State Consumer Disputes Redressal Commission
Puneet Bansal vs M/S Aggarwal Sales on 11 January, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.273 of 2016
Date of institution : 05.09.2016
Date of decision : 11.01.2017
1. Mr. Puneet Bansal son of Shri Jai Kishan Dass Bansal,
resident of # 426, Jeevan Adhar Co-operative House Building,
Sector 48-A, Chandigarh.
2. Mrs. Veena Bansal wife of Shri Jai Kishan Dass Bansal,
resident of # 426, Jeevan Adhar Co-operative House Building,
Sector 48-A, Chandigarh.
.......Complainants
Versus
M/s Aggarwal Sales through its Managing Director/Principal Officer
having its Corporate Office at Royale Estate Extension, Chandigarh-
Delhi Highway, Zirakpur, Punjab-140 603.
........Opposite Party
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Shri Vinod Kumar Gupta, Member
Present:-
For the complainants : Shri Kabir Sarin, Advocate. For the opposite party : Ex parte.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The instant Consumer Complaint has been filed by the complainants under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 as amended upto date (in short, "the Act") along with an Consumer Complaint No.273 of 2016 2 application for filing joint complaint. The said application was impliedly allowed, vide order dated14.9.2016 as the complainants were permitted to proceed with the complaint, which has been filed jointly. This is deemed permission to file joint complaint. The complainants can otherwise also file joint complaint as complainant No.1 and complainant No.2 are son and mother, respectively and are joint applicants of allotment of the Unit and a joint Apartment Buyer's Agreement has been executed by the opposite party with them with regard to Unit No.804, 4th Floor, Tower No.8, having super area of 1775 square feet in the Project in question.
2. Brief facts, as mentioned in the complaint, are to the effect that the opposite party made a proclamation through newspaper advertisements, marketing e-mails and telemarketing and launched integrated residential complex at Village Lohgarh, Zirakpur, Punjab. The complainants, who are son and mother, after going through the said advertisements made an application for allotment of a Unit in the said Project. Accordingly they were registered for allotment of a residential apartment measuring 1775 square feet for permanent residence of complainant No.1, who wished to reside separately after the marriage. The Apartment in question was solely for the residential purpose of complainant No.1, the son of complainant No.2 and it was three-bed rooms Apartment in high end gated colony. In addition to three-bed rooms, the opposite party has to provide parking space, including power back-up etc. Car parking area will be extra and the total price of the Unit was fixed at Consumer Complaint No.273 of 2016 3 ₹65,00,000/-. After due process, the opposite party allotted to the complainants a residential Apartment bearing No.804 at 4th Floor, Tower No.8, having three bedrooms, hall, 3 toilets, kitchen, servants room and also parking area with super built up area of 1775 square feet. As per the terms and conditions of the Apartment Buyer's Agreement dated 14.5.2013, Ex.C-1, the price was fixed at ₹65,00,000/-. As per the Down Payment Plan, the complainants were granted rebate of ₹5,50,000/-. The complainants tendered ₹30,00,000/- at the time of booking and the residue amount of ₹2,50,000/- was to be paid at the time of possession. The complainants made the payments in part performance at their end as under:-
i. ₹10,00,000/- on 14.02.2013 vide Receipt No.248; ii. ₹12,50,000/- on 05.03.2013, vide Receipt No.250; iii. ₹7,50,000/- on 23.03.2013, vide Receipt No.253; iv. ₹10,20,510/- on 12.10.2013, vide Receipt No.333;
v. ₹18,00,000/- on 24.01.2014 through RTGS/SBI; and
vi. ₹55,620/- on 13.03.2014 as Service Tax.
