State Consumer Disputes Redressal Commission
Jagir Singh vs Greater Mohali Area Development ... on 12 March, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 652 of 2017
Date of Institution : 03.08.2017
Date of Reserve : 27.02.2018
Date of Decision : 12.03.2018
Jagir Singh son of Sh. Maya Ram, Resident of 601, Sector-2,
Urban Estate, Kurukshetra.
....Complainant
Versus
1. Greater Mohali Area Development Authority through
Chairman, PUDA Bhavan, Sector 62, Mohali (Punjab).
2. Chief Administrator, Greater Mohali Area Development
Authority, Room No. 102, PUDA Bhawan, Sector 62, Phae-VII ,
SAS Nagar, Punjab
3. Estate Officer (H), Greater Mohali Area Development
Authority, PUDA Bhawan, Sector 62, Phae-VII , SAS Nagar,
Punjab
....Opposite parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainant : Sh. Karan Nehra, Advocate
For the opposite parties: Sh. Anuj Kohli, Advocate
Consumer Complaint No. 652 of 2017 2
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
Complainant has filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that Ops widely advertised their project "Purab Premium Apartments" in Sector 88, SAS Nagar, Mohali. Keeping in view the facilities to be provided in the project, as per the brochure, the complainant applied for a residential apartment Type 3 alongwith servant accommodation having a super area of 2221 square feet for a total sale consideration of Rs. 69 Lacs. Alongwith the application, he had deposited earnest money of Rs. 6,90,000/- vide receipt No. 66366 dated 19.1.2012. The draw of lot was held on 20.3.2012 in which complainant was successful allottee and intimation in this regard was issued by the Ops vide their letter dated 23.3.2012. Lateron, Letter of Intent (in short LOI) dated 22.5.2012 was issued showing the tentative total price payment schedule and within how much time, the possession of the flat will be given. According to the payment schedule, the complainant was to pay Rs. 13.80 Lacs equal to 20% to complete 30% payment of the apartment and the remaining was to be paid in lumpsum within a period of 60 days from the issue of LOI with a rebate of 5%, otherwise, the remaining amount was to be paid in six half yearly installments alongwith interest @ 12%. After paying 30% of the amount to the Ops, complainant made several visits to the site and till March, 2015 not even 30% of the work was complete. Since the Consumer Complaint No. 652 of 2017 3 project was not going to be completed within the time, complainant applied for refund of the amount alongwith interest as agreed in Clause 3(ii) of the LOI. However, the Ops did not pay the interest, rather, a sum of Rs. 9,22,788/- was deducted against the terms and conditions of the LOI. Alleging unfair trade practice and deficiency in services, the complainant has filed this complaint to quash the orders dated 12.8.2015 and 26.8.2015, deducting a sum of Rs. 9,22,788/- and pay this amount alongwith interest @ 12%, direct Ops to pay interest on a sum of Rs. 11,47,212/- @ 12% from 26.8.2015 till the date of payment, direct the Ops to pay compensation of Rs. 2 Lacs and Rs. 50,000/- as litigation expenses.
2. Upon notice, Ops appeared and filed their written reply taking preliminary objections that there is no deficiency in services or unfair trade practice on the part of Ops; the complainant was refunded the amount as per terms and conditions of the LOI and complainant had accepted the amount without any protest, therefore, now he is not consumer of the Ops; the complaint is time barred; complicated questions of facts and law are involved, which cannot be adjudicated in summary procedure, therefore, the matter be relegated to the Civil Court and that there is Arbitration Clause No. 6 and in case of dispute, the matter is to be relegated to the Arbitrator, therefore, the complaint before this Commission is not maintainable. On merits, submission of averment for allotment of apartment by the complainant for a total cost of Rs. 69 Lacs is a matter of record. It is also a matter of record that alongwith the Consumer Complaint No. 652 of 2017 4 application form, he had deposited 10% as earnest money i.e. Rs. 6,90,000/-. It is also a matter of record that in the draw of lots, the complainant was successful and he was allotted Type-3 residential apartment in their project "Purab Premium Apartment" and LOI dated 22.5.2012 was issued. He made further payment 20% to make it 30% as per the LOI, however, the complainant failed to make further payment either in lumpsum or in installments as referred in the LOI. He had moved an application for refund of the amount and refund was paid to him as per the terms and conditions of the LOI after deducting the admissible charges. Accordingly, it was denied that there is any unfair trade practice or deficiency in services on the part of Ops. The complainant is not entitled to any other amount of compensation or any litigation expenses as alleged in the complaint. Complaint is without merit, it be dismissed.
