State Consumer Disputes Redressal Commission
A.S.Sarna vs State Of Punjab on 1 June, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 876 of 2017
Date of Institution : 06.10.2017
Date of Reserve : 14.05.2018
Date of Decision : 01.06.2018
Amanbir Singh Sarna S/o Sh. Jatinderbir Singh, resident of house
No. 241, New Model Town, Ludhiana
....Complainant
Versus
1. State of Punjab through Secretary, Department of Housing
and Urban Development, Sector 9, Chandigarh.
2. Greater Mohali Area Development Authority, PUDA Bhawan,
Sector 62, SAS Nagar through its Chief Administrator.
....Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainant : Sh. A.S. Salar, Advocate
For opposite party No.1: Sh. B.B. Menon, AAG, Punjab
For opposite party no.2 : Sh. Anuj Kohli, Advocate
Consumer Complaint No. 876 of 2017 2
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
The complainant has filed this complaint under Section 17 of the CP Act on the averments that the Ops launched their project under the name and style of Purab Premium Apartments, Sector 88, SAS Nagar. The complainant being eligible applied for one of the flat. Its total cost was Rs. 69 Lacs. The allotment was on the basis of draw of lots. In the draw of lot, complainant was successful and Letter of Intent (hereinafter referred as LOI) dated 20.5.2012 was issued in favour of the complainant. A sum of Rs. 6.9 lacs equal to 10% of the cost was deposited alongwith application. In the LOI, Op demanded another amount of Rs. 13.80 Lacs equal to 20% of the cost of the flat, which was deposited by the complainant. For the remaining period, schedule of payment was given by the Op and the complainant paid the amount as under:-
Sr. Particulars Dated Annexure No.
No.
Bank Draft 18.6.2012 C-3 Rs.13,80,000/-
4 Bank Draft 5.11.2012 C-4 Rs.10,16,600/-
5 Bank Draft 20.5.2013 C-5 Rs. 9,71,750/-
6 Bank Draft 18.11.2013 C-6 Rs. 9,26,900/-
7 Pay-in-Slip 19.5.2014 C-7 Rs. 8,82,050/-
8 Bank Draft 13.11.2014 not available but will be Rs.8,37,200/-
produced during evidence
9 Bank Draft 14.5.2015 C-8 Rs.7,92,350/-
10 Pay-in-Slip 15.7.2016 C-9 Rs.3,45,000/-
11 Pay-in-Slip 15.07.2016 C-10 Rs.1,38,000/-
12 Pay-in-Slip 15.07.2016 C-11 Rs.1,40,992/-
13 Total Total Rs.74,30,842/-
As per the terms and conditions of the LOI, the possession of the flat was to be given within a period of 3 years from the date of issue of LOI. On 30.6.2016, after a delay of more than 1 year, allotment Consumer Complaint No. 876 of 2017 3 letter was issued by the Ops vide which balance price of 5% was to be paid within a period of 30 days and under Clause V, it was mentioned to take the physical possession of the apartment "as is where is basis" and allottee shall not be entitled to claim any rebate or refund on any ground whatsoever. However, the complainant was surprised to see that although allotment letter was issued after a delay of one year from the promised date, the apartments were not inhabitable. When the fact regarding delay in completing the apartments were brought to the knowledge of Op No. 2, it was threaten that if it is not acceptable, the allotment letter shall be cancelled and entire amount forfeited. The practice of offering incomplete and uninhabitable apartments has become the standard practice of the developers. Vide letter dated 30.6.2016, it was also informed that super area of the apartment has been increased. The complainant had booked the flat having super area with 1160 sq. ft. but he received the letter of offer of possession in which the super area of the flat was increased. The Op is illegally charging for stilt and open parking spaces, which is in contravention to the Punjab Apartment and Property Regulation Act, 1995 and the judgment of the Hon'ble Supreme Court in 'Nahal Chand Laloo Chand Private Limited Vs. Panchali Co-operative Housing Society Ltd.", Civil Appeal Nos. 2544 of 2010 with Nos. 2449 and 2456 and 2545-48 of 2010. Although the Op has issued the offer of possession letter but it is contrary to the agreement that possession shall be offered only after obtaining completion/occupation certificate from the Competent Authority and not on 'as is where is basis'. Alleging Consumer Complaint No. 876 of 2017 4 unfair trade practice and deficiency in services on the part of Ops, this complaint has been filed by the complainant for refund of a sum of Rs. 81,65,842/- alongwith interest @ 5.5% from the date of payment till realization or alternatively if the refund cannot be ordered for some reason then pay compensation of Rs. 15 Lacs for delay in delivery of the possession.
