State Consumer Disputes Redressal Commission
Harneet Suri vs Chandigarh Overseas Private Limited on 19 July, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 65 of 2016 Date of Institution : 17.02.2016 Date of Decision : 19.07.2016 Harneet Suri wife of Sh.Jasjeet Suri and Jasjeet Suri son of Lt. Col.Gurdial Singh Suri Both are R/o H.No.1194, Sector 34-C, Chandigarh. ......Complainants V e r s u s Chandigarh Overseas Private Limited, SCO No.196-197, Top Floor, Sector 34-A, Chandigarh, PIN 160 022, through its Managing Director. Now shifted at:- Fashion Technology Park, adjacent to BSF Housing Colony, Sector 90-Mohali. .... Opposite Party 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.Ravinder Pal Singh, Advocate for the complainants.
Sh.Surjeet Bhadu, Advocate for the opposite party.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT The facts in brief are that the opposite party launched a project, known as Fashion Technology Park, in Sector 90, Mohali. It was widely advertised, with an offer of selling shops/units measuring 100/125 square feet. The said proposed complex was situated in Industrial Knowledge (Fashion Technology Park), Sector 90, Mohali. In the information memorandum, it was specifically alleged that construction of the boundary wall and site office had already started and construction work of the project, commenced in the second week of September 2006, which will be completed within 24 months. It was further stated that possession of the unit will be handed over to the buyers, within 30 months, to be counted from second week of September 2006. To enable complainant no.1 to earn her livelihood, by way of self-employment i.e. to setup a readymade garments outlet, the complainants opted to purchase a unit, measuring 250 square feet (125 sq.ft x 2), design studio no.5, 6th floor, Block A-2, (in short the unit) in the said project. At that time, an amount of Rs.2.50 lacs was paid by the complainants through cheque. An amount of Rs.1.25 lacs was paid on 14.08.2006. Vide letter dated 24.10.2006 Annexure C-4, unit was allotted to the complainants. To provide security for the investment made, in the information memorandum, buyback option of the unit was offered @Rs.7.50 lacs, for each unit of 100 square feet. Developer Buyer Agreement was signed on 26.12.2006. Against total price of unit, by 22.02.2007, the complainants had paid an amount of Rs.9.50 lacs. Balance amount was to be paid at the time of delivery of possession of the unit. Vide letter dated 13.08.2006, intimation regarding eligibility for buyback was made by the opposite party to the complainants. It was accepted by them on 19.04.2009. However, no confirmation was received for the same. Project was to be completed by 18.01.2010. It was further said that construction at the site had stopped. Delivery of possession was going to be delayed, which forced the complainants to accept buyback offer. Vide letter dated 29.06.2010, the complainants were intimated that for delay in delivery of possession of the unit, they will be compensated by paying penalty amount @Rs.50/- per square feet, per month of the super area, till such time possession is not delivered. The said compensation amount, was paid by the opposite party, for few months, totaling Rs.1,42,742/- and, thereafter, it stopped paying the same. It was alleged that on account of buyback option, the complainants are entitled to get an amount of Rs.15 lacs. In the meantime, it also came to the notice of the complainants that the opposite party is selling the project to some other Company and the project will now be launched with a different name i.e. Jade Business Park. By stating as above, following relief was sought by the complainants:-
"(i) The Opposite Party be directed to pay to the complainants a sum of Rs.15,00,000/- as per the buy-back agreement alongwith interest @18% p.a.
(ii) The Opposite Party be directed to pay to the complainants the amount of penalty on account of delay @Rs.50/- per sq.ft. total amounting Rs.12,500/- per month for the delay in possession i.e. from 18.01.2010 till the date buy back amount (Rs.15,00,000/- alongwith interest) is paid minus the amount of Rs.1,42,742/- which was already paid to the complainants alongwith interest @18% p.a.
(iii) The Opposite Party be directed to pay to the complainants an amount of Rs.5,00,000/- as compensation for causing mental tension, harassment, undue hardship and agony due to deficiency in providing the service, alongwith Rs.1,00,000/- as cost of present litigation."
