State Consumer Disputes Redressal Commission
Navneet Mahajan vs Parsvnath on 1 May, 2013
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH. Complaint Case No. 14 of 2013 Date of institution: 01.03.2013 Date of decision : 01.05.2013 1. Navneet Mahajan S/o Mr. Darshan Kumar Mahajan 2. Neeti Mahajan W/o Navneet Mahajan Both residents of H.No.34, A/D Gandhi Nagar, Jammu and Kashmir. Complainants Versus 1. Parsvnath Developers Limited, Registered & Corporate Office, 6th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi -110001through its local address: SCO No.1, Ist floor, Sector-26, Madhya Marg, Chandigarh. 2. Chandigarh Housing Board, through its Chairman, 8, Jan Marg, Sector-9, Chandigarh. Opposite Parties. Complaint U/s 17 of Consumer Protection Act,1986. For the Complainant: : Sh. Harkeerat Singh, Advocate For Opposite Party No.1: Sh.Aftab Singh, Advocate, proxy for Sh.Ashwani Talwar, Advocate For Opposite Party No.2 : Sh.Tarundeep Singh Khera,Advocate, proxy for Sh.Jai Singh Brar, Advocate alongwith Sh.Nirmaljeet Singh, Jr.Assistant CORAM: Justice Sham Sunder(Retd), President Mrs.Neena Sandhu, Member
Per Justice Sham Sunder (Retd), President The facts, in brief, are that Opposite Party No.1 had widely advertised its project of a township, in the name of Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh, envisaging sale of residential units, to be developed, and constructed by it, on the land of Opposite Party No.2. Opposite Party No.1 had even constructed a sample flat, at the site, enabling the public to take decision in purchasing the same. It was also stipulated that the construction of the residential units and other related infrastructure, was likely to be completed, within a period of 36 months, from the date of signing the Development Agreement, which was signed on 6.10.2006. The complainants- who are husband and wife , impressed by the brochure, applied for allotment of a two bedroom flat, D category, measuring 1700 Sq. ft. super area, vide application dated 17.9.2007, accompanied by a cheque of Rs.5,90,000/-, as earnest money. The application of the complainants was acknowledged and they were allotted flat No.D8-104,in Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh, vide allotment letter dated 11.10.2007, copy whereof is annexure C3. It was stated that later on, as per the request of the complainants, the name of Mr.Darshan Kumar Mahajan was also included alongwith the name of abovementioned allottees, vide letter dated 11.7.2008 annexure C4. It was further stated that the payment plan was construction linked. It was further stated that according to the said payment plan, the complainant deposited another sum of Rs.23,63,750/-, vide receipt dated 2.1.2008, and Rs.3.00 lacs vide receipt dated 5.9.2008, copies whereof are Annexure C5 & C6 respectively. In this way, upto 5.9.2008, a total sum of Rs.32,53,750/-, was deposited with the Opposite Parties. Flat Buyer Agreement dated 17.9.2007, was entered into amongst the parties, copy whereof is Annexure C1. It was further stated that the complainants came to know that the Opposite Parties failed to construct the flats and even the foundation was not laid at the site. It was further stated that the complainants repeatedly requested the Opposite Parties, to refund the amount, alongwith interest as there was no progress of the project, and the same was delayed for unlimited period. However, no reply was received. It was further stated that the Opposite Parties were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act,1986(hereinafter to be called as the Act only), was filed, claiming refund of the amount of Rs.32,53,750/- alongwith interest @ 24% p.a. and compensation/damages of Rs.20.00 lacs, besides litigation costs.
2. Opposite Party No.1, in its written version, admitted the factual matrix of the case, that the complainants were allotted a flat with super area of 1700 square feet, in the aforesaid project, at a basic price of Rs.1,18,15,000/-. It was also admitted that a Flat Buyer Agreement was executed amongst the complainants, and the Opposite Parties on 17.9.2007. It was also admitted that the complainants deposited Rs.32,53,750/-. It was, however, stated that after the execution of the Development Agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to Opposite Party No.1, by the Chandigarh Housing Board.
