State Consumer Disputes Redressal Commission
Jasbir Singh vs Country Colonisers Private Limited on 24 August, 2020
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Misc. Application No.1906 of 2019
In/and
Consumer Complaint No.378 of 2019
Date of Institution : 07.05.2019
Date of Reserve : 08.07.2020
Date of Decision : 24.08.2020
1. Jasbir Singh son of S.Paul Singh resident of House No.496,
Phase 3/A, Mohali, Punjab.
2. Sweety Bawa wife of Jasbir Singh resident of House No.496,
Phase 3/A, Mohali, Punjab
....Complainants
Versus
1. M/s Country Colonisers Private Limited (Wave Group
Company) through its Chairman Sh.Rajinder Singh Chadha,
having their registered office at P.O. Rayon and Silk Mills
Adjoining Coca Cola Depot, G.T. Road, Chheharta, Amritsar,
Punjab -143105. Email : [email protected]
2. Sh.Rajinder Singh Chadha, Chairman of Country Colonizers
Private Limited (Wave Group Company) having its registered
office at P.O. Rayon and Silk Mills Adjoining Coca Cola Depot,
G.T. Road, Chheharta, Amritsar, Punjab-143105. Email:
[email protected]
3. M/s Country Colonizers Pvt. Ltd., An Wave Infratech Venture
Through its Vice Chairman/Director Sh.Manpreet Singh
Chadha having its office at Site Office at Sector 85, Mohali,
Punjab. Email : [email protected]
4. Manpreet Singh Chadha, Vice Chairman/director of Country
Colonisers Private Limited (Wave Group Company) having its
office at Site Office at Sector 85, Mohali, Punjab.
Email:[email protected]
....Opposite parties
Consumer Complaint No 378 of 2019 2
5. HDFC Bank Ltd., through its Branch Manager having its office
at SCO 153-155, Sector 8-C, Chandigarh. Email :
[email protected]
...... Proforma respondent
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Mr. Rajinder Kumar Goyal, Presiding Member
Mrs.Kiran Sibal, Member Present:-
For the complainants : Sh.Sanjeev Sharma, Advocate For Opp. Parties No.1to4 : Sh.Tejeshwar Singh, Advocate For Opposite party No.5 : Ms.Neetu Singh, Advocate RAJINDER KUMAR GOYAL, PRESIDING MEMBER :
The complainants have filed this complaint, under Section 17 of the Consumer Protection Act 1986, (in short, "the Act"), for issuance of the following directions to the opposite parties:
I. to refund the entire amount of Rs.57,64,422/-
along with interest at the rate of 12% from the date of receipt of the respective amounts till the date of actual realization;
II. to pay Rs.2,00,000/- as compensation on account of highly negligent, deficient service, illegal and unlawful acts and for mental agony and harassment suffered by the complainants. III. to repay the amount of EMI/Interest paid by the complainants to the Bank.
IV. to pay Rs.55,000/- as litigation expenses. Consumer Complaint No 378 of 2019 3 Misc. Application No.2260 of 2018
2. This application has been filed by opposite parties No.1 to 4 under Order VII Rule 11(D) read with Section 151 of CPC and Section 26 of the Consumer Protection Act, 1986 for dismissal of the present complaint being not maintainable in view of Section 79 read with Section 89 of the Real Estate (Regulation and Development) Act, 2016. It is stated that the Commission does not have jurisdiction to adjudicate upon the said dispute, in view of the provisions of the Real Estate (Regulation and Development) Act, 2016 which came into force on 01.05.2017. It was further submitted that RERA is a comprehensive act, enacted to serve the interest of consumers and regulate promoters in the real estate sector.
3. Reply to the application has not been filed by the complainants.
4. We have heard the arguments of the counsel for the parties and have carefully gone through the record.
5. In the present case the project in question was launched by opposite parties No.1 to 4 and the complainants booked one residential floor with the opposite parties in the year 2014. The facts are not in dispute. The main stress of opposite parties No.1 to 4 is only with regard to the maintainability of the complaint before this Commission since the RERA has come into force on the date of filing of the present complaint. It needs to be mentioned that provisions of Sections 2, 20 to 39, 41 to 58, 71 to 78 came into force with effect from 01.05.2016 and the provisions of Sections 3 to 19, 40, 59 to 70 and Section 79 to 80 came into force with effect from Consumer Complaint No 378 of 2019 4 01.05.2017. It is also an admitted fact that the complainants had entered into Residential Floor Allottee(s) Arrangement prior to the coming into force of the RERA and they had also booked the flat/apartment much earlier to the date of enforcement of RERA in the State of Punjab and even in the country, in the year 2014. Having failed to comply with the terms of the said Arrangement the complainants have approached this Commission for the illegal acts, omissions and commissions and adoption of unfair trade practice and various types of deficiencies in service and as such, they being 'consumers' and the opposite parties being 'service providers' have approached this Commission under the C.P. Act. It would be appropriate to reproduce the relevant provisions of Sections 71, 79, 88, 89 of RERA as under:-
"71. Power to adjudicate.-(1) For this purpose of adjudicating compensation under sections 12, 14, 18 and section 19, the Authority shall appoint in consultation with the appropriate Government one or more judicial officer(s) deemed necessary, who is or has been a District Judge to be an adjudicating officer for holding an inquiry in the prescribed manner after giving any person concerned a reasonable opportunity of being heard.
