State Consumer Disputes Redressal Commission
Gina Singh Choudhary & Anr. vs Eros City Developers Pvt. Ltd. on 30 April, 2024
C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
IN THE DELHI SATE CONSUMER DISPUTES REDRESSAL
COMMISION
Date Of Institution: 01.04.2016
Date Of Hearing: 16.10.2023
Date Of Decision: 30.04.2024
CONSUMER COMPLAINT NO. 324/2016
IN THE MATTER OF:
1. MS. GINA SINGH CHOUDHRY,
W/O MR. APUL CHOUDHARY,
R/O H. NO.-64,
SECTOR - 37, NOIDA.
2. MR. APUL CHOUDHARY,
S/O MR. Y.K. CHOUDHARY.
(Through: AKJ Law Associates)
.... Complainants
VERSUS
EROS CITY DEVELOPERS PVT. LTD.
(THROUGH ITS MANAGING DIRECTOR)
REGD. OFFICE:
S-1 AMERICAN PLAZA,
INTERNATIONAL TRADE TOWER
NEHRU PLACE, NEW DELHI-110019
(Through: Capex Legal)
...Opposite Party
ALLOWED PAGE 1 OF 17
C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
HON'BLE MR. J.P. AGRAWAL, MEMBER (GENERAL)
Present: Ms. Radhika Goyal and Mr. Vikas Jain, Counsels for
Complainant
Ms. Vidhi Goel and Ms. Malini Sud, Counsels for the
Opposite Party
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
JUDGMENT
1. The present complaint has been filed by the Complainants before this commission alleging deficiency of service and unfair trade practice on the part of opposite party and has prayed the following reliefs:
a. Grant a sum of Rs.39,92,738/- (towards principal amount of Rs.15,96,322/- along with compensation in the form of interest of Rs.23,96,416/-) at the rate of 18% per annum along with pendente lite and future interest at the same rate or such higher rate of interest which this Hon'ble Commission may deem fit in the interest of justice, from the date of making payments till the date of actual realization of the payment. b. Grant a sum of Rs.15 lacs towards exemplary damages to the Complainants as detailed above in the complaint.
c. Grant cost of Litigation to the complainants.
ALLOWED PAGE 2 OF 17 C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
d. Any other order, relief or direction which this Hon'ble Commission may deem fit and proper under the circumstances of the case may kindly be passed in favour of the Complainants and against the Opposite Party.
2. Brief facts necessary for the adjudication of the complaint are that the Complainants purchased a commercial shop bearing no. 36 from the original owner, upper ground floor, measuring 345 sq. ft., at a rate of Rs. 4000 per sq. ft. in the mall named "Eros Market Place," of the Opposite Party, situated at Plot No. 2, Shakti Khand-II, Indirapuram, Ghaziabad. Subsequently, the Complainants entered into a Shop Buyer's Agreement dated 22.08.2005 with the Opposite Party. The Opposite Party assured the Complainants of handing over possession of the said shop by the end of the year 2007. However, there was no mention of any date of possession in the said agreement dated 22.08.2005. The Opposite Party failed to hand over the actual possession of the said shop to the Complainants till date despite receiving full and final payment of Rs. 15,96,322/- by the year 2012.
3. Moreover, the Opposite Party offered possession of the said shop to the Complainants on 23.02.2010 without obtaining the completion certificate and also demanded an additional payment, failing to pay which the earnest money, i.e., 20% of the basic price of the shop, would be forfeited by the Opposite Party. However, as per RTI filed by the Complainants, the Opposite Party obtained the Partial Completion Certificate for the shopping mall from the GDA on 05.04.2014 and full Completion Certificate on 26.03.2016, which was later cancelled and restored again on 16.06.2023. Therefore, the ALLOWED PAGE 3 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
possession offered to the Complainants was illegal. Additionally, the Opposite Party not only failed to provide facilities such as showrooms, food court, restaurants, etc., in the said mall but also failed to provide good quality construction as promised in its brochure. The Opposite Party also forced the Complainants to sign a maintenance agreement which was one-sided with inflated and exaggerated maintenance charges of Rs. 15/- per sq. ft. per month but there was hardly any maintenance as lifts, elevators, and escalators were not in working condition. Aggrieved by the actions of the Opposite Party, the Complainants approached this commission alleging deficiency on the part of the Opposite Party.
