State Consumer Disputes Redressal Commission
Manju Arora vs Unitech Limited on 5 October, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.100 of 2014
Date of institution : 11.07.2014
Date of decision : 05.10.2015
1. Manju Arora wife of Krishan Kumar Arora,
2. Krishan Kumar Arora son of Satnam Dass, residents of Plot
No.3 in front of H.No.1685, Rajpura, District Patiala.
.......Complainants
Versus
1. Unitech Limited, Real Estate Division, SCO 189-90-91, Sector
17-C, Chandigarh, through its authorized officer.
2. Unitech Limited, Real Estate Division (Marketing), 5th Floor,
Tower-A, Signature Towers, South City 1, NH-8, Gurgaon
through its Managing Director.
........Opposite Parties
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President
Shri Baldev Singh Sekhon, Member
Shri Vinod Kumar Gupta, Member Present:-
For the complainants : Shri Vishal Goel, Advocate. For the opposite parties : Ms. Vertika H. Singh, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The complainants, Manju Arora and Krishan Kumar Arora, have filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, "the Act") for the issuance of following directions to the opposite parties:-Consumer Complaint No.100 of 2014 2
i) to deliver the physical possession of the plot in dispute immediately, along with other amenities, like roads, park, lights, transformer and water connection;
ii) to pay Rs.50/- per square yard per month of the area of the plot for the period of delay in offering the possession with effect from 10.10.2011;
iii) to pay Rs.12,00,000/-, as increased cost of construction;
iv) to pay Rs.5,00,000/-, as compensation for the
harassment and damages suffered by them; and
v) to pay Rs.33,000/-, as counsel fee.
They alleged, in their complaint, that an Agreement dated 10.10.2008 was executed between the opposite parties and Karanjit Singh and Harwinder Kaur in respect of the Plot measuring 358.80 square yards situated in 'Uniworld City', Sector 97, Mohali, Punjab.
That plot was purchased by them from said allottees on 12.4.2010 regarding which an endorsement was made on the Agreement and transfer was made in their names by the opposite parties. They became the purchasers of the plot after that endorsement and the total sale consideration was Rs.53,37,150/-, which included the basic price and external development charges. As per the terms and conditions of the Agreement, the possession was to be delivered to them within 36 months of the date of execution thereof. More than 2 years and 8 months have already expired but still the possession has not been delivered, though they paid Rs.49,48,650/- to the opposite parties as per the Payment Schedule. They approached the authorized officials of the opposite parties a number of times and Consumer Complaint No.100 of 2014 3 made a demand to deliver the possession but no responsible answer was given by them. Even the service of the registered notice dated 30.1.2013 and sending of e-mail on 19.4.2013 has not served any purpose. On account of the non-delivery of possession, they suffered a lot as they wanted to raise construction, being in grave need thereof. The approximate cost of construction, as in October 2011 was Rs.1,400/- per square feet and which has now accelerated to Rs.2,000/- per square feet. Thus, they have suffered a loss of Rs.12,00,000/-, on account of that increase in the cost of construction. As per clause 4(c) of the Agreement, they are entitled to the penalty of Rs.50/- per square yard per month of the area of the plot on account of the delay in offering the possession. They had taken loan from H.D.F.C. Bank Ltd. for the payment of the above said amount and are paying interest on that amount and are living in a rented house. Thus, they are suffering on both the sides on account of the non-delivery of the possession and non-fulfilment of the Agreement by the opposite parties.
