State Consumer Disputes Redressal Commission
Renu Khanna vs M/S Emaar Mgf Land Private Ltd. on 24 September, 2019
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 73 of 2018 Date of Institution : 16.02.2018 Date of Decision : 24.09.2019 Renu Khanna W/o Sh.Sandeep Khanna, R/o House No.138, Sector 10, Panchkula. ......Complainant V e r s u s M/s Emaar MGF Land Private Limited (Mohali Hills), Site Office: - Sector 105, Landran-Banur Road, Opposite Reliance Petrol Pump, Mohali-160061, through its Managing Director/Director/Authorized Representative. IInd Address:- M/s Emaar MGF Land Private Limited, ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001, through its Managing Director/Director/Authorized Representative. Shravan Gupta, Director/Managing Director/Chief Managing Director/Authorized Representative of M/s Emaar MGF Land Private Limited, ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001, through its Managing Director/Director/ Authorized Representative. ....Opposite Parties Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MRS. PADMA PANDEY, MEMBER.
MR. RAJESH K. ARYA, MEMBER.
Argued by: Sh.Sandeep Bhardwaj, Advocate for the complainant.
Sh.Ashim Aggarwal, Advocate for the opposite parties.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT It is an unfortunate aspect of this case that the opposite parties were not competent to sell plots/units and to collect money from the prospective buyers in respect of their project named 'Augusta Park', Mohali Hills, Sector 109, SAS Nagar, Mohali, Punjab, (in short the project), as they were not in possession of necessary permissions/approvals from the Competent Authorities, especially from the Forest Department.
It is the case of the complainant that in the year 2008, she came across the alluring advertisements made by the opposite parties, with regard to the said project. On meeting, the representative of M/s Emaar MGF Land Private Limited (in short the Company), they allured her to purchase a plot for the purpose of her residence. In her complaint, it has been specifically pleaded in para nos.6 to 9 as under:-
"That the complainants requested OPs No.1 and 2 to show the site where the plot is located. However, they were shown a chunk of land in the said project, on the map/chart of the site/project, pertaining to Sector 109, Mohali Hills, Mohali, Punjab. It was assured to the complainant that OPs No.1 and 2 possessed all necessary approvals/sanctions and that physical possession of the plot, in Sector 109, Mohali Hills, Mohali, Punjab, will be delivered within two years from the date of booking.
That believing the assurances made by OPs No.1 and 2, the complainant moved an application for allotment of a plot measuring 500 square yards in Augusta Park, Sector 109, Mohali Hills, Mohali, Punjab. It is relevant to mention here that the opposite parties received an amount of Rs, 17,25,000/- on 10.04.2008 towards the booking amount, allotment and 1st installment amounting to Rs. 2,87,500/- without entering into agreement as such the opposite parties acted in contravene to the provision of PAPR Act. The copy of the receipt dated 10.04.2008 and 10.04.2008 is placed on record as Annexure C-1and C-2.
That thereafter the opposite parties allotted a plot bearing no.81, in Augusta Park, Sector 109, @Rs.11500/- per square yards was allotted. In the said provisional letter, basic sale price of the plot was mentioned as Rs.57,50,000/-. In addition to that the complainants were also required to Rs.7,50,500, towards External Development Charges. In this manner, the total sale consideration, to the tune of Rs.65,00,500/-was to be paid by the complainant.
That buyers agreement dated 17.04.2008 Annexure C-3 was executed in between the parties as per Clause 8 of the Agreement, subject to force majeure conditions, OPs No.l and 2 were liable to handover the physical possession of residential plot no.81, in favor of the complainant within a period of 2 years but not later than three years i.e. by 16.04.2010"
Furthermore, in para no.12 it has been pleaded as under:-
"That to the utter shock of the complainant about the verification of the late development and non-sanctioning of permissions and approval, the complainant came to know from the similar located allottees that the entry points of the said sector (109) in which the plot is located, were sealed/fenced by the Govt, of Punjab, Forest Department which fact was never disclosed to the complainant by the opposite parties. This fact is further fortified from the information obtained by similar located allottees, under the Right to Information Act 2005, from the Government of Punjab, Forest Department, in the matter. The complainant was shocked to see and read the information dated 05.05.2015 Annexure C-6, wherein the Government of Punjab, Forest Department, SAS Nagar, Mohali, which is the Controlling Authority of OPs No.l and 2, in unequivocal terms intimated that:-
"...All the entry points of Sectors 109, 108 and 105 relating to the project of M/s Emaar MGF Land Ltd. (Mohali Hills) have been sealed/closed by fencing spike wires and digging trenches.