3. The parties were allowed to lead their respective evidence in support of their complaint. Complainant in his evidence has tendered his affidavit Ex. C-A and documents Exs. C-1 to C-8. On the other hand, Ops tendered affidavit of Mahesh Bansal, Estate Officer (Housing), GMADA as Ex. OP-A.
4. We have heard the counsel for the parties and have carefully gone through the pleadings of the parties, evidence and documents on the record.
5. An objection has been taken by the counsel for the Ops that the complainant has applied for a refund vide their application dated 22.6.2015 Ex. C-6 and the Ops vide their letter dated Consumer Complaint No. 652 of 2017 5 12.8.2015 Ex. C-7, LOI was cancelled and the refund was ordered after deducting 10% of the consideration money, interest and other dues payable. Accordingly, vide order dated 26.8.2015 Ex. C-8, a sum of Rs. 9,22,788/- was deducted and the payment of Rs. 11,47,212/- was paid to the complainant. It has been argued by the counsel for the Ops that once the payment was received without any protest, the complainant is no more a consumer. However, counsel for the complainant argued that in case the Ops have deducted the amount more than admissible as per the terms and conditions of the LOI, then it is unfair trade practice on the part of Ops and in case the Ops have indulged in unfair trade practice then the complainant has a right to file the complaint within 2 years from the date of order of refund. He has further pointed out that the total cost of the flat was fixed by the Ops as Rs. 69 Lacs and 10% comes to Rs. 6,90,000/-, however, the Ops deducted a sum of Rs. 9,22,788/-. No detail has been given how and on what account their excess amount has been deducted, therefore, the complainant has a right to file the complaint to pay deficient amount. In case the required amount has not been paid by the Ops to the complainant on demand, it will amount to deficiency in services and deficiency in services is also covered under the Consumer Protection Act. Therefore, we do not agree with the plea raised by the counsel for the Ops that after receipt of the refund amount, the complainant is no more 'consumer'.
6. It has been further argued by the counsel for the Ops that the complaint is time barred. As stated above, the refund order Consumer Complaint No. 652 of 2017 6 was issued on 26.8.2015 and in case according to the version of the complainant, less amount has been paid to him then he reserve his right to file the complaint within a period of 2 years from that date and the complaint was filed by the complainant before this Commission on 8.8.2017 i.e. within a period of 2 years, therefore, the complaint is not time barred. Counsel for the Ops was unable to point out how the complaint is not within limitation, therefore, we do not agree with the plea raised by the counsel for the Ops that the complaint is barred by limitation.
7. Another objection taken by the counsel for the Ops with regard to intricate questions of law and facts involved, therefore, the matter be referred to the Civil Court. In case we go through the pleadings of the parties, the complainant had booked one residential apartment with Ops and had paid a sum of Rs. 20,70,000/- as 30% to the total consideration amount. In this case, there is no complicated question of law and facts involved as it is only the interpretation of documents and then to see whether there is any deficiency in service on the part of Ops. We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission. The benches of this Commission are headed by retired High Court Judges/retired District & Session Judges, who have long experience at their back and are fully competent to decide such like matters. In this regard, we are fortified by the judgment of "Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi", 2002(6) SCC 635 wherein it was held that 'the State Commission and District Forum are headed by Consumer Complaint No. 652 of 2017 7 retired High Court Judges and officers of District Judge level and in our view, this is not such a case which cannot be decided by the 'Consumer Fora' after obtaining evidence and if need be after getting an expert opinion'. Further reference can be made to "Shiv Kumar Agarwal versus Arun Tandon and another", 2007(2) CLT 287, decided by the Hon'ble National Commission. In that case a plea that case involves complicated questions of fact and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled - Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. Therefore, we are of the opinion that this Commission is fully competent to decide this complaint and no cause of action is made out to refer the case to the Civil Court.
