State Consumer Disputes Redressal Commission
Mrs. Anita Aggarwal vs M/S Sushma Buildtech Ltd., on 25 April, 2017
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH Consumer Complaint No. 834 of 2016 Date of Institution 21.11.2016 Date of Decision 25.04.2017 Mrs. Anita Aggarwal W/o Mr. Ashok Kumar Aggarwal, resident of Flat No.49, First Floor, Sangam Enclave, Sector 48-A, Chandigarh. Present address: House No.202, Tower No.1, Motia Royal City, Zirakpur, Tehsil Derabassi, Distt. S.A.S Nagar (Pb.). Mr. Ashok Aggarwal S/o Babu Ram Aggarwal, resident of Flat No.49, First Floor, Sangam Enclave, Sector 48-A, Chandigarh. Present address: House No.202, Tower No.1, Motia Royal City, Zirakpur, Tehsil Derabassi, Distt. S.A.S Nagar (Pb.). ....Complainants. Versus Sushma Buildtech Ltd., having its registered office at Plot No.381, Industrial Area, Phase I, Chandigarh through its Director. Sushma Buildtech Ltd., SCO-172-173, 1st Floor, Sector 9C, Madhya Marg, Chandigarh through its Director. .....Opposite Parties. BEFORE: MR. DEV RAJ, PRESIDING MEMBER
MRS. PADMA PANDEY, MEMBER.
Present: Mrs. Anita Aggarwal and Sh. Ashok Kumar Aggarwal, complainants in person.
Sh. Sanjeev Sharma, Advocate for the Opposite Parties.
PER DEV RAJ, PRESIDING MEMBER In brief, the facts of the case, are that believing the version of the Opposite Parties and the sample flat shown, the complainants booked a residential apartment i.e. duplex Penthouse No.B-1202 on 12th Floor in Tower B measuring 1910 sq. ft;. (super area) with terrace area in the project of the Opposite Parties, namely, Sushma Elite Cross, located at Gazipur, M.C. Zirakpur, Tehsil Derabassi, District Mohali, Punjab, basic sale price whereof was Rs.50,19,950/-. Apartment Buyer's Agreement dated 10.07.2012 (Annexure C-3) was executed between the parties. The complainants obtained housing loan of Rs.35 Lacs from Bank of India, Chandigarh and Tripartite Agreement dated 06.08.2012 (Annexure C-4) was executed. Payments were to be made directly to the Opposite Parties based on construction linked payment plan. The complainants paid a total amount of Rs.51,70,594/- including service tax and late payment penalty interest (Annexure C-5)_. It was stated that allotment letter was handed over on 09.08.2011 whereas one sided Apartment Buyer's Agreement was executed on 10.07.2012. It was further stated that as the complainants are residing in rented flat and paying rent to the landlord, they requested the Opposite Parties to hand over the flat but did not get any satisfactory answer. It was further stated that in the month of December 2015, the complainants again asked for possession and also gave written request for change in their address. It was further stated that vide email dated 24.12.2015 (Annexure C-6), the Opposite Parties requested the complainants to shift to another commercial project 'Infinium' or another residential project 'Sushma Grande' and further committed assured return in the shape of 12% p.a., which was unfair trade practice on their part.
2. It was further stated that as per Clause 14(d) of the Agreement, possession of the unit, in question, was to be handed over by the Opposite Parties, within the stipulated period of 36 months from the date of execution of the agreement but they failed to do so. It was further stated that on getting no response, the complainants in the month of July 2016, again requested the Opposite Parties for handing over the possession of the unit, in question, and also requested for change of their address. It was further stated that vide email dated 27.07.2016 (Annexure C-7), the Opposite Parties again reiterated the offer to the complainants which was earlier sent on 24.12.2015. It was further stated that representative of the Opposite Parties told the complainants that no dues certificate would be issued and possession of the unit, in question, would be given provided they signed maintenance agreement first. It was further stated that payment of maintenance charges was to be made and that too was to be effective from the date of receipt of occupation and completion certificates from the authorities. It was further stated that till date, neither any phone call nor any mail or written communication has been received from the Opposite Parties.
3. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, 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, seeking directions to the Opposite Parties, to refund Rs.51,70,594/- alongwith interest @18% from respective dates of deposits; pay penalty of Rs.3,82,000/- calculated @Rs.5/- per sq. ft. up-to August 2013; Rs.20,00,000/- as compensation for mental agony and physical harassment and Rs.50,000/- as litigation expenses.
4. The Opposite Parties, in their written statement, took up certain preliminary objections, to the effect, that the complainants, being investor, had purchased the flat, in question, for commercial purpose/speculation and earning profits, as and when there was escalation in the prices of real estate, as such, would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act; that due to existence of arbitration clause No.21 in the Agreement, this Commission has no jurisdiction to try the matter and the same be referred to the sole Arbitrator; that this Commission lacks pecuniary jurisdiction to entertain the present complaint and that the complainants concealed the material facts and approached this Commission on flimsy grounds, which does not entitle them to claim refund of money. It was stated that the Opposite Parties have duly offered possession of the unit, complete in all respects on 10.01.2017 and are committed to pay the delayed compensation.
5. On merits, it was stated that as per clause 14(d) of the Agreement, the possession of the unit, in question, was to be delivered within 42 months from the signing of the agreement and in case of delay in handing over the possession, the complainants were entitled to penalty. It was further stated that the complainants are habitual defaulters as they never paid the installments in time and as such, an amount of Rs.1,25,142/- has accrued against them due to delay in payment of installments. It was further stated that the complainants are not owners of the flat, in question, as the flat is mortgaged with the bank. It was further stated that since the complainants are defaulters of bank, a case is pending against them at Debts Recovery Tribunal. It was further stated that possession of flat was offered to the complainants on 10.01.2017. It was further stated that the complainants after signing the buyer agreement and till the filing of present complaint has never ever made any communication with regard to any dispute over clauses of the buyer agreement. It was further stated that several demands and reminders were sent to the complainants as they defaulted in timely payment of installments. It was further stated that possession of the flat was offered after completion of all the amenities and receipt of completion certificate on 27.06.2016. It was further stated that the Opposite Parties had already completed and handed over possession of units in other towers in the same project namely Sushma Elite Cross to its customers on time and only a negligible delay has taken place in the present project. It was further stated that the delayed compensation shall be credited/adjusted in the account of the complainants as per the binding terms of the agreement. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
6. The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.
7. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Bhupinder Singh Bedi, their Authorised Signatory, by way of evidence, alongwith which, a number of documents were attached.
8. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
9. It is evident that in pursuance of application dated 31.07.2011, the complainants were allotted a Duplex Penthouse No.B-1202 on 12th floor in Tower B admeasuring 1910 sq. ft. (super area) and terrace area (for Duplex Penthouse only) in a Residential Complex known as Sushma Elite Cross located at Gazipur, MC, Zirakpur, Distt. SAS Nagar (Mohali) vide allotment letter dated 09.08.2011 (Annexure C-2), basic sale price whereof was Rs.50,19,950/-. Apartment Buyer's Agreement (Annexure C-3) was executed between the parties on 10.07.2012. The complainants paid an amount of Rs.51,70,594/- including interest in the sum of Rs.1,00,407/- to Opposite Parties, as depicted from customers statement (Annexure C-5). The complainants also obtained housing loan of Rs.35,00,000/- from Bank of India, as is evident from Tripartite Agreement (Annexure C-4). The complainants have been, by and large, making payments timely as is evident from Annexure R-7 (colly.) and wherever there was delay, the Opposite Parties charged interest on the delayed payment. No liability can be fastened upon the complainants for delay in making payments by other allottees (Annexure R-5 colly.). Further as per Clause 14 (d) of the Agreement, the Opposite Parties were to give possession of the unit, in question, within a period of 36 months from the date of execution of the said Agreement plus further grace period of 6 months (totaling 42 months) i.e. by 09.01.2016. The Opposite Parties obtained completion certificate on 27.06.2016 (Annexure R-6). The possession offered on 10.01.2017 was, thus, after delay of one year from the stipulated date viz. 09.01.2016. The possession offered on 10.01.2017 was also after filing of the complaint on 21.11.2016.