All the above said sealing/fencing has been done and the trenches have been dug as the User Agency has not been granted approval under FBAS-1980 from the Government of India.
The said entry points would be reopened only after the necessary approvals are granted.
However in respect of Sector 109, it is intimated that under IFA-1927, Rule 29, 33 and 66 and also violation of order dated 12.12.1996 of the Hon'ble Supreme Court of India, a case has been filed on 03.07.2012 which is pending adjudication before the Kharar Court Photocopies of the said case are attached."
The complainant has further pleaded that despite the fact that it was promised by the opposite parties, vide clause 8 of the agreement dated 17.04.2008 (Annexure C-3) that possession of the plot, in question, will be delivered latest by 16.04.2011 i.e. within a maximum period of three years from the date of the execution of the said agreement, inspite of the fact that they were not having necessary permissions/licence, especially from the Forest Department to launch or to sell the project.
It is her further case that because there was no development at the project site, as such, she stopped making further payments to the Company. However, to her utter shock, the opposite parties vide letters dated 24.08.2017 and 30.11.2017 (Annexure C-4 colly.), cancelled the allotment of the plot, in question, and sent a cheque in the sum of Rs.2,87,500/- after forfeiting the amount of Rs.17,25,000/- out of the deposited amount of Rs.20,12,500/-. The said cancellation letter was challenged by the complainant, by way of writing letter dated 05.12.2017 (Annexure C-5), whereby the cheque of Rs.2,87,500/- was returned to the opposite parties and request was made by her to refund the entire deposited amount of Rs.20,12,500/- alongwith interest @15% p.a. but of no avail. It is further case of the complainant that even the size of the plot, in question, was arbitrarily increased from 500 square yards to 750.42 square yards. Since no prior consent had been obtained from the complainant for the increase, as such, the said fact had also been challenged by her, in the letter aforesaid. By placing reliance on information obtained by similarly located allottees, under the Right to Information Act, 2005 (in short the RTI), in respect of the project, in question, the complainant asserts that the opposite parties were not in a position to launch, sell and deliver possession of the plot, in question, by the committed date or even thereafter, as they have not obtained necessary permissions/licence. When the opposite parties did not pay any heed to her request, as such, she filed this compliant, with following prayer:-
"(i) To refund the amount of Rs.20,12,500/- deposited by the complainant, from the respective dates of deposits till realization, along with interest @15% from the date of deposit, till realization.
(ii) To pay compensation of Rs.2 lacs, on account of mental agony, physical harassment, financial loss, caused to the complainant, and deficiency in service, negligence and adoption of unfair trade practice on the part of OPs No.l and 2.
To pay cost of litigation of Rs.1 lac to the complainant.
Or any other directions, this Hon'ble Commission deems fit"
Her claim has been contested by the opposite parties, on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that this Commission has no pecuniary jurisdiction to deal with the matter; that the complainant did not fall within the definition of "consumer" as defined under Section 2(1)(d) of the Act, because she is the owner of a house at Sector 10, Panchkula, as such, she being investor had purchased the plot, in question, for commercial purpose and the Territorial jurisdiction of this Commission has also been challenged.
On merits, it has been stated in the reply that exemption was granted by the State Government to the Company from applicability of the provisions of Punjab Apartment and Property Regulation Act, 1995 (in short the PAPRA) in 2006 itself; that the opposite parties had launched residential plots in the year 2010; that the Partial completion has also been obtained from the Competent Authorities vide letter dated 16.10.2015; that development works in the area, where the plot, in question, is located have been completed and the complainant was offered possession of the plot vide letter dated 28.07.2015, (Annexure OP/2).
It has also been added in the reply that time was not to be considered as essence of the contract, as the Company had committed only to make its endeavor to complete development works within the time period mentioned in Clause 8 of the agreement. However, in the same breath, it was pleaded that the complaint filed is time barred. It has been averred that the complainant defaulted in making remaining payment, towards price of the said plot, as a result whereof, reminders were sent to her, by the opposite parties and when she failed to do so, allotment thereof, was cancelled on 24.08.2017 and cheque of the remaining amount, after forfeiture of the earnest money, was sent to her.
