State Consumer Disputes Redressal Commission
Jasdev Singh Mattu vs Parsvnath on 13 September, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH. Complaint Case No. 33 of 2012 Date of institution: 29.5..2012 Date of decision : 13.9.2012 1. Jasdev Singh Mattu son of Sh.Sampuran Singh Mattu, resident of Sechshausere STD 122/33, 1150 Wien Vienna, Austrian, Europe C/o Mr.Rakesh Gupta, Advocate,#216, Sector 35-A, Chandigarh. 2. Kanwaljeet Mattu wife of Jasdev Singh Mattu, resident of Sechshausere STD 122/33, 1150 Wien Vienna, Austrian, Europe C/o Mr.Rakesh Gupta, Advocate,#216, Sector 35-A, Chandigarh. Complainants Versus 1. Parsvnath Developers Limited, through its Director, SCO No.1, First Floor, Madhya Marg,Sector-26, Chandigarh. 2. The Director, Parsvnath Developers Limited, Registered & Corporate Office, 6th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi -110001. 3. The Chairman, Chandigarh Housing Board, 8 Jan Marg, Sector-9, Chandigarh. Opposite Parties. Complaint U/s 17 of Consumer Protection Act,1986. Present: Sh.Varinder Arora, Advocate, for the complainants. Sh.Aftab Singh, Advocate, for Opposite Parties No.1&2. Sh.Karan Sharma, Advocate for Opposite Party No.3. CORAM: Justice Sham Sunder(Retd), President Mrs.Neena Sandhu, Member
Per Justice Sham Sunder (Retd), President The facts, in brief, are that the complainants, who are husband and wife, in order to purchase a property in India for residential purpose, applied jointly for a residential unit, with the Opposite parties, and deposited Rs.6,07,750/- as earnest money vide cheque/bank draft No.052696 dated 23.5.2008 drawn on UTI Bank Ltd. Thereafter, another sum of Rs.6,07,750/- was deposited vide cheque No.652697 in respect of the dwelling unit No.D4-604. A Flat Buyer Agreement , was entered into, amongst the parties, copy whereof is annexure C-2. It was stated that upon booking the said flat/dwelling unit, the complainants, in order to upgrade their living standard and according to their social status, opted for a better flat and wrote letter dated 1.7.2008 to the Opposite Parties for up-gradation of flat from D4-G04 to D2-G01. The Opposite Parties acceded to their request and confirmation regarding the same was given to the complainants vide letter dated 11.7.2008, copy whereof is annexure C3. It was further stated that the Opposite Parties demanded an additional amount of Rs.22,23,250/-, on account of change of category of Unit and the same was paid by the complainants, vide demand draft dated 21.8.2008. It was further stated that according to the Development Agreement dated 6.10.2006, entered into between the Developer and the Chandigarh Housing Board, the construction of the residential units, was to be completed within 36 months. It was further stated that the complainants visited the spot in the month of December,2009 and then in March,2010 and found that the Opposite Parties failed to construct the flats and even the foundation was not laid at the site.
Since there was no development in the area, the complainants requested the Opposite Parties to refund the amount of Rs.34,38,750/- alongwith interest @ 24% p.a. from the date of receipt till its realization, but to no avail. It was further stated that the Opposite Parties were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act,1986(hereinafter to be called as the Act only), was filed by them, claiming refund of the amount of Rs.34,38,750/- from the Opposite Parties alongwith interest @24% p.a. and Rs.5 lacs as compensation, for harassment, mental torture and unfair trade practice, besides litigation costs of Rs.50,000/-.
2. Opposite Parties No.1&2, in their written version, admitted the factual matrix of the case, that the complainants applied for the allotment of a flat, in their project at Rajiv Gandhi Chandigarh Technological Park in Chandigarh, which was allotted to them. They applied for change of category and on allotment of changed unit of bearing No.GO1 on the Ground Floor in Block No.D2 having an approximate 1700 sq.ft of super built area, at a basic price of Rs.1,21,55,000/-, a Flat Buyer Agreement dated 11.11.2008 was executed amongst the complainants, and the Opposite Parties. It was also admitted that the complainants deposited Rs.34,38,750/-. It was stated that after execution of the Development Agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to Opposite Parties No.1&2, by the Chandigarh Housing Board. It was further stated that, when Opposite Parties No.1&2, were fencing the land, possession whereof was delivered to them, for the development of project, a dispute arose, as the Haryana Government, claimed ownership, with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to Opposite Parties No.1&2, but it was discovered to be the land of the Forest Department. It was further stated that a period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same. It was further stated that the complainants did not deposit all the instalments and, as such, violated the provisions of Clause 5(a) of the aforesaid Agreement. It was further stated that in case of cancellation, Rs.6,07,750/, being 5% of the basic price was to be forfeited. It was further stated that after deducting the said amount of Rs.6,07,750/- from the deposited amount of Rs.34,38,750/-, the remaining amount which works out to be Rs.28,31,000/- shall be refunded to the complainants, as per the provisions of Clause 5(a) of the Agreement dated 11.11.2008.
