State Consumer Disputes Redressal Commission
Sukhjinder Singh vs M/S Ireo Fiveriver Pvt. Ltd. on 18 April, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 281 of 2015 Date of Institution : 18.11.2015 Date of Decision : 18.04.2016 Sukhjinder Singh son of Amrik Singh, resident of V.P.O. Diwana, Tehsil Tohana, District Fatehabad, Haryana. ......Complainant V e r s u s M/s IREO Fiveriver Pvt. Ltd., Corporate Office, SCO No.6-8, 1st and 2nd Floor, Sector 9-D, Chandigarh, through its Authorized Signatory, Ms.Sunaina Minhas D/o Maj.Arbinder Singh. .....Opposite Party 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.Ashish Verma, Advocate for the complainant.
Sh.Ramnik Gupta, Advocate for the opposite party.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT Vide our separate detailed order of the even date, recorded in consumer complaint No. 278 of 2015, titled as Sukhjinder Singh Vs. M/s IREO Fiveriver Pvt. Ltd., this complaint has been partly accepted, with costs, as per the directions given therein.
Certified copy of the order passed in consumer complaint No. 278 of 2015, shall also be placed on this file.
Certified copy of the main order, alongwith this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Sd/- Sd/- Sd/- (DEV RAJ) MEMBER (JUSTICE JASBIR SINGH (RETD.)) PRESIDENT (PADMA PANDEY) MEMBER Rg. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 278 of 2015 Date of Institution : 18.11.2015 Date of Decision : 18.04.2016
Sukhjinder Singh son of Amrik Singh, resident of V.P.O. Diwana, Tehsil Tohana, District Fatehabad, Haryana.
......Complainant V e r s u s M/s IREO Fiveriver Pvt. Ltd., Corporate Office, SCO No.6-8, 1st and 2nd Floor, Sector 9-D, Chandigarh, through its Authorized Signatory, Ms.Sunaina Minhas D/o Maj.Arbinder Singh.
....Opposite Party Argued by: Sh.Ashish Verma, Advocate for the complainant.
Sh.Ramnik Gupta, Advocate for the opposite party.
================================================ Complaint case No. :
281 of 2015 Date of Institution :
18.11.2015 Date of Decision :
18.04.2016 Sukhjinder Singh son of Amrik Singh, resident of V.P.O. Diwana, Tehsil Tohana, District Fatehabad, Haryana.
......Complainant V e r s u s M/s IREO Fiveriver Pvt. Ltd., Corporate Office, SCO No.6-8, 1st and 2nd Floor, Sector 9-D, Chandigarh, through its Authorized Signatory, Ms.Sunaina Minhas D/o Maj.Arbinder Singh.
.....Opposite Party Argued by: Sh.Ashish Verma, Advocate for the complainant.
Sh.Ramnik Gupta, Advocate for the opposite party.
Complaints under Section 17 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.
MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT By this order, we propose to dispose of, two consumer complaints bearing nos.278 of 2015 and 281 of 2015, both titled as Sukhjinder Singh Vs. M/s IREO Fiveriver Pvt. Ltd.
The issues involved in both the cases, except minor variations, here and there, of law and facts are the same. Counsel for the parties are in agreement that both the complaints can be decided by passing a consolidated order. To dictate order, facts are being taken from consumer complaint bearing no.278 of 2015.
By filing this complaint, it is stated by the complainant that he booked a residential plot, measuring 370.04 square yards, (@Rs.25,000/- per square yard, basic sale price) for an amount of Rs.92,51,000/-, with the opposite party, in its project namely "IREO Fiveriver", Panchkula-Kalka-Urban Complex, District Panchkula. Further amount was to be paid towards External Development Charges (EDC) @Rs.4100/- per square yard, Infrastructure Development Charges (IDC) @Rs.525/- per square yard and IFMS @Rs.350/- per square yard. In this manner, total sale consideration of the unit, in question, was fixed at Rs.1,10,90,750/-. Amount towards 10% of the basic sale price was paid at the time of booking. It was development linked plan. The following schedule was fixed to make the payments, vide the said Agreement:-
On Booking :
Rs.925100/- (10% of BSP) With Allotment :
Rs.1387650/- (15% of BSP) On start of site development :
Rs.1815508.75/- (15% of BSP + 25% EDC, PLC & IDC) Within 3 months of commencement of development work at site :
Rs.1815508.75/- (15% of BSP + 25% EDC, PLC & IDC) On partial (50%) completion of laying of services i.e. excavation, laying of pipes etc. :
Rs.1815508.75/- (15% of BSP + 25% EDC, PLC & IDC) On completion of PHE services to the property :
Rs.1815508.75/-(15% of BSP + 25% EDC, PLC & IDC) On completion of WBM :
Rs.1054614/- (10% of BSP + 100% IFMS & Additional Facility Charge) On offer of possession :
Rs462550/- (5% of BSP +100% Stamp Duty and Registration) Buyer's Agreement was executed between the parties on 08.09.2011. The complainant also paid 15% of the total price, as agreed to between the parties. In this manner, the complainant had paid an amount of Rs.23,12,750/-, towards part price of the said unit. Further amount in installments was to be paid, on start of development, at the site, which never started. As per admitted facts by the opposite party, development at the project site was started only on 13.04.2015.
