State Consumer Disputes Redressal Commission
Karam Jeet Singh vs Emaar Mgf Land Private Limited on 16 February, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.138 of 2014
Date of institution : 28.08.2014
Date of decision : 16.02.2017
Karam Jeet Singh s/o Savinder Singh Ahuja R/o H.No.286, Phase 1,
Urban Estate, Patiala-147 002.
.......Complainant
Versus
1. Emaar MGF Land Limited, ECE House, 28 Kasturba Gandhi
Marg, New Delhi-110001 through its Managing
Director/Authorized Signatory.
2. Emaar MGF Land Limited, SCO 120-122, First Floor, Sector
17-C, Chandigarh through its Regional Manager/Branch
Manager/Authorized Signatory.
3. Emaar MGF Land Limited, Banur Landran Road, Opposite
Reliance Petrol Pump, Sector 105, Mohali Hills, Mohali, Punjab
through its Manager/Authorized Signatory.
........Opposite Parties
Consumer Complaint under Section
17(1)(a)(i) of the Consumer Protection Act,
1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Shri Vinod Kumar Gupta, Member
Shri Harcharan Singh Guram, Member Present:-
For the complainant : Shri Munish Goel, Advocate. For the opposite parties: Shri Ashim Aggarwal, Advocate.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The complainant, Karam Jeet Singh, has filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in Consumer Complaint No.138 of 2014 2 short, "the Act") for the issuance of following directions to the opposite parties:-
i) to refund ₹35,00,157/- along with 15% interest per annum from the date of deposit till payment;
ii) to pay ₹50/- per square yard per month as per clause 8 of the Buyers Agreement dated 4.7.2007 till the physical possession of the plot is handed over to him;
iii) to pay ₹5,00,000/- on account of compensation for causing mental tension, harassment and mental agony;
and
iv) to pay ₹33,000/- as cost of litigation.
2. The complainant alleged therein that he wanted to purchase a plot for self living. The opposite parties advertised for sale of plot at their site "Mohali Hills" in Sector 105, Mohali. The complainant contacted opposite parties for purchasing a plot in September 2006 and they informed that work for completion of basic amenities was at full swing in Sector 105 and they intended to provide physical possession of plots to the applicants in next two or at the maximum in three years from the date of registration. On query the complainant was told by the opposite parties that their project already stood cleared from all concerned Departments and development of whole area was at full swing for providing basic amenities like electricity, roads, water, sanitation, fully developed parks, electric poles etc. The complainant after getting full assurance from the opposite parties purchased a plot of 300 square yards at the rate of ₹11,500/- per square yard in Sector 105, Mohali, Consumer Complaint No.138 of 2014 3 which included parking bay, preferential location charges, external development charges and interest free maintenance charges etc. for his personal use/self-living. The complainant submitted an application along with cheque of ₹ 10,35,000/- to the opposite parties on 23.9.2006. Thereafter the opposite parties issued provisional allotment letter dated 8.5.2007 to the complainant for allotment of plot bearing No.445 in Sector 109, SAS Nagar, Mohali. The opposite parties provided instalment payment plan and according to the same, they were to give physical possession of the plot within 24 months from the date of allotment i.e. by September 2008. The complainant after receiving letter dated 8.5.2007 duly objected for allotment of plot in Sector 109 as he has submitted the application for allotment of plot in Sector 105. However, the opposite parties wrongly replied that their Sector 105 was not developed and they were only developing Sector 109. Actually the opposite parties developed Sector 105 and did not develop Sector 109 at all. They with mala fide intentions changed the location of plot of complainant from Sector 105 to Sector 109 with sole intention to sell plots in Sector 105 at higher rates to new applicants at their own whim and fancies. The complainant agreed to take plot in Sector 109 under misrepresentation by the opposite parties. The opposite parties executed plot buyer's agreement on 4.7.2007 and as per clause 8 thereof, the physical possession of the plot was to be delivered to the complainant within a period of two years from the date of execution of agreement but not later than three years i.e. by July 2010. It is also mentioned in clause 8 of the Agreement that Consumer Complaint No.138 of 2014 4 opposite parties would be liable to pay a penalty of the sum of ₹50/- per square yard per month for such period of delay beyond three