State Consumer Disputes Redressal Commission
Raj Kumar vs Unitech Limited on 5 October, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.99 of 2014
Date of institution : 11.07.2014
Date of decision : 05.10.2015
Raj Kumar son of Chaman Lal, r/o House No.4701, A.W.H.O.
Complex, Darshan Vihar, Sector 68, Mohali.
.......Complainant
Versus
1. Unitech Limited, Real Estate Division, SCO 189-90-91, Sector
17-C, Chandigarh, through its authorized officer.
2. Unitech Limited, Real Estate Division (Marketing), 5th Floor,
Tower-A, Signature Towers, South City 1, NH-8, Gurgaon
through its Managing Director.
........Opposite Parties
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President
Shri Baldev Singh Sekhon, Member
Shri Vinod Kumar Gupta, Member Present:-
For the complainant : Shri Vishal Goel, Advocate. For the opposite parties : Ms. Vertika H. Singh, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The complainant, Raj Kumar, has filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, "the Act") for the issuance of following directions to the opposite parties:-Consumer Complaint No.99 of 2014 2
i) to deliver the physical possession of the plot in dispute immediately, along with other amenities, like roads, park, lights, transformer and water connection;
ii) to pay Rs.50/- per square yard per month of the area of the plot for the period of delay in offering the possession with effect from 5.3.2011;
iii) to pay Rs.12,00,000/-, as increased cost of construction;
iv) to pay Rs.5,00,000/-, as compensation for the
harassment and damages suffered by them; and
v) to pay Rs.33,000/-, as counsel fee.
He alleged, in his complaint, that an Agreement dated 5.3.2008 was executed between the opposite parties and Anuj Grover in respect of the Plot measuring 502.32 square yards situated in 'Uniworld City', Sector 97, Mohali, Punjab. That plot was purchased by him from the said allottee on 12.8.2008 regarding which an endorsement was made on the Agreement and transfer was made in his name by the opposite parties. He became the purchaser of the plot after that endorsement and the total sale consideration was Rs.74,72,010/-, which included the basic price and external development charges.
As per the terms and conditions of the Agreement, the possession was to be delivered to him within 36 months of the date of execution thereof. More than 3 years and 4 months have already expired but still the possession has not been delivered, though he paid the full price of the plot to the opposite parties as per the Payment Schedule. He approached the authorized officials of the opposite Consumer Complaint No.99 of 2014 3 parties a number of times and made a demand to deliver the possession but no responsible answer was given by them. Even the sending of e-mail has not served any purpose. On account of the non-delivery of possession, he suffered a lot as he wanted to raise construction being in grave need thereof. The approximate cost of construction as in March 2011 was Rs.1,400/- per square feet and which has now accelerated to Rs.2,000/- per square feet. Thus, he has suffered a loss of Rs.12,00,000/-, on account of that increase in the cost of construction. As per clause 4(c) of the Agreement, he is entitled to the penalty of Rs.50/- per square yard per month of the area of the plot on account of the delay in offering the possession. Thus, he is suffering on both the sides on account of the non- delivery of the possession and non-fulfilment of the Agreement by the opposite parties.
