National Consumer Disputes Redressal
Rajeev Kumar Singh vs Jai Prakash Associates Ltd. & Anr. on 15 June, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 975 OF 2017 1. RAJEEV KUMAR SINGH S/o. Shri K.P. Singh, R/o. D-63 Sector 40 Noida U.P - 201 301 ...........Complainant(s) Versus 1. JAI PRAKASH ASSOCIATES LTD. & ANR. Sector - 128 Noida U.P. - 201 304 2. Jaypee Infratech Limited., Sector -128, Noida - 201 304 Uttar Pradesh ...........Opp.Party(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Complainant : Mr. Varun Lal, Advocate with Mr. Ankit Malik, Advocate For the Opp.Party : Mr. Sumeet Sharma, Advocate with Mr. Abhishek Raj and Mr. Paras Choudhary, Advocate
Dated : 15 Jun 2020 ORDER
1. These two complaints have been filed by the Complainant Shri Rajiv Kumar Singh against Opposite Party Jaiprakash Associates Ltd. & Anr. The following prayers have been made in Consumer Complaint No.975 of 2017:-
i. Direct the Opposite Parties to refund the amount of ₹1,00,93,668/- (Rupees one crore ninety three thousand six hundred & sixty eight only) with respect the said apartment, with interest at the rate of 18% per annum from 01/03/2015, till the date of payment, by the Opposite Parties.
ii. Direct the Opposite Parties to pay the Complainant, costs to the tune of ₹5 lakhs on account of mental agony and torture.
iii. Direct the Opposite Parties to pay costs of litigation
iv. Pass any order further orders as this Hon'ble Commission may deem fit and proper in the interests of justice.
2. Similarly, prayers in Consumer Complaint No.976 of 2017 are as follows:
i. Direct the Opposite Parties to refund the amount of ₹84,71,891/- (Rupees eighty four lakh seventy one thousand eight hundred & ninety one only) with respect to the said apartment, with interest at the rate of 18% per annum from 09/03/2015 till the date of payment, by the Opposite Parties.
ii. Direct the Opposite Parties to pay the Complainant, cost to the tune of ₹5 lakhs on account of mental agony and torture.
iii. Direct the Opposite Parties to pay costs of litigation.
iv. Pass any order further orders as this Hon'ble Commission may deem fit and proper in the interests of justice.
3. Brief facts of the Consumer Complaint No.975 of 2017 are that the Complainant purchased an apartment for his younger son having super area of 2375 sq. ft. for total sale consideration of 1,04,86,375 excluding charges and thereby OP1 allotted Unit reference No. KRH0041803 vide Provisional Letter of Allotment (PLA) dated 30.08.2011. As per letter of PLA, OPs promised to deliver the possession of said unit within 42 months i.e. by 01.03.2015 to the complainant. Despite timely payment by complainant, OPs failed to deliver the possession of said unit within the time.
4. Since there was no construction happening at the project site, the completion of the project in the near future seemed extremely unlikely. Complainant was compelled to send a legal notice dated 06.08.2016 to OPs asking them to refund the deposited amount along with interest. OPs replied to said legal notice vide reply dated 28.11.2016 admitting the delay in delivery of possession and further tried to justify the delay in finishing of the construction project on Force Majeure conditions. Complainant in respect of said unit has made a total payment of 1,00,93,668 as per the Statement of Accounts till 14.9.2016.
5. The opposite parties resisted the complaint by filing their written statement. It has been stated by the opposite party in reply to the CC No.975 of 2017 that the complainant has booked another residential unit vide unit bearing no KRH0041804 for investment purpose speculating in the Real Estate Market. OPs further allege that complainant has failed to submit any proof before this commission to show the loss suffered by him before praying for refund of the deposited amount therefore, it is clear that the complainant has filed the complaint for making undue enrichment and is not a consumer as per the provisions of Consumer Protection Act, 1986. It has been further stated that there is an arbitration clause no 10.0 in the agreed standard Terms & Conditions of the application form dated 14.8.2011 which clearly states that complainant should invoke the arbitration clause after trying to amicably settle the dispute at the first instance. OPs further stated that Force Majeure events such as Shortage of labour, scarcity of water, restrictions in excavations, villager agitations as well as legal impediments, caused delay in the project and such facts were duly brought to the notice of the complainant. It is submitted that claims as raised by complainant are utterly untenable and it is therefore, prayed to dismiss the complaint with exemplary costs.
