State Consumer Disputes Redressal Commission
Sh. Paramjit Singh Dhunde vs M/S Emerging India Real Assets P Ltd. on 14 May, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 733 of 2017 Date of Institution : 12.10.2017 Date of Decision : 14.05.2018 Sh.Paramjit Singh Dhunde, S/o Late Sh.Jagir Singh, presently residing at 7 Shortreed Grover, Brampton, ON L6R 0R8, Canada through GPA Jagatpal Singh, S/o Late Sh.Prithipal Singh, resident of Village Dallanwala, Tehsi Malerkotla, District Sangrur, Punjab. ......Complainant V e r s u s Emerging Valley (P) Limited, SCO No.46-47, 1st Floor, Sector 9-D, Chandigarh-160009 through its Managing Director. ..... Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MR.DEV RAJ, MEMBER.
MRS.PADMA PANDEY, MEMBER.
Argued by: Sh.Mukesh Verma, Advocate for the complainant.
Sh.Goldy Jakhar, Advocate for the opposite party.
JUSTICE JASBIR SINGH (RETD.), PRESIDENT The complainant is an NRI. He has filed this complaint, through his nephew, namely Jagatpal Singh. Initially, this complaint was filed by the attorney of the complainant namely Jagatpal Singh, showing him as the complainant. However, when an objection was raised by the opposite party, by way of moving miscellaneous application, amended memorandum of parties was placed on record, showing the complaint having been filed by Paramjit Singh Dhunde (complainant), through his attorney Jagatpal Singh.
It is case of the complainant that to earn his livelihood, in June 2012, he purchased one corporate office, measuring 1000 square feet, for an amount of Rs.43 lacs, in the project of the opposite party, known as 'Emerging World' in Emerging Valley, Landran-Banur Road, Mohali, Punjab. It was stated that the opposite party allured the complainant by saying that the said project is best in the world. The complainant made the entire payment of Rs.43 lacs, through cheque dated 04.06.2012. It is so reflected in receipt dated 07.06.2012 and confirmation letter dated 29.06.2012 Annexures C-3 and C-4. It is further case of the complainant that without any communication to make the payment, promise was made with him that against the amount deposited, he will be paid an amount of Rs.38,700/- per month, till the date of offer of possession of the unit. For few months, he continued to receive the said amount, however, thereafter, it was stopped by the opposite party. It was averred that possession of the unit was committed to be delivered within three years, from the date of purchase. Vide letter dated 07.06.2012, he was offered buyback of the unit, after three years of purchase @Rs.43,000/- per square feet. Reference has been made to the documents Annexure C-6 and C-7 in that regard. It is positive case of the complainant that on verification, he came to know that before launching the project, necessary permissions were not available with the opposite party. Visits at the project site showed that except existence of some slabs, construction work of the unit(s) was stopped. Faced with the situation, the complainant sought refund of amount paid, with interest, however, nothing was done by the opposite party.
By alleging deficiency in providing service and adoption of unfair trade practice, on the part of the opposite party, this complaint has been filed, seeking refund of amount paid with interest, compensation etc. Upon notice, reply was filed by the opposite party. It was stated that the consumer complaint is not maintainable because it was filed by the attorney namely Jagatpal Singh, in his own name. Further, the dispute relates to a commercial space i.e. a corporate office, as such, this complaint is not maintainable. Further, by agreeing to sell the unit, through buyback policy, the complainant ceases to be a consumer. It shows that the complainant was an investor. It was stated that office space is ready for possession, however, the complainant is not coming forward to take the same. It was alleged that rate of interest claimed is on the higher side and that the complainant would not fall within the definition of a consumer. It was averred that the complainant has sought interest and compensation, which could not be granted simultaneously. It was pleaded that interest granted also amounted to compensating the complainant. It was further pleaded that M/s Emerging India Real Assets (P) Limited, has been wrongly impleaded as party to the complaint, whereas the privity of contract survived between the complainant and Emerging Valley Pvt. Limited. The complaint has been filed with malafide intentions just on surmises and conjectures, which needs to be dismissed.