Upon notice, reply was filed by the opposite party, stating that in the face of existence of an arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaint. It is stated that the complaint is barred by limitation. Pecuniary jurisdiction of this Commission is also challenged. It is averred that there was no concluding contract, between the parties. Developer Buyer Agreement was signed only by one complainant namely Jasjeet Suri (complainant no.2). Project, in question, is a commercial one and the complainants would not fall within the definition of consumer. It is stated that in view of having signed for lease deed with M/s Greenfield Sites Management Private Limited, it cannot be said that the complainants wanted to put up their own business, in the unit, in question, and on the other hand it can very well be said that they had purchased the unit, in question, for commercial purpose i.e. for earning returns out of the same and enjoy lease rental. The complainants have spent only an amount of Rs.9.50 lacs. It is stated that benefit of buyback option cannot be granted in favour of the complainants, as no such Agreement was entered into between the parties. The said buyback option was to be accepted by M/s Greenfield Sites Management Private Limited and there is nothing on record that it was accepted by the said party. As such, the complainants are not entitled to the refund of Rs.15 lacs, as claimed by them, towards buyback offer. It is further stated that relief towards buyback option and penalty for delayed compensation cannot be enforced. If both the reliefs are awarded, it would amount to double benefit to the complainants.
It is further stated that construction could not be started on account of force majeure circumstances, beyond the control of the opposite party, like non-availability of construction material; dispute with construction contractors i.e. M/s Vascon Engineers Ltd., M/s Star Construction and M/s Ionic Realty Limited, as a result whereof, they had to be removed, which led into dispute and the matter went to a Civil Court, which took a long time for settlement thereof. Besides this, the opposite party also became victim of global recession. Qua delayed compensation, it was stated that the amount was to be deposited with M/s Greenfield Sites Management Private Limited, to use it for the purpose of maintenance of the complex. By stating as above, it was prayed that let the complaint be dismissed.
In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and repudiated those, contained in the written version of the opposite party.
The Parties led evidence, in support of their case.
We have heard Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, 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.
To decide above said question, it is necessary to reproduce the provisions of Section 3 of the Consumer Protection Act 1986 (in short the Act), 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."
It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of 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) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists."
Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, this Commission has no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case, some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainants have spent their life savings to get a unit, for the purpose referred to above. Their hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act, a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his share of Arbitrator's fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainants have spent their entire life earnings to purchase the unit, in the said project, launched by the opposite party. However, their hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the unit, in question, in a developed project. As per ratio of the judgments in the case of 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), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
In view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, 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, being devoid of merit, is rejected.
There is no dispute that the project, in question, was to be completed by 18.01.2010. However, even as on today, it is not complete. Above fact and also a dispute, as to whether the unit purchased in the project would fall within the definition of consumer complaint, came up for consideration, before this Commission, in a case titled as M/s Chandigarh Overseas Private Limited Vs. Easow Mathew, First Appeal No.284 of 2015, decided on 25.01.2016. Taking note of similar contentions, this Commission, gave findings as under:-
6. On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the opposite parties. Defence taken by the appellant that the respondent was not a consumer was righty rejected, by observing as under:-
"As we have already observed, the complainant has specifically pleaded in his complaint that he wanted to settle a business for himself for earning his livelihood and to become an independent business owner, he agreed to purchase the said unit of 100 sq. ft. in Design Studio No.12. The complainant has also pleaded that he is a consumer as per the provisions of the Consumer Protection Act as the said unit was purchased by him for earning his livelihood. The allegations of the complainant are supported by his own affidavit. The OPs have not produced any such evidence that the complainant is a property dealer dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainant from the OPs is only 100 sq. ft. which is for small investors. Since the complainant wanted to settle a business for himself for earning his livelihood, it cannot be inferred that the said unit was purchased by him with the sole motive of earning profits. As far as the contention of the learned counsel for the OPs that the complainant is not qualified to run his unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether he was eligible under "Small Investor Scheme" or not. At this stage, such an objection is not tenable. In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon'ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer."
