State Consumer Disputes Redressal Commission
Mr. Rohit Udasi & Anr vs M/S Wave Megacity Centre Pvt Ltd on 31 October, 2022
CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution: 16.07.2020
Date of hearing: 06.09.2022
Date of Decision: 31.10.2022
COMPLAINT CASE NO.- 180/2020
IN THE MATTER OF
MR. ROHIT UDASI,
S/O MR. RJ UDASI
MS. SHELLY UDASI
W/O MR. ROHIT UDASI
BOTH RESIDENTS OF :
B-709, RAJAPUSHPA ATRIA,
SURVEY NO. 148, GOLDEN MILE ROAD,
KOKAPET, RANGAREDDY DISTRICT
HYDERABAD - 500075
(Through: Chamber of Legal Solutions)
...Complainants
VERSUS
M/S WAVE MEGACITY CENTRE PVT. LTD.
HAVING REGISTERED OFFICE AT:
MEZZANINE FLOOR, M-4,
SOUTH EXTENSION PART-II,
NEW DELHI-110049
(Through: VSA Legal)
...Opposite Party
ALLOWED PAGE 1 OF 12
CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE MS PINKI, (JUDICIAL MEMBER)
Present: None for the parties.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
JUDGMENT
1. The present complaint has been filed by the Complainants before this commission alleging deficiency of service on the part of Opposite Party and has prayed the following reliefs:
a) Pass an order thereby directing the Opposite Party to refund the amount of Rs. 36,43,500/- to the Complainants.
b) Award punitive damages to the tune of Rs. 2,50,000/- in favour of the Complainants.
c) Award interest pende-lite and future interest amounting to Rs. 7,50,000/- in favour of the Complainants.
d) Award litigation expenses to the tune of Rs. 50,000/- in favour of the Complainants.
e) Any other order/ relief/ direction may also kindly be passed in favour of the complainant as this Hon'ble Commission may deem fit, just and proper according to the facts and circumstances of the present case and in the interest of justice.
2. Brief facts necessary for the adjudication of the present complaint are that on 09.07.2013, the Complainants booked a residential apartment with the Opposite Party in the project 'Elegantia Serviced Residences' situated at Noida, Uttar Pradesh. Thereafter, the Opposite Party allotted apartment bearing no. 1903 at 19th Floor through Allottee Arrangement dated 09.07.2013. As per Clause 5.1 of the said Allottee Arrangement, the Opposite Party ALLOWED PAGE 2 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 assured the complainants to complete the said project within forty- eight months alongwith an extended period of six months from the date of execution of this arrangement. However, till date neither the construction has been completed nor the possession of the apartment has been handed over by the Opposite Party. The Complainants over the time had paid a sum of Rs. 36,43,500/- to the Opposite Party as and when demanded by it. The Complainants sent various communications to the Opposite Party to know about the status of the said project but no satisfactory response was given by the builder.
3. Aggrieved by the default in handing over the possession of the said apartment within stipulated time, now the complainants prayed for refund of the amount deposited by them alongwith interest and compensation.
4. The Opposite Party has contested the present case and raised preliminary objections as to the maintainability of the complaint case. The counsel for the Opposite Party submitted that the Complainants are not 'consumer' under the Consumer Protection Act, 1986 as the Complainant invested the money in real estate to earn profit. He further submitted that there is an arbitration clause in the Allottee Arrangement dated 09.07.2013, which bars the jurisdiction of this commission.
5. The counsel for the Opposite Party submitted that the delay, if any, occurred on account of reasons beyond its control. He argued that the Hon'ble National Green Tribunal vide order dated 11.01.2013 directed the builders of Noida and Greater Noida to refrain from extracting ground water for the purpose of construction, which halt the work of Opposite Party from January, 2013 to July, 2013. It was further submitted by the counsel for the Opposite Party that ALLOWED PAGE 3 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 vide order dated 14.08.2013, the Hon'ble National Green Tribunal stayed all the construction within 10 km radium of the Okhla Bird Sanctuary, which again delayed the project in question.
