State Consumer Disputes Redressal Commission
Sanjay Khanna vs C And C Towers Ltd. on 3 August, 2018
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
Consumer Complaint No.1090 of 2017
Date of Institution: 18.12.2017
Order reserved on: 26.07.2018
Date of Decision : 03.08.2018
Sanjay Khanna S/o Sh. S.C. Khanna R/o House No.542, Sector 18,
Chandigarh.
.....Complainant
Versus
1. C & C Tower Limited, ISBT cum Commercial Complex,
Opposite Verka Milk Plant, Phase VI, Mohali Punjab, through
its Managing Director.
2. C & C Tower Limited through its Managing Director, ISBT cum
Commercial Complex, opposite Verka Milk Plant, Phase VI,
Mohali Punjab through its General Manager.
3. C & C Tower Limited, through its Managing Director, ISBT cum
Commercial Complex, opposite Verka Milk Plant, Phase VI,
Mohali, Punjab through its Chairman.
.....Opposite Parties
Complaint U/s 17(1)(a) of the Consumer
Protection Act, 1986 (as amended up to
date).
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Smt. Surinder Pal Kaur, Member.
Present:-
For the complainant : Sh. Manmohan, Advocate For the opposite parties : Sh. Rohit Mittal, Advocate .................................................................................. J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
The complainant has instituted this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act") Consumer Complaint No.1090 of 2017 2 against opposite parties (in short OPs) on the premise, that he is self employed person and has been running his work from his home premises. He is residing in a joint family and facing lot of difficulties from working in the home premises in houseno.542, Sector 18, Chandigarh, as there remains interference in the living of joint family. He required separate commercial office space for his self employment for earning his livelihood. He booked one office space in the commercial building of OPs to earn his livelihood by way of self employment. He entered into a concession agreement dated 15.04.2009 for development of bus terminal-cum-commercial complex at Mohali on a design and transfer basis with the GMADA, State Government of Punjab and the Punjab Infrastructure and Development Board (PIDB). It was also made public that the transferor (OP) has been allotted the project site in Sector 57, Mohali and a project site lease started in terms of the concession agreement for 90 years with effect from 15.12.2009. The complainant booked a commercial office space no.24 super area 549 square feet at 7th floor on 15.07.2017. The total cost of the said unit was agreed as Rs.27,45,000/- (Rs.5000/- per square feet). He deposited Rs.5,50,000/- on 15.07.2010, as 20% of total price of unit with OPs. OP sent demand notice dated 21.08.2010 to deposit Rs.4,10,750/- (15%). Thereafter, the complainant deposited a sum of Rs.4,10,750/- on 16.09.2010 and, thus, complainant paid the total amount of Rs.9,60,750/- i.e. 35% of the total price to OPs.
Thereafter, OPs issued allotment letter dated 27.11.2010 to him. As Consumer Complaint No.1090 of 2017 3 per clause 1.3.5 of allotment letter, the construction of the said unit was likely to be completed within 30 months from the date of start of lease period i.e. 15.12.2009 and as per clause B of allotment letter, in case of failure of handing over the possession of the said unit to the buyers on or before 30 months from the date of start of lease period, the transferor shall pay to the buyer simple interest @6% per annum on the amount advanced by the buyers for the period of delay beyond 30 months. On asking for date of delivery of possession of the unit by him, OPs failed to disclose the same. He received letter dated 07.05.2015 annexure C-5 from OPs that construction would restart by July 2015 and the project would be completed by mid of the year 2017. No construction work has been completed by OPs by the end of the year 2017 nor it seems likely to be completed in further couple of years. The complainant requested that since project has already been delayed and, thus, requested to release the interest after calculation till that date to him under clause 1.3.5 of allotment letter. Vide letter dated 30.06.2016, OPs admitted the delay and calculated the interest of Rs.57,645/- in the account of complainant. The complainant never violated any terms and conditions of allotment letter including clause 1.2.3, as complainant never asked for cancellation of said booked space. The OPs have not sent any letter demanding installments on due dates from complainant. It was presumed that when first floor is not completed after the period of seven years, then how and when the OPs completed and gave the possession of the said office space of Consumer Complaint No.1090 of 2017 4 seventh floor in this case. As per letter dated 30.06.2016 sent by OPs, interest would be adjusted @6% in the next installment, but till date, OPs have not demanded the next installment in this case. As per clause 1.2.1 of allotment letter, if there is delay on the part of the buyer to make timely installment, then he is liable to pay interest @2% per mensem i.e. 24%. The OPs have not obtained the requisite approvals, permissions, sanctions from the competent authorities for developing the said project. The OPs have failed to comply with various provisions of Punjab Apartment and Property Regulation Act, 1995 (PAPRA). The OPs indulged in unfair trade practice in collecting money from complainant. The cause of action is continuing one in this case. The complainant is entitled to receive the below noted amounts for violation of terms and conditions of allotment letter and in not handing over the possession of the unit by OPs to him:
(i) to refund the deposited amount of Rs.9,60,750/-.