It is further case of the complainant that as per Clause 11.1 of the Agreement, possession of fully developed plot was to be handed over to the complainant within a period of 30 months i.e. 24 months plus (+) 6 months grace period, from the date of execution of that Agreement i.e. by 07.03.2014. The complainant kept on approaching the opposite party, with a request to start development at the project site, however, till the mid of year 2014, nothing was done. Some employees of the opposite party informed the complainant that work could not be started at the site, for want of requisite permissions, to be granted by the Competent Authorities. Compelled under the circumstances, by writing a letter dated 24.02.2015, the complainant sought refund of the amount paid, alongwith interest @24%, from the respective dates of deposits, till realization. When nothing was done, the present complaint was filed by the complainant, with a request made in para 8 of the complaint that the same (complaint) be allowed and the opposite party be directed to refund an amount of Rs.23,12,750/- deposited by the him, alongwith interest @24%, till realization.
Upon notice, written reply was filed by opposite party stating that in the face of existence of an arbitration clause in the Agreement to settle disputes between the parties, this Commission has no jurisdiction to entertain the same (complaint). To say so, reliance was placed upon amended provisions of Section 8 of the Arbitration and Conciliation Act 1996 (in short the 1996 Act). It is also asserted that the complainant would not fall within the definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act, as he has neither bought any goods nor hired any services, from the opposite party and further that the plot was purchased by the complainant only to get profit, in future. The complainant had booked two plots, and as such, the purchase thereof, cannot be termed as genuine purchase, for residential purpose. It is further stated that the parties are bound by the terms and conditions of the Agreement. It is a contractual obligation between the parties to be discharged, as such, this Commission has no jurisdiction to entertain the complaint and only the Civil Court has jurisdiction. It is further stated that no cause of action had accrued, in favour of the complainant to get refund, as claimed in this complaint. It is averred in para 1 (ii) of the preliminary objections that construction/development activity was to be carried out by the opposite party, on its own land and that no service was to be provided by the opposite party to the complainant. Construction could not be started on account of force majeure circumstances. To say so, reliance was placed on Clause 1 of the Agreement, which reads thus:-
"Force Majeure" shall mean any event beyond the reasonable control of the Company or Confirming Parties by itself or in combination with other events or circumstances which cannot (i) by the exercise of reasonable diligence, or (ii) despite the adoption of reasonable precautions and/or alternative measures, have been prevented, or caused to have been prevented, and which impairs or adversely affects the Company's/Confirming Parties' ability to perform its obligation under this Agreement, and which events and circumstances shall include but not be limited to a) acts of God, i.e. fire, drought, flood, earthquake, epidemics, natural disasters or deaths or disabilities; b) explosions or accidents, air crashes and shipwrecks; c) strikes of lock outs, industrial dispute; d)non-availability of cement, steel or other construction material due to strikes of manufactures, suppliers, transporters or other intermediaries or otherwise; e)war and hostilities of war, riots or civil commotion; f) non-grant, refusal, delay, withholding, cancellation of any approval from any governmental authority or imposition of any adverse condition or obligation in any approvals from any governmental authority, including any delay beyond the control of the Company/ Confirming Parties in issuance of the Completion Certificate and/or any other approvals/certificate as may be required; g) any matter, issues relating to grant of approvals/permissions, notices, notifications by the Competent Authority becoming subject matter of any suit/writ before a Court of law; h) the promulgation of or amendment in any law, rule or regulation or the issue of any injunction, court order or direction from any governmental authority that prevents or restricts the Company/Confirming Parties from complying with any or all the terms and conditions as agreed in this Agreement; i) economic recession; j) any event or circumstances analogous to the foregoing.
It is further stated that delay was caused on account of unforeseen conditions/restrictions imposed by the Government Authorities. It is averred that layout plans and licence to develop 169.864 acres of land was granted on 23.03.2010, however, after execution of the Buyers Agreement, road circulation plan of the Sector, where the project is situated, was changed on 22.11.2011. The opposite party was directed to amend their layout plans accordingly, which were submitted within a month. However, its approval-in-principal was given only on 02.08.2013 and was confirmed on 14.10.2013. Fresh condition to get the project hydraulically studied, from a premier institute was also imposed. It is further stated that vide letter dated 16.03.2011, DTCP Haryana, directed the opposite party, not to carry out earth work/construction at the site, without obtaining NOC from the Irrigation Department, which was granted only on 20.03.2013 i.e. after about two years. Licence for additional land measuring 10.594 acres plus 18.343 acres, which was a part of the project was not cleared by the Department, as the area was situated in a squatted small pockets. Further, the Hon'ble Supreme Court of India, in the case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012 granted stay and issued directions to the State of Haryana and its functionaries, not to undertake any further construction on the land, in question. The said stay order was vacated on 12.12.2012. Approval for environment clearance from the State Level Environment Impact Assessment Authority, was also sought, which was granted only on 15.04.2014. Clearance from National Board for Wild Life (NBWL) Authorities was given only on 24.04.2015. It is stated that all the events mentioned above, were beyond the control of the opposite party, and as such, the development at the project site could not be commenced.
On merits, sale of developed plot and payment made by the complainant, as mentioned by him, in the complaint stands admitted. The remaining averments are denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
The parties led evidence in support of their cases, alongwith which, number of documents were attached.
On completion of the proceedings, arguments of the parties concerned, in both the cases, were heard, in detail.
Counsel for the complainant addressed his arguments, in terms of the facts stated in earlier part of this order. It is stated that the opposite party was required to take permissions/clearances aforesaid, before launching the project, in question, but it failed to do so, and further that amended provisions of Section 8 of 1996 Act, are not applicable in the face of existence of Section 3 of 1986 Act and that the complainant is not a speculator.