6. Brief facts of the Consumer Complaint No.976 of 2017 are similar to those of CC No.975 of 2017 except that in CC No.976 of 2017, the Opposite Party has taken another ground that the complaint is not maintainable before this Commission as the amount paid by the Complaintant is far less than ₹1 crore. In CC No.976 of 2017, the Complainant in respect of the unit has made a total payment of ₹84,71,891/- as per the Statement of Accounts till 14.9.2016. .
7. The complaint No.976 of 2017 has also been resisted by the opposite parties by filing the written statement on the similar grounds as in CC No.975 of 2017 with an additional ground relating to pecuniary jurisdiction. It has been stated by the opposite party that the present complaint is not within the pecuniary jurisdiction of this commission as the complainant has prayed for the refund of his money which is way below ₹1 Crore.
8. Both the parties filed evidence by way of affidavit which have been taken on record.
9. Heard the Learned Counsel for the parties and perused the record. The Learned Counsel for the Complainant stated that though the complainant has booked two residential units with the Opposite Party but the Complainant is a consumer because the two units have been booked for the use of his two sons. Learned Counsel stated that this commission in many of its judgements has agreed that if the additional plot or flat is not purchased for trading purposes, the Complainant would be a consumer. In support of his argument the Learned Counsel for the Complainant has relied upon the following judgments of this Commission where this Commission has taken a view that merely by booking more than one flat, the complainant does not become disentitled to be a consumer:-
Col. Kuldip Singh Versus Emaar MGF Land Ltd. & Anr. in First Appeal No.783 of 2015 in Consumer Complaint No.100/2015, decided on 11/01/2018 (NC).
Kavita Ahuja versus Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd. and Ors. Consumer Complaint Nos.137, 145 and 146 of 2010, decided on 12/02/2015 (NC)
10. There has been a huge delay in handing over the possession and there is no hope that the possession would be given in the near future. In these circumstances, there is no point in waiting for the construction to be completed. The only remedy available to the Complainant whose money has been locked in the project is to seek refund. It is not material for the Complainant whether the delay has been caused by any force majeure condition or otherwise, because the fact remains that the delay has been caused due to siphoning of funds from this project to other projects or for purchase of additional land for future projects and the project has suffered due to lack of funds and other administrative reasons. No Force Majeure Condition becomes applicable in the present case. It was requested that the complaints be allowed and the amount paid by the Complainants be refunded alongwith 18% per annum interest.
11. On the other hand, the Learned Counsel for the Opposite Parties stated that these complaints are not maintainable as the insolvency proceedings are going on in respect of Opposite Party No.2 Jaypee Infratech limited. It was further stated that the delay in construction has occurred due to various force majeure conditions which were beyond the control of the Opposite Party. Thus, even if, the amount is ordered to be refunded, no interest can be ordered for the delay period. It has been further argued that the Complainant is not a consumer as he has booked two units in the same project of the Opposite Party. Clearly the units were booked for investment purposes to earn profit. The Learned Counsel for the Opposite Party referred to the judgment of this Commission in Consumer Complaint No.159/2012 Anil Dutt vs. M/s Business Park Town Planners Ltd. (BPTP) to support the argument that a person having booked more than one unit is not a consumer as the units would have been booked for commercial purpose.
12. Had the complainant been the real home seeker, he would have waited for the completion of the units which will definitely have the increased value in terms of money. The Complainant is seeking refund as there is slump in the real estate market. It was further pointed out by the Learned Counsel for the Opposite Parties that this Commission does not have the pecuniary jurisdiction to decide the Complaint No.976 of 2017 as the amount paid by the Complainant alongwith compensation would not reach to ₹1 crore.