Provided that any person, whose complaint in respect of matters covered under sections 12, 14, 18 and section 19 is pending before the Consumer Disputes Redressal Forum or the Consumer Disputes Redressal Commission or the National Consumer Redressal Commission, established under section 9 of the Consumer Protection Act, 1986 (68 of 1986), on or before the commencement of this Act, he may, with the permission of such Forum or Commission, as the case may be, withdraw the complaint pending before it and file an application before the adjudicating officer under this Act. Consumer Complaint No 378 of 2019 5 (2).....
(3)....."
79. Bar of jurisdiction.-No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.
88. Application of other laws not barred.--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.
89. Act to have overriding effect.-The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force."
Some questions were raised by the 'consumers' with the Ministry of Housing and Urban Property Alleviation, Government of India. Under Frequently Asked Questions (FAQ) at Sr. Nos. 85 and 86 it has been observed as under:-
"85. Are the civil courts and consumer forums barred from entertaining disputes under the Act?
As per Section 79 of the Act civil courts are barred from entertaining disputes (suits or proceedings) in respect of matters which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the Act to determine. However, the consumer forums (National, State or District) have not been barred from the ambit of the Act. Section 71 proviso permits the complainant to withdraw his complaint as regards matters under Section 12, 14, 18 and section 19 from the consumer forum and file it with the adjudicating officer appointed under the Act. Consumer Complaint No 378 of 2019 6
86. Can a complainant approach both the Regulatory Authority/adjudicating officer and the consumer forums for the same disputes?
The laws of the country do not permit forum shopping, thus, an aggrieved can only approach one of the two for disputes over the same matter."
In answer to question No.85 it has been stated that the jurisdiction of the Consumer Fora at District, State or National level has not been barred from the ambit of C.P. Act. Rather Section 71 of RERA provides the 'consumer', whose complaint in respect of matters covered under Sections 12, 14, 18 and Section 19 is pending before the Consumer Disputes Redressal Forum or the Consumer Disputes Redressal Commission or the National Consumer Redressal Commission, established under Section 9 of the C.P. Act, an option to seek permission from the Fora, as the case may be, to withdraw the complaint pending before it and file an application before the adjudicating officer under the RERA.
6. A perusal of Section 79 of RERA reveals that the provisions of said Act bar the jurisdiction of Civil Court. The Consumer Fora under the C.P. Act are not Civil Courts; rather, are performing the judicial functions, which are summary in nature. As such, bare reading of Section 79 of RERA makes it clear that the same is not applicable.
7. In answer to question No.86 it has been stated that the consumer/complainant can approach either of the two authorities i.e. the Consumer Fora under the C.P. Act or the authorities established under the RERA.
Consumer Complaint No 378 of 2019 7
8. It is also relevant to mention that as per Section 3, the provisions of the C.P. Act are in addition to and not in derogation of the provisions of any other law for the time being in force. Similarly Section 71 of the RERA has specifically mentioned about the applicability of the provisions, which falls under Section 12, 14, 18 and Section 19 of the C.P. Act and the first proviso to Section 3 of the RERA provides that the projects, which are ongoing on the date of commencement of the RERA and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of RERA. Section 88 of RERA says that application of other laws is not barred. The provisions of RERA shall be in addition to and not in derogation of the provisions of any other law for the time being in force. The provisions of Section 88 of the RERA and the provisions of Section 3 of the C.P. Act are almost identical, which means both the Fora have jurisdiction to entertain and decide the matter, whichever come in their respective jurisdiction. Section 89 of the RERA provides that the provisions of RERA shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. However, there is no inconsistency between the provisions of the two Central Acts. The C.P. Act is applicable where there is deficiency in service and adoption of unfair trade practice, whereas the provisions of RERA have own field i.e. Section 12, 14, 18 and 19 of RERA. This makes it very much clear that there is no inconsistency in the provisions of Consumer Complaint No 378 of 2019 8 both the Acts. Section 88 of RERA has clarified that application of other laws is not barred. The remedies are additional remedies under the RERA as well.
9. Moreover, by introduction of RERA, the jurisdiction of the C.P. Act is not specifically ousted. The scope and reach of the C.P. Act of 1986 has been considered by the Hon'ble Supreme Court in catena of judgments, some of the important ones are: Lucknow Development Authority v. M.K. Gupta (1994) 1 SCC 243, Fair Air Engineers (P) Ltd. vs. N. K. Modi (1996) 6 SCC 385, Skypay Couriers Limited v. Tata Chemicals Limited (2000) 5 SCC 294, State of Karnataka vs. Vishwabharathi House Building Cooperative Society (2003) 2 SCC 412, CCI Chambers Cooperative Housing Society Limited Vs. Development Credit Bank Limited (2003) 7 SCC 233, Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (2004) 1 SCC 305, H.N. Shankara Shastry Vs. Assistant Director of Agriculture, Karnataka (2004) 6 SCC 230.
10. In M.Lalitha's case (supra), Hon'ble Supreme Court noticed the background, the object and reasons and the purpose for which the Act of 1986 was enacted. After referring to its earlier judgments in M.K. Gupta's case (supra) and N.K. Modi's case (supra), the Hon'ble Supreme Court observed as under:-
"11. The preamble of the Act declares that it is an Act to provide for better protection of the interest of consumers and for that purpose to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and matters connected therewith. In Section 3 of the Act in Consumer Complaint No 378 of 2019 9 clear and unambiguous terms it is stated that the provisions of the 1986 Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
12. From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi-judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi-judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders."
