State Consumer Disputes Redressal Commission
Kesar Singh Bhatti vs M/S Manohar Infrastructure & ... on 23 April, 2019
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 382 of 2018 Date of Institution : 10.10.2018 Date of Decision : 23.04.2019 Kesar Singh Bhatti s/o Pritam Singh, r/o H.No.51, Officer Enclave, Phase 2, Patiala, Chandigarh. Balbir Kaur w/o Kesar Singh Bhatti, r/o H.No.51, Officer Enclave, Phase 2, Patiala, Chandigarh. ......Complainants V e r s u s M/s Manohar Infrastructure & Constructions Pvt. Limited, SCO No.139-141, Sector 17-C, Chandigarh, through its Chairman-cum-Managing Director. .... Opposite Party Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT MR.RAJESH K. ARYA, MEMBER
Argued by: Sh.Inder Mohan Parihar, Advocate for the complainants.
Sh.I.P. Singh, Advocate for the opposite party alongwith Sh.Arvinder Singh, Company Secretary.
PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT The complainants have filed this complaint, seeking refund of amount of Rs.23,12,500/-, paid by them, to the opposite party, towards price of the residential plot, measuring 250 square yards, purchased by them, on 14.04.2012, in a Mega Housing Project, known as 'Palm Garden', Mullanpur, Punjab. Total price of the said plot was fixed at Rs.46,25,000/-. It is case of the complainants that despite the fact that substantial amount equal to 50% of the total sale consideration, referred to above, had been paid to the opposite party, by 29.03.2014, yet, it failed to allot plot no. and send buyer's agreement for their signatures. It was stated that possession of the plot has not been offered and delivered by the opposite party, despite the fact that it was booked as far as back in April 2012. Recently, the opposite party asked the complainants to sign the buyer's agreement, terms and conditions of which were found contrary to what were promised at the time of booking of the plot, in question. Even the price of the plot was found increased, from the rate which was committed at the time of booking thereof, plus EDC. Furthermore, it was found in the said agreement that still the opposite party needs 30 months for delivery of possession of the plot, in question. Besides as above, it also came to the knowledge of the complainants that there was violation of the provisions of The Punjab Apartment and Property Regulation Act, 1995 (PAPRA) on the part of the opposite party, by launching and selling the project, in question. Since, there was an inordinate delay, in the matter, as such, left with no alternative, vide notice dated 26.07.2018, Annexure C-6, the complainants sought refund of the amount paid alongwith interest but the opposite party failed to do so.
By stating that the aforesaid act and conduct of the opposite party amounted to deficiency in providing service and also adoption of unfair trade practice, the present complaint has been filed, with a prayer to issue directions to them to refund the amount paid alongwith interest, compensation etc. In the reply filed by the opposite party, it took numerous objections like, expression of interest shown by the complainants was for speculative purposes. The plot, in question, was purchased for future gain, as such, the complainants being investors, would not fall within the definition of consumer, as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986 (in short, the Act, 1986). It was pleaded that complicated questions of facts and law are involved in this complaint, as such, the same cannot be entertained by this Commission, proceedings before which are summary in nature. Only Civil Court has jurisdiction to entertain and decide this complaint. Territorial jurisdiction of this Commission was also challenged. It was stated that the project of the opposite party has been registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA). Jurisdiction of this Commission was further challenged, by stating that RERA being a special statute took precedence over the Act, 1986. It was so said by Counsel for the opposite party, at the time of arguments.
On merits, it was admitted that the plot, in question, was sold to the complainants, in a project of the opposite party known as "Palm Garden" aforesaid. It was stated that the complainants have made payment of Rs.13,87,500/- and thereafter failed to make further payment towards price of the said plot. (However, to the contrary, it is evident from the payment receipts placed on record by the complainants, that they have made payment of Rs.23,12,500/- and not Rs.13,87,500/-). To say that there was lot of development in the project, some photographs were placed on record by the opposite party. It was stated that the project was approved on 22.03.2013. Formal agreement was signed with the Government on 14.06.2013. Thereafter, some more land was added to the project, for which completion period was given upto 13.06.2018, vide supplementary agreement dated 16.06.2016. It was stated that exemption from the applicability of provisions of the PAPRA already stood granted by the Government concerned, in favour of the opposite party on 25.01.2017. In view of above, act of the opposite party in getting money deposited against expression of interest, from the purchasers stood rectified. The exemption granted will relate back to the date, when application was moved for sanction, to launch the project, in the year 2011 i.e. it is retrospective in nature. It was averred that once the State Government has not held that the opposite party had violated the provisions of PAPRA, as such, this Commission cannot go into the said question. It was stated that as per Section 35 of the PAPRA, jurisdiction of Civil Court is barred to entertain and decide any question relating to matters arising under it (PAPRA). The complainants have waived of their rights to raise any objection regarding permissions/approvals aforesaid, by making payment towards price of the said plot and also, they did not raise any objection nor they raised immediate demand for refund of the amount paid. It was averred that, as on today, the opposite party is in possession of all the requisite permissions/clearances, in respect of the said project. At the time of arguments also, it was contended with vehemence, by Counsel for the opposite party that irregularities, if any, in accepting the expression of interest to purchase the land in the absence of necessary permissions/sanctions; non-execution of Buyer's Agreement, as per Section 6 of the PAPRA etc. have no adverse effect on the project of the opposite party. It was averred that the complainants were requested number of times, to come forward for selection of plot; pay the remaining amount towards price of the plot and take possession thereof, but they failed to do so. They are defaulters in making payment of the remaining amount. The complainants did not turn up, for execution of the agreement. Notices were also sent to the complainants, in the matter, but to of no avail. Now the complaint seeking refund of the amount paid, is barred by time. It was further stated that claim of the complainants seeking interest @18% p.a. is totally unjustified. Even for fixed deposits, in the banks, rate of interest is very less. It was also stated that huge amount has been invested by the opposite party for getting necessary clearances and in developing the site in dispute. The opposite party is trying to complete the project, as early as possible, as the development work is going on, in full swing and provision of basic amenities such as roads, electricity etc. are near completion. It was further stated that the complaint is barred by limitation. However, in the same breath, it was pleaded that, as per Supplementary Agreement dated 16.06.2016, the Govt. concerned has given completion period of the project upto 13.06.2018 (which period already stood expired). Furthermore, on request made by the opposite party, the Competent Authority has extended completion period of the project, upto 31.07.2019. At the same time, it was averred that time was not the essence of contract. The project was delayed, also on account of red-tapism in the offices of the Govt. Department concerned and also business/political rivalry. The Competent Authorities delayed in granting approvals/sanctions, as far as the present project is concerned. It was stated that delay in delivery of possession of plots occurred also on account of shortage of building material and ban on mining by the Govt., which could be termed as force majeure circumstances. Furthermore, there was no sale of goods to the complainants. Saying that neither there is any deficiency in rendering service nor adoption of unfair trade practice, on the part of the opposite party, it was prayed that this complaint having no substance deserves dismissal with cost.
In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and repudiated those, contained in written version of the opposite party.
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, very carefully.