13. I have given a thoughtful consideration to the arguments advanced by the Learned Counsel for the parties and examined record. For another project of the Opposite Party, a Consumer Complaint No. 2194/2016 was filed by a Complainant seeking refund of the deposited amount and in that complaint also, similar objections and arguments were raised by the Opposite Party No.1, however, this Commission in Consumer Complaint No.2194/2016 decided on 01/10/2019 (NC), has observed the following on the issue of maintainability of the complaint:-
"10. At the outset, we address ourselves to the submission of the learned Counsel for the Opposite Party that since a moratorium has been ordered against 'Jaypee Infratech Limited' by the National Company Law Tribunal at Allahabad in IDBI Bank Limited Vs. Jaypee Infratech Limited, 2017 SCC OnLine NCLT 12613, this Commission has no jurisdiction to entertain the Complaint against this Opposite Party also. Further, learned Counsel argued that the present Complaint is bad for non-joinder of parties as Jaypee Infratech Limited is not a party here. It is reiterated that Jaypee Infratech Limited is not a party before us and therefore, we are of the considered view that this Complaint against Jaiprakash Associates Limited is maintainable. Be that as it may, this Commission in judgement dated 01.10.2018 in Arvind Kumar Dhingra & Ors. Vs. Jaiprakash Associates Limited & Anr., Consumer Complaint No. 1495 of 2015, while having given its anxious consideration to the question of maintainability of the Complaint against Jaiprakash Associates Limited has observed as follows:
"17. As regards the apprehension that the home buyers would abandon their participation in the proceedings against JIL under IBC and would rush to file claims before this Commission, as noted earlier, nothing in law prevents such flat buyers from proceeding against JAL under the provision of C.P. Act, for the redressal of their grievances, if any, against JAL.
18. As regards the contention that the Hon'ble Supreme Court has already permitted RBI to direct financial institutions to proceed against JAL under the provisions of IBC, and pursuant thereto, ICICI bank has already approached NCLT by way of an Insolvency Petition against JAL, the fact remains that as to day, no Insolvency Petition has been admitted against JAL which is contesting the petition filed by ICICI Bank, and consequently there is no prohibition, at this stage, on institution or continuance of any proceedings against the said company. Mere institution of an Insolvency Petition which is yet to be admitted does not come in the way of the proceeding against JAL at this stage.
19. As regards the contention that under the terms and conditions of allotment it is for JIL and not for JAL to refund the amount received from the allottees, this Commission in my view, would be competent to pass appropriate orders, including payment of compensation by JAL in the event of its ultimately holding that the services rendered by the said company to the buyers were defective and / or deficient, resulting in loss to them. In that event, JAL may have such remedy, if any, as may be open to it against JIL for reimbursement to the extent it is made to pay to the home buyers.
20. Since in my opinion, JAL was a co-service provider along with JIL and not just an agent of JIL, qua the home buyers, I need not examine the contention of the complainants that this Commission should lift the corporate veil and hold JAL to be the service provider, on account of its being the promoter and holding company of JIL.
21. For the reasons stated hereinabove, I hold that the complainants, being consumers not only of JIL but also of JAL, these complaints can, for the present, continue against JAL, though the same cannot at this stage continue against JIL."
11. The Hon'ble Supreme Court in Civil Appeal No (s). 11320-11329 of 2018 has dismissed all the Appeals preferred by Jaiprakash Associates Limited and observed in para 4 to 6 of the order as follows:
"4. We make it clear that Commission may examine "all" contentions available to "both sides" regarding the rights and obligations of the parties inter se on its own merits in accordance with law uninfluenced by any observation made in the impugned judgment.
6. We once again make it clear that the impugned order may not be construed as having given any direction to the respondents in the complaint. The Commission, however, may give appropriate directions in the final Judgment which obviously will be subject to the outcome of the proceedings before the NCLT insofar as JIL is concerned and also subject to the outcome of proceedings against JAL before the NCLT."
12. Hence, we are of the considered view that the question of maintainability of Complaint against Jaiprakash Associates Limited has attained finality and at the cost of repetition at the time of disposal of this Complaint, no insolvency petition has been admitted against Jaiprakash Associates Limited."