(ii) to pay interest on the deposited amount @12% per annum from 15.07.2010 to November 2017 Rs.8,45,460/-
(iii) to pay compensation of Rs.4 lakhs for mental
harassment and
(iv) to pay Rs.25,000/- as cost of litigation.
2. Upon notice, OPs appeared and filed written reply and contested the complaint of complainant by raising preliminary objections that claim of interest @12% per annum and compensation is beyond the terms and conditions of allotment letter. The parties Consumer Complaint No.1090 of 2017 5 are bound by the terms of contract only. The allotment is commercial in nature and complainant has booked it with the sole aim of earning profits and investment. The complainant was contractually bound to clear all installments in timely fashion to OPs. The complainant opted for construction linked payment plan and he cleared the installments in a staggered manner linked to the various stages of the construction. In the event, complainant wished to surrender the commercial space, he would be governed by clauses 1.2.1 & 1.2.3 of the allotment and certain amounts would be automatically forfeited, as per contract. On merits, OPs pleaded that the sole purpose of complainant is to earn profits by means of investment in booking this commercial space and is not consumer of OPs. The construction of the said unit was likely to be completed in 30 months, failing which he is bound by clause 1.3.5 of allotment, which stipulates a case of delay, as alleged in the present case. The complainant can surrender the commercial space under clause 1.2.1 and 1.2.3 of allotment letter. The OPs are undertaking construction work in accordance to the permissible construction as per sanctioned building plans and in compliance of Municipal Laws, which are regulating the said construction. Such like joint ventures, wherein there is public private partnership, it is not possible to fix a date for completion, as there is government intervention and role plan as well. The complainant admitted letter December 2015 and complaint is thus, barred by time as filed in the year 2017. The OPs have the requisite approvals for the construction of the complex. The OPs do Consumer Complaint No.1090 of 2017 6 not require a license from GMADA, since they have executed a concession agreement dated 15.04.2009 for the development of the complex on a design/build/operate and transfer basis with GMADA.
The OPs controverted the averments of complainant and prayed for dismissal of the complaint.
3. The complainant tendered in evidence his affidavit Ex.C-A alongwith copies of documents Ex.C-1 to Ex.C-7 and closed the evidence. As against it, OPs tendered in evidence affidavit of Colonel Charan Vir Singh Sehgal, Chief General Manager- Commercial of OPs as Ex.OP-1/A alongwith documents Ex.OP-1/1 to Ex.OP-1/19 and closed the evidence.
4. We have heard the learned counsel for the parties at considerable length and have also examined the record of the case. The first point raised by counsel for the OPs is that there is an arbitration clause in letter of allotment Ex.C-4 and hence consumer complaint is not maintainable. We find no force in this submission of OPs. The matter has been settled by larger bench of Hon'ble National Commission in consumer complaint no.701 of 2015, decided on 13.07.2017 titled as "Aftab Singh Vs. EMAAR MGF Land Limited and another". The National Commission has held in this authority that an arbitration clause in the afore-stated kind of Agreements between the complainants and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the Arbitration Act, 1996. Against this order of the National Commission, Civil Appeal Consumer Complaint No.1090 of 2017 7 nos.23512-23513 of 2017 titled as EMAAR MGF Land Limited and another Vs. Aftab Singh" was filed by OP before the Top Court of the country, which has since been dismissed by the Apex Court, vide order dated 13.02.2018. Consequently, the presence of an arbitration clause is not a bar to resolution of this dispute by the Consumer Forum. Even otherwise, the Apex Court has also so held in "National Seeds Corporation Limited Vs. M. Madhusudhan Reddy and another" 2012(2)CLT-382/383 and in Fair Air Engineers (P) Ltd. vs. N. K. Modi (1996) 6 SCC 385 that Section 3 of C.P. Act gives additional remedy to consumers to avail of his remedy as per his choice. In view of Section 3 of the Act conferring the additional remedy on the consumers, we find no force in this submission of OPs and reject the same.