The first question that falls for consideration, is, as to whether, the complainants are investors, as such, they would not fall within definition of consumer, as defined under Section 2 (1) (d) of the Act, 1986.
We are not going to accept this contention. In the present case, the complainants by way of filing rejoinder have clarified that the plot, in question had been purchased by them, so that they are able to construct a house and reside therein. At the same time, there is nothing on the record to prove that the complainants, who are husband and wife, are property dealers, and deal in the sale and purchase of property, on regular basis, and as such, the plot, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. They waited for more than six years in the hope that they will get possession of the plot, in question, and have then filed this consumer complaint. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite party, mere bald assertion to that effect, cannot be taken into consideration. Since the opposite party has levelled allegations against the complainants, the onus lay upon it, to place on record, documentary evidence in that regard, which it failed to do so. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316, Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, and recently in Shashi Kala Gupta Vs. M/s. Omaxe Chandigarh Extension Developers Pvt. Ltd. & Anr., First Appeal No. 1281 of 2017, decided on 15 Mar 2019. Relevant part of the said order (FA 1281 of 2017) reads thus:-
"........This Commission in Kavit Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd. (I) (2016) CPJ 31 (NC) held that when there is a specific pleading stating that the additional plots/flats purchased are for the personal use of the family members, the onus is on the Opposite Parties to establish that the purchaser is dealing in real estate i.e. purchase and sale of plots/flats and are indulging in commercial activity. In the instant case there is no documentary evidence filed by the Developer to establish that the Complainant was indulging in any commercial activity in real estate, involved in the purchase and sale of plots........ "
The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of a 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party, therefore, being devoid of merit, is rejected.
The next question that falls for consideration, is, as to whether, this Commission has got territorial jurisdiction to entertain and decide this complaint or not.
According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, perusal of almost all the documents placed on record, pertaining to transaction carried out between the parties, reveal that the same have been issued and received from/by Chandigarh Office of the opposite party i.e. Manohar Infrastructure and Constructions Pvt. Ltd., SCO No.139-141, Sector 17-C, Chandigarh. Even the documents placed on record, which were issued by Controlling Authority of the opposite party, with regard to approvals qua the project, in question, are also addressed to its Chandigarh Office, meaning thereby that the opposite party was carrying out its business at the said office for gains. Not only as above, as per information provided by the opposite party alongwith written reply, address of the Company has been mentioned as SCO No.139-141, Sector 17-C, Chandigarh-160017. In view of above, it can safely be said that this Commission has got territorial Jurisdiction to entertain and decide this complaint. Objection taken by the opposite party, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.
It is evident from record that by 29.03.2014, the complainants had paid an amount of Rs.23,12,500/-, to the opposite party, towards price of the residential plot, measuring 250 square yards, in the said project, total sale consideration of which was fixed at Rs.46,25,000/-. The amount paid was equal to 50% of the total sale consideration, yet, the opposite party failed to allot plot and send buyer's agreement for their signatures. It is further evident from the record that instead of issuing allotment letter and sending buyer's agreement for signatures of the complainants, the opposite party, vide letter dated 15.05.2014 made further demand of Rs.6,93,750/-, which was not paid by the complainants, as it failed to allot plot no. and send Buyer's Agreement for their signatures, in respect of sale of the said plot and also by that time, they came to know that when the project was launched and sold, before grant of exemption from the provisions of applicability of PAPRA on 25.01.2017, no permission was available with the opposite part y.
However, to defeat the claim raised by the complainants, it has vehemently been contended by Counsel for the opposite party that fault lays on the part of the complainants, as they were requested a number of times, by way of sending letter followed by numerous reminders, to come forward for allotment of plot, sign the buyer's agreement as well as for taking possession of the plot, but they failed to do so. It was so said by placing letter dated 15.05.2014 Annexure O-1 and reminder letter dated 28.06.2014 Annexure O-2. We have gone through the contents of the said letter and reminder and found that not even a single word has been mentioned therein by the opposite party, regarding allotment of plot or for execution of buyer's agreement. Whereas, on the other hand, as stated above, it is evident from the said documents, that only demand of Rs.6,93,750/- was made therein, to proceed for expression of interest. It may be stated here that once the opposite party had already received 50% of the sale consideration, it was required of it to send buyer's agreement for signatures and not to proceed for expression of interest. Irrespective of the fact that the opposite party was exempted from the provisions of PAPRA or not, it is the legal right of the allottee/buyers, to know about terms and conditions of the agreement, against the property which he/she is going to purchase. Whereas, in the instant case, the terms of the agreement to be entered into with the complainants were never even shown to them, what to speak of providing copy thereof, at the time of booking of the plot, in question. Now at this stage, the complainants cannot be asked to sign the agreement, as the terms and conditions contained therein were prepared and framed by the opposite party, unilaterally, without consulting the complainants, which itself is an unfair trade practice. As such, it is held that, in the instant case, the complainants were trapped by the opposite party, by usurping 50% amount of total sale consideration, but they were not provided the agreement containing detailed terms and conditions in respect of sale of the plot, in question, which act amounted to deficiency in providing service and also unfair trade practice. Under similar circumstances, similar view had been taken by the National Commission in M/s. Pyramid Arcades Pvt. Ltd Vs. Raju Kishanchand Lakhani, First Appeal No. 99 of 2016, decided on 10 May 2016. Relevant part of the said order reads thus:-
"Instead of touching the heart of the problem, the learned counsel for the Appellant has just skirted it. This is an admitted fact that even after accepting 60% of the total value of the flat, the Appellant / OP did not execute the agreement to Sell. This is the principal deficiency on the part of the Appellant / OP. In a latest case, titled Samarth Associates Eng.& Builders & Ors. Vs. Ramesh Ramachandra Lokhande RP No.4729 of 2012, dated 10.09.2013, we observed as under :
"6. All these arguments are bereft of force. It is clear that the petitioners/Builders did not execute the Agreement, till the eleventh hour and piled on the agony of the allottee, by cancelling his allotment, for no valid reasons. The cause of action arose on 19.11.2009. Till date, no agreement has been executed.
"7. The following deficiencies are apparent on the face of the record. First of all, it is not understood why the agreement was not executed at or about the execution of receipt of Rs.25,000/-. In Belaire Owners' Association Vs. DLF Ltd. & Ors., Case No.19/2010, vide supplementary order dated 03.01.2013, the Competition Commission of India, held :-
"31.The terms of the agreement to be entered into with the allottee were never shown to the allottee at the time of booking of the apartment. These terms and conditions of the agreement were prepared and framed by the company unilaterally without consulting the buyer. Once the company had already received considerable amount from the applicants/buyers, this agreement was forced upon the allottees and the allottee had no option but to sign the agreement, as otherwise the agreement provided for heavy penalties and deduction from the money already deposited by the allottees with the company, which itself was an abuse of dominance. The appropriate procedure would have been that a copy of the agreement which DLF proposed to enter with the allottee should have been made available to the applicants at the time of inviting applications".
8. Aggrieved against the order of this Commission, dated 10.09.2013, Special Leave to Appeal (Civil) Nos.36667-68 of 2013, with the same cause title (Samarth Associates Engineers & Builders & Ors. Vs. Ramesh Ramachandra Lokhande) was filed before the Hon'ble Apex Court. The Hon'ble Apex Court, vide its order dated 16.12.2013, dismissed the same".