years from the date of execution of the agreement. The opposite parties illegally persuaded the complainant to sign buyer's agreement on the pretext that they will look into the grievances of the complainant qua allotment of plot in Sector 109 instead of Sector 105 in a meeting with Company officials and further promised that they will allot plot in Sector 105, in case, Sector 105 would be developed earlier. The complainant paid a sum of ₹1,72,500/- to the opposite parties through cheque dated 10.9.2007. The complainant further paid ₹5,17,500/- for which receipts dated 10.3.2008 were issued to him. The complainant paid another sum of ₹3,45,000/- through cheque dated 25.6.2008. The complainant paid another sum of ₹3,45,000/- through cheque dated 27.7.2008. The complainant further paid another sum of ₹4,29,552/- through cheques dated 9.9.2008. The complainant paid another sum of ₹4,29,552/- through cheque dated 22.12.2008. The complainant further made payment of Rs.53,553/- for which receipt dated 25.12.2008 was issued. The complainant further deposited ₹1,72,500/-, vide cheque dated 12.3.2009 being last instalment after one payment of ₹1,72,500/- being waived off on account of payment of all instalments on time. The complainant deposited the entire amount qua the price of the plot and nothing was due towards him. The opposite parties were to give physical possession of the plot within maximum three years from the date of buyer's agreement dated 4.7.2007 upto 3.7.2010 but till the date of filing of the Consumer Complaint No.138 of 2014 5 complaint they did not provide physical possession of the plot to the complainant despite a number of visits to the opposite parties. As per clause 8 of the Buyer's Agreement, the opposite parties are liable to pay a sum of ₹50/- per square yard per month after three years from the date of buyer's agreement i.e. dated 4.7.2007. The complainant went to the site and found that roads were not constructed and there was no provision of sewerage, water and electricity. No construction was going on at the site and the project was not cleared from concerned Departments. The opposite parties have not completed the basic amenities at the site since 2006 and they are not in a position to deliver possession of the plot in near future in-spite of the fact that the complainant paid full price of the plot to them. As a result the dreams of the complainant to have his own plot have fallen on his feet and he suffered huge mental tension, agony and harassment. As such, the complainant is not only entitled to refund of the entire amount along with interest but also compensation and litigation costs.
3. In the joint written reply the opposite parties admitted that the complainant applied for the plot in their project and the Buyer's Agreement was executed between them and that the amounts, as mentioned in the complaint, were paid, as per the terms of the Agreement to them. While denying the other allegations made in the complaint they pleaded that the complainant being the signatory to the Agreement is bound by the terms and conditions contained therein. No doubt, they proposed to hand over the possession of the developed plot to the complainant within 36 months but there was no Consumer Complaint No.138 of 2014 6 definitive promise to deliver the same within specified time. In cases of sale of immovable property and construction, time is never regarded as the essence of the contract. As per clause 39 of the Agreement, all the disputes are to be referred to the Arbitrator to be appointed as per the provisions of the Arbitration and Conciliation Act, 1996 and on that ground the complaint is liable to be dismissed/returned for presentation to the proper Forum. The complaint is time barred in terms of Section 24-A of the Act as the complainant is now challenging allotment of plot in Sector 109 and is alleging that he had applied for plot in Sector 105 only. Hence, having signed the agreement qua plot in Sector 109 on 4.7.2007 the complainant is not only estopped from pleading to the contrary but also the complaint is time barred having been filed more than 7 years after alleged cause of action. The complainant not having rescinded the contract and accepted alleged delay implies time was not of essence and thus, present complaint is not only time barred but also not maintainable. It was also said that the opposite parties are ready to relocate the complainant to some other plot, in the same project, where possession could be offered to him shortly. It was further stated that neither there was any deficiency in rendering service on the part of the opposite parties nor they had indulged in any unfair trade practice as alleged.