7. Contention of Counsel for the appellant that the respondent was not a consumer also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-
"Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
8. By noting ratio of the judgment of the Hon'ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583 , it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case, application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession of the unit. In the year 2009, when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellant on 22.06.2009, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the respondent, on 04.08.2009 vide letter Annexure C-7. On account of that act, the respondent cannot be excluded from the definition of a consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja's case (supra), that surplus funds can be invested, in such a manner, in purchasing property/unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he would fall within the definition of a consumer."
As per averments made in the complaint, the unit was purchased by the complainants, so that complainant no.1 may setup a retail garments outlet to earn her livelihood, by way of self-employment. Nothing contrary has been shown, by the opposite party, in support of its contention.
Reliance placed by the opposite party upon ratio of judgment passed by this Commission, in Sneh Lata Singla Vs. M/s Chandigarh Overseas Pvt. Ltd., First Appeal No.39 of 2013, decided on 02.09.2013, to say that the complainants would not fall within the definition of consumer, is also liable to be rejected. In that case, the complainant had purchased a design studio, measuring 400 square feet i.e. four industrial units of 100 square feet each. She was a retired IAS Officer, earning sufficient amount towards pension. She wanted to set up a large garment manufacturing unit, by employing number of persons. By noting above facts, it was said by this Commission that two units were purchased by her, not for earning her livelihood but it was to be used for commercial purpose.
So far as the present case is concerned, position is altogether different. The complainants have purchased only 250 square feet area and it was specifically stated by them that they were supposed to set up a retail garment outlet only, to enable complainant no.1 to earn her livelihood, by way of self-employment. There is nothing on record, to the contrary. As such, reliance placed by Counsel for the opposite party, in the aforesaid case is misplaced.
The next question that falls for consideration, is, as to whether, the opposite party can take shelter under the force majeure circumstances, claimed by it, in its written reply, for non-construction of the unit and non-delivery of possession thereof, to the buyers including the complainants, for a long period of about more than 9 years of booking. The force majeure circumstances claimed by the opposite party are; construction remained stayed for the period from 26.04.2011 to 23.08.2014, on account of dispute between the construction contractors aforesaid; shortage of construction material; and also global recession.
First coming to the plea taken by the opposite party to the effect that delay aforesaid occurred, as the construction remained stayed by the Competent Court, for the period from 26.04.2011 to 23.08.2014, on account of dispute with the construction contractors. It may be stated here that a similar plea, in respect of the same project, was taken by the builder/opposite party, in M/s Chandigarh Overseas Private Limited Vs. Easow Mathew's case (supra), which was negated by this Commission, while holding as under:-
"It was further argued by Sh.Surjeet Bhadu, Counsel for the appellant, that between the period from 26.04.2011 to 23.08.2014, construction remained stayed, on account of order passed by the Competent Court, and as such, for the said period, no liability can be fastened upon the appellant, in not completing the construction. The argument raised by Sh.Surjeet Bhadu, appears to be attractive, however, on analyzing facts of the case, we feel that it has no legs to stand.
Admittedly, as noted by the Forum, possession of the unit was to be delivered by 18.01.2010. By that time, project was not complete. If some order/stay had been passed before the said date (18.01.2010), upto the promised date i.e. 18.01.2010, benefit could have been given to the appellant. However, in the present case, default had already started, when possession of the unit was not delivered on 18.01.2010, as per promise made by the appellant. Stay on construction was imposed thereafter i.e. from 26.04.2011. In view of above, no benefit can be given to the appellant, for the said fact."
Not only this, in M/s. Utopia Projects Pvt. Ltd. Vs Shahin Bi Mulla, First Appeal No. 1227 of 2014, decided on 01.04.2015, under similar circumstances, the Hon'ble National Commission, while rejecting the plea of the builder held as under:-
"The reason given by the Developer for the delay is 'Disputes with the Contractor'. Viewed from any angle, such disputes cannot be construed to be within the ambit of 'force majure conditions'. Therefore, the Appellant cannot take umbrage under this clause."