10. The first objection raised by the Opposite Parties was 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 Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. The Opposite Parties also moved a miscellaneous application bearing No.107 of 2017 under Section 8 of Arbitration and Conciliation Act, 1996 for referring the matter to the sole arbitration, which was disposed of by this Commission vide order dated 03.02.2017, by holding that the applicability of the arbitration process would be seen at the time of final arguments in the main case. It may be stated here that the objection raised by the Opposite Parties, in this regard, deserves rejection, in view of the judgment passed by this Commission in case titled ' Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-
"25. The next 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.
26. 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."
27. 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."
28. 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.
29. 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."
30. 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, the Consumer Foras have 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.
31. 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.
32. 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 complainant has spent his life savings to get a unit, for his residential purpose. His 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/her 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.
33. 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 complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the plot, 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.
34. 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."
35. 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."
In view of the above, and also in the face of ratio of judgments, referred to above, the argument raised by Counsel for the Opposite Parties, stands rejected.
11. To defeat claim of the complainants, the next objection raised by the Opposite Parties was that the complainants, being investor, had purchased the unit, in question, for earning profits, as and when there is escalation in the prices of real estate, as such, they would not fall within the definition of a consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on the record to show, that the complainants are property dealer(s), and are indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd ., 2016 (1) CPJ 31, it was held by the National Commission that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavita Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the flat, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta , 2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as " Aashish Oberai Vs. Emaar MGF Land Limited", Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-
"In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015."
The complainants, thus, fall within the definition of 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.
12. An objection was raised by the Opposite Parties that since the sum total of reliefs claimed by the complainants, in their complaint, exceed Rs.1 Crore, hence, this Commission has no pecuniary jurisdiction to entertain this complaint. It may be stated here, to clarify the position, that a similar question fell for determination before this Commission in Surjit Singh Thadwal Vs. M/s Emaar MGF Land Pvt. Ltd. & Anr., Complaint Case No.484 of 2016, decided by this Commission on 15.12.2016, wherein while negating the said plea, it was held as under:-
"13. Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.
14. In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint. However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties. Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-
"3. Complaint (at pp 17-36) was filed with the following prayer "It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant."
4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission."
15. It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.
As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).
In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition, it was observed as under:-
"12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-
(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.
(2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.
(3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and
(ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi."
16. In Ambrish Kumar Shukla case (supra), ratio of judgment- Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.'s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission. If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected."
In the instant case, the sum-total of reliefs claimed by the complainants, excluding interest, is well below Rs.1 Crore and, therefore, it falls within the pecuniary jurisdiction of this Commission. Therefore, the objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.
13. The next question, which falls for consideration, is, as to whether on account of delay in offering possession, the complainants are entitled to refund of the amount deposited by them with interest or not. Clause 14(d) of the Apartment Buyer's Agreement dated 10.07.2012 (Annexure C-3), being relevant, is, interalia, extracted hereunder:-
"The Developer shall endeavour to give possession of the said Unit to the Buyer within a period of Thirty Six (36) months from the date of the execution of this Agreement unless and until restrained by circumstances beyond its contemplation and control. Besides, the Developer can take six months grace period for completing and handing over the said Unit to the Buyer. The Developer shall hand over the said Unit to the Buyer for his occupation and use and subject to the Buyer having complied with all the terms and conditions of this Agreement. In the event of his failure to take over and/or occupy and use the said Unit provisionally and/originally allotted within thirty (30 days) from the date of intimation in writing by the Developer for such occupancy, the same shall lie at his risk and cost and the Buyer on the sole discretion of the Developer, shall be liable to pay compensation/holding charges @Rs.5/- per sq. ft. of the super built-up area per month as holding charges for the entire period of such delay. On the other hand, if the Developer fails to give possession of the said Unit within the aforesaid period then the Developer shall pay to the Buyer compensation/penalty @Rs.5/- per sq. ft. of the super built-up area per month for the entire period of such delay........"
