State Consumer Disputes Redressal Commission
Ravinder Kaur vs Bajwa Developers Ltd. on 6 April, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
1) Consumer Complaint No.186 of 2016
Date of institution : 13.06.2016
Date of decision : 06.04.2017
Ravinder Kaur wife of Kawarjit Singh, aged 40 years, resident of VPO
Kaler, District Faridkot, Punjab.
....Complainant
Versus
1. The Managing Director, Bajwa Developers Limited, SCO No.17-
18, Sunny Enclave, Desu Majra, Distt. S.A.S. Nagar, Mohali.
2. The Manager (Sales), Bajwa Developers Limited, SCO No.17-18,
Sunny Enclave, Desu Majra, District S.A.S. Nagar, Mohali.
....Opposite Parties
2) Consumer Complaint No.187 of 2016
Date of institution : 13.06.2016
Date of decision : 06.04.2017
Ms. Gurdial Kaur wife of Sh. Kartar Singh, aged 45 years, resident of
Surgapuri Road, Kotkapura, District Faridkot, Punjab.
....Complainant
Versus
1. The Managing Director, Bajwa Developers Limited, SCO No.17-
18, Sunny Enclave, Desu Majra, Distt. S.A.S. Nagar, Mohali.
2. The Manager (Sales), Bajwa Developers Limited, SCO No.17-18,
Sunny Enclave, Desu Majra, District S.A.S. Nagar, Mohali.
....Opposite Parties
Consumer Complaints under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member
Present:-
For the complainant : Sh. Pankaj Maini, Advocate For the opposite parties: Sh. T.S. Khaira, Advocate. Consumer Complaint No.186 of 2016 2 JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT :
This order will dispose of the above mentioned two Consumer Complaints filed by the complainants, under Section 17 of the Consumer Protection Act, 1986 (in short, "the Act"), as the facts and the questions of law involved in these complaints are the same. The facts of the complaints are verbatim and both the complaints have been filed against the same opposite parties by the complainants. The facts are taken from Consumer Complaint No.186 of 2016.
Consumer Complaint No.186 of 2016:
2. Brief facts, as set out in the complaint, are that for her personal use, the complainant booked 2 BHK flat (BR No.416) 2016, measuring 900 sq.ft. (approx.), situated at Sector 74-A-117, Mohali, having value of ₹25,00,000/- with the opposite parties. The agreement was entered between them on 18.04.2011 and the complainant paid ₹13,75,000/- on different dates. As per payment schedule given in the agreement, the date of final payment was 13.01.2013 i.e. date of delivery. The complainant paid first instalment of ₹1,00,000/- on 18.04.2011; ₹5,25,000/- on 09.07.2011; ₹3,75,000/- on 14.03.2012;
₹3,75,000/- on 09.11.2012; totaling ₹13,75,000/- by 09.11.2012. At the time of executing the agreement, the opposite parties had given date of possession in the beginning of 2013, although they were not having the permission from GMADA authorities for setting up residential colony in Sectors 74-A and 117, SAS Nagar, Mohali under the name of "Sunny Basant". They got permission from GMADA only on 19.05.2014, subject to getting approval from the other statutory bodies. In fact, they Consumer Complaint No.186 of 2016 3 had no permission to establish the residential colony under the provisions of law. As per letter dated 19.05.2014 issued by GMADA, vide memo No.GMADA/DTP/2014/1483, letter of intent was issued, subject to fulfillment of other requirements mentioned in that letter. After receipt of ₹13,75,000/-, the opposite parties refused to accept the further payments from the complainant, as they knew that they were not having requisite permissions or sanctions from the competent authorities to set up the said project. It can also be presumed that they have no permission from Fire Safety Department, Sanitary Department, Electricity Department and Water Works Department. They received huge amount from the complainant, without providing the basic facilities in the project. The opposite parties failed to deliver possession of the flat in question by the agreed period. They failed to lay even a single brick at the site. The opposite parties even sold the flat to the complainant, which was earmarked for EWS category, but took the amount from her under general category. The CLU was granted to the opposite parties on 19.05.2014. They could not sell the flat to anyone until and unless the CLU was granted. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, due to which the complainant suffered mental tension and harassment. Accordingly, the complainant has prayed for issuance of following directions to the opposite parties:
i) to refund ₹13,75,000/-, along with interest at the rate of 18% per annum, which comes to ₹12,35,000/- (approximately), totaling ₹26,00,000/-;
ii) to pay ₹5,00,000/-, as compensation for mental agony caused t the complainant;Consumer Complaint No.186 of 2016 4
iii) to award punitive damages to the tune of ₹4,00,000/- to the complainant, for not having requisite permissions by the opposite parties.