3. After notice, Ops appeared and filed their reply. Op No. 2 in its written reply took the preliminary objections that there is no deficiency in service or any unfair trade practice on the part of Ops; complicated questions of law and facts are involved, which cannot be adjudicated in summary procedure; the complainant is not consumer as defined under the CP Act; the Op has already issued the allotment letter and offer of possession dated 30.6.2016; there is Arbitration Clause No. 21 in the allotment letter and offer of possession lays down that in case of any dispute or difference arising out of the terms of allotment, the same shall be referred to the Sole Arbitrator i.e. Chief Administrator, GMADA, SAS Nagar or any other person appointed by him; the letter of allotment and offer of possession was issued to the complainant and despite that instead of taking the possession, the complainant has sought refund under Clause 3(II) of the LOI, which is not applicable because he could seek the refund before issuance of the allotment- cum-offer of possession letter. On merits, it has been stated that Op launched the scheme and proposed to build up 4500 flats under Purab Premium Apartments after inviting the application, draw of lot was held on 20.3.2012 and 1400 applicants were held Consumer Complaint No. 876 of 2017 5 successful but only 1075 applicants were found eligible. Ops proposed to build 1620 number of flats and during the execution of the project, approximately 400 allottees had defaulted in making due payments and 75 allottees opted for refund of their money. The Group Housing Project is always planned in such a manner that contribution from all the allottees is taken into consideration for its timely completion and delay on the part of even one allottee, seriously prejudice the completion of the project. Complainant was successful and LOI was issued in his favour and in June, 2016 allotment letter-cum-offer of possession was also issued. It was also mentioned that in case super area is increased, then additional charges will be taken. The construction has been raised by the Op as per the approved drawings and so far no additional amount has been demanded by the Op from the allottee. It has been denied that their project is incomplete or inhabitable. Op has not indulged in any alleged unfair trade practice. There is no malafide on its part. It was also denied that Op has violated the provisions of PAPRA, 1995. It has been decided by the Competent Authority that the maintenance charges shall be payable on quarterly basis, which shall be inclusive of car parking. It was denied that the complainant is entitled to refund of any amount alongwith interest from the date of schedule, date of delivery of possession or to the tune of Rs. 74,30,842/- because the possession of the complete apartment has already been offered to the complainant vide letter dated 30.6.2016. It was again reiterated Consumer Complaint No. 876 of 2017 6 that there is no unfair trade practice or any deficiency in services on the part of Op. Complaint is without merit, it be dismissed.
4. Op No. 1 stated that the written statement filed by Op No. 2 be read as a written statement on their behalf also, therefore, no separate written statement was filed by Op No. 1.
5. In the evidence, complainant tendered affidavits of Amanbir Singh Sarna as Ex. C-A & C-B and documents Ex. C-1 to C-12. On the other hand, Op No. 2 tendered affidavit of Mahesh Bansal, E.O. (Housing) as Ex. Op2/A alongwith documents Ex. Op- 2/1 to Op-2/12. Op No. 1 stated that evidence of Op No. 2 be read as evidence of Op No. 1.
6. We have heard the counsel for the complainant, counsel for Op No. 2 and had gone through the pleadings of the parties, evidence and documents on the record.
