State Consumer Disputes Redressal Commission
Hardeep Mahajan vs Emmar Mgf Land Pvt.Ltd. on 14 May, 2015
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Consumer Complaint : 28 of 2015 Date of Institution : 19.02.2015 Date of Decision : 14.05.2015 Hardeep Mahajan s/o Sh. T. P. Mahajan, Mrs. Amita Mahajan wife of Sh. Hardeep Mahajan, Both residents of House No.1799, Phase VII, Mohali (Punjab). ......Complainants. Versus Emaar MGF Land Limited, SCO No.120-122, First Floor, Sector 17-C, Chandigarh, through its Director. Emaar MGF Land Ltd., SCO No.120-122, First Floor, Sector 17-C, Chandigarh, through its Manager. ....Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by:
Sh. Sunil Toni, Advocate for the complainants.
Sh. Sanjeev Sharma, Advocate for the Opposite Parties.
PER DEV RAJ, MEMBER The facts, in brief, are that vide allotment letter dated 26.09.2007, the Opposite Parties provisionally allotted the plot bearing No.244 measuring 300 sq. yards in Augusta Park, Sector 109, Mohali, originally to Sh. Surjit Singh R/o House No.19/56, Rajinder Nagar, New Delhi (Annexure C-1). It was stated that later on the said plot was transferred in the name of the complainants, through Plot Buyer's Agreement dated 04.07.2007 (Annexure C-2). It was further stated that as per the installment payment plan, the complainants paid almost the total price vide receipts (Annexure C-3 colly.). It was further stated that as per Clause 8 of the Agreement, the Opposite Parties were to deliver possession of the plot within a period of three years, from the date of execution thereof and in the event of failure to do so, they were liable to pay a penalty of Rs.50/- per sq. yard per month, for such period of delay beyond three years, from the date of execution of the same (Agreement). It was further stated that the period of three years for handing over possession of the plot to the complainants ended on 04.07.2010 and as per Clause 8 of the Agreement, the penalty calculated @Rs.50/- per sq. yard per month for delay in possession after three years came to be Rs.8,25,000/-.
2. It was further stated that being the genuine buyers, the complainants paid all the installments almost in time and, accordingly, the Opposite Parties waived off the last installment of 5% basic price vide letter dated 29.11.2008 (Annexure C-4). It was further stated that the complainants approached Opposite Party No.2, regarding delay in possession of the plot but no satisfactory reply was received from the Opposite Parties till date. Every time, a tentative time between 6-8 months was given. It was further stated that till date the complainants were running from pillar to post to know about the exact status of the plot, in question and date of delivery of possession thereof. It was further stated that the Opposite Parties did not fulfill their part of the commitment by not delivering possession of the plot within three years to the complainants. Ultimately, the complainants asked for the refund of amount deposited with interest and compensation but to no avail.
3. It was further stated that the, aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence 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, directing the Opposite Parties, to refund the amount of Rs.40,50,354/- alongwith interest @24% per annum from 04.07.2007 till realization of amount; pay Rs.8,25,000/- as compensation @Rs.50/- per sq. yard per month from 04.07.2010 till date as per the Agreement; Rs.2,00,000/- as compensation on account of harassment and mental agony; and Rs.33,000/- as litigation expenses.
4. The Opposite Parties, were served and put in appearance on 26.03.2015. They filed their joint written statement on 30.04.2015. In the written statement, the Opposite Parties, took-up certain preliminary objections, to the effect that since the possession of the plot was offered to the complainants on 28.09.2012, the cause of action had arisen in their favour for filing the present complaint, in the year 2012 and the complaint having been filed in the year 2015, was clearly barred by limitation; that the complainants are not the consumers as they are having their own houses viz. House No.1799, Phase VII, Mohali and House No.2200, Phase VII, Mohali and the plot, in question was purchased by them for speculative and commercial purpose; that this Commission was having no jurisdiction to entertain the complaint due to the existence of Arbitration clause No.39 in the Agreement; that the complaint was barred for non-joinder of HDFC Ltd. as a party.
5. On merits, it was stated that the unit, in question was transferred in the name of Mr. Hardeep Mahajan and Ms. Amita Mahajan, vide letter dated 18.03.2009 on completion of the relevant formalities and as per Buyer's Agreement, the total sale consideration whereof was Rs.40,50,354/-. It was denied that the complainants made all the payments, on time. It was also denied that the total payment was made. It was further stated that the complainants only attached receipts showing the payment of Rs.34,35,354/- towards the price of the plot besides Rs.75,000/- paid towards transfer charges. It was admitted that the possession was to be handed over within 3 years from the date of execution of the Agreement and in case of any delay, the Opposite Parties were liable to pay compensation @Rs.50/- per sq. yard per month, for the period beyond 3 years. It was further stated that the Company launched EMGF Cares for you program in November 2008, and all customers who cleared their outstanding on or before 25.12.2008, and continued to remit their future installments, on or before the due dates, qualified under the scheme and the last 5% of the basic sale price was waived off for these customers. It was further stated that the complainants remitted most of the installments on time, and as per scheme, their last installment of 5% was waived off. It was further stated that in order to incorporate the benefits accruing under the scheme in the account of the complainants, they were required to furnish an indemnity on the format shared by the Company, which they failed to do.