11. In Kishori Lal Vs. Chairman, Employees' State Insurance Corporation 2007(5) Recent Apex Judgments (R.A.J.) 68, the Hon'ble Supreme Court held as under:-
"17.......... The trend of the decisions of this Court is that the jurisdiction of the Consumer Forum should not and would not be curtailed unless there is an express provision prohibiting the Consumer Forum to take up the matter which falls within the jurisdiction of civil court or any other forum as established under some enactment. The Court had gone to the extent of saying that if two different fora have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the power of the Consumer Forum to adjudicate upon the dispute could not be negated."Consumer Complaint No 378 of 2019 10
12. Further in National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. (2012) 2 SCC 506, it has been authoritatively held by the Hon'ble Supreme Court that the protection provided to the consumers under the Act is in addition to the remedies available under any other Statute.
13. Similarly, State Consumer Disputes Redressal Commission Chandigarh, U.T. Chandigarh in Consumer Case No.659 of 2017 (Veena Ghai & Anr. v. Manohar Infrastructure & Constructions Pvt. Ltd.), which was decided along with bunch of similar other cases, vide order dated 28.06.2018, observed that RERA and PAPRA will not debar the jurisdiction of the Consumer Fora in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the opposite parties. It has been held as follows:-
"Further contention was raised by Counsel for the opposite parties that in the face of provisions of the RERA, under which the opposite parties have registered the project, in question, on 15.09.2017, it was not open to this Commission, to entertain and decide the present complaint. He further asserted that sufficient safeguard is provided under the provisions of RERA and if the complainants are feeling aggrieved of any action, on the part of the opposite parties, they may approach under the said Act (RERA) and not under the Act, 1986.
We are not inclined to accept this argument. At the time of arguments, it is very fairly admitted by Counsel for the contesting parties, that the provisions of RERA are prospective in nature. It was also so said by the High Court of Consumer Complaint No 378 of 2019 11 Bombay in the case of NeelKamal Realtors Suburban Pvt. Ltd. and anr. Vs. Union of India and ors. 2018 (1) R.C.R. (Civil) 298. It is on record that under the RERA, the opposite parties got themselves registered their project, only on 15.09.2017. It is also on record that some of the provisions of RERA came into operation on 01.05.2016 and even the remaining of it, in May 2017. In all, the grievance has been raised by the complainants qua wrongful act/mistake done leading to deficiency in providing service and adoption of unfair trade practice, in selling the project by the opposite parties without sanctions/approvals, before coming into existence of RERA. Reading of the provisions of Section 88 of RERA makes it very clear that the same are in addition and not in derogation of the provisions of any other law for the time being in force. Section 79 of the RERA further makes it very clear that jurisdiction of only the Civil Court to entertain a suit or proceedings qua action taken as per the provisions of the said Act, is barred.
It may be stated here that the Consumer Foras under the Act, 1986 despite having some trappings of a Civil Court are not the Civil Courts. As such, the jurisdiction of the Consumer Foras is not debarred, to entertain the complaints filed by consumers, alleging deficiency in providing service, negligence and adoption of unfair trade practice against the opposite parties. Intention of the framers of law has been made clear by the concerned Department i.e. Ministry of Housing and Urban Property Alleviation, Government of India in its website www.mygov.in/group/ministry-housing-and- urban-poverty-alleviation. Under Frequently Asked Questions (FAQ), at Sr.nos. 85 and 86, it was observed as under:-
"85. Are the civil courts and consumer forums barred from entertaining disputes under the Act?Consumer Complaint No 378 of 2019 12
As per section 79 of the Act civil courts are barred from entertaining disputes (suits or proceedings) in respect of matters which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the Act to determine. However, the consumer forums (National, State or District) have not been barred from the ambit of the Act. Section 71 proviso permits the complainant to withdraw his complaint as regards matters under section 12, 14, 18 and section 19, from the consumer forum and file it with the adjudicating officer appointed under the Act.
86. Can a complainant approach both the Regulatory Authority / adjudicating officer and the consumer forums for the same disputes?
The laws of the country do not permit forum shopping, thus, an aggrieved can only approach one of the two for disputes over the same matter."
It was also so said by the State of Punjab in its Official Website Portal rera.punjab.gov.in. The above fact clearly indicates that in the face of provisions of the RERA, any action taken under the provisions of Act 1986 is not debarred. In view of above findings, we can safely say that RERA and PAPRA will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the opposite parties. Further, in another judgment passed by the Hon'ble National Commission passed in Consumer Case No.1764 of 2017 titled as "Ajay Nagpal Vs. Today Homes & Infrastructure Pvt. Ltd." decided on 15.04.2019, wherein it has been held as under:-
"40. From the various decisions of the Hon'ble Supreme Court referred to above, the following principles emerge:- Consumer Complaint No 378 of 2019 13
(i) The Consumer Protection Act, 1986 is a supplement Act and not in derogation of any other Act.
(ii) Any Consumer who is aggrieved by any defect in goods purchased or deficiency in service as also regarding unfair trade practice, can approach the Consumer For a by filing the complaint under the Act. Even a Class Action Complaint is permissible under the Act.
(iii) The Consumer Fora constituted under the Consumer Protection Act, 1986 are not Civil Courts.
(iv) The Consumer Fora can provide for the reliefs as contemplated under Section 14 of the Act.
