National Consumer Disputes Redressal
Dlf Universal Ltd. vs Abdul Waseem on 5 February, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI APPEAL NO. 365 OF 2006 (Against the Order dated 02/06/2006 in Complaint No. 128/2003 of the State Commission Delhi) 1. DLF LIMITED DLF CENTRE SANSAD MARG NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL AZIM W-111, GREATER KAILASH-II NEW DELHI - 110049 - ...........Respondent(s) APPEAL NO. 366 OF 2006 (Against the Order dated 02/06/2006 in Complaint No. 129/2003 of the State Commission Delhi) 1. DLF LIMITED DLF CENTRE SANSAD MARG NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL BASIT W - 111, GREATER KAILASH - II NEW DELHI - 110049 2. SAROJ GARG W/o. Late of Sh. V.K . Garg Resident of b-14, 3rd Floor . Shashi Garden Mayur Vihar Phase -1 New Delhi 110091 Delhi ...........Respondent(s) APPEAL NO. 367 OF 2006 (Against the Order dated 02/06/2006 in Complaint No. 127/2003 of the State Commission Delhi) 1. DLF LIMITED DLF CENTRE SANSAD MARG, NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL WASEEM W - 111, GREATER KAILASH - II NEW DELHI - 110049 ...........Respondent(s) APPEAL NO. 464 OF 2006 (Against the Order dated 02/06/2006 in Complaint No. 98/2003 of the State Commission Delhi) 1. DLF UNIVERSAL LTD. DLF CENTRE, SANSAD MARG NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL WASEEM W-111, GREATER KAILASH-II NEW DELHI - 110048 - ...........Respondent(s) APPEAL NO. 465 OF 2006 (Against the Order dated 02/06/2006 in Complaint No. 96/2003 of the State Commission Delhi) 1. DLF UNIVERSAL LTD. DLF CENTRE, SANSAD MARG NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL AZIM W-111, GREATER KAILASH -II NEW DELHI - 110048 - ...........Respondent(s) APPEAL NO. 472 OF 2006 (Against the Order dated 03/04/1996 in Complaint No. 474/1993 of the State Commission Maharastra) 1. DLF UNIVERSAL LTD. DLF CENTRE SANSAD MARG NEW DELHI - 110001 ...........Appellant(s) Versus 1. ABDUL BASIT W-111, GREATER KAILASH - II NEW DELHI - 110048 - ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MR. VINAY KUMAR, MEMBER For the Appellant : FAs/365-367/2006 For the Appellant : Mr. Aditya Narain, Advocate Ms. Seema Sundd, Advocate Mr. Saurabh Seth, Advocate Mr. Shashank Bhushan, Advocate Ms. Anushree Narain, Advocate For the Respondent : Mr. M.L. Lahoty, Advocate Mr. Ravi Gupta, Advocate Ms. Gargi B. Bhrali, Advocate For the Respondent : FA Nos.464, 465 & 472/2006 For the Appellant : Mr. R. Narain, Advocate Ms. Kanika Gomber, Advocate Mr. Siddharth Bantha, Advocate Ms. Nimita Kaul, Advocate For the Respondent : Mr. M.L. Lahoty, Advocate Mr. Ravi Gupta, Advocate Ms. Gargi B. Bhrali, Advocate Dated : 05 Feb 2015 ORDER These are six First Appeals against six individual orders passed by the Delhi State Consumer Disputes Redressal Commission in six Consumer Complaints. All impugned orders were pronounced on 2.6.2006. First Appeal Nos.464, 465 & 472 of 2006 arise from decisions in CC Nos.98, 96 & 97 of 2003 before the State Commission. These three appeals are filed by Shri Rajan Narain, Advocate and have been argued by Shri Ravinder Narain, Advocate. All three matters relate to flats booked by the complainants in Richmond Park Project of Appellant/OP DLF Universal Ltd. Similarly, FA Nos.365, 366 & 367 of 2006 have been filed against orders of the State Commission in Consumer Complaint Nos.128, 129 & 127 respectively. These three appeals are filed by Shri Ajay Goyal, Advocate and have been argued by Shri Aditya Naraian, Advocate. These three matters relate to booking of flats by the same complainants in Regency Park Project of the same Appellant/OP, DLF Universal Ltd.
2. As the facts and issues involved are very similar in all six cases, they are taken up for disposal through this common order. For facility of reference, facts as contained in FA No.464 of 2006 are taken for one batch of three appeals and facts as appearing in FA No.365 of 2006 are taken for the second batch of three Appeals.