4. The Opposite Party has contested the present case and raised preliminary objections as to the maintainability of the complaint case. The counsel of the Opposite Party submitted that the Complainants are not consumer under the Consumer Protection Act, 1986 as they invested the money to earn profit, which amounts to commercial purpose. The counsel for the Opposite Party also contended that the present complaint is barred by limitation as per Section 24A of the Consumer Protection Act, 1986 as the possession of the said shop was offered to the Complainants on 23.02.2010 and the Complainants had taken over the physical possession of the said shop and the present complaint is filed after the expiry of 2 years from the date of possession. He further submitted that there is no cause of action in favour of the Complainants to file the present complaint.
5. The counsel for the Opposite Party further submitted that the property in question is situated at Ghaziabad, therefore, this commission does not have territorial jurisdiction to adjudicate the present matter.
ALLOWED PAGE 4 OF 17 C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
Furthermore, he submitted that as per the booking Agreement dated 22.08.2022, the possession of the said shop was to be delivered to the Complainants after it was ready for delivery and payment of all dues by the Complainants. As per clause 47 of the said Agreement, it was expressly mentioned that any advertisement does not form the basis of the booking Agreement. Pressing the aforesaid objections, the counsel appearing on behalf of the Opposite Party prayed that the complaint be dismissed.
6. The Complainants have filed the Rejoinder rebutting the written statement filed by the Opposite Party. Thereafter, both the parties have filed their Evidence by way of Affidavit in order to prove their averments on record. Written argument of both the parties is on record.
7. We have perused the material available on record and heard the counsel for the parties.
8. The facts that the Complainants booked shop bearing shop no. 19 in the said mall with the Opposite Party is evident from the Shop Buyer Agreement dated 22.08.2005 (Annexure- C1). Payment to the extent of Rs. 15,96,322/- made by the Complainants to the Opposite Party is not disputed by the parties.
9. The first question for consideration is whether the present complaint is barred by limitation as per the consumer protection act, 1986?
10. The Opposite Party has contended that the present complaint is barred by limitation as per Section 24A of the Consumer Protection Act, 1986 as the Complainants had taken over possession of the said ALLOWED PAGE 5 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
shop. It is imperative to refer to Section 24A of the Consumer Protection Act, 1986, which provides as under:
24A. Limitation period.--\\ (1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2)Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the Complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period: Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay."
11. A perusal of the above statutory provision of law reflects that the complaint shall be filed before the State Commission within two years from the date on which the cause of action has arisen. It is clear from the record that the Opposite Party failed to hand over the actual possession of the said shop to the Complainants till date. More so, no conveyance deed has been registered in favour of the Complainants. We further deem it appropriate to refer to Mehnga Singh Khera and Ors. Vs. Unitech Ltd. as reported in I (2020) CPJ 93 (NC), wherein the Hon'ble National Commission has held as under:
"It is a settled legal proposition that failure to give possession of flat is continuous wrong and constitutes a recurrent cause of action and as long as the possession is not delivered to the buyers, they have every cause, grievance and right to approach the consumer courts."
ALLOWED PAGE 6 OF 17 C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
12. Relying on the above settled law, it is clear that failure to deliver possession being a continuous wrong constitutes a recurrent cause of action in favour of the buyer and therefore, till the time possession is not delivered to the Complainants, they are within right to file the present complaint before this commission. Consequently, the present complaint is not barred by limitation as per Section 24A of the Act
13. The next question for consideration before us is whether the Complainants are Consumer within the definition of the Consumer Protection Act 1986?
14. To comment on this issue, we deem it appropriate to refer to Section 2(1)(d) of the Consumer Protection Act, 1986, which provides as under:
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of ALLOWED PAGE 7 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose] [Explanation. - For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment"
15. The above statutory provision makes it clear that a person who buys goods or avails services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment is a consumer but does not include a person who avails of such services for any commercial purpose. However, Commercial purpose doesn't cover a person using things they bought or services they used only to make a living through self-employment.
16. Returning to the fact of the present case, it is evident from Shop Buyer Agreement dated 22.08.2005 (Annexure C-1) executed between the contesting parties that the Complainants had booked a shop bearing No. 19 with the Opposite Party and the Opposite Party had also taken Rs. 15,96,322/- from the Complainants for the said shop.
17. Further after examining the facts, this Hon'ble Commission is of the view that the Complainants were seeking space for their self-usage to earn their sole livelihood by means of self-employment by running women cloth's clothes and fashion accessories.