4. The parties led evidence in support of their respective averments.
5. We have heard the learned counsel for both the sides and have carefully gone through the records of the case. Consumer Complaint No.138 of 2014 7
6. It has been submitted by the learned counsel for the complainant that from the evidence produced by the complainant, which includes the Buyer's Agreement Ex.C-4, it stands proved that the possession of the developed plot was to be given to the complainant within a period of two years from the date of execution of the Agreement but not later than three years. The payments were time linked and no development ever proceeded and the payments were made as per the Schedule, which form part of the Agreement. The Agreement was executed on 4.7.2007 and, as such, the possession was to be delivered by the opposite parties to the complainant on or before 4.7.2010 but they failed to do so. From that evidence, it also stands proved that the development had not been started at the site and the opposite parties were/are not in a position to hand over the possession of the developed plot. The complainant cannot wait for all times to come to get the plot as he is in dire need of the house to accommodate his family. Initially the plot was booked in Sector 105. Thereafter the opposite parties informed the complainant that they were developing Sector 109 prior to Sector
105. Later on the complainant was informed that the opposite parties will develop simultaneously Sectors 105, 108 and 109. Accordingly the Buyer's Agreement Ex.C-4 dated 4.7.2007 was executed. At the time of execution of the Agreement the complainant deposited with the opposite parties an amount of Rs.10,35,000/- and Plot No.45 in Sector 109 was allotted to him. The complainant had almost paid the entire sale consideration and a part of the External Development Charges but at the spot there is no Consumer Complaint No.138 of 2014 8 development till date. The opposite parties misrepresented the fact that the development in Sector 109 will be carried out first. Neither the development in Sector 109 or in Sector 105 had been carried out. Till date there is no development at all. The opposite parties have failed to perform their part of the contract and they were negligent in not delivering the possession; as a result of which the complainant suffered mental agony and harassment and is entitled to the compensation by way of interest on the amount already paid by him, besides the refund of that amount. He also submitted that keeping in view the facts and circumstances of the case and the settled law the complainant is entitled to interest at the rate of 15% per annum from the date of payment of the said amount.
7. On the other hand, it has been submitted by the learned counsel for the opposite parties that no doubt, the possession of the developed plot could not be delivered to the complainant but that will not entitle the complainant to any compensation by way of interest or otherwise as in case of the sale of immovable property or development of the plot the time is never the essence of the contract. It is very much clear from the interpretation of the terms and conditions of the Agreement that the parties never intended that the time should be the essence of the contract. The penalty to be imposed upon the opposite parties for delayed possession is provided by way of clause 8 of the Agreement and at the time of delivery of possession, the complainant can claim the amount mentioned in that clause. Therefore, he is not entitled to any such interest by way of compensation. Moreover the complaint is time- Consumer Complaint No.138 of 2014 9 barred in terms of Section 24-A of the Act as the complainant is now challenging allotment of plot in Sector 109 and is alleging that he had applied for plot in Sector 105 only. Hence, having signed the agreement qua plot in Sector 109 on 4.7.2007 the complainant is not only estopped from pleading to the contrary but also the complaint is time barred having been filed more than 7 years after alleged cause of action. It has further been submitted by the learned counsel for the opposite parties that this Commission does not have the jurisdiction to entertain the present complaint as it has been specifically stated/mentioned in the said Agreement in clause no.39 that all the disputes shall be referred to an Arbitrator to be appointed as per provisions of Arbitration and Conciliation Act, 1996. In the last it has been submitted that the opposite parties are committed towards delivering possession in favour of the complainant at the earliest and are expediting the activity in the area where the plot of the complainant is located so that possession can be offered to the complainant at the earliest. The complainant may explore the option to relocate to another plot within the same sector, which can be offered for possession shortly in case he desires earlier possession. He prayed that there is no merit in the present complaint and the same be dismissed with cost.
8. We have given our thoughtful consideration to the contentions of the learned counsel for the parties.
9. The first and foremost question to be decided for the disposal of the present complaint is whether the time was the essence of the contract as entered into between the parties and which is in the form Consumer Complaint No.138 of 2014 10 of Buyer's Agreement Ex.C-4? It can be termed as a contract for the transfer of immovable property. It is now well settled that in a case of transfer of immovable property time is not the essence of the contract. It was held in BANGALORE DEVELOPMENT AUTHORITY vs. SYNDICATE BANK (2007) 6 Supreme Court Cases 711 by the Hon'ble Supreme Court that in a contract involving construction, time is not the essence of the contract but the same was qualified by the words "unless specified". It is the settled law that time is not ordinarily the essence of contract for sale of immovable property though the parties can make it so by express stipulation in the contract itself or inferred, if the nature of the property intended to be sold requires it. The Consumer Forum may infer that the contract for the sale of immovable property is to be performed in a reasonable time if the conditions are; (i) from the express terms of the contract, (ii) from the nature of the property, and (iii) from the surrounding circumstances. For example, the object of making the contract. Though in case of sale of immovable property time is not regarded as the essence of the contract, yet it has to be ascertained from the terms of the contract, as to whether the time was the essence of the contract and for that purpose the intention of the parties to be gathered from the terms of the contract itself and such an intention must be expressed in unequivocal language.