On the other hand, Counsel for the opposite party, has vehemently argued that in view of existence of arbitration clause in the Agreement, 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. It is further argued that, may be, taking note of un-amended provisions of Section 8 of 1996 Act vis-à-vis Section 3 of 1986 Act, it had earlier been said that the Consumer Foras have jurisdiction to entertain a complaint, as Section 3 provides additional remedy to the consumers and existence of arbitration clause in the agreement would not bar jurisdiction of the Consumer Foras, however, with amendment in Section 8 of the 1996 Act, position has changed. In a way, he made an attempt to say that amendment in Section 8 of 1996 Act, leaves no power, with the Consumer Foras to entertain any consumer complaint, in cases, wherein provisions for settlement of disputes is provided through arbitration. To buttress his arguments, he has referred to Clause 34 of the Agreement, which reads thus:-
"All or any disputes arising out of or touching upon or in relation to the terms of this Agreement or its termination including the interpretation and validity of the terms hereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussions failing which the same shall be settled through reference to a sole Arbitrator to be appointed by a resolution of the Board of Directors of the Company, whose decision shall be final and binding upon the Parties. The Allottee hereby confirms that it shall have no objection to the appointment of such sole Arbitrator even if the person so appointed, is an employee or advocate of the Company or is otherwise connected to the Company and the Allottee hereby accepts and agrees that this alone shall not constitute a ground for challenge to the independence or impartiality of the said sole Arbitrator to conduct the arbitration. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereto and shall be held at the Company's offices or at a location designated by the said sole Arbitrator in Chandigarh. The language of the arbitration proceedings and the Award shall be in English. Both the Parties will share the fees of the Arbitrator in equal proportion".
It is submitted that construction/development work could not be started on account of force majeure circumstances, as referred to, in earlier part of the order. He further submitted that development work at the site, is being carried out in full swing and the opposite party is making sincere efforts to hand over possession of the said unit, to the complainant, in the near future.
Above arguments were controverted by Counsel for the complainant, in rebuttal.
The principal question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause in the Agreement, 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. It may be stated here that under similar circumstances, in a case titled as Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, this Commission, brushed aside similar argument, raised by Senior Counsel for the builder, while holding as under:-
"24 Before dealing with the legal issues, it is necessary to note down amended and unamended provisions of Section 8 of 1996 Act and other provisions, which were added in the 1996 Act (principal Act), by the Arbitration and Conciliation Amendment Act, 2015, which was signed by the Hon'ble President of India on 31.12.2015.
Unamended provisions of Section 8 of 1996 Act, reads thus:-
"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."
25. After amendment, Section 8 of 1996 Act, 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."
26. The provisions which needs interpretation/ explanation, as added in the principal Act, have been underlined, in the above extracted paragraph. Vide the 2015 Act, in principal Act, Fourth Schedule was added with it, scale of fee, to be charged by an Arbitrator has been prescribed. Besides as above, by making amendment in Section 11 of 1996 Act, it is provided that any application of the contesting parties to appoint an Arbitrator is to be decided by the High Court/its nominee expeditiously as possible and an effort be made to dispose of the same, within 60 days, from the date of service of notice upon the opposite party. Further, by making an amendment in the principal Act, Section 29 A has been added providing that an Arbitrator is supposed to make an award within 6 months from the date the Arbitral Tribunal enters upon the reference. There is a provision for extending the time period for 6 months more, with consent of the parties. Thereafter, the Court has been given power to extend it, in case of need. As per Section 34 of 1996 Act, the award so passed, can be challenged before the Court. As per amended provisions added in the principal Act, the Court is supposed to dispose of the said dispute within a period of one year, from the date, on which the notice is served upon the opposite party. As per law, the matter can further be challenged in the High Court and may be, thereafter, it will go to the Hon'ble Supreme Court of India.
27. Now, we would like to deal with applicability of Section 8 (amended) of the principal Act, to the proceedings before this Commission. It is to be decided, as to whether, in the face of existence of an arbitration clause in the Agreement, it is open to this Commission, to entertain a consumer complaint, in terms of provisions of Section 3 of 1986 Act or not.
Here, it is necessary to reproduce the provisions of Section 3 of 1986 Act, for consideration:-
"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."
28 Such issue was also raised, when unamended provisions of Section 8 of 1996 Act, was in existence. Similar argument was raised that when settlement of disputes is provided through arbitration in the Agreement, the consumer complaint is not maintainable. In umpteen number of cases, it is held by the Hon'ble Supreme Court of India, National Commission and various State Commissions, that Section 3 of 1986 Act 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 providing service etc. A similar issue came up before this Commission in Sh.Dharam Pal Gupta Vs. M/s Emaar MGF Land Limited and another, Consumer Complaint No.147 of 2015, decided on 13.10.2015. After noting the ratio of judgments of the Hon'ble Supreme Court of India, in various cases, and also of the National Commission, it was observed as under:-
It was next vehemently argued by Counsel for Opposite Parties No.1 and 2 that the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer's Agreement. To say so, reference was made to Clause 42 of the Buyer's Agreement, which reads thus:-
"42. In the event of any dispute arising out of or touching upon or in relation to the terms of this Agreement or its termination, including the interpretation and validity thereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussion, failing which the same shall be settled through arbitration of an Arbitrator to be appointed (by?) the Company. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996, or any statutory amendments, modifications or re-enactment thereof for the time being in force and shall be held at New Delhi. The Courts at Mohali alone shall have the territorial jurisdictions in all matters arising out of/touching and/or concerning this Agreement"
It is stated that in case of dispute, an attempt will be made to settle the same, in an amicable manner, failing which, the same shall be referred to an Arbitrator in terms of Arbitration and Conciliation Act, 1996 (in short the 1996 Act). Heavy reliance has been placed on judgment of Calcutta High Court titled as Sudarshan Vyapar Pvt. Ltd. and another's case (supra). Further reliance was placed on a judgment rendered by the State Consumer Disputes Redressal Commission, Punjab, at Chandigarh, titled as Raj Kumar Singal Vs. M/s Puma Realtors Private Limited and another, Miscellaneous Application Nos.1226 and 1227 of 2014, in Consumer Complaint No.60 of 2014 and also upon a case titled as M/s S.B.P. and Co. Vs. M/s Patel Engineering Limited and another, AIR 2006 SC 450.