In para no.12 of the written reply, it has been candidly admitted by the opposite parties that the Forest Department has sealed the entries of the project in question. However, it has been specifically pleaded that now the "No Objection Certificate" has been issued by the Forest Department on 16.01.2018 and as such there is no problem for entry into the project site. Revision of layout plans of the project, in question, a number of times, has also not been disputed. Prayer was made to dismiss the complaint with cost.
The parties have been afforded adequate opportunities to adduce evidence in support of their respective contentions, by way of affidavit and they also produced numerous documents.
We have heard the contesting parties and have gone through record of the case, very carefully.
In this case, following points have been emerged for consideration:-
Whether the arbitration clause in the agreement bars the jurisdiction of this Commission?
Whether this Commission has pecuniary and territorial jurisdiction to entertain this complaint?
Whether the complainant falls under the definition of consumer?
Whether the opposite parties were in position to launch and sell the project in 2008?
Whether time was essence of the contract?
Whether unilateral and suo motto increase in area of the plot by the Company will amount to novation of contract, especially when no consent has been taken from the complainant?
Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?
First, we would like to deal with the objection raised by the opposite parties, to the effect that in the face of existence of provision in the agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that 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/Allotment Letter, 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. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon'ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon'ble Supreme Court of India, vide order dated 10.12.2018.
In this view of the matter, objection raised by the opposite parties, in this regard, stands rejected.
The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide this complaint or not.
According to Section 17 (2) of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to her. We have gone through the record and it is evident that both the payments receipts dated 10.04.2008 (Annexure C-1) in the sum of Rs.17,25,000/- and (Annexure C-2) in the sum of Rs.2,87,500/- were issued by Chandigarh Office of the Company, as the same bear round stamp thereon as "Emaar MGF Land Limited Chandigarh". Not only as above, even the Plot Buyer's Agreement dated 17.04.2008 (Annexure C-3) has been executed between the parties at Chandigarh, as is evident from page 33 thereof. In view of above, it can safely be said that the opposite parties are running their business from the said place at Chandigarh and also the fact that cause of action accrued to the complainant at Chandigarh, as such, this Commission has got territorial jurisdiction to entertain the present complaint, in view of the provisions of Section 17 (2) of the Act. Objection taken by the opposite parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
The next question under our consideration is as to whether the complainant falls within the definition of a consumer, as defined by Section 2 (1) (d) of the Act? It may be stated here that mere bald objection of the opposite parties that the complainant had purchased the plot, by way of investment, to gain huge profits, does not carry any weight and is liable to be rejected. The complainant, in para no.4 of her complaint, supported by her affidavit, has clearly stated that the plot, in question, was purchased by her, for her residential purposes. There is nothing, on the record, that the complainant is a property dealer and deals in the sale and purchase of property, on regular basis. Mere fact that the complainant is living in a house at Sector 10, Panchkula, is not sufficient to debar her from the purview of a 'consumer'. A person cannot be said to have purchased a house for a commercial purpose only by proving that he/she has purchased more than one houses or plots. Separate plots may be purchased by a person for the individual use of his/her family members. A person may buy more than one house as per his requirements. 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. Apart from it, the opposite parties failed to adduce an iota of evidence to recluse the complainant from the definition of 'consumer' under the Act. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided 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. Furthermore, under similar circumstances, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-
" In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015."
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. In the opinion of this Commission, the complainant falls within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties, therefore, being devoid of merit and stands rejected.
Admittedly, the opposite parties have issued numerous advertisements with regard to sale of plots, in the said project. The complainant was also attracted and she agreed to purchase a plot bearing no.81, measuring 500 square yards, in Augusta Park, Sector 109, SAS Nagar, Mohali and made payment of Rs.17,25,000/-, vide receipt dated 10.04.2008 (Annexure C-1), as a result whereof, 'Plot-Buyer's Agreement' dated 17.04.2008 was executed between the parties. Total price of the said plot was fixed at Rs.65,00,500/-. Another amount of Rs.2,87,500/- was paid by the complainant. Thus, the total amount of Rs.20,12,500/- stood received by the opposite parties by April 2008. It is also an admitted fact that as per Clause 8 of the agreement, the opposite parties were liable to handover the physical possession of residential plot no.81, in favour of the complainant, within a period of 2 years but not later than three years from the date of execution thereof i.e. latest by 16.04.2011.