(v) A Consumer cannot pursue two remedies for the same cause of action. However, if a Consumer has not approached for redressel of its grievance under the particular Statute, the Consumer can approach the Consumer Fora under the Consumer Protection Act. But, if the Consumer had already approached the Authority under the relevant Statute, he cannot simultaneously file any complaint under the Consumer Protection Act.
(vi) Mere availability of a right to redress the grievance
in a particular Statute will not debar the
complainant/ Consumer from approaching the
Consumer Fora under the Act.
(vii) Even though under Sections 14, 15, 18 and 19 of RERA, various provisions have been made which are to be followed by the Developer/Promoters and the rights and duties and the return of amount as compensation as also rights and duties of Allottees, yet same cannot mean to limit the right of the Allottee only to approach the Authorities constituted under the RERA, he can still approach Consumer Complaint No 378 of 2019 14 the Consumer Fora under the Consumer Protection Act.
(viii) Section 71 of RERA which gives the power to adjudicate, does not expressly or impliedly bar any person from invoking the provisions of the Consumer Protection Act. It has also given a liberty to the person whose complaint is pending before the Consumer Fora to withdraw it and file before the RERA authorities.
(ix) Section 79 of RERA only prohibits the jurisdiction of Civil Court from entertaining any suit or proceeding in respect of any matter which can be decided by the Authorities constituted under the RERA. As the Consumer Fora are not Civil Courts, the provisions of Section 79 which bar the jurisdiction of Civil Courts, will not be attracted. So far as to grant injunction is concerned, only that power has been taken away Section 79. But, it does not, in any manner, effect the jurisdiction of the Consumer Fora in deciding the complaints.
Both, the Consumer Protection Act, 1986 and the Real Estate (Regulation and Development) Act, 2016 are supplemental to each other and there is no provision in the Consumer Protection Act, which is inconsistent with the provisions of RERA."
14. In view of law laid down in the above noted authorities, it is held that this Commission is competent to entertain and decide the present complaint and the provisions of RERA do not bar the jurisdiction of the Consumer Fora. Accordingly, the application filed by the opposite parties No.1 to 4 is hereby dismissed. Facts of the Complaint
15. Brief facts, as averred in the complaint, are that the opposite parties launched a luxury project in the name of "WAVE FLOORS" Consumer Complaint No 378 of 2019 15
in Sector 85 and 99, SAS Nagar, Mohali and propagated to provide "Residential Accommodation to its customers" the epitome of distinctive style and assured high quality residential complex. It was also apprised by the opposite parties that the present project (WAVE ESTATE) is a Mega Project consisting of mix of Flats, Villas, Commercial Complexes and a Club House is also coming up in the said vicinity being promoted by them within the prestigious gated community characterized by outstanding levels of comfort, convenience and security. It was assured that the residential project of the opposite parties would be a huge success. It is further averred that believing the aforesaid assurances the complainants, who were looking for a decent residential accommodation/apartment for their own use at Mohali, had approached the opposite parties in February 2014 for purchase of Residential Flat/Apartment. It is further averred that the opposite parties allotted a Residential Floor bearing No.177, 1st Floor, in Sector 85, Block-A Mohali, having saleable super area of approximately 1350 square feet (209.03 square meters) and the Basic sale price of the residential floor under subvention plan was fixed as Rs.60,96,000/-, including EDC charges of Rs.1,30,500/- and Rs.75,000/- towards Club membership, thus, the total price of Residential Floor was fixed as Rs.63,01,500/-. An Apartment Agreement was executed between the complainants and the opposite parties in respect of the above mentioned Flat/Apartment on 16.04.2014 and as per clause 5.1 thereof the possession of the said project and the said apartment was to be delivered within a Consumer Complaint No 378 of 2019 16 period of 24 months with a grace period of 6 months from the date of agreement i.e. not later than 30 months latest by 15.10.2016 failing which as per clause 5.5. thereof the opposite parties were to pay to the allottee compensation calculated at the rate of Rs.5/- per square feet per month on the super area. It is further averred that out of Rs. 63,01,500/-, the complainant paid Rs.57,64,422/- against the demand raised, which is clear from the payment demand notice dated 15.11.2018. The complainants came to know that the layout plan has been changed by the opposite parties without seeking approval from the complainants or its existing customers. Even necessary approvals/permissions to the project were also not granted by the competent authorities and the opposite parties are not going to complete the construction and hand over the possession of the apartment for another one year. The agreed timeline for handing over the possession has already elapsed on 15.10.2016, however, the construction is far from completion. It is further averred that thereafter the complainants repeatedly requested the opposite parties telephonically and also by visiting their site office to refund the amount along with upto date interest but of no use. Due to this act and conduct of the opposite parties in not delivering the possession of the apartment, complete in all respects, along with all the promised amenities or in the alternative in not refunding the amount deposited by the complainants along with interest caused financial loss, mental tension and harassment to the complainant. Alleging deficiency in service and adoption of unfair trade practice on their part the present complaint has been Consumer Complaint No 378 of 2019 17 filed for issuance of above mentioned directions to the opposite parties.