6. The counsel for the Opposite Party submitted that Complainants were given an option to re-allot their unit from unit no. 1903 to unit no. 3E-32/3 vide letter dated 22.07.2017 but the Complainants did not consent to the same. Pressing the aforesaid objections, the counsel appearing on behalf of the Opposite Party prayed that the complaint be dismissed.
7. The Complainants has filed the Rejoinder rebutting the written statement filed by the Opposite Party. Both the parties have filed their Evidence by way of Affidavit in order to prove their averments on record. Written arguments of both the parties are also on record.
8. We have perused the material available on record and heard the counsel for the parties.
9. The fact that the Complainants had booked an apartment bearing no. 1903 with the Opposite Party is evident from the Allottee Arrangement dated 09.07.2013 (Annexure-A-1). Payment to the extent of Rs. 36,42,500/- by the Complainants to the Opposite Party is evident from the Statement of Account dated 25.09.2017 issued by the Opposite Party. (Annexure-A-2). WHETHER COMPLAINANTS FALL IN THE CATEGORY OF 'CONSUMER' UNDER THE CONSUMER PROTECTION ACT, 1986?
10. The Opposite Party contended that the Complainants are not Consumer as defined under the Consumer Protection Act, 1986 as they invested the money to earn profit, which amounts to commercial purpose. To resolve this issue, we deem it appropriate ALLOWED PAGE 4 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 to refer to Aashish Oberai Vs Emaar MGF Land Limited reported in I (2017) CPJ 17(NC) wherein it is held as under:
"6. ....... 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."
11. It is imperative to refer to the dicta of the Hon'ble National Commission in CC-1122/2018 titled Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. decided on 01.11.2019, wherein, the Hon'ble National Commission has held as under:
"19. The contention of the Learned Counsel that the said Flats were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainant have purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. The Opposite Parties failed to discharge their onus and we hence hold that the Complainant are 'Consumers' as defined under Section 2(1)(d) of the Act."
ALLOWED PAGE 5 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022
12. From the aforesaid dicta of the Hon'ble National Commission, it flows that it is for the Opposite Party to prove that the apartment purchased was for commercial purpose, by way of some documentary proof and a mere bald statement is not sufficient to raise adverse inference against the Complainants.
13. In the present case, the Opposite Party has merely made a statement that the Complainant purchased the apartment to gain profit and on perusal of the record before us, we fail to find any material which shows that the Complainants are engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such apartment. Mere allegation, that the purchase of the property is for investment purpose, cannot be the ground to reject the present consumer complaint. Consequently, the objection raised on behalf of the Opposite Party is answered in the negative.
WHETHER THE EXISTENCE OF ARBITRATION CLAUSE IN THE ALLOTTE ARRANGEMNT BARS THE JURISDICTION OF CONSUMER COURTS?
14. The next preliminary objection raised by the Opposite Party is that since there exists an arbitration clause in the Allottee Arrangement dated 09.07.2013, the parties should be referred to arbitration and this commission is barred from exercising its jurisdiction. To deal with this issue, we deem it appropriate to refer to Emaar MGF Land Limited vs. Aftab Singh reported at I (2019) CPJ 5 (SC), wherein the Apex court has held as under:-
"55. We may, however, hasten to add that in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an ALLOWED PAGE 6 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 arbitration agreement, there is no inhibition in disputes being proceeded in arbitration. It is only the case where specific/special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration."
15. The Hon'ble Apex Court has put to rest the controversy relating to the existence of arbitration clauses in the allotment letter/apartment buyer agreement etc. as is evident from the relevant paragraph of Emaar MGF Land Limited (supra). In the present case also, the Complainants have opted for the special remedies provided under the Consumer Protection Act, 1986. Therefore, this commission can refuse to relegate the present case to the arbitration. Hence, this commission is authorised to adjudicate the present case and the existence of an arbitration clause in the arrangement does not affect the jurisdiction of this commission.
WHETHER THE OPPOSITE PARTY IS DEFICIENT IN PROVIDING ITS SERVICES TO THE COMPLAINANTS?
