State Consumer Disputes Redressal Commission
Arvinderjit Singh vs Unitech Ltd. on 25 May, 2017
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA Consumer Complaint No. 156 of 2016 Date of Institution 03.06.2016 Date of Decision 25.05.2017 Arvinderjit Singh son of Sh. Surjit Singh, resident of House No.1314, Ground Floor, Guru Teg Bahadur Complex, Sector 70, Mohali, Punjab. Complainant Versus Unitech Limited, Signature Towers, Ground Floor, NH-8, South City-1, Gurgaon -122001, Haryana. Opposite Party CORAM: Hon'ble Mr. Justice Nawab Singh, President. Shri Balbir Singh, Judicial Member.
For the parties: Ms. Sheenu Sura, counsel for the complainant Opposite party ex parte O R D E R NAWAB SINGH J, (ORAL) The present complaint under Section 17 of the Consumer Protection Act, 1986 (for short, 'Consumer Act') has been filed by Arvinderjit Singh-complainant averring that on October 01st, 2011, he booked a flat with Unitech Limited-opposite party (for short, 'Developer') in the project Crestview, Wildflower Country, Gurgaon. An agreement dated February 17th, 2012 (Exhibit C-4) was executed between the complainant and the developer. As per clause 4 a (i) of the agreement, the possession of the flat - apartment was to be handed over within thirty six months from the date of signing the agreement. The developer allotted Flat No.0403, Block No.A2, Crestview, Wildflower Country, Gurgaon to the complainant vide allotment letter (Exhibit C-2) for a total consideration of Rs.70,76,710/-. In all, the complainant paid Rs.23,98,164/- to the developer vide account details Exhibit C-5. Inspite of repeated requests made to the developer to handover the possession to the complainant, the possession was not handed over. The complainant prayed that the developer be directed to refund the deposited amount, that is, Rs.23,98,164/- alongwith interest at the rate of 18% per annum from the date of its respective deposit; Rs.5,00,000/- as compensation and Rs.44,000/- litigation expenses.
2. Unitech, in its reply, resisted the complaint on various grounds, including its maintainability. The developer in preliminary objections averred that this Commission does not have the pecuniary jurisdiction to try/adjudicate the complaint because the complainant is not "Consumer" within the meaning of Section 2(1)(d) of the Consumer Act, as the flat in question has been booked for resale; vide Article-14 of the Buyer's Agreement, dated February 17th, 2012, it was resolved between the parties that all the disputes, differences or disagreements arising out of, in connection with or in relation to the Agreement, shall be decided by Arbitration in accordance with the provisions of the Arbitration & Conciliation Act, 1996 (for short, 'Arbitration Act, 1996'). On merits, it is pleaded that the complainant invested the money in the flat when the real estate market was at its peak and to earn profit.
3. On November 08th, 2016, Shri R.K. Dogra, Advocate filed written version on behalf of the developer. Thereafter, the case was adjourned to January 12th & 19th, 2017, February 22nd, 2017, April 18th, 2017, May 03rd, 2017 but nobody put in appearance on behalf of the developer. Hence, the developer was proceeded ex parte.
4. The complainant Arvinderjit Singh in his evidence appeared as CW1 and produced following the documents:-
1.
Receipt dated October 01st, 2011 Exhibit C-1
2. Allotment letter dated October 01st, 2011 Exhibit C-2
3. Payment Schedule Exhibit C-3
4. Buyer's Agreement Exhibit C-4
5. Account Details Exhibit C-5
5. The following questions arise for consideration:-
(i) Whether the complainant is consumer or not? (ii) Whether the present complaint is to be referred to Arbitration in view of Clause-13 of the Buyer's Agreement, dated March 08th, 2011? (iii) Whether the developer defaulted in delivering the possession of the flat to the complainant or not?