7. An objection has been taken by Op No. 2 that the complainant is not a consumer as per the provisions of the CP Act and had applied for flat to earn profit by way of resale of the same, therefore, he is 'investor' and not a 'consumer'. However, the complainant in his complaint has specifically referred that being eligible to apply for the flat for residential purposes he has applied the same with Op No. 2. The Ops have not placed on the record any document that the complainant is having any other housing property in the area of Mohali/Tricity. There is no evidence that the previous track of the complainant is doing business in the real estate, therefore, in the absence of any such previous track of the complainant doing business in real estate, it cannot be said that Consumer Complaint No. 876 of 2017 7 mere booking of one flat was only for the purpose of investment. A reference can be given to the judgment 2017(3) CLT 459 "Pranab Basak versus Suhas Chatterjee". In that case, two flats were booked by the complainant and a plea was taken that the complainant had booked these flats for investment purposes. It was observed by the Hon'ble National Commission that unless it is established that the complainant is dealing in sale and purchase or his real intention in booking the flat was to sell the same on profit, on appreciation of the value of the real estate. This judgment was not rebutted by the Op. Therefore, we do not agree with the plea raised by the counsel for the Op that the complainant is not a consumer but an investor.
8. An other plea has been taken by Op No.2 is that there is Condition No. 6 of the Letter of Intent, which provides arbitration proceedings. There is no dispute with regard to dispute resolution in the LOI through Arbitration but the counsel for the Op before filing the reply has not moved any application under Section 8 of the Arbitration and Conciliation Act, 1996 to refer the matter to the Arbitrator, in case the Op was really interested to get the matter adjudicated before the Arbitrator. Further under Section 3 of the CP Act, an additional remedy has been provided to the Consumer Fora to deal with such type of complaints. It is in addition and not in derogation of any other provision under any other Act, therefore, under Section 3 of the CP Act, Consumer Fora have the jurisdiction to try these type of complaints even if there is arbitration clause, therefore, we do not agree with the plea raised by the counsel for Consumer Complaint No. 876 of 2017 8 the Op that the matter must be referred to the Arbitrator. Even if there is an arbitration clause in the agreement in view of Section 3 of the Act Consumer Fora has a right to entertain the complaint. A reference has been made to the judgment reported in 1(2017) CPJ 17 (NC) titled as "Ashish Oberoi Vs. Emaar MGF" in which it was held that complainant cannot be compelled to resort to Arbitration, in terms of the Arbitration Clause contained in Buyer's Agreement.
9. It is a matter of record that the Ops invited application for their project 'Purab Premium Apartments'. The complainant applied for it. The allotment was on the basis of draw of lots. In the draw of lots, the complainant was successful and LOI dated 22.5.2012 Ex. C-1 was issued in favour of the complainant for residential apartment Type 3 for a total cost of Rs. 69 Lacs. Already the complainant had deposited 10% of the cost alongwith the application form and vide this LOI further payment of Rs. 13,80,000/- was demanded to make it 30% to be paid by 22.6.2012 and in case the allottee opted for Plan 'B' then the remaining 65% was to be paid as under:-
# Instalments Due Date Principal Interest Total No. Amount Amount payable 1 1 22-Nov-2012 747500.00 269100.00 1016600.00 2 2 22-May-2013 747500.00 224250.00 971750.00 3 3 22-Nov-2013 747500.00 179400.00 926900.00 4 4 22-May-2014 747500.00 134550.00 882050.00 5 5 22-Nov-2014 747500.00 89700.00 837200.00 6 6 22-May-2015 747500.00 44850.00 792350.00 TOTAL 4485000.00 941850.00 542850.00 and the 5% was to be paid at the time of offer of possession. The complainant made the payment as referred in para No. 1 of the complaint. In this way, total payment of Rs. 74,30,842/- was paid Consumer Complaint No. 876 of 2017 9 by the complainant to the Op. The complainant alongwith his own affidavit in which this fact has been recorded has placed on the record Ex. C-3 the payment of Rs. 13,80,000/- vide DD No. 552680 dated 18.6.2012, cheque dated 5.11.2012of Rs. 10,16,600/- Ex. C-
4, cheque dated 20.5.2013 of Rs. 9,71,750/- Ex. C-5, cheque dated 18.11.2013 of Rs. 9,26,900/- Ex. C-6, payment of Rs. 8,82,050/- vide DD No. 386937 dated 19.5.2014 Ex. C-7, payment of Rs. 7,92,350/- dated 14.5.2015 Ex. C-8, payment of Rs. 3,45,000/- vide DD No. 358871 dated 13.7.15 Ex. C-9, payment of Rs. 1,38,000/- vide cheque No. 358873 dated 15.7.2016 Ex. C-10, payment of Rs. 1,40,992/- vide cheque No. 358872 dated 15.7.2016, therefore, these documents corroborate the version of the complainant and this fact has not been denied by the Ops in the written reply.