On the other hand, it is stated by Counsel for the complainant that in terms of Section 3 of the 1986 Act, above plea supported by the said judgments, needs to be rejected.
In the case of M/s S.B.P. and Co.'s case (supra), the Hon'ble Supreme Court dealt with altogether a different issue i.e. what is the nature of function of the Chief Justice or his designate, under Section 11 of the 1996 Act. Whether it is purely an administrative function or the Chief Justice or his designate, has the power to adjudicate upon the issues like existence of Arbitration clause in the Agreement/its validity. None of the provisions of 1986 Act were under consideration. The Hon'ble Supreme Court in M/s S.B.P. and Co.'s case (supra) discussed in detail, the provisions of the 1996 Act, and then gave a finding that powers of the Chief Justice of India or the High Court, under Section 11 (6) is not an administrative power but it is a judicial power. When discussing the question, as to who would fall within the definition of Judicial Authority, in terms of Section (8) of the 1996 Act, by making reference to ratio of judgment in the case Fair Air Engineers Pvt. Ltd. & anr. Vs. N.K. Modi, III (1996) CPJ 1 (SC) = (1996 (6) SCC 385, it was only said that judicial authority will include the Courts, and also specific Tribunals like Consumer Fora. Whether the Consumer Fora is bound to refer the matter to the Arbitrator, was not under consideration, in the above case.
The part of ratio of judgment in case Fair Air Engineers Pvt. Ltd. & anr.'s case (supra) dealing with above aspect, was not discussed in M/s S.B.P. and Co.s case (supra). In the former judgment besides opining that Consumer Fora have all the trappings of the judicial authority, further, by making reference to the provisions of Section 34 of the Arbitration Act, 1940 viz a viz Section 3 of 1986 Act, in Fair Air Engineers Pvt. Ltd. & anr.'s case (supra),it was observed as under:-
"It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the CPC. Thereby, as seen, Section 34 of the Act does not confer and automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on their own and on the peculiar facts and circumstances of the particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act."
It was specifically opined that the remedy under Section 3 of the 1986 Act, is in addition to and not in derogation to any other remedy available to an individual.
The above question was again dealt with, by the Hon'ble Supreme Court of India, in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & anr., I (2012) CPJ 1 (SC). Taking note of the provisions of 1996 Act and Section 3 of the 1986 Act, it was observed as under:-
"29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2-Judge Bench interpreted that section and held as under:
"the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Mr. Suri, that the words 'in derogation of the provisions of any other law for the time being in force' would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.
30. In Skypak Couriers Limited v. Tata Chemicals Limited (supra), this Court observed:
"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."
31. In Trans Mediterranean Airways v. Universal Exports (supra), it was observed:
"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".
Ratio of the judgments have left nothing to chance. It was mandated that even in the case of special legislation, it is permissible for an individual to avail remedy, under the 1986 Act. The National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013 after taking ratio of judgment in the case of M/s S.B.P. and Co.'s case (supra), came to a specific conclusion that remedy provided under Section 3 of the 1986 Act is in addition to and not in derogation of the provisions of any other law, for the time being in force. It was specifically stated that ratio of judgment passed in M/s S.B.P. and Co.'s case (supra), will not debar a Consumer Fora from entertaining the complaint, even in cases where an alternative remedy of Arbitration is provided. Vide that judgment many Revision-Petitions were decided.
Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/Opposite Party challenged above order in the Hon'ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013), the Hon'ble Supreme Court of India, by making reference to the ratio of judgment in the case M/s S.B.P. and Co.'s case (supra), observed that the judgment has no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction can be exercised by the Consumer Fora or not. In that judgment, the Supreme Court had not interpreted the provisions of 1996 Act in the light of the provisions contained in 1986 Act. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act is mandatory, cannot lead to an inference that the Consumer Fora is bound to make a reference to the Arbitral Tribunal. As such, the facts of Sudarshan Vyapar Pvt. Ltd. and another's and Raj Kumar Singal's cases (supra) relied upon by Counsel for Opposite Parties No.1 and 2, cannot be applied to the facts of the present case.
The position has further been clarified by the National Commission, in the latest Judgment titled as Shri Satish Kumar Pandey and another Vs. M/s Unitech Limited, Consumer Complaint No.427 of 2014 (alongwith other 23 connected cases), decided on 08.06.2015. It was observed as under:-
"It was also contended by the learned counsel for the opposite party that since the agreements between the parties contains arbitration clause, arbitration and not a complaint before this Commission is the appropriate remedy. I, however, find no merit in this contention. As provided in Section 3 of the Consumer Protection Act, the provision of this Act are in addition to the other remedies available to a consumer. Therefore, the availability of arbitration as a remedy does not debar the complainant from approaching a consumer forum in a case of deficiency in the services rendered to him by the service provider or adoption of unfair trade practices by him. This issue came up for consideration of the Hon'ble Supreme Court in National Seeds Corporation Vs. M. Madhusudhan Reddy & anr. (2012) 2 SCC 506 and after taking into consideration the provisions of the Section 8 of the Arbitration Act of 1996 and the Section 3 of the C.P. Act it was held that the plain language of Section 3 of the C.P. Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. The Hon'ble Supreme Court has also held that the complaint filed by a consumer before the consumer fora would be maintainable despite their being an arbitration clause in the agreement to refer the dispute to the Arbitrator. In view of the above referred authoritative pronouncement of the Hon'ble Supreme Court which was later followed by a Three Members Bench of this Commission in DLF Ltd. Vs. Mridul Estate Pvt. Ltd., R.P. No.412 of 2011 decided on 13-05-2013, the aforesaid contention advanced by the learned counsel for the opposite party is liable to be rejected."