3. Upon notice, opposite parties appeared and filed written reply, taking preliminary objections that the complaint is not maintainable and this Commission has no pecuniary jurisdiction to entertain and decide the same, as the claim of the complainant is less than ₹20,00,000/-, which has been exaggerated by claiming interest at the rate of 18%. The complainant has not come to this Commission with clean hands. In fact, the flat in question was meant for economically weaker section (EWS) of society and the complainant appended no document to show that she belongs to EWS category. The complainant assured that she would get some documents and entered into the agreement for purchasing the said flat. The complainant is estopped from claiming any relief, as she has not paid the instalments within the due dates and, thus, committed default of the contract. The payment of instalments was the essence of the contract. The refund of the amount is governed by clause 10 of the agreement. The flat in question has been purchased by the complainant for reselling purposes. There is no 'consumer-service provider' relationship between the parties. She does not fall within the ambit of the 'consumer'. Rather she is an investor. On merits, number of the flat, area, sale consideration and execution of agreement to sell are admitted. Payment of ₹13,75,000/- is also admitted. It was pleaded that the complainant has wrongly mentioned the date of agreement. Correct date is 13.07.2011. No date of delivering the possession was specified, as the complainant had to Consumer Complaint No.186 of 2016 5 submit the documents to prove that she belongs to EWS of the society. The complainant failed to comply with the terms and conditions of the agreement, by not making the payment of instalments on due dates. As per clauses 2 & 3 of the agreement, the payment of instalments was the essence of the contract. As per clause 4 thereof, the complainant was to make the complete payment, 10 days before the date she intends to get the registration and possession of the flat. It is denied that the opposite parties refused to accept the payment. The complaint is time barred. The relief prayed is over-stated. There is no deficiency in service on the part of the opposite parties and the complainant is not entitled to any relief. Similar other pleas as taken in preliminary objections were repeated and denying other allegations of the complaint, it was prayed that the same be dismissed.
4. To prove her claim, the complainant tendered her affidavit Ex.C-A, along with documents Ex.C-1 to Ex.C-5. On the other hand, the opposite parties tendered affidavit of Sh. Jarnail Singh Bajwa, Ex.OP-A. The opposite parties also placed on record additional affidavit of Sh. Jarnail Singh Bajwa along with documents Annexure OP-1 to Annexure OP-3, as per the directions of this Commission.
5. We have heard learned counsel for the parties as well as perused the written arguments submitted on behalf of the opposite parties and have gone through the record carefully.
6. Learned counsel for the complainant vehemently contended that the complainant purchased the flat in question from the opposite parties for ₹25,00,000/- and agreement Ex.C-1 was executed between the parties. She admittedly deposited ₹13,75,000/- with the opposite Consumer Complaint No.186 of 2016 6 parties. However, the opposite parties failed to complete the project, as they have no requite licenses or permission to develop the project. The possession of the flat was assured to be delivered in beginning of 2013, but the opposite parties failed to complete the project/flat by that period. GMADA issued letter dated 19.05.2014 to the opposite parties to fulfil certain requirements to get approved their project, but they failed to comply with that letter. He further contended that the complainant was allotted EWS flat, despite taking the price as per general category. On account of failure of the opposite parties to complete the project/flat, the complainant is entitled to refund of the amount deposited by her, along with interest and compensation.
7. Per contra, learned counsel for the opposite parties argued that there is no deficiency in service on the part of the opposite parties. The complainant herself failed to perform her part of the agreement, by not paying the instalments by the due dates. She herself opted to purchase the EWS House, claiming herself to be of EWS category. No date of possession was ever committed, as the complainant was to complete the formalities for getting the EWS house. The timely payment was the essence of the contract, but she failed to comply with the terms and conditions of the agreement. He further argued that this Commission has no pecuniary jurisdiction to decide the dispute, as the claim of the complainant is less than ₹20,00,000/-. The complaint is also time barred. The complainant is not entitled to any relief and the complaint is liable to be dismissed.