14. On the basis of the above findings of this Commission in Consumer Complaint No.2194/2016, Anish Singhal vs. Jaiprakash Associates Ltd. (Supra), there seems to be no necessity of dealing with the question of maintainability again. Thus, the present complaints are maintainable against OP No.1 Jai Prakash Associates Limited as there is moratorium against the OP No.2 Jaypee Infratech Limited and the complaints can be finally decided treating OP No.1 Jai Prakash Associates as the only opposite party.
15. So far as the question of Complainant being or not being a consumer is concerned, this Commission has already taken a view in a number of cases that if the complainant is not in the business of purchase/sale of the plots/flats, he will be treated as a consumer. This Commission in Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14.09.2016, has held as follows:-
"In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose".
It was also observed that:-
"It would be pertinent to note that there is no evidence of the complainant having purchased and then sold any residential property. Therefore, it would be difficult to say that he was engaged in the business of the buying and selling of the property or that villa in question was booked by him for speculative purposes".
16. In another case, Kavit Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd., I(2016) CPJ31(NC), wherein three flats were booked by the complainant, this Commission held the complainant to be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and held as follows:-
"In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
8. As observed by the Hon'ble Supreme Court in Laxmi Engineering Works (supra) what is a 'commercial purpose' is a question of fact to be decided in the facts of each case and it is not the value of the goods that matters but the purpose for which the goods brought are put to. The same would be equally applicable to for hiring or availing services.
9. In any case, it is not appropriate to classify such acquisition as a commercial activity merely on the basis of the number of houses purchased by a person, unless it is shown that he was engaged in the business of selling and purchasing of houses on a regular basis. If, for instance, a person has two-three children in his family and he purchased three houses one for each of them, it would be difficult to say that the said houses were purchased by him for a commercial purpose. His intention in such a case is not to make profit at a future date but is to provide residential accommodation to his children on account of the love and affection he has for his children. To take another example, if a person has a house say in Delhi but he has business in other places as well and therefore, purchases one or more houses at other places where he has to live presently in connection with the business carried by him, it would be difficult to say that such acquisition is for commercial purpose. To give one more example, a person owning a house in a Metropolitan city such as Delhi, or Mumbai, may acquire a house at a hill station or a place, which is less crowded and more peaceful than a Metropolitan city, in my view, it cannot be said that such acquisition would be for commercial purpose. In yet another case, a person may be owning a house but the accommodation may not be sufficient for him and his family, if he acquires one or more additional houses, it cannot be said that he has acquired them for commercial purpose. Many more such examples can be given. Therefore, it cannot be said that merely because of the complainant had agreed to purchase three flats in the same complex the said acquisition was for a commercial purpose".
17. This Commission, in Rajesh Malhotra & Ors. Vs. Acron Developers & 2 Ors., First Appeal No. 1287 of 2014, decided on 05.11.2015 has held as follows:-
"12. Therefore, in order to determine whether the goods are purchased for commercial purpose, the basic pre-requisite would be whether the subject goods have been purchased or the services availed of with the prime motive of trading or business activity in them, for the purpose of making profit, which, as held in Laxmi Engineering (supra) is always a question of fact to be decided in the facts and circumstances of each case".
18. On the basis of the above authoritative judgements of this commission, there seems to be no iota of doubt that the Complainant in the present complaint is a consumer. The judgment relied upon by the Opposite Party in Consumer Complaint No.159/2012 Anil Dutt vs. M/s Business Park Town Planners Ltd. (BPTP) (Supra) relates to a case where 10 units were booked by one consumer and clearly this Commission has observed that a person booking 10 plots cannot be treated as consumer as the plots were booked for commercial purpose. In Laxmi Engineering Works Vs. P.S.G Industrial Institute (1995) 3 SCC583, Hon'ble Supreme Court has observed that the finding on issue of commercial purpose will depend on facts and circumstances in each case. In the present case, only two flats were booked by the Complainant and therefore, facts of the two cases are different. Thus, the judgment of this Commission in Consumer Complaint No.159/2012 Anil Dutt vs. M/s Business Park Town Planners Ltd. (BPTP) (Supra) cannot be applied in the present case.