Under above circumstance, it is held that the complainants were right in not signing the agreement containing terms and conditions heavily loaded in favour of the opposite party, which too was tried to be presented before them for signatures in the year 2018 only, as disclosed by them (complainants) during arguments.
In the instant case, despite the fact that the plot, in question was booked as far as back in April 2012, still the opposite party in its written statement, is saying that development of the project is at advance stage and that basic amenities such as roads, electricity etc. are near completion. No exact period/date of possession has still been given, by which possession of the plot could be delivered. Burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/ opposite party. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In case, all the development/construction activities, are being undertaken and near completion, then it was for the opposite party, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/ construction activities are being undertaken and about to complete in near future, but it failed to do so. Mere placing on record some photographs, perusal of which too, reveal that still lot of development works need to be completed, are of no help to the opposite party, especially in the face of its candid admission in para no.14 of written reply that basic amenities such as roads, electricity, sewerage, landscaping and other development works are near completion. In the absence of amenities mentioned in para no.14 of reply of the opposite party, and also completion certificate, possession of the plot is not possible to be delivered. It appears that the opposite party is not serious in developing the project. Had it been serious in doing so, it would have definitely allotted plot in favour of the complainants within a short period of time and sent buyer's agreement for signatures, within a reasonable period of two to three months, on receipt of amount, referred to above, which was more than 50% of the sale consideration, as far as back in 2014, but it failed to do so. Under these circumstances, it can very well be said that the opposite party was not interested in developing the project and to deliver possession of the plot, in question, but was interested in usurping money from the customers, which act also amounts to deficiency in providing service and adoption of unfair trade practice. This is not the first case, but this Commission has decided number of cases against the opposite party with similar facts, in respect of the same project "Palm Garden", Mullanpur, Punjab, wherein, it has been proved that it has lost interest in developing the project, in a time bound manner.
Another plea was taken by the opposite party, in its written version that since serious/complicated questions of facts and law are involved in the present complaint, only the Civil Court has power to adjudicate the same, and this Commission did not have the jurisdiction to adjudicate the present complaint. It may be stated here that the complainants hired the services of the opposite party, for purchasing the plot, in question, in the manner, referred to above. It is a simple case of non-delivery of possession of the plot in question, for want of development and basic amenities at the project site, which act amounts to deficiency in rendering service, negligence and adoption of unfair trade practice. Section 2 (1) (o) of the Act, defines service as under:-
"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service".
From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC) it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). No complicated questions are involved in this case. Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable under the Act. Not only as above, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainants have a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of a consumer. In this view of the matter, plea taken by the opposite party, in this regard, being devoid of merit, must fail, and the same stands rejected.
It has been noticed that apart from above objections, in the present case, various other stereotype pleas/objections have been taken by the opposite party, which it has been taking in past, in almost all the consumer complaints filed in respect of the same project "Palm Garden", Mullanpur, Punjab, already decided by this Commission such as limitation; time is not the essence of contract; project was delayed on account of force majeure circumstances like ban on mining; business rivalries etc.; exemption from the provisions of PAPRA after issuance of notification dated 25.01.2017; jurisdiction of this Commission is barred in view of provisions of PAPRA and RERA; only civil court has jurisdiction to entertain and decide this case; complainants were defaulters in making payment etc. It may be stated here that all these objections/pleas taken by the opposite party has been dealt with, by this Commission, in number of consumer complaints already decided and recently in Jaspreet Kaur Vs. M/s Manohar Infrastructure & Constructions Pvt. Limited and ors. consumer complaint no. 70 of 2018 , decided on 02.11.2018, as under:-
"It is specifically brought to our notice, at the time of arguments, by Counsel for the complainant that as per Guidelines to launch project in the mega housing project, (Palm Garden situated in mega housing project), it is not open to the project proponent like the opposite parties, to sell the project to general public without getting proper sanctions/approvals from the Competent Authorities. Similar Guidelines were also brought to the notice of this Commission, in earlier complaints filed by consumers, in respect of the same project. Condition no.4 of the said Guidelines reads thus:-
"4 Conditions for grant of concessions:-
..........
The project shall not be advertised/launched and no money will be collected from general public for allotment of land/plot/flat/any space till such time the layout/zoning plans are cleared from the competent authority and exemption u/s 44 of PAPRA is issued by the Government."
It is mandated that the project can only be launched when layout/zoning plans are cleared from the Competent Authorities and exemption is granted from operation of the provisions of PAPRA, by the Government concerned. It was also so said in the 'Letter of Intent' for the Grant of Special Package of Incentives under Industrial Policy 2009, issued on 03.05.2013 (the said document is available in some of the paper books of cases, already filed before this Commission) issued in favour of the opposite parties, by the Chief Administrator, PUDA, SAS Nagar, Mohali.
At the time of arguments, it has also come to our notice that when the project was advertised and sold in the year 2011, the opposite parties were not even registered with the GMADA, SAS Nagar, as a qualified project proponent, to obtain license under Section 5 of the PAPRA. Certificate of Registration was granted by the GMADA only on 27.06.2014, permitting the opposite parties to setup a colony subject to their obtaining requisite licenses, as mandated under the provisions of PAPRA.
In view of above, contention of Counsel for the complainant that the project, in question, was sold without any permission(s)/sanction(s) from the Competent Authorities and also violating the provisions of Sections 4 (1) (a) and (b) and 6 of the PAPRA appears to be correct. The said provisions reads thus:-
"4. Issuing of advertisement or prospectus:-
(1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication..................".
"6.(1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed for together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act no. 16 of 1908) ;"
A question, as to whether, necessary permission/sanctions had been obtained by the opposite parties before launching this project, came up for consideration before this Commission, recently in Veena Ghai and anr. Vs. M/s Manohar Infrastructure & Construction s Pvt. Limited and anr., consumer complaint no. 659 of 2017 decided on 28.06.2018. This Commission held as under:-
"The fact that the project was launched without obtaining necessary permissions/sanctions having been obtained from the Competent Authorities, is further fortified from a document of the opposite parties, placed on record as Annexure O-12 (at page 89 of the file), showing in a tabular format, as to by which dates, approvals, NOCs were granted to them, by the Competent Authorities. Relevant part of the said table is reproduced hereunder:-
Sr.No. Approval Dated Approval of project 25.04.2013 NOC from Forest Department 14.07.2014 Approval of layout plan 06.10.2015 Approval of zoning plan 24.11.2015 Permission for solid water, sewerage and storm water disposal 06.07.2015 Approval of detailed project/services plans of roads, water supply, sewerage, storm water drainage, treated water supply and electrification 27.11.2015 Grant of Consent to Establish (NOC) Water and Air 1.12.2015 NOC from Pollution Angle 15.02.2016 Environment Clearance 03.06.2016 NOC for electricity connection 15.03.2017 Extension of Grant of Consent (NOC) Water and Air 17.04.2017 Permission for Solid Waste Disposal and Storm Water Disposal 19.05.2017 Perusal of the aforextracted table clearly reveals that not even a single permission was available with the opposite parties, when the project, in question, was launched and sold to the customers, including the complainants, in March 2011. As such, the project, in question, was launched in complete derogation of the above said provisions.
