State Consumer Disputes Redressal Commission
Roshan Kumar vs Emerging India Housing Corporation ... on 11 January, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 252 of 2017 Date of Institution : 24.03.2017 Date of Decision : 11.01.2018 Roshan Kumar s/o Sh.Lal Chand, Resident of Aggarwal Book Depot, Nabha Gate, Sangrur. Pooja Garg w/o Sh.Roshan Kumar, Resident of Aggarwal Book Depot, Nabha Gate, Sangrur. ......Complainants V e r s u s Emerging India Housing Corporation Ltd., SCO 46-47, Sector 9-D, Near Mattka Chowk, Madhya Marg, Chandigarh -160009. Emerging India Housing Corporation (P) Ltd., B-57, Lower Ground, South Extension, New Delhi-49, through its Managing Director. ..... Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR.DEV RAJ, MEMBER.
MRS.PADMA PANDEY, MEMBER.
Argued by: Sh.Gaurav Bhardwaj, Advocate for the complainants.
Sh.Raghav Gulati, Advocate for the opposite parties, assisted by Sh.Harmandeep Singh, Public Relation Manager.
PER DEV RAJ, MEMBER This complaint has been filed by the complainants, seeking refund of amount of Rs.18,86,600/- paid by them, on different dates, during the years 2011 to 2013, to the opposite parties, towards flat bearing No.B-402, in their (opposite parties) project, launched by them, under the name and style 'Emerging Heights-III", Sector 115, Greater Mohali, Kharar-Landran Road, Punjab. It was specifically stated that despite the fact that the opposite parties had received substantial amount aforesaid, against total sale consideration of Rs.37,81,100/-, they failed to offer and deliver possession of the said unit. It was further stated that, not only as above, deficiency in rendering service and adoption of unfair trade practice, is writ large, as, in the first instance, allotment letter, in respect of the said unit was issued in favour of the complainants, after a long delay i.e. only on 18.08.2012 but Flat Buyer's Agreement was never provided by them (opposite parties), despite making number of requests in the matter. It was further stated that as per terms and conditions of the allotment letter, the opposite parties could have raised demand towards the third installment, on commencement of the construction work, but they have not started the construction of the tower, where the unit in question was allotted. The opposite parties wrongly took third and fourth installments. As such, even the demands raised by the opposite parties, were not in line with the stage of construction. It was further stated that, later on, it came to the knowledge of the complainants, that the opposite parties had not obtained requisite permissions/sanctions from the Competent Authorities, to launch the said project, as a result whereof, they sought information under RTI Act, 2005, from the Competent Authorities. However, vide letters dated 21.03.2016 Annexure C-14 and 22.03.2016 Annexure C-15, it was informed by the Competent Authorities, that the opposite parties have not obtained necessary permissions/sanctions, to launch the said project. It was further stated that when neither possession of the unit was offered and delivered, for want of construction; basic amenities and necessary approvals/sanctions having been obtained from the Competent Authorities; nor the amount deposited towards the unit was refunded, left with no alternative, the complainants served legal notice dated 27.10.2015 upon the opposite parties, but to no avail.
It was further stated that the aforesaid act and conduct of the opposite parties, amounted to deficiency in providing service and adoption of unfair trade practice, which caused mental agony and physical harassment to the complainants. It was further stated that, besides as above, the complainants were also caused financial loss, as they have been paying monthly installments to the Bank, from which they have obtained loan amount, for making payment towards price of the said unit, yet, still they are empty handed. Hence this complaint has been filed by the complainants, seeking directions to the opposite parties to refund the amount paid, alongwith interest, compensation and litigation expenses.