ALLOWED PAGE 8 OF 17 C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
18. In view of the aforesaid, it is clear that the Complainants had bought shop for the purpose of earning a livelihood by self-employment from the Opposite Party by paying full consideration of Rs.15,96,322/-. Therefore, the Complainants falls under the category of 'consumer' provided by the Consumer Protection Act, 1986.
19. More so, the Opposite Party has merely made a statement that the Complainants purchased the shop in question for commercial purpose and on perusal of the record before us, we also fail to find any material which shows that the Complainants are 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 shops. Mere allegation, that the purchase of the property is for commercial purpose, cannot be the ground to reject the present consumer complaint. Consequently, the objection raised on behalf of the Opposite Party is answered in the negative.
20. The third question point for consideration before us is that whether this commission has territorial jurisdiction to decide the present complaint?
21. To adjudicate this issue, it is appropriate to refer to Section 17(2) of the Consumer Protect Act, 1986 which provides as under:
"(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction-
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business ALLOWED PAGE 9 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
22. Analysis of Section 17 (2) of the Consumer Protection Act, 1986 leads us to the conclusion that this commission shall have the territorial jurisdiction where Opposite Party at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or the cause of action arose.
23. Having discussed the statutory position, the facts of the present case reflect that the registered office of the Opposite Party is at S-1 American Plaza, International Trade Tower, Nehru Place, New Delhi-110019. Since the registered office falls within the territory of Delhi, this commission has the territorial jurisdiction to adjudicate the case.
24. To strength the aforesaid findings, we tend to rely on Rohit Srivastava v. Paramount Villas Pvt. Ltd. reported at 2017 SCC OnLine NCDRC 1198, wherein it has been held as under:
"It is not in dispute that the Registered Office of Opposite Party No. 1 Company is situated in Delhi, i.e., within the territorial jurisdiction of the State Commission at Delhi and therefore, in the light of clear provision contained in Section 17(2)(a), which stipulates that a Complaint can be instituted in a State Commission, within the limits of whose jurisdiction, the Opposite Party actually carries on business. In view of the said provision, we have no hesitation in coming to the ALLOWED PAGE 10 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
conclusion that since the Registered Office of the first Opposite Party is situated in Delhi, the State Commission did have the territorial jurisdiction to entertain the Complaint."
25. Relying on the above settled law, we are of the view that this commission has the territorial jurisdiction to decide the present complaint.
26. Having discussed the preliminary objections raised on behalf of the Opposite Party, the next issue which arises is whether the Opposite Party is actually deficient in providing its services to the Complainants.
27. The expression Deficiency of Service has been dealt with by the Hon'ble Apex Court in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:
"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression 'service' in Section 2(1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction.
ALLOWED PAGE 11 OF 17 C/324/2016 D.O.D.: 30.04.2024
MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the Opposite Party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation.
28. Returning to the facts of the present case, it is noted that although the Complainants submitted that the Opposite Party assured them of handing over possession of the said shop by the end of 2007, we failed to find any document or provision that shows us the time period within which the Opposite Party had to hand over possession of the said shop to the Complainants.
29. To resolve the aforesaid issue, it is appropriate to refer to the First Appeal no. 348/2016 tiled as "Ajay Enterprises Pvt. Ltd. and Ors. vs. Shobha Arora and Ors." decided on 10.05.2019, wherein the Hon'ble NCDRC has held as under:
"......under Section 46 of the Indian Contract Act, 1872, the following provision is there:
46.Time for performance of promise, where no application is to be made and no time is specified - Where, by the contract, a promisor is to perform his promise without application by the promisee, and no time for performance is specified, the engagement must be performed within a ALLOWED PAGE 12 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
reasonable time.
Explanation - The question "what is a reasonable time" is, in each particular case, a question of fact".
19. from the above provision it is clear that if there is no time limit for the performance of a particular promise given by one party, it is to be performed within a reasonable time. In most of the builder buyer agreements, the period ranges from 24 to 48 months and the most common agreement seems to be for 36 months plus grace period of six months for completion of construction and delivery of possession. If the possession is delivered beyond 42 months or beyond 48 months, the deficiency in service on the part of the Opposite Party shall stand proved."
30. Relying on the above settled law, if the possession is delivered beyond the 42 months or beyond 48 months, the deficiency in service on the part of the Opposite Party shall stand proved.