It was further stated that, when Opposite Party No.1, was fencing the land, possession whereof was delivered to it, for the development of project, a dispute arose, as the Haryana Government, claimed ownership, with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to Opposite Party No.1, but it was discovered to be the land of the Forest Department. It was further stated that, as per Article 2.2.2, period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same. It was further stated that, as per Article 4.2.1. of the Development Agreement dated 6.10.2006, executed between the Developer and the Chandigarh Housing Board, it was agreed between the parties that 30% of the revenues received in the Escrow Account shall be transferred to a designated bank of Opposite Party No.2, and correspondingly the balance 70% shall be transferred to the account of the Developer. Consequently, the liability of the Developer, and the Chandigarh Housing Board, in case of refund, was corresponding to the above agreed arrangement of receipts also.
It was further stated that the complainants did not deposit all the instalments and, as such, violated the provisions of Clause 5(a) of the Flat Buyer Agreement. It was further stated that in case of cancellation, Rs.5,90,750/, being 5% of the basic price was to be forfeited. It was further stated that after deducting the said amount of Rs.5,90,750/- from the deposited amount of Rs.32,53,750/-, the remaining amount works out to be Rs.26,63,000/-. It was further stated that, as such, the balance amount of Rs.26,63,000/-
shall be refunded to the complainants, as per the provisions of Clause 5(a) of the Agreement dated 17.9.2007. It was further stated that the dispute between the Opposite Parties, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Fora was barred. It was denied that Opposite Party No. 1, was deficient, in rendering service, and indulged into unfair trade practice. The remaining averments, were denied, being wrong.
3. Opposite Party No.2, in its written version, admitted the factual aspect of the case, that the complainants were allotted flat No.D8-104 on 11/15.10.2007 and a Flat Buyer Agreement, was executed, amongst the complainants, and the Opposite Parties. It was also admitted that the complainants deposited Rs.32,53,750/- as per Construction Linked Payment Plan. It was stated that as per Clause 9(e) of the Flat Buyer Agreement, Opposite Party No.2, Chandigarh Housing Board, was to only provide the land for the project and the Developer (Opposite Party NO.1) was to undertake the development of the said project, and, as such it was the Developer which was solely responsible for all quality parameters, timely delivery of residential units, all claims/liabilities and compensation towards defects/delay etc. It was further stated that the dispute, between the Opposite Parties, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Fora was barred. It was further stated that on receiving the complaint, Opposite Party No.2 has already refunded Rs.9,76,125/-, being 30% of its share, vide demand draft No.422474 dated 15.4.2013. It was further stated that there was no deficiency, in rendering service, nor indulgence into unfair trade practice, on the part of Opposite Party No.2, and a prayer was made for dismissal of the complaint qua it.
4. The complainants, in support of their case, led evidence by way of their affidavits, alongwith which, a number of documents were attached.
5. Opposite Party No.1, filed the affidavit of Sh.Prehlad Kumar Jain, President, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi, by way of evidence, and also attached a number of documents therewith.
