State Consumer Disputes Redressal Commission
Ramanjit Kaur Batth vs The Shalimar Estates (P) Ltd. on 2 September, 2015
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 111 of 2015 Date of Institution : 03.06.2015 Date of Decision : 02.09.2015 1. Ramanjit Kaur Batth w/o Sh. Kulbir Singh Batth r/o H.No.851, Phase-7, Mohali, presently at r/o H.No.2153, Phase-7, S.A.S. Nagar (Mohali). 2. Kulbir Singh Batth s/o Sh. Mohinder Singh Batth, r/o H.No.851, Phase-7, Mohali, presently at r/o H.No.2153, Phase-7, S.A.S. Nagar (Mohali). ......Complainants V e r s u s 1. The Shalimar Estates Pvt. Ltd., Corp. Office, SCO No.110-111, Sector 8, Chandigarh, presently at The Shalimar Mall, Sector 5, Panchkula. 2. The Managing Director, The Shalimar Estates Pvt. Ltd., Corp. Office, SCO No.110-111, Sector 8, Chandigarh, presently at The Shalimar Mall, Sector 5, Panchkula. .... Opposite Parties Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: MR. DEV RAJ, PRESIDING MEMBER
MRS. PADMA PANDEY, MEMBER Argued by:
Sh. Ramandeep Singh Pandher, Advocate for the complainants.
Sh. Jaspreet Singh, Advocate Proxy for Sh. Arun Kumar, Advocate for the Opposite Parties.
PER DEV RAJ, PRESIDING MEMBER The facts, in brief, are that the complainants moved an application for registration for allotment of a commercial showroom, in an upcoming shopping mall to be constructed by the Opposite Parties, in Industrial Area, Mohali. It was stated that the complainants intended to use the said showroom, to earn their livelihood, by way of self-employment. The total price of the showroom was Rs.36,00,000/-. Alongwith the application, the complainants deposited a sum of Rs.3,60,000/-, as required by the Opposite Parties, which was duly acknowledged vide acknowledgment slip dated 17.02.2006 Annexure P-3. The said application was accepted by the Opposite Parties, and acceptance-cum demand letter dated 28.02.2006 Annexure P-4, was issued, in favour of the complainants. The complainants were, thus, allotted a showroom of Category 'C', with super area of 400 square feet. It was further stated that as stipulated in the acceptance-cum-demand letter, the complainants had to pay Rs.23,30,000/- (io.e. around 65% of the total amount of Rs.36 lacs) in five installments. The possession was to be delivered within 2 years, from 28.02.2006. It was further stated that the complainants, in total, deposited a sum of Rs.24,37,835/-, up-to 30.09.2008, with the Opposite Parties, on various dates, which included Rs.23,30,000/- towards the price of the aforesaid showroom and Rs.1,07,835/- as interest @15% p.a. for delay in installments.
2. The complainants personally visited the office of the Opposite Parties, and sought clarification, from them, about the schedule of completion of the showroom and handing over of the same, to them. It was further stated that, by the stipulated date i.e. 28.02.2008, no progress regarding the construction of showroom, had been made. In the meanwhile, the complainants came to know about a new advertisement, issued by the Opposite Parties, in a reputed newspaper, about the showrooms of the same shopping mall. As per that advertisement, the scheme commenced on 28.11.2006, and closed on 12.12.2006. According to the said advertisement, a new time frame was fixed for handing over the possession by December 2008, instead of February 2008, which was earlier committed by the Opposite Parties.
3. Another advertisement, by the Opposite Parties, regarding the showrooms of the same shopping mall, appeared in a newspaper, in October 2007. As per their advertisement, in the newspaper, it was mentioned that the possession of showrooms would be handed over within the time period of two years i.e. by October 2009. It was further stated that though a period of two years, expired in February 2008, yet there was no sign of any construction, with regard to the showroom, at the site. The complainants sent notice dated 23.05.2015, to the Opposite Parties, seeking refund of the amount deposited, but to no avail. It was further stated that even till the date of filing of the complaint, no progress, in the construction of showrooms, had been made.