5. The next foremost contention raised by counsel for OPs is that complainant is not consumer of OPs and hence the instant complaint before this Commission is not maintainable. Much emphasis has been laid on this point by counsel for OPs that it is a purely commercial project, as he booked the office space purely for earning profits for investment purposes only. Section 2(1)(d) of the Act, deals with definition of Consumer and it is defined as under:
"(d) "consumer" means any person who,--
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when Consumer Complaint No.1090 of 2017 8 such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) 12 [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 12 [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person 13 [but does not include a person who avails of such services for any commercial purpose];
Explanation- For the purpose of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment."
It is, thus, evident from perusal of explanation appended with this Section that even commercial goods and commercial services, if purchased or hired by a person exclusively for the purpose of earning his livelihood by means of self employment bring him within the ambit of the Act. Herein, the complainant has specifically pleaded in para no.2 of the complainant and also swore this fact in para no.2 in his affidavit on oath that he booked the office in the commercial project of OP, exclusively for the purpose of earning his livelihood by means of self employment. There is nothing on the record proved by OPs that complainant has been regular property dealer and has been selling and purchasing the immovable properties. No such instance or evidence has come forth on the Consumer Complaint No.1090 of 2017 9 record on the part of OPs in this case. Consequently, it is established on record that complainant purchased the commercial space for the purpose of earning his livelihood exclusively by means of his self employment and he is held to be consumer under the Act. This point is, thus, decided in favour of complainant.
6. The other evidence placed on record by the parties, coupled with pleadings of both the parties have been perused by us. Ex.C-1 is the copy of application for allotment of commercial office submitted by complainant to OPs. Ex.C-2 is the copy of demand notice dated 21.08.2010 issued by OPs to complainant demanding Rs.4,10,750/-. The statement of account of complainant is Ex.C-3 on the record, showing the payments in his account. The letter of allotment sent to complainant by OPs on 27.11.2010 Ex.C-4. As per clause 1.3.5 of it, the construction of the said unit was to be completed within 30 months from the date of start of lease period, after all necessary approvals and sanctions have been obtained subject, however to force majeure circumstances and reasons beyond the control of OPs. Ex.C-5 is copy of letter sent to complainant by OPs on 07.05.2015 admitting the delay in execution of the project. Ex.C-6 is the copy of letter sent by complainant to OPs asking them to pay the simple interest @6% on the amount advanced by him. Ex.C-7 is the letter sent to complainant by OPs on 30.06.2016 to the effect that complainant is entitled to receive simple interest @6% on the amount initially deposited for the period of delay beyond 30 months from compliance dated 16.12.2009. The simple Consumer Complaint No.1090 of 2017 10 interest shall accrue in his account till the date of next installment and shall be adjusted there against next installment.