FA No. 464 of 20063. The case of the Complainant, as seen from the record, was that he had booked a residential apartment in Richmond Park Project of DLF City with the OP/DLF Universal Ltd. Under the agreement of 19.4.1996 an apartment was allotted for basic consideration of Rs.33,91,519/-, which was later raised to Rs.39,40,159/-. The entire amount was paid, but the OP did not hand over possession of the apartment. As per the complaint petition, the allotment was also cancelled on 14.5.2003 and while doing so the OP forfeited a huge sum of Rs.30,11,885/-. Even the remaining balance of Rs.9,28,274/- out of the total money paid by the Complainant, was not returned to him. Therefore, a Consumer Complaint was filed with following prayer:-
"A) direct the Opposite Party to restore the allotment of Apartment No.052 and Parking No.PRF 040, Richmond Park, DLF City; And B) alternatively, in case the Opposite Party has made any allotment of the said Apartment No.F052 and Parking No.PRF 040 to any other person, direct allotment of similarly situated Apartment and Parking in Richmond Park, DLF City; And C) alternatively, direct the Opposite Party to refund the entire amount of Rs.39,40,159/- to the Complainant with interest @ 20% p.a. with effect from the date of deposit or such rate of market interest as this Hon'ble Commission may deem fit; And D) allow compensation in the sum of Rs.30,50,000/- to the Complainant on account of mental tension, agony, harassment caused to the Complainant by the Opposite Party.; And E) Awards costs of the Complainant in favour of the Complainant and against the Opposite Party."
4. In response to the above Complaint, the Written Statement filed on behalf of the OP before the State Commission, denying that the right of the OP was limited to deducting10% of the agreed consideration as 'earnest money' alone. The deductions made were claimed to be as per agreement of 19.4.1996 between the parties. The details of the amount received and deductions made are shown in the Written Statement as follows:-
"Amount paid for Flat and Parking 39,40,159/- Less: i) Earnest money (10% of cost & Parking) : 3,62,768/- ii) Delayed interest upto 15.5.2003 : 4,00,710/- iii) Interest on instalments upto 15.5.2003 : 21,79,174/- iv) Brokerage : 69,233/- 30,11,885/- Balance Refundable Rs.9,28,274/-"
5. The main contention of the OP before the State Commission was that the Complaint was not maintainable as the apartments were booked for a 'commercial purpose'. The relevant averment in the written statement before the State Commission was:
"That the Petitioner has admitted by letter received by the Respondent only on 11.2.2002 that VISBA, a trading house, had made the bookings only for investment sake to earn more yield on their money. By the said letter, it is admitted by the Petitioner that the bookings made by VISBA included three apartments in Regency Park, three apartments in Richmond Park including the said Apartment F-052 Richmond Park, one property each in Shopping Mall and Super Mart respectively. It is further admitted that the investment was made to earn more yield on their money which was not possible due to the depressed market. A copy of the said letter is annexed herewith and marked as ANNEXURE-A. This would make it clear that the said apartments were booked for commercial purposes and would fall outside the definition of "service". Thus, the Petitioner is not "consumer" under Section 2 (1) (d) (ii) of the consumer Protection Act, 1986 (Act), which excludes persons purchasing property for commercial purposes. Further, the allotment of the apartment has been cancelled by the Respondent by letter dated 14.5.2003 and consequently, the Petitioner cannot be regarded as a "consumer" under Section 2 (1) (d) of the said Act and consequently, the purported complaint is not maintainable and is liable to be dismissed."
6. We find that the impugned order does make a reference to this preliminary objection but has not given any finding thereon. The complaint has been allowed, directing the OP to make deduction towards earnest money only and refund the rest of the money, as the allotment had been cancelled.
FA No.365 of 20067. It arises out of decision of the State Commission in Consumer Complaint No. 128 of 2003. The Prayer of the complainant before the State Commission was very similar. It sought possession of the apartment and parking with waiver of the holding charge. In the alternative, it sought refund of the entire amount with interest, compensation and cost.
8. In reply to the Complaint, the Written Statement by appellant/OP before the State Commission, started with the following averment--
"That the Opposite Party has already moved an Application under Section 26 of the Consumer Protection Act, raising therein preliminary dispute in relation to jurisdiction of this Hon'ble Commission as also the Complainant not being covered under the amended definition of the term "consumer". The Opposite Party herein prays to this Hon'ble Commission to refer to and rely upon the aforesaid Application and the submissions made therein, and the same are not being repeated herein for the sake of brevity."
9. Learned arguing counsel, Mr. Aditya Narain argued that in these three complaints the application mentioned above had, inter alia, raised the preliminary objection of the transaction having been commercial in nature and therefore, the complainant not being a consumer. It was to be read as a part of the pleadings of the OP. However, the State Commission did not give any finding on this plea.