Now the question arises, as to whether, the opposite parties were competent to sell and to deliver possession of the plot, in question, to the complainant? The complainant while placing on record various Informations obtained under the provisions of RTI Act, has contended that everything was concealed by the opposite parties, with regard to the project, in question. She has placed on record RTI information dated 05.05.2015 (Annexure C-6), in respect of the project in question, which reads as under:-
"No.903 Dated 05/05/2015 Subject:- To provide information under Right to Information Act 2005-Baljeet Singh Ref:- Your Letter dated 01.04.2015 The information is being sent as mentioned below in reference to your letter on the subject cited above:-
The entry points of the project of M/s Emaar MGF Land Ltd. (Mohali Hills) for Sector 109, 108 and 105 have been closed by the Forest Department by thorny Fencing wire and digging the trenches.
The above mentioned paths has been closed due to the reason that user agency has not obtained the requisite permission from Government of India for the use of land of Forest Department under FCA 1980 for the paths.
The paths will be opened only after obtaining the final approval from Government of India.
The Case for the paths of Sector 109 is pending adjudication since 03.07.2012 before the Civil Court Kharar for violation of IFA-1927, under Section 29, 33 and 63 and the order dated 12.12.1996 passed by the Hon'ble Supreme Court. The photocopy of the document is attached.
Forest Commissioner Officer Shahibjada Ajit Singh Nagar"
Thus, from the bare perusal of the afore-extracted information transpires that the Company was not competent to sell plots. Rather its project running under the name of M/s Emaar MGF Land Limited has been sealed by the Forest Department, by putting thorny-wire fencing and by digging of the trenches at the entry points. Even the paths leading to the project have been closed due to the reason that requisite permissions/approvals under FCA 1980, were not obtained from the Government of India for the use of land of the Forest Department. The fact regarding sealing of entries of the said project is further corroborated from the letter dated 15.04.2015 (Annexure C-7), sent by the opposite parties themselves, to the Chief Administrator, GMADA, requesting it to take up the matter with the Forest Department, regarding sealing of entry points of the project, in question, as the same had been stated to be "illegal access". It has been clearly mentioned by the opposite parties, in the said letter that "....... we are bound by the agreement to give delivery within time bound manner to our various restive customers, we had applied for grant of access with your good self". This admission of the opposite parties, in the said letter, itself clearly goes to prove that even till that date (15.04.2015), they were not in a position, to deliver possession of the plot(s) to their customers, including the complainant, in the said project, on account of the reason that the entries thereof had been sealed by the Forest Department, stating it to be an "illegal access through the Forest Strip", permission/sanction, whereof has not been obtained by them. It is significant to mention here that the opposite parties have obtained 'No Objection Certificate' (Annexure OP/9) from the Government of India, Forest and Wild Life Protection Department, Punjab, only on 16.01.2018, meaning thereby that till 16.01.2018 they were not even in possession of the passage, in question, whereas on the other hand, the plot, in question, was agreed to sell to the complainant on receipt of substantial amount referred to above, in the year 2008 without any access thereto.
Furthermore, the complainant has placed on record, RTI Information dated 29.04.2014 (Annexure C-8), having been issued by the Greater Mohali Area Development Authority (GMADA), which says that the opposite parties have not even applied for commissioning of sewerage treatment plant, water supply, electricity supply and electricity grid station, in respect of the project named Emaar MGF Land Limited, at Mohali.
Furthermore, the complainant has also placed on record RTI information, (Annexures C-10 to C-13), issued by the Competent Authority, which shows that even lay out plans in respect of the sector, in question, were got revised thrice. The layout plans in respect of Sector 109 alongwith other sectors, were finally got approved only in the year 2013, whereas, on the other hand, the opposite parties agreed to sell the plot in question to the complainant in April 2008. It is further evident from RTI Information dated 26.02.2015 (Annexure C-20), issued by the Punjab State Power Corporation Limited (PSPCL), that no regular electricity connection has been released in the sector, in question.