Collecting money from the perspective buyers without obtaining the required permissions and sanctions is an unfair trade practice on the part of the project proponent. It is well settled law that it is duty of the builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers. It was also so said by the National Commission, in a case titled as M/s Ittina Properties Pvt. Ltd. & 3 Ors. Vs. Vidya Raghupathi & Anr., First Appeal No. 1787 of 2016, decided on 31 May 2018. Relevant part of the said order reads thus:-
"................This Commission in Brig. (Retd.) Kamal Sood Vs. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.
It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.09.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency............"
However, in the present case, the opposite parties did not place on record the documents, referred to, in the table aforesaid. As such, an adverse inference can easily be drawn that had the said documents been placed on record, the same would have gone against the interest of the opposite parties, as it would have been evident therefrom that when huge amount of Rs.16,20,000/- had been received from the complainant in 2011, they were not even owners of the land, whereupon the project was to be developed. This act amounts to grave unfair trade practice on the part of the opposite parties.
As far as the question of challenging RTI information placed on record by the complainant, which goes against the opposite parties, is concerned, it may be stated here that except bald assertion to the effect that the same is not authentic, no evidence in rebuttal thereto, has been placed on record, to convince this Commission. The said information might have been obtained by a similar located allottee under RTI, but the contents of the said RTI letter pertains to the project of the opposite parties only, to which no contrary evidence has been placed by them, to prove it false/incorrect. As such, plea taken in this regard, stands rejected.
Furthermore, amount accepted at the time of booking was more than 25% i.e. Rs.16,20,000/- against Rs.54 lacs. No Agreement was got signed, as is mandatory under the above said provisions. As such, there is a complete violation of the provisions of the PAPRA. It is an admitted case of the opposite parties that permission seeking exemption from the applicability of provisions of PAPRA has finally been granted only in the year 2017, which cannot be said to have any retrospective effect but on the other hand, will have prospective effect only. As such, it could very well be said that by selling the units without authority, the opposite parties violated the provisions of PAPRA, and the said violation amounts to adoption of an unfair trade practice, which is glaring and vivid on their part.
Similar controversy came up for consideration before this Commission, qua this project owned by the opposite parties, in the case of Shaminder Walia and another Vs. M/s Manohar Infrastructure and Constructions Pvt. Limited, Consumer Complaint no.918 of 2016, decided on 08.05.2017 (alongwith six connected cases). Noting similar contentions, this Commission observed as under:-
"To get a plot allotted in the project named as 'Palm Garden', first payment was received by the opposite party on 11.01.2012. It is virtually admitted on record that when the project was sold, not even a single permission was available with the opposite party. It is admitted in the written version that part of the project of the opposite party was approved much later, in the year March 2013. Formal Agreement was signed with the Govt. of Punjab on 14.06.2013. Thereafter, additional area was added and supplementary agreement was signed on 16.06.2016. Notification granting exemption from the applicability of the provisions of PAPRA was issued only on 25.01.2017. Perusal of the said notification makes it very clear that exemption given was conditional, as has been referred in para no.5 of the said notification. Besides other conditions, condition no.5 (iii to vii), reads thus:-
"(iii). The promoter shall deposit the entire amount in respect of the contribution to the Punjab Urban Development Fund, created under section 32 of the Punjab Apartment and Property Regulations Act, 1995 (Act No.14 of 1995), within a period of 30 days of the sanctioning of their layout plan.
(iv). The promoter shall acquire the ownership of project land in its name including land under agreement to develop and land under agreement to sell. The plots falling under land proposed to be acquired if any through Govt. acquisition, plot through which revenue rasta or khali passes shall not be developed and sold till these pockets are acquired and ownership is transferred in the name of the Promoter.
(v) The plots/land to which the access is proposed through the land to be acquired if any by the Government shall not be developed and sold till that land under the access is acquired and transferred in the name of the promoter and access is provided.
(vi) The promoter shall be responsible for obtaining the final NOC from Punjab Pollution Control Board.
(vii) Before starting the development of the proposed project promoter shall obtain environmental clearance from the Ministry of Environment and Forest Government of India as required under EIA notification dated 14.9.2006 as well as consent to establish (NOC) from the Punjab Pollution Control Board."
It is specifically mentioned that before starting development of the proposed project, promoter was to obtain environmental clearance from the Ministry of Environment and Forest Government of India, in terms of EIA notification dated 14.09.2006. There is nothing on record that such clearance was obtained by the opposite party. Further, it was also mentioned that requisite amount be paid towards Punjab Urban Development fund, within a period of 30 days, from the date of sanctioning of layout plans. No evidence has been placed on record, showing payment of the aforesaid amount. Furthermore, it is mandated that the promoter shall also be responsible for getting 'No Objection Certificate' from Punjab Pollution Control Board. No document exists on record, showing that such approval was obtained by the opposite party.".
At the time of arguments, Sh.I.P. Singh, Advocate, argued with vehemence that issuance of notification dated 25.01.2017 granting exemption from the applicability of many provisions of PAPRA qua mega project, in question, will relate back to 12.09.2011, the date, on which application was filed to get licence, under the mega housing policy. In a way, it was said that when the above notification was issued, it ratifies all the mistakes/irregularities committed by the opposite parties, qua sale of plots in the year 2011, without obtaining necessary sanctions and approvals from the Competent Authorities. To so say, reliance has been placed upon the ratio of judgment in the case of M/s Murudeshwara Ceramics Ltd. Vs. State of Karnataka, 2002 (1) SCC Page 116.
On perusal of the entire record and documents, we are not going to accept the said arguments. In the case of Shaminder Walia (supra), similar contention was raised and the same was rejected by this Commission, by observing as under:-
"It was contended by Counsel for the opposite party that after issuance of notification dated 25.01.2017 exempting applicability of many provisions of PAPRA qua mega project, the irregularities adopted by it qua sale of plots in the year 2012, etc. stands rectified. In para no.16 of its reply, it was specifically stated by the opposite party that irregularity in accepting expression of interest for sale of the plot in the said project, will have no adverse effect.