On merits, payment of amount, as alleged by the complainant is not controverted. Payment of monthly compensation aforesaid, upto August 2015 was also admitted. Qua non availability of sanctions and approvals of the project, nothing was said except twisting the matter here and there. By taking similar objections, written arguments were offered for placing on record, by moving a miscellaneous application. However, at the time of arguments that application was withdrawn. It was specifically noticed that there was nothing new, in the written arguments, except the facts already stood mentioned in the written statement.
No certificate having been issued by any competent Authority, granting permission to the opposite party, to develop the project; pollution certificate etc. have been placed on record. At the time of arguments also, even on our asking, Counsel for the opposite party has failed to show necessary approvals having been obtained by the opposite party, to sell the project, in question. There is nothing on record to show that possession of the unit was ever offered to the complainant.
The contesting parties led evidence in support of their case.
We have heard the contesting parties, and have gone through the evidence, and record of the case, carefully.
At the time of arguments, again frivolous objection was raised by Counsel for the opposite party that let the complaint be dismissed, having been filed in the name of attorney of the complainant. The said objection is not tenable because amended memorandum of parties was allowed to be accepted by this Commission, vide order dated 02.04.2018 passed in miscellaneous application no.169 of 2018, which was passed in the presence of Counsel for the opposite party. The said order has become final. The complaint was treated, having been filed in the name of the original allottee i.e. the complainant, through his attorney. Objection raised in this regard being frivolous is rejected.
It has vehemently been contended by Counsel for the opposite party that the dispute is qua a shop, purchased by the complainant in a commercial complex, launched by the opposite party and there is nothing on record to prove that it was purchased by the complainant to earn his livelihood, by way of self-employment, as such, he would not fall within the definition of consumer, in terms of Section 2 (1) (d) of the Act. It was further vehemently contended by Counsel for the opposite party that the complainant also did not fall within the definition of consumer, as the unit was purchased by him, to give it on lease and then to resell it, to the opposite party, at a higher price.
We are not going to agree with the contention raised. It may be stated here that, it is specifically mentioned in the complaint, that the complainant is a resident of Canada. However, his income is not good and he wish to come to India and the unit was purchased by him, for earning his livelihood. On the other hand, no evidence has been produced on record by the opposite party to prove that the complainant is the property dealer and deals in the sale and purchase of property, on regular basis, and as such, the unit has been purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof.
Now coming to the second plea taken by the opposite party that because the unit was purchased by him, to give it on lease and then to resell it to the opposite party, at a higher price, under buyback scheme, as such, in that even also, the complainant did not fall within the definition of a consumer. It may be stated here that, when completion of the project was not visible, under above circumstances, when buyback offer was made by the opposite party, on 07.06.2012, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the complainant. On account of that act, which developed out of the conduct of the opposite party itself, the complainant cannot be excluded from the definition of a consumer. Similar controversy, as to whether the complainant(s) on purchase of a shop/unit and as to whether, if he/they accepted buyback offer would fall within the definition of consumer or not, came up for consideration, before this Commission, in a case titled as M/s Chandigarh Overseas Private Limited Vs. Easow Mathew, First Appeal No.284 of 2015, decided on 25.01.2016. Taking note of similar contentions, this Commission, gave findings as under:-
On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the opposite parties. Defence taken by the appellant that the respondent was not a consumer was righty rejected, by observing as under:-
"As we have already observed, the complainant has specifically pleaded in his complaint that he wanted to settle a business for himself for earning his livelihood and to become an independent business owner, he agreed to purchase the said unit of 100 sq. ft. in Design Studio No.12. The complainant has also pleaded that he is a consumer as per the provisions of the Consumer Protection Act as the said unit was purchased by him for earning his livelihood. The allegations of the complainant are supported by his own affidavit. The OPs have not produced any such evidence that the complainant is a property dealer dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainant from the OPs is only 100 sq. ft. which is for small investors. Since the complainant wanted to settle a business for himself for earning his livelihood, it cannot be inferred that the said unit was purchased by him with the sole motive of earning profits. As far as the contention of the learned counsel for the OPs that the complainant is not qualified to run his unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether he was eligible under "Small Investor Scheme" or not. At this stage, such an objection is not tenable. In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon'ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer."