6. The first question, that falls for consideration is whether the complainant is consumer or not? Unless there is evidence on record to show that the complainant had booked more than one property/flat for the purpose of trading, a bald assertion by the developer that property/flat had been bought for the purpose of making profits is not sufficient to hold that the transaction was for "Commercial purpose." Except for a bald plea in the written version that the flat had been purchased by the complainant with a view to sell it on premium and make profits, Developer has not said even an additional word in this behalf, leave alone leading evidence to prove the assertion. So, this plea of the developer is hereby rejected.
7. The next question is as to whether the matter is to be referred to the Arbitration per clause 13 of the Buyer's Agreement, dated February 17th, 2012 or not?
8. Learned counsel for the developer has contended that after enactment of the Arbitration and Conciliation (Amendment) Act, 2015 in Section 8 of the Arbitration Act, it is mandatory for this Commission to refer the parties to arbitration.
9. Section 8 of the Arbitration Act, 1996 is reproduced as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
10. After amendment of the Section in the year 2015, Section 8 reads as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists."
11. Section 3 of the Consumer Act is relevant to adjudicate the point at issue. So, it is necessary to reproduce the provisions of Section 3 of the Consumer Act:-
"3. Act not in derogation of any other law.--The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
12. Upon reading of the Section 3 of the Consumer Act, it is clear that it provides additional remedy and existence of arbitration clause, in the agreement, to settle disputes between the parties, is not a bar to entertain a complaint filed by the consumer, alleging deficiency in service in providing services etc. It is a remedy in addition to and not in derogation to any other remedy available to an individual. Hon'ble Supreme Court in Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294 held as under:-
"Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force."
13. In another case Trans Mediterranean Airways v. Universal Exports 2011(4) R.C.R.(Civil) 472 (SC), Hon'ble Supreme Court held as under:
"In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy.
14. No doubt these authorities were rendered prior to the amendment of Section 8 of the Arbitration Act, 1996 but even then the spirit of Section 8 of Arbitration (Amendment) Act, 2015 and Section 3 of the Consumer Act is the same, that is, the remedy is in addition to and not in derogation to any other remedy available. In a judgment Lt. Col. Anil Raj and Another Versus M/s Unitech Limited and another, C.C. No.346 of 2013, decided on May 02nd, 2016 by Hon'ble Mr. Justice D.K. Jain, President, National Consumer Disputes Redressal Commission, New Delhi after considering the amendment in Section 8 of the Arbitration (Amendment) Act, 2015 held that in spite of the recent amendments in the Arbitration Act that the protection provided to the consumers under this Act is in addition to the remedies available under any other statute, including the consentient arbitration under the Arbitration Act. It was held that the complaint filed by a consumer before the Consumer Fora would be maintainable despite there being an arbitration clause in the agreement to refer the dispute to the Arbitrator. Hence, the aforesaid contention advanced by learned counsel for the developer is rejected.
15. The next question is whether the developer defaulted in delivering the possession of the flat to the complainant or not?
16. The complainant had applied for flat with the developer. Apartment Allotment Agreement (Exhibit C-4) was executed between the parties on February 17th, 2012. Flat No.0403, Block No.A2, Crestview, Wildflower Country, Gurgaon was allotted to the complainant. The complainant paid Rs.23,98,164/- to the developer. As per clause 4 a (i) of the agreement, the possession of the flat - apartment was to be handed over within thirty six months from the date of signing the agreement, that is, by February 16th, 2015 but the developer failed to do so and it was certainly a case of deficiency in service.
17. In view of above, the complaint is allowed. Unitech Limited-developer is directed to pay Rs.23,98,164/- (Rupees Twenty Three Lac Ninety Eight Thousand One Hundred Sixty Four Only) to the complainant, alongwith interest at the rate of 12% per annum from the date of its respective deposits till the date of realization; Rs.25,000/- as compensation for rendering deficient services and Rs.10,000/- towards litigation expenses. The entire amount be paid by the developer within a period of 45 days, from the date of receipt of the order, otherwise, it will carry interest at the rate of 18% per annum, till realization and it calls for pointed notice that under Section 27 of the Act, if the developer fails or omits to comply with this order, it shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine or with both.
Announced 25.05.2017 (Balbir Singh) Judicial Member (Nawab Singh) President