Defence of the Opposite Parties
16. Upon notice, the opposite parties appeared and filed their written statements to the complaint.
17. Opposite parties No.1 to 4 filed their written statement taking preliminary submissions that the present complaint is not maintainable as the complainants do not fall under the definition of 'consumer' as defined in the Act. The complainants have sought to buy an apartment in question for commercial purposes. It has been stated that complainants already own numerous residential units at #76, Roop Nagar, I/F Main Park, Near Gate Hakima, Amritsar and #496 Phase 3/A, Mohali. Apart from the above mentioned addresses, the complainants own another residential unit in Mohali at #606, F.F., Phase-2, Mohali which could be established via Bank Account Statement of the complainant. The above facts clearly show that the complainants have sought to purchase a unit with the answering OP for commercial purposes and not for residential purpose. The present complaint is not maintainable in view of the arbitration clause 13 in the Apartment Allottee(s) Arrangement. The complaint is not maintainable as this Commission does not have the jurisdiction to adjudicate upon the said dispute. The complainants are defaulter in making the payments to the opposite parties within the stipulated period. The complainants availed loan from the HDFC Bank and as per Tripartite agreement the opposite parties No.1 to 4 were to pay the pre-EMI interest. The opposite parties have already Consumer Complaint No 378 of 2019 18 paid Rs.7,53,907/- to the Bank on behalf of the complainants. The complainants have paid only 20% amount and rest of the payment i.e. Rs.45,72,000/- paid by HDFC Ltd.. The complainant was offered possession vide letter dated 15.11.2018. The answering opposite parties have also obtained the requisite Occupancy Certificate. As well as, the opposite parties have also obtained Partial Completion Certificate of an area of 171.557 acres on 12.09.2018. The complainants were required to pay certain amounts which they are not willing to pay. It has been further pleaded that the answering opposite parties No.1 to 4 entered into a Memorandum of Agreement (MoA) dated 03.02.2006 with the Government of Punjab and as per Clause 5(e) thereof, the State Government was to acquire land under the provisions of Land Acquisition Act, 1894 and transfer the same to the answering opposite parties for development. However, the State Government failed to acquire any land for it and, as such, the approved plan of the entire project also shows certain "Critical Area' i.e. the lands, which are not in their possession, due to failure of the State Government. The lands, which are not available with it, form 10% of the total land required for the project, due to which laying of lines for basic services is not complete. The request was made to the Land Acquisition Collector, Greater Mohali, vide letter dated 19.01.2012, requesting the State Government to acquire 23.21 acres of land, which falls within the master plan of the project, but without any result. However, answering opposite parties has managed to enter into a Land Use Agreement with the local farmer, from whose land Consumer Complaint No 378 of 2019 19 an access road has been laid for proper access to the project. Thus, the delay, if any, in the completion of the project is due to inaction on the part of GMADA, which was beyond the control of opposite party No.1. It was contended that there was no time for mandatory completion of construction of the Project under the Apartment Allottee(s) Arrangement. The Commission has got no jurisdiction to entertain and decide the present complaint. In the present case, intricate questions of law and facts are involved and require a great deal of evidence to be led from both the sides, hence is purely within the competency of a Civil Court. On merits, allotment of the unit, in question, in favour of the complainants is admitted, however, the complainants\ had not specified the purpose of the booking of the residential unit in Mohali as they had already numerous residential accommodation in their name. The complainants are in the habit of habitually delaying payments. However, the possession of the apartment is ready to hand over. It is denied that there is any deficiency in service on the part of opposite parties No.1 to 4. Other similar pleas, as raised in preliminary objections, have been reiterated and denying other allegations of the complainants and prayed for dismissal of the complaint with costs.
18. Opposite party No.5, in its written statement, raised preliminary objections that the rights of the parties to the present lis are governed by the Tripartite agreement Ex.OP-5/1. In case of cancellation of the unit or in the contingency of termination of "Residential Floor Allottee(s) Arrangement", opposite party No.5 has the first charge/right to seek apportionment of its dues. As on Consumer Complaint No 378 of 2019 20 09.07.2019, an amount of Rs.43,23,953/- was outstanding towards the total loan amount. On merits, it is submitted that the complainants approached opposite party No.5 for sanctioning of Rs.48,76,800/- as per their request. Out of which Rs.45,75,000/- has been disbursed by the answering opposite party. Dismissal of the complaint qua opposite party No.5 was prayed. Evidence of the Parties
19. To prove their claim, the complainants filed their affidavits along with photocopies of documents i.e. News Article as Ex.C-1, Rent Agreement dated 28.02.2018 as Ex.C-2, Rent Agreement dated 29.01.2019 as Ex.C-3, cheque dated 21.02.2014 as Ex.C-4, Agreement dated 16.04.2014 as Ex.C-5, Tripartite Agreement dated April, 2014 as Ex.C-6, Statement of Account dated 28.02.2019 as Ex.C-7, Interest statements dated 13.03.2019 as Ex.C-8 (colly), Bank Statement showing rent paid as Ex.C-9 (colly), Email dated 04.03.2019 as Ex.C-10, payment demand notice dated 15.11.2018 as Ex.C-11.