As per the Payment Plan appended with the Apartment Buyer's Agreement, the complainants were required to clear 90% of the total sale price as and when intimated by the opposite party by way of instalments from time to time. Besides this, the residual payments such as Interest Free Maintenance Security, Development Charges, Power Back-up, Utility Charges etc. were to be cleared at the time of demand raised by the opposite party, from time to time, specifically Consumer Complaint No.273 of 2016 4 at the time of giving intimation to hand over the possession. In part performance of their agreement the complainants had already deposited ₹58,76,130/-. Only a meagre amount remains to be paid. The complainants have made reference to clause 8.2 of the Agreement, in which it is mentioned that in the event of delay in delivery of possession, the complainants-allottees shall not raise any dispute or make any claim whatsoever in respect of the residential unit against the opposite party. Perhaps under the garb of this, the possession is being delayed. It is alleged that the opposite party gravely breached the terms and conditions of the allotment in not being in a position to provide possession of the Apartment in question complete in all respect and has also failed to provide mandatory Completion Certificate as required under the Punjab Apartment and Property Regulations Act, 1995. Till date the opposite party has failed to offer possession of the Apartment in question. Almost three years have already elapsed and substantial amount out of the sale consideration has already been deposited with the opposite party. It is averred in the complaint that physical inspection has revealed that residential Villa and the project, as a whole, is far from completion and the utility and infrastructural requirements are lacking. The opposite party is not in possession of the Completion Certificate as required under law meaning thereby that they have yet to fulfil all the requirements of the competent authority as described under various Acts. The complainants have alleged in the complaint that the opposite party failed to reveal the Consumer Complaint No.273 of 2016 5 details of development work and completion of infrastructural project i.e. Windcross, which in reality is non-existent at the site. As per the Advertisements and the contents of the brochure, the committed period for handing over the possession was 24 months with further four months extra grace period and the needful was required to be done as per the Payment Plan, which is part of Buyer's Agreement Ex.C-1. The complainants have deposited various amounts, vide receipts and RTGS as well as the Account Payee's Cheques, Ex.C-2 to Ex.C-4 total amounting to ₹58,76,130/-. However, the opposite party has failed to comply with the same. In-spite of its service, none appears to rebut the averments made in the complaint nor any evidence has been led by the opposite party.
3. We have heard learned counsel for the complainants and have carefully gone through the averments of the complainants and the evidence in support of those averments.
4. Learned counsel for the complainants vehemently contended that the complainants have paid ₹30,00,000/- at the time of allotment and only residual amount of ₹2,50,000/- remains to be paid. Thereafter the complainants have paid the remaining amount, vide various receipts, as detailed in para no.3(g) of the complaint, the total amounting to ₹58,76,130/- against the total price of the Unit being ₹59,50,000/- (₹65,00,000/- minus ₹5,50,000/-). The period for delivery of possession was 24 months and at the most four months extra grace period can be taken by the opposite party i.e. the possession was to be delivered within 28 months from the date of Consumer Complaint No.273 of 2016 6 allotment. In fact there is no progress at the site as in-spite of inquiries the opposite party did not respond nor intimated that whether they have received the required sanctions from the competent authorities i.e. PUDA, Town and Country Planning Department such like CLU, Completion Certificate etc. It is further contended that the site was inspected by the complainants. At that place there is no construction, no amenities such like as proper roads, water supply and sewerage lines have not been laid down. Virtually there is no progress in the Project in question. Almost three years have already elapsed and there is not an iota of evidence available at the spot that the Project will be completed within next few months even. In these circumstances specifically with the increase of price of the properties and construction material the complainants are suffering losses and have invested their hard- earned money for the residential house and are without roof.
5. The averments made in the complaint as well as in the evidence led by the complainants remain unrebutted. In view of the settled position of law in this situation the averments and the evidence of the complainants are to be accepted as correct. Although the opposite party is ex parte, still we have perused the record and it would be appropriate to make the reference to the documentary record in the shape of exhibits along with affidavit, which clearly point out that the complainants have deposited th ₹30,00,000/- at the time of allotment of Unit No.804, 4 Floor, Tower 8 in the aforesaid Project of the opposite party. Since the Consumer Complaint No.273 of 2016 7 complainants have paid the amount in lump sum, therefore, they were liable to the rebate amounting to ₹5,50,000/-. Instead of ₹65,00,000/-, they were required to pay only ₹59,50,000/-. The complainants have already paid amount of ₹58,76,130/-. In this manner, almost the entire amount has been paid but there is no inkling of getting the possession and the completion of the alleged project.