We are not going to agree with the contention raised. There is nothing on record that the said notification is retrospective in nature. As stated above, when the project was sold, not even a single permission was available with the opposite party. The sale was made in contravention of the provisions of PAPRA and upon issuance of notification in the month of January 2017, violation committed or admitted irregularities made, cannot be rectified. Similar question qua this very project, came up for consideration before this Commission in Sukhvinder Singh Hayer Vs. M/s Manohar Infrastructure and Constructions Pvt. Limited, Complaint case no.775 of 2016 decided on 23.03.2017 (02 connected cases), wherein it was observed as under:-
"It is specifically mentioned that before starting development of the proposed project, promoter was to obtain environmental clearance from the Ministry of Environment and Forest Government of India, in terms of EIA notification dated 14.09.2006. There is nothing on record that such clearance was obtained by the opposite party. Further, it was also mentioned that requisite amount be paid towards Punjab Urban Development fund, within a period of 30 days, from the date of sanctioning of layout plans. No evidence has been placed on record, showing payment of the aforesaid amount. Furthermore, it is mandated that the promoter shall also be responsible for getting No Objection Certificate from Punjab Pollution Control Board. No document exists on record, showing that such approval was obtained by the opposite party. Contention of Counsel for the opposite party that notification dated 25.01.2017 exempting applicability of many provisions of PAPRA qua mega project, the sale of plots in the year 2011 etc. stands rectified. We are not going to agree with the contention raised. There is nothing on record that the said notification is retrospective in nature. When project was sold, not even a single permission was available with the opposite party. The sale was made in contravention of the provisions of PAPRA and upon issuance of notification in the month of January 2017, violation committed cannot be rectified. Similar question qua this very project, came up for consideration before this Commission in Monika Vs. M/s Manohar Infrastructure and Construction Pvt. Limited, Complaint case no.251 of 2016 decided on 27.09.2016, wherein it was observed as under:-
"The pleadings of the parties indicate that when project was marketed and sold, not even a single permission was available with the project proponent/opposite party. There is a complete violation of the provisions of the PAPRA. It is an admitted case of the opposite party that application seeking exemption from the applicability of provisions of PAPRA is still pending under consideration, with the Authorities concerned. Unless exemption is granted, its violation would amount to adoption of an unfair trade practice, which is glaring and vivid on the part of the opposite party, in this complaint.
Qua a similar project launched by the opposite party in the same area, in Appeal No.248 of 2016, decided on 31.08.2016, titled as M/s Manohar Infrastructure and Constructions Pvt. Limited Vs. Sh.Tilak Raj Bakshi, under similar circumstances, this Commission, while dismissing the said appeal, has observed as under:-
"The documents placed on record clearly show that the project was launched without getting any permission from the Competent Authorities. Detailed brochure was issued showing facilities to be made available in the project launched and its layout plan. It is also on record that when it came to the notice of GMADA that the plots/flats are being sold unauthorizedly by the appellant, it gave a notice in the newspaper 'Hindustan Times' dated 18.08.2012, which reads thus:-
"PUBLIC NOTICE This is for the information of one and all that it has come to the notice of the Competent Authority that one company named as M/s Manohar Singh & Co. is allegedly booking/selling plots in the Mullanpur- Siswan region near Chandigarh border in the State of Punjab. This is being intimated that the above said project is not approved by the State Government. The Competent Authority is initiating legal proceedings in this regard.
If anybody has booked or purchased any plot in the locality mentioned above he/she is advised to contact the undersigned along with documentary proof for further legal action against the said promoter. Further, while buying any plot in any locality falling under the jurisdiction of GMADA, all are advised to visit the website www.gmada.gov.in to verify if the colony/project is approved or not.
Chief Administrator GREATER MOHALI AREA DEVELOPMENT AUTHORITY, PUDA Bhawan, Sector 62, SAS Nagar".
It is specifically stated in the notice dated 18.08.2012 that the appellant was allegedly booking/selling the plots in Mullanpur, near Chandigarh Border, in the State of Punjab, unauthorizedly. It was further stated that the project is not approved by the Competent Authority and it (Competent Authority) is initiating legal proceedings against the project proponent for its activity. Above said notice makes it very clear that when the plot was sold on 13.04.2012, the project was not approved by the Competent Authorities. It is also so reflected in the details given by the appellant with this appeal, which is available at page 33 of the paper book. Reading of above said document, makes it very clear that the project was approved by the Government on 25.04.2013; Letter of Intent (LOI) was issued on 03.05.2013; Change of Land Use (CLU) certificate was granted on 31.03.2014; project was registered on 21.06.2014; No Objection Certificate by the District Forest Officer, SAS Nagar, Mohali, was issued on 14.07.2014; Zoning plan was approved by the Chief Town Planner, Punjab on 24.11.2015 and Detailed Project Report (DPR)/Service Plans were approved by the Chief Engineer, GMADA, Mohali, on 27.11.2015. As per established law, if the project proponent sells the project without obtaining necessary permissions or clear title of the acquired land, it would amount to adopting unfair trade practice. It was so said by the Hon'ble National Commission in Atul Maheshwari and ors. Vs. Yamuna Expressway Industrial Development Authority, II (2016) CPJ 623 (NC). Relevant portion of the said judgment reads thus:-
"OP should not have announced the scheme, until or unless they got clear title of the acquired land".
Similar view was expressed by the National Commission in Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.756 of 2016, decided on 30.03.2016. In that case, when upholding the findings given by this Commission, that the project cannot be even marketed before getting approvals/sanctions, from the Competent Authorities, to launch it, it was observed by the National Commission, as under:-
"We are unable to persuade ourselves to agree with the ld. counsel. While affirming the order passed by the District Forum and commenting and deprecating the conduct of the opposite parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-
If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.
6. We are in complete agreement with the view taken by the State Commission. As noted above, the petitioners happen to be body corporate. Before offering the farmhouses in the said project as Agent of Respondent No. 2, they must be aware about the status of the sanction for launch of the project. Therefore, it is beyond one's comprehension that the present Petitioner was not aware about the actual state of affairs for which only the developer could be held responsible."
In the present case also, there is nothing on record that when expression of interest/applications were invited to sell the said project, clear intimation was given to the intending purchasers that the project sold was in infancy stage and it will take years together before necessary permissions will be provided by the Competent Authorities."
In the present case also, as stated above, there is nothing on record to show that when the project, in question, was launched and sold, any permission was available with the opposite parties. It is also not proved on record that the said fact of selling the project without permissions/approvals was brought to the notice of the intending purchasers. The purchasers were not informed that it will take years for obtaining necessary sanctions and approvals, after sale of the said project. In the present case, there is nothing on record to show that when notification dated 25.01.2017 granting exemption to the opposite parties from the applicability of some provisions of the PAPRA was granted, violations committed were brought to the notice of the Competent Authorities/Govt. The mega housing policy and the provisions of PAPRA debars any builder to advertise and sell the project before getting necessary sanctions. Merely because in some newspaper, a notice had appeared on behalf of the GMADA intimating the general public that Manohar Singh and Company is selling the project unauthorizedly, would not amount to intimation to the Competent Authorities i.e. the Govt. of Punjab, that the opposite parties have committed many mistakes, while selling the project, in question. Had those mistakes been brought to the notice of the Competent Authorities, at the relevant time, the license to launch the said project, was bound to be rejected, being in violation of provisions of the PAPRA; Special Package of Incentives under Industrial Policy 2009 and mega housing policy. Any ratification is possible, in case, the mistake committed is brought to the notice of the Competent Authorities. Thereafter, only the Competent Authorities by passing a conscious order can ratify the said mistake. In the present case, merely issuance of notification aforesaid, by the Competent Authorities, on 25.01.2017, would not ratify the mistakes committed in law by the opposite parties.