2. The complaint was contested by the opposite parties, who filed joint written reply. In the written reply they did not dispute that the plot was originally sold to Karanjit Singh and Harwinder Kaur, vide Agreement dated 10.10.2008, which was purchased by the complainants and endorsement to that effect, on the Agreement, was made on 12.4.2010. They also did not dispute that total sale consideration was of Rs.53,37,150/- and that the complainant paid Rs.49,48,650/- as per the Payment Schedule. They also admitted that the possession of the plot has not been delivered to the Consumer Complaint No.100 of 2014 4 complainants so far. While denying the other allegations made in the complaint, they pleaded that the Agreement regarding the delivery of possession within 36 months was subject to force majeure circumstances and they could not hand over the possession of the Unit due to the global melt down of the economy worldwide wherein the foreign investors, as anticipated by them, refrained from any kind of investment in India and large portions of the buildings are lying vacant throughout in this country. There was a total cash crunch throughout and all these circumstances were beyond their control. The said penalty as per clause 4(c) of the Agreement was not payable on account of delay in delivery of possession in case the delay was beyond their control. As per the terms of the Agreement, if for any reason they were not in a position to offer this plot, then they could have offered an alternative property to the complainants or have refunded the amount in full with interest at the rate of 10% per annum. They had duly intimated the complainants about the progress at the site and the reason for the delay. In fact due to slump in the real estate the cost of construction has not increased to the extent mentioned in the complaint and in fact the complainants are trying to generate profits by filing the complaint. They have bona fide intention to complete the Project and hand over the possession of the plot to the complainants and others and the delay had occurred on account of the said reasons. Even if there is such a delay, no amount in excess of the amount mentioned in the Agreement is payable by them. The complainants do not fall under the definition of 'consumer' as contained in the Act, as they are Consumer Complaint No.100 of 2014 5 simply investors and had purchased the plot for commercial purposes. They wanted to make profit by sale of the plot in the open market. This Commission has no territorial jurisdiction to adjudicate this complaint as the Agreement itself was executed at New Delhi and payments were made either at that place or in Gurgaon Office. No permission was granted by this Commission to the complainants to file the complaint jointly and, as such, the same is not maintainable. The dispute mentioned in the complaint is not a 'consumer dispute'. It relates to the contractual matter arising out the terms and conditions of the Agreement and the interpretation thereof which can only be adjudicated in civil proceedings. Moreover the complainants being the second allottees cannot claim themselves to be the consumers. The complaint filed by them is not maintainable. There was no deficiency in service on their part and they themselves are the victims of the market recession and are facing immense financial hardship. They prayed for the dismissal of the complaint with special costs; having been filed on false, frivolous and vexatious grounds.
3. To prove the allegations made in the complaint, the complainants proved the affidavit of Manju Arora, complainant No.1, Ex.CA and the documents Ex.C-1 to Ex.C-4. On the other hand, the opposite parties proved the affidavit of A.P.Singh, Authorised Representative Ex.OPA and the documents Ex.OP1 to Ex.OP3.
4. We have carefully gone through the averments made by both the sides, evidence produced by them in support of their respective averments and have heard learned counsel on their behalf. Consumer Complaint No.100 of 2014 6
5. It was submitted by the learned counsel for the complainants that all the allegations made in the complaint stand proved from the affidavit of Manju Arora, complainant No.1, Ex.CA and the documents proved on the record. As per the Buyer's Agreement Ex.C-1, the opposite parties were to deliver the possession of the plot to the complainants within 36 months of the date of the Agreement but they failed to do so and, as such, they are liable to pay the penalty as per clause 4(c) of the Agreement. Had the possession been delivered to the complainants in time, they must have timely raised the construction. On account of that delay, they were not in a position to raise the construction and now they will have to spend much more amount on account of escalation in the prices of the building material. For all these years, they suffered mental agony and harassment, as they were hoping for the timely delivery of possession but their hopes were shattered on account of the act of omission on the part of the opposite parties to deliver the possession. Therefore, they are entitled to Rs.5,00,000/-, as compensation for that mental agony and harassment. He prayed that all the directions, as prayed for in the complaint, be issued to the opposite parties.
6. On the other hand, it was submitted by the learned counsel for the opposite parties that the possession could not be given to the complainants within 36 months of the Agreement on account of the force majeure circumstances and those circumstances stand proved from the affidavit of A.P. Singh, Ex.OPA. There was global recession in the real estate market and the people were not coming Consumer Complaint No.100 of 2014 7 forward to invest in the same. That recession/slump had not been foreseen by the opposite parties and, therefore, they cannot be made liable to pay any amount on account of delay in possession. Moreover, the complainants were the re-allottees and that also disentitles them to claim the penalty for the delay. When they got the plot re-allotted in their names, they had the knowledge that delivery of the possession of the plot was being delayed. Therefore, they cannot ask for the penalty as per clause 4(c) of the Agreement.