6. According to Section 2(n) of PAPRA, "development works"
means internal development works and external development works. According to Section 3 of Chapter II, the promoter is liable to do as under in a Colony to be developed by it (relevant extract):-
3.General liabilities of promoter.-(1) xx xx xx xx (2) A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
(a) 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, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
xxxx xxxxx xxxxx xxxx
(c) given inspection on seven days, notice or demand,- Consumer Complaint No.273 of 2016 8
xxxx xxxxx xxxxx xxxx
(i) 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; and xxxx xxxxx xxxxx xxxx
(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
xxxx xxxxx xxxxx xxxx
(j) not allow persons to enter into possession until an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained ;
Further according to Section 4(1) of the PAPRA, no promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such plot to make advances or deposits, unless:-
"(a) the promoter holds a certificate of registration under sub-
section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication. (2) xxxx xxxx xxxx xxxx Consumer Complaint No.273 of 2016 9 (3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3."
According to Section 5 of the PAPRA, it is provided as under:-
"5.(1) Any promoter, who desires to develop a land into a colony, shall make an application in the prescribed form alongwith the prescribed information and with the prescribed fee to the competent authority for grant of permission for the same and separate permission will be necessary for each colony.
(2) On receipt of the application under sub-section (1), the competent authority, after making enquiry into the title to the land, extent and situation of the land, capacity of the promoter to develop the colony, layout of the colony, conformity of the development of the colony with the neighbouring areas, plan of development works to be executed in the colony and such other matters as it may deem fit, and after affording the applicant an opportunity of being heard and also taking into consideration the opinion of the prescribed authority, shall pass an order, in writing, recording reasons either granting or refusing to grant such permission.
(3) Where an order is passed granting permission under sub-
section (2), the competent authority shall grant a licence in the Consumer Complaint No.273 of 2016 10 prescribed form, after the promoter has furnished a bank guarantee equal to twenty five percent of the estimated cost of the development works certified by the competent authority and the promoter has undertaken to enter into an agreement in the prescribed form for carrying out completion of development works in accordance with the conditions of the licence so granted.
(4) The licence granted under sub-section (3) shall be valid for a period of three years and will be renewable from year to year on payment of prescribed fee."
Section 9 of the PAPRA relates to the maintenance of accounts of the sums taken by promoters and the same reads as under:-
"9. Accounts of sums taken by promoters.- The promoter shall maintain a separate account in any scheduled bank of sums taken by him from persons intending to take or who have taken apartments or plots, as advance, towards sale price or for any other purpose, or, deposit, including any sum so taken towards the share capital for the formation of a co-operative society or a company, or towards the outgoings (including ground rent, if any, municipal or other local taxes, charges for water or electricity, revenue assessment, interest on mortgages or other encumbrances, if any, stamp duty and registration fee for the agreement of sale and the conveyance); and the promoter shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for Consumer Complaint No.273 of 2016 11 those purposes including for the construction of apartments and, in the case of colonies, for meeting the cost of development works, and shall on demand, in writing, by the competent authority make full and true disclosure of all transactions in respect of that account and shall not utilize for any other purpose the amounts so collected for a particular purpose."
According to Section 14(ii) :-
"in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5."
