State Consumer Disputes Redressal Commission
Ajay Sharma vs M/S Bajwa Developers Ltd. on 23 August, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
1.Consumer Complaint No.9 of 2017 Date of institution : 12.01.2017 Date of decision : 23.08.2017
1. Ajay Sharma s/o Shri J.R. Sharma, R/o House No.581, Shantivan Society, Sector 48-A, Chandigarh.
2. Meenu Sharma w/o Ajay Sharma R/o House No.581, Shantivan Society, Sector 48-A, Chandigarh.
.......Complainants Versus
1. Bajwa Developers Limited, Regd. SCO 210-211, Ground Floor, Above Gopal Sweets, Sunny Business Centre, Mohali through its Managing Director Shri J.S. Bajwa.
2. Hi-Tech Housing Welfare Society (Regd.), SCO 210-211, 2nd Floor, Above Gopal Sweets, Sunny Business Centre, Mohali through its Chairman / President / Vice President / Treasurer / Authorised Representative.
........Opposite Parties
2. Consumer Complaint No.10 of 2017 Date of institution : 12.01.2017 Date of decision : 23.08.2017 Rajnish Sood S/o Bansi Lal Sood, R/o House No.1382, Sector 20-B, Chandigarh.
.......Complainant Versus Consumer Complaint No.9 of 2017 2
1. Bajwa Developers Limited, Regd. SCO 210-211, Ground Floor, Above Gopal Sweets, Sunny Business Centre, Mohali through its Managing Director Shri J.S. Bajwa.
2. Hi-Tech Housing Welfare Society (Regd.), SCO 210-211, 2nd Floor, Above Gopal Sweets, Sunny Business Centre, Mohali through its Chairman / President / Vice President / Treasurer / Authorised Representative.
........Opposite Parties Consumer Complaints under Section 17(1)(a)(i) of the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Present:-
For the complainants : Shri Sandeep Bhardwaj, Advocate. For opposite party No.1 : Shri Sukaam Gupta, Advocate. For opposite party No.2 : Ex parte.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
Both the above referred Consumer Complaints are being decided by this common order, as common questions of law and facts, except some minor variations, here and there, are involved in these complaints. The facts are taken from Consumer Complaint No.9 of 2017.
2. The complainants, Ajay Sharma and Meenu Sharma, have filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, "the C.P. Act") for the issuance of following directions to the opposite parties:- Consumer Complaint No.9 of 2017 3
i) to refund the amount of ₹22,56,000/- along with 18% interest from the respective dates of deposits till realization;
ii) to pay an amount of ₹5,22,546/- (₹11,118/- x 47 months) paid towards EMI to the HDFC Bank till date and further refund the amount of EMI paid to HDFC Bank till the refund of the amount;
iii) to pay compensation of ₹5 lakhs on account of mental agony, physical harassment, financial loss caused to the complainants; and
iv) to pay ₹1 lakh as cost of litigation to the complainants.