10. In the present case, there is a specific stipulation in the Agreement to hand over the possession within a period of two years from the date of execution of the Agreement but not later than three Consumer Complaint No.138 of 2014 11 years. In order to determine whether the time was the essence of the contract or not the above said clause of the Buyer's Agreement is reproduced below:-
"8. Subject to Force Majeure conditions and reasons beyond the control of the Company, the Company shall endeavor to deliver possession of the Plot to the Allottee within a period of 2 (Two) years from the date of execution of this Agreement, but not later than 3 (Three Years). In the event that the possession of the Plot is likely to be delayed for reason of any force majeure event or any other reason beyond the control of the Company including Government strike or due to civil commotion or by reason of war or enemy action or earthquake or any act of God or if non delivery is as a result of any act, notice, order, rule or notification of the Govt. And any other public or Competent Authority or for any reason beyond the control of the Company, then in any of the aforesaid events, the Company shall upon notice claiming force majeure to the Allottee be entitled to such extension of time till the force majeure event persists or the reason beyond the control of the Company exists. In the event that the Company fails to deliver possession of the Plot without existence of any force majeure event Consumer Complaint No.138 of 2014 12 or reason beyond the control of the Company within a maximum period of 3 (Three) years from the date of execution of this Agreement, the Company shall be liable to pay to the Allottee, a penalty of the sum of Rs.50/- (Rupees Fifty only) per sq. yds. Per month for such period of delay beyond 3 (Three) years from the date of execution of this Agreement."
A reading of this clause makes it clear that the time was the essence of the contract. The opposite parties were to deliver the possession within a period of 2 years from the date of execution of this Agreement but not later than 3 years. When one is to go for the developed plot and is required to pay major part of the development, it can easily be concluded that in such like cases the time is the essence of the contract. No one wants that his money be blocked and the possession be not delivered within the time stipulated by the contract. From our above discussion, we conclude that the time was the essence of the contract.
11. The next question that arises for consideration is, as to whether the complaint filed by the complainant is time barred or not? According to clause 8 of the Buyer's Agreement, the possession of the plot was to be delivered to the complainant within a period of 2 years from the date of Buyer's Agreement but not later than three years. Neither the possession was delivered to the complainant nor the amount deposited by the complainant has been refunded so far. Clause 8 further provides that buyer-complainant is entitled to Consumer Complaint No.138 of 2014 13 penalty of the sum of Rs.50/- per square yard per month till the delivery of possession after three years from the date of execution of the buyer's agreement. There was, thus, a continuing cause of action, in favour of the complainant to file the complaint. In Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah And Anr., II 2000 (1) CPC 269=AIR 1999 SC 380, wherein, the facts and circumstances were similar to the one, involved, in the instant case, it was held that there was a continuing cause of action, and the complaint was not barred by time. In Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), the complainant applied for a plot, in the year 1992, on the basis of inducement made in the advertisements of the opposite party/builder. It was known to the opposite party that the land, in question, was under litigation. Consumer Complaint was filed, in the year 2009, claiming relief of execution of the sale deed, which was granted to him. An objection was taken that the complaint was barred by time. The Hon`ble Supreme Court held that there was a continuing cause of action, and, as such, the complaint was not barred by time. The principle of law, laid down, in the aforesaid cases, is fully applicable to the facts of the instant case. Under these circumstances, it is held that the complaint was not at all barred by time. The objection taken by the opposite parties, in this regard, being devoid of merit, must fail and the same is rejected.
12. So far as the contention of the learned counsel for the opposite parties with regard to the existence of clause 39 in the Buyer's Agreement is concerned, the remedy available under the Act is an Consumer Complaint No.138 of 2014 14 additional remedy and the matter is no more res-integra. Hon'ble Supreme Court in 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 and in 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.
13. Recently, it was held by the Hon'ble National Commission, in Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016, as under:-
"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 Consumer Complaint No.138 of 2014 15 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."