The complainants had earlier filed consumer complaint bearing no.110 of 2016 before this Commission, which was transferred to the District Forum-II, Chandigarh (in short the Forum), for want of pecuniary jurisdiction. However, thereafter, while relying upon judgment passed by the Hon'ble National Commission, titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016, wherein it was held that for determining the pecuniary jurisdiction, the Consumer Fora has to consider the value of the goods and compensation claimed and not the reliefs claimed alongwith compensation, and because in the present case, the value of the unit, in question, was more than Rs.20 lacs i.e. Rs.37,81,100/-, the Forum, as such, while giving liberty to the complainants, to file the said consumer complaint before the appropriate Fora having pecuniary jurisdiction, dismissed it (consumer complaint bearing RBT No.561 of 2016), vide order dated 07.02.2017, being not maintainable, as a result whereof, the present complaint has been filed before this Commission.
Upon notice, reply was filed by the opposite parties, wherein, they took certain preliminary objections, to the effect, that the complaint was liable to be dismissed, because as per Clause 10.9 of the Allotment Letter, any dispute, with regard to the unit, in question, was to be referred to an Arbitrator; that this Commission has no territorial jurisdiction, to entertain and decide this complaint; that the complainants being investors, did not fall within the definition of consumers, as provided under the Act; and that since the complainants had earlier filed a complaint, in respect of the same unit, in the manner, referred to above, as such, now the second complaint is not maintainable before this Commission.
On merits, purchase of the unit, in question, and also payments made by the complainants, as mentioned in the complaint, were not disputed. It was stated that possession of the unit, in question, was to be offered to the complainants in 2015. It was further stated that the complainants were allotted the unit, in question, on 2nd floor, and the tower in which the said unit is located, has already been constructed upto 6 floors. It was further stated that construction of the said tower is near completion and possession of the unit is expected to be delivered to the complainants, soon. It was further stated that the complainants have approached this Commission, with unclean hands and have not disclosed the material facts. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
The contesting parties led evidence in support of their case.
We have heard the contesting parties, and have gone through the evidence, and record of the case, carefully.
First, we will deal with the objection, raised by the opposite parties, that since the earlier consumer complaint bearing no.110 of 2016 filed by the complainants before this Commission, was transferred to the Forum, in view of the prevailing law, with regard to pecuniary jurisdiction but was later on dismissed by the Forum, being not maintainable for want of pecuniary jurisdiction in view of law laid down by the Hon'ble National Commission, in Ambrish Shukla's case (supra), as such, now this complaint being a second one, is not maintainable.
We do not agree with the objection raised by the opposite parties, for the reasons to be recorded hereinafter. It may be stated here that, no doubt, in view of the prevailing law, the present consumer complaint filed by the complainants, was, in the first instance, vide order dated 28.07.2016, transferred by this Commission, to the Forum, for its disposal, and thereafter, it could not be adjudicated upon, by it (Forum), in view of law laid down by the Hon'ble National Commission, in Ambrish Shukla's case (supra) on 07.10.2016, to the effect that for determining the pecuniary jurisdiction of the Consumer Fora, value of the unit/plot is also required to be taken into consideration, irrespective of the fact that the complainant(s) is/are seeking refund of the part amount paid towards price thereof, alongwith compensation claimed. The Forum had dismissed the said consumer complaint because the price of the unit, in question, was more than Rs.20 lacs i.e. Rs.37,81,100/-, as such, the complainants were given liberty to approach the appropriate Fora, having pecuniary jurisdiction, as a result whereof, the present complaint has been filed by them before this Commission. The fact remains that the present complaint had never been decided on merits. As such, in no way, it can be said that the present complaint is not maintainable being a second one, after applying principles of res judicata. Had the consumer complaint, in the first instance, been decided on merits, by this Commission, and instead of filing appeal, had the complainants filed a second complaint, on the same cause of action, only in those circumstances, it would have been said that the second complaint, which had already been decided is not maintainable. Same would have been in the case of the Forum. As such, it is held that since, under the circumstances, referred to above, the complainants were having no alternative, then to file this complaint before this Commission again, the same is maintainable and in no way, it can be said to be a second complaint, on the same cause of action, especially, when the same was never decided on merits neither by this Commission nor by the Forum. Objection taken by the opposite parties, in this regard, stands rejected.