7. It is an admitted fact that the complainants are not the original allottees of the plot in dispute. In fact, they had stepped into the shoes of the original allottes after the endorsement was made on the Buyer's Agreement. That endorsement is dated 12.4.2010. However, in view of that endorsement, they cannot be held to be the re-allottes in the same sense in which the word "re-allottee" has been used in various judgments of the Hon'ble National Commission and the Hon'ble Supreme Court. Vide that Endorsement the names of Karanjit Singh and Harwinder Kaur were deleted and the names of the complainants were entered and it was mentioned that the booking stand in their names.
8. Learned counsel for the opposite parties has placed reliance on the judgment of the Hon'ble Supreme Court reported in 2009(2) CLT 411 (Haryana Urban Development Authority v. Raje Ram) in support of her arguments. In that case the complainants were not the original allottees and were the re-allottees, to whom the re- allotment was made in the year 1994, 1996 and 1997, respectively. All of them were aware of the fact that there was delay in delivering Consumer Complaint No.100 of 2014 8 the allotted plots either in forming the layout itself or delay in delivering the allotted plot on account of encroachment etc. and in spite of that fact they took the allotment. It was held that their cases cannot be compared to the cases of the original allottees, who were made to wait for a decade or more for delivery of possession and, thus, put to mental agony and harassment. The re-allottees were aware that the time for the performance was not stipulated as the essence of the contract and the original allottes had accepted the delay. By no stretch of imagination the ratio of this judgment can be applied to the facts of the present case. The Agreement was entered into on 10.10.2008 and the possession was to be delivered to the allottees within 36 months of that date, which comes to 10.10.2011. The booking stood transferred in the names of the complainants on 12.4.2010, well before that date. Therefore, it does not lie in the mouth of the learned counsel for the opposite parties to allege that being the re-allottee the complainants cannot take benefit of the clause, which deals with the penalty payable in case of delay in the delivery of possession. It cannot be said that the so called original allottees had the knowledge that there was delay in the delivery of possession, as the plot had been re-booked in the names of the complainants much before the date of the delivery of the possession itself.
9. The opposite parties have tried to take refuge of the force majeure circumstances. Clause 4(a) of the Buyer's Agreement, Ex.C-1, deals with the delivery of possession and for the proper appreciation thereof, the same is reproduced below:- Consumer Complaint No.100 of 2014 9
4.a. Delivery of Possession:
i) That the possession of the Floor is proposed to be delivered by the Developers to the Purchaser(s) within 36 months of signing hereof subject to Force Majeure circumstances and upon registration of Sale Deed provided all amounts due and payable by the Purchaser (s) under this Agreement have been paid to the Developers within the stipulated period. It is, however, understood between the Parties that various Floors in the Township shall be ready and be completed in phases and handed over to the allottees accordingly.
ii) That it is agreed that the Developers shall also be entitled to reasonable extension in time for delivery of possession of the Floor on account of any default or negligence attributable to the Purchaser(s)' fulfillment of obligations under the Agreement.
iii) ......
A perusal of this clause makes it very much clear that the possession of the plot was to be delivered to the complainants within 36 months of 10.10.2008 and it was only in case of force majeure circumstances that the opposite parties had the excuse for not delivering the possession within that time. It is not the case of the Consumer Complaint No.100 of 2014 10 opposite parties that there was any default or negligence on the part of the complainants so as to make them entitled to for the reasonable extension of the time.
10. According to the opposite parties, the following were the force majeure circumstances:-
"There was slump in the real estate market and it could not hand over the possession due to the global melt down of the economy worldwide, wherein the foreign investors, as anticipated by it, refrained from any kind of investment in India and large portions of the buildings are lying vacant throughout India as there was total cash crunch throughout."
Can these circumstances be termed as force majeure circumstances? The word "force majeure" has been defined in Concise Law Dictionary by P. Ramanatha Aiyar as "irresistible force or compulsion; circumstance beyond one's control". It was held by the Hon'ble Apex Court in AIR 1961 SC 1285 (M/s Dhanrajamal Gobindram v. M/s Shamji Kalidas and Co.) that force majeure means act of God, war, insurrection, riot, civil commotion, strike, earthquake, tide, storm, tidal wave, flood, lightning, explosion, fire and any other happening which the lessee would not reasonably prevent or control.