In view of the above, objection raised by Counsel for the opposite parties that 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, being devoid of merit, is rejected.
14. It would be apposite to refer to the relevant provisions of Punjab Apartment and Property Regulation Act, 1995 (in short, PAPRA"), which are as follows:
3. General Liabilities of Promoter:-
(1) Notwithstanding anything in any other law for the time Consumer Complaint No.138 of 2014 16 being in the force, a promoter, who develops a colony or who constructs or intends to construct a building of apartments, shall, in all transactions with persons taking or intending to take a plot or an apartment on ownership basis, be liable to give or produce, or cause to be given or produced, the information and the documents mentioned hereinafter in this section.
(2) A promoter who develops a colony or who constructs or intends to construct such building of apartments shall,-
(a) make full and true disclosure of the nature of his title to the land on which such colony is developed or such building is constructed or is to be constructed, such title to the land having been duly certified by an attorney-at-law or an advocate of not less than seven years standing, after he has examined the transactions concerning it in the previous thirty years ; and if the land is owned by another person, the consent of the owner of such land to the development of the colony or construction of the building has been obtained;
(b) make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land;
(c) give inspection on seven days, notice or demand,-
(i) of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony; and
(ii) of the plan and specifications of the building built or to be built on the land as well as of the common areas and facilities and common services provided (including supply of electricity and water, sewerage and drainage systems, lifts, fire-fighting equipment), such plans and specifications being in accordance with the provisions of the building regulations, and approved by the authority which is required so to do under any law for the time being in force, indicating thereon what parts of the building and the appurtenant areas are intended to be kept as common areas and facilities in the case of apartments :
Provided that the number and sizes of the apartments shall conform to such building regulations, and the area of an apartment shall not exceed such limit as may be fixed by the competent authority;
(d) display or keep all the documents, plans and specifications or copies thereof referred to in clauses (a), (b) and (c) of this sub-section at the site and in his office and make them available for inspection to persons taking or intending to take a plot or an apartment and after the association is formed, he shall furnish the association a copy of these documents and of the sanctioned plan of the building;
(e) disclose the nature of fixtures, fittings and amenities, including the provision for one or more lifts, provided or to be provided;Consumer Complaint No.138 of 2014 17
(f)disclose on reasonable notice or demand, if the promoter is himself the builder, the prescribed particulars as respects the designs and the materials to be used in construction, and, if the promoter is not himself the builder, disclose all agreements entered into by him with the architects and contractors regarding the design, materials and construction of the building;
(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly;
(h) except where there are no agreements about specific plots or apartments and allotment is made by draw of lots, prepare and maintain a list of plots or apartments with their numbers, the names and addresses of the parties who have taken or agreed to take plots or apartments, the price charged or agreed to be charged therefor, and the terms and conditions, if any, on which the plots or apartments are taken or agreed to be taken;
Provided that the competent authority may direct that,-
(i) in the case of residential apartments, if the total number of apartments is one hundred or more, ten percent of the apartments; and
(ii) in the case of colony, if the total area of the colony is forty hectares or more, ten per cent of the area under residential plots and houses, be reserved for being sold or leased to such person belonging to such economically weaker section of society, in such manner and on such terms and conditions as may be prescribed;
(i) state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons who have taken or are to take the apartments;
(j) not allow person to enter into possession until an occupation certificate required under any law is duly given by the appropriate authority under that law and no person shall take possession of an apartment until such occupation certificate is obtained;
(k) make a full and true disclosure of all outgoings, including ground rent, if any, municipal or other taxes, charges for water and electricity, revenue assessment, interest on mortgages or other encumbrances, if any;
(l) give the estimated cost of the building and the apartments proposed to be constructed, or colony to be developed, and the manner in which escalation in such cost for valid reasons may be approved by mutual agreement ;
(m) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and
(n) give on demand and on payment of reasonable charges true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed.Consumer Complaint No.138 of 2014 18
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.
(2) The advertisement or prospectus issued under sub-
section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed.
(3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
(4) When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
(a) the promoter, if an individual;
(b) every partner of the firm, if the promoter is a firm;
(c) every person who is a director at the time of issue of
the advertisement or prospectus, if the promoter is a company :
Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or
(b) the advertisement or prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c) after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor. (5) When any advertisement or prospectus includes any untrue statement, every person who authorised its issue, shall Consumer Complaint No.138 of 2014 19 be punished with imprisonment for a term which may extend upto one year or with fine which may extend upto five thousand rupees, or, with both, unless he proves that the statement was immaterial or that he had reason to believe and did upto the time of issue of the advertisement or prospectus believe that the statement was true.