Then Rules were framed under Section 45 of the PAPRA; namely, Punjab Apartment and Property Regulation Rules, 1995 (in short, "the Rules") and according to Rules 7, 8 & 17 of these Rules , it has been provided as under:-
"7. Disclosure regarding registration and licence - The promoter shall disclose the number of his certificate of registration granted under sub-section (2) of section 21 and, in the case of a colony, also the validity of licence issued under sub-section (3) of section 5 and display the certificate of registration and the licence so granted at a conspicuous place in his office and make it available for inspection to the persons taking or intending to take an apartment or a plot in the colony and to a person authorized by the competent authority. Consumer Complaint No.273 of 2016 12
8. Supply of copies of documents. - The promoter on demand shall supply true copies, on payment of reasonable charges, of the following documents, namely :-
(a) Title deed of land, certificate of the attorney at-law or an advocate of not less than seven years standing, referred to in clause (a) of sub-section (2) of section 3 and copies of the advertisement issued under section 4;
(b) Copy of the consent of the land owner, if the land does not belong to the promoter as referred to in clause (a) of sub-
section (2) of section 3;
(c) Design of apartment, agreement with an architect and a contractor, referred to in clause (f) of sub-section (2) of section 3;
(d) Copy of occupation certificate referred to in section 14; and
(e) Certificate of registration granted under sub-section (2) of section 21 and in case of colony, the permission granted under sub-section (2) of section 5.
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." Consumer Complaint No.273 of 2016 13
7. The perusal of the above provisions of PAPRA and Rules, the opposite party was required to be registered and to get the licence to develop the Colony under above referred provisions but no copy of the licence issued by the competent authority to develop the colony has been placed on the record. This licence is required under Rule 13 of the Rules and its renewal as per Rule 14 of the Rules. According to Section 4 of the PAPRA, no Promoter shall issue an advertisement or receive the application under it if he holds a certificate of registration under Section 21(2) or a copy of the advertisement or prospectus is filed in the office of the competent authority and the advertisement or prospectus shall be made available for inspection in the office of the promoter. No copy of the advertisement or prospectus has been placed on the record of this case under which applications were received by the opposite party for allotment of the plots under that scheme. Under Section 5(2), layout of the colony is to be submitted to the competent authority. No copy of the CLU and layout plan duly sanctioned by the Chief Town Planner has been placed on the record by the opposite party. According to Section 4(2) of the PAPRA, the opposite party was not entitled to receive the applications till the CLU and layout plan of the colony regarding the development works and validity of the licence is there but the opposite party has not placed any such document on the record. Therefore, the opposite party has not complied with the basic provisions under the PAPRA and Rules made thereunder before inviting the applications.
Consumer Complaint No.273 of 2016 14
8. Even the basic documents with regard to the title of the property where the colony is to be developed have not been placed on the record or consent of the land owner, if the property does not belong to the Promoter. Copy of occupation certificate, as referred to, in Section 14 and Certificate of Registration granted under Section 21 of the PAPRA have also not been placed on the record. If it has not obtained any occupation certificate, then under Section 2(j), it cannot allow the persons to enter the possession until Occupation Certificate is given by the Competent Authority.. Therefore, the opposite party has been taking all the money from the complainant without complying with the basic requirements as required under PAPRA. Therefore, in view of the above, it is clear that the opposite party has not complied with even the basic provisions of the PAPRA and Rules and forced them to deposit the aforesaid amount. In this way, the opposite party has befooled the complainant by extorting money from them. There is no development work either internal or external. The opposite party has taken the money, did not deliver the possession, did not obtain the necessary certificate from the competent authorities to develop the colony, NOC from the concerned Departments with regard to the development internal as well as external. Even layout plan is not approved so far. In these circumstances, the opposite party has violated the various provisions of the PAPRA and the Rules framed thereunder and issued advertisement without having any land with it. It could not have issued such an advertisement or allot plot or even Consumer Complaint No.273 of 2016 15 receive any amount from general public. It has not maintained any separate account as required under Section 9 of the PAPRA, as the amount given by the allottees herein the complainants was trust money and can only be used for the purpose of development of the plot.