10. For the other three appeals, it was explained by Shri Ravinder Narain, learned arguing counsel for DLF Universal Ltd, that VISBA is a partnership firm of which the three Complainants are members/partners. While three separate Complaints are individually filed by them, the fact remains that all three of them have jointly signed the above letter, addressed to the OP on the letter head of VISBA. Learned counsel emphatically argued that contents of the letter constitute clear admission of the fact that the purpose of booking individual flats was not residential but commercial. It was for investment. He also relied upon decisions of this Commission wherein it has been held that if more than one flat is booked it is to be treated as booking for investment and not for residential purpose.
11. A copy of the VISBA letter of 11.2.2002 (which was a part of the pleadings before the State Commission) has also been brought on record as part of written arguments of the Appellant. It is a letter of nearly four pages in which the signatories, i.e. the three complainants, have attempted to make out a strong case against charging of penal interest, processing fees, liquation damages, holding charges and interest. Learned counsel emphasised the following opening paras in this letter in support of the plea of commercial transaction taken by the Appellant/OP before the State Commission. These paragraphs read as follows:-
"We are one the regular investors of your esteemed organization. At present we have the following properties with you.
1. REGENCY PARK Y212 Y-202 Y-203
2. RECHMOND PARK F-061 F-062 F-052
3. SHOPPING MALL 0-125
4. SUPERMART C-041C One of your broker M/s. SVS Propmart (P) Ltd. had approached us, suggesting us to book commercial properties instead of residential properties. You would recall that we had made the booking only for investment sake to earn more yield on our money. We had booked these flats at the peak time assuring that money will multiply with your esteemed organization, But due to depressed market, the rates of the properties have gone down drastically and we have lost a lost of money in the above deals instead of earning some money.
Now on approaching your goodself for relief though the above broker we were initially informed that we would get back all the amount except for some deduction of 3-4 lacs.
Subsequently when we agreed to the deal and asked for property at Mega Mall we were informed that on exorbitant sum of Rs.70.00 lakhs would be deducted out of our investment. We enclose a chart of the same. It seems that the brokers do not have any liason with your office except to take commission. They misrepresent the facts to investors like us. This gives a bad name to your good office. Initially they tell something and when facts are verified they are completely different. In the initial/booking also we were misguided regarding the rates & that we should opt for installment plan.
We have been taken aghast by such calculation. You have shaken not only me but my whole family out of wits. We feel bad that an investment in DLF for such a long time instead of yielding any results has brought loss to us. You should be more caring towards your customer rather than bringing loss to him". (Emphasis supplied)
12. Learned counsel argued that subsequent to amendment of the provision in Section 2 (1) (d) (ii) in the Consumer Protection Act, 1986, which came into effect on 15.3.2003, any service hired or avail for any commercial purpose stand excluded from the purview of the Act. Admittedly, the flats in all these Appeals were booked prior to 15.3.2003. However, he emphasised that in all cases, the Consumer Complaint was filed subsequently thereto. Therefore, the exclusion of commercial purpose would be the first issue to arise in consideration of the Consumer Complaint. It is thus clear that the question of complainant not being a consumer was raised in all six complaints.
13. Learned counsel, Mr. Ravinder Narain relied on the decision of Hon'ble Supreme Court of India in Birla Technologies Ltd. Vs. Natural Glass and Allied Industries Ltd., (2011) 1 SCC 525. In this case the issue of deficiency of service arose from purchase and installation of finance and marketing software modules in 1999. Allegedly, the performance was not as promised and the dispute started developing. The complainant sent a legal notice on 4.4.2003 detailing the deficiencies. The Consumer complaint itself was filed before the State Commission on 26.6.2003.The OP raised a preliminary objection that the complainant was not a 'consumer'. The State Commission accepted the objection and dismissed the complaint. The national Commission held that the goods purchased by the complainant were being used for a commercial purpose and therefore the complainant was not a consumer under Section 2(1)(d)(i) of the Consumer Protection Act, 1986. But, it also held that the goods were within the one year warranty period and therefore, the respondent/complainant was entitled to be considered under section 2(1)(d)(ii) during the period of warranty.
14. Hon'ble Supreme Court set aside the decision of the National Commission observing that--
"9. In view of the findings of the National Commission that the goods sold by the Appellant to the Respondent/complainant amounted to 'goods' and that such goods were purchased for commercial purpose of earning more profits, there could be no dispute that even the services which were offered had to be for the commercial purpose. Nothing was argued to the contrary. It seems that the whole error has crept in because of the wrong factual observation that the complaint was filed on 1.8.2000. In that view, it has to be held that the complaint itself was not maintainable, firstly, on the count that under Section 2(1)(d)(i), the goods have been purchased for commercial purposes and on the second count that the services were hired or availed of for commercial purposes. The matter does not come even under the Explanation which was introduced on the same day i.e. on 15.3.2003 by way of the amendment by the same Amendment Act, as it is nobody's case that the goods bought and used by the Respondent herein and the services availed by the Respondent were exclusively for the purpose of earning the Respondent's livelihood by means of self-employment. In that view, it will have to be held that the complaint itself was not maintainable in toto.