11. To take refuge under the force majeure circumstances, it was incumbent on the part of the opposite parties to prove that the alleged circumstances were beyond their control. There may be Consumer Complaint No.100 of 2014 11 worldwide recession and crunch in the real estate business but the opposite parties were bound to fulfil their commitment under the Agreement for developing the Project and delivering the possession of the plot to the complainants within the agreed time. These were the circumstances, which could have been foreseen and should have been kept in mind while agreeing upon the terms and conditions so mentioned in the Agreement. If these are to be taken as an excuse to wriggle out of the condition so imposed in the Agreement, then in every case such a plea would be taken as an excuse for performing their part of the contract by the Developers. They had been collecting huge amounts from the customers for the development of the Project and we wonder where that amount had been going. They are not to play the game at the cost of others. When they insist upon the performance of the promise by the consumers, they are to be bound by the reciprocal promises of performing their part of the Agreement. Thus, the delay in delivering the possession of the plot within the agreed period of 36 months amounts to deficiency in service on the part of the opposite parties, for which the complainants are to be suitably compensated.
12. As already stated above, the possession of the plot was to be delivered to the complainants on or before 10.10.2011 and admittedly the same was not delivered to them. The Agreement itself stipulates that in case of that delay the opposite parties were liable to pay charges at the rate of Rs.50/- per square yard per month of the area of the plot. Therefore, the opposite parties are Consumer Complaint No.100 of 2014 12 liable to pay those charges to the complainants from 10.10.2011 till the date of delivery of possession.
13. The complainants claimed Rs.12,00,000/-, as escalation in the cost of construction. They were required to prove that since the said date of delivery of possession there was rise in the prices of the construction material. It has been deposed by Manju Arora, complainant No.1, in her affidavit Ex.CA, that the approximate cost of construction upon a plot was Rs.1,400/- per square feet in October 2011 and the same at present is Rs.2,000/- per square feet on account of the escalation of the cost of the construction. No other evidence has been produced by the complainants to corroborate this deposition of complainant No.1.
14. On the other hand, it was deposed by A.P. Singh in his affidavit Ex.OPA that the complainants themselves have derived fancy figure of Rs.2,000/- per square feet as prevailing cost of construction in comparison to Rs.1,400/- per square feet in 2011. He also deposed that due to slump in the real market the cost of construction has not at all increased to that extent and the complainants are now just trying to generate profits by filing the complaint. Thus, the opposite parties do admit that there is increase in the cost of construction but according to them, the increase in the construction is not to that extent as deposed by complainant No.1 in her affidavit. No documentary evidence has been produced by the complainants in support of the oral evidence so produced by them. In these circumstances this Commission is to do some guess work by making use of the information available regarding the increase in the cost of Consumer Complaint No.100 of 2014 13 construction. There is increase in the cost of construction but the same is marginal one and during the period of 2010 to 2015 that cost of construction has either been rising or falling as per the availability of that construction material, policies of the Government and illegal methods adopted by the persons, who are managing the quarries of sand, bajari etc. In these circumstances, we conclude that the complainants suffered a loss of Rs.5,00,000/-, on account of the escalation in the cost of construction.
15. The complainants waited for all this period for delivery of possession of the plot to them so that they may raise the construction and live in the house peacefully. The opposite parties by delaying the delivery of possession had been adding to their harassment and agony. We are of the opinion that for the harassment and agony suffered by the complainants they are entitled to Rs.1,00,000/-, as compensation.
16. In the result, this complaint is accepted with Rs.11,000/-, as litigation costs and following directions are issued to the opposite parties:-
i) to deliver the possession of the plot, complete in all respects, to the complainants within three months of the date of receipt of the certified copy of this order;
ii) to pay penalty/charges at the rate of Rs.50/- per square yard per month from 10.10.2011 till the date of delivery of possession of the plot;
iii) to pay Rs.5,00,000/-, on account of escalation in the cost
of construction; and
Consumer Complaint No.100 of 2014 14
iv) to pay Rs.1,00,000/-, as compensation for the
harassment and mental agony suffered by the
complainants.
17. The arguments in this case were heard on 29.9.2015 and the order was reserved. Now, the order be communicated to the parties.
18. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER (VINOD KUMAR GUPTA) October 05 , 2015 MEMBER Bansal