Now, we will deal with the objection, raised by the opposite parties, that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.
This objection has been raised in the written statement, by placing reliance on Clause 10.9 contained in the allotment letter. However, in view of reasons given hereinafter, no relief can be granted, in favour of the opposite parties. This issue has already been dealt with, by this Commission, in a case titled as 'Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon'ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013), Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), and held that even in the face of existence of arbitration clause in an Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Furthermore, under similar circumstances, the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016, held as under:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
Furthermore, the National Commission in a case titled Omaxe Limited Vs. Dinesh Lal Tarachandani, First Appeal No.1433 of 2016, decided on 24.11.2016, while dismissing the appeal filed by the builder (Omaxe), held as under:-
"We are unable to persuade ourselves to agree with the Learned Counsel. In our opinion, the decision of the State Commission being based on the authoritative pronouncements by the Hon'ble Supreme Court and also on the decision dated 02.05.2016, rendered by this Bench in the case of Lt. Col. Anil Raj & Ors. Vs. M/s Unitech Limited & Ors. in CC No. 346/2013, in which we have held that notwithstanding the amendments in the Arbitration Act, the reasoning and ratio of the decision of the Hon'ble Supreme Court, in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Ors. (Supra) still holds good, no fault can be found with the view taken by the State Commission.
Consequently, the Appeal fails and is dismissed accordingly."
In view of the above, the objection raised in this regard, being devoid of merit is rejected.
The next question that falls for consideration, is, as to whether, this Commission has got territorial jurisdiction to entertain and decide this complaint or not. It may be stated here that according to Section 17 (2) (b) of the Consumer Protection Act, 1986 (in short the Act) a complaint can be filed in the State Commission, within the limits of whose jurisdiction, 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 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. Further, as per Section 17 (2) (c) of the Act, a complaint can also be filed in the State Commission, where the cause of action, wholly or in part, arises to the party, filing the complaint. It is significant to mention here that perusal of letter dated 20.07.2011 Annexure C-2, confirming the booking of the unit, in question, and also the payment confirmation letter dated 01.03.2016 Annexure C-4 reveals that the same were issued by the opposite parties, in favour of the complainants, from their Corporate Office at Chandigarh i.e. SCO 46-47, First Floor, Sector 9-D, Near Mattka Chowk, Madhya Marg, Chandigarh-160009. Not only as above, the opposite parties, in their reply have very candidly admitted that they have their office at Chandigarh. Therefore, in our considered view, since as per the documents, referred to above, a part of cause of action, accrued to the complainants, within the territory of Chandigarh, as such, the instant complaint can be entertained and adjudicated upon by this Commission, at Chandigarh, in view of the provisions of Sections 17(2)(b) and 17 (2) (c) of the Act. The plea taken by the opposite parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
The next question, that falls for consideration, is, as to whether, the complainants are speculators, and that they have purchased the unit, in question, for earning profits i.e. for resale, as and when there is escalation in the prices of real estate, therefore, they would not fall within the definition of consumers, as defined by Section 2 (1) (d) (ii) of the Act, as alleged by the opposite parties. It may be stated here that there is nothing, on record to show that the complainants are the property dealers and are indulged in sale and purchase of property, on regular basis. In para no.11 of the complaint, supported by their affidavits, it has been specifically stated by the complainants that the unit, in question was purchased by them, for their residential purpose. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties in their written reply, therefore, being devoid of merit, is rejected.
