State Consumer Disputes Redressal Commission
Shiv Kumar vs Country Colonisers Pvt. Ltd. on 21 February, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 481 of 2017
Date of Institution : 13.06.2017
Date of Reserve : 06.02.2018
Date of Decision : 21.02.2018
Shiv Kumar son of Hari Chand, resident of Gurmukh Colony,
Samana, District Patiala, India, now residing 19, Mount BLANC
Place, North Park, Auckland, New Zealand through SPA Holder
Tilak Raj son of Hari Chand, resident of Indira Puri, Samana,
District Patiala.
....Complainant
Versus
1. Country Colonisers Private Limited (Wave Group Company)
through its Chairman Sh. Rajinder Singh Chadha, having their
registered office at P.O. Rayon and Silk Mills, Adjoining Coca Cola
Depot, G.T. Road, Chheharta, Amritsar, Punjab-143105.
2. Rajinder Singh Chadha, Chairman of Country Colonisers
Private Limited (Wave Group Company) having its registered office
at P.O. Rayon and Silk Mills, Adjoining Coca Cola Depot, G.T.
Road, Chheharta, Amritsar, Punjab-143105.
3. M/s Country Colonisers Pvt. Ltd., An Wave Infratech Venture
Through its Vice Chairman/Director Sh. Manpreet Singh Chadha
having its Office at Site Office at Sector 85, Mohali, Punjab.
4. Manpreet Singh Chadha, Vice Chairman/Director of Country
Colonisers Private Limited (Wave Group Company) having its
Office at Site Office at Sector 85, Mohali, Punjab.
....Respondents/Opposite parties
5. Housing and Development Corporation Bank (HDFC) through
its Branch Manager having its Office at SCO No. 97-98, First Floor,
Consumer Complaint No. 481 of 2017 2
Opposite at HDFC Life, New Leela Bhawan Market, Patiala-
147001.
....Proforma Respondent-OP No.5
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainant :Sh. D.S. Virk, Advocate
For opposite parties No.1 to4:Sh. Tejeshwar Singh, Advocate
For opposite party No. 5 :Ms. Anjali Moudgill, Advocate
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
Complainant has filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that Op Nos. 1 to 4 launched the luxury project of residential floors by the name of Wave Floors in Sector 85 and 99, SAS Nagar (Mohali). It was also apprised by the Ops that present project is mega project and shall have mix of flats, villas, commercial complexes and club house being promoted by Ops being the prestigious gated community with a running wall throughout the periphery of the entire township with luxury swimming pool, a world class tennis court, indoor games and a health club. The brochure further enumerated that it will have Consumer Complaint No. 481 of 2017 3 jogging trail, walking paths, tennis courts, badminton courts, sit out plaza, swimming pool, kids park, splash pool etc. with luxury condominiums with 100% power backup, unhindered 24 hours water supply and three tier security system. Complainant was staying in a rented premises at Samana and wanted to have residence near Chandigarh, approached the Ops for purchasing residential floor. The Ops allotted residential floor bearing No. 181 on the Ground Floor in Sector 85, Block A of 1350 sq. ft., comprised in the scheme of Ground plus Two Floors, constructed on a Plot having an area of 250 sq. yards (approximately 209.03 sq. mts) for basic sale price of the floor under subvention plan was fixed as Rs. 71,05,000/- (Rs. 69,00,000/- + EDC charges Rs. 1,30,500/- and Rs. 75,000/- Club Membership charges). It was also decided that IFMS charges, stamp duty, service taxes and other charges/tax are to be decided at the time of offer of possession. Then the complainant approached HDFC Bank for availing a home loan and a sum of Rs. 55,00,000/- was approved in December, 2013. Apartment agreement was executed on 11.12.2013 and it was assured that possession complete in all respects would be handed over to him within a period of 30 months(inclusive of grace period of 6 months). It was also provided under Clause 5.5 of the buyer's agreement, if the Ops failed to offer possession of the said floor to the allottee by the end of grace period i.e. 30 months, the Ops shall be liable to pay to the allottee compensation calculated @ Rs. 5/- per sq. ft. per month of the super area, which expired on 9.8.2016. According to Clause 6.1, it was provided that on Consumer Complaint No. 481 of 2017 4 completion of the construction, the developer shall hand over the possession of the same in the manner stated under Clause 5. The developer shall execute the appropriate documents of conveyance/sale deed in favour of the allottee for transfer of ownership of the said floor. The complainant asked the Ops to give the exact date of handing over the possession on account of loss of interest and payment of EMIs to the bank without getting the possession whereas Ops kept on asking the complainant to pay the amount as asked by them and complainant paid it. However, Ops failed