8. There is Arbitration Clause No. 6 in the LOI that in case of any dispute between the parties, the matter is required to be referred to the Sole Arbitrator i.e. Chief Administrator, GMADA. No application under Section 8 of the Arbitration and Conciliation Act, 1996 was filed by the counsel for the Ops with the written statement with regard to referring the matter to the Arbitrator. Moreover, under Section 3 of the CP Act gives the additional remedy to the complainant to adjudicate this complaint before this Commission because provisions of the Act are not in derogation but in addition, therefore, the objection raised by the counsel for the Ops is not tenable.
Consumer Complaint No. 652 of 2017 8
9. As per the averments in the pleadings, some of the facts are admitted that complainant had applied for an apartment in the project of the Ops known as "Purab Premium Apartments" in Sector 88, SAS Nagar, Mohali. Alongwith the application, he had deposited a sum of Rs. 6,90,000/-. He was successful in the draw of lots and in this regard, intimation was given to him vide letter dated 23.3.2012 Ex. C-3 and then LOI dated 22.5.2012 Ex. C-4 was issued. After issuance of the LOI, the complainant further deposited a sum of Rs. 13,80,000/- vide receipt Ex. C-5. Then vide letter dated 22.6.2015, the complainant had moved an application for refund of the amount as the project could not be completed within the time frame given in the LOI. The Clause 3(ii) of the LOI is relevant, which reads as under:-
(II) Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent. In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually. Apart from this, there shall be no other liability of the Authority."
However, the counsel for the Ops argued that after paying the 30%, the complainant failed to pay either according to the Plan-A Consumer Complaint No. 652 of 2017 9 or Plan-B. He has further referred to Clause 2.1(I) and 2.3(II), which read as under;-
"2.1(I) Payment of Rs. 1380000/- (Thirteen Lakh Eighty Thousand Only) being 20% price of the apartment is to be made by 22.6.2012 to complete 30% of the apartment. 2.3(II) Delays in payment of instalments shall result in cancellation of the allotment. However, on request establishing genuine grounds, delays up to 12 months can be condoned by the Estate Officer, by charging 18% interest for the period of delay. Delays beyond 12 months shall not be condoned under any circumstances and shall result in cancellation of allotment and refund of the amounts paid, after forfeiture of 10% of the amount. Possession shall not be handed over till all dues are cleared."
He has further referred to Clause 5(VII) of the LOI, which reads as under:-
"In case of breach of any condition(s) of allotment or of regulations or non-payment of any amount due together with the penalty, the apartment shall be liable to be resumed and in that case an amount not exceeding 10% of the total amount of consideration money, interest and other fees payable in respect of the apartment shall be forfeited as per the provision of section 45(3) of the Punjab Regional and Town Planning and Development Act, 1995 (hereinafter to be called the Act)."Consumer Complaint No. 652 of 2017 10
According to that in case the complainant breached the conditions of the LOI then the apartment shall be liable to be resumed and the amount deposited will be refunded to the complainant after deduction of 10% of total amount of the consideration, interest and other fees payable and accordingly, a sum of Rs. 9,22,788/- was deducted.
10. Whether the complainant is entitled to refund of the amount according to Clause 3(II) of the LOI as pleaded in the complaint? This question had came up for hearing before the Hon'ble High Court in CWP No. 16153 of 2014 "Rajiv Arora Versus State of Punjab and others", decided on 21.07.2015 and it was observed by the Hon'ble High Court that in case the complainant himself is defaulter then he is not entitled to the refund as per Clause 3(II) of the LOI. Rather, he will be entitled to refund under Clause 2.3(II) of the LOI. Similar matter in Appeal No. 843 of 2016 had came up before this Commission also and after referring CWP No. 16153 of 2014 (supra), it was observed that the complainant will not be entitled to refund under Clause 3(II) of the LOI, rather, the Ops will be liable to pay the excess amount to the complainant under Clause 2.3(II) and Clause 5(VII) of LOI.