Such a contention also came up for consideration, before this Commission in Shaminder Walia's case (supra) and it was rejected by observing as under:-
"It was vehemently contended by Counsel for the opposite party that once exemption from the applicability of the provisions of PAPRA stood granted in the year January 2017, it will relate back to the date of launching of the project, and all irregularities stands rectified. To support above said contention, he has placed reliance on the ratio of judgment passed by the Hon'ble Supreme Court of India, titled as M/s Murudeshwara Ceramics Ltd. Vs. State of Karnataka, 2002 (1) R.C.R. (Civil) 130.
We are not going to accept the arguments raised. It has already been held in Sukhvinder Singh Hayer` case (supra) that upon issuance of notification in the month of January 2017, granting exemption from the applicability of the provisions of PAPRA, violation committed prior thereto, cannot be rectified. To so say, in Sukhvinder Singh Hayer` case (supra), reliance was also placed upon the judgment passed by this Commission in Monika`s case (supra). The said finding was given in consonance with the findings of the National Commission in Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another`s case (supra).
As far as the reliance placed by Counsel for the opposite party on M/s Murudeshwara Ceramics` case (supra) is concerned, we have gone through the facts of the same very carefully and found that the same were altogether different from the facts of the present case. In the case before the Hon'ble Supreme Court of India, when interpreting the provisions of Section 109 of the Karnataka Land Reforms Act, 1961, it was stated that power of the Government to grant exemption with regard to the land, in any area from operation of some of the provisions of the Act, for using the said land for a particular purpose, are to be seen, not at the time of sale/purchase of the land in dispute, but at the time, when it was going to be put for the said use. It was noted that after sale of the land, in dispute, when it was going to be put for industrial use, exemption already stood granted. The position is altogether different; as in the present case, by indulging into selling the project without any sanctions in its hands, the opposite party has committed unfair trade practice, as defined in Section 2 (1) (c) (i) and (iii) of the CP Act.
It is apparent on record that in the year 2012, activities of the opposite party in selling the project, without any sanction were noticed by the Competent Authorities and on 18.08.2012, as a result whereof, notice was published in a newspaper, stating that such sale was illegal. Copy of newspaper dated 18.08.2012, in which the said public notice was issued by the GMADA, is placed on record as Annexure C-10, in consumer complaint bearing no.890 of 2016, titled as Sheela Devi and another Vs. Manohar Infrastructure and Constructions Private Limited.".
In the case of Shaminder Walia (supra), it was vehemently contended that M/s Manohar Singh and Co. and the opposite parties namely M/s Manohar Infrastructure and Constructions Pvt. Ltd., are two different identities and notice issued in the said newspaper qua M/s Manohar Singh and Co. will not have any effect, so far, the project of the opposite parties (M/s Manohar Infrastructure and Constructions Pvt. Ltd.) is concerned. The said contention was rejected by this Commission, by placing reliance upon various documents and the photographs.
In the present case, it was fairly admitted by Sh.I.P. Singh, Advocate, that the opposite parties are part and parcel of M/s Manohar Singh and Co. Above fact clearly demonstrates that the GMADA, when came to know about unauthorized sale of a project, issued a notice asking general public not to purchase any property from the opposite parties and also contemplated a legal action. However, it appears that no such legal action was taken against the opposite parties. It may be on account of connivance of the opposite parties with Offices of the said Authority.
Further contention of Counsel for the complainant is that amount was received without offering Buyer's Agreement for signing, within a reasonable period say two or three months, but it was never offered. This fact is clearly admitted on record. As per the provisions of Section 6 of the PAPRA, it is incumbent upon the project proponent to execute Buyer's Agreement on accepting application for purchase of unit etc., within a reasonable time say about two to three months. By not offering Buyer's Agreement, for signing within reasonable time, the opposite parties committed unfair trade practice and also were deficient in providing service. It was also earlier so said by this Commission, in a case titled as Usha Kiran Ghangas Vs DLF Homes Panchkula Private Limited, Complaint Case No.93 of 2016, decided on 02.06.2016. Relevant portion of the said case, reads thus:-
"The opposite parties are also guilty of adoption of unfair trade practice. It is on record that the complainant booked the unit, in question, in the project aforesaid, on 16.02.2011. She was allotted unit, vide letter dated 23.02.2011, on which date, she had paid an amount of Rs.4 lacs. Buyer's Agreement was not put for signing in a reasonable time, say two to three months. She continued to make payment and when Buyer's Agreement was got signed, on 18.08.2011, she had already paid an amount of Rs.21,68,524/-. By not offering Buyer's Agreement, for signing in a reasonable time, the opposite parties also committed unfair trade practice. The complainant is a widow. Her interest needs to be protected".
At the same time, it is also held that merely taking a bald plea, in the absence of any documentary evidence, saying that the complainant was asked, number of times, to come forward for execution of buyer's agreement, is of no help to the opposite parties. Not even a single document has been placed on record, in this case, by the opposite parties, asking the complainant, to come for signatures of Buyer's Agreement. However, as far as letter dated 14.02.2014 is concerned, it may be stated here that vide the said letter, further demand of Rs.10,80,000/- was made from the complainant and, as such, it is of no help to the opposite parties. As such, in the present case, by not offering Buyer's Agreement, for signing in a reasonable time, or even till date, the opposite parties committed unfair trade practice and are also deficient in providing service.
At time of arguments, it was also vehemently contended by Sh.I.P. Singh, Advocate for the opposite parties that application to get mega project approved, was filed in the year 2011. Delay occurred on account of laxity on the part of the bureaucrats/Competent Authorities in granting permissions/ approvals and further it was deliberately delayed, because of rivalry existing between the political party in power and the Managing Director/Directors of the Company.
Such a plea has been taken just to raise it without any material on record. It may be stated here that the application to get necessary permissions, was moved in the year 2011 before the Competent Authorities, what happened thereafter; whether any objection was raised; whether at any point of time, it was taken up with the Authorities concerned, to give permission(s), within three months, as per Rules or not, has not been made clear. There is nothing on record that when the Competent Authorities allegedly did not grant permissions/approvals and delayed the matter, any reminders were sent to them, to do the needful. Not even a single document has been placed on record that the Competent Authorities delayed the matter deliberately, despite the fact that necessary steps were taken at the end of the opposite parties, for obtaining requisite permissions, for launching and selling the said project. At the same time, there is nothing on record, whether any Officer(s) of the Management of this Company was/were the member(s) of any political party; they ever contested any election; and whether question of rivalry causing delay on account of political reasons was ever taken up before the Competent Fora/Court of Law. It is on record that to get necessary permission qua the land in the project, applications were moved in parts. The opposite parties continued to purchase land and continued moving the applications, to the Authorities. In this view of the matter, the plea taken by the opposite parties, stands rejected.
A plea was also taken by the opposite parties, in its written version, to the effect that delay in delivery of possession of the plot was caused on account of ban on mining, as such, building material such as sand etc., remained short to an extent, meaning thereby that it had encountered force majeure circumstances.