6. The Opposite Parties denied the calculations of Rs.8,25,000/-. It was further stated that the complainants were offered possession of the plot, in question, on 28.09.2012 vide offer of possession letter (Annexure R-4 colly). It was further stated that the Opposite Parties, on various occasions, explained to the complainants that the compensation payable in terms of Clause 8 was to be adjusted/paid at the time of registration of the unit. It was further stated that the Opposite Parties already informed the complainants vide letter dated 27.04.2015 (Annexure R-5 colly.) that an amount of Rs.4,02,410/- payable in terms of Clause 8 of the Agreement, had been adjusted in their account. It was further stated that at the time of registration of the property, maintenance, stamp duty/registration, electrification charges etc. were payable. It was further stated that the Company had put in all efforts to expedite the handing over of the unit and also sent offer of possession letter dated 28.09.2012 on completion of laying of services as mentioned in the Buyer's Agreement. It was further stated that there were holding charges due against the complainants, for not taking possession of the plot since 28.09.2012. It was further stated that as on 27.04.2015, the complainants were liable to pay Rs.5,05,343/- as holding charges.
7. It was further stated that as the complainants failed to take physical possession of the plot, the Opposite Parties sent settlement of final dues letter dated 23.01.2015 (Annexure R-6) and demanded the amounts payable for getting the plot registered. It was further stated that the complainants failed to take possession till date and intentionally concealed the fact of issuance of letter dated 23.01.2015 from the Commission. It was further stated that many other allottees having plots, in the vicinity of the plot of the complainants took possession vide possession certificates (Annexure R-7 colly.). It was further stated that the plot, in question, was ready for possession and the complainants could remit the balance outstanding amount and take the possession immediately. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
8. The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.
9. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Sachin Kapoor, their Senior Manager (Legal), by way of evidence, alongwith which, a number of documents were attached.
10. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
11. The first question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not. The Opposite Parties have specifically pleaded that the possession of the plot, in question, was offered to the complainants on 28.09.2012. Insofar as Annexure R-1 i.e. Customer Information Form dated 26.09.2012 is concerned, it only shows that the complainants visited the Opposite Parties in connection with the possession of Plot No.244, Sector 109, measuring 300 sq. yards, but the same does not in any way establish that the possession was offered to them. The letter dated 28.09.2012 (Annexure R-4 colly.), though addressed to the complainants, is claimed to have been sent through Over Night Express Limited Couriers. The courier document receipt does not contain the complete address of the complainants and it has nowhere been signed by them (complainants) in token of having received the same. Thus, the Opposite Parties have failed to prove by leading any cogent evidence that the same was sent to the complainants. It, therefore, cannot be accepted that the letter dated 28.09.2012 was received by the complainants. Thus no cause of action accrued to the complainants on 28.09.2012. There was, thus, a continuing cause of action. Under these circumstances, it is held that the complaint was not at all barred by time. Therefore, the plea of the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
12. The next objection, raised by the Opposite Parties, is as regards the existence of arbitration clause in the Buyer's 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 document, aforesaid, 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 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. In this view of the matter, this objection of the Opposite Parties, being devoid of merit, must fail, and the same stands rejected.
13. The next objection of the Opposite Parties was that the headnote of the complaint showed that the complainants were having House No.1799, Phase VII, Mohali (Punjab) and as per communication with HDFC Bank at the time of obtaining loan (Annexure R-2), they (complainants) gave the address of House No.2200, Phase VII, Mohali. It was, thus, the plea of the Opposite Parties that the complainants, being already owners of two houses purchased the plot, in question for commercial purpose, and, as such, they were not the consumers. In the absence of any cogent documentary evidence, proving that the aforesaid two houses were owned by the complainants, the objection of the Opposite Parties, to this effect, is hollow and the same is not sustainable in the eyes of law. The same, therefore, stands rejected.