9. In support of his contentions, the complainants have referred to the Consumer Case No. 77 of 2008 "Satinder Pal Singh Bawa & Anr. v. M/s Sahara India Commercial Co. Ltd." decided on 11.8.2015 in which the Hon'ble National Commission has allowed compensation of Rs. 2 lacs on account of delay in delivery of possession and ₹ 50,000/- as cost of litigation.
10. The Consumer Protection Act came into existence in the year 1986 and it is one of the benevolent piece of legislation in India to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. There is not even an iota of evidence led by the opposite party to rebut the averments made in the complaint. In these circumstances, an adverse inference is to be drawn against the opposite party. The evidence on the record clearly shows deficiency in service on the part of the opposite party, as it went on accepting the instalments, without bothering to complete the project as agreed upon between the parties. It appears that just to fleece the innocent consumers, they had made misleading advertisement in violation of the provisions of Sections 3, 4 and 5 of the PAPRA. The Government is not even taking any action against the private builders, although Consumer Complaint No.273 of 2016 16 there are provisions of registration of FIR and cancellation of their licenses under section 25 of the PAPRA. The act and conduct of the opposite party amount to deficiency in service and unfair trade practice.
11. In the present case opposite party-builder knew from the very beginning that it had not complied with the provisions of PAPRA and the Rules framed thereunder, would not be able to provide plot and deliver possession within stipulated period of 28 months. Thus by misrepresenting induced the complainants, who is a lady and her son to book the plot due to which the complainants suffered mental agony and harassment. The complainants lady and her son who were hoping for a roof over their head have suffered injury. The complainants paid the substantial amount to the opposite party with the hope of getting the apartment in a reasonable time but till date there is no hope of the same. The opposite party made false statement of facts about the goods and services i.e. allotment of apartment in stipulated period. This act and conduct of the opposite party is clear case of misrepresentation and deception which resulted into injury and loss of opportunities to the complainants. Had complainants would not have invested with the opposite party they would have invested their money elsewhere. There is escalation in the price of construction material also. The builders in India have similar strategies to sell houses/plots .The complainants have suffered loss as discussed above, so the complainants deserve Consumer Complaint No.273 of 2016 17 suitable compensation, which we quantify in a lump sum as ₹2,00,000/.
12. Hon'ble National Commission in various judgments has specifically stated that the amount paid by the complainants is trust money deposited with the builder-opposite party and the same can be only used for construction purposes. This is also mentioned in Section 9 of the Punjab Apartment and Property Regulation Act, 1995. The builder is under obligation to hand over the possession in a reasonable time. Builder cannot be allowed to fleece the buyers. If the builder fails to deliver the possession well in time or after some reasonable delay, then he is bound to refund the amount with interest having failed to deliver the possession as per the terms and conditions of the Buyer's Agreement. Reference in this regard may be made to the judgments of the Hon'ble National Commission reported in 2016 (4) CPR 489 (NC) (Pradeep Chowdhry & Anr. v. Unitech Ltd. & Anr.) and 2016(4) CPR 363 (M/s Ansal Housing & Construction Ltd. & Ors. v. Jotinder Singh).
13. Under Rule 17 of the Rules, interest payable on the amount has been specifically mentioned at the rate of 12% per annum in case of cancellation. If neither apartment is provided nor it is cancelled, certainly such persons are also entitled to interest at the rate of 12% per annum.
14. In view of the discussion made above, this complaint is allowed and following directions are issued to the opposite party:- Consumer Complaint No.273 of 2016 18
i) to refund the amount of ₹58,76,130/- along with interest at the rate of 12% per annum from the dates of different deposits till the date of payment;
ii) to pay ₹2,00,000/-, as compensation, for inconvenience,
mental agony and harassment; and
iii) to pay ₹20,000/-, as litigation costs.
The compliance of this order shall be made by the opposite party within one month from the date of receipt of the certified copy of this order and failing that it shall also be liable to pay interest on the compensation amount of ₹2,00,000/- at the rate of 12% per annum from the date of this order till the date of payment.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (VINOD KUMAR GUPTA) MEMBER January 11, 2017 Bansal