10. As per Clause 3(II) of the LOI, it has been mentioned as under:-
"(II) Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent. In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually. Apart Consumer Complaint No. 876 of 2017 10 from this, there shall be no other liability of the Authority."
According to this Clause, the possession was to be delivered within a period of 36 months, failing which the allottee was entitled to refund alongwith interest @ 8% p.a. annually on the deposited amount. However, the Ops issued allotment of residential built up apartment on 30.6.2016 Ex. C-2, alongwith that balance payment of 5% maintenance charges and corpus towards Welfare Society were demanded. In Clause No. 5 of the allotment letter, it has been mentioned that the apartment shall be offered on "as is where is"
basis and the allottee shall not be entitled to claim any rebate or refund on any ground whatsoever. However, this Clause was not there, therefore, the Ops cannot rewrite the clauses over and above the LOI. However, in the LOI, it has been mentioned that the possession of the apartment shall be handed over after completion of the development works at the site. Therefore, the Clause No. 5 in the allotment-cum-offer of possession letter "as is where is" basis is contradictory to the LOI. Therefore, the Op cannot issue any condition contrary to the LOI.
11. The counsel for the Op has raised the question that once the offer of possession letter has been issued then the complainant does not have any right to call for the refund. However, this plea is not sustainable firstly on the ground that according to Clause 3(II) of the LOI, in case the possession is not delivered within a period of 36 months from the date of issuance of the LOI then the complainant has a right to have an option for Consumer Complaint No. 876 of 2017 11 refund because it amounts to deficiency in service. In this regard, we are fortified by the judgment 2017(1) CPR 168 (NC) "Sanjay Kumar versus Sahara Prime City Limited & others" wherein it was held that allottee is entitled to withdraw from the scheme in the event of delay in completion of the project. Whereas the allotment- cum-offer of possession letter was issued on 30.6.2016 after a gap of more than one year because the offer of possession letter was to be given according to LOI by 22.5.2015, therefore, right to refund has accrued in favour of the complainant according to Clause 3(II) of the LOI. Further in the notice dated 13.6.2017, which was issued by the complainant through his Advocate Ex. C-12, it has been mentioned that complainant was surprised to see that though the allotment letter has been issued after a delay of 1 year from the promised date, the apartments were not in inhabitable condition when the fact regarding delay in completion of the apartment was brought to the knowledge of Op No. 2, it was threatened that if it is not acceptable in whatever and wherever condition, the allotment shall be cancelled and accordingly, he has requested for refund of the amount. No reply to this notice was given by Op No.2. Counsel for Op No. 2 has argued that their project is complete. In this regard, he has referred to one certificate Ex. Op-2/2, which reads as under:-
"This is to certified that the basic amenities such as water supply, electricity and sewerage system etc. including development works related to Civil, Public Health and Electrical services has been completed in all respects in Consumer Complaint No. 876 of 2017 12 Tower No. A-4, A-5, A-6, B-3, B-4, B-5, B-6, C-3, C-4, C-5, C-6, C-7, C-8, D-4, D-5, D-6 and D-7 on date 30.6.2016."