Reading of ratio of the judgments referred to above, make it clear that in case of M/s S.B.P. and Co.'s case (supra), the issue before the Supreme Court of India was altogether different. The provisions of 1986 Act were not under consideration viz. a viz. the provisions of 1996 Act. As such, the ratio of judgments referred to above, makes it very clear that the judgments in Sudarshan Vyapar Pvt. Ltd. and another's and Raj Kumar Singal's cases (supra), were given by wrongly interpreting the ratio of M/s S.B.P. and Co.'s case (supra).
In view of the above, it is held that the submission of Counsel for Opposite Parties No.1 and 2, that the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer's Agreement, being devoid of merit, stands rejected.
29. Not only this, in the latest judgment titled as Mahindra Holidays & Resorts India Ltd. Vs. Adnan Samoon Rassiawala & 6 Ors., First Appeal No. 127 of 2016, decided on 18.03.2016, the National Commission observed as under:-
"The short question for consideration in this Appeal is as to whether the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (for short "the State Commission") was justified in dismissing the application filed by the Appellant, the Opposite Party in the Complaint, under Section-8 of the Arbitration and Conciliation Act, 1996, seeking stay of the proceedings in the Complaint and for referring the matter to arbitration, in view of the fact that there was an Arbitration Agreement between the parties.
Though Mr. Pattjoshi, learned Senior Counsel, has made valiant attempt to convince us that in the light of the decision of the Hon'ble Delhi High Court in HDFC Bank Ltd. v. Satpal Singh Bakshi, 2013 (134) DRJ 566 (FB), the parties were bound by the Arbitration Agreement and in view of the clear provision of Section-8 of the said Act, the dispute, subject matter of the Complaint, ought to have been referred to arbitration, yet we are unable to persuade ourselves to agree with the learned Senior Counsel. The issue sought to be raised is no more res integra as stands concluded by a number of authoritative pronouncements by the Hon'ble Supreme Court (see Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (dead) through LRs & Ors., (2004) 1 SCC 305; Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294; and National Seeds Corporation Ltd. v. Madusudan Reddy, (2012) 2 SCC 506).
In light of the said decisions of the Hon'ble Supreme Court, directly on the point, decision of the High Court cannot be relied upon, particularly when none of the afore-noted decisions have been noticed in the High Court's decision, on which reliance has been placed by the learned Senior Counsel.
We do not find any illegality in the impugned order, warranting our interference.
Consequently, the Appeal fails and is dismissed in limine".
30. Now it is to be seen, whether, after making amendment in Section 8 of the principal Act, any additional rights have accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling disputes through an Arbitrator, this Commission is not empowered to entertain a consumer complaint.
As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act.
31. Now, we will have to see what difference has been made by effecting amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains that judicial Authority needs to refer dispute, in which arbitration agreement exist for arbitrator, notwithstanding any judgment/decree or order of any Court. That may be true where in a case, some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said. Otherwise also, as has been stated in the earlier part of this order, where there is any ambiguity in understanding meaning of provision of law, or where two interpretations are possible, one beneficial to the consumer would be accepted.
32. We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/ multinational companies/traders. As in the present cases, the consumers/ complainants have spent their entire life savings to get a plot, so that they can construct a house thereon. Their hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act, the complaint is supposed to be decided within three months, from the date of service of the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act, the consumer will be forced to (as in the present case) pay huge expenses. As in the present case, the complainant is claiming refund of Rs.65,56,513/- alongwith interest, compensation and litigation costs, aggregate value whereof, if added may be near about Rs.1 crore. In that event, the complainant will be forced to pay an amount of Rs.1,68,750/- towards her share of Arbitrator fees. Not only as above, it is admissible to an Arbitrator, to decide the dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of General Assembly Resolution No.39/248 and the provisions of 1986 Act. In view of above, the ground raised by Counsel for opposite party no.1, stands rejected."
Similar view was reiterated by this Commission, in Praveen Kumar Arora and another Vs. Emaar MGF Land Limited, consumer complaint No.198 of 2015, decided on 04.04.2016, by further holding as under:-
"20. The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. In the present case, the complainants have spent their entire life earnings to purchase a unit, in a housing project, launched by the opposite party. It was their hope that they will live therein. However, their hopes were shattered, when despite making payment of entire amount towards price, they failed to get possession of a unit, in a developed project. As per established ratio of the judgment in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and also in the judgment of 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), it was said that the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
21. In view of the above, the argument raised by Counsel for the opposite party that in the face of existence of arbitration clause in the Agreement, 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, being devoid of merit, is rejected".