Contention of Counsel for the appellant that the respondent was not a consumer also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-
"Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is 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 houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
By noting ratio of the judgment of the Hon`ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583 , it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case, application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession of the unit. In the year 2009 , when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellant on 22.06.2009, may be on account of frustration in not getting possession of the unit , in time, it was accepted by the respondent , on 04.08.2009 vide letter Annexure C-7. On account of that act, the respondent cannot be excluded from the definition of a consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja`s case (supra), that surplus funds can be invested, in such a manner, in purchasing property/unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he would fall within the definition of a consumer."
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant thus, falls within the definition of 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by Counsel for the opposite party, being devoid of merit, is rejected.
It is proved on record that the project was unauthorizedly launched. Under similar circumstances, in respect of the same project i.e. 'Emerging World', consumer complaint bearing No.446 of 2016 was filed before the District Forum I, U.T, Chandigarh, which was allowed and the amount deposited was ordered to be refunded alongwith interest, compensation etc. on the ground that the project was not complete and also was launched without any authority. Against the said order passed by the Forum, the opposite party/builder came in appeal before this Commission, which was dismissed, by observing as under:-
"Counsel for the appellant failed to show that, even as on today, the project is complete and possession of the units can be offered to the purchasers, in all the appeals. Arguments qua lack of territorial jurisdiction of the Consumer Foras at Chandigarh, to entertain and decide the consumer complaints, aforesaid, was rightly rejected by the Forum by stating that Head Office of the appellant(s) is situated at Chandigarh; documents in respect of the unit, in question, were issued from the said office, as such, the Forum at Chandigarh has the territorial jurisdiction to entertain and decide the dispute, in question. In the present appeals also, office address of the appellant is shown as SCO No.46-47, First Floor, Sector 9-D, Madhya Marg, Chandigarh. Findings given to that effect by the Forum is perfectly justified.
When granting relief to the respondent, on merits, the Forum observed as under:-
"It is, thus, established on record that the OP has received the entire sale price of the showroom space in question in onetime from the complainant vide receipts dated 29.04.2013 and 01.05.2013 (Annexures C-1 and C-2) respectively but they failed to hand over the possession of the built up showroom space in question, completed in all respects to him even after a lapse of more than reasonable period of three years. The OP by not delivering the legal physical possession of the fully developed commercial space to the complainant till date, even after having received entire sale price, is not only deficient in rendering services but is also guilty of indulging into unfair trade practice. The OP in the present case "wants to have the cake and eat it too", as admittedly it had received entire cost of the commercial space. The OP, being the builder, is enjoying the possession of the commercial space as well as the entire sale consideration paid by the complainant. On the other hand, complainant after having paid the entire sale consideration of the commercial space, is still empty handed. The OP wants the complainant to run from one court to another, so that they can go on enjoying the complainant's money without any hindrance. Besides this the Opposite Party has failed to give any definite date of possession to the complainant despite his repeated requests/visits and, thus under these circumstances, the complainant was left with no option but to seek the refund of his deposited amount vide legal notice dated 06.06.2016 because more than 4 years have already passed from the date of booking of the showroom space in question. Non-refund of the deposited amount by the OP to the complainant after receipt of the legal notice itself amounts to deficiency in service as also indulgence into unfair trade practice."
It may be stated here that earlier also, against the appellant (Emerging Valley Pvt. Ltd.), in Naveen Goel and another Vs. Emerging Valley Private Limited, consumer complaint bearing no.218 of 2015, decided by this Commission on 17.02.2016, it was held as a matter of fact that when the project was sold, even Change of Land Use (CLU) was not in the hands of the opposite party (now appellant). Even Letter of Intent (LOI) was released thereafter. First Appeal bearing no.278 of 2016 filed against the order dated 17.02.2016, was dismissed, in limine, by the National Commission, vide order dated 18.04.2016."
By noting above fact, it can be said that by selling the project, without approvals, the opposite party is guilty of rendering deficient service and also adoption of unfair trade practice. The complainant is certainly entitled to refund of the amount paid, after deduction of Guaranteed Rental Income (GRI) already received by him, for some period, from the opposite party.
It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the complainant. It has been proved on record that an amount of Rs.43 lacs, was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite party, for its own benefit. It has provided nothing to the complainant till date. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the complainant is certainly entitled to get refund of the amount deposited by him, alongwith interest, from the respective dates of deposits till realization.