It may be stated here that as regards the alleged shortage of construction material like sand etc. in the market, nothing has been placed on record, by the opposite parties, to prove that it was unable to procure the said construction material, in adequate quantity. There is no evidence of the opposite parties having invited tenders for supply of construction material and there being no response to such tenders. A similar plea for delay in delivery of possession of the units, was taken by a builder, before the Hon`ble National Consumer Disputes Redressal Commission, New Delhi, in Consumer Case No.347 of 2014, titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), decided on 14 Aug 2015, which was rejected and the complaint was allowed in favour of the complainant. The principle of law, laid down, in the aforesaid case is fully applicable to be present case. In the present case also, the opposite parties failed to convince this Commission, that they actually encountered force majeure circumstances, as a result whereof, delay in handing over possession of the unit occurred. As such, the stand taken by the opposite parties, in this regard, is rejected.
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By placing reliance on letter dated 14.02.2014 Annexure O-1, it was vehemently contended by Counsel for the opposite parties that the complainant was defaulter in making payment towards price of the plot, in question. We have gone through the contents of letter dated 14.02.2014 and found that it was intimated to the complainant that the project is nearing completion, whereas, on the other hand, by that time, as held above, even necessary permissions were not available with the opposite parties. It is also very pertinent to add here that even in the written version, the opposite parties, have not stated a single word about completion of development work. If we believe the contents of letter dated 14.02.2014, the development work would have been completed in that month only or say after one or two months therefrom, whereas, on the other hand, photographs placed on record by the opposite parties themselves, reveal that still it will take a long time for completing the development work. It can easily be revealed from the said photographs that still lot of development work is pending to be done as far as the roads etc. are concerned. Sanitary/sewerage pipes and electric wires are found lying in open ground. It can be adjudged from the photographs, that entrance of the project has been beautified, to allure the innocent customers. Photographs themselves prove the position of the project, as in 2018 and, as such, what would have been the position of project in 2014, can very well be imagined. It is further very significant to add here that vide letter dated 14.02.2014, the opposite parties are saying that the project is near completion, whereas, in their joint reply filed in the present case, i.e. in 2018 they are still saying that the development work is going on in full swing and is at advance stage. It is very strange that, as per the version of the opposite parties, from February 2014 to August 2018, the development work is hanging on at advance stage only. The plot was booked in the year 2011 and now it is November 2018. Still the opposite parties are saying that the complainant can come forward for execution of the Agreement meaning thereby that she will have to wait for more years, to get her plot because after that they will say that she cannot file a complaint before the expiry of period of handing over the plot, as mentioned therein (Agreement), it being premature. The complainant cannot be made to wait for an indefinite period, for delivery of possession of the plot purchased by her. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the plot. Under these circumstances, it can be said that there is a material violation in providing service, on the part of the opposite parties. It is a settled law that when there is a material violation on the part of the builder, in not handing over possession by the stipulated date, the purchaser is not bound to accept the offer, even if the same is made at a belated stage and on the other hand, can seek refund of amount paid. It was so held by the National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held as under:-
"I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest."
Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No. 59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-
"Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same.
Further, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, under similar circumstances, held as under:-
"I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery".
The complainant, is, thus, entitled to get refund of amount deposited by her. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to her, as also escalation in prices.
Further contention was raised by Counsel for the opposite parties that in the face of supplementary agreement dated 16.06.2016, whereby the Govt. of Punjab, has granted permission to complete the project by 13.06.2018, as such, the complainant was to be handed over possession on or before that date. It may be stated here that we have gone through the contents of the Supplementary Agreement dated 16.06.2016 and are of the considered opinion that it is of no help to the opposite parties, as far delay in delivery of possession of the plot, in question, to the complainant is concerned. The said Agreement was signed between the opposite parties and the Govt. of Punjab, only in relation to permission sought by them (opposite parties), vide letter dated 25.08.2015 (after about more than three and a half years of booking of the present plot), for addition of 94.60 acres of more land in the project area. It was on account of this reason, that supplementary agreement was executed.
At the same time, if this plea taken by the opposite parties that since supplementary agreement was executed on 16.06.2016 between them and the Govt. of Punjab and as such, now they (opposite parties) are liable to hand over possession of the plot to the complainant latest by 13.06.2018, is considered in favour of the opposite parties, then it would amount to admittance on their (opposite parties) part that till 16.06.2016, they were not in possession of the land even, but on the other hand, they had booked a plot and received 30% of the price of the plot, as far as back in 2011. Furthermore, it is not clarified by the opposite parties that if the land for plot was ultimately got in their hands, by way of supplementary agreement dated 16.06.2016, then for which land, they were talking about in the application acknowledgment receipt dated 16.11.2011 issued in favour of the complainant, saying that all layout plans, specification and other details are tentative. If this is so, it amounts to grave unfair trade practice on the part of the opposite parties, as they had received an amount of Rs.16,20,000/- against a plot by November 2011, but on the other hand, till 15.06.2016, they have not even acquired land for the same (plot). Sequence of events narrated above, clearly goes to prove that the conduct of the opposite parties, throughout remained contumacious. As stated above, not even a single permission to launch the project was available with the opposite parties at the relevant time. As has been discussed in earlier part of this order, permissions continued to pour in, upto the year 2017. Even as on today, there is nothing on record to show that development at the site is complete. Despite request made, refund of the amount paid by the complainant towards price of the said plot has not been made. It can safely be said that the complainant was well within her right, to file this complaint. It was nowhere agreed to between the parties, at the time of booking of the said plot, that the complainant can be made to wait for an indefinite period.
At the same time, in the face of plea having been taken by the opposite parties that they were required to deliver possession of the plot to the complainants by 13.06.2018, as per the terms and conditions of the supplementary Agreement, referred to above, as such, in the same breath taking a plea that the present case is beyond limitation or that time is not to be considered as essence of the contract, is not sustainable in the eyes of law and is accordingly rejected. Even otherwise, it is not the proven case of the opposite parties that they were ready with delivery of possession of the plot, within a reasonable period of about two to three years, from the date of making payment or say by 13.06.2018 even, but the complainant, failed to take the same, on account of some personal grounds/financial constraints. It is settled law that in the cases, where possession of the residential units is not offered by the builder, there is a continuing cause of action, in favour of the allottee/purchaser.
Further contention was raised by Counsel for the opposite parties that in the face of provisions of the RERA, under which the opposite parties have registered the project, in question, on 15.09.2017, it is not open to this Commission, to entertain and decide the present complaint. He further asserted that sufficient safeguard is provided under the provisions of RERA and if the complainant is feeling aggrieved of any action, on the part of the opposite parties, she may approach under the said Act (RERA) and not under the Act, 1986.
We are not inclined to accept this argument. At the time of arguments, it is very fairly admitted by Counsel for the contesting parties, that the provisions of RERA are prospective in nature. It was also so said by the High Court of Bombay in the case of NeelKamal Realtors Suburban Pvt. Ltd. and anr. Vs. Union of India and ors. 2018 (1) R.C.R. (Civil) 298. It is an admitted fact that under the RERA, the opposite parties got themselves registered their project, only on 15.09.2017. Some of the provisions of RERA came into operation on 01.05.2016 and even the remaining of it, in May 2017. In all, the grievance has been raised by the complainant qua wrongful act/mistake done leading to deficiency in providing service and adoption of unfair trade practice, in selling the project by the opposite parties without sanctions/approvals, before coming into existence of RERA. Reading of the provisions of Section 88 of RERA makes it very clear that the same are in addition and not in derogation of the provisions of any other law for the time being in force. Section 79 of the RERA further makes it very clear that jurisdiction of only the Civil Court to entertain a suit or proceedings qua action taken as per the provisions of the said Act, is barred.