10. However, the National Commission has observed that if the Respondent/complainant choose to file a suit for relief claimed in those proceedings, they can do so according to law and in such a case, they can claim and the benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting proceedings under the Act while computing the period of limitation prescribed for such a suit."
15. Mr. Ravi Gupta, learned counsel for the Complainants/Respondents, replying to the arguments of the other side based on the VISBA letter of 11.2.1999 as well as 11.2.2002, emphasised that it was not a case of booking of flats for the purposes of commercial gains. He drew our attention to the rejoinder filed on behalf of the Complainants before the State Commission in which this point has been directly clarified. The relevant paragraph read as follows:
"7. That the flats were booked in individual name and not for commercial purposes. The flats were booked for residential purposes only. The complainant had purchased the said apartment with the aim of shifting the base from Moradabad to Delhi and for his personal use. The said letter given to the opposite party only to convince the inconvenience and hardship facing by the complainant and as such the complainant not even once exercised his right to sell and booked the profit thereof. Due to the adamant unethical attitude of the opposite party, the complainant due to the severe hardship constrained to write that being legal owner of the property is lying as waste and unproductive without any due returns. The complainant is very much a consumer and within the definition."
16. We queried learned counsel for certain clarifications. If the real objective was to shift residence from Mordabad to Delhi, what action was taken by the complainants in response to the letter of 17.9.1999, in which they were informed that occupation certificate had been issued by the competent authority and possession of the flats was offered to them. The letter also informed that if possession was not taken within 90 days, holding charge at the rate of Rs.5 per sft. per month would be charged. Why did the Complainants take ten months to respond to it. Even when the response was made in the letter of 29.7.2000, it did not raise the issue of holding charge. It needs to be noted here that Clause 16 in the Apartment Buyer's Agreement of 19.4.1996 had specifically provided for it.
17. Learned counsel fairly admitted that there was no correspondence of this period on which reply to these questions could be based. He however, drew our attention to the observation of the State Commission in para 13 of the impugned order wherein failure of the OP to respond to the Complainant's letter of 29.7.2000 for a period of four months had been held to be a deficiency of service. Learned counsel also argued that the Complainants are in export business and not professional dealers and investors in property. He argued that the flats were booked because it was their own requirement for personal residence.
18. The following conclusions emerge from the details examined above--
Admittedly, the flats were booked in 1994-95 and possession was offered in September 1999. The question of justifiability of 'holding charge' cropped up in November 2000 and correspondence ensued. However, there is no explanation why possession was not taken before that.
The plea of the complainants that the OP had not fixed any time limit for delivery of possession, by itself puts a question mark on their subsequent claim that flats were booked as they wished to move residence from Moradabad to Delhi.
Admittedly, all three complainants had booked two flats each, in their individual names, but in two separate projects i.e. one each in Richmond Park Project and Regency Park Project. This, together with the fact that cancellation of allotments was sought in 1997 (though not agreed by the OP), further weakens the claim of acquisition for residential purpose.
The Complaint petitions do mention booking of flats 'for residential purpose' but this claim is directly challenged in the pleadings of the Appellant/OP before the State Commission, on the basis of complainants' own letter of 11.2.2002, cited earlier in this order. The explanation for this letter, in the rejoinder affidavit of the complainants, that it was given only to convince the OP about the inconvenience and hardship being faced by them, is at best a measure of damage control.
19. In our considered view, it is evident from the pleadings and evidence on record that these were cases of booking of flats in two different projects by the Complainants for purposes of investment. In other words, the purpose was not residential, but commercial gain through investment. In terms of the provision in Section 2 (1) (d) (ii), which will be applicable to the cases at hand, a person availing such a service for commercial purpose is excluded from the definition of 'consumer'. As observed earlier in this order, this issue was raised before the State Commission, but was not addressed in the impugned order. Therefore, we deem it imperative to set aside the impugned order. However, in the facts and circumstances of the case, if the respondents/complainants choose to avail of an appropriate remedy, their application for condonation of delay shall be considered keeping in view the observations of the Supreme Court in Laxmi Engineering Works Vs. PSG Industrial Institute- (1995) 3 SCC 583.
20. In FA Nos.464 of 2006 and 465 of 2006 this Commission had, while admitting the Appeals, stayed the operation of the impugned order subject to deposit of Rs.10 lakhs within four weeks in each case. Similar order was passed on 22.9.2006 in FA No.472 of 2006. These deposits are now directed to be returned to the Appellants with interest accrued thereon. Statutory deposits made by the Appellants shall however not be returned, but credited to the Consumer Welfare Fund of the Central Government, in the Department of Consumer Affairs. No order as to costs.
......................J D.K. JAIN PRESIDENT ...................... VINAY KUMAR MEMBER