2. The complaint was contested by the opposite parties, who filed joint written reply. In the written reply they did not dispute that the plot was originally sold to Anuj Grover, vide Agreement dated 5.3.2008, which was purchased by the complainant and endorsement to that effect on the Agreement was made on 12.8.2008. They also did not dispute that total sale consideration was of Rs.74,72,010/- and that the complainant paid the full amount as per the Payment Schedule. They admitted that the possession of the plot has not been delivered to the complainant so far. While denying the other allegations made in the complaint, they pleaded that the Agreement regarding the delivery of possession within 36 Consumer Complaint No.99 of 2014 4 months was subject to force majeure circumstances and they could not hand over the possession of the Unit due to the global melt down of the economy worldwide wherein the foreign investors, as anticipated by them refrained from any kind of investment in India and large portions of the buildings are lying vacant throughout in this country. There was a total cash crunch throughout and all these circumstances were beyond their control. The said penalty as per clause 4(c) of the Agreement was not payable on account of delay in delivery of possession in case the delay was beyond their control. As per the terms of the Agreement, if for any reason they were not in a position to offer this plot, then they could have offered an alternative property to the complainant or have refunded the amount in full with interest at the rate of 10% per annum. They had duly intimated the complainant about the progress at the site and the reason for the delay. In fact due to slump in the real estate the cost of construction has not increased to the extent mentioned in the complaint and in fact the complainant is trying to generate profits by filing the complaint. They have bona fide intention to complete the Project and hand over the possession of the plot to the complainant and others and the delay had occurred on account of the said reasons. Even if there is such a delay, no amount in excess of the amount mentioned in the Agreement is payable by them. The complainant does not fall under the definition of 'consumer' as contained in the Act, as he is simply investor and had purchased the plot for commercial purposes. He wanted to make profit by sale of Consumer Complaint No.99 of 2014 5 the plot in the open market. This Commission has no territorial jurisdiction to adjudicate this complaint as the Agreement itself was executed at New Delhi and payments were made either at that place or in Gurgaon Office. The dispute mentioned in the complaint is not a 'consumer dispute'. It relates to the contractual matter arising out the terms and conditions of the Agreement and the interpretation thereof which can only be adjudicated in civil proceedings. Moreover the complainant being the second allottee cannot claim himself to be the 'consumer'. The complaint filed by him is not maintainable. There was no deficiency in service on their part and they themselves are the victims of the market recession and are facing immense financial hardship. They prayed for the dismissal of the complaint with special costs having been filed on false, frivolous and vexatious grounds.
3. To prove the allegations made in the complaint, the complainant proved his affidavit Ex.CA and the documents Ex.C-1 to Ex.C-3. On the other hand, the opposite parties proved the affidavit of A.P.Singh, Authorised Representative Ex.OP/A and the documents Ex.OP-1 and Ex.OP-2.
4. We have carefully gone through the averments made by both the sides, evidence produced by them in support of their respective averments and have heard learned counsel on their behalf.
5. It was submitted by the learned counsel for the complainant that all the allegations made in the complaint stand proved from the affidavit of Raj Kumar, complainant, Ex.CA and the documents Consumer Complaint No.99 of 2014 6 proved on the record. As per the Buyer's Agreement Ex.C-1, the opposite parties were to deliver the possession of the plot to the complainant within 36 months of the date of the Agreement but they failed to do so and, as such, they are liable to pay the penalty as per clause 4(c) of the Agreement. Had the possession been delivered to the complainant in time, he must have timely raised the construction. On account of that delay, he was not in a position to raise the construction and now he will have to spend much more amount on account of escalation in the prices of the building material. For all these years, he suffered mental agony and harassment, as he was hoping for the timely delivery of possession but his hopes were shattered on account of the act of omission on the part of the opposite parties to deliver the possession. Therefore, he is entitled to Rs.5,00,000/-, as compensation for that mental agony and harassment. He prayed that all the directions, as prayed for in the complaint, be issued to the opposite parties.
6. On the other hand, it was submitted by the learned counsel for the opposite parties that the possession could not be given to the complainant within 36 months of the Agreement on account of the force majeure circumstances and those circumstances stand proved from the affidavit of A.P. Singh, Ex.OPA. There was global recession in the real estate market and the people were not coming forward to invest in the same. That recession/slump had not been foreseen by the opposite parties and, therefore, they cannot be made liable to pay any amount on account of delay in possession. Consumer Complaint No.99 of 2014 7 Moreover, the complainant was the re-allottee and that also disentitles him to claim the penalty for the delay. When they got the plot re-allotted in his name, he had the knowledge that delivery of the possession of the plot was being delayed. Therefore, he cannot ask for the penalty as per clause 4(c) of the Agreement.