20. Opposite parties No.1 to 4 filed the affidavit of Smt. Jaspreet Kaur, Authorized Signatory along with photo copies of documents i.e. Authority Letter as Ex.OP-1/1, Driving License as Ex.OP-1/2, Application for Allotment Letter dated 28.02.2014 as Ex.OP-1/3, Account Statement as Ex.OP-1/3-A, Demand Notices, Reminders, Receipts etc. as Ex.OP-1/4(colly), Account Statement dated 18.07.2019 as Ex.OP-1/4A, Bank Subvention Deduction Detail dated 30.08.2014 as Ex.OP-1/6, Bank Subvention Deduction Detail dated 28.04.2015 as Ex.OP-1/7, Intimation of Possession Letter Consumer Complaint No 378 of 2019 21 dated 15.11.2018 as Ex.OP-1/8, Occupancy Certificate dated 01.11.2018 as Ex.OP-1/9, Partial Completion Certificate dated 12.09.2018 as Ex.OP-1/10, Memorandum of Agreement dated 03.02.2006 as Ex.OP-1/11, Approved Plan as Ex.OP-1/12, Letter dated 19.01.2012 as Ex.OP-1/13, Land Use Agreement dated 14.06.2012 as Ex.OP-1/14, Mohali Master Plan as Ex.OP-1/15, Official Email dated 05.10.2015 as Ex.OP-1/16, Order dated 11.08.2006 as Ex.OP-1/17.
21. Opposite party No.5 filed the affidavit of Aditya Kochar, Assistant Manager dated 09.07.2019 along with photocopies of documents i.e. copy of Tripartite agreement dated 29.04.2014 as Ex.OP-5/1, copy of Loan Statement dated 09.07.2019 as Ex.OP- 5/2, Copy of Home Loan Agreement dated 12.05.2014 as Ex.OP- 5/3.
Contention of the Parties
22. We have heard learned counsel for the parties and have gone through evidence and record carefully.
23. Learned counsel for the complainants vehemently contended that the complainants booked one residential floor with opposite parties No.1 to 4 for their residential purposes. The complainants opted Subvention Scheme as offered by opposite parties No.1 to 4 and availed the housing loan from opposite party No.5, which was sanctioned on 12.05.2014. A "Residential Floor Allottee(s) Arrangement" was executed between the parties on
16.04.2014, as per which the possession was to be delivered to the complainants within 30 months from the date of execution of the Consumer Complaint No 378 of 2019 22 agreement. The complainants against the total sale consideration, paid a sum of Rs.57,64,422/-. However, there was no progress at the site of the project and opposite parties No.1 to 4 and kept on unnecessarily delaying construction, despite receipt of substantial amount from the complainants towards the price of the flat, in question. The complainants are even paying the instalments to the Bank against the loan amount disbursed to opposite parties No.1 to
4. The complainants number of times visited the office of opposite parties No.1 to 4 to take the possession but no offer of possession was ever made to the complainants. When the complainants lost their hope to get the possession in near future then they decided to opt out of the project and seek refund of the amount along with interest but neither the possession was offered nor refund was made. Thus, there is clear-cut deficiency in service and unfair trade practice on the part of opposite parties No.1 to 4. Therefore, the complainants are entitled to all the reliefs, as prayed for in the complaint.
24. Per contra, learned counsel for opposite parties No.1 to 4 vehemently contended that the complainants do not fall within the definition of consumer and bought the housing unit for commercial purposes and not for residential purpose. The complaint is not maintainable before this Commission in view of the Arbitration Clause 13 in the Agreement. Learned counsel for opposite party No.1 further argued that intricate questions of facts and laws are involved in the present complaint and cannot be decided in a summary procedure. It was further contended that there was no Consumer Complaint No 378 of 2019 23 specific period mentioned in the agreement for delivery of possession. They were just to make endeavour to deliver the possession of the unit, in question, within 30 months from the date of agreement. Moreover, the complainants cannot allege any delay on their part, as they themselves failed to pay the due amounts regularly on time. The possession of the said unit has already been offered to the complainants on 15.11.2018. Moreover, the Occupation Certificate has also been obtained on 01.11.2018. The opposite parties are ready with the possession of the residential floor, in question. As such, the complainants cannot allege any deficiency on the part of opposite parties No.1 to 4. Therefore, the complaint is liable to be dismissed with costs.
25. Learned counsel for opposite party No.5 contended that there is no deficiency in service on the part of opposite party No.5, as it just advanced the loan amount in favour of the complainants for making payment of price of the unit, in question, to opposite parties No.1 to 4 under the Tripartite Agreement. In case of cancellation of the unit or in the contingency of termination of the Residential Allottee(s) Arrangement, it has the first charge/right to seek apportionment of its dues. The complaint is liable to be dismissed against it.
Consideration of the Contentions
26. We have given our thoughtful consideration to the respective contentions raised by learned counsel for the parties.
27. First of all, we would like to decide the objection raised by opposite parties No.1 to 4 that the complainants do not fall under Consumer Complaint No 378 of 2019 24 the definition of 'consumer', as defined in the Act, on the ground that he purchased the unit, in question, for commercial purpose in order to earn profits.
28. In this regard, It is relevant to mention that there is no evidence from the side of opposite parties No.1 to 4 to prove that the complainants are indulging in sale/purchase of property for commercial purpose and simple assertion in this regard in the reply of the opposite parties No.1 to 4 is not sufficient to prove this fact. Hon'ble National Commission in M/s IREO FIVERIVER PVT. LTD. v. SURINDER KUMAR SINGLA & OTHERS First Appeal No.1358 of 2016, decided on 29.11.2016, while relying upon its earlier decision in KAVITA AHUJA & OTHERS v. SHIPRA ESTATE LTD. & JAI KRISHNA STATE DEVELOPERS PVT. LTD. & OTHERS Consumer Case No.137 of 2010, decided on 12.02.2015, held the complainant as consumers, observing that the appellant failed to show any cogent evidence, which may indicate that the respondents/complainants or any of them has been indulging in sale purchase of the properties or that the complainant or any one of them had booked the subject plots in the development project undertaken by the appellant with the intention to sell the plot on subsequent date for earning profit. In the instant case also, as already discussed above, there is no evidence led by opposite parties No.1 to 4 to prove that the complainants indulged in sale/purchase of properties or that they purchased the unit, in question, for further sale or for earning profits. Accordingly, the above said objection/contention of opposite parties No.1 to 4 are Consumer Complaint No 378 of 2019 25 rejected and the complainants are held to be 'consumers' as defined, under the Act.