to complete the construction and to hand over the possession of the residential floor as agreed. When the complainant visited the site, they were anguished and pained to see that the development/construction of the flat is far from completion. Even completion/occupation certificate was not applied to the GMADA. Ops also collected EDC @ Rs. 522/- per sq. yard and club membership of Rs. 75,000/- from the complainant whereas there is no development at the site, which included parks, landscapes, gated community, pavements, jogging trails, swimming pool, gym, spa etc. The complainant has paid a sum of Rs. 66,16,660/- as demanded by the Ops. The Ops had also submitted revised layout plan of the project and had delayed the project so as to reap undue enrichment for themselves at the cost of poor allottees. The complainant, who is residing in the rented accommodation has suffered a double blow on account of false assurances of Ops as they have not completed the project and handed over the floor to the complainant. They also did not adhere Consumer Complaint No. 481 of 2017 5 to the provisions of PAPRA. The complainant sent an email dated 13.12.2016 and asked for the refund of the amount as the Ops have failed to hand over the possession of the floor. Ops replied to the email and assured that they would hand over the possession in the first week of April, 2017 but all in vain. Ops failed to obtain permanent electricity connection from PSPCL, club is not operational/constructed, clean drinking water is not available, boundary wall is incomplete, therefore, they have failed to provide the facilities as promised by them in the project. Alleging deficiency in service on the part of Ops, this complaint has been filed before this Commission seeking direction against the Ops to refund a sum of Rs. 66,16,660/- paid by the complainant to Ops alongwith suitable interest rate, pay compensation to the tune of Rs. 5,00,000/- and Rs. 55,000/- as litigation expenses.
2. Upon notice, Op Nos. 1 to 4 appeared and filed their written reply through Raghav Sharma their Authorised Representative taking preliminary objections that the complaint is not maintainable as the complainant does not fall under the definition of the consumer as complainant already owns three separate properties i.e. 19, Mount BLANC Place, North Park, Auckland, New Zealand; Ward No. 13, Gurmukh Colony, Samana, District Patiala, Punjab and Fluent Academy, SCF 45, FF, Leela Bhawan, Patiala, therefore, the present floor was booked for investment purposes; the complaint is not maintainable in view of Arbitration Clause in the agreement; the complainant opted for subvention linked plan. Under this plan, the complainant paid 15% Consumer Complaint No. 481 of 2017 6 of the basic sale price, following which the residential floor allottee(s) arrangement was executed between the allottee and the developer and subsequently, a tripartite agreement was executed with them and the bank and the complainant had taken the loan. The amount under this plan became due to the Ops in accordance with the stage of the construction and the bank was to pay these amounts as and when it became due. The bank paid the entire remainder of the amount except for 15% of the basic sale price, service tax, preferential location charges, EDC, club membership etc. Under the tripartite agreement, the EMI commenced from the month following the month in which the loan disbursement is complete. Till such commencement, the complainant is liable to pay the pre-EMI interest, which was agreed simple interest charged on the loan amount disbursed. Under Clause 3, the developer had agreed to pay pre-EMI interest on behalf of the allottee for 24 months from the date of disbursement of the first loan installment. Under Clause 4, the liability of the borrower to pay the EMI amount is not subject to the stage of the construction. In this case, the loan was disbursed on 10.1.2014, therefore, Ops were liable to pay pre- EMI interest upto 9.1.2016 and after that the complainant is obliged to bear the installment of pre-EMI interest as per the terms of the tri-partite agreement. The liability of the complainant to pay the Pre- EMI interest was irrespective of and not subject to the stage of construction and date of handing over the possession. However, as soon as the complainant was required to start paying the Emi amounts as per the tri-partite agreement, he filed the present false Consumer Complaint No. 481 of 2017 7 and frivolous complaint; the complainant has failed to fulfill his obligation under the agreement. Ops paid huge amount of Rs. 8,88,246/- to Op No. 5 on account of Pre-EMI interest, on behalf of the complainant. Complainant has paid only a meager amount of Rs. 14,61,660/- out of Rs. 66,16,660/- and the remaining amount was paid by Op No. 5 to Op Nos. 