State Consumer Disputes Redressal Commission
Ashok Kumar Dewan vs Dlf Ltd. on 10 September, 2021
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
JUDGMENT RESERVED ON: 17.08.2021
JUDGMENT PRONOUNCED ON: 10.09.2021
COMPLAINT NO. 289/2013
IN THE MATTER OF
ASHOK KUMAR DEWAN ....COMPLAINANT
VERSUS
DLF LTD. ....OPPOSITE PARTY
CORAM:
HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE SH. ANIL SRIVASTAVA, (MEMBER)
Present: None for the Complainant.
Mr. Kalyan Thevar, Counsel for the Opposite Party.
PER: HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
[Court hearing convened via video-conferencing on account of Covid-19]
1. The present Consumer Complaint has been filed before this Commission under Section 13 & 14 of the Consumer Protection Act, 1986, by Mr. Ashok Kumar Dewan (hereinafter referred to as "Complainant") against DLF Ltd. (hereinafter referred to as "Opposite Party") seeking the following reliefs:-
CC 289/2013 Page 1 of 17A. "Direct the Opposite Party to refund Rs. 1319174.23 along with interest @ 18% p.a. towards earnest money.
B. Direct the opposite party to pay interest of Rs.3432931.00 on the total amount which was deposited with the OP as sales price @ 18% p.a. on the amounts lying deposited from 13.5.2006 with the opposite party till the same was refunded to the complainant on 13.05.2011.
C. Grand a compensation of Rs. 5,00,000/- to the complainant on account of making mental agony, harassment and deficiency in service and unfair trade practices by the opposite party on the complainant.
D. The OP be burdened with fine of Rs.20,00,000.00 which may be ordered to be deposited with Consumer Legal Aid as the agreements made to sign by the OP from many of its customers is against the public policy of India and against consumer sentiment and law.
E. Cost of Rs. 22,000/- be also awarded in favour of the complainant and against the opposite party towards litigation."
2. Brief facts necessary for the adjudication of the present complaint are that the Complainant applied for booking of a Commercial Space in the Opposite Party's project namely "The Galleria DLF Jalandhar" located at Nakodar Road, Jalandhar, Punjab.
3. Subsequently, vide Space Buyer Agreement dated 26.07.2007, the Complainant was allotted premises bearing No. 309 on the Third Floor, admeasuring 1003 sq.ft. in the Opposite Party's project. The Total sale consideration was agreed between the parties at Rs. 55,16,500/-. The terms of the agreement provided that the construction of the aforesaid commercial space would be completed within 36 months from the date of execution of the Agreement.
CC 289/2013 Page 2 of 174. The Complainant made timely payments to the Opposite Party to discharge his liability towards the same. The Complainant had deposited a total amount of Rs. 49, 81, 891/- till 23.06.2008 to the Opposite Party.
5. After passage of the stipulated time period, aggrieved by the delay, the Complainant vide letter dated 17.04.2009 sought cancellation of the aforesaid booking and requested refund of the amount paid. The Opposite Party vide letter dated 15.01.2010 intimated the Complainant that the project was nearing completion and that the possession would be delivered within a short period.
6. However, the Opposite Party failed to adhere to the promises made and aggrieved by the same, the Complainant again wrote a letter dated 24.07.2010 wherein the Complainant sought cancellation and requested refund of the amount deposited with the Opposite Party. The Complainant again reiterated the aforesaid requests vide letters dated 08.10.2010 and 03.12.2010. Vide mail dated 04.01.2011, the Opposite Party reverted to the aforesaid requests made by the Complainant and offered a refund of Rs. 36,62,716.77/- against the already deposited amount of Rs.49,81,491/- .
7. Aggrieved by the amount offered, the Complainant again inquired about the deductions through several letters and personal visits to the office of the Opposite Party. The Opposite Party, vide email dated 30.03.2011, offered to refund the amount after deducing the earnest money along with interest at the rate of 6% .
8. The Opposite Party refunded an amount of Rs. 39, 32, 547/- after deducting the earnest money and other charges. The Calculations made by the Opposite party is reproduced as follows:-
CC 289/2013 Page 3 of 17 A Amount Received Rs. 49,81,891/-
B Earnest Money Rs. 11,03,300/-
C DLI Amount Rs. 29,924.23/-
D Brokerage paid Rs. 1,85,950/-
E Amount paid as Rs. 80,887/-
compensation
Refund Amount [A-(B+C+D+E)] Rs. 35,81,830/-
Interest (6% p.a. for 23 months) Rs. 4,11,910/-
Total Amount Payable Rs. 39,93,740/-
(Refund Amount + Interest)
9. The Opposite Party sent the cheque dated 16.05.2011 of Rs. 39, 32, 547/-, which was received by the Complainant on 17.05.2011. However the Complainant was dissatisfied with the deductions made by the Opposite Party.
