State Consumer Disputes Redressal Commission
Parsvnath vs Gk Bhatnagar on 3 September, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH. Appeal Case No. 189 of 2012 Date of institution: 01.06.2012 Date of decision : 03.09.2012 Chandigarh Housing Board, 8, Jan Marg,Sector-9, Chandigarh through its Chairman. ---Appellant Versus 1. G.K.Bhatnagar S/o Sh.I.K.Bhatnagar ; 2. Mrs.Pamela Bhatnagar W/o Sh.G.K.Bhatnagar 3. Parsvnath Developers Ltd. through its Director, SCO -1, First floor, Madhya Marg, Sector-26, Chandigarh. 4. The Director, Parsvnath Developers Ltd., Regd.& Corporate office, 6th Floor, Arunachal Building,19, Barakhamba Road, New Delhi- 110001 . Respondents Appeal U/S 15 of the Consumer Protection Act,1986 Present Sh. Vikas Jain, Advocate for the appellant. Sh.Arun Kumar, Advocate for respondents No.1&2. Sh. Aftab Singh Khara, Advocate, proxy for Sh.Ashwani Talwar, Advocate for respondents No.3&4. Appeal case No.194 of 2012 (Date of institution:7.6.2012) 1. Parsvnath Developers Ltd., Regd.& Corporate office, 6th floor, Arunachal Building,19, Barakhamba Road, New Delhi through its Managing Director. 2. The Director, Parsvnath Developers Ltd. SCO -1, First floor, Madhya Marg, Sector-26, Chandigarh. . Appellants Versus 1. G.K.Bhatnagar S/o Sh.I.K.Bhatnagar ; 2. Mrs.Pamela Bhatnagar W/o Sh.G.K.Bhatnagar Both residents of Kothi No.1139, Sector-36-C, Chandigarh 3. The Chairman, Chandigarh Housing Board, 8, Jan Marg, Sector-9, Chandigarh. .. Respondents. Present: Sh. Aftab Singh Khara, Advocate, proxy for Sh.Ashwani Talwar, Advocate for the appellants. Sh.Arum Kumar,Advocate for respondents No.1 &2 Sh.Vikas Jain, Advocate for respondent No 3 QUORUM : Justice Sham Sunder (Retd), President Mrs. Neena Sandhu, Member
Per Justice Sham Sunder (Retd) , President This order shall dispose of the aforesaid two appeals, arising out of the order dated 30.4.2012(wrongly typed 30.4.2011), rendered by the District Consumer Disputes Redressal Forum-II, U.T. Chandigarh (hereinafter to be referred as the District Forum only), vide which it accepted the complaint, and directed the Opposite Parties(now appellants) as under ;
(i) Refund the amount of Rs.15,85,750/- to the complainants alongwith interest @9% per annum, from the respective dates of deposits, till actual payment.
ii) Pay Rs.7,000/- to the complainants as costs of litigation.
This order be complied with by the Opposite Parties jointly and severally within 45 days from the date of receipt of its certified copy, failing which OPs shall be liable to pay interest @ 18% per annum from the respective dates of deposits, till it is actually paid, besides costs of litigation of Rs.7000/-
2. The Complainants, who are husband and wife, applied for a residential unit, in the project namely Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh of the Opposite Parties, for their personal use and for the use of their family members. The total price of the flat was Rs.51.43 Lacs. The complainants deposited Rs.2,57,000/- alongwith the application form on 21.09.2007. They were allotted residential flat, in category E, bearing No. 201, on second floor, Block E-2, having an approx. 740 sq. ft. of super built area, in the said complex. The Opposite Parties issued allotment letter dated 11.10.2007. The balance amount was to be paid by the complainants, in instalments, as per construction linked payment plan, and, accordingly, the complainants paid Rs.2,57,300/- vide cheque dated 30.10.2007 and Rs.10,71,450/- vide cheque dated 30.11.2007. In all, the complainants paid a sum of Rs.15,85,750/- and after the receipt of said amount, the Opposite Parties executed a Flat Buyer Agreement on 14.3.2008. According to the Development Agreement dated 06.10.2006 , the construction of the flats was to be completed by the Developer within 36 months, from 6.10.2006. It was further stated that the complainants visited the spot in the first week of July,2011, and found that Opposite Parties No.1 & 2, failed to make any development, at the site. It was further stated that dissatisfied with the act and conduct of the Opposite Parties, the complainants sought refund of the amount of Rs.15,85,750/- alongwith interest, but to no avail. It was further stated, that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by them.