6. Opposite Party No.2, filed the affidavit of Mrs.Mandeep Kaur, HCS, Secretary, Chandigarh Housing Board.
7. We have heard the Counsel for the Parties, and have gone through the evidence and record of the case, carefully.
8. The Counsel for the complainants, submitted that the complainants, applied for the allotment of a flat, and they were allotted flat No. D08-104, having super area of 1700 sq.ft. approximately in the project of Parsvnath Prideasia, Rajiv Gandhi Chandigarh Technology Park, Chandigarh. He further submitted that the complainants deposited total amount of Rs.32,53,750/- with the Opposite Parties upto 5.9.2008. He further submitted that, as per the Flat Buyer Agreement dated 17.9.2007(Annexure C1/R-1/2), the construction of the residential units, was likely to be completed within 36 months of signing the Development Agreement R-1/1 dated 6.10.2006, between the Developers and the Chandigarh Housing Board. He further submitted that though a sum of Rs.32,53,750/- was deposited by the complainants, towards part payment of the price of flat, yet not even a brick was laid, at the spot, what to speak of construction of flats. He further submitted that there was no breach of the Agreement, on the part of the complainants, yet, they were not given possession of the flat. He further submitted that the complainants, therefore, could not wait for an indefinite period, and were entitled to the refund of amount, deposited by them, with interest, as also compensation for harassment. He further submitted that Opposite Party No.1, could not deduct 5% of the basic price, from the amount, deposited by the complainants, in the event of refund of the same, as the payment was made according to the construction linked plan, and there was no default, in making part payment of the price of flat. He further submitted that Opposite Party No.2 only refunded Rs.9,76,125/-, without any interest and compensation. He further submitted that the complainants were also entitled to compensation for harassment and mental torture caused to them. He further submitted that the Opposite Parties, were certainly deficient, in rendering service, to the complainants, by neither refunding the amount, deposited by them, nor paying them the compensation, and they also indulged into unfair trade practice.
9. On the other hand, the Counsel for Opposite Party No.1, submitted that, no doubt, the Development Agreement R-1/1 dated 6.10.06, was executed between the Opposite Parties, as a result whereof, possession of the entire unencumbered land for the project was to be provided by Opposite Party No.2.
He further submitted that since Opposite Party No.2, did not hand over possession of the entire unencumbered chunk of land, required for the development of project, the construction could not be undertaken. He further submitted that there was, thus, dispute between the parties, as a result whereof, the matter was referred to the arbitrators, and their final decision, was still awaited and, as such, this Commission has no jurisdiction to entertain and decide the complaint. He further submitted that, since there was default, on the part of the complainants, in depositing the remaining instalments, towards the price of flat, they were only entitled to the refund of amount, after deduction of 5% of the basic price, as per Clause 5(a) of the Agreement dated 17.9 2007. He further submitted that according to Article 4.2.1. of the Development Agreement R-1/1, as well as Clause 5 of the Escrow Agreement R-1/3, the liability of the Developer and the Chandigarh Housing Board, in case of refund, was in the ratio of 70:30. He further submitted that though a period of 36 months, was provided, under Article 2.2.1 of the Agreement R-1/1 dated 6.10.2006, and under Clause 9(a) of the Agreement dated 17.9.2007, for the completion of construction, yet the same was to commence, only after the possession of the entire unencumbered land, had been handed over to Opposite Party No.1, for the development of project, by Opposite Party NO.2, but it (Opposite Party NO.2) failed to do so. He further submitted that, under these circumstances, Opposite Party No.1, was neither deficient, in rendering service, nor it was liable to pay any compensation, nor it indulged into unfair trade practice.
10. The Counsel for Opposite Party No.2, submitted that, as per the Escrow Agreement, Opposite Party No.2, has already refunded its 30% share amounting to Rs.9,76,125/- vide bankers cheque dated 15.4.2013 which was submitted in the Commission itself on 22.4.2013 and, as such, the remaining amount is to be paid by Opposite Party No.1.
11. The first question, that arises for consideration, is, as to within which period, the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants applied for the allotment of a flat, and they were allotted the same. They deposited Rs.32,53,750/-, in instalments, towards the price of flat, according to construction linked payment plan, as admitted by the Opposite Parties. Clause 9(a) of the Flat Buyer Agreement dated 17.9.2007 annexure C1/ R-1/2, referred to above, which is relevant, for answering the question, posed, at the outset of this paragraph, reads as under ;
Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.