The aforesaid RTI Information which has been brought on record by the complainant has gone unrebutted by the opposite parties. Not even a single document has been brought on record to prove that the information relating to non-existence of basic amenities such as water, electricity etc.; revision of layout plans on number of occasions till 2013; sealing of project by the Forest Department, is false. Had the said information been false or fabricated, the opposite parties could have obtained certificate from the said Authorities, to say that the same had not been supplied from their Departments but they failed to do so.
Earlier also, a similar question fell for determination, before this Commission, against the same builder i.e. Emaar MGF Land Private Limited, in respect of the same Sector i.e. Sector 109, in a case titled as Dr. Manuj Chhabra Vs. M/s Emaar MGF Land Limited, Consumer Complaint No. 140 of 2015 decided on 05.11.2015. This Commission ordered refund of the amount paid, alongwith interest and compensation, in favour of the complainant, while holding as under:-
"As a matter of fact, possession of the plot was offered only on 09.03.2015, and that too has been held to illegal, as the Opposite Parties have not taken requisite permissions/sanctions from the Forest Department, as a result whereof, entry points of the project have been sealed, stating to be "illegal access", which fact is apparent from the letter dated 15.04.2015, referred to, in earlier part of this order. The Opposite Parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the plot, in question. In our considered opinion, the complainant is entitled to the refund of amount of Rs.64,63,090/-, deposited by him, towards price of the said plot. The complainant was, thus, caused financial loss. Hard-earned money, deposited by the complainant, towards the plot, in question, was utilized by the Opposite Parties, for a number of years. In case of delay, in deposit of installment(s), the Opposite Parties had been charging interest @15% P.A., compounded at the time of every succeeding installment, from the complainant, as per Clause 3 of the Agreement. It is, therefore, held that the Opposite Parties, by neither delivering physical possession of the plot, in question, complete in all respects, by the stipulated date, nor refunding the amount to the complainant, were not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant, is, thus, entitled to the refund of Rs.64,63,090/-, alongwith interest compounded quarterly @15%, from the respective dates of deposits."
In the First Appeal No. 1028 of 2015, filed by the Company, the National Commission vide order dated 19.04.2016, directed the Company to refund the entire amount paid by the complainant alongwith interest @12% p.a. from the respective dates of deposits. Relevant part of the said order is reproduced hereunder:-
"Bearing in mind all these factors, I direct the Appellants to refund to the Complainant the amount of Rs.64,63,090/-, deposited by him, along with interest @ 12% p.a. from the date of each deposit till 15.05.2016, by which date the total amount, in terms of this interim order, has to be paid.................."
As such, it can very well be said that the aforesaid act of the opposite parties is a result of fraud, as defined under Section 17 of the Contract Act, 1872 (in short the Act, 1872) which reads as under:-
"17. 'Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent."
The facts of the case transpire that the opposite parties made false representations, which were materially incorrect and were made in such a way that the complainant, to whom it was made, was entitled to rely upon it and she may act in reliance on it. The complainant is thereby involved in a disadvantageous contract with the opposite parties and suffered financial loss, mental agony and physical harassment. Representations/ statements made at that time were believed to be true. All the facts established that from the very inception there was an intent to induce the complainant to enter into a contract and also intent to deceive her.
It is an admitted fact that the complainant being allured by the advertisements issued by the opposite parties, agreed to purchase a plot in the said project and therefore agreement dated 17.04.2008 (Annexure C-3) was executed between the parties. Infact, the acts committed by the Company are not only fraud but also amounts to misrepresentation of facts. The entire project was not having any access and it was surrounded by the forest land. Even if it is assumed that both the parties were under mistake, as to matter of fact, even then the contract is void under the provisions of Section 20 of the Act, 1872. Apart from it, the object of the Company was to grab the land of the Forest Department, forcibly and unauthorizedly, by opening access to the project, in question, as a result whereof, the Forest Department had put the thorny wire-fencing and dug trenches, to stop entry to the project site. Apart from above, in the present case, the contract is void for uncertainty under the provisions of Section 29 of the Act, 1872.