4. It was further stated that neither possession was delivered to the complainants up-to 28.02.2008, nor the refund of amount was made. It was further stated that, thus, the Opposite Parties, misled the complainants, that possession of the showroom shall be delivered to them, within two years, from the date of allotment i.e. by February 2008 and fleeced them of their hard earned money, to the tune of Rs.24,37,835/- but failed to abide by the commitment. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice.
5. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund the amount of Rs.24,37,835/-, alongwith interest @15% P.A. from the respective dates of deposits, till realization; pay compensation, to the tune of Rs.2 lacs, for mental agony and physical harassment; and cost of litigation.
6. The Opposite Parties, put in appearance on 08.07.2015. In their joint written version, they pleaded that the complaint was not maintainable. It was further pleaded that the complainants did not fall within the definition of 'consumers', as they booked the showroom for commercial purpose, for investment purposes. It was further pleaded that the complaint was not maintainable, as an arbitration clause, existed, in the application form, and, in case of any dispute, the matter was to be referred to the Arbitration. It was further pleaded that the complaint involved complicated questions of fact and law, which required examination and cross-examination of the witnesses, by a Civil Court, and, as such, could not be adjudicated upon, by the District Forum, the proceedings, before which, are summary, in nature. It was admitted that the complainants booked the showroom, with the Opposite Parties, and an amount of Rs.24,37,835/-, in all, was deposited by them (complainants), towards the price of the showroom. It was also admitted that possession of the showroom was to be delivered, within a period of two years i.e. upto 28.02.2008. It was stated that the completion of project, was delayed, as the other buyers, like the complainants, had not paid the due instalments, due to which, the Opposite Parties suffered a huge loss, as they had to pay penalty/compensation, to various customers, as per Condition No.12 of the application form. It was further stated that construction of the entire 10 storey building, including two basements, had already been completed, by the Opposite Parties. It was further stated that all outer and inner walls, partitions, plasters, base flooring etc. etc., were also completed, and only finishing work and fittings of electrical and air conditioning works, were in progress.
7. It was further stated that, in case of delay, the Opposite Parties were liable to pay damages/penalty/compensation @ Rs.10/- per sq. feet per month, in terms of Condition No.12 of the application form. It was further stated that delay, in the project, was never in the interest of the Opposite Parties. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
8. The complainants, in support of their case, submitted their joint affidavit, by way of evidence, alongwith which, a number of documents were attached.
9. The Opposite Parties, in support of their case, submitted the affidavit of Mr.R.K. Aggarwal, their Managing Director, by way of evidence.
10. We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
11. The first question, that falls for consideration, is, as to whether, the complainants fall within the definition of consumers or not. It may be stated here, that the complainants, in their complaint, in clear-cut terms, stated that they had booked showroom, in question, for using the same, to earn their livelihood, by way of self-employment. This fact was also corroborated by them, through their joint affidavit, submitted by way of evidence. No evidence was produced by the Opposite Parties, to the contrary, that the showroom, in question, was booked by the complainants, not for the purpose of using the same, to earn their livelihood, by way of self-employment. Even, no evidence was produced by the Opposite Parties, that the complainants are property dealers and are engaged in the sale and purchase of commercial property, with an intention to gain huge profits. No evidence was also produced by the Opposite Parties, that the complainants were running any other commercial activity, on a large scale, and earning huge profits, therefrom. Further in reply by way of affidavit, filed to the interrogatories served upon Mrs. Ramanjit Kaur Batth (complainant No.1), she has categorically testified that she got married with complainant No.2 on 7.3.1998 and has two children, who are studying at YPS, Mohali. She has further testified that she is B.Com and is presently Director, Administration at Doaba Group of Colleges and joined the said post in year 2011 after waiting for few years. She has further testified that she is getting salary from the college and maintain her house from salary. Complainant No.1 also testified that she and her husband are British Passport holders and are staying at Mohali since the year 2002 and at that time, her family shifted permanently to Mohali and both of them were not doing any job. She further testified that with the purpose of starting their business by way of self-employment at Shalimar Mall, so as to meet their family expenses, they purchased the said showroom in the year 2006. She further testified that on account of failure on the part of Opposite Parties in handing over possession of the allotted showroom, complainant No.1 and her husband started looking for other opportunities to earn their living, as the earnings brought from England started depleting. It was further testified that, under such circumstacnes, the deponent joined the above said job in the year 2011 and her husband joined Doaba Amusement Parks. It was further testified that the complainants are residing in their own house in Phase-7, Mohali. Under these circumstances, by no stretch of imagination, it could be said that the complainants did not fall within the definition of consumers. Such a plea, having been taken by the Opposite Parties, in their written version, therefore, being devoid of merit, must fail, and the same stands rejected.