7. The OPs tendered in evidence affidavit of Col. Charan Vir Singh Sehgal, Chief General Manager Commercial of OPs Ex.OP-1/A stating that he has been authorized to pursue the case by virtue of resolution passed by Board of Directors of OPs. The complainant seeks refund of the amount only and not the possession of the allotted space. The said amount comes out less than Rs.20,00,000/- and hence this Commission has no jurisdiction to try the complaint, as stated by this witness. He further stated that due to plummeted real estate market, the complainant has been retracting from his commitment to avoid the loss to him due to speculation. He further deposed that complainant is not entitled to any relief, as per clauses of allotment letter. He further stated that there is an arbitration clause in allotment letter, hence consumer complaint is not maintainable. This witness further stated that there is changes in design and structure by government of Punjab and GMADA and the project in question viz. ISBT-cum-commercial complex situated at Mohali is being developed by OPs on a piece of land owned by GMADA under PPP code in DBOTF format and due to above reasons, the above referred delay took place. The OPs have all the necessary approvals and sanctions of the project. Ex.OP-1/1 is the copy of resolution in favour of this witness. Ex.OP-1/2 is the copy of application of complainant for allotment of commercial space. Ex.OP-1/3 is the copy of letter from PIDB to OP for development of Consumer Complaint No.1090 of 2017 11 bus terminal-cum-commercial complex at Mohali. The concession agreement entered into between the OPs and GMADA on 15.04.2009 is Ex.OP-1/4. The project and said lease is dated 13.08.2009 Ex.OP-1/5 in favour of OPs by Chief Administrator GMADA. The letter of Estate Officer of GMADA to OPs is dated 27.01.2010 Ex.OP-1/6. Ex.OP-1/7 is the copy of letter to GMADA to OPs regarding submitting the revised plans, as well as complete drawings as discussed and finalized in the meeting with the Deputy Chief Minister Punjab. Ex.OP-1/8 is the copy of letter from GMADA to OP for giving direction to carry out the construction according to directions, as contained in it. Ex.OP-1/9 is the letter issued by India Ecological Department Government of India to OPs regarding weather report. Ex.OP-1/10 is the copy of status report of DBTCC Mohali dated 03.10.2011. The letter issued by PSPCL to OPs regarding no objection certificate for 7.2 acres of land. Ex.OP-1/18 is the copy of letter from GMADA to OP regarding clarification of licence of construction dated 12.06.2017, showing that no licence of construction was granted to OP and no agreement was entered with government by OP. Ex.OP-1/19 is the copy of partial completion certificate dated 15.12.2016 granted to OPs. This is not completion certificate and partial completion certificate has no place to stand. We have also examined the other documents of OPs on the record.
8. From perusal of above referred evidence on the record, it is evident that OPs were not granted any licence to construct this project, as per information supplied by Superintending Engineer Consumer Complaint No.1090 of 2017 12 GMADA contained in Ex.OP-1/18. This is violation of Section 3 of PAPRA Act, 1995. There is no question of construction of any project without holding a licence to construct it, as per statutory mandate of Section 3 of PAPRA Act. Even lease was granted to OPs in this project on 13.08.2009 vide Ex.OP-1/5 and 30 months period given in allotment letter for completion of construction has already expired. Even completion certificate has not been obtained by OPs. The OPs carried on this project without holding licence under Section 3 of PAPRA Act, 1995 which is clear unfair trade practice and this fact is proved on record by Ex.OP-1/18, the information supplied by Superintending Engineer GMADA. This Commission has also observed in "Sharanjeet Kaur Vs. C.C. Towers Ltd. & another" C.C. No.343 of 2016 decided on 02.06.2017 that no licence was granted to OPs for construction of this project and no agreement was entered by OPs with government for this project. The OPs were not holding any licence for raising construction nor any agreement was entered into with Government about it. In this citation, it is held that builder is liable to refund the deposited amount with interest @12% per annum under Rule 17 of Punjab Apartment and Property Regulation Rules, 1995 framed under Section 45 of PAPRA Act. We also rely upon law laid down by this Commission in C.C. No.314 of 2017 titled as "Indu Laroia Vs. C and C Towers Limited" decided on 07.11.2017 in this regard to seek legal support.
Consumer Complaint No.1090 of 2017 13
9. As a result of our above discussion, the complaint of complainant succeeds and OPs are directed to refund the deposited amount of Rs.9,60,750/- with interest @12% per annum from the date of their respective deposits till the date of their actual payments. The complainant has claimed amount of Rs.8,45,460/- separate as interest from 15.07.2010 till November 2017. This part of relief is covered by the relief granted to complainant (supra), whereby we have awarded the payment of interest @12% per annum on the deposited amounts by complainant from the date of their deposits till actual payment by OPs. The complainant is also awarded the amount of Rs.60,000/- as compensation for mental harassment and Rs.30,000/- as cost of litigation. These amounts shall be payable by OPs to complainant within 45 days from the date of receipt of certified copy of the order.
10. Arguments in this complaint were heard on 26.07.2018 and the order was reserved. The certified copies of the order be communicated to the parties, as per rules.
11. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (SURINDER PAL KAUR) MEMBER August 03, 2018.
(MM)