5. Development of Land into Colony:
(1) Any promoter, who desires to develop a land into a colony, shall make an application in the prescribed form alongwith the prescribed information and with the prescribed fee to the competent authority for grant of permission for the same and separate permission will be necessary for each colony.
(2) On receipt of the application under sub-section (1), the competent authority, after making enquiry into the title to the land, extent and situation of the land, capacity of the promoter to develop the colony, layout of the colony, conformity of the development of the colony with the neighbouring areas, plan of development works to be executed in the colony and such other matters as it may deem fit, and after affording the applicant an opportunity of being heard and also taking into consideration the opinion of the prescribed authority, shall pass an order, in writing, recording reasons either granting or refusing to grant such permission.
(3) Where an orders is passed granting permission under sub-section (2), the competent authority shall grant a licence in the prescribed form, after the promoter has furnished a bank guarantee equal to twenty five percent of the estimated cost of the development works certified by the competent authority and the promoter has undertaken to enter into an agreement in the prescribed form for carrying out completion of development works in accordance with the conditions of the licence so granted.
(4) The licence granted under sub-section (3) shall be valid for a period of three years and will be renewable from year to year on payment of prescribed fee. (5) The promoter shall enter into agreement undertaking to pay proportionate development charges for external development works to be carried out by the Government or a local authority.
(6) The competent authority shall determine the proportion in which, and the time within which, the estimated development charges referred to in sub-section (5) shall be paid to the State Government, or the local authority, as the case may be.
(7) The promoter shall carry out and complete the Consumer Complaint No.138 of 2014 20 development of the land in accordance with the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (Central Act 33 of 1976) and other laws for the time being in force. (8) The promote shall construct or get constructed at his own cost schools, hospitals, community centres and other community buildings, on the land set apart for this purpose or transfer such land to the State Government either free of cost or upon payment of actual cost of developed land, as decided by the State Government, which shall be at liberty to transfer such land to any local authority or any person or institution on such terms and conditions as it may deem fit:
Provided that if, having regard to the amenities which exist or are proposed to be provided in the locality, the competent authority is of the opinion that it is not necessary to provide one or more of such amenities, it may exempt the promoter from providing such amenities, either wholly or in part, on such terms and conditions as it may deem fit. (9) The promote shall, where the total area of the colony is forty hectares or more, reserve upto ten per cent of the area under residential plots and apartments as the competent authority may direct, for being sold or leased to such persons belonging to such economically weaker sections of society, in such manner and on such terms and conditions, as may be prescribed.
(10) The promoter shall carry out all directions issued by the competent authority for ensuring due compliance of the execution of the layout and the development works therein and to permit the competent authority or any officer authorised by it to inspect such execution. (11) The promoter shall be responsible for the maintenance and up keep of all roads, open spaces, public parks and public health services until the date of transfer thereof, free of cost to the State Government or the local authority.
(12) In the event of the promoter contravening any provisions of this Act, or rules made thereunder or any conditions of the licence granted under sub-section (3) the competent authority may, after giving an opportunity of being heard, cancel the licence and enforce the bank guarantee furnished by the promoter under the said sub-section(3). (13) When a licence is cancelled under sub-section (12), the competent authority may itself carry out or cause to be carried out the development works, and after adjusting the amount received as a result of enforcement of bank guarantee, recover such charges as the competent authority may have to incur on the said development works from the promoter and the allottees in the manner prescribed as arrears of land revenue.
(14) The liability of the promoter for payment of development charges referred to in-sub section (13) shall not exceed the amount the prompter has actually recovered from Consumer Complaint No.138 of 2014 21 the allottees less the amount actually spent on such development works, and that of the allottees shall not exceed the amount which they would have to pay to the promoter towards the expenses of the said development works under the terms of the agreement of sale or transfer entered into between them:
Provided that the competent authority may, recover from the allottees with their consent, an amount in excess or what may be admissible under the aforesaid terms of agreement of sale or transfer.