7. It is an admitted fact that the complainant is not the original allottee of the plot in dispute. In fact, he had stepped into the shoes of the original allottes after the endorsement was made on the Buyer's Agreement. That endorsement is dated 12.8.2008. However, in view of that endorsement, he cannot be held to be the re-allotte in the same sense in which the word "re-allottee" has been used in various judgments of the Hon'ble National Commission and the Hon'ble Supreme Court. Vide that Endorsement the name of Anuj Grover was deleted and the name of the complainant was entered and it was mentioned that the booking stands in his name.
8. Learned counsel for the opposite parties has placed reliance on the judgment of the Hon'ble Supreme Court reported in 2009(2) CLT 411 (Haryana Urban Development Authority v. Raje Ram) in support of her arguments. In that case the complainants were not the original allottees and were the re-allottees, to whom the re- allotment was made in the year 1994, 1996 and 1997, respectively. All of them were aware of the fact that there was delay in delivering the allotted plots either in forming the layout itself or delay in delivering the allotted plot on account of encroachment etc. and in spite of that fact they took the allotment. It was held that their cases Consumer Complaint No.99 of 2014 8 cannot be compared to the cases of the original allottees, who were made to wait for a decade or more for delivery of possession and, thus, put to mental agony and harassment. The re-allottees were aware that the time for the performance was not stipulated as the essence of the contract and the original allottes had accepted the delay. By no stretch of imagination the ratio of this judgment can be applied to the facts of the present case. The Agreement was entered into on 5.3.2008 and the possession was to be delivered to the allottee within 36 months of that date, which comes to 5.3.2011. The booking stood transferred in the name of the complainant on 12.8.2008 well before that date. Therefore, it does not lie in the mouth of the learned counsel for the opposite parties to allege that being the re-allottee the complainant cannot take benefit of the clause, which deals with the penalty payable in case of delay in the delivery of possession. It cannot be said that the so called original allottee had the knowledge that there was delay in the delivery of possession, as the plot had been re-booked in the name of the complainant much before the date of the delivery of the possession itself.
9. The opposite parties have tried to take refuge of the force majeure circumstances. Clause 4(a) of the Buyer's Agreement, Ex.C-1, deals with the delivery of possession and for the proper appreciation thereof, the same is reproduced below:-
4.a. Delivery of Possession:Consumer Complaint No.99 of 2014 9
i) That the possession of the Floor is proposed to be delivered by the Developers to the Purchaser(s) within 36 months of signing hereof subject to Force Majeure circumstances and upon registration of Sale Deed provided all amounts due and payable by the Purchaser (s) under this Agreement have been paid to the Developers within the stipulated period. It is, however, understood between the Parties that various Floors in the Township shall be ready and be completed in phases and handed over to the allottees accordingly.
ii) That it is agreed that the Developers shall also be entitled to reasonable extension in time for delivery of possession of the Floor on account of any default or negligence attributable to the Purchaser(s)' fulfillment of obligations under the Agreement.
iii) ......
A perusal of this clause makes it very much clear that the possession of the plot was to be delivered to the complainant within 36 months of 5.3.2008 and it was only in case of force majeure circumstances that the opposite parties had the excuse for not delivering the possession within that time. It is not the case of the Consumer Complaint No.99 of 2014 10 opposite parties that there was any default or negligence on the part of the complainant so as to make them entitled to for the reasonable extension of the time.
10. According to the opposite parties, the following were the force majeure circumstances:-
"There was slump in the real estate market and it could not hand over the possession due to the global melt down of the economy worldwide, wherein the foreign investors, as anticipated by it, refrained from any kind of investment in India and large portions of the buildings are lying vacant throughout India as there was total cash crunch throughout."
Can these circumstances be termed as force majeure circumstances? The word "force majeure" has been defined in Concise Law Dictionary by P. Ramanatha Aiyar as "irresistible force or compulsion; circumstance beyond one's control". It was held by the Hon'ble Apex Court in AIR 1961 SC 1285 (M/s Dhanrajamal Gobindram v. M/s Shamji Kalidas and Co.) that force majeure means act of God, war, insurrection, riot, civil commotion, strike, earthquake, tide, storm, tidal wave, flood, lightning, explosion, fire and any other happening which the lessee would not reasonably prevent or control.