14. The next question, which falls for consideration, is, as to what amount the complainants deposited and whether they are entitled to refund of the same. It is clearly evident that the Opposite Parties vide letter dated 23.01.2015 (Annexure R-6 colly.) informed the complainants that they would be commencing the process of execution and registration of conveyance deed, in favour of the complainants and raised a demand of Rs.10,79,864.08Ps. The complainants have not filed any rejoinder to the written statement, filed by the Opposite Parties, nor did they deny receipt of this document during arguments. It is, therefore, assumed that the complainants received this communication and they failed to deposit the dues and failed to take over possession despite offering the same by the Opposite Parties. This action, on the part of the complainants amounted to rescinding the contract. Counsel for the Opposite Parties submitted that since the complainants have sought refund of the amount deposited, Clause 2(f) of the Plot Buyer's Agreement dated 04.07.2007 shall be attracted and, in terms thereof, 30% of the total sale consideration was forfeitable. Clause 2(f) of the Plot Buyer's Agreement dated 04.07.2007 (Annexure C-2), reads as under:-
"2(f) The Allottee(s) has entered into this Agreement on the condition that out of the amounts paid/payable by the Allottee towards the Sale Price, the Company shall treat 30% of the Sale Price as Earnest Money (hereinafter referred to as "the Earnest Money"). However, if the Allottee chooses not to sign this Agreement and further chooses to forfeit his allotment, then 20% of the amount paid by the Allottee at the time of the Expression of Interest shall stand forfeited and the rest of the amount (if any) shall be refunded to the Allottee. However, after signing this Agreement, in order to ensure the fulfillment, by the Allottee, of all the terms and conditions as contained in the application and this Agreement and in the event of the failure of the Allottee to perform all obligations set out in this Agreement or fulfill all the terms and conditions of this Agreement or in the event of failure of the Allottee to sign and return this Agreement in its original form to the Company within 30 (Thirty) days from its date of Receipt by the Company, the Allottee hereby authorizes the Company at its sole option and discretion, to forfeit out of the amounts paid by the Allottee, the Earnest money as aforementioned together with any interest paid, due or payable, any other amount of a non-refundable nature. The Allottee further agrees that the condition of forfeiture of Earnest Money shall remain valid and effective till the execution and registration of the Conveyance Deed for the Plot and the Allottee hereby authorizes the Company to resort to such forfeiture after considering the above mentioned 30 (Thirty) days as notice period to the Allottee and the Allottee has agreed to this condition to indicate the Allottee's commitment to faithfully fulfill all the terms and conditions contained in the Allottee's application and this Agreement."
No doubt, as per the afore-extracted Clause 2(f) of the Plot Buyer's Agreement dated 04.07.2007 (Annexure C-2), in case the allottee failed to perform all obligations set out in this Agreement or fulfill all the terms and conditions of the same, the Opposite Parties were at liberty, to forfeit the Earnest money viz. 30%, out of the amounts paid by the complainants together with any interest paid, due or payable, any other amount of a non-refundable nature. It was also made clear in the afore-extracted clause that if the complainants chose not to sign the Agreement and further chose to forfeit his allotment, then 20% of the amount paid by them at the time of the Expression of Interest was to be forfeited and the rest of the amount was refundable to them. As stated above, the complainants, by not paying Rs.10,79,864.08Ps, demand whereof was raised vide letter dated 23.01.2015 (Annexure R-6 colly.), were not interested in taking possession of the plot, in question, despite the fact that the same was offered to them, vide letters dated 23.01.2015 (Annexure R-6) and 27.04.2015 (Annexure R-5), i.e. before and after filing the complaint, and sought refund of the amount. This amounted to surrender of the plot, in question, and, as already observed above, the Agreement between the parties, stood rescinded. However, in our considered opinion, fixing 30% of sale consideration, as earnest money, and forfeiture thereof, can be said to be unreasonable and unconscionable. Since such a condition in the Plot Buyer's Agreement dated 04.07.2007 (Annexure C-2) is unilateral, unreasonable and unconscionable, it can be said that by incorporating the same, the Opposite Parties indulged into unfair trade practice. A similar question arose in DLF Ltd. Vs. Bhagwanti Narula, Revision Petition No.3860 of 2014, decided on 06.01.2015, by the National Consumer Disputes Redressal Commission, New Delhi, wherein as per the Agreement, 20% of the sale price of the premises was to collectively constitute the earnest money, which was to be forfeited, in case, the allottee made a default in payment of instalments(s) and asked for refund of the amount deposited. Such Clause came up for interpretation, before the National Commission, in the aforesaid case. The National Commission, ultimately, held that an Agreement having forfeiture Clause of more than 10% of the sale consideration, would be invalid, as it would be contrary to the established legal principle that only a reasonable amount could be forfeited, in the event of default, on the part of the buyer. In the aforesaid case, the National Commission placed reliance on Bharathi Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd., (1996) 4 SCC 704, wherein the Hon'ble Supreme Court of India accepted the contention that, in appropriate case, the Consumer Forum, without trenching upon acute disputed questions of fact, may decide the validity of the terms of the contract based upon the fact situation and may grant relief, though, each case depends upon its own facts. Ultimately, the National Commission, in the aforesaid case, held that the amount exceeding 10% of the total sale price, could not be forfeited, by the seller. Relying upon, what has been held above, in DLF Ltd.'s case (supra), in our considered opinion, Clause 2(f) contained in Annexure C-2 providing for forfeiting 30% of the sale consideration, being unreasonable and unconscionable, amounted to unfair trade practice. It is, therefore, held that the Opposite Parties are only entitled to forfeit 10% of the sale consideration of the plot, and not 30% of the same.