29. Opposite Parties No.1 to 4 took another objection in its reply that complicated questions of law and facts are involved, therefore, this Commission has no jurisdiction to entertain the complaint. In case we go through the pleadings of the parties, the complainant had booked one flat with opposite parties No.1 to 4 and had paid a sum of Rs.57,64,422/- as demanded by opposite parties No.1 to 4. An Agreement was executed between the complainant and opposite parties No.1 to 4 and as per the terms and conditions of the agreement, the opposite parties No.1 to 4 were to deliver the possession within 24 months with an extended period of six months, from the date of execution of the agreement. It is only the interpretation of agreement and then to see whether there is any deficiency in service on the part of the opposite parties? We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission. In this regard, we are fortified by the judgment of 'Dr.J.J.Merchant and Ors. V. Shrinath Chaturvedi' 2002(6) SCC 635, wherein it was held that the State Commission and District Forum are headed by retired High Court Judges and Officers of District Judge level and in our view, this is not such a case which cannot be decided by the 'Consumer Fora' after obtaining evidence and if need be after getting an expert opinion.
30. The further objection raised by opposite parties No.1 to 4 is that this Commission has no pecuniary jurisdiction to entertain and Consumer Complaint No 378 of 2019 26 try the complaint. In this respect, it is relevant to mention that the basic sale price of the flat, in question, is Rs.60,96,000/-, as per Independent Residential Floor Allottee(s) Arrangement Ex.C-5 executed between the parties and against the total sale consideration the complainants have paid a sum of Rs.57,64,422/- to opposite parties No.1 to 4, which is above Rs.20,00,000/- and below Rs.1,00,00,000/-. Therefore, the complaint filed by the complainants is well within the pecuniary jurisdiction of this Commission. Accordingly, the objection raised by opposite parties No.1 to 4 in this regard is rejected.
31. So far as the other objection of opposite parties No.1 to 4 that as per Arbitration Clause-13 of the agreement, Ex.C-4, the matter between the parties is liable to be referred to the Arbitrator, is concerned, it is relevant to mention here that the Larger Bench of the Hon'ble National Commission, vide order dated 13.07.2017, passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh v. EMAAR MGF Land Limited & Anr., also held that an Arbitration Clause in the afore-stated kind of 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, 1996. The Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed against the said order of the Hon'ble National Commission has also recently been dismissed by the Apex Court, vide order dated 13.02.2018. Consequently, the existence of an Arbitration Clause is not a bar to resolution of this dispute by this Consumer Complaint No 378 of 2019 27 Commission. Accordingly, the said objection of opposite parties No.1 to 4 is rejected.
32. Now coming to the merits of the case, admittedly, the complainants purchased the unit, in question, from opposite parties in the manner stated in the complaint in respect of which Residential Floor Allottee(s) Arrangement, Ex.C-5, executed between the complainants and opposite parties No.1 to 4 on 16.04.2014. As per Clause 5.1 of the said agreement, subject to Clause 5.2 and further subject to all the allottee(s) of the said "Apartment" in the said project making timely payment(s), the developer was to endeavour to complete the development of the project in general and the said apartment in particular as far as possible within 30 months, with an extended period of 6 months from the date of execution of the Apartment Allottee(s) Arrangement and/or from the date of start of construction of Group Housing named 'Wave Estate', whichever was later. However, there is no date was mentioned in the agreement as to when the construction was started. Therefore, we infer that the possession was to be delivered within 30 months of the date of the agreement 16.04.2014. In this manner, the possession was to be delivered to the complainants on or before 16.10.2016, which the opposite parties have failed to deliver. As per agreement, the basic sale price of the unit, in question, was fixed as Rs.60,96,000/-, against which, the complainants have already deposited a sum of Rs.57,64,422/-. Further, the complainants as per agreement opted for Subvention Plan and availed a housing loan of Rs.48,76,800/- from opposite party No.5 - HDFC Ltd. and a Tripartite Agreement was executed between the parties, Ex.OP-5/1. Consumer Complaint No 378 of 2019 28 As per Clause 3 of the Tripartite Agreement, the builder assumes the liability of payments under the loan agreement as payable by the Borrower to HDFC during the 24 months. On the other side, the Occupancy Certificate was procured by the opposite parties on 01.11.2018 (Ex.Op-1/9), whereas the intimation for possession was given to the complainants on 15.11.2018 (Ex.OP-1/8), wherein the opposite parties invited the complainants to complete the formalities within 45 days. In the said letter, it was specifically mentioned that the physical possession of the said Floor shall be handed over at the time of execution of Conveyance / Sale Deed. To which, the complainants did not raise any objection after receiving the letter. But an email dated 04.03.2019 was written to the opposite parties with the request for refund of the amount. The email sent by the complainants just one month before filing of the complaint. The complainants in their complaint has pleaded that the opposite parties have not developed the project as such they seek refund of their money. To support their averments, the complainants have filed mere affidavits and no other cogent evidence have been filed to show that the project is not developed. However, on the other hand, learned counsel for opposite parties No.1 to 4 argued that the project is completed and Occupancy Certificate has already been obtained (Ex.OP-1/9). It has been further argued an intimation letter for offering the possession was also sent to the complainants, however, they did not come forward to take the possession and to clear their dues, rather they filed the present complaint to get the undue advantage. The opposite parties is also paying the pre-EMI interest on the loan amount availed by the complainants. It is clear Consumer Complaint No 378 of 2019 29 from the above discussions that the unit, in question, was to be delivered on or before 16.10.2016 but the same was offered to the complainants on 15.11.2018. If we go through the Agreement dated 1610.2014, clause 5.5 says that if there is delay in construction of the "Residential Floor" for reasons attributable solely to the Developer, delay charges would be payable to the Allottee(s) at the rate of Rs.5/- per square feet per month on Saleable / Super Area. The relevant portion of Clause 5.5 is reproduced hereunder:
"5.5 Subject to clause 5.1 and 5.2 above and further the Allottee(s) having complied with its obligations under the Application Form as well as this "Residential Floor" Allottee(s) Arrangement, including but not limited to timely payment of the entire Consideration and other charges as per the payment plan opted by the Allottee(s), in the event of willful delay in construction of the "Residential Floor" for reason attributable solely to the Developer, delay charges would be payable to the Allottee(s) at the rate of Rs.5/- per square feet per month on Saleable/Super Area."