10. Thus, left with no other option, alleging deficiency of service and unfair trade practice on the part of the Opposite Party, the Complainant approached this commission.
11. The Opposite Party contested the present case and raised some preliminary objections as to the maintainability of the present complaint and contended (a) that the present complaint is not maintainable because it is beyond the Territorial and pecuniary jurisdiction of this Commission ; (b) that the present complaint is beyond the period of limitation ; (c) that the said commercial space has been purchased solely for the purpose of investment, merely for "Commercial Purpose", hence, the Complainant is not a Consumer within the provisions of the Consumer Protection Act, 1986 ; (d) that the present complaint is non maintainable due to existence of an CC 289/2013 Page 4 of 17 arbitration clause (e) that the Complainant has failed to establish any kind of deficiency in providing services by the Opposite Party. Pressing the aforesaid preliminary objections, the Opposite Party prayed that the present Consumer Complaint should be dismissed.
12. The Complainant filed his Rejoinder rebutting the written statement filed by the Opposite Party. The parties filed their Evidence by way of Affidavit in order to prove their averments on record. After the completion of the pleadings, the Final Arguments were heard.
13. We have heard the counsel for the Opposite Party and perused through the material on record.
14. Before delving into the merits of the case, we deem it appropriate to adjudicate preliminary issues as to the maintainability of the Consumer Complaint.
TERRTITORIAL AND PECUNIARY JURISDICTION
15. The first and foremost question for consideration is whether this commission has the jurisdiction to adjudicate the present complaint. We deem it appropriate to refer to Section 17 of the Consumer Protection Act, 1986 which provides as under:
"(1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction--
(a) to entertain-
(i) complaints where the value of the goods or services and compensation, if any, claimed [exceeds rupees twenty lakhs but does not exceed rupees one crore]; and
(ii) appeals against the orders of any District Forum within the State; and
(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State, where it appears to the State Commission that such District Forum has CC 289/2013 Page 5 of 17 exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. (2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction-
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
16. Analysis of Section 17 of the Consumer Protection Act, 1986 leads us to the conclusion that this commission shall have the pecuniary jurisdiction in cases where the total claim including the compensation is more than twenty lakhs and less than One Crore. Moreover, clause 17(2) of the Act provides the extent of territorial jurisdiction, wherein it has been provided that the state commission shall have the jurisdiction to entertain cases where Opposite Party at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or the cause of action arose.
CC 289/2013 Page 6 of 1717. Having discussed the statutory position, the facts of the present case reflect that the value of the flat and the compensation prayed for by the Complainant is beyond Rs. 20 Lakhs but does not exceed Rs. 1 Crore, accordingly, the commission has the pecuniary jurisdiction to deal with the present complaint. So far as the territorial jurisdiction is concerned, the registered office of the Opposite Party is at DLF Centre, Sansad Marg, New Delhi-110001. Since the registered office falls within the territory of Delhi, this commission has the territorial jurisdiction to adjudicate the case.
18. To strength the aforesaid findings, we tend to rely on Rohit Srivastava v. Paramount Villas Pvt. Ltd. reported at 2017 SCC OnLine NCDRC 1198, wherein it has been held as under:
"It is not in dispute that the Registered Office of Opposite Party No. 1 Company is situated in Delhi, i.e., within the territorial jurisdiction of the State Commission at Delhi and therefore, in the light of clear provision contained in Section 17(2)(a), which stipulates that a Complaint can be instituted in a State Commission, within the limits of whose jurisdiction, the Opposite Party actually carries on business. In view of the said provision, we have no hesitation in coming to the conclusion that since the Registered Office of the first Opposite Party is situated in Delhi, the State Commission did have the territorial jurisdiction to entertain the Complaint."
19. Relying on the above settled law, we are of the view that this commission has both the territorial and pecuniary jurisdiction to decide the present complaint.
PERIOD OF LIMITATION
20. The next issue to be adjudicated is whether the complaint is within the period of limitation as prescribed in the Consumer Protection Act, CC 289/2013 Page 7 of 17 1986. It is imperative to refer to Section 24A of the Consumer Protection Act, 1986 wherein it is provided as under:-
"24A. Limitation period.-
(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. (2) Notwithstanding anything contained in sub-
section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint as this such period:
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay."