16. The next question for consideration before us is whether the Opposite Party is deficient in providing its services to the Complainants or not. The expression Deficiency of Service has been dealt with by the Hon'ble Apex Court in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:
"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a ALLOWED PAGE 7 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 person in pursuance of a contract or otherwise in relation to any service.
24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression 'service' in Section 2(1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the Opposite Party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation.
17. At this stage, we deem it appropriate to refer to Clause 5.1 of the Allottee Arrangement dated 09.07.2013, which bound the Opposite Party to complete the construction of the said project within 48 months plus extended six months from the date of execution of this arrangement. However, it is admitted by the Opposite Party that till date neither the construction of the said project has been completed ALLOWED PAGE 8 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 nor the possession of the apartment in question was handed over to the Complainants.
18. Relying on the above settled law, it is clear that the Opposite party failed to comply with the contractual obligation of providing the said apartment within the contractually stipulated period and therefore, is guilty of deficiency in service.
19. The Opposite Party further submitted that the delay in completion of the project in question was due to the National Green Tribunal order dated 11.01.2013, which prohibits the extraction of ground water for the purpose of construction activities. We note that the Allottee Arrangement was executed between the parties on 09.07.2013. If there was a complete ban on use of underground water for construction and the said prohibition was passed on 11.01.2013, then the Opposite Party must have taken into account, the impact of the said prohibition while entering into Agreements with the Complainants. Therefore, it is not open to the Opposite Party to rely upon the said prohibition in order to justify the delay in construction of the said apartment sold to the Complainants. The Opposite Party knew at the time of entering into agreement with the Complainants that it will not be able to use underground water for construction of the apartment and therefore, will have to make alternative arrangements from authorized sources for making the water available for the said construction. Therefore, the aforesaid prohibition on use of the underground water for construction purpose does not justify the delay in completion of the construction.
20. In any case, no material has been placed by the Opposite Party on record to show that efforts were made by it during the relevant period to procure water from alternative sources but it was unable ALLOWED PAGE 9 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 to obtain the water from the said sources. More importantly, in the Arrangement executed between the parties, it was not disclosed to the buyers that since no underground water can be used for construction purpose, the developer will have to arrange water from alternative sources and in case it is not able to arrange water, the construction would be delayed and in that case, it will not be held responsible for the delay in completion of the construction. Thus, in our view, the reference to the direction of National Green Tribunal in only an excuse to justify the inordinate delay on the part of the Opposite Party to complete the project and failure of delivery of possession to the Complainants.
21. Undisputedly, the Opposite Party has failed to deliver possession of the said apartment to the Complainants even after expiry of more than five years from the stipulated date of completion of construction without any reasonable excuse. Thus, we are of the view that Opposite Party is guilty of deficiency in service.
22. It is also appropriate to refer to Aashish Oberai vs. Emaar MGF Land Limited reported in I (2017) CPJ 17 (NC), wherein the Hon'ble National Commission has held as under:
"I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant 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.
23. Relying on the above settled law, we hold that the Complainants are not bound to take the possession of the said apartment after the ALLOWED PAGE 10 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022 stipulated period and are entitled to refund of the entire amount paid by them alongwith interest.
24. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party to refund the entire amount paid by the Complainants i.e., Rs. 36,42,500/- along with interest as per the following arrangement:
A. An interest @ 6% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till 31.10.2022 (being the date of the present judgment);
B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party pays the entire amount on or before 31.12.2022;
C. Being guided by the principles as discussed above, in case the Opposite Party fails to refund the amount as per the aforesaid clause (A) on or before 31.12.2022, the entire amount is to be refunded along with an interest 9% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till the actual realization of the amount.
25. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to pay a sum of A. Rs. 2,00,000/- as cost for mental agony and harassment to the Complainants; and B. The litigation cost to the extent of Rs. 50,000/-.
26. Applications pending, if any, stand disposed of in terms of the aforesaid judgment.
ALLOWED PAGE 11 OF 12 CC/180/2020 MR. ROHIT UDASI & ANR. VS. WAVE MEGACITY CENTRE PVT. LTD. DOD.: 31.10.2022
27. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
28. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) (JUDICIAL MEMBER) Pronounced On:
31.10.2022 ALLOWED PAGE 12 OF 12