It may be stated here that the Consumer Foras under the Act, 1986 despite having some trappings of a Civil Court are not the Civil Courts. As such, the jurisdiction of the Consumer Foras is not debarred, to entertain the complaints filed by consumers, alleging deficiency in providing service, negligence and adoption of unfair trade practice against the opposite parties. Intention of the framers of law has been made clear by the concerned Department i.e. Ministry of Housing and Urban Property Alleviation, Government of India in its website www.mygov.in/group/ministry-housing-and-urban-poverty-alleviation. Under Frequently Asked Questions (FAQ), at Sr.nos. 85 and 86, it was observed as under:-
"85. Are the civil courts and consumer forums barred from entertaining disputes under the Act?
As per section 79 of the Act civil courts are barred from entertaining disputes (suits or proceedings) in respect of matters which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the Act to determine. However, the consumer forums (National, State or District) have not been barred from the ambit of the Act. Section 71 proviso permits the complainant to withdraw his complaint as regards matters under section 12, 14, 18 and section 19, from the consumer forum and file it with the adjudicating officer appointed under the Act.
86. Can a complainant approach both the Regulatory Authority/adjudicating officer and the consumer forums for the same disputes?
The laws of the country do not permit forum shopping, thus, an aggrieved can only approach one of the two for disputes over the same matter."
It was also so said by the State of Punjab in its Official Website Portal rera.punjab.gov.in. The above fact clearly indicates that in the face of provisions of the RERA, any action taken under the provisions of Act 1986 is not debarred.
Be that as it may, a similar question came up for consideration, before this Commission, when considering the applicability of the provisions of Section 8 (amended) of Arbitration Act 1996 Act viz a viz CPA 1986, in the case of ' Sarbjit Singh Vs. Puma Realtors Private Limited', IV (2016) CPJ 126, wherein, it was observed as under:-
" "The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.
To decide above said question, it is necessary to reproduce the provisions of Section 3 of the Consumer Protection Act 1986 (in short the Act), 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."
It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, ( Civil Appeal No.20923 of 2013) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.
In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.--
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists."
Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case, some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act, a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of Arbitrator's fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.
Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-
"In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986."
It was authoritatively said that in view of Section 3 of the Act 1986, it is open to the consumers to approach the Consumer Foras, for redressal of their grievance, notwithstanding that he/she can get relief under any other Act. Similar findings, to the effect that an Arbitration Clause in the Agreements between the complainant(s) and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act, has been upheld by the Hon'ble Supreme Court of India, in Civil Appeal bearing No.23512-23513 of 2017, vide order dated 13.02.2018.
In view of above findings, we can safely say that RERA and PAPRA will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the opposite parties.
It is necessary to mention here that alongwith Monika's case supra, one more case titled as Virinder Bharadwaj Vs. M/s Manohar Infrastructure and Construction Pvt. Ltd., Complaint case No.252 of 2016, was filed before this Commission. Both the complaints were allowed by this Commission vide common order dated 27.09.2016. Aggrieved of that order, the opposite parties went in appeal bearing no.1436 of 2016 before the National Commission. The opposite parties therein, has assailed the above said judgment, to the extent only of granting interest on the principal amount involved and payment of compensation and litigation expenses. Notice was issued confined to that extent. The opposite parties were directed to refund the principal amount paid by the complainant in that case. Above fact would mean that on merits, the opposite parties have failed to lay challenge to the judgment passed by this Commission, referred to above.
In the present case, an attempt has been made to by-pass the above provision of PAPRA by showing the sale as an expression of interest to purchase a plot. It has been so said before this Commission, at the time of arguments, by Counsel for the opposite parties that sale of the plot has not yet been confirmed. It may be stated here that it was an outright sale, when first payment of Rs.16,20,000/- was accepted by the opposite parties, in the year 2011. Above said contention raised by opposite parties, qua similar project, was rejected by this Commission, in Appeal No.248 of 2016, decided on 31.08.2016, titled as M/s Manohar Infrastructure and Constructions Pvt. Limited Vs. Sh.Tilak Raj Bakshi, wherein it was observed as under:-
"Furthermore, as is evident from the documents on record, the appellant is also guilty of violation of Section 6 of the Punjab Apartment and Property Regulation Act, 1995, (in short the PAPRA Act). In a very deceptive manner, an attempt has been made to show actual sale of plot, as an expression of interest. As has been held in earlier part of this order, vide document Annexure C-2, the terms and conditions of sale settled to make payment was also made available. Once it is so, by not offering the Buyers Agreement for signing in a reasonable time, say two to three months but on the other hand, after a lapse of many years of the sale of plot, the appellant has committed an unfair trade practice."
It is evident from the facts mentioned above that when the project in question was sold, neither CLU nor any other permission was available with the opposite parties. The Agreement was entered into with the Govt. only on 14.06.2013, to launch this project and that too, subject to many conditions. It is also on record that to get necessary permission qua the land in the project, applications were moved in parts. Opposite parties continued to purchase land and continued moving the applications, to the Authorities. Facts clearly indicate that the opposite parties were guilty of launching a project against mandate of law.
In view of above, contention of Counsel for the opposite parties that since the complainant has herself showed preference for a plot, after expression of interest was filled by her, and she waited for allotment of a plot, as such, delay if any will be deemed to have been waived of by her, stands rejected. There is nothing on record to show that plot was selected by the complainant and further when the plot was sold, not even a single permission was available with the opposite parties. There is nothing on record to show that delay caused was condoned by the complainant. Reliance placed by Counsel for the opposite parties on Krishna Bahadur Vs. M/s Purna Theater, 2004 (4) S.C.T 137, is of no help to them, as far as facts of the present case are concerned, because facts of that case are altogether different.
The opposite parties also cannot take shelter under the plea that time is not to be considered as essence of the contract".
In the present case also, no such document has been produced on record by the opposite party, which could persuade this Commission to deviate from the findings, what have been given in Jaspreet Kaur `s case supra. As such, in view of order of this Commission passed in Jaspreet Kaur `s case supra, findings whereof are also applicable to the present case being the objections/pleas taken by the opposite party, of same nature in respect of the same project "Palm Garden", this complaint is partly accepted, with costs, and the opposite party is directed as under:-
To refund the amount Rs.23,12,500/-, to the complainants, alongwith interest @13% p.a., from the respective dates of deposits onwards.
To pay compensation, in the sum of Rs.1,00,000/- for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
To pay cost of litigation, to the tune of Rs.22,000/- to the complainants.
The payment of awarded amounts mentioned at sr.nos.(i) to (iii) above, shall be made within a period of 45 days 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 @13% p.a., from the date of default and interest @13% 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 complainants have availed loan facility from any banking or financial institution, for making payment towards price of the plot, in question, it will have first charge of the amount payable, to the extent, the same is due to be paid by them (complainants).
Certified Copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion Pronounced.
23.04.2019 Sd/-
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/-
(RAJESH K. ARYA) MEMBER Rg.