12. The next question, that arises for consideration, is, as to whether, the complaint under Section 17 of the Consumer Protection Act, is not maintainable, on account of the reason, that an arbitration clause exists in the application form. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Act is required to be made, which reads as under ;
"3.Act not in derogation of any other law.--
The provisions of their 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 existence of an arbitration clause, in the document, aforesaid, would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act. Similar principle of law, was laid down, in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi III (1996) CPJ 1 (SC) and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. III (2003) CPJ 9 (SC). In this view of the matter, the submission of the Counsel for the Opposite Parties, being devoid of merit, must fail, and the same stands rejected.
13. There is, no dispute, about the factum, that the complainants booked a showroom, referred to above, with the Opposite Parties. There is also hardly any dispute that the total amount of Rs.24,37,835/- on various dates, towards the price of showroom and delayed interest, was deposited with the Opposite Parties. As per Condition No.12 of Annexure P-2, possession of the showroom was to be given within two years, from the date of issuance of acceptance-cum-demand letter, subject to force majeure circumstances. It was admitted by the Opposite Parties that possession was to be delivered, on or before 28.02.2008. Admittedly, possession of the showroom has not even so far been delivered to the complainants. By not delivering possession of the showroom, up-to 28.02.2008, and even till today, the Opposite Parties failed to abide by their commitment. They, thus, fleeced the complainants, of their hard earned money, by making a false promise. The Opposite Parties, could, thus, not only be said to be deficient, in rendering service, but they also indulged into unfair trade practice.
14. No doubt, a period of two years could be extended due to force majeure circumstances. It was for the Opposite Parties, to clearly explain, in the written reply, as to what were those circumstances, which were beyond their control, as a result whereof, the construction could not be completed, in time, and possession could not be delivered by 28.02.2008. In the written reply, the only plea taken up by the Opposite Parties, was to the effect, that other buyers, like the complainants, of the showroom, in the same project, did not make the payment of instalments, in time, as a result whereof, there was delay in the completion of project. No evidence, in this regard was, however, produced by the Opposite Parties. It may be stated here, that the complainants, in this case, have already deposited a huge amount of Rs.24,37,835/-, towards the price of the showroom. When the complainants found that there was no progress, in the construction of project, at the site, it was not obligatory upon them, to pay the remaining instalments, if any, until a firm assurance had been held out to them, that the project would be completed in the very near future. As stated above, till date, neither the project has been completed, nor possession of the showroom has been delivered to the complainants. Since, the Opposite Parties failed to adhere to the terms and conditions, contained in the brochure Annexures P-1 and P-2, they could not blame the complainants, for not making the payment of remaining sale consideration/instalments. The instalments against the price of the showroom, were to be paid, as depicted in Annexure C-4. The complainants paid complete instalments, as per the schedule depicted in Annexure C-4. The Opposite Parties, therefore, failed to prove, any circumstance, beyond their control, due to which the construction was delayed. In Prasad Homes Private Limited Vs. E. Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), no development work was carried out, at the site. Thus, the payment of further installments was stopped by the complainants. It was, under these circumstances, held that the builder could not be allowed to take shelter, under the agreement clause, to usurp the money, deposited by the complainants. It was further held that the builder cannot forfeit the money, paid by the complainants, on account of their own fault, in not carrying out the development work. Ultimately, the National Commission, ordered the refund of amount with interest. The principle of law, laid down, in Prasad Homes Private Limited's case (supra), is fully applicable to the facts of the instant case. It is therefore, held that the plea, referred to above, taken up by the Opposite Parties, in the written reply, therefore, appears to be false. The said plea was taken up by them, just with a view to cover up their lapse, and to deny the refund of amount, claimed by the complainants. The submission of the Counsel for the Opposite Parties, being devoid of merit, must fail, and the same is rejected.