21. Analysis of Section 24A of the Consumer Protection Act, 1986 shows that this commission is empowered to admit a complaint if it is filed within a period of 2 years from the date on which cause of action has arisen.
22. Returning to the facts of the present case, the Complainant sought cancellation of the commercial space and accordingly sought refund of the amount paid vide its first letter dated 17.04.2009 (Page 55 of the Complaint). Thereafter, the Complainant sent repeated reminders to the Opposite Party for the same through various letters dated 24.07.2010, 08.10.2010 and 03.12.2010. The Opposite Party finally acceded to the requests of the Complainant and remitted an amount of Rs. 39, 32, 547/- on 16.05.2011 after forfeiture of the earnest money. The cause of action arose in favour of the Complainant and the period of limitation commences from the date when Opposite Party remitted CC 289/2013 Page 8 of 17 the said amount. The Complaint was filed on 10.05.2013 i.e. within the period of two years. The Complaint is well within the period of limitation and hence the contention of the Opposite Party is answered in negative.
COMPLAINANT- A CONSUMER OR NOT?
23. The counsel for Opposite Party has contended that the Complainant is not a consumer within the meaning of the Consumer Protection Act, 1986 and cannot invoke the provisions of the Act. The counsel for Opposite Party has alleged that the Complainant have booked the said unit for Commercial Purpose.
24. This aspect as to what constitutes "Commercial Purpose" has been elaborately dealt with by the Hon'ble Apex Court in Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers and Ors. reported at (2020) 2 SCC 265. The relevant portion has been reproduced as under:
"19. To summarize from the above discussion, though a straight-jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is 'for a commercial purpose':
(19.1) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, 'commercial purpose' is understood to include manufacturing/industrial activity or business-to- business transactions between commercial entities. (19.2) The purchase of the good or service should have a close and direct nexus with a profit-generating activity. (19.3) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the CC 289/2013 Page 9 of 17 transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. (19.4) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of 'generating livelihood by means of self- employment' need not be looked into. "
25. We also tend to rely on 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 Apartments were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainants 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 Complainants are 'Consumers' as defined under Section 2(1)(d) of the Act."
26. From the aforesaid dicta of the Hon'ble Supreme Court and the Hon'ble National Commission, it flows that it is for the Opposite Party to prove that the flat purchased was for commercial purpose, by way of some documentary proof and a bald statement is not sufficient to raise adverse inference against the Complainant.
27. Returning to the facts of the present case, the Complainant in his rejoinder has submitted that the Complainant had booked the CC 289/2013 Page 10 of 17 commercial unit for earning livelihood. A mere bald statement has been made by the Opposite Party that the Complainant purchased the unit for a commercial purpose and on perusal of record before us, we fail to find any material which shows that the Complainant is engaged in the business of purchasing and selling shops/commercial units on a regular basis, solely with a view to make profit by sale of such houses. Mere allegation, that the purchase of the property is for commercial purpose, cannot be the ground to reject the present consumer complaint. Whereas, in fact it has been well established that the Commercial space was purchased for self consumption/ earning livelihood. Consequently the objection raised on behalf of the Opposite Party is answered in negative.
EXISTENCE OF ARBITRATION CLAUSE IN THE AGREEMENT
28. The next preliminary objection raised by the Opposite Party is that since there exists an Arbitration clause in the agreement, the parties should be referred to arbitration and this commission is barred from exercising its jurisdiction. The Opposite Party has relied on Clause 51 of the Agreement, which is reproduced below for ready reference:-
"51. All or any disputes arising out of or touching upon or in relation to the terms of this Agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through arbitration. The arbitration proceedings shall be governed by the Arbitration & Conciliation Act, 1996 or any statutory amendments/modifications thereof for the time being in force. The arbitration proceedings shall be held at an appropriate location in Delhi or New Delhi by a Sole Arbitrator who shall be appointed by the Intending Seller and whose decision shall be final and binding CC 289/2013 Page 11 of 17 upon the parties. The Intending Allottee Cereby confirms that he/she shall have no objection to this appointment even if the person so appointed, as the arbitrator is an employee or advocate of the Intending Seller or otherwise connected with the Intending Seller and the Intending Allottee confirms that notwithstanding such relationship/connection, the Intending Allottee shall have no doubts as to the independence or impartiality of the said Arbitrator. The Courts at Jalandhar alone and the Punjab & Harayana High Court at Chandigarh alone shall have the jurisdiction."
29. 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 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."
30. 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 Complainant has 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 authorized to adjudicate the case and the existence of an arbitration clause in the agreement does not affect the jurisdiction of this commission.