15. The next question, that falls for consideration, is, as to what amount the complainants would be entitled, in such circumstances. Thus, as held above, only 10% of the sale consideration could be forfeited. The total sale consideration as per Plot Buyer's Agreement (Annexure C-2) was Rs.40,50,354/- including External Development Charges (EDC) and PLC. The complainants, in their complaint, have sought refund of the aforesaid amount of Rs.40,50,354/- apart from other reliefs. It is pertinent to mention here that on 12.05.2015, the complainants moved an application before this Commission, for placing, on record, all the receipts of installments including registration amount and transfer fee as Annexure C-3 (colly). showing the total payment of Rs.40,27,354/-. On filing of the application aforesaid, the Reader of the Commission was directed to calculate the actual amount from the copies of receipts attached with the application and submit report with regard to the total amount paid by the complainants to the Opposite Parties. As per the report submitted by the Reader on 12.05.2015 itself, according to the said receipts, the total amount paid by the complainants to the Opposite Parties came to be Rs.38,55,354/-. On rechecking the receipts annexed with the application aforesaid, the amount arrived at by the Reader, was found to be correct. Since the amount paid by the complainants came to be Rs.38,55,354/- as per the receipts placed, on record, the refund of amount of Rs.40,50,354/- as sought by them, is an afterthought. Thus, in our considered opinion, the complainant deposited an amount of Rs.38,55,354/- with the Opposite Parties and not Rs.40,50,354/-. The Opposite Parties could forfeit only 10% of the total sale consideration viz. Rs.40,50,354/- (Page 24). Therefore, the amount of forfeiture shall come to Rs.4,05,035/-. The complainants are, thus, entitled to Rs.34,50,319/- i.e. (Rs.38,55,354.00 minus (-) Rs.4,05,035.00). By not refunding this amount, the Opposite Parties were deficient in rendering service.
16. The next question, which falls for consideration, is, as to whether, the complainants are entitled to any compensation or not. As per Clause 8 of the Plot Buyer's Agreement dated 04.07.2007 (Annexure C-2), possession was to be delivered within 3 years but the same was offered to them vide letters dated 27.04.2015 (Annexure R-5) and 23.01.2015 (Annexure R-6) i.e. after a delay of 4 Years 7 Months 18 Days. The complainants had made payments in the sum of Rs.38,55,354/-, which was undoubtedly their hard earned money. For rescinding the contract, the complainants stand penalized by forfeiting 10% of the total sale price in the sum of Rs.4,05,035/-. The complainants have certainly suffered physical harassment and mental agony at the hands of the Opposite Parties, for which, they need to be suitably compensated. In our considered opinion, compensation in the sum of Rs.1,50,000/-, would be just and adequate, to meet the ends of justice.
17. No other point, was urged, by the Counsel for the parties.
18. For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Parties are jointly and severally held liable and directed in the following manner:-
(i) To refund the amount of Rs.34,50,319/- i.e. [Rs.38,55,354.00 (amount paid) minus (-) Rs.4,05,035.00 being 10% of Rs.40,50,354.00], to the complainants, alongwith interest @9% per annum, from the respective dates of deposits, till realization, within 45 days, from the date of receipt of a certified copy of this order.
(ii) To pay an amount of Rs.1,50,000/- (Rupees One Lac Fifty Thousand only), to the complainants, as compensation for mental agony and physical harassment, within a period of 45 days from the date of receipt of a certified copy of the order.
(iii) Housing Development Finance Corporation Limited (HDFC) shall have the first charge, on the amount to be refunded, to the complainants, by the Opposite Parties, to the extent, the amount is due to it, against the complainants as it (HDFC) advanced loan in their (complainants) favour for part payment of the price of plot, in question, under the Tripartite Agreement dated 13.04.2009 (Annexure R-3).
(iv) To pay cost of litigation, to the tune of Rs.15,000/-, to the complainants.
(v) In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @12% per annum, instead of 9% P.A., from the respective dates of deposits, till realization and amount mentioned in Clause (ii) above, with interest @12% per annum from the date of default, besides payment of costs, to the tune of Rs.15,000/-.
19. Certified Copies of this order be sent to the parties, free of charge.
20. The file be consigned to Record Room, after completion.
Pronounced May 14, 2015.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Sd/-
[PADMA PANDEY] MEMBER Ad