Under above circumstances, the opposite party is also liable to compensate the complainant for causing him mental agony, physical harassment and financial loss.
It was submitted by the Counsel for the opposite party, that the interest and compensation could not be granted simultaneously. He further submitted that interest granted also amounted to compensating the complainant. The submission of the Counsel for the opposite party does not appear to be correct. The words interest and compensation are sometimes used interchangeably and, on other occasions, they have distinct connotation. Interest in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, interest is understood to mean the amount, which one has contracted to pay for use of borrowed money. In whatever category interest in a particular case may be put, it is a consideration, paid either for the use of money, or for forbearance in demanding it, after it has fallen due, and, thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable. The interest is being granted, to the complainant, for improper and illegal retention of the amount deposited by him, with the opposite party, for a long time. Had the amount been refunded to the complainant, immediately, when the project had not taken off, for want of the requisite permissions, required for launching the same, he would have invested the same, in some business or deposited the same in the bank, as a result whereof, he would have got interest thereon. For financial loss, which the complainant incurred, this Commission, as such, has decided to grant interest, on the amount deposited, which could be said to be just, fair and reasonable. The submission of Counsel for the opposite party, being devoid of merit, stands rejected.
Now coming to grant of compensation for mental agony, physical harassment and financial loss caused to the complainant, it may be stated here that according to Section 14(d) of the Act, 1986 the Consumer Foras can grant compensation, to the complainant. The word compensation is again of very wide connotation. It has not been defined, in the Act. According to the dictionary, it means, compensating or being compensated, thing given as recompense. In legal sense, it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Consumer Foras have been vested with the jurisdiction to award value of goods or services and compensation, it has to be construed widely enabling the Consumer Foras, to determine compensation, for any loss or damage suffered by a consumer, which in law is otherwise, the wide meaning of compensation. The provision, in our opinion, enables a consumer to claim and empowers the Consumer Fora to redress any injustice done to him. The Commission or the Forum in the Act, is, thus, entitled to award not only the value of the goods or services, but also to compensate a consumer for injustice suffered by him. In this case, substantial amount of Rs.43 lacs, was deposited with the opposite party, in one go. The complainant booked the unit, in the hope of getting its possession within the stipulated period. His hopes were dashed to the ground, when he saw that there was no development activity, at the spot, and even necessary permissions had not been obtained by the opposite party, for carrying out construction and development, before it collected money from the prospective buyers. The complainant, thus, was caused physical harassment and mental agony, by the opposite party In Paramvir Singh Vs P.H. Houses Pvt. Ltd., Revision-Petition No.2779 of 2010 decided on 11.5.2011 decided by the National Commission, in similar circumstances, when possession of the unit was not given by the builder to the complainant for a long period, refund of the amount deposited by him with interest @15% and the compensation were granted. The principle of law, laid down in Paramvir Singh's case (supra) is fully applicable to the facts of the instant case. This Commission, is, thus, well within its right, to grant interest, as well as compensation simultaneously. The submission of the Counsel for the opposite party, being devoid of merit, must fail, and the same stands rejected.
As far as the objection regarding impleading of M/s Emerging India Real Assets (P) Limited in this consumer complaint, is concerned, it may be stated here that earlier, number of similar complaints, in respect of same project, have been entertained and decided by this Commission, wherein, it has been proved on record that the project in question, is a joint venture and has been jointly launched and sold by Emerging Valley (P) Limited, alongwith its sister concern M/s Emerging India Real Assets (P) Limited and M/s Emerging India Housing Corporation Limited. As such, objection taken in this regard, being devoid of merit, stands rejected.
No other point, was urged, by the contesting parties.
For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party is directed as under:-
To refund the amount of Rs.43 lacs to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards, after deducting the amount already received by him, towards Guaranteed Rental Income (G.R.I.).
To pay compensation, in the sum of Rs.1,50,000/- for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.22,000/- to the complainant.
The payment of awarded amounts, in the manner mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) thereafter shall carry penal interest @15% p.a., instead of @12%, from the date of default, after deducting the amount already received by him, towards Guaranteed Rental Income (G.R.I.) and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
However, it is made clear that, if the complainant, has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
14.05.2018 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Sd/-
(PADMA PANDEY) MEMBER Rg.