CC 289/2013 Page 12 of 17DEFICIENCY OF SERVICE
31. Having discussed the maintainability of the present complaint, the next issue to be adjudicated is whether the Opposite Party is actually deficient in providing its services to the Complainant. 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) 16 SCC 512, wherein it has been held as follows:
"28. 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."CC 289/2013 Page 13 of 17
32. Returning to the facts of the present case, we deem it appropriate to refer to Clause 10.2 of the agreement, which reads as follows:
"10.2. The Intending Seller based on its present plans and estimates and subject to all just exceptions, contemplates to complete construction of the said Building/ said Premises within a period of thirty six (36) months from the date of execution of this Agreement unless there shall be delay or there shall be failure due to reasons mentioned in Clauses (11.1), (11.2), (11.3) and Clause (39) or due to failure of Intending Allottee to pay in time the price of the said Premises along with other charges and dues in accordance with the schedule of payments given in Annexure-V or as per the demands raised by the Intending Seller from time to time or any failure on the part of the Intending Allottee(s) to abide by all or any of the terms or conditions of this Agreement."
33. Clause 10.2 of the agreement stipulates that the construction was to be completed within 36 months from the date of execution of the Agreement. The agreement was executed on 26.07.2007 and hence the construction was to be completed by the Opposite Party on or before 26.07.2010. However, the Opposite Party failed to adhere to the stipulated time period as envisaged in the Agreement since the project was nowhere near completion. Hence, the Opposite Party is deficient in providing services to the Complainant.
34. Aggrieved by the delay, the Complainant sought cancellation of the Allotment and sought refund of the amount paid to the Opposite Party. However, the Opposite Party only remitted an amount of Rs. 39, 32, 547/- as against the deposited amount of Rs. 49, 81, 491/-. The Opposite party has submitted that the deduction of earnest was made as per the terms and conditions of the Agreement entered between the parties. The clause pertaining to the deduction of Earnest money is reproduced as follows:-
CC 289/2013 Page 14 of 17"4. ............ The Intending Allottee hereby authorizes the Intending Seller to forfeit out of the amounts paid/payable by him/her, the earnest money as aforementioned together with any interest paid, due or payable along with, any other amount of a non- refundable nature in the event of the failure of the Intending Allottee to perform his/her obligations or fulfil all the terms and conditions set out in the Expression of Interest. Form and/or this Agreement executed by the Intending Allottee including but not limited to the occurrence of any event of default as described in Clause 12 of this Agreement or in the event of failure of the Intending Allottee to sign and return this Agreement in its original form to the Intending Seller within thirty (30) days from the date of its despatch by the Intending Seller.
The Intending Allottee agrees that the conditions for forfeiture of earnest money shall remain valid and effective till the execution and registration of the conveyance deed and/or Deed of Apartment for the said Premises and that the Intending Allottee hereby authorizes the Intending Seller to effect such forfeiture without any notice to the Intending Allottee and the Intending Allottee has agreed to this condition to indicate his/her commitment to faithfully abide by all the terms and conditions contained in his/her Expression of Interest Form and this Agreement."
35. The aforesaid clause reflects that the Opposite Party had the authority to forfeit the Earnest money only when there is a default on part of the Complainant. However, in the present case, as established above, the Opposite Party has been deficient in providing services to the Complainant and only then the Complainant sought cancellation of the allotment and refund of the amount paid. The aforesaid clause for forfeiture of the earnest is not applicable to the present case and the deductions made by the Opposite Party are wholly illegal and uncalled for.
CC 289/2013 Page 15 of 17CONCLUSION
36. Keeping in view the facts of the present case, we allow the following reliefs as prayed for by the Complainant:
I. We direct the Opposite Party No.1 to refund the amount of Rs. 13, 19, 174. 23/- along with interest as per the following arrangement:
A. An interest @ 6% p.a. calculated from 16.05.2011 (the date of refund of the amount after wrongly deducting the amounts) till 01.09.2021 (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 31.10.2021;
C. In case the Opposite Party No.1 fails to refund the amount as per the aforesaid clause (A) on or before 31.10.2021, the entire amount is to be refunded 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. II. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party No.1 is also directed to pay to the Complainant A. A sum of Rs. 1,00,000/- as cost for mental agony and harassment;
B. And the litigation cost to the extent of Rs. 50,000/-.
37. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.
CC 289/2013 Page 16 of 1738. 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.
39. File be consigned to record room along with a copy of this Judgment.
(DR. JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (ANIL SRIVASTAVA) MEMBER Pronounced On:
09.09.2021 CC 289/2013 Page 17 of 17