8. We have given thoughtful consideration to the contentions raised by the learned counsel for the parties.
Consumer Complaint No.186 of 2016 7
9. Admittedly, the complainant purchased 2 BHK flat (BR No.416), measuring 900 sq.ft., for consideration of ₹25,00,000/- from the opposite parties and agreement Ex.C-1 was executed between the parties on 13.07.2011. Against the sale consideration, the complainant deposited ₹13,75,000/, as per agreement Ex.C-1 as well as demand draft and receipt Ex.C-2 and Ex.C-3 respectively. As per the complainant, the possession of the flat was agreed to be delivered in the beginning of 2013, whereas as per the version of the opposite parties, no date of handing over of possession was specified, as the complainant was required to submit the documents to prove that she belongs to economically weaker section of the society. It is pertinent to mention here that the flat in question was sold to the complainant, vide agreement dated 13.07.2011, whereas the permission to set up residential colony was given by GMADA to the opposite parties, vide letter dated 19.05.2014 Ex.C-4 and that too subject to getting approval from other statutory bodies. The fact remains that the opposite parties agreed to sell the flat and received huge amount of ₹13,75,000/- from the complainant, without having any permission to setting up the residential colony from the competent authorities in the year 2011.
10. As getting permission from this Commission, the opposite parties placed on record additional affidavit of Sh. Jarnail Singh Bajwa dated 21.02.2017, along with certain documents. They placed on record Promoter Registration Certificate dated 07.05.2012 as Annexure OP-1 and copy of Change of Land Use dated 09.11.2012 as Annexure OP-2. As already said above, the flat in question was agreed to be sold, vide agreement dated 13.07.2011. The opposite parties were not having any Consumer Complaint No.186 of 2016 8 Promoter Registration Certificate and CLU on 13.07.2011 for developing the project and the same were obtained by the opposite parties in the year 2012, i.e. after one year of the purchase of flat by the complainant. The opposite parties also placed on record copies of documents regarding their ownership over the land, where the project in question was to be set up. All these documents were executed after the date of execution of agreement to sell with the complainant, which was executed on 13.07.2011.
11. All the above facts and circumstances clearly prove that the opposite parties have not complied with the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"). As per section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to make full and true disclosure of the nature of his title to the land, on which such colony is developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days, notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with section 3 of the PAPRA.
12. As per section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to Consumer Complaint No.186 of 2016 9 produce on record any such permission, as they were proceeded against ex parte. So, they also violated Section 5 of PAPRA.
13. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this respect. There is no evidence or pleading on record on behalf of the opposite parties in this respect. As such, the opposite parties also violated Section 9 of the PAPRA.
14. Further, as per Section 12 of the PAPRA, if the builder fails to deliver possession of the plot/apartment by the specified date, then the builder is liable to refund the amount deposited by the buyer with interest.
15. As per Rule 17 of the "Punjab Apartment and Property Regulation Rules, 1995, framed under Section 45 of the PAPRA, it has been provided as under:-
17. Rate of interest on refund of advance money upon cancellation of agreement.- The promoter shall refund full amount collected from the prospective buyers under sub-
section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
16. The opposite parties had been collecting huge amounts from the buyers for the development of the project. The amount received from the complainant-buyer was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. The opposite parties are not to play the game Consumer Complaint No.186 of 2016 10 at the cost of others. When it insists upon the performance of the promise by the consumers, it is to be bound by the reciprocal promises of performing their part of the agreement. The opposite parties have failed to comply the aforementioned provisions of PAPRA, while launching and promising to develop their project. Thus, the delay in not completing the flat within the agreed period amounts to deficiency in service on the part of the opposite parties, for which the complainant is to be suitably compensated.
17. The Consumer Protection Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The complainant has made payment of substantial amount to the opposite parties with the hope to get the possession of the flat in a reasonable period. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of flat and delivery of possession in a stipulated period. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainant. Had the complainant not invested his money with the opposite parties, she would have invested the same elsewhere. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the plot/unit/flat within a reasonable period. The complainant cannot be made to wait indefinitely to get possession of the flat booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the Consumer Complaint No.186 of 2016 11 opposite parties i.e. builder knew from the very beginning that they had not complied with the provisions of the PAPRA and Rules and would not be able to complete the flat and to deliver the possession within the stipulated period, thus by misrepresentation induced the complainant to book the flat, due to which the complainant has suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainant is a deposit held by the opposite parties in trust of complainant and it should be used for the purpose of building the flat, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainant, are also required to be taken into consideration for awarding compensation. In addition to that she is also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by him on account of the betrayal by the opposite parties in shattering his hope of getting the flat by waiting for all this period. In these circumstances, the complainant is entitled to the refund of the Consumer Complaint No.186 of 2016 12 amount deposited by her, along with interest and suitable compensation.