Facts of the Complaint:
3. The complainants alleged in their complaint that the complainants, who are husband and wife, decided to purchase independent residential plot in a project in or around tricity, wherein they could construct a house for their own use and for the use of their family members. As such, they were looking for a residential plot and came to know about opposite party No.2, which advertised itself as a Society and informed them about being in collaboration with opposite party No.1. Believing the tall claims of opposite party No.2, the complainants became members of the Society and filled an application form dated 25.12.2011. Opposite party No.2 also issued one application form dated 25.12.2011 wherein opposite party No.2 received an amount of ₹5,000/- towards the membership fee and got the complainants enrolled with the Society for purchase of the plot measuring 200 square yards. It is further averred that opposite party Consumer Complaint No.9 of 2017 4 No.2 issued one payment plan wherein the total cost of the plot was mentioned as ₹31,20,000/-. Opposite party No.2 also handed over one site plan showing the location of the Sector where the plot has been sold to the complainants. Opposite Party No.2 informed the complainants that the land belongs to opposite party No.1 and as such, Buyer's Agreement will be executed by opposite party No.1 with them. The opposite parties assured about the safety of the Project and, as such, the complainants paid the amount of ₹5,000/- through cheque No.211133 drawn on IDBI Bank dated 25.12.2011, another amount of ₹3,07,000/- through cheque No.211135 dated 31.12.2011 drawn on IDBI Bank and then amount of ₹6,24,000/- through cheque No.790579 dated 1.2.2012 drawn on Punjab & Sind Bank totaling ₹9,36,000/-. Thereafter opposite party No.2 allotted plot bearing No.19T measuring 200 square yards situated in Sector 124, Jandpur/Chado, Tehsil and District SAS Nagar, Mohali, for ₹31,20,000/- in respect of which, one Agreement dated 5.2.2012 has been executed by opposite party No.1 with them. It is further averred that in the year 2014 the complainant was informed that plot measuring 19T measuring 200 square yards was not available and the opposite parties changed the plot number 19T to Plot No.66 in Sector 123, Jandpur and also changed the area from 200 square yards to 250 square yards without providing any reasons. Since the complainants were in need of plot for constructing their own house and have already paid huge amount, as such, being in a disadvantageous position, they accepted the change of plot. The price was also got increased from ₹32,10,000/- to ₹42,48,000/- and Consumer Complaint No.9 of 2017 5 they acknowledged the receipt of ₹22,56,000/- from the complainants. They compelled the complainants to execute another agreement dated 24.8.2014 in continuation of the previous one by changing the plot number and the consideration. The opposite parties produced the previous dates of receiving the amount from the complainants and informed to pay the remaining amount after clearing of the land by the Government authorities as the area, where the plot was situated was not clear. The complainants kept on waiting for the response of the opposite parties but no response of any kind was received. The complainants approached opposite parties on 21.5.2016 and were informed that the land was still not clear and opposite party No.2 will inform about the possession as well as clearance of land of plot within a period of six months regarding which specific endorsement was made on the agreement by opposite party No.1. That period of six months got expired on 20.11.2016 but no response of any kind was received and as such, the complainants again approached opposite party No.1 and they were informed that the land was still not clear and assured to inform them on clearance of land. It is further averred that in the month of December 2016, the complainants again approached opposite party No.1 and requested to refund the amount but opposite party No.1 flatly refused to do so. It is also averred that there were no permissions and approvals in favour of the opposite parties at the time of executing the agreement and receiving the consideration and as such, the terms of the agreement are totally in contravention of the Punjab Apartment and Property Regulation Act, 1995 (in Consumer Complaint No.9 of 2017 6 short, "PAPRA"). Even the basic requirements have also not been fulfilled which entitle the opposite parties to advertise, sell, enter into agreement and receive consideration from the consumers like the complainants. The complainants paid their hard earned money besides availing home loan for which they are paying instalments. The opposite parties are habitual defaulters and have planned to collect the money of the prospective buyers on false assurances of the delivery of possession of units, allot the same provisionally in order to grab the entire sale consideration and to the contrary invest that money in some other business. Physical actual possession of the units in almost all the projects launched by the opposite parties in the last six to seven years or even before that have still not been delivered to the prospective buyers. As such, the complainants have now lost faith in opposite parties in their ability to deliver the plot and the latter's credentials have gone down drastically. Therefore, the complainants are no more interested in the project of the opposite parties and sought refund of the amount of ₹22,56,000/- but they flatly refused to do so. Due to this deficiency in service and adoption of unfair trade practice the complainants have not only suffered financial loss but also suffered mental agony and physical harassment.