15. The Counsel for the Opposite Parties, submitted that, they were ready to pay compensation @ Rs.10/- per sq. feet, per month of the super area, for the period of delay as per Condition No.12 of the terms and conditions (Annexure P-2) attached to the application form and, as such, the complainants were not entitled to the refund of amount, alongwith interest and compensation. The submission of the Counsel for the Opposite Parties, does not appeal to reason. If compensation of Rs.10/- per sq. feet, per month of the super area, would justify the claim of the complainants, and no further relief is given that would give unnecessary advantage to the Opposite Parties, because they may still neglect to complete construction for a number of years by simply paying Rs.10/- per sq.ft. per month of the super area i.e. Rs.4,000/- per month. The Opposite Parties must be getting very high returns, on the amount of Rs.24,37,835/- which was deposited with them, from time to time, by the complainants, by investing the same, in some business. Even the modest interest @8% p.a., which the Opposite Parties may be earning on Rs.24,37,835/- comes to Rs.16,252/- per month i.e., much more than the amount which they are ready to pay @ Rs.10/- per sq. feet, per month of the super area. This compensation might have been said to be sufficient, in case, the complainants had prayed for delivery of possession of the showroom. No prayer was made for delivery of possession. Even, at the time of arguments, the Counsel for the complainants, in clear- cut terms, submitted that the complainants only claimed refund of the amount, with interest and compensation. The complainants are, thus, entitled to the refund of amount with interest @15% P.A., from the respective dates of deposits.
16. Although, a period of more than seven years from 28.02.2008, the date committed for handing over possession of the showroom, to the complainants, has lapsed, yet the construction is not complete. No doubt, the Counsel for the Opposite Parties, submitted that the construction at the site, was in full swing. However, such a submission of the Counsel for the Opposite Parties, cannot be taken into consideration. Such a plea may be another excuse, on the part of the Opposite Parties, to delay the refund of hard earned money already deposited with them, by the complainants.
17. The complainants, were not only deprived of the use of their hard earned money, for a long time, which was deposited with the Opposite Parties, but they also suffered a lot of mental agony and physical harassment, as till date not even a single penny, has been refunded to them, nor possession of the showroom has been delivered. The complainants shall also not be able to purchase the showroom, like the one, in question, at the same rate at which it was allotted to them. For such physical harassment, mental agony and escalation in the prices of real estate, the complainants are also entitled to compensation. Compensation in the sum of Rs.1,00,000/- if granted, shall meet the ends of justice.
18. No other point, was urged, by the Counsel for the parties.
19. For the reasons recorded above, the complaint is partly accepted, with costs, in the following manner:-
(i) The Opposite Parties are directed to refund Rs.24,37,835/-, deposited by the complainants, with interest @ 15% p.a. from the respective dates of deposits onwards.
(ii) The Opposite Parties are further directed to pay compensation, in the sum of Rs.1,00,000/- (Rupees One Lac only), for causing mental agony and physical harassment to the complainants, by neither handing over possession of the showroom, by the committed date, nor refunding the amount.
(iii) The Opposite Parties are further directed to pay cost of litigation, to the tune of Rs.15,000/- to the complainants.
(iv) The aforesaid directions, shall be complied with by the Opposite Parties within a period of 45 days, from the date of receipt of a certified copy of the order, failing which, they shall be liable to pay the amount mentioned in clause (i) above, with penal interest @ 18% p.a., from the respective dates of deposits till realization and interest @15% P.A., on the amount mentioned in Clause (ii) above, from the date of filing the complaint, till realization, besides payment of cost of litigation.
20. Certified Copies of this order be sent to the parties, free of charge.
21. The file be consigned to Record Room, after completion Pronounced.
September 02, 2015.
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[DEV RAJ] PRESIDING MEMBER Sd/-
[PADMA PANDEY] MEMBER Ad