State Consumer Disputes Redressal Commission
Sunita Sheokand vs Sushma Buildtech Limited on 25 January, 2017
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 445 of 2016 Date of Institution : 09.08.2016 Date of Decision : 25.01.2017 Sunita Sheokhand wife of Dr.Anoop Sheokhand, resident of House No.8/27, New Campus, HAU, Hisar. ......Complainant V e r s u s Sushma Buildtech Limited, Corporate Office, SCO No.172-173, First Floor, Sector 9-C, Chandigarh, through its Authorized Representative. ....Opposite Party Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by:- Sh.Tarun Gupta, Advocate for the complainant.
Sh.Sanjeev Sharma, Advocate for the opposite party.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT It is case of the complainant that she hired the services of the opposite party by purchasing a residential apartment, bearing no.B-101, 1st Floor, Tower B, measuring 1825 square feet (in short the unit), in its project, namely "Sushma Elite Cross", Gazipur, MC Zirakpur, District SAS Nagar, Mohali, Punjab. An application was moved by the complainant, alongwith which, an amount of Rs.4,57,700/- was paid as earnest money. Total price of the said unit was fixed at Rs.49,56,880/-, which included Preferential Location Charges (PLC), Floor Premium Charges, Power Backup Charges, Club Membership Charges etc. By 10.08.2011, the complainant had paid an amount of Rs.46,45,983/-. Apartment Buyer's Agreement (in short the Agreement) Annexure C-2 was executed between the parties, on 12.08.2011. It is further alleged that as per Clause 15 (d) of the Agreement, physical possession of the unit, complete in all respects, was to be delivered to the complainant within a maximum period of 42 months i.e. 36 months plus (+) 6 months grace period, from the date of execution of the same (Agreement). Thus, possession of the unit was to be delivered latest by 11.02.2015. However, possession of the unit was not offered by the stipulated date, for want of construction and development at the site. It was averred that as per the present status of project, it seems that the opposite party will not be able to deliver possession of the unit, even by the end of 2017. It is stated by the complainant that she has visited the office of the opposite party, a number of times, with a request to apprise her about exact date of delivery of possession of the unit, but it failed to give any satisfactory answer.
Under above circumstances, refund of the amount deposited was sought alongwith interest, besides claiming compensation for mental and physical harassment and litigation expenses, by way of filing the instant complaint, in which notice was issued on 11.08.2016. It is on record that thereafter the complainant received one letter dated 01.09.2016, offering her possession of the unit, in question.
Upon notice, reply was filed by the opposite party, taking numerous preliminary objections, stating that in the face of existence of arbitration clause in the Agreement to settle disputes between the parties, this Commission has no jurisdiction to entertain the same (complaint). To say so, reliance was placed on Clause 22 of the Agreement. Separate application in this regard was also moved by the opposite party on 28.09.2016, which was disposed of, vide order dated 30.09.2016, with the direction that question qua arbitration will be considered at the time of final arguments in the case. It is also asserted that the unit, in question, was purchased for future gain, as such, the complainant would not fall within definition of a consumer, as defined under Section 2 (1) (d) of 1986 Act. Territorial and pecuniary jurisdiction of this Commission was also disputed. It was averred that the complaint filed is beyond limitation. It was pleaded that possession of the unit, in question, had already been offered to the complainant, vide letter dated 01.09.2016, but she refused to accept the same. It was averred that the project, in question was complete in the year 2014. An application was filed with the Competent Authority, for grant of completion certificate, in December 2014, however, it was delayed and granted only in the month of June 2016. It is stated that the complainant alongwith other allottees, had not made timely payments, as a result whereof, construction of the units could not be carried out, as per schedule, causing delay in delivery of possession of the unit(s). It is averred that possession of the unit, in question, was to be delivered to the complainant, as per Clause 15 (d) of the Agreement, subject to making of timely payments by her, but in the present case, since she was defaulter, in making payment, she was levied delayed payment interest of Rs.36,115/-. It was averred that, as such, delay took place on account of force majeure circumstances, referred to above. It was admitted that the complainant had purchased the unit, in question, from the opposite party. Execution of the Agreement was also admitted. It was stated that the opposite party was only to make an endeavor to offer possession of the said unit, within a total period of 42 months, aforesaid, as such, time was not the essence of contract. It was further stated that even otherwise, in the cases of immovable property, time is never regarded as essence of contract. It was further stated that it was well within the knowledge of the complainant that in case of delay in offer of possession, stipulated penalty had been provided in the Agreement, which safeguarded her rights. It was further stated that the opposite party is ready to pay amount of compensation/ penalty, for the period of delay, to the complainant. It was further stated that no notice was ever sent by the complainant seeking refund of amount paid with interest. It was further stated that, in case, the complainant still wanted refund of the amount deposited; the same would amount to surrender of the unit, and would attract forfeiture charges.