31. Further, it is clear from the record that the Opposite Party offered possession of the said shop to the Complainants vide letter dated 02.12.2009 and handed over possession of the said shop to the Complainants on 21.05.2010 without a completion certificate. The Opposite Party relied upon Section 15-A of the Uttar Pradesh Urban Planning and Development Act, therefore, it imperative to Section 15A of The Uttar Pradesh Urban Planning and Development Act, 1973 which read as follows:
"15-A Completion Certificate. -
(1) Every person or body having been granted permission under sub-section (3) of section 15, shall complete the development according to the approved plan and send a notice in writing of such completion to the Authority, and ALLOWED PAGE 13 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
obtain a completion certificate from the Authority in the manner prescribed or provided in the bye-laws of the Authority. Provided that if completion certificate is not granted and refusal to grant it is not intimated within three months after receipt of the notice of completion, it shall be deemed that the Completion certificate has been granted by the Authority.
(2) No person shall occupy or permit to be occupied any commercial building or use are permit to be used such building or part thereof affected building or work until completion certificate has been issued by the Authority, or Authority has failed for three months after the receipt of notice of completion to intimate its refusal of grant of the said certificate.
Explanation. - For the purposes of this section, the expression 'commercial building' shall have the meaning assigned to it in the Uttar Pradesh Municipal Corporations Act. 1959."
32. The above dicta reflect that the no one should use or allow others to use a commercial building until the concerned authority issues a completion certificate for it. If the authority doesn't respond within three months after being notified of the completion, it's assumed they're not refusing to grant the certificate.
33. In the present case, the Opposite Party admitted in paragraph 5 of the written statement that they applied for the completion certificate in the year 2008-2009 and eventually obtained the completion certificate on 05.04.2014 from the relevant authority. However, it is ALLOWED PAGE 14 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
evident from the reply to the RTI dated 21.11.2022 from the Ghaziabad Development Authority that the Opposite Party applied for the completion certificate on 14.11.2013 and obtained a partial completion certificate on 05.04.2014. Moreover, it is mentioned in the partial completion certificate dated 05.04.2014 that it is necessary for the Opposite Party to obtain the complete completion certificate. Therefore, the Opposite Party clearly failed to obtain the complete completion certificate from the relevant authority by 02.12.2009, on which the possession was offered or even by the year 2014. Consequently, the possession of the said shop was offered illegally, as the same was offered without a completion certificate.
34. Furthermore, it is evident from the pictures attached with the complaint [Annexure- C11 (colly)] that the construction of the said mall was not completed even by the year 2016. Therefore, it is clear that the Opposite Party inordinately delayed in completing the construction of the said shop. The Complainants cannot be expected to wait for an indefinite time period to reap the benefits of their hard- earned money, which they have spent in order to purchase the property in question (Ref: Fortune Infrastructure v. Trevor D'Lima reported at (2018) 5 SCC 442).
35. Relying on the above settled law, we hold that the Opposite Party is deficient in providing its services to the Complainants with regards to timely completion of the said shop and kept the hard-earned money of the Complainants for years.
36. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party to refund the amount ALLOWED PAGE 15 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
paid by the Complainants i.e., Rs.15,96,322/-. along with simple interest as per the following arrangement:
A. An interest @ 6% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till 30.04.2024 (being the date of the present judgment);
B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party pays the entire amount on or before 30.06.2024; C. Being guided by the principles as discussed above, in case the Opposite Party fails to refund the amount as per the aforesaid clause (A) on or before 30.06.2024, the entire amount is to be refunded along with an interest @ 9% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till the actual realization of the amount.
37. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to pay a sum of A. Rs. 1,00,000/- as cost for mental agony and harassment to the Complainants; and B. The litigation cost to the extent of Rs. 50,000/-.
38. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.
39. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties as well as forwarded to the corresponding E-mail addresses available on the record i.e. ALLOWED PAGE 16 OF 17 C/324/2016 D.O.D.: 30.04.2024 MS. GINA SINGH CHOUDHARY AND ANR. VS. EROS CITY DEVELOPERS PVT.
LTD.
[email protected] (Complainant) and [email protected] (Opposite Party).
40. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) (J.P. AGRAWAL) MEMBER (GENERAL) Pronounced On: 30.04.2024 LR-ZA ALLOWED PAGE 17 OF 17