As far as the plea taken by the opposite party to the effect that delay aforesaid also occurred on account of shortage of construction material and also it suffered global recession, is concerned, the same also deserves rejection, in view of principle of law laid down by the Hon'ble National Commission, in Consumer Case No.347 of 2014 , titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), decided on 14 Aug 2015, wherein, while rejecting the plea of the builder, it was held as under:-
""As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity. This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in 36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders. In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party. As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such tenders. Therefore, I find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity".
xxxxxxxx xxxxxxxx Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.
Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression 'slow down' would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word 'slow down' having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project".
The principle of law laid down in the aforesaid cases is fully applicable to the facts of the present case. By making a misleading statement, that possession of the unit, in question, would be delivered latest by 18.01.2010, and by not abiding by the commitment made, while raising false grounds i.e. by taking shelter under the force majeure circumstances, referred to above, the opposite party was not only deficient, in rendering service, but also indulged into unfair trade practice.
Another objection raised by the opposite party that the complaint is barred by limitation, is also devoid of merit. Since in the present case, admittedly, till date, neither possession of the unit, in question, was offered to the complainants, for want of construction and development at the site, nor the amount deposited by them was refunded and at the same time, the force majeure circumstances, claimed by the opposite party, to support their stand of delay aforesaid, has been negated by this Commission by giving detailed findings, by referring to the settled law, as such, there is a continuing cause of action, in favour of the complainants, to file the instant complaint, in view of principle of law laid down, in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for the opposite party, in this regard, being devoid of merit, must fail, and the same stands rejected.
Another objection raised by Counsel for the opposite party that this Commission lacks pecuniary jurisdiction to entertain and decide the complaint, also needs rejection. It is apparent on record that the complainants had paid an amount of Rs.9.50 lacs towards purchase of built-up unit. In view of facts of this case, they may have rightly or wrongly presumed that they are entitled to get buyback price of the unit i.e. Rs.15 lacs. Besides that they also claimed an amount of Rs.5 lacs, towards compensation for mental agony and physical harassment and Rs.1 lac, towards litigation expenses. Not only as above, they are also claiming penalty amount @Rs.50/- per square feet, per month of the super area (minus i.e. Rs.1,42,742/- already paid) for the delayed period whereof 18.01.2010, up-to-date. If the total claim is considered, it will go beyond Rs.20 lacs and below Rs.1 crore, as such, the complaint would fall within the pecuniary jurisdiction of this Commission.
Further contention raised by Counsel for the opposite party that as the Developer Buyer's Agreement was signed only by complainant no.2, as such, a joint complaint filed by both the complainants was not maintainable, is liable to be rejected. Perusal of record indicates that on the Developer Buyer's Agreement, names of both the complainants, who are husband and wife, have been mentioned. No doubt, the said Agreement is signed by complainant no.2 only. However, in the receipts of payments issued by the opposite party, names of both the complainants are mentioned. This is apparent on perusal of receipts Annexures C-5 and C-6 (colly.) dated 12.10.2006, 12.10.2006, 26.12.2006 and 22.02.2007. Otherwise also, such a plea cannot be entertained, as in the complaint, both the complainants have specifically stated that they have purchased the unit, in question, jointly. It was duty of the opposite party to get the Developer Buyer's Agreement signed from complainant no.1 also, however, it remained satisfied only after getting signatures of complainant no.2. As such, at this stage, such a plea cannot be raised.
It is prayed by Counsel for the complainants that on account of buyback option having been exercised, let amount of Rs.15 lacs, be ordered to be paid to them, by the opposite party. The said prayer has been opposed by Counsel for the opposite party. It is stated that no Agreement qua buyback was ever executed between the parties, as such, the said relief cannot be granted.