It was further stated that the dispute between the Opposite Parties, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Fora was barred. It was denied that Opposite Parties No. 1&2 were deficient, in rendering service, and indulged into unfair trade practice. The remaining averments were denied, being wrong.
3. Opposite Party NO.3, Chandigarh Housing Board, in its written version, also admitted the factual matrix of the case. It was stated that, as per Clause 9(e) of the Flat Buyer Agreement, Opposite Party No.3, was only to handover the land to the developer, and the whole responsibility of construction at the site was of Opposite Parties No.1&2. It was further stated that the Developer was solely responsible, for constructing the residential units, within the stipulated period, and delivering possession of the flat, to the complainants. It was further stated that, in view of the Escrow Agreement, executed between the Opposite Parties, the liability of Opposite Party No.3 to refund the amount was to the extent 30%, and the same was under process and would be provided within a period of 15 days. It was further stated that the remaining amount of 70% was to be refunded by Opposite Parties No.1 & 2. It was denied that Opposite Party NO.3, was deficient, in rendering service and it indulged into unfair trade practice. The remaining allegations, were denied, being wrong.
4. The complainants, in support of their case, led evidence by way of affidavit of Sh.Jasdev Singh Mattu, Complainant No1, alongwith which, a number of documents were attached.
5. Opposite Parties No.1&2, filed the affidavit of Sh.Prehlad Kumar Jain, President, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi, by way of evidence, and also attached a number of documents therewith.
6. Opposite Party No.3, filed the affidavit of Smt.Mandeep Kaur, HCS, Secretary, Chandigarh Housing Board, by way of evidence.
7. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
8. The Counsel for the complainants, submitted that the complainants, who are Non-Resident Indians, after going through the fancy advertisements of Opposite Parties No.1&2, applied for the allotment of a flat, and they were allotted flat No. D4-G04. Subsequently, on the request of the complainants, they were allotted higher category flat No.D2-G01 in the project of Parsvnath Prideaisa, Rajiv Gandhi Chandigarh Technology Park, Chandigarh.
He further submitted that, as per Flat Buyer Agreement dated 11.11.2008 ( Annexure C2/R-1/2), the construction of the residential units, was likely to be completed within 36 months of the signing of the Development Agreement R-1/1 dated 6.10.2006, between the Developers and the Chandigarh Housing Board. He further submitted that though a sum of Rs.34,38,750/- was deposited by the complainants, towards part payment of the price of flat, yet not even a brick was laid, at the spot, what to speak of construction of flats. He further submitted that there was no breach of the Agreement, on the part of the complainants, yet, they were not given possession of the flat. He further submitted that the complainants, therefore, could not wait for an indefinite period, and were entitled to the refund of amount, deposited by them, with interest, as also compensation for harassment. He further submitted that Opposite Parties No.1&2 could not deduct 5% of the basic price, from the amount, deposited by the complainants, in the event of refund of the same, as the payment was made according to the construction linked plan, and there was no default, in making part payment of the price of flat. He further submitted that the complainants were also entitled to compensation of Rs.5 lacs for harassment and mental torture caused to them. He further submitted that the Opposite Parties, were certainly deficient, in rendering service, to the complainants, by neither refunding the amount, deposited by them, nor paying them the compensation, and they also indulged into unfair trade practice.
9. On the other hand, the Counsel for Opposite Parties No.1&2, submitted that, no doubt, Development Agreement R-1/1 dated 6.10.06, was executed between the Opposite Parties, as a result whereof, the possession of entire unencumbered land for the project was to be provided by Opposite Party No.3. He further submitted that since Opposite Party No.3, did not hand over the possession of the entire unencumbered chunk of land, required for the development of project, the construction could not be undertaken. He further submitted that there was, thus, dispute between the parties, as a result whereof, the matter was referred to the arbitrators, and their final decision, was still awaited and, as such, this Commission has no jurisdiction to entertain and decide the complaint. He further submitted that, since there was default, on the part of the complainants, in depositing the remaining instalments, towards the price of flat, they were only entitled to the refund of amount, if they applied for the cancellation of allotment, after deduction of 5% of the basic price, as per Clause 5(a) of the Agreement dated 11.11.2008. He further submitted that though a period of 36 months, was provided, under Article 2.2.1 of the Agreement R-1/1 dated 6.10.2006, and under Clause 9(a) of the Agreement dated 11.11.2008, for the completion of construction, yet the same was to commence, only after the possession of entire unencumbered land, had been handed over to Opposite Parties No.1&2 , for the development of project, by Opposite Party NO.3, but it (Opposite Party NO.3) failed to do so. He further submitted that, under these circumstances, Opposite Parties No.1&2, were neither deficient, in rendering service, nor they were liable to pay any compensation, nor they indulged into unfair trade practice.