(15) Notwithstanding anything contained in this Act, after development works have been carried out under sub-section (13), the competent authority may, with a view to enabling the promoter, to transfer the possession of, and the title to, the land to the allottees within a specified time, authorise the promoter by an order to receive the balance amount, if any, due from the allottees after adjustment of the amount which may have been recovered by the competent authority towards the cost of the development works and also transfer the possession of, and the title to, the land to the allottees within aforesaid time and if the promoter fails to do so, the competent authority shall on behalf of the promoter transfer the possession of, and the title to, the land to the allottees on receipt of the amount which was due from them. (16) After meeting the expenses on development works under sub-section (13), the balance amount shall be payable to the promoter.
6. Contents of Agreement of Sale:-
(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 form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act no. 16 of 1908) ;
Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots. (2) The promoter shall not cancel unilaterally the agreement of sale entered into under sub-section (1) and if he has sufficient cause to cancel it, he shall give due notice to the other parties to the agreement and tender a refund of the full amount collected togetherwith interest at the rate as may Consumer Complaint No.138 of 2014 22 be prescribed.
(3) The agreement to be prescribed under sub-section (1) shall contain inter alia the particulars as hereunder specified in clause (a) in respect of apartments and as specified in clause (b) in respect of plots in a colony and to such agreement shall be attached the copies of the documents specified in clause (c),-
(a) the particulars in the case of apartment,-
(i) if the building is to be constructed, the liability of the promoter to construct the building according to the plans and specifications approved by the authority which is required so to do under any law for the time being in force;
(ii) the date by which the possession of the apartment is to be handed over to the allottee;
(iii) the area of the apartment including the area of the balconies which should be shown separately:
(iv) the price of the apartment including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the allottee of the apartment and the intervals at which the instalments thereof may be paid;
(v) the precise nature of the association to be constituted of the persons who have taken or are to take the apartments;
(vi) the nature, extent and description of the common areas and facilities and the limited common areas and facilities, if any;
(vii) the percentage of undivided interest in the common areas and facilities and in the limited common areas and facilities, if any, appertaining to the apartment agreed to be sold, such percentage shall be the ratio of the built-up area of the apartment to the total built-up area of all the apartments;
(viii) the statement of the use for which the apartment is intended and restrictions on its use, if any;
(b) particulars in the case of plots in a colony,-
(i) the date by which the possession of the plot is to be handed over to allottee;
(ii) the area and price of the plot; and
(iii) the statement of the use for which the plot is intended
and restriction on its use, if any;
(c) the copies of documents to be attached with the
agreement,-
(i) the certificate by an attorney-at-law or advocate referred to in clause (a) of sub-section(2) of section 3;
(ii) certified copy from any relevant revenue record showing the nature of the title of the promoter to the plot or the land on which the building of apartments is constructed or is to be constructed ; and
(iii) the plans and specifications of the apartment as approved by the authority which is required so to do under any law for the time being in force.Consumer Complaint No.138 of 2014 23
9. Accounts of sums taken by promoter:- The promoter shall maintain a separate account in any scheduled bank of sums taken by him from persons intending to take or who have taken apartments or plots, as advance, towards sale price or for any other purpose, or, deposit, including any sum so taken towards the share capital for the formation of a co-operative society or a company, or towards the outgoings(including ground rent, if any, municipal or other local taxes. charges for water or electricity, revenue assessment, interest on mortgages or other encumbrances, if any, stamp duty and registration fee for the agreement of sale and the conveyance); and the promoter shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes including for the construction of apartments and, in the case of colonies, for meeting the cost of development works, and shall on demand, in writing, by the competent authority make full and true disclosure of all transactions in respect of that account and shall not utilize for any other purpose the amounts so collected for a particular purpose.
12. Refund of Amount:-If the promoter,-
(a) fails to give possession, in accordance with the terms of his agreement, of a plot or an apartment duly completed by the date specified, or any further date agreed to by the parties; or
(b) for reasons beyond his control and of his agents, is unable to give possession of the plot or the apartment by the date specified, or the further agreed date; the promoter shall be liable on demand, but without prejudice to any other remedies to which he may be liable, to refund the amounts already received by him in respect of that plot or apartments with simple interest at the rate as may be determined by the competent authority from the date the promoter received the sums till the date the amounts and interest thereon is refunded, and the amounts and the interest shall be a charge on the land on which a plot is to developed, or a building is or was to be constructed and the construction, if any, thereon shall be subject to any prior encumbrances.