The next question that falls for consideration, is, as to whether, the opposite parties possessed all the requisite permissions, to launch the said project and sell the units therein or not. It may be stated here that the complainants, in their complaint, have taken a specific stand that the booking of the unit, in question, was done by them, in the project of the opposite parties, on the allurements made by them (opposite parties) vide brochure Annexure C-1, wherein it was, in clear-cut terms mentioned that the project, in question, was approved by the Punjab Government, whereas, infact no permission/approval was taken by them, for the same. In support of their contention, the complainants have placed on record, letters dated 21.03.2016 Annexure C-14 and 22.03.2016 Annexure C-15 i.e. the information obtained under RTI Act, 2005, from the Senior Town Planner, PUDA and GMADA, respectively. Not only us, anyone will be shocked, on going through the information supplied by the said Competent Authorities. It has been very candidly intimated vide the said letters that not even a single case with regard to launching of the project namely M/s Emerging Heights-III, Sector 115, Greater Mohali, has been dealt with by the Competent Authorities and that no licence or approval has been granted to the opposite parties, for launching the said project by the Government concerned. It is also very pertinent to add here that in reply to para no.15 of the complaint, wherein the complainants, while relying upon the said information, have alleged that the opposite parties have not obtained permissions from the Govt. concerned to launch the said project, they (opposite parties) in their reply, have stated 'that the contents of para no.15 of the complaint are either matter of record or are denied for want of any specific knowledge'. The admission of the opposite parties in the first part is sufficient for this Commission, to come to the conclusion that the complainants are legally right to seek refund of the amount paid by them, towards price of the said unit. The opposite parties gave a misleading information to the general public including the complainants, just with a view to grab hard earned money of the gullible buyers, that the project launched by them, has been got approved from the Punjab Government. The documents placed on record indicate that when project was marketed and sold, not even a single permission was available with the project proponent/opposite parties. Even nothing has been produced on record by the opposite parties, that, as on today, they are in possession of necessary approvals/ sanctions to launch the said project. To launch the project, without getting necessary permissions/approvals, would amount to unfair trade practice. Under similar circumstances, the National Commission in a case titled as Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016, has held as under:-
"We are unable to persuade ourselves to agree with the ld. counsel. While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-
If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.
We are in complete agreement with the view taken by the State Commission. "
In the present case also, there is a complete violation of the provisions of the PAPRA and the said violation amounts to adoption of an unfair trade practice, which is glaring and vivid on the part of the opposite parties. Under above circumstances, it can very well be said that the project launched by the opposite parties is farce. As such, the plea taken by the opposite parties to the effect that the project is near completion and possession of the unit, in question, will be delivered soon, has no significant value in the eyes of law, especially when the said project has been proved to be farce, under the peculiar facts and circumstances, referred to above.
At the same time, non-delivery of possession of the unit, in question, by the stipulated date, is a material violation on the part of the opposite parties and amounts to deficiency in providing service and adoption of unfair trade practice. It is settled law that when there is a material violation on the part of the builder, in not handing over possession of units/plots by the stipulated date, the purchaser is not bound to accept the offer, even if the same is made at a belated date and on the other hand, can seek refund of amount paid. It was so held by the National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held as under:-
"I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest."
Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No. 59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same."
Further, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, under similar circumstances, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
However, in the present case, the position is worst, as the opposite parties have not even obtained permissions/approvals to launch the said project. Under above circumstances, it is held that since there was a material violation on the part of the opposite parties, in not offering and handing over possession of the unit, in question, even till date, and also it is held that the project in question, has turned to be farce, as such, the complainants are entitled to get refund of amount paid by them.
It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the complainants. It has been proved on record that an amount of Rs.18,86,600/- was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest @24% p.a. (2% per month compounded), as per Clause 5.5 of the Allotment Letter, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainants are certainly entitled to get refund of the amount deposited by them, alongwith interest, from the respective dates of deposits till realization.
No other point, was urged, by the contesting parties.
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under:-
To refund the amount of Rs.18,86,600/- to the complainants, alongwith interest @12% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.33,000/- to the complainants.
The payment of awarded amounts, in the manner mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a., instead of @12%, from the date of filing of this complaint and interest @12 % p.a., on the amounts mentioned at sr.nos.(ii) and (iii) also, from the date of filing of this complaint, till realization.
However, it is made clear that, if the complainants, have availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
11.01.2018 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.