12. The plain reading of Clause 9(a) of the Flat Buyer Agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of signing the Development Agreement dated 06.10.2006, annexure R1/1. The time could be extended, in terms of the Development Agreement, dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the Developer. Opposite Party No.1 admitted, in its written reply, that, in the first instance, possession of the entire project land, claimed to be unencumbered, was handed over to it, by Opposite Party No.2, and when the fencing was being done, the Haryana Govt. raised a dispute, with regard to the ownership of a portion of the same. It is the case of Opposite Party No.1, that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to it, the same was discovered to be that of the Forest Department. No evidence was, however, produced by Opposite Party No.1, in this regard. Even if, it is assumed, for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the Developer, that the delay was caused, in the construction of residential units. The Developer also could not take shelter of force majeure clause. No document was produced by Opposite Party No.1, that any restriction was imposed by any Court or Authority, upon it, as a result whereof, it could not raise construction of residential units, in time.
Even, it was not proved, that there was delay, in the grant of environmental clearance. Opposite Party No.1, without first confirming the clear title of the entire land, over which the project, was to be developed, started booking the flats, and allotting the same, to the prospective buyers, by fleecing them of huge amounts, and making misleading statement, that the construction of residential units, will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Party No.1, thus, indulged into unfair trade practice. It is, therefore, held that the construction of residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009.
13. The next question, that arises for consideration, is, as to whether the complainants are entitled to the refund of amount, deposited by them, with interest or not ? Clause 9(d) of the Flat Buyer Agreement, which is relevant, to answer this question, reads as under;
9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.
14. The complainants deposited the amount towards part payment of the price of flat, in the hope of getting its possession, within a period of 36 months from 6.10.2006, but they found that there was no development, at the site, and even a single brick, had not been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option with the complainants, in such circumstances, was to ask for the refund of amount and, accordingly, they approached the Opposite Parties and requested for refund of the deposited amount. The plain reading of Clause 9(d) extracted above, reveals that if the Developer, for, whatever the reasons may be, fails to deliver the possession of residential unit to the buyers, the Developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyers, with interest, at the SBI Term Deposit Rate, as applicable on the date of refund. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount immediately, with interest, as provided under Clause 9(d) of the Agreement, referred to above. Since Opposite Party No.2 has already refunded Rs.9,76,125/- being 30% of the principal amount on 22.4.2013 to the complainants, it is liable to pay interest at the SBI Term rate interest, as prevailing on the aforesaid date (i.e. 22.4.2013) according to clause 9(d) of the Agreement annexure C1/R-1/2.
Opposite Party No.1 is held liable to refund the amount of Rs.22,77,625/- to the complainants, with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above.
15. Coming to the submission of the Counsel for Opposite Party No.1, that since there was breach of Clause 5(a) of the Flat Buyer Agreement, by the complainants, they were only entitled to the refund of the remaining amount, deposited by them, after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument, advanced by the Counsel for Opposite Party No.1, is misconceived. Clause 5(a) of the aforesaid Agreement dated 17.9.2007, reads as under ;
5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.
16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the Agreement, and if the payment, was not made, within the stipulated period or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in the payment of instalments, or of any other term and condition of the Agreement, aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the Opposite Party, that the payment of instalments was made by the complainants, from time to time, as and when the same fell due.
There was no delay, in making payment of the part price of flat, through instalments, on the part of the complainants. Since, after the expiry of period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainants were not required to deposit the amount of remaining instalments. The complainants had, thus, asked for the refund of amount. There was also no breach of any other term and condition of the Agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of entire amount, deposited by them, with interest, as held above. The submission of the Counsel for Opposite Party No.1 ,in this regard, being without merit, must fail, and the same stands rejected.
17. The next question, that arises for consideration, is, as to whether, the complainants are entitled to compensation, for not handing over possession to them, as per the terms and conditions of the Agreement C1/R-1/2 dated 17.9.2007, referred to above, and for causing physical harassment and mental agony, or not ? Clause 9 ( c ) of the Agreement, referred to above, which is relevant for answering the question, reads as under
:
9(c) In case of possession of the built up area is not offered to the Buyer within a period of 36 months or extended period as stipulated in sub-clause (a) above the Buyer shall be entitled to receive from Developer compensation @ Rs.107.60 per sq.mtr (Rs.10/- per sq.ft) of the super area of the unit per month and to no other compensation of any kind. In case the Buyer fails to clear his account and take possession of the unit within30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @ 107.60 per sq.mtr. (Rs.10/- per sq.ft) of the super area of the unit per month in addition to the liability to pay interest to the sellers and other consequences of default in payment.