3. Opposite Parties No.1 & 2, in their joint written version, admitted the factual matrix of the case. It was admitted that the basic price of the flat allotted to the complainants was Rs.51,43,000/-. It was also admitted that the amount of Rs.15,85,750/- was deposited by the complainants, by way of instalments. It was stated that the Chandigarh Administration was desirous of developing residential, commercial and other related infrastructure facilities, as an integrated project, at Rajiv Gandhi Chandigarh Technological Park, in Chandigarh.
It was further stated that immediately after signing of the Development Agreement dated 6.10.2006, between the Opposite Parties , the Chandigarh Housing Board handed over 123.79 acres of land to Opposite Parties No.1&2, which the said Board claimed to be unencumbered, though, in fact, it was not unencumbered.
It was further stated that in January,2007, Opposite Parties No.1&2, commenced erection of fencing, around the said land, when the Haryana Government claimed ownership over a part of the same and , as such, they (Opposite Parties No.1&2) were stopped from carrying on their activities. On 9.2.2007, the Chandigarh Housing Board informed Opposite Parties No.1&2, that the dispute had been resolved. Believing the assurance given by the Chandigarh Housing Board, Opposite Parties No.1&2, once again commenced the erection of fencing. On 15.2.2007, Opposite Parties No.1&2, were surprised, when the Haryana Government, again raised objection, stating that the dispute had not been resolved. It was further stated that the alternate and revised demarcated land which was offered to the answering Opposite Parties, by the Chandigarh Housing Board, included the land belonging to the Forest Department, on which there existed more than 200 full grown trees, and restrictions were imposed, by the Forest Department, with regard to the felling of the same, and use of this land for the project. It was further stated that since possession of the entire unencumbered land of the project, was not handed over to Opposite Parties No.1 & 2, the construction could not be started, as it was an integrated project. It was further stated that a period 36 months, for the completion of project, was to commence, from the date, when possession of the entire unencumbered land of the project, was to be handed over to Opposite Parties No.1 & 2, which stage never arrived . It was further stated that, under these circumstances, Opposite Parties No.1 & 2, were not at fault, in completing the construction. It was further stated that Opposite Parties No.1 & 2, had not abandoned the project. It was further stated that even the dispute, has been referred to the arbitrators, and their decision is still awaited and, as such, the District Forum had no jurisdiction to entertain and decide the complaint. It was further stated that, under these circumstances, if the complainants wanted the refund of amount, already deposited, they could only be refunded Rs.13,28,600/-, after deduction of 5% of the basic price of the flat i.e. 2,57,150/- as per clause 5(a) of the Flat Buyer Agreement. It was denied that Opposite Parties No. 1 & 2, were deficient, in rendering service, or indulged into unfair trade practice.
4. Opposite Party No.3, in its separate written version, admitted the factual matrix of the case. It was stated that, as per the flat buyer agreement, Opposite Party No.3, was only to provide the land to Opposite Parties Nos. 1 & 2. It was further stated that the whole project was to be constructed by the Developers, as per schedule, mentioned in the agreement, and, in the event of non- performance of their part of the obligation, they were liable to refund the amount, alongwith interest etc. It was further stated that the Developers, Opposite Parties NOs.1 & 2, were to pay the bid price of Rs.821.21 crores in six quarterly instalments, from the date of signing of the Development Agreement dated 6.10.2006, against which they deposited only Rs.516.53 crores and the balance bid price is due to be deposited. The Developer, had failed to carry out the development of the project, as per the terms and conditions of the Development Agreement, and had stopped all the activities, at the project site, including the stoppage of payment of the bid price. It was further stated that on asking the Developers to pay the balance bid price, they raised certain issues for which arbitration proceedings are going on. It was further stated that the Developers were solely responsible, for constructing the residential units, within the stipulated period, and delivering possession of the flat, to the complainants. It was admitted that the construction was to be completed within 36 months from 6.10.2006, the date, when the Development Agreement was executed between the Opposite Parties.