From the above, it is clear that the complainants are entitled to get compensation on account of delay in possession. As per the judgment passed by the Hon'ble Apex Court in "Secretary, Bhubaneshwar Development Authority Vs. Susanta Kumar Mishra" 2009 (4) SCC-684" the parties are bound by the terms and conditions of the agreement. Accordingly, the complainants cannot seek refund of the deposited amount, especially when the possession has already been offered to the complainants by obtaining the Occupancy Certificate.
Consumer Complaint No 378 of 2019 30
33. So far as the pre-EMI interest is concerned, the builder assumes the liability of payments under the loan agreement as payable by the Borrower to HDFC during the 24 months (the period be referred to as the "Liability Period" and the Liability be referred to as "Assumed Liability"). The relevant portion of the Tripartite Agreement is reproduced hereunder:
"The Borrower has informed HDFC of the scheme of arrangement between the Borrower and the Builder in terms whereof the Builder hereby assumes the liability of payments under the loan agreement as payable by the Borrower to HDFC during the 24 Months (the period be referred to as the "Liability Period" and the Liability be referred to as "Assumed Liability"). It is however agreed that during the liability period the repayment liability is joint and several by and between the Borrower and the Builder. The assumption of liability under subvention scheme by the Builder in no manner whatsoever releases, relinquishes and / or reduces the liability of the Borrower and that same shall not be affected in any manner on account of any difference and / or dispute between the Borrower and the Builder under the arrangement between them."
34. The above condition proves that the opposite parties No.1 to 4 assumes the liability to pay interest on the loan amount during 24 months, however, the possession was offered by opposite parties No.1 to 4 to the complainants on 15.11.2018. It is a different point that the complainants did not come forward to get the possession. However, if the complainants get the possession, then the liability to pay the interest on the loan amount ceases after 15.11.2018, when the possession was offered.
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35. So far as opposite party No.5-Bank is concerned, there is no allegation of any deficiency in service or adoption of unfair trade practice against it. Otherwise also, it provided only home loan and has no role in construction or delivery of possession of the Apartment, in question. As such, the complaint against opposite party No.5 is hereby dismissed.
36. From the above detailed discussions, we are of the view that instead of seeking refund of the entire deposited amounts the complainants are entitled to the possession of the allotted Floor complete in all respects with Occupancy Certificate from opposite parties No.1 to 4. Therefore, we hereby allow the complaint and pass the following order against opposite parties No.1 to 4:
i) to deliver actual physical possession of the apartment / Residential Floor bearing No.177, 1st Floor, Sector A having saleable / super area 1350 sq.ft. complete in all respects, to the complainants along with all the promised facilities and the 'Completion Certificate' and 'Occupation Certificate' subject to the payment of balance outstanding amount towards the price of the apartment / Residential Floor without any interest or penal interest by the complainants.
ii) to execute the sale / conveyance deed and get the same registered in the names of the complainants after handing over the actual physical possession of the apartment / flat, in question as per direction (i) above and the expenses for the same shall be borne by the complainants.Consumer Complaint No 378 of 2019 32
iii) to pay Rs.5/- per sq. ft. per month of saleable / super area as per clause 5.5 of the agreement from the committed date of delivery i.e 16.10.2016 till 15.11.2018 (when the possession was offered).
iv) to pay pre-EMI interest on the loan amount to opposite party No.5 till 15.11.2018, as availed by the complainants under Subvention Plan.
v) to pay Rs.65,000/- as compensation on account of mental agony and harassment as well as litigation expenses.
37. It is made clear that the balance amount towards sale consideration payable by the complainants shall be adjusted from the above said liability of opposite parties No.1 to 4 and after the said adjustment, they shall pay the remaining amount, as directed above, if any, to the complainants.
38. The compliance of this order shall be made by opposite parties No.1 to 4 within two months from the date of receipt of the certified copy of this order.
39. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(RAJINDER KUMAR GOYAL) PRESIDING MEMBER (KIRAN SIBAL) MEMBER August 24,2020 parmod