Defence of Opposite Parties:
4. In their joint written statement opposite parties Nos.1 and 2 took preliminary objections that there is no "consumer-service provider" relationship between the complainants and opposite parties. The complainants are not 'consumers' as per the provisions Consumer Complaint No.9 of 2017 7 of the C.P. Act. The complainants were aware at the time of execution of Agreement on 5.2.2012 that the approvals were yet to be taken and it was clearly mentioned in clause 6 of the agreement that in case the authorities refuse to pass the layout plan of the land in which the plot/flat is sold, then the buyer will be entitled to the refund of his amount only and will not be entitled to any compensation etc. The layout plan was passed by the statutory authorities and the complainants were informed telephonically to take the possession. However, the complainants, who have booked the plot, vide serial No.19T were allotted Plot No.66. On merits, it is admitted that the complainants became Members of the Society and were enrolled with them for purchase of plot measuring 200 square yards. It is also admitted that the complainants deposited ₹22,56,000/- out of ₹42,48,000/- and in the absence of non-deposit of complete payment the possession could not be delivered to them.
It is averred that the complainants entered into agreement on 5.2.2012 with the complete knowledge that the approvals were yet to be taken and they were booking the plot in future project. The complainants were given serial No.19T and not plot number with further instalments to be paid on specified dates but the complainants showed their inability to pay instalments due to financial crisis and got extension in dates for paying instalments but deposited only ₹3,00,000/- in 2014. The complainants requested for change in plot area and got allotted plot No.66 but they failed to deposit further instalments as per Plan. The opposite parties are always ready to provide the possession subject to payment of all the Consumer Complaint No.9 of 2017 8 instalments and the complainants are at liberty to get the possession and start construction after statutory formalities after clearing all dues. Since the complainants failed to deposit the instalments, therefore, the possession could not be delivered to them. The complainants have purchased the plot for resale and when they found that they are not fetching good price in the market, they filed the present complaint for the refund of the amount deposited. The complaint is baseless and flagrant abuse of the process of law to harass and blackmail the opposite parties. The same is liable to be dismissed under Section 26 of the C.P. Act; being frivolous and vexatious.
5. Though the written statement appears to have been filed on behalf of opposite parties Nos.1 and 2 jointly but the power of attorney has been filed only on behalf of opposite party No.1 i.e. Bajwa Developers Limited. Since none appeared on behalf of Opposite party No.2 despite repeated calls, therefore, it was proceeded against ex parte, vide order dated 11.7.2017. Evidence of the Parties:
6. To prove the allegations made in the complaint, the complainants proved on record their affidavits as Ex.C-A and Ex.C-B along with documents Ex.C-1 to Ex.C-18. On the other hand, opposite party No.1 proved on record the affidavit of Jarnail Singh Bajwa, Managing Director of Bajwa Developers Limited, as Ex.OP-1/A. Consumer Complaint No.9 of 2017 9
7. I have carefully gone through the averments of the parties and the evidence produced by them in support of those averments. I have also heard learned counsel for both the sides. Contentions of the Parties:
8. It has been vehemently argued by the learned counsel for the complainants that the complaint filed by the complainants is to be allowed on this ground itself that there was violation of the provisions of the PAPRA by the opposite parties and without having the requisite permissions/sanctions of the competent authorities they received amounts exceeding Rs.25,000/- and executed the Agreement Ex.C5 regarding the plot in dispute. The Agreement is dated 5.2.2012 whereas all the alleged permissions/sanctions, by virtue of the documents proved by the complainants were granted by the competent authorities after that date. Moreover, the opposite parties were not in possession of the land in which the plots were to be carved out. By selling the plot without the requisite permissions/sanctions and the possession of the land the opposite parties adopted unfair trade practice. There is no likelihood of the completion of the Project in the near future and as such, the complainants are no more interested in the possession of the plot and they have already requested the opposite parties for the refund of the amount along with interest and compensation for the harassment and mental agony suffered by them, however, they failed to do so. This act of the opposite parties in not refunding the amount deposited by the complainants amounts to deficiency in Consumer Complaint No.9 of 2017 10 service on their part; as a result of which the complainants suffered mental harassment and agony.