It was further stated that, in view of the Escrow Agreement, executed between the Opposite Parties, in case of refund to the buyers, the liability of the Chandigarh Housing Board was to the extent of 30% only. It was denied that Opposite Party NO.3, was deficient, in rendering service, or it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
5. The parties led evidence, in support of their case.
6. After hearing the Counsel for the parties , and, on going through the evidence and record of the case, the District Forum, passed the order, in the manner, referred to, in the opening para of the instant order.
7. Feeling aggrieved, the aforesaid two appeals, one by Chandigarh Housing Board/Opposite Party No.3, and the second by Parsvnath Developers Ltd. & another appellants/Opposite Parties No.1 & 2, for setting aside the impugned order, were filed.
8. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
9. The Counsel for Chandigarh Housing Board, appellant/Opposite Party No.3, in Appeal Case No.189/2012, submitted that, it was the responsibility of the Developers to construct the flats and deliver possession thereof within 36 months from 6.10.2006, the date when the Development Agreement between the Opposite Parties, was executed. He further submitted that, as per clause 9( c)of the Flat Buyer Agreement, on account of non-delivery of possession, within the prescribed time, compensation indicated therein, could only be awarded against the Developers. He further submitted that even the possession of the remaining project land, to the extent of 1.3 acres was handed over to the Developers on 1.2.2008. It was further submitted that according to Article 5 of the Escrow Agreement, in case of refund, the liability of Opposite Party No.3 was limited to the extent of 30% only. He further submitted that a sum of Rs.4,75,725/-, being 30% of principal amount, has already been refunded to the complainants through pay order No. 235915 dated 23.12.2011 sent vide letter dated 26.12.2011. It was further submitted that the appeal be accepted and the order of the District Forum be set aside.
10. The Counsel for Parsvnath Developers Ltd. and another, appellants/Opposite Parties in Appeal No.194/2012 submitted that, till date the Chandigarh Housing Board, had not handed over the possession of the entire unencumbered land, required for the project, in question. He further submitted that it was, under these circumstances, that the construction of the project could not be undertaken and the possession of flat could not be delivered, as it was an integrated project. He further submitted that the appellants have not abandoned the project. He further submitted that the complainants were only entitled to the refund of amount, after deduction of 5% of the basic price, in view of the provisions of clause 5(a) of the Flat Buyer Agreement. He further submitted that the penal interest awarded by the District Forum, is on the higher side. He further submitted that the impugned order of the District Forum, being illegal, is liable to be set aside.
11. The Counsel for respondents No.1 & 2/complainants, submitted that the order of the District Forum is legal and valid.
12. The first question, that arises for consideration, is, as to within which period the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants applied for the allotment of a flat. They were allotted a flat. They deposited Rs.15,85,750/- through various instalments, towards the price of flat, which was allotted to them, as admitted by the Opposite Parties. Clause 9(a) of the Flat Buyer Agreement annexure R1/2, dated 14.3.2007, referred to above, which is relevant, for answering the question, posed at the outset of this paragraph, reads as under ;
Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.
13. The plain reading of Clause 9(a) of the Flat Buyer Agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the Development Agreement dated 06.10.2006 annexure R-1/1. The time could be extended, in terms of the Development Agreement dated 6.10.2006, subject to force majeure, and the circumstances, beyond the control of the Developers. Opposite Parties No.1 & 2 admitted, in their written reply that, in the first instance, possession of the entire project land was handed over to them by Opposite Parties No.3, and when the fencing was being done, the Haryana Govt. raised dispute with regard to the ownership of a portion of the land. It is further the case of Opposite Parties No. 1 & 2, that when that dispute was resolved, and in lieu of the disputed portion of the land, possession of some other land was given to them, the same was discovered to be that of the Forest Department. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of the residential units, could not be undertaken, on the remaining land, which constituted a major portion of the project land, and with regard whereto, there was no dispute, whatsoever. No doubt, the Counsel for the appellant in Appeal Case No.189/2002, submitted that the possession of the remaining 1.3 acres of the project land was also handed over to respondents No.3 & 4 on 1.2.2008. However, no evidence in this regard, was produced, in the District Forum. Therefore, it was not, on account of the circumstances, beyond the control of the Developers, that the delay was caused, in the construction of residential units . The Developer also could not take shelter of force majeure clause. No document was produced by Opposite Parties No.1 & 2, that any restriction was imposed by any Court or Authority upon them, as a result whereof, they could not raise construction of the residential units, in time. Even, it was not proved, that there was delay, in the grant of environmental clearance. Opposite Parties No.1 & 2, without first confirming the clear title of the land, over which the project was to be developed, started booking the flats and allotting the same to the prospective buyers, by fleecing them of huge amounts by making misleading statement, that the construction of residential units will be complete within 36 months w.e.f. 6.10.2006. Even long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Parties No.1 &2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009.