The parties led evidence in support of their cases, alongwith which, number of documents were attached.
On completion of the proceedings, arguments were addressed by Counsel for the parties, in terms of stand taken by them in the complaint and written reply, which were heard, in detail.
The first question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.
According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to her. In the instant case, it is evident that the Agreement dated 12.08.2011, containing detailed terms and conditions, is executed between the parties at Chandigarh. Besides as above, perusal of copy of allotment letter dated 12.08.2011 Annexure R-2, placed on record by the opposite party itself reveals that the same was issued from its Chandigarh office. Apart from that, even other documents placed on record, by the opposite party, alongwith written statement, clearly goes to reveal that it was running its business from Chandigarh i.e. Plot No.381, Phase-I, Industrial Area, Chandigarh. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. The objection taken by the opposite party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
Another objection taken by the opposite party, with regard to pecuniary jurisdiction of the Commission, also deserves rejection. It may be stated here, that the complainant has sought refund of amount of Rs.46,45,983/- alongwith interest @18%, compounded monthly from respective dates of deposits; compensation to the tune of Rs.3 lacs for mental agony and physical harassment; and cost of litigation to the tune of Rs.50,000/-, aggregate value whereof, after excluding interest claimed in view of law laid down by three Member Bench of the National Commission in a case titled as Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), (prevailing till date), fell above Rs.20 lacs and below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection taken by the opposite party, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.
The next question that falls for consideration is as to whether, the complainant is an investor and did not fall within the definition of a consumer, under Section 2 (1) (d) (ii) of the Act, as alleged by the opposite party or not. It may be stated here that there is nothing on the record, that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by her, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. On the other hand, the complainant has specifically stated in para no.1 of the complaint that she has purchased the said unit, for personal use. Since, the opposite party has leveled allegations against the complainant, as such, the onus lays upon it, to prove it, which it filed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by the opposite party, mere bald assertion i.e. simply saying that the complainant being investor, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316. Not only this, recently in a case titled as Aashish Oberai Vs. Emaar M GF Land Limited, Consumer Case N o . 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-
"In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house.
Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose."
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainant, thus, falls within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party in its written reply, therefore, being devoid of merit, is rejected.