Not only as above, execution of judgment/decree passed by the Consumer Foras is very easy and less time consuming. Invariably, in all the judgments passed, between one to three months' time, is granted to the judgment debtors(s) to discharge liability. If it is not so done, and the order is not stayed in the meantime by the Higher Fora, two options are available with the complainant/decree holder. Section 25 of 1986 Act provides the procedure to enforce orders by the Consumer Foras. In Sector 25 (3), it is provided that where any amount is due from any person, under an order passed by any Consumer Fora, the concerned Consumer Fora, on an application moved by the decree holder, may issue a certificate to the Collector of the District, to recover the said amount, by way of land revenue, in terms of Section 72 of the Punjab Land Revenue Act, 1887. The said provision is also very stringent. The Collector is supposed to attach the holding of the judgment debtors to take the said property under his own management and control. The Collector is further supposed to manage the said property and raise all rents and profits accruing therefrom to the exclusion of the defaulter, until the decree is satisfied. The above procedure will consume at the maximum four to six months, for realization of the amount awarded. Further option is also available to a complainant/decree holder, to move an application under Section 27 of 1986 Act, which provides that where a trader or a person against whom, a complaint was made, fails or omits to comply with the order passed by the Consumer Fora, such party would entail award of punishment of imprisonment for a term, which shall not be less than one month, but may extend to three years, or with fine, which shall not be less than Rs.2,000/-, and may be extended upto Rs.10,000/-, or both. This provision is very effective, as and when application is moved under Section 27 of 1986 Act, for fear of imprisonment, it is seen that immediately the judgment debtor(s) make an attempt to comply with the order passed by the Consumer Foras. Whereas, to the contrary Section 36 of 1996 Act, provides that award shall be enforced, in accordance with the provisions of the Code of Civil Procedure 1908, in the same manner, as if it was a decree of a Court. Such a procedure is very costly and time consuming. Executing a decree would virtually mean fighting one more litigation, in a Court, to get enforcement of the award. If such a procedure is adopted, it will defeat the very purpose and spirit of 1986 Act. Accordingly, in this view of the matter and also in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite party, stands rejected.
The next question that falls for consideration, is, as to whether, the complainant, who has purchased two adjoining plots, in the project of the opposite party, it could be said that the same were purchased for earning profits i.e. for resale, and as and when there is escalation in the prices of real estate, as such, he would not fall within the definition of consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. No doubt, it is a fact that the complainant has purchased two adjoining plots, measuring 370.04 square yards, each, in the project of the opposite party. By making reference to above purchase, it is stated by the opposite party that the plots were purchased for future gain. Objection raised by the opposite party, in this regard, is baseless. The complainant is a resident of Tohana, District Fatehabad, Haryana, and in the complaint filed, it is specifically pleaded by him that he regularly visits Chandigarh, with regard to his business. He purchased the said plots with a purpose to shift his base, to somewhere near to Chandigarh.
At the time of arguments, it was also stated by Counsel for the complainant that two adjoining plots were purchased by the complainant, with a view to construct a bigger house. Nothing has been produced on record, to show that two plots cannot be amalgamated. Said permission can be granted, may be subject to payment of some amount. Reliance placed by Counsel for the opposite party, to support his contention, on a judgment of the National Commission, titled as Sunil Gupta Vs. Today Homes and Infrastructure (Pvt.) Ltd., consumer complaint no.5 of 2015, decided on 03.02.2014, is not justified. In that case, the complainant was residing in a posh area of Delhi and he had purchased two constructed villas, in Gurgaon, situated at a distance from each other. However, in the present case, as stated above, the complainant is a resident of Tohana, Haryana. It is stated by him that he was regularly visiting Chandigarh, for his business purpose. Under above circumstances, he had purchased two adjoining plots to construct a bigger house, for his residence purpose. In this view of the matter, the ratio of judgment, reliance whereupon has been placed by the opposite party, is not applicable to the present case.
At the same time, nothing has been produced on record, by the opposite party to show that the complainant is a property dealer and is engaged in sale and purchase of property on regular basis. In the absence of any cogent evidence, in support of the objection raised by the opposite party, mere bald assertion to that effect, cannot be taken into consideration. Even otherwise, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, 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, Revision Petition No.3861 of 2014, decided on 26.08.2015 . The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit(s), was/were purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, falls within the definition of 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, raised by the opposite party, therefore, being devoid of merit, is rejected.
Another objection was raised by Counsel for the opposite party that since the complainant sought enforcement of the Agreement, in respect of the immoveable property, only a Civil Court can decide the complaint, and as such, consumer complaint is not maintainable. It may be stated here, that the complainant hired the services of the opposite party, for purchasing the plot, in the manner, referred to above. According to Clause 11.1 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the opposite party, it was to deliver physical possession of the unit, within a period of 30 months i.e. 24 months plus (+) 6 months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.3. Section 2 (1) (o) of the Act, defines service as under:-
"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service"
From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, as stated above, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainant has a remedy to file a suit, for specific performance, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by him, as he falls within the definition of consumer, as stated above. In this view of the matter, the objection of the opposite party, in this regard, being devoid of merit, must fail, and the same stands rejected.
The next question, that falls for consideration, is, as to within which period, possession of the unit, in question, was to be delivered to the complainant. As stated above, according to Clause 11.1 of the Agreement, subject to force majeure conditions/reasons, beyond the control of the opposite party, it was to deliver physical possession of the unit, within a period of 30 months i.e. 24 months plus (+) 6 months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.3 i.e. latest by 07.03.2014.
Admittedly, possession of the unit, in question, was not even offered to the complainant, by the stipulated date, or even by the date, the instant complaint was filed or even till date. Even, in the written version, the opposite party, frankly admitted, that possession of the unit, in question, could not be offered to the complainant, for want of construction and development work at the site, on account of the reasons beyond its' control i.e. on account of force majeure circumstances. However, the force majeure circumstances, which have been claimed by the opposite party, for not starting development and construction work, at the site are, delay in sanction of layout plans by the Competent Authorities; delay in grant of NOC from the Irrigation Department; delay in clearance and delayed grant of licence for additional land measuring 10.594 acres plus 18.343 acres, by the Competent Authorities, as the area was situated in a squatted small pockets; delay in approvals for environment clearance by the Competent Authorities; and also stay on construction on the land, in question, granted by the Hon'ble Supreme Court of India, in the case of case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, which was finally vacated on 12.12.2012.