15. Thereafter, Punjab Apartment and Property Regulation Rules, 1995 were framed under Section 45 of the PAPRA and according to Rules 7, 8 & 17 thereof, it has been provided as under:-
"7. Disclosure regarding registration and licence - The promoter shall disclose the number of his certificate of registration granted under sub-section (2) of section 21 and, in the case of a colony, also the validity of licence issued under Consumer Complaint No.138 of 2014 24 sub-section (3) of section 5 and display the certificate of registration and the licence so granted at a conspicuous place in his office and make it available for inspection to the persons taking or intending to take an apartment or a plot in the colony and to a person authorized by the competent authority.
8. Supply of copies of documents. - The promoter on demand shall supply true copies, on payment of reasonable charges, of the following documents, namely :-
(a) Title deed of land, certificate of the attorney at-law or an advocate of not less than seven years standing, referred to in clause (a) of sub-section (2) of section 3 and copies of the advertisement issued under section 4;
(b) Copy of the consent of the land owner, if the land does not belong to the promoter as referred to in clause (a) of sub- section (2) of section 3;
(c) Design of apartment, agreement with an architect and a contractor, referred to in clause (f) of sub-section (2) of section 3;
(d) Copy of occupation certificate referred to in section 14; and
(e) Certificate of registration granted under sub-section (2) of section 21 and in case of colony, the permission granted under sub-section (2) of section 5.
17. Rate of interest on refund of advance money upon cancellation of agreement.- The promoter shall refund full amount collected from the prospective buyers under sub- section (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
16. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainant-buyer was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. It is not to play the game at the cost of others. When it insists upon the performance of the promise by the consumers, it is to be bound by the reciprocal promises of performing its part of the Agreement.
17. The Consumer Protection Act came into being in the year 1986. It is one of the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation Consumer Complaint No.138 of 2014 25 cannot be overlooked and its object is not to be frustrated. There is not an iota of evidence led by the opposite parties to rebut the averments made in the complaint by way of authenticated documentary evidence. The complainant has made payment of substantial amount to the opposite parties with the hope to get the possession of the plot in a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and construction/development of the Project in a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainant. Had the complainant not invested his money with the opposite parties, he would have invested the same elsewhere. There is escalation in the price of construction also. The complainant has suffered loss, as discussed above. The builder is under obligation to deliver the possession of the plot within a reasonable period. The complainant cannot be made to wait indefinitely to get possession of the plot booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builder knew from the very beginning that it had not complied with the provisions of the PAPRA and the Rules frames thereunder and would not be able to deliver the possession within the stipulated period, thus by misrepresenting induced the complainant to book the plot, due to which the complainant has suffered mental agony and harassment. It is the settled principle of law that compensation Consumer Complaint No.138 of 2014 26 should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainant is a deposit held by the opposite parties in trust of complainant and it should be used for the purpose of developing the plots, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainant, are also required to be taken into consideration for awarding compensation. In addition to that he is also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by him on account of the betrayal by the opposite parties in shattering his hope of getting the plot by waiting for all this period.
18. Under Section 12 of the PAPRA read with Rule 17 of the Rules framed thereunder, reproduced above, if the amount is to be refunded, it is to be refunded along with interest at the rate of 12% per annum.
19. In view of our above discussion, this complaint is allowed and the following directions are issued to the opposite parties:- Consumer Complaint No.138 of 2014 27
i) to refund the amount of ₹35,00,157/- along with interest at the rate of 12% per annum from the different dates of deposit of different amounts till the date of actual payment;
ii) to pay ₹3,00,000/-, as compensation for the harassment and mental agony suffered by him; and
iii) to pay ₹20,000/-, as cost of litigation.
20. The opposite parties shall make compliance of this order within one month from the date of receipt of the certified copy of this order.
21. If the opposite parties have failed to comply with the order in the complaint within the stipulated period, then the amount of compensation awarded, vide this order in the complaint shall carry interest at the rate of 12% per annum from the date of this order till realization.
22. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (VINOD KUMAR GUPTA) MEMBER (HARCHARAN SINGH GURAM) MEMBER February 16, 2017 Bansal Consumer Complaint No.138 of 2014 28