No doubt, as per the afore-extracted clause, the Opposite Parties were to give possession of the unit, in question, within a period of 42 months from the date of execution of the Agreement i.e. (36 months + 6 months grace period). Thus, by computing 42 months from the date of execution of the Agreement i.e. 10.07.2012, the possession of the unit, in question, was to be delivered by the Opposite Parties to the complainants by 09.01.2016. As per Opposite Parties, possession of the unit, in question, was offered vide letter dated 10.01.2017 (Annexure R-4), whereby the complainants were asked to pay the outstanding amount of Rs.3,42,594/-. The complainants have averred that despite their approaching the Opposite Parties for handing over flat because they were residing in a rented flat and were unable to pay rent as well as installment/EMI to the Bank, they did not get any satisfactory answer regarding possession. It was stated that the Opposite Parties attempted to allure them by asking to shift to another/commercial project. There was clear delay of one year beyond the period stipulated in the agreement, in offering possession. Under similar circumstances, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon'ble National Commission, ordered refund to the complainants, holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainant was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.
14. No doubt, a plea has been taken by the Opposite Parties that possession of the unit, in question, was delayed on account of the reasons beyond its control i.e. on account of force majeure circumstances. However, the force majeure circumstances, which have been claimed by the Opposite Parties, for not completing construction work, at the site and offering possession by the stipulated date are delay in making payment on the part of the complainants, including other allottees and secondly, delay in issuance of completion certificate by the Competent Authorities. Now here, the question arises, as to whether, the aforesaid circumstances, can be termed as force majeure circumstances, to justify delay in delivering possession of the unit, by the stipulated date or not.
15. First coming to the plea taken by the Opposite Parties regarding delay in offer of possession on account of the reason that there was delay in making payment on the part of the complainants, it may be stated here that delay in remitting some of the installments by the complainants was not very significant. Wherever, there was delay, the Opposite Parties charged interest at exorbitant rate on delayed payments. It is on record that the complainants had cleared all the payments except the amount demanded in offer of possession letter dated 10.01.2017 (Annexure R-4). For delay in making payments by the other allottees, the complainants cannot be penalized. In such circumstances, the plea raised by the Opposite Parties cannot be accepted. Secondly, such a plea has no legs to stand, also in view of decision rendered by the National Commission, in a case titled as Puneet Malhotra Vs Parsvnath Developers Ltd., Consumer Complaint No. 232 of 2014, decided on 29.01.2015, wherein under similar circumstances it was observed and held as under:-
"If some of the allottees had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating Inventory at a lower price".
16. As far as the second plea taken by the Opposite Parties regarding delay in offer of possession i.e. delay in issuance of completion certificate by the Competent Authorities, is concerned, it may be stated here that the said plea also does not merit acceptance. As stated above, as per terms and conditions of the Agreement, possession of the unit was to be handed over within a period of 36 months, from the date of signing the Agreement. To cover any delay caused in the process, the Opposite Parties were entitled to 6 months more time, as per Clause 15 (d) i.e. Opposite Parties were bound to hand over possession of the unit, latest by 09.01.2016.