Now we will see, whether the complainant is entitled to get refund of the amount paid, as prayed in this complaint and whether there exists any violation of the terms and conditions of the agreement by the opposite party or not. It is not in dispute that by depositing an amount of Rs.4,57,700/- the complainant booked the unit, in question, with the opposite party on 16.06.2011. Total price of the unit was fixed at Rs.49,56,880/-, including the charges, referred to above. It is also not in dispute that by 10.08.2011, the complainant had deposited an amount of Rs.46,45,983/-. Buyer's Agreement was signed between the parties, thereafter on 12.08.2011. Above facts clearly establishes that there was no default committed, ever by the complainant. Balance amount of few lacs, was to be paid at the time, when possession was to be taken over, after completion of the project. As per Clause 15 (d) of the Agreement, possession of the constructed unit was to be offered within a period of 36 months, from the date of execution of the Agreement. The opposite party was entitled to 6 months' grace period, to facilitate handing over possession to the complainant. In a way, possession was required to be handed over on or before 11.02.2015. However, it was not done. Possession was offered only after filing of this complaint, vide letter dated 01.09.2016, which being subsequent event, cannot be taken note of, in view of law laid down by the National Commission in a case titled as Sanjay Kumar Baranwal & 2 Ors. Vs. Selene Constructions Ltd., Consumer Case No. 914 of 2015, decided on 19th May 2016, wherein it was held that possession offered during the pendency of the case, being a subsequent event, lies no rub in taking note of. At the same time, it is also a settled law that when there is a material violation on the part of the builder, in not handing over possession by the stipulated date, the purchaser is not bound to accept the offer, if made at a belated stage and in that even, he or she can seek refund of amount paid. It was so held by the National Commission, in a case titled as Aashish Oberai Vs. Emaar M GF Land Limited, Consumer Case N o . 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held as under:-
"I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest."
Not only this, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No. 59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same.
Further, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, under similar circumstances, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
Under these circumstances, it is held that since there was a material violation on the part of the opposite party, in not offering and handing over possession of the unit by the stipulated date or by the time, this complaint was filed, the complainant is thus, entitled to get refund of amount deposited by her. In view of above facts of the case, the opposite party is also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to her, as also escalation in prices.
No doubt, a plea has been taken by the opposite party that possession of the unit, in question, was delayed on account of the reasons beyond its` control i.e. on account of force majeure circumstances. However, the force majeure circumstances, which have been claimed by the opposite party, for not completing construction work, at the site and offering possession by the stipulated date are delay in making payment on the part of the complainant, including other allottees and secondly, delay in issuance of completion certificate by the Competent Authorities. Now here, the question arises, as to whether, the aforesaid circumstances, can be termed as force majeure circumstances, for non-development & construction work at the site and non-delivery of possession of the units, by the stipulated date or not.
First coming to the plea taken by the opposite party regarding delay in offer of possession on account of the reason that there was delay in making payment on the part of the complainant, it may be stated here that nothing cogent and convincing evidence has been brought on record, in the shape of any customer ledger or statement of account, pertaining to the account of the complainant, to prove that she was defaulter in making payment towards price of the said flat. In the absence of any evidence, a bald plea taken by the opposite party in this regard, cannot be considered. Secondly, such a plea has no legs to stand, also in view of decision rendered by the National Commission, in a case titled as Puneet Malhotra Vs Parsvnath Developers Ltd., Consumer Complaint No. 232 of 2014, Decided on 29.01.2015, wherein under similar circumstances it was observed and held as under:-
"If some of the allottees had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating Inventory at a lower price".
As far as the second plea taken by the opposite party regarding delay in offer of possession i.e. delay in issuance of completion certificate by the Competent Authorities, is concerned, it may be stated here that the said plea also does not merit acceptance. As stated above, as per terms and conditions of the Agreement, possession of the unit was to be handed over within a period of 36 months, from the date of signing the Agreement. To cover any delay caused in the process, the opposite party was entitled to 6 months more time, as per Clause 15 (d) i.e. the opposite party was bound to hand over possession of the unit, latest by 11.02.2015.
Furthermore, there is nothing on record to show that when completion certificate was not issued by the Competent Authorities, when application was moved on 15.12.2014, any follow-ups were done by the opposite party. What correspondence took place between the Authorities and the opposite party, in the matter, if any, has not been placed on record. There might be certain objections raised by the Complete Authorities, which took time to remove, on the part of the opposite party. There is also nothing on record, to show that at any point of time, the matter was taken up by the opposite party, with the Government Authorities, to expedite the issuance of completion certificate, so that possession of the units, could be offered to the complainant and other allottees. On the basis of vague averments, no relief can be granted to the opposite party. The purchaser of a unit, who had nothing to do with the issuance of completion certificate, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the unit. It is therefore held that no force majeure circumstances were encountered by the opposite party, as far as the present unit, in question. As such, the plea raised by the opposite party, in this regard, stands rejected.