After perusal of document on record, we are going to accept contention raised by Counsel for the opposite party. The unit, in question, was purchased on 24.10.2006, vide allotment letter Annexure C-4. As per scheme applicable on the project, some buyers were entitled to exercise buyback option. Vide letter dated 13.08.2006 Annexure C-7, the complainants were intimated that they were eligible to exercise buyback option. Thereafter, the complainants kept mum. Option was not exercised. As per scheme of the project, qua buyback offer, Agreement was to be entered into between the complainants and M/s Greenfield Sites Management Private Limited. The option was given by the complainants only on 19.04.2009 vide letter Annexure C-8. The said option was made in response to letter dated 13.08.2006 and offer was made after lapse of about three years. There is nothing on record to show that the said offer was ever accepted by M/s Greenfield Sites Management Private Limited. Even otherwise, M/s Greenfield Sites Management Private Limited, which was to honour the said buyback offer, has not been impleaded as a necessary party to the complaint. If that is so, such a benefit of buyback cannot be granted in favour of the complainants. Prayer made by the complainants to this extent stands rejected.
Further contention was raised by Counsel for the complainants that directions be issued to refund amount paid by them, alongwith interest and also an order be passed to make payment of penalty amount towards delayed compensation. Whether the complainants are entitled to above said two benefits or not, is the question that falls for consideration. A similar issue came up for consideration, before this Commission, in the case of M/s Chandigarh Overseas Private Limited (supra), wherein this Commission observed and held as under:-
"It was further contended by Sh.Surjeet Bhadu, Advocate, that the Forum in its order impugned, has given double benefit to the respondent, by ordering refund of Rs.4,75,000/- with interest @9% P.A. from the respective dates of deposits and also payment of penalty amount @Rs.50/- per square yard (infact feet) per month, of the super area, from 19.01.2010 upto realization of the amount, as referred to above. It is prayed by him that either interest be waived off, or penalty amount imposed be withdrawn. On the other hand, it is stated by Counsel for the respondent that benefit given to the respondent by the Forum, is perfectly justified. The penalty has been imposed, as per Clause 28 of the terms and conditions of the Developer Buyer Agreement.
We are of the considered opinion that by granting penalty, besides interest on refund etc., double benefit has been given to the respondent. Amount deposited has been ordered to be returned with interest @9% per annum, from the respective dates of deposits, till realization. It was so said taking note of non-completion of the project. Had the refund not been ordered and, on the other hand, had possession of the unit been ordered to be delivered to the respondent, only in that event, taking note of delay in handing over possession, Clause 28 of the Agreement to pay penalty for the delayed period, could have been invoked. By granting interest on the deposited amount to be returned and also penalty for the delayed period, unwarranted double benefit has been given to the respondent by the Forum. In the case of Shri Suman Nandi and another Vs. M/s Unitech Limited and another, Consumer Complaint No.277 of 2013, decided on 17.12.2015, the National Commission, observed that instead of ordering payment of penalty amount for delayed possession, it is desirable to grant interest on the deposited amount, to secure interest of the consumers"
In view of findings given above, it is held that the complainants would not be entitled to get penalty amount towards delayed compensation. However, they shall be entitled to get refund of the deposited amount, alongwith interest @15% p.a. (less than the interest charged by the opposite party i.e. 24% p.a., on the delayed payments).
Since, the opposite party failed to deliver possession of the unit, in question, to the complainants, despite the fact that they had received substantial amount, in respect of the same, and on the other hand, took bald assertions, to defeat their claim, their hopes were dashed to the ground, thereby causing them, mental agony, physical harassment and also financial loss, as such, besides refund of the deposited amount alongwith interest, it is also liable to compensate them (complainants).
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party is directed as under:-
To refund an amount of Rs.9.50 lacs, alongwith interest @15% p.a., from the respective dates of deposits onwards, to the complainants [(minus (-) Rs.1,42,742/- i.e. the amount already paid by opposite party to the complainants towards delayed compensation/penalty)].
To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices of the real estate.
To pay cost of litigation, to the tune of Rs.30,000/- to the complainants.
The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite party, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, it shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @18% p.a. instead of interest @15% p.a. from the respective dates of deposits onwards, and interest @15% 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, in case, the complainants have availed loan facility from any financial institution(s), 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.
The file be consigned to Record Room, after completion Pronounced.
19.07.2016 _ Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.