17. Furthermore, there is nothing on record to show that when completion certificate was not issued by the Competent Authorities, when application was moved in December 2014, any follow-ups were done by Opposite Parties. What correspondence took place between the Authorities and the Opposite Parties, in the matter, if any, has not been placed on record. There might be certain objections raised by the Complete Authorities, which took time to remove, on the part of the Opposite Parties. There is also nothing on record, to show that at any point of time, the matter was taken up by the Opposite Parties, with the Government Authorities, to expedite the issuance of completion certificate, so that possession of the units, could be offered to the complainants and other allottees. On the basis of vague averments, no relief can be granted to the Opposite Parties. The purchaser of a unit, who had nothing to do with the issuance of completion certificate, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the unit. It is, therefore, held that no force majeure circumstances were encountered by the Opposite Parties, as far as the present unit, in question. As such, the plea raised by the Opposite Parties, in this regard, stands rejected.
18. Under these circumstances, it is held that since there was material violation, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. Thus, in view of law laid down in aforesaid judgments, the complainants are entitled to refund of Rs.51,70,594/-.
19. It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.51,70,594/- was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the Opposite Parties, for their own benefit. There is no dispute that for making delayed payments, the Opposite Parties were charging heavy rate of interest, for the period of delay in making payment of installments. It is well settled law that whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the right to interest. It was also so said by the Hon'ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014. In view of above, the complainants are certainly entitled to get refund of the amount deposited by them to the tune of Rs.51,70,594/- alongwith interest from the respective dates of deposits till realization.
20. This Commission in Consumer Complaint no.445 of 2016 titled Sunita Sheokhand Vs. Sushma Buildtech Limited, decided on 25.01.2017, where delay in offering possession was around 19 months, granted refund alongwith 15% interest. Considering the delay in this complaint, which was around one year, interest @12% p.a. simple, on the amount to be refunded, in our considered opinion, would be just and adequate.
21. The next question, which falls for consideration, is, as to whether, the complainants are entitled to any compensation or not. The complainants deposited their hard earned money, in the hope that they would get a flat to live in. On account of non-delivery of possession of the unit, in question, within the stipulated period, the Opposite Parties were deficient in rendering service and the complainants have suffered physical harassment and mental agony on account of the acts of omission and commission of the Opposite Parties, for which, they needs to be suitably compensated. The complainants have sought compensation for mental agony and harassment to the tune of Rs.20,00,000/- which is highly exaggerated. The delay in offering possession is of one year. Compensation in the sum of Rs.1,50,000/-, if granted, would be just and adequate, to meet the ends of justice.
22. It is on record that in terms of Tripartite Agreement (Annexure C-4), the complainants obtained loan in the sum of Rs.35 Lacs from Bank of India, for making payment to the Opposite Parties towards part of the sale consideration of unit. Bank of India, shall have first charge on the amount to be refunded to the complainants, to the extent it is due against the complainants.
23. No other point, was urged, by the Counsel for the parties.
24. For the reasons, recorded above, the complaint is partly accepted, with costs. The Opposite Parties are, jointly and severally, held liable and directed in the following manner:-
To refund the amount of Rs.51,70,594/- alongwith simple interest @12% per annum, to the complainants, from the respective dates of deposits, till realization, within 45 days, from the date of receipt of a certified copy of this order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @15% per annum, instead of 12% per annum, from the date of filing the complaint, till actual payment;
To pay an amount of Rs.1,50,000/- to the complainants, as compensation for deficiency in service, mental agony and physical harassment, within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith interest @12% per annum from the date of filing the complaint till actual payment;
To pay cost of litigation, to the tune of Rs.35,000/- to the complainants within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the Opposite Parties shall pay the aforesaid amount alongwith simple interest @12% per annum from the date of filing the complaint till actual payment.
25. Since Bank of India advanced housing loan to the complainants, it shall have the first charge on the amount to be refunded, to the extent, the same is due against the complainants.
26. Certified Copies of this order be sent to the parties, free of charge.
27. The file be consigned to Record Room, after completion.
Pronounced 25.04.2017.
[DEV RAJ] PRESIDING MEMBER [PADMA PANDEY] MEMBER Ad