Now coming to the unilateral increase of area of the plot in question by the Company. Although, the opposite parties were not in a position to sell the plot and offer possession thereof to the complainant yet they played a chicanery by issuing letter dated 28.07.2015, (Annexure OP/2) (i.e. after more than 8 years of booking of plot and more than five years of promised date of possession), vide which it unilaterally and suo motto increased the area of the captioned plot from 500 square yards to 750.42 square yards and also increased its value to Rs.1,02,83,655/- from its original value of Rs.65,00,500/-. It seems that this unilateral act of the opposite parties has been committed to cause great hardship for the hapless complainant, so that she may not be able to file a complaint before this Commission, and, rather, she should approach the National Commission at Delhi, for the purpose. The complainant has considerably pleaded that before increasing area of the plot, the opposite parties failed to take her consent. In fact, this act of the opposite parties has only added salt to the injuries of the complainant. At the same time, it is also held that the act of the opposite parties, in terming the letter dated 28.07.2015 (Annexure OP/2), as offer of possession also, in the absence of development work; basic amenities at the site; and also entry points of the project being sealed/closed by the Forest Department, amounted to deficiency in providing service and also adoption of unfair trade practice. It is therefore held that the alleged offer of possession made by the opposite parties, vide letter dated 28.07.2015 is farce and thus not sustainable, in the eyes of law.
Astonishingly, thereafter, the Company had issued letters dated 24.08.2017 and 30.11.2017 (Annexure C-4 colly.), with regard to cancellation of the plot in question. Alongwith the said letter dated 30.11.2017, cheque no.817327 dated 24.11.2017 in the sum of Rs.2,87,500/- was sent to the complainant. However, the same was returned by her alongwith letter dated 05.12.2017 (Annexure C-5), with the request to refund the entire deposited amount, in the sum of Rs.20,12,500/- alongwith interest @15% p.a. As such, the unilateral cancellation of the said plot by the Company is of no consequence. When the contract was void from its inception due to the fraudulent act and misrepresentation on the part of the opposite parties, in this situation, cancellation/termination of the contract and forfeiture of amount deposited by the complainant cannot be done, in view of the provisions of Section 65 of the Act, 1872. This Section lays obligation of person who has received advantage under void agreement or contract that becomes void. It reads as under:-
"65. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it."
In our considered opinion, viewed from any angle, since the opposite parties were not competent to sell the plot, in question, in 2008 because of want of access to the land and other necessary permissions, referred to above, and infact it has acted in a fraudulent manner by misrepresentation of material facts, the complainant was right in not making further payments and seeking refund of the amount paid alongwith interest. Under above circumstances, the opposite parties were duty bound to refund the entire amount collected from the complainant, alongwith interest. By not refunding the entire amount paid by the complainant and on the other hand, sending a cheque after forfeiting substantial amount of Rs.17,25,000/- out of the deposited amount of Rs.20,12,500/-, the opposite parties adopted unfair trade practices with the complainant.
Now coming to the objection raised by the opposite parties, with regard to pecuniary jurisdiction of this Commission. When the agreement in respect of the plot, in question, was executed between the parties on 17.04.2008, its area was mentioned therein as 500 square yards and total value thereof was fixed at Rs.65,00,500/-. Thus, if the total relief claimed by the complainant keeping in mind the total value of plot as Rs.65,00,500/- plus other reliefs claimed are clubbed together, the complaint filed could be said to be within the pecuniary jurisdiction of this Commission.
However, the opposite parties, with a view to thwart the claim and create hardship for instituting the complaint before this Commission, has unilaterally, without prior consent of the complainant had issued letter dated 28.07.2015 (Annexure OP/2), wherein, area of the plot has been increased from 500 square yards to 750.42 square yards and accordingly, its price was also increased to Rs.1,02,83,655/- from Rs.65,00,500/-. The offer made vide letter dated 28.07.2015 was never accepted by the complainant. The opposite parties had no right to unilaterally increase the area of the plot, with the sole purpose to disallow the complainant from filing complaint before this Commission.
Infact, by raising an objection of pecuniary jurisdiction, on this ground, the opposite parties have taken the plea of novation of the contract. Novation means extinguishment of the terms of an earlier contract and the creation of another between new persons at least one of whom was a stranger to the original contract and it is essential for the principle of novation to apply that there must be the mutual consent of all parties concerned.
However, there is no novation of contract in the eyes of law. Section 62 of the Act, 1872 provides that if the parties to the contract, agreed to substitute the new contract, or to rescind or alter it, only then, the original contract need not to be performed.
