period, then the opposite parties shall be liable to pay the same, alongwith penal interest @18% compounded quarterly, instead of simple interest @15% p.a. from the respective dates of deposits, till realization. Similarly, in case, the litigation costs of Rs.50,000/-, is not made, within the stipulated period, it shall carry penal interest @18% compounded quarterly, from the date of passing of this order, till realization.
Certified copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
12.01.2016 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Sd/-
[PADMA PANDEY] MEMBER Rg.