1 to 4; There is no mandatory date of completion of construction of the project under the Residential Floor Allottee(s) Arrangement and the word endeavour was mentioned to complete the development of the project as far as possible within 30 months. In case the construction is delayed beyond the period fixed under the agreement, Clause 5.5 stipulated that Ops will pay penal charges @ Rs. 5/- per sq. ft. per month for the delayed period; the prayer of the complainant for refund of the paid amount is not maintainable in the light of terms and conditions of tripartite agreement. Ops further entered into memorandum of agreement dated 3.2.2006 with the State of Punjab and according to Clause 5(e) of the memorandum of agreement, the State Government shall acquire land under the provisions of the Land Acquisition Act, 1984 and transfer the same to the Ops. The approved plan of the entire project also shows critical areas i.e. land, which is not in possession of the Ops and due to the failure of the State Government in acquiring the same, the land which is not available to the Ops equal to10% of the total land required for the entire project. They requested the State Government to acquire 23.21 acres of land, which fall within the master plan of the project. Further GMADA was to provide external access roads to the Consumer Complaint No. 481 of 2017 8 project upon execution of land use agreements with the local farmers, which the GMADA has failed. However, Op No. 1 entered into a land use agreement with local farmers from whose land an access road has been laid for proper access to the project. Therefore, the delay, if any, in completion of the apartment of the complainant is due to the reasons which are beyond the control of Ops; the State Commission does not have the jurisdiction to entertain and decide the present complaint as intricate questions of law and facts are involved, therefore, the matter be relegated to the Civil Court; the Commission does not have the pecuniary jurisdiction to entertain this complaint and that there is no cause of action for the complainant to file this complaint. On merits, booking of the ground floor by the complainant with the Ops is admitted. However, it was denied that any assurance was given with regard to completion of the project by the Ops. It was never promised to the complainant that the possession will be delivered in August, 2016 or that it would be mandatory that possession will be delivered within 30 months after execution of the residential floor allottee arrangement. Ops have only promised to endeavour to complete the construction within a period of 30 months. Under the subvention scheme Pre-EMI interest to the bank is being paid by the Ops on behalf of the complainant as per the tripartite agreement. It was denied that the complainant had been approaching the Ops with regard to the completion of the apartment. It was also denied that the complainant visited the site in August, 2016 and that there was no construction at the site. It Consumer Complaint No. 481 of 2017 9 was denied that Ops violated any provisions of the PAPRA. It was denied that a sum of Rs. 66,16,660/- has been paid by the complainant and remaining amount was paid by Op No. 5. In fact only a sum of Rs. 14,61,660/- has been paid by the complainant. Other averments of the complaint were denied. It has been stated that there is no merit in the complaint, it be dismissed.
3. Op No. 5 in its reply took the preliminary submissions that the complaint has been directed only against Op Nos. 1 to 4 in terms of Residential Floor Allottee Arrangement as per the finance advanced by this Op, the rights of the parties are governed by the loan agreement. In case of cancellation of the unit or in the contingency of termination of plot buyer's agreement, this Op has the first charge/right to seek apportionment of its dues. The account of the complainant is regular. On merits, the averments of the complainant were denied as these were referred to Op Nos. 1 to 4. It was stated that complainant availed a loan of Rs. 55,00,000/- out of sanctioned loan amount of Rs. 51,55,000/-, therefore, no deficiency in service on the part of this Op; complaint is without merit, it be dismissed.
4. To support his contentions, the parties led their respective evidence.
5. The complainant in his evidence has tendered affidavit of Tilak Raj son of Hari Chand, SPA holder as Ex. C-A and documents Exs. C-1 to C-7C. On the other hand, Op Nos. 1 to 4 had tendered affidavit of Sh. Amarjit Singh, Authorised Signatory as Ex. Op-1/A and documents Exs. Op1/1 to Ex. Op-1/22. Consumer Complaint No. 481 of 2017 10
6. We have heard the counsel for the parties and have carefully gone through the averments made in the complaint, written reply filed by the Ops and evidence and documents on the record.