11. To take refuge under the force majeure circumstances, it was incumbent on the part of the opposite parties to prove that the Consumer Complaint No.99 of 2014 11 alleged circumstances were beyond their control. There may be worldwide recession and crunch in the real estate business but the opposite parties were bound to fulfil their commitment under the Agreement for developing the Project and delivering the possession of the plot to the complainant within the agreed time. These were the circumstances, which could have been foreseen and should have been kept in mind while agreeing upon the terms and conditions so mentioned in the Agreement. If these are to be taken as an excuse to wriggle out of the condition so imposed in the Agreement, then in every case such a plea would be taken as an excuse for performing their part of the contract by the Developers. They had been collecting huge amounts from the customers for the development of the Project and we 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. Thus, the delay in delivering the possession of the plot within the agreed period of 36 months amounts to deficiency in service on the part of the opposite parties, for which the complainant is to be suitably compensated.
12. As already stated above, the possession of the plot was to be delivered to the complainant on or before 5.3.2011 and admittedly the same was not delivered to him. The Agreement itself stipulates that in case of that delay the opposite parties were liable to pay charges at the rate of Rs.50/- per square yard per month of the area Consumer Complaint No.99 of 2014 12 of the plot. Therefore, the opposite parties are liable to pay those charges to the complainant from 5.3.2011 till the date of delivery of possession.
13. The complainant claimed Rs.12,00,000/-, as escalation in the cost of construction. He was required to prove that since the said date of delivery of possession there was rise in the prices of the construction material. It has been deposed by Raj Kumar, complainant, in his affidavit Ex.CA, that the approximate cost of construction upon a plot was Rs.1,400/- per square feet in March 2011 and the same at present is Rs.2,000/- per square feet on account of the escalation of the cost of the construction. No other evidence has been produced by the complainant to corroborate this deposition of the complainant.
14. On the other hand, it was deposed by A.P. Singh in his affidavit Ex.OPA that the complainant himself has derived fancy figure of Rs.2,000/- per square feet as prevailing cost of construction in comparison to Rs.1,400/- per square feet in 2011. He also deposed that due to slump in the real market the cost of construction has not at all increased to that extent and the complainant is now just trying to generate profits by filing the complaint. Thus, the opposite parties do admit that there is increase in the cost of construction but according to them, the increase in the construction is not to that extent as deposed by the complainant in his affidavit. No documentary evidence has been produced by the complainant in support of the oral evidence so produced by him. In these Consumer Complaint No.99 of 2014 13 circumstances this Commission is to do some guess work by making use of the information available regarding the increase in the cost of construction. There is increase in the cost of construction but the same is marginal one and during the period of 2010 to 2015 that cost of construction has either been rising or falling as per the availability of that construction material, policies of the Government and illegal methods adopted by the persons, who are managing the quarries of sand, bajari etc. In these circumstances, we conclude that the complainant suffered a loss of Rs.5,00,000/-, on account of the escalation in the cost of construction.
15. The complainant waited for all this period for the delivery of possession of the plot to him so that he may raise the construction and live in the house peacefully. The opposite parties by delaying the delivery of possession had been adding to his harassment and agony. We are of the opinion that for the harassment and agony suffered by the complainant, he is entitled to Rs.1,00,000/-, as compensation.
16. In the result, this complaint is accepted with Rs.11,000/-, as litigation costs and following directions are issued to the opposite parties:-
i) to deliver the possession of the plot, complete in all respects, to the complainant within three months of the date of receipt of the certified copy of this order; Consumer Complaint No.99 of 2014 14
ii) to pay penalty/charges at the rate of Rs.50/- per square yard per month from 5.3.2011 till the date of delivery of possession of the plot;
iii) to pay Rs.5,00,000/-, on account of escalation in the cost
of construction; and
iv) to pay Rs.1,00,000/-, as compensation for the
harassment and mental agony suffered by the
complainant.
17. The arguments in this case were heard on 29.9.2015 and the order was reserved. Now, the order be communicated to the parties.
18. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER (VINOD KUMAR GUPTA) October 05, 2015 MEMBER Bansal