9. On the other hand, it has been vehemently argued by learned counsel for opposite party No.1 that the complainants were only investors in the plot. The complainants have purchased the plot for resale and when they found that they are not fetching good price in the market, they filed the present complaint for the refund of the amount deposited. There is no "consumer-service provider"
relationship between the complainants and opposite party No.1. The complainants are not consumers as defined under the C.P. Act qua opposite party No.1. He further submitted that opposite party No.1 had already applied for the permissions/sanctions of the competent authorities before the Agreement was executed and, as such, there was no violation of the provisions of the PAPRA. The Project was exempted from the provisions of that Act and, as such, the complainants cannot invoke the same to get the relief claimed in the complaint. Moreover, in clause 6 of the Agreement it was clearly mentioned that in case the authorities refuse to pass the layout plan of the land in which the plot/flat is sold, then the buyer will be entitled only for refund of his amount and will not be entitled for any compensation etc. However, the layout plan was passed by the statutory authorities and the complainants were informed telephonically to take the possession, who were allotted plot No.66. The complainants themselves have not deposited the complete amount of the plot in question and, therefore, the possession could not be delivered to them. However, the opposite parties are ready to Consumer Complaint No.9 of 2017 11 deliver the possession of the plot in question on the payment of the due amounts by the complainants. They are not entitled to any of the amounts claimed in the complaint and the same is liable to be dismissed.
Consideration of Contentions:
10. I have given my thoughtful consideration to the contentions raised by the learned counsel for both the sides.
11. According to the complainants, against the total price of ₹42,48,000/- they paid an amount of ₹22,56,000/- and the payment of the same has been admitted by the opposite parties in their written statement. It cannot be made out from the evidence produced on the record that the complainants invested the amount in the plot in dispute for the purposes of resale. I am not inclined to conclude that the complainants do not fall under the definition of 'consumer' as contained in Section 2(1)(d) of the C.P. Act. It is very much clear from the contents of the Agreement Ex.C5 that the plot, which the complainants agreed to purchase, was to be developed and the opposite parties were required to execute a registered sale deed in favour of the complainants within 10 days of the payment of the total sale consideration. As per the contents of the Agreement the complainants were to accept any change made in the layout plan by the competent authority and the plot which they agreed to purchase could have been changed and they were to be bound by that change of plot. Thus, the complainants hired the services of the opposite parties for a consideration and, as such, fall under the definition of 'consumer'.
Consumer Complaint No.9 of 2017 12
12. As per Section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to make full and true disclosure of the nature of their title to the land, on which such colony is to be developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days' notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with Section 3 of the PAPRA. Even the possession of the land on which the plot in question was to be carved out was not with the opposite parties at the time of execution of the Agreement dated 5.2.2012, Ex.C-5 and receiving the different amounts from the complainants.
13. As per Section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they also violated Section 5 of PAPRA.
14. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/apartments/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this respect. There is no evidence or pleading Consumer Complaint No.9 of 2017 13 on record on behalf of the opposite parties in this respect. As such, the opposite parties also violated Section 9 of the PAPRA.
15. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainants-buyers was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and I wonder where that amount had been going. They are not to play the game at the cost of others. When they insist upon the performance of the promise by the consumers, they are to be bound by the reciprocal promises of performing their part of the Agreement.
16. Except the bald statement of Jarnail Singh Bajwa, made in his affidavit Ex.OP-1/A, that the opposite parties had applied for the issuance of Letter of Intent or for permission for Change of Land Use before the Agreement, no supporting document has been proved on the record. The contents of the documents could have been proved only by the document itself and the oral evidence produced by the opposite parties cannot be relied upon. By executing the Agreement Ex.C-5 and receiving the amount more than ₹25,000/- the opposite parties violated the provisions of PAPRA. They were not competent to execute the Agreement in respect of the plot and to receive different amounts. These acts on the part of the opposite parties amount to adoption of unfair trade practice. In these circumstances the complainants are entitled to the refund of the amount so paid by them. Though they had not paid all the amounts as per the Agreement, yet keeping in view the fact that the opposite parties had not obtained all the permissions/sanctions as per PAPRA from the Consumer Complaint No.9 of 2017 14 competent authorities, they were justified in not making further payments as and when those facts came to their knowledge. The opposite parties cannot withhold their amount and are liable to refund the same along with interest.