7. Now before taking the complaint, some preliminary objections have been taken by Ops No. 1 to 4 that the complainant is not a consumer as the property was booked by the complainant for the purpose of sale. In the written reply, it has been referred that the complainant owns three separate properties i.e. 19, Mount BLANC Place, North Park, Auckland, New Zealand; Ward No. 13, Gurmukh Colony, Samana, District Patiala, Punjab and Fluent Academy, SCF 45, FF, Leela Bhawan, Patiala, however, no document has been referred by the Ops that these properties are owned by the complainant. The complainant has filed this complaint through Special Power of Attorney holder Sh. Tilak Raj son of Hari Chand and the complainant has recently gone to New Zealand. The Special Power of Attorney has been filed on the record duly attested by Consulate Officer of Wellington, New Zealand. It has been further referred by the complainant in para No. 3 of the complaint that he is residing at Samana in a rented accommodation and his parents are in the old age and having proper medical facilities in Tricity, he wanted to reside near Chandigarh. Therefore, he booked a flat with Ops in their project at Mohali. Therefore, the purpose of the complainant for booking the flat was for residential purpose and not to sell the property. Consumer Complaint No. 481 of 2017 11 However, counsel for the Ops has referred to the email given by the complainant to the Ops Ex. C-7A, which reads as under:-
"I am very much frustrated from your uncooperative attitude. Kindly see the below email, I requested you to supply me the copy of agreement and the details of total payment I made to you. But you didn't give reply to my email. Now I have lost the customer to who I was to sell the property. I have been bearing heavy rate of interest since the subvention period expired in January, 2016.
Now I am not interested in your property as due to unnecessary delay, I had to bear lots of loss and my present circumstance doesn't permit me to continue with it. It all happened due to too much delay in your project. You were supposed to give possession by the end of subvention period, but it couldn't happen till date. Kindly refund me full amount with interest as soon as possible. Kindly reply soon and do reply please. Thanks."
In this email, he has referred that due to non-delivery of the possession, he lost his customer. However, we are not to go by one line. He is requesting time and again for delivery of possession of the property and there is no previous document showing trading of the complainant in the real estate. Till such an evidence on the record, mere reference in one of the email, it does not make any difference when other averments in the complaint that his family is residing at Samana in a rented accommodation and he wanted to purchase this floor only for the purpose of residence of the family to Consumer Complaint No. 481 of 2017 12 provide better medical facilities. In this regard, we are fortified by the judgment 2017(3) CLT 459 "Pranab Basak versus Suhas Chatterjee". In that case, two flats were booked by the complainant and a plea was taken that the complainant had booked these flats for investment purposes. It was observed by the Hon'ble National Commission that unless it is established that the complainant is dealing in sale and purchase or his real intention in booking the flat was to sell the same on profit, on appreciation of the value of the real estate. The Ops have failed to place on the record any document that previously the complainant was trading in real estate. In the absence of those findings, we do not agree with the plea taken by the counsel for the Ops that the complainant had booked the flat for commercial purposes.
8. It has been argued by the counsel for Op Nos. 1 to 4 that complicated questions of law and facts are involved, therefore, the matter be referred to the Civil Court. In case we go through the pleadings of the parties, the complainant had booked one residential floor with Ops and had paid a sum of Rs. 66,16,660/- as demanded by the Ops from time to time. Residential Floor Allottee(s) Arrangement is there and Ops have failed to deliver the possession within the time frame. It is only the interpretation of agreement and then to see whether there is any deficiency in service on the part of Ops. We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission. The benches of this Commission are headed by retired High Court Judges/retired District & Session Consumer Complaint No. 481 of 2017 13 Judges, who have long experience at their back and are fully competent to decide such like matters. In this regard, we are fortified by the judgment of "Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi", 2002(6) SCC 635 wherein it was held that 'the State Commission and District Forum are headed by retired High Court Judges and officers of District Judge level and in our view, this is not such a case which cannot be decided by the 'Consumer Fora' after obtaining evidence and if need be after getting an expert opinion'. Further reference can be made to "Shiv Kumar Agarwal versus Arun Tandon and another", 2007(2) CLT 287, decided by the Hon'ble National Commission. In that case a plea that case involves complicated questions of fact and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled - Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. Therefore, we are of the opinion that this Commission is fully competent to decide this complaint and no cause of action is made out to refer the case to the Civil Court.
9. Ops No. 1 to 4 raised the objection that there is arbitration clause No. 13 exists in the agreement and in case of any dispute arose between the parties, the matter is to be referred to the Arbitrator. In case the Ops were really interested that the matter should be referred to the Arbitrator then they should have moved an application under Section 8 of the Arbitration and Conciliation Act, 1996 alongwith the written reply but no such application was Consumer Complaint No. 481 of 2017 14 filed. Otherwise under Section 3 of the CP Act, additional remedy has been provided under the Act, therefore, we are of the opinion that the Consumer Fora are duly competent to deal with the complaint despite having the arbitration clause in the agreement.
10. An objection has been taken by Op Nos. 1 to 4 that this Commission does not have the pecuniary jurisdiction to entertain this complaint. The price of the flat is less than Rs. One Crore