Now here, the question arises, as to whether, the aforesaid circumstances, encountered by the opposite party, can be termed as force majeure circumstances, for non-development & construction work at the site and non-delivery of possession of the units, by the stipulated date or not.
First coming to the plea taken by the opposite party regarding delay in sanction of final lay-out plans by the Competent Authorities, it may be stated here that the said plea does not merit acceptance. It was the bounden duty of the opposite party, to get approved the final layout plans, in respect of the project, in question before launching the project, and only, thereafter, accept booking amount from the customers. The complainant including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite party chose to accept booking, on the basis of provisional sanction of the layout plan, by the Competent Authorities, it is to blame to only itself, for the delay, and not the purchasers of units. The purchaser of a plot, who had nothing to do with the sanction of the layout pland, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the plot. Similar view was taken by the National Commission in a case titled as M/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17th Dec 2015. As such, the plea raised by the opposite parties, in this regard, stands rejected.
Now coming to the second plea taken by the opposite party, to the effect that there was delay in grant/issuance of NOC and various permissions/ licence/clearances from various Departments like environment, irrigation, wildlife etc., it may be stated here that the same also does not merit acceptance. In our considered opinion, it is the duty of the builder, to obtain the requisite permissions or sanctions, referred to above, in the first instance, and, thereafter, recover/ accept the consideration money from the purchaser of the flats/plots. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken, in getting such permissions, could have been contemplated by the builder, before issuing the brochure. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/sanctions/ licence to allot plot or to construct building/apartments, invites offers and collects money from the buyers. If the possession of plot, as also the construction of the building/apartment is delayed, because of such reasons, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances. It was also so said by the National Commission, in a case titled as Kamal Sood Vs. DLF Unive rsal Ltd., III (2007) CPJ 7 (NC). In that case also, a similar plea regarding non-grant of various sanctions, approvals and certificates in respect of the DLF project, by the Government concerned, resulting into delay in delivery of possession of the unit, was raised by the Builder. However, the National Commission in that case, while brushing aside the said plea of the builder, observed and held as under:-
"The main questions which require consideration in the appeal are--
(i) Can a builder give alluring advertisement promising delivery of possession of the constructed building/flat to the purchaser/ consumer within the stipulated time, and, subsequently, on his failure, turn around and contend that as governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan, were not given, the delay in construction should not be the ground for grant of compensation to the consumer? And,
(ii) Secondly, whether the consumer should suffer by paying escalation cost due to such delay?
2. In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.
3. Secondly, in such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so, escalation cost is required to be borne by the builder."
The principle of law, laid down in the aforesaid case, is fully applicable to be present case. In this view of the matter, the plea of the opposite party, to this effect, also stands rejected.
So far as the plea regarding grant of stay by the Hon'ble Supreme Court of India, in a case of Ravinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, is concerned, it may be stated here that the said stay was granted on 19.04.2012 and was vacated on 12.12.2012. Otherwise also, the said stay was not specific to the opposite party. Directions were issued to the Government only, not to undertake construction on the land in question. At the maximum taking a stay order, as an order to the opposite party/builder also, benefit of only about 08 months period (stay granted on 19.04.2012 and vacated on 12.12.2012) can be given and not beyond that. It was not clarified by the opposite party, as to what stopped it to start construction and development work before 19.04.2012 and, thereafter, from 12.12.2012, the date when stay aforesaid was vacated. At the same time, as has been held above, if the opposite party did not take requisite approvals/sanctions, from the Competent Authorities, before launching the project, in question, it cannot take shelter under the force majeure clause, to defeat the claim of the complainant.
The pleas taken by the opposite party, claiming force majeure circumstances, referred to above, also deserves rejection, in the face of case titled as Ramesh Chander and another Vs. M/s IREO Fiveriver Private Limited, CC No.99 of 2014, decided on 29.04.2015, qua this very project, decided by the State Commission, Haryana, Panchkula. In that case also, exactly similar excuses were given by the opposite party, for not starting development at the site and non-delivery of possession of the unit, to the purchasers, which were rejected by the State Commission, Haryana, Panchkula, by observing as under:-
"It is not disputed that the builder floated the project and they were bound to obtain all the permissions before they invite applications from public. The builder cannot raise plea that for want of certain clearances, the possession of the plot could not be delivered. When the builder invited the applications and collected huge amount from the public, they cannot delay the allotment/possession of the plot for awaiting clearances. Thus, delay/breach, if any, was on the part of the builder. The builder has not even remotely alleged any default on the part of the complainants"
First Appeal No.473 of 2015 filed against that order by the opposite party before the National Commission, New Delhi, was got dismissed as withdrawn, vide order dated 22.07.2015.
Even otherwise, there is nothing on record, to show that at any stage, when the project was going to be delayed, difficulties now propagated were brought to the notice of the purchasers. There is also nothing on record, to show that at any point of time, the matter was taken up by the opposite party, with the Government Authorities, to expedite the sanctions etc., so that construction/ development at the project could be started. It is therefore held that by not starting the development and construction work at the site and also by not handing over possession of the unit, to the complainant by the stipulated date, mentioned in the Agreement, and even as on today, there was a material violation, on the part of the opposite party, which act amounted to deficiency in providing service and adoption of unfair trade practice.
It is also argued with vehemence by Counsel for the opposite party that construction/development activity was to be carried out by the opposite party, on its own land and since no service was to be provided as alleged, to the complainant, by the opposite party, under the said Agreement, as such, he would not fall within the definition of consumer and thus complaint deserves to be dismissed.