14. The next question, that arises for consideration, is, as to whether the complainants were entitled to the refund of amount, deposited by them, with interest or not ? Clause 9(d) of the Flat Buyer Agreement annexure R1/2 which is relevant, to answer this question, reads as under;
9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.
15. The complainants deposited instalments, in time, with the hope of getting possession of the flat allotted to them, within a period of 36 months from 10.6.2006, but all their hopes were dashed to the ground, when they found that even by the year 2011, not even a single brick had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option with the complainants, in such circumstances, was to ask for the refund of the amount. The plain reading of Clause 9(d) extracted above, reveals that if the Developer, for whatever the reasons may be, fails to deliver the residential unit to the buyer, the Developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable, on the date of refund. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the entire amount, with interest, as provided under Clause 9(d) of the Agreement, referred to above. The complainants were, thus, entitled to the refund of the amount of Rs.15,85,750/-
(out of which amount of Rs.4,75,725/- being 30% of principal amount has already been paid by the appellant in Appeal Case No.189 of 2012 to the complainants on 26.12.2011) with interest, at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above, from the date of deposit till realization, but not @ 9% P.A. as granted by the District Forum. The order of the District Forum deserves to be modified to this extent.
16. Coming to the submission of the Counsel for Opposite Parties No.1 & 2, that since there was breach of Clause5(a) of the Flat Buyer Agreement, by the complainants, they were entitled to the refund of the amount deposited by them, only after deduction of 5% of the basic price of the flat ,it may be stated here, that such an argument advanced by the Counsel for Opposite Parties No.1 & 2, is misconceived. Clause 5(a) of the aforesaid Agreement C/2 , reads as under ;
5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.
17. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, was the essence of the Agreement and if the payment was not made, within the stipulated period, or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement was liable to be cancelled and the amount was to be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in making the payment of instalments, or violation of any other term and condition of the Agreement aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the Opposite Parties, that the payment of instalments was made by the complainants, as and when the same fell due. There was no delay, in making payment of instalments, towards the part price of the flat, on the part of the complainants. Since, after the payment of the aforesaid amount, and expiry of the period of 36 months, from 6.10.2006, not even a single brick had been laid, the complainants were left with no other alternative, than to ask for the refund of amount. There was also no breach of any other term and condition of the Agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of the entire amount, deposited by them. The District Forum was also right, in holding so. The findings of the District Forum, in this regard, are affirmed. The submission of the Counsel for the Parsvnath Developers & another appellants, in this regard, being without merit, must fail, and the same stands rejected.
18. The District Forum granted penal interest @ 18% p.a., in the event of non-compliance of the order within 45 days. It may be stated here, that penal interest @ 18% awarded, on account of non-compliance of its order, within 45 days, is also on the higher side. In our opinion, penal interest @ 12% p.a., on account of non-compliance of the order, could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification.
18. Although, the dispute interse the Opposite Parties i.e. Parsvnath Developers Ltd. and the Chandigarh Housing Board, as per clause 18 of the Escrow Agreement R-1/2 dated 1.06.2007, executed amongst them, and the State Bank of India has already been referred to the Arbitrators, yet the jurisdiction of the Consumer Fora, was not barred. With a view to resolve the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986 is made, which reads as under ;
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.
Section 3 of the Act is worded, in widest terms, and leaves no manner of doubt that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being in force. The mere fact that the other remedy of resorting to the arbitration proceedings, as per Agreement annexure R-1/2, has been availed of by the Opposite Parties, that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. The submission of the Counsel for the Parsvnath Developers Ltd. appellants, in appeal NO.194 of 2012, being devoid of merit is rejected.