10. The Counsel for Opposite Party No.3, submitted that, it was the responsibility of the Developer, Opposite Party No.1, to complete the construction in 36 months, commencing from 6.10.2006, as per the Flat Buyer Agreement C-2/ R-1/2. He further submitted that the possession of the entire unencumbered land, on which the residential complex, was to be developed, had already been handed over to the Developer, according to the Agreement, executed between the Opposite Parties . He further submitted that the construction of residential flats, could certainly be started by Opposite Parties No.1&2, on that land, but they did not do so intentionally. He further submitted that as per the Escrow Agreement, Opposite Party No.3 is liable to refund 30% of the principal amount.
11. The first question, that arises for consideration, is, as to within which period, the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants applied for the allotment of a flat and they were allotted the same. They deposited Rs.34,38,750/-, in instalments, towards the price of flat, according to construction linked payment plan, as admitted by the Opposite Parties. Clause 9(a) of the Flat Buyer Agreement dated 11.11.2008 annexure R-1/2, referred to above, which is relevant, for answering the question, posed, at the outset of this paragraph, reads as under ;
Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.
12. The plain reading of Clause 9(a) of the Flat Buyer Agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of signing of Development Agreement dated 06.10.2006 annexure R1/1. The time could be extended, in terms of the Development Agreement, dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the developer. Opposite Parties No1&2 admitted, in their written reply, that, in the first instance, the possession of the entire project land, claimed to be unencumbered, was handed over to them by Opposite Party No.3, and when the fencing was being done, the Haryana Govt. raised a dispute, with regard to the ownership of a portion of the same. It is the case of Opposite Parties No.1&2, that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to them, the same was discovered to be that of the Forest Department. No evidence was, however, produced by Opposite Parties No.1&2, in this regard. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the developer, that delay was caused, in the construction of residential units.
The developer also could not take shelter of force majeure clause. No document was produced by Opposite Parties No.1&2, that any restriction was imposed by any Court or Authority, upon them, as a result whereof, they could not raise construction of residential units, in time.
Even, it was not proved, that there was delay in the grant of environmental clearance. Opposite Parties No.1&2, without first confirming the clear title of the entire land, over which the project, was to be developed, started booking the flats, and allotting the same, to the prospective buyers, by fleecing them of huge amounts, and making misleading statement, that the construction of residential units, will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Parties No.1&2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009.
13. The next question, that arises for consideration, is, as to whether the complainants are entitled to the refund of amount, deposited by them, with interest or not ? Clause 9(d) of the Flat Buyer Agreement, which is relevant, to answer this question, reads as under;
9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.
14. The complainants deposited the amount towards part payment of the price of flat, in the hope of getting its possession, within a period of 36 months from 10.6.2006, but by the end of March,2010, not even a single brick, had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option, with the complainants, in such circumstances, was to ask for the refund of amount. The plain reading of Clause 9(d) extracted above, reveals that if the Developer, for, whatever, the reasons may be, fails to deliver the possession of residential unit to the buyer, the Developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable on the date of refund. According to the Escrow Agreement Annexure R1/3, the Developer and the Chandigarh Housing Board shall be liable to refund in the ratio of 70% and 30% respectively. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount, with interest, as provided under Clause 9(d) of the Agreement, referred to above. The complainants are, thus, held entitled to the refund of amount of Rs.34,38,750/- with interest at the SBI term deposit rate, as per Clause 9(d) of the Flat Buyer Agreement C2/R-1/2, and the Escrow Agreement, referred to above.
15. Coming to the submission of the Counsel for Opposite Parties No.1&2, that since there was breach of Clause 5(a) of the Flat Buyer Agreement, by the complainants, they were only entitled to the refund of the remaining amount, deposited by them, after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument, advanced by the Counsel for Opposite Parties No.1 & 2, is misconceived. Clause 5(a) of the aforesaid Agreement dated 11.11.2008, reads as under ;
5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.
16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the Agreement, and if the payment, was not made, within the stipulated period or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in the payment of instalments, or of any other term and condition of the Agreement, aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the Opposite Parties , that the payment of instalments was made by the complainants, from time to time, as and when the same fell due. There was no delay, in making payment of the part price of flat, through instalments, on the part of the complainants. Since, after the expiry of a period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainants were not required to deposit the amount of remaining instalments. The complainants had, thus asked for the refund of amount. There was also no breach of any other term and condition of the Agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of entire amount, deposited by them, with interest, as held above. The submission of the Counsel for the Opposite Parties, in this regard, being without merit, must fail, and the same stands rejected.