Thus, the section provides that the original contract need not be performed in the following cases:-
where the parties to the contract agree to substitute a new contract for it, technically called "novation".
where the parties to a contract agree to rescind it;
where the parties to a contact agree to alter it.
After going the material available on record, this Commission has found that in the present case, the complainant has never given her consent for novation or substitution or alteration of the terms and conditions of the agreement (Annexure C-3). Whereas, on the other hand, she had challenged the unilateral change in the area and price of the plot, in question, vide letter dated 05.12.2017, (Annexure C-5). Thus, there has been no novation of the contract dated 17.04.2008.
In the case in hand, the opposite parties had cancelled the allotment of plot in question, vide letter dated 24.08.2017, as well as vide subsequent letter dated 30.11.2017. In both the letters, the opposite parties, had admitted receipt of amount of Rs.20,12,500/- from the complainant with regard to plot measuring 500 square yards. It is very clear from the said letters that the opposite parties never offered the plot of area measuring 750.42 square yards to the complainant. Rather, it has been established from the letters, referred to above, that the act and conduct of the opposite parties with regard to increase in size of the plot to 750.42 square yards was unilateral. Thus, there has been no novation of the contract, as the said increased area was never accepted by the complainant. Only the executable contract (Annexure C-3), wherein, the total price of the plot, in question, was fixed as Rs.65,00,500/- shall hold the field. As such, in the present case, if total value of the plot, in question, i.e. Rs.65,00,500/-, plus compensation claimed by way of interest @15% p.a. on the deposited amount of Rs.20,12,500/- and other reliefs claimed, are clubbed together, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide this complaint. Objection taken by the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.
In view of above, application moved by the opposite parties, challenging pecuniary jurisdiction of this Commission also stands dismissed.
Undisputedly, the possession of the plot was to be delivered latest by 16.04.2011 and now it is September 2019, still the complainant is empty handed. It is well settled law that non-delivery of possession of plot(s)/unit(s) in a developed project, by the stipulated date, is a material violation on the part of a builder and the allottee is well within his/her right to seek refund of the amount paid. It was so said by the National Commission, in a case titled as Aashish Oberai Vs. Emaar M GF Land Limited, Consumer Case N o . 70 of 2015, decided on 14 Sep 2016, wherein, 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."
The above view taken by the National Commission has been reiterated by it, in the case titled as Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. Relevant part of the said order reads thus:-
"This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment".
The above view taken is further supported by the principle of law laid down by the Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. In that case possession of the unit had been offered during pendency of the complaint after obtaining occupation certificate, though after a delay of 2 years of the stipulated date. The Supreme Court upheld the order of refund of amount paid alongwith interest, passed by the National Commission, while holding as under:-
"In the present case, admittedly the Appellant - Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer's Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent - Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.
In Lucknow Development Authority v. M.K. Gupta, this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a "service" as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.
In Fortune Infrastructure & Anr. v. Trevor D'Lima & Ors., this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.
The Respondent - Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant -
Builder. The Respondent - Flat Purchaser was justified in terminating the Apartment Buyer's Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent - Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation."
In the present case also, there has been an inordinate delay in the matter regarding offering possession of the plot in question as such the complainant cannot be made to wait for an indefinite period for delivery of actual physical possession of the plot, at the whims and fancies of the opposite parties. The complainant is entitled to seek refund of the amount deposited.
It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.20,12,500/- was paid by the complainant towards price of the said plot. The said amount has been utilized by the opposite parties, for their own benefits, but on the other hand, she was not provided anything. 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 so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335. The complainant is, thus, entitled to refund of the amount paid, alongwith interest, from the respective dates of deposits, till realization.
The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units, by the stipulated date, fell for determination before the Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Relevant part of the said order is reproduced hereunder:-
"We have in our Judgment in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65 held that in case the amounts have to be refunded, the Interest Act would apply. In our view, in these matters as it is not possible for us to ascertain what was the prevailing rate of interest, we have been directing payment of interest @ 12% from the date the amounts were deposited till repayment."