19. For the reasons, recorded above, both the aforesaid appeals are partly accepted, with no order as to costs, with the following modifications ;
(i)Respondents No.1 & 2/Opposite Parties No.1 &2 in Appeal Case No.189/2012 and appellants in Appeal Case No.194/2012 are held liable jointly and severally to refund the amount of Rs.11,10,025/- (Rupees eleven lacs ten thousands twenty five) (being 70% of the principal amount) deposited by the complainants alongwith interest at the SBI Term Deposit rate, applicable on the date of refund (instead of 9% P.A. granted by the District Forum) from the respective dates of deposits, till realization, as per Clause 9(d) of the Flat Buyer Agreement and the Development Agreement.
(ii) Appellant/Opposite Party No.3 in Appeal Case No.189/2012 , is held liable to pay interest to the complainants at the SBI Term Deposit rate (instead of 9% P.A. granted by the District Forum), on the amount of Rs.4,75,725/- (being 30% of the principal amount) from the respective dates of deposits till 26.12.2011 as applicable on that date(26.12.2011), as per Clause 9(d) of the Flat Buyer Agreement dated 14.3.2007.
(iii) the direction of the District Forum regarding the grant of penal interest @ 18% p.a. on non-compliance of the order within 45 days, is modified, and instead the Opposite Parties, are ordered to pay penal interest @ 12% p.a. on the payable amounts, on account of non-compliance of the order, within the period stipulated by the District Forum.
(iv) the remaining relief of costs granted by the District Forum, shall remain unaltered.
20.. Certified Copies of this order be sent to the parties, free of charge.
21. The file be consigned to the Record Room, after compliance .
Sd/-
Announced (JUSTICE SHAM SUNDER)(Retd.) September 3,2012 President Sd/- ( NEENA SANDHU) *Js Member STATE COMMISSION Appeal Case No.189/2012 Present: Sh. Vikas Jain, Advocate for the appellant.
Sh.Arun Kumar, Advocate for respondents No.1&2.
Sh. Aftab Singh Khara, Advocate, proxy for Sh.Ashwani Talwar, Advocate for respondents No.3&4.
Dated the ___________ ORDER Vide our detailed order of the even date, recorded separately, this appeal has been partly accepted, with no order as to costs, with some modifications depicted therein.
(NEENA SANDHU) (JUSTICE SHAM SUNDER)(Retd) Member President STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH.
Appeal Case No. 194 of 2012Date of institution: 7.6.2012 Date of decision : 03.9.2012
1. Parsvnath Developers Ltd., Regd.& Corporate office, 6th floor, Arunachal Building,19, Barakhamba Road, New Delhi through its Managing Director.
2. The Director, Parsvnath Developers Ltd. SCO -1, First floor, Madhya Marg, Sector-26, Chandigarh.
. Appellants Versus
1. G.K.Bhatnagar S/o Sh.I.K.Bhatnagar ;
2. Mrs.Pamela Bhatnagar W/o Sh.G.K.Bhatnagar Both residents of Kothi No.1139, Sector-36-C, Chandigarh
3. The Chairman, Chandigarh Housing Board, 8, Jan Marg, Sector-9, Chandigarh.
..
Respondents.
Present: Sh. Aftab Singh Khara, Advocate, proxy for Sh.Ashwani Talwar, Advocate for the appellants.
Sh.Arum Kumar,Advocate for respondents No.1 &2 Sh.Vikas Jain, Advocate for respondent No 3 QUORUM : Justice Sham Sunder (Retd), President Mrs. Neena Sandhu, Member Per Justice Sham Sunder (Retd) , President This appeal has been partly accepted, with no order as to costs, in terms of our detailed order of the even date, recorded separately, in connected Appeal case bearing No.189 of 2012 titled as Chandigarh Housing Board Vs G.K.Bhatnagar & Ors. A copy of that order be placed on this file, which shall form part of this order.
2. Certified Copies of this order be sent to the parties, free of charge.
3. The file be consigned to the record room.
Sd/- sd/-
(NEENA SANDHU) (JUSTICE SHAM SUNDER) (Retd) Member President