In case we go through this certificate, firstly, the name of the Officers, who signed this document has not been mentioned and secondly, it relates to the basic amenities with regard to water supply, electricity, sewerage system etc. but this certificate does not indicate that there is completion of all the development work at the site. It has been referred by the Op in the LOI Clause 3.2 that possession of the apartment shall be handed over "after completion of development works", therefore, completion of development work at the site is pre-requisite before offering the allotment-cum-possession letter. We have gone through this letter dated 30.6.2016 Ex. C-2, rather, it contains clause contrary to the LOI wherein it has been mentioned "as is where is" basis and it does not indicate about completion of the development work at the site. The copy of the brochure issued by Op No. 2 has not been placed on the record by the Op or the complainant, only some photographs have been placed on the record from Ex. Op-2/3 to 12 and on the basis of these photographs, it cannot be determined about completion of the development work at the site. The salient features of the project in the brochure are given as under:-
"* 75% open spaces.
• All locations good. All apartments North-East facing with big
Windows and Balconies. Designed respecting the age old wisdom of Vaastu. All areas in each apartment designed to let Fresh Natural Air flow through and with movement of Sun in view. Minimal requirement of electricity.
Consumer Complaint No. 876 of 2017 13• To be built by firms of national repute, with steel, cement, paints, flooring, prefabricated doors, bathroom fittings and kitchen fittings of only reputed brands (*see overleaf). Pipes only through open ducts and not walls. Quality of construction to be supervised by third party independent agencies.
• 24 hour pressurized water supply. No overhead or rooftop water tanks.
• Piped metered LPG/NPG, Garbage chute.
• Automatically switching Common Generator backup for fans, lights, TV and Fridge @ 0.8, 1 & 1.2 kW per house, as per size. Underground electric cabling no electric poles. • Alternatives over parental controls - 3 All Weather 25 meter Indoor Swimming Pools, 8 Lawn Tennis Courts, 2 Skating Rinks, 8 Indoor Badminton Courts & 8 Table Tennis tables, two 5000 sq. ft. Gyms, 8 Basket Ball Courts, 8 Volley Ball Courts, 2 Football Grounds, Over mile long Walking Tracks, a Community Centre + Club + Yoga & Meditation Hall with 30000 sq. feet covered area and Convenient Shopping for day to day needs to be provided within 5 minutes walking distance of every apartment as a matter of right, as soon as construction of apartments concludes.
• Card plus Finger Print based Common Entry Control for security. 4 feet high railings for safety.
• To be designed and built so as to withstand earthquakes as per Zone 4 notified by GOI. (7 on Richter scale) • Spacious fast elevators and fire fighting equipment. • Possession to be handed over in 36 months from date of draw."
The list of approved makes of finishing items, fittings, fixtures and engineering installations has been given as under:-
Items Approved make / materials
Civil Finishes
Flooring in Bed Rooms, Living Full thickness vitrified tiles 600 MM X
600MM (RAK, Restile, Nitco)
Flooring in Corridors, Balconies, Full thickness anti-skid vitrified tiles
Toilets, Kitchen (RAK, Restile, Nitco)
Staircase Treads Kota Stone
Flooring in Lift Lobbies Full body anti-skid vitrified tiles with
flame-torched granite border (makes
as above)
Wall finishes (interior) Gypsum Punning on walls finished
with Plastic emulsion Paint with Birla
White Putty (Paints-Asian, ICI Dulux,
Consumer Complaint No. 876 of 2017 14
Berger)
Wall finished in Toilets and Kitchen Wall tiles in dado up to 2100mm (Kajaria, Somany) Kitchen counter 19mm Granite slab with 750mm dado in ceramic wall tiles (8" x 12" min) above Counter (makes as above) Kitchen Wash Basin Stainless Steel (Nirali, Neel Kanth) Kitchen Storage 8" deep row of Stainless Steel wire net drawers under the entire length of counter with real wood facing and 9 inch x 12 feet long Granite slab at 21"
above counter. Rails: Hettich Railings on Balconies, Passages 4' high in Stainless Steel (SS 304) Doors (Dry areas) Pre molded door shutters with Chip Board / Eco Lax Board core, covered with HDF skin (Make :