Similar view was taken by the Supreme Court of India in H.P. Housing Board Vs. Janak Gupta , (2009) INSC 627, while holding as under:-
"We may note that in Haryana Urban Development Authority vs. Darsh Kumar (2005) 9 SCC 449, this Court has said that in future the Forum/Commission will follow the principles laid down by it in the case of Balbir Singh-I(supra).In the light of the aforenoted decisions, the order of the Commission, awarding interest at the rate of 18% per annum cannot be sustained. We are of the view that having regard to the facts and the circumstances of the instant case, award of interest @ 12% per annum would meet the ends of justice. .........................".
In view of principle of law laid down by the Supreme Court of India, in the cases, referred to, in this paragraph, if interest @12% p.a. is awarded to the complainant, from the respective dates of deposits, till realization, that will meet the ends of justice. At the same time, the complainant is also held entitled for compensation towards mental agony and physical harassment, caused to her, at the hands of the opposite parties.
Counsel for the opposite parties has contended that since it was mentioned in the agreement that the Company shall endeavor to deliver possession of the plot within a period of three years, from the date of signing thereof, as such, time was not to be considered as essence of the contract. The contention raised is devoid of merit. It may be stated here that once a specific period of 3 years, was mentioned in Clause 8 of the Agreement with commitment to complete the development work, now at this stage, the opposite parties cannot wriggle out of the same. Other than this Clause contained in the agreement, there is no Clause, which speaks about the period/date for delivery of possession of the plot, to the complainant. A clear-cut promise was made to deliver possession of the plot, within a maximum period of 3 years i.e. on or before 16.04.2011. It is not the case of the opposite parties, that they encountered any force majeure circumstances, as a result whereof, they were legally entitled for extension of time for delivering possession of the plots to the allottees, including the complainant. As such, time was unequivocally made the essence of contract. In view of above, plea of the opposite parties in this regard stands rejected.
Now coming to the objection raised by the opposite parties, to the effect that this complaint is time barred, it may be stated here that since it has been held above that the opposite parties were not in a position to deliver possession of the plot, in question, to the complainant for want of development and necessary permissions from the Competent Authorities and also at the same time, the letter dated 28.07.2015 upon which reliance has been placed by the opposite parties saying it as possession letter, has been held to be a paper possession, not sustainable in the eyes of law, as such, there was a continuing cause of action in favour of the complainant, to file this complaint, in view of principle of law down, in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), wherein it was held that when possession of the residential units is not offered, there is a continuing cause of action, in favour of the allottee/buyer. Objection raised in this regard, as such, is rejected.
In the present case, since the opposite parties themselves were deficient in providing service and negligent, in not developing the project and delivering possession of the plot, by the stipulated date as promised vide the agreement, for the reasons stated above, the complainant was right in not making further payment demanded by them (opposite parties). It is settled law that the allottees of flats/plots could not be expected to go on making payments to the builder as per the payment plan, when they could discover that it is not in a position to hand over possession of the property in time, for want of construction and development at the project site. It was so said by the National Commission in Rakesh Anand & Anr. Vs M/S. Royal Empires (Royal Minaar), First Appeal No. 1378 of 2016, decided on 09 Apr 2018. Relevant part of the said order reads thus:-
"...........It is clear from these facts that the complainants could not be expected to go on making payments to the OP builder as per the payment plan, when they could discover that the OP builder was not in a position to hand over the possession of the property in time."
Furthermore, the Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, held that if the builder is at fault in not delivering possession of the unit by the stipulated date, it cannot expect the allottee(s) to go on paying instalments to it. Similar view had also been taken by the National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. Under these circumstances, in no way, the complainant can be termed as defaulter, if she had stopped making payments, on few occasions, as alleged by the opposite parties. Objection taken in this regard, stands rejected.
No other point, was urged, by the contesting parties.
For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-
To refund the amount Rs.20,12,500/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.20,12,500/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
To pay compensation, in the sum of Rs.1,00,000/- for causing mental agony and physical harassment and also deficiency in providing service and adoption of unfair trade practice and also cost of litigation, to the tune of Rs.35,000/- to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.1,00,000/- and Rs.35,000/- shall carry interest @12% p.a. from the date of passing of this order, till realization.
However, it is made clear that if the complainant has availed loan facility from any Bank/Financial Institution, for making payment towards part price of the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by her (complainant).
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced 24.09.2019 Sd/-
[JUSTICE RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Sd/-
(RAJESH K. ARYA) MEMBER Rg.