17. The next question, that arises for consideration, is, as to whether, the complainants are entitled to compensation, for not handing over possession to them, as per the terms and conditions of the Agreement C2/ R-1/2 dated 11.11.2008, referred to above, and for causing physical harassment and mental agony, or not ? Clause 9 ( C ) of the Agreement, referred to above, which is relevant for answering the question, reads as under
:
9(c) In case of possession of the built up area is not offered to the Buyer within a period of 36 months or extended period as stipulated in sub-clause (a) above the Buyer shall be entitled to receive from Developer compensation @ Rs.107.60 per sq.mtr (Rs.10/- per sq.ft) of the super area of the unit per month and to no other compensation of any kind. In case the Buyer fails to clear his account and take possession of the unit within30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @ 107.60 per sq.mtr. (Rs.10/- per sq.ft) of the super area of the unit per month in addition to the liability to pay interest to the sellers and other consequences of default in payment.
18. The possession of the flat was not offered, to the buyer, within a period of 36 months from 6.10.2006. As stated above, even till date, not even a single brick, has been laid, at the spot. In these circumstances, as per Clause 9( C) of the aforesaid Agreement, the complainants only became entitled to compensation @107.60 per sq.mtr(Rs.10/- per sq.ft. ) of the super area of the unit, per month. The language of Clause 9(c) is unambiguous and clear. The parties executed the Agreement, aforesaid with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No compensation, beyond the terms and conditions, contained in Clause 9 ( C) of the aforesaid Agreement, could be claimed by the complainants. It is, thus, held that the complainants are entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009, the last date of completion of the project, till the actual payment was made to them.
In this view of the matter, the compensation claimed to the tune of Rs.5 lacs for mental agony & physical harassment, cannot be granted to them.
19. Coming to the submission of Counsel for Opposite Parties No.1&2, that since the remedy for settlement of dispute, by way of arbitration, has already been availed of, by the Opposite Parties, in accordance with clause 18 of the Escrow Agreement dated 1.6.2007 Annexure R1/3 executed between them, the complaint under Section 17 of the Consumer Protection Act,1986 was barred, it may be stated here, that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be 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 fact that the remedy of arbitration, which was provided, in the Agreement dated 1.6.2007 annexure R1/3, has already been availed of by the Opposite Parties , that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for Opposite Parties No.1 & 2, being devoid of merit, must fail, and same stands rejected.
20. For the reasons, recorded above, the complaint is partly accepted with costs of Rs.5000/- , in the following terms ;
(i) Opposite Parties No.1 & 2 are held liable jointly and severally to refund the amount of Rs.24,07,125/- (being 70% of the principal amount) deposited by the complainants alongwith interest at the SBI Term Deposit rate, from the respective dates of deposits till realization, as per Clause 9(d) of the Flat Buyer Agreement and the Escrow Agreement.
(ii) Opposite Party No.3 Chandigarh Housing Board is held liable to refund Rs.10,31,625/- (being 30% of the principal amount) to the complainant with interest at the SBI Term Deposit rate from the respective dates of deposits till realization, as per clause 9(d) of the Flat Buyer Agreement and the Escrow Agreement.
(iii) Parsvnath Developers Limited (Opposite Parties No.1 & 2) shall also pay compensation, for not offering the built up flat within 36 months @ Rs.107.60 per sq. mtr (Rs.10/- per sq.ft) of the super area of the unit, per month, from 5.10.2009, the last date of completion of the project, till actual payment to the complainants is made, as provided by Clause 9( C) of the Flat Buyer Agreement.
(iv) The aforesaid directions shall be complied with, by the Opposite Parties, within 30 days, from the date of receipt of a copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a, on the aforesaid payable amounts, besides costs.
21. Certified Copies of this order be sent to the parties, free of charge.
22. The file be consigned to the Record Room.
Sd/-
Announced (JUSTICE SHAM SUNDER)(Retd) September13,2012 President Sd/-
( NEENA SANDHU) *Js Member STATE COMMISSION Complaint case NO.33/2012 Present: Sh.Varinder Arora, Advocate, for the complainants.
Sh.Aftab Singh, Advocate, for Opposite Parties No.1&2.
Sh.Karan Sharma, Advocate for Opposite Party No.3.
Dated:
13th September , 2012 ORDER Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted with costs, in the manner, depicted therein.
(Neena Sandhu) (Justice Sham Sunder) (Retd) Member President