This plea has been refuted by Counsel for the complainant. He has referred to Clause 22.3 of the Agreement, which reads thus:-
"The Company shall carry out the internal development within the IREO Fiveriver project, which inter alia, incudes laying of the roads, water lines, sewer lines, electric lines etc. However, it is understood that external linkages for these services beyond periphery of the IREO Fiveriver project, such as water lines, sewer lines, storm water drains, roads, electricity, horticulture and other such integral services are to be provided by the State Government authorities and/ or the Local Authorities."
It is specifically stated that Company shall carry out the internal development within the IREO Fiveriver project, which inter alia, incudes laying of the roads, water lines, sewer lines, electric lines etc. however, external development thereof, will be the responsibility of State Government. Above provision leaves no doubt that a promise of providing services, referred to above, was also made under Clause 22.3 of the Agreement, alongwith possession of the fully developed plot over which construction can be raised. Nobody will purchase only a piece of land, without promise of development, at such a high price i.e. Rs.25,000/- per square yard. In this view of the matter, it doesn't lie in the mouth of the opposite party to say that construction/ development activity was to be carried out by the opposite party, on its own land and that no service was to be provided, as alleged, to the complainant, under the said Agreement. The plea taken by the opposite party in this regard, stands rejected.
The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount deposited or not. It has been held by this Commission, in preceding part of this order, that the opposite party failed to deliver possession of the unit, in question, to the complainant, on account of its own fault, i.e. by not taking various permissions/sanctions, from the Competent Authorities, well in time, as a result whereof, it was not allowed to develop the area. Even as on today, the opposite party did not give any firm date, to deliver possession of the unit, to the complainant, after development of the project. Already more than about five years have lapsed from the date of allotment, as also about more than two years, from the stipulated date, but possession of the unit is not even in sight, in near future. The complainant has deposited a substantial amount of Rs.23,12,750/- to the opposite party, but still he did not get anything in lieu thereof. The complainant cannot be made to wait for an indefinite period, at the hands of the opposite party. It is therefore held that the complainant is entitled to refund of an amount of Rs.23,12,750/-, deposited by him, towards the unit, in question.
It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is argued by Counsel for the opposite party that interest cannot be granted, as no prayer has been made by the complainant qua that, in the relief Clause. We are not going to accept this argument. It appears that inadvertently only refund of amount has been sought, in the prayer Clause, whereas, no mention has been made therein, qua grant of interest. On this basis alone, interest cannot be declined to the complainant. Averments made in the complaint are to be seen in toto. In the heading of the complaint and also in para no.8 thereof, it is specifically stated as under:-
"Complaint under Sections 12 and 17 of the Consumer Protection Act, 1986 with a Prayer that this Hon'ble Commission may be Pleased to direct the Opposite Party to refund an amount of Rs.2312750/- (Rs.Twenty three Lacs and twelve thousand seven hundred fifty only) deposited by the complainant towards payment of residential Plot No.T72 at "Ireo Fiveriver" Sector 3,4 &4A Pinjore-Kalka Urban Complex, district Panchkula Haryana along with interest 24% p.a. from the date of the payment by the complainant to the opposite party till the date of realization of the total amount in actual.
Para No.8- Moreover, once the purpose of purchasing a plot has been defeated thus the complainant is fully entitled to seek refund of the amount alongwith 24% interest. Therefore the complainant most humbly submits that the present complaint deserves to be allowed and the Opposite Party may kindly be directed to pay Rs.2312750/- deposited by him towards the payment of the above-mentioned plot along with an interest @24% till the date of payment"
To claim compensation, it is further pleaded that the opposite party has acted in a very untruthful and wrong manner. In reply filed by the opposite party, to the contents of para 8 of the complaint, it is stated as under:-
"b) In view of the detailed submissions made herein above, it is submitted that the Opposite Party has always acted in a very fair manner and as such claim of refund that too alongwith highly exaggerated interest @24% is highly unwarranted and squarely against the agreed terms of the said Agreement"
Above said plea taken, makes it clear that the opposite party has also noticed and was aware that the complainant is seeking refund of the deposited amount with interest. It is an admitted fact that an amount of Rs.23,12,750/- was paid by the complainant, to the opposite party. The said amount has been used by the opposite party, for its own benefit. There is no dispute that for making delayed payments, the opposite party was charging heavy rate of interest @15% p.a. as per Clause 7.2 of the Agreement, 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). The complainant, in para no.8 of the complaint, has made a request for refund of the amount deposited, alongwith interest @24% p.a., till realization. In our considered view, the request made for, by the complainant, @24% is on the higher side. The opposite party has also, in para no.8 of its reply on merits, has averred that interest @24% being claimed by the complainant, is highly exaggerated. As such, if interest @13% p.a., on an amount of Rs.23,12,750/-, from the respective dates of deposits, till realization, is granted, that will meet the ends of justice.
No other point, was urged, by Counsel for the parties, concerned.
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party is directed as under:-
To refund an amount of Rs.23,12,750/- to the complainant, alongwith interest @ 13% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant.
Consumer Complaint No. 281 of 2015- Sukhjinder Singh Vs. M/s IREO Fiveriver Pvt. Ltd:-
To refund an amount of Rs.23,12,750/- to the complainant, alongwith interest @ 13% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant.
The payment of awarded amounts (in both the complaints) mentioned at sr.nos.(i) to (iii), shall be made by the opposite party, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, they shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @16% p.a. instead of @13% p.a. from the respective dates of deposits onwards, and interest @ @13% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
However, it is made clear that in a case, where the complainant(s) has/have availed loan facility from any financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him/her (complainant(s).
Certified Copies of this order be sent to the parties, free of charge The file be consigned to Record Room, after completion.
Pronounced.
18.04.2016 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.