MASONITE/Durian/KALPATRU) Doors (Wet areas) Permafinish Almira Shutters Pre-laminated Windows UPVC (Fenesta or Aluplast) with manufacturer approved Stainless Steel friction stays and hardware Items Approved make / materials Plumbing Services LPG/NPG Pipe & Fittings Conforming to safety standards Water supply system Hydro-Pneumatic (DP pumps, Grundfos) Water supply main risers and Stainless Steel pressed joints (SS 316 distribution Viega, Geberit) Waste, vent pipes, fittings Neeco, RIF Valves Sant, Leaders Bathroom faucets, showers, health Jaquar, Kohler, Roca faucets, kitchen faucets wash basis mixers, floor gratings, CP Towel rails, soap dishes Bathroom drains Viega WCs (Wall mounted), Wash Basins Hindware, Roca, Kohler Electrical Services Emergency back-up (1KW each flat) Lights (One CFL in each room) Philips, OSRAM, WIPRO, GE Switches, Sockets Legrand Mylinc, ABB, L&T, North West MCBs, ELCBs and switch gears Legrand Mylinc, ABB, L&T, North West Exhaust Fans Bajaj, Crompton, Orient;
Wires Copper FRLS (Kalinga, Plaza,
Anchor)
Fire Protection
Fire Hose Reel and Fire Hose Cabinet with wet-riser at each Lift and Staircase Lobby and Yard hydrants Fire Pump (1 electric main pump+1 diesel standby pump) + 1 jockey pump Consumer Complaint No. 876 of 2017 15 There is no certificate by any Competent Authority of the Ops that according to the salient features and approved makes of finishing items for the fixtures and engineering installations have been provided by them as highlighted by them in the brochure.
Therefore, the Op has failed to comply with Clause No. 3(II) of LOI before offering the possession because the possession of the apartment was to be handed over after completion of the work at the site but Op has not been able to produce any evidence with regard to completion of the development work at the site.
Therefore, the complainant is not expected to get the possession as proposed by the Op "as is where is" basis and has a right to seek for refund. Therefore, mere offer of possession is not sufficient to get the possession till completion of development works at the site by the Op, which the Op in this case has failed to prove, therefore, the complainant has a right to go for refund.
12. An objection was taken by the counsel for the Op that the complainant does not fall within the pecuniary jurisdiction of this Commission and the total amount claimed by him comes to Rs. 1,00,88,852/-. Originally, the complainant had filed the complaint and had demanded interest @ 15% but lateron an application for amendment was moved by the counsel for the complainant, which was allowed by this Commission vide order dated 11.4.2018 and in the amended complaint now the complainant has sought the refund alongwith interest @ 5.5% and in case the interest is calculated on the amount paid by the complainant then it comes to Rs. 98,85,819/-, which comes within the pecuniary jurisdiction of this Consumer Complaint No. 876 of 2017 16 Commission, whereas the counsel for the Op has calculated the amount from the date of deposit upto March, 2018. However, the complaint was filed by the complainant on 6.10.2017 and the interest is to be calculated upto the date of filing the complaint. In case lateron any amendment was sought by the complainant and the amendment has been allowed by this Commission, it will date back from the date of institution of the complaint and not from the date, it was allowed. Therefore, we do not agree with the calculations made by the counsel for the Op from the date of deposit till March, 2018. We are of the opinion that the complaint filed by the complainant is within the pecuniary jurisdiction of this Commission.
13. No other point was argued.
14. Sequel to the above, we allow the complaint and direct the Ops as under:-
(i) refund a sum of Rs. 74,30,842/- alongwith interest @ 5.5% from the various dates of deposit till payment;
(ii) Op is directed to pay this amount within a period of 45 days from the date of receipt of the copy of the order passed by this Commission, otherwise, Op will pay interest @ 9% p.a. from the date of filing the complaint till the date of payment on the deposited amount;
(iii) pay Rs. 21,000/- as litigation expenses.
15. If the Ops failed to comply with the above directions within the period mentioned above, the complainant shall be at Consumer Complaint No. 876 of 2017 17 liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
16. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
17. Order be communicated to the parties as per rules.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER June 01, 2018.
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