An objection was also taken by the opposite party that since it was only proposed to deliver possession, within the period mentioned in the Agreement, as such time was not the essence of contract. It may be stated here that, as held above, as per Clause 15 (d) of the Agreement, possession of the constructed unit was to be offered within a period of 36 months, from the date of execution of the Agreement. The opposite party was entitled to 6 months' grace period, to facilitate handing over possession to the complainant. In a way, possession was required to be handed over on or before 11.02.2015. In view of above, there is no substance in the arguments raised by Counsel for the opposite party that time was not the essence of contract At the same time, it is also submitted that the opposite party cannot evade its liability, merely by saying that since the word proposed/tentative was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer's Agreement, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof. It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-
"Merely making endeavour to deliver possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer".
In view of above, the plea of the opposite party in this regard also stands rejected.
Another objection taken by the opposite party that since the unit, in question, falls under the category of immovable property, as such, in that event also, time is not to be considered as essence of the contract, is also bereft of merit, in view of ratio of judgment titled as Saradamani Kandappan vs S. Rajalakshmi & Ors., Civil Appeal Nos. 7254-7256 of 2002 & and Contempt Petition (C) No. 28-29 of 2009, decided on 4th July, 2011, wherein the Hon`ble Supreme Court held as under:-
"A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S. Vidyanadam and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed:
"It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.
In the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .........We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation.
Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."
(emphasis supplied) Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may."
Since, it has already been held above in preceding part of this order, that as per settled law, the complainant is entitled to refund of the entire amount deposited alongwith interest and compensation, because the opposite party failed to prove any fault on the part of the complainant and it is not obligatory upon her, to accept possession so offered to her, after a belated stage, and that too, in the absence of any force majeure circumstances, as such, the plea taken by the opposite party to forfeit the earnest money or that it is ready to pay compensation for the period of delay, is rejected.
At the same time, it is also held that since, admittedly, by the time, the present complaint was filed before this Commission, possession of the unit had not been offered to the complainant, as such, the same is within limitation, in view of principle of law, laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC).
It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is not in dispute that an amount of Rs.46,45,983/- was paid by the complainant. The said amount has been used by the opposite party, for its own benefit. There is no dispute that for making delayed payments, the opposite party was charging heavy rate of interest, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainant is certainly entitled to get refund of the amount deposited by them, to the tune of Rs.46,45,983/- alongwith interest @15% p.a., from the respective dates of deposits (less than the rate of interest charged by the opposite party, in case of delayed payment i.e. 18% p.a. (simple), as per Clause 7.4 (b) of the Agreement), till realization.
The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in case titled 'Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-
"25. The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.
26. To decide above said question, it is necessary to reproduce the provisions of Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;
"3. Act not in derogation of any other law.--
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
27. It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
28. Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
29. In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists."
30. Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
31. Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case, some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
32. We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act, a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of Arbitrator's fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
33. The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
34. Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
35. In view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected."
In view of the above, the plea taken by the opposite party in this regard, being devoid of merit, is rejected.
No other point, was urged, by Counsel for the parties.
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party, is directed as under:-
To refund the amount of Rs.46,45,983/- to the complainant, alongwith interest @15% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant.
The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made by the opposite party, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, it shall be liable to pay the amount mentioned at sr.no.(i), alongwith penal interest @18% p.a., instead of interest @15% p.a., from the respective dates of deposits onwards, and interest @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
However, it is made clear that in a case, where the complainant has availed loan facility from any financial institution(s), it shall have the first charge of the amount payable, to the extent, the same is due to be paid by her (complainant).
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
25.01.2017 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.