11. In refund order Ex. C-8 there is no split up of the basic amount and the other amounts in the form of interest and other fees payable. However, after addressing arguments, on 1.3.2018, the counsel for the Op has given the calculation sheet, which reads as under:-
Sr. No. Particulars Amount Amount
(A) Total Amount deposited by Allottee 20,70,000/-
Consumer Complaint No. 652 of 2017 11
Calculation of Consideration Money
1 Total Cost of Flat 69,00,000/-
2 Scheme Interest 9,41,850/-
3 Penal Interest 11,72,820/-
4 Total Consideration Money 90,14,670/-
(B) 10% of Consideration Money 9,01,467/-
(C) Service Tax # 3.09% earnest 21,321/-
money i.e. 6,90,000/-
Net Refundable Amount to Allottee (A)-(B)-(C) 11,47,212/-
Whether the interest for the entire period and penal interest is required to be calculated when the case for refund is to be processed. For that, we are to go by the entire LOI terms and conditions and we can rely upon Clause 5(VII) or Clause 2.3(II) referred above. Clause 2.3(II) referred above shows that in case there was any delay in payment, it shall result in cancellation of the allotment. However, on request, establishing genuine ground delay upto 12 months can be condoned by the Estate Officer by charging 18% penal interest and delay beyond 12 months shall not be condoned and excess amount will be refunded after forfeiture of 10% of the amount. It is clear from the pleadings and documents on the record that no request was made by the complainant to Ops to condone delay in depositing the payment. Therefore, in case first installment was not paid by the complainant then the flat should have been cancelled and then refund the amount according to the terms and conditions of the LOI. In case the Ops failed to cancel the flat allotted in favour of the complainant for their own benefit, which cannot be allowed to the disadvantage of the complainant because they did not cancel the flat so that lateron they could calculate the interest amount at the time of calculating the refund upto that date. Therefore, the calculations made by the counsel for Consumer Complaint No. 652 of 2017 12 the Ops in the calculation sheet referred above are not correct. In the first installment, the interest amount has been calculated as Rs. 2,69,100/- and its 10% will come to Rs. 26,910/-. In this way, the Ops were entitled to deduct a sum of Rs. 6,90,000/- plus Rs. 26,910/- and total comes to Rs. 7,16,910/- whereas the Ops have deducted a sum of Rs. 9,22,788/-. In this way, the Ops have paid a less amount to the complainant to the tune of Rs. 2,05,878/-. Another amount of Rs. 21,321/- has been deducted on account of Service Tax. Once no services have been availed by the complainant then Service Tax was not liable to be paid. Moreover, no Service Tax statement submitted to the concerned Authority has been placed on the record by the Ops that it was paid to the Government of India. The order for refund was made on 26.8.2015 and it would have been paid in the year 2015-16 and in the absence of any Service Tax Statement on the record whether it was paid to the Government of India or not, Ops cannot be allowed to deduct this amount as a Service Tax amount due to the complainant.
12. In nutshell, the complainant is entitled to a sum of Rs. 2,05,878/-. Since the amount was illegally withheld by the Ops, therefore, Ops will pay interest on the amount w.e.f. 26.8.2015 when the refund order was passed.
13. No other point was argued.
14. Sequel to the above, we partly accept the complaint and direct the Ops to pay a sum of Rs. 2,05,878/- to the complainant alongwith interest @ 9% p.a. from 26.8.2015 till the Consumer Complaint No. 652 of 2017 13 date of payment. They were further directed to pay Rs. 50,000/- on account of compensation for harassment and Rs. 21,000/- as litigation expenses for compelling the complainant to file the complaint to get the refund.
15. The above directions be complied by the Ops within a period of 45 days from the date of receiving of the copy of the order, failing which the complainant shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
16. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
17. The counsel for the parties / concerned parties are directed to collect free certified copy of the order from the office of the Commission within a period of 15 days from the date of pronouncement.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER March 12, 2018.
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