18. The possession of the flat was not offered, to the buyers, within a period of 36 months from 6.10.2006. As stated above, even till date, not even a single brick, has been laid, at the spot. In these circumstances, as per Clause 9( c) of the aforesaid Agreement, the complainants became entitled to compensation @107.60 per sq.mtr (Rs.10/- per sq.ft. ) of the super area of the unit, per month. The language of Clause 9(c) is unambiguous and clear. The parties executed the Agreement, aforesaid, with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No compensation, beyond the terms and conditions, contained in Clause 9 ( c) of the aforesaid Agreement, could be claimed by the complainants. It is, thus, held that the complainants are entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009, the last date of completion of the project, till the actual payment was made to them. In this view of the matter, the compensation claimed to the tune of Rs.20 lacs for mental agony & physical harassment, cannot be granted to them.
19. Coming to the submission of Counsel for Opposite Party No.1, that since the remedy for settlement of dispute, by way of arbitration, has already been availed of, by the Opposite Party, in accordance with clause 18 of the Escrow Agreement dated 1.6.2007 Annexure R1/3 executed between them, the complaint under Section 17 of the Consumer Protection Act,1986 was barred, it may be stated here, that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be made, which reads as under ;
3.Act not in derogation of any other law.
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being, in force.
The mere fact that the remedy of arbitration, which was provided, in the Agreement dated 1.6.2007 annexure R1/3, has already been availed of, by the Opposite Parties , that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law, was laid down, in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for Opposite Party No.1, being devoid of merit, must fail, and same stands rejected.
20. For the reasons, recorded above, the complaint is partly accepted with costs of Rs.5000/- , in the following terms ;
(i) Opposite Party No.1 is held liable to refund the amount of Rs.22,77,625/-(rupees twenty two lacs seventy seven thousands six hundred twenty five) deposited by the complainants alongwith interest at the SBI Term Deposit rate, from the respective dates of deposits till realization, as per Clause 9(d) of the Flat Buyer Agreement .
(ii) Opposite Party No.2, is held liable to pay interest to the complainant at the SBI Term Deposit rate, on the amount of Rs.9,76,125/-, from the respective dates of deposits till 22.4.2013, as per Clause 9(d) of the Flat Buyer Agreement dated 17.9.2007.
(iii) Opposite Party No.1 shall also be liable to pay compensation, for not offering the possession of built up flat within 36 months @ Rs.107.60 per sq. mtr (Rs.10/- per sq.ft) of the super area of the unit, per month, from 5.10.2009, the last date of completion of the project, till actual payment to the complainants is made, as provided by Clause 9( c) of the Flat Buyer Agreement dated 25.1.2008.
(iv) The aforesaid directions, shall be complied with, by the Opposite Parties , within 30 days, from the date of receipt of a certified copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a, from the date of default, on the aforesaid payable amounts, besides costs.
21. Certified Copies of this order be sent to the parties, free of charge.
22. The file be consigned to the Record Room.
Sd/-
Announced (JUSTICE SHAM SUNDER)(Retd) May 1,2013 President Sd/-
( NEENA SANDHU) *Js Member STATE COMMISSION Complaint case NO.14/2013 For the Complainant: :
Sh. Harkeerat Singh, Advocate For Opposite Party No.1: Sh.Aftab Singh, Advocate, proxy for Sh.Ashwani Talwar, Advocate For Opposite Party No.2 : Sh.Tarundeep Singh Khera,Advocate, proxy for Sh.Jai Singh Brar, Advocate alongwith Sh.Nirmaljeet Singh, Jr.Assistant Dated:
1st May,2013 ORDER Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted with costs, in the manner, depicted therein.
(Neena Sandhu) (Justice Sham Sunder) (Retd) Member President