17. The Consumer Protection Act came into being in the year 1986. It is one of the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. There is not an iota of evidence led by the opposite parties to rebut the averments made in the complaint by way of authenticated documentary evidence. The complainants have made payment of substantial amount to the opposite parties with the hope to get the possession of the plot in a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and construction in a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainants. Had the complainants not invested their money with the opposite parties, they would have invested the same elsewhere. There is escalation in the price of construction also. The complainants have suffered loss, as discussed above. The builder is under obligation to deliver the possession of the plot within a reasonable period. The complainants cannot be made to wait indefinitely to get possession of the plot booked. From the facts and evidence brought on the record of the Consumer Complaint No.9 of 2017 15 complaint, it is clearly made out that the opposite parties i.e. builder knew from the very beginning that they had not complied with the provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period, thus by misrepresenting induced the complainants to book the plot, due to which the complainants have suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainants is a deposit held by the opposite parties in trust of complainants and it should be used for the purpose of developing the plots, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainants for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainants, are also required to be taken into consideration for awarding compensation. In addition to that they are also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by them on account of the betrayal by the opposite parties in shattering their hope of getting the plot by waiting for all this period.
Consumer Complaint No.9 of 2017 16
18. Under Section 12 of the PAPRA read with Rule 17 of the Rules framed thereunder, if the amount is to be refunded, it is to be refunded along with interest at the rate of 12% per annum.
19. However, the complainants are not entitled to the refund of the amount paid by them towards EMIs of the loan obtained from the HDFC Bank Ltd. Only interest part can be refunded from the EMIs. No separate amount of interest has been mentioned in the complaint. Therefore, in view of the fact that they are being refunded the whole amount deposited by them along with interest at the rate of 12% per annum, they are not held entitled to the refund of the EMIs paid by them towards the loan amount.
20. In view of the above discussion, the complaint is allowed and the following directions are issued to the opposite parties:-
i) to refund the amount of ₹22,56,000/- along with interest at the rate of 12% per annum from the different dates of deposit of different amounts till the date of actual payment;
ii) to pay ₹2,00,000/-, as compensation for the harassment and mental agony suffered by them; and
iii) to pay ₹20,000/-, as cost of litigation.
Consumer Complaint No.10 of 2017:
21. In this complaint, the complainant also purchased a residential plot from the opposite parties in the same manner as in CC No.9 of 2017 and paid total sum of ₹26,40,000/- against the total price of ₹42,48,000/-. The Project has not been developed and the possession of the plot has not been delivered till the date of filing of the complaint. As such, the complainant sought a direction to the Consumer Complaint No.9 of 2017 17 opposite parties to refund the amount of ₹26,40,000/- along with 18% interest; ₹5 lakhs on account of mental agony, physical harassment, financial loss caused to the complainant and ₹1 lakh as cost of litigation.
22. In this case also, similar averments have been made by opposite party No.1 in his written statement and opposite party No.2 preferred not to appear before this Commission and was proceeded against ex parte. No evidence whatsoever has been filed by opposite party No.1 except the affidavit of Shri J.S. Bajwa, Managing Director of the Company as Ex.OP-1/A.
23. In view of the discussion held in Consumer Complaint No.9 of 2017 (Ajay Sharma and another v. Bajwa Developers Limited and another), Consumer Complaint No.10 of 2017 is also allowed and following directions are issued to the opposite parties:-
i) to refund the amount of ₹26,40,000/-, along with interest at the rate of 12% per annum from the different dates of deposit of different amounts till the date of actual payment;
ii) to pay ₹2,00,000/-, as compensation for the harassment
and mental agony suffered by him; and
iii) to pay ₹20,000/-, as cost of litigation.
24. The compliance of this order shall be made by the opposite parties within one month from the date of receipt of the certified copy of this order and failing that they shall be liable to pay interest on the said amounts of ₹2,00,000/- in each case, at the rate of 12% per annum from the date of this order till the date of payment.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT August 23, 2017 Bansal Consumer Complaint No.9 of 2017 18