18. The plea of the opposite parties that this Commission has no pecuniary jurisdiction to decide the complaint as the claim of the complainant is less than ₹20,00,000/- is not tenable, as the complainant has sought refund of ₹13,75,000/-, along with compensation of ₹5,00,000/- and punitive damages to the tune of ₹4,00,000/-. Thus, the total amount claimed exceeds ₹20,00,000/-. The plea of the opposite parties that the complaint is time barred is also not tenable, as the opposite parties themselves failed to complete the project and failed to obtain requisite permissions from the competent authorities. When there is no development at the site, the complainant is not supposed to make further payments.
19. The complainant has claimed refund of ₹13,75,000/- along with interest at the rate of 18% (approximately ₹12,35,000/-). Hon'ble National Commission in case Kamal Sood v. DLF Universal Ltd. 2007 (3) C.P.J. 7 (NC), in similar set of circumstances, where the builder was at fault in not obtaining permission for construction in advance before issuing advertisement and collected money from customers without having any licence, ordered for refund of deposited amount along with interest at the rate of 12%, besides compensation. In view of the above authority as well as Rule 17 of PAPRA, the complainant is entitled to the refund of his deposited amount, along with interest at the rate of 12%.
20. Accordingly, the complaint is allowed and following directions are issued to the opposite parties:
Consumer Complaint No.186 of 2016 13
i) to refund ₹13,75,000/-, to the complainant, along with interest at the rate of 12% per annum from the respective dates of deposits till realization, as per Rule 17 of PAPRA;
ii) to pay ₹1,30,000/-, as compensation for the mental agony and harassment suffered by him; and
iii) to pay ₹13,000/-, as costs of litigation.
The opposite parties shall comply the order within 30 days of the receipt of certified copy of the order, failing which the compensation amount shall also carry interest at the rate of 12% from the date of this order till realization.
Consumer Complaint No.187 of 2016
21. Similarly, in Consumer Complaint No.187 of 2016 (Ms. Gurdial Kaur Vs. The Managing Director, Bajwa Developers Limited & Anr.), the complainant booked 2 BHK flat No. 2257, measuring 900 sq.ft. (Approximately) situated at Sector 74-A-117, Mohali, for ₹25,00,000/-, as per agreement dated 16.10.2012 Ex.C-1. The complainant deposited ₹13,95,000/- with the opposite parties on different dates, as per agreement Ex.C-1 and receipt Ex.C-2. The opposite parties failed to develop the project, where the flat in question was situated. Accordingly, the complainant sought the following directions to the opposite parties:
i) to refund ₹13,95,000/-, along with interest at the rate of 18% per annum, which comes to ₹8,35,000/- (approximately), totaling ₹22,32,000/-;
ii) to pay ₹5,00,000/-, as compensation for mental agony caused to the complainant;
iii) to award punitive damages to the tune of ₹2,68,000/- to the complainant, for not having requisite permissions by the opposite parties.Consumer Complaint No.186 of 2016 14
22. The opposite parties filed their reply and took similar pleas as taken up by them in the reply filed in Consumer Complaint No.186 of 2016.
23. To prove her case, the complainant tendered her affidavit Ex.C-A, along with documents Ex.C-1 to Ex.C-4. On the other hand, opposite parties tendered affidavit of Sh. Jarnail Singh Bajwa, Ex.OP-A. They also filed additional affidavit of Sh. Jarnail Singh Bajwa along with documents, as per directions of this Commission.
24. In view of the reasons and discussion held in Consumer Complaint No.186 of 2016 (Ravinder Kaur Vs. The Managing Director, Bajwa Developers Limited & Anr.), this complaint i.e. Consumer Complaint No.187 of 2017 (Ms. Gurdial Kaur Vs. The Managing Director, Bajwa Developers Limited & Anr.) is accepted and the following directions are issued to the opposite parties:
i) to refund ₹13,95,000/-, to the complainant, along with interest at the rate of 12% per annum from the respective dates of deposits till realization, as per Rule 17 of PAPRA;
ii) to pay ₹1,30,000/-, as compensation for the mental agony and
harassment suffered by him; and
iii) to pay ₹13,000/-, as costs of litigation.
25. The complaints could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER April 06, 2017.
(Gurmeet S)