19. An objection has been raised by the Learned Counsel for the Opposite Parties that this Commission does not have the pecuniary jurisdiction to decide complaint No.976 of 2017 as the total amount paid by the Complainant is only ₹84,71,891/-
It is seen that the total consideration of the flat is more than Rupees one crore and as per the judgment of the larger bench of this Commission in the case of Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt. Ltd. decided on 07/10/2016 (NC), the pecuniary jurisdiction of a consumer forum will be determined on the basis of total consideration plus compensation demanded as the total consideration is more than ₹1 crore, this Commission has the pecuniary jurisdiction to decide the present complaint No.976 of 2017.
20. It is seen that there has been inordinate delay in handing over the possession and the Complainant has a right to seek refund in such situation. This Commission in Consumer Case No.2194 of 2016, Anish Singhal vs. Jaiprakash Associates Ltd. (supra) has also addressed the issue of delay due to alleged Force Majeure Conditions and it has observed as under:-
"The contention of the learned counsel for the Opposite Party that the delay is attributable to Force Majeure Events, and therefore no deficiency of service can be attributed to them is totally unsustainable as the Opposite Party could not substantiate by means of any documentary evidence that the project was delayed by events beyond their control. Except for stating that there was economic slowdown in the real estate market, orders of the NGT restraining the builders from extracting underground water for construction and restraining the concerned authorities from issuing Completion Certificate for the buildings constructed within 10km radius of the Okhla Bird Sanctuary which led to the delay, which submission, viewed from any angle, cannot be said to be a "Force Majeure Event" as the said restraint was set aside on 19.08.2015, as stated by the Opposite Party themselves in their Written Version and it is pertinent to mention that even thereafter till the date of final arguments, i.e., four years subsequent to the restraining orders have been lifted, still the construction is incomplete and the Opposite Party is not in a position to deliver possession. There is no material on record to establish that the aforenoted reasons were beyond their control."
21. Thus, clearly no ground is established for justification of the delay on the ground of alleged Force Majeure Conditions. In such situation the delay in handing over the possession would be treated as deficiency in service on the part of the Opposite Party. Hon'ble Supreme Court in Civil Appeal No.12238 of 2018 titled as "Pioneer Urban Land & Infrastructure Ltd. versus Govindan Raghavan" has upheld the order of this Commission by observing the following:
"3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent - Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent - Flat Purchaser could not be compelled to take possession at such a belated stage. The grounds urged by the Appellant - Builder for delay in handing over possession were not justified, so as to deny awarding compensation to the Respondent - Flat Purchaser. The clauses in the Agreement were held to be wholly one - sided, unfair, and not binding on the Respondent - Flat Purchaser. 6 The Appellant - Builder was directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent - Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation.
9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.
22. From the above observations of the Hon'ble Supreme Court, it is clear that the Complainant can seek refund if sufficient time has elapsed after the due date of possession as per the agreement and the possession has not been offered.
23. From the above examination of facts and Law, it is brought out in the present cases that the Complainant is entitled to get refund of the deposited amount by him. For considering the amount of compensation, it is seen that the Hon'ble Supreme Court in Kolkata west International Pvt. Ltd. Vs. Deva Asis Rudra 11 (2019) CPJ29 (SC) has reduced the interest from 12% per annum as awarded by this Commission to 9% per annum and therefore, I deem it appropriate to allow 9% per annum interest on the amount of refund.
24. Based on the above discussion both the complaints are allowed as under:-
CC/975/2017 The Opposite Party No.1 Jai Prakash Associates Limited will refund an amount of ₹1,00,93,668/- (Rupees one crore ninety three thousand six hundred & sixty eight) alongwith 9% per annum interest from the date of respective deposits till actual payment.
CC/976/2017 The Opposite Party No.1 Jai Prakash Associates Limited is directed to refund an amount of ₹84,71,891/- (Rupees eighty four lakh seventy one thousand eight hundred & ninety one only) alongwith 9% per annum interest from the date of respective deposits will actual payment.
25. This order be complied with by the Opposite Party No.1 Jai Prakash Associates Limited within a period of three months from the date of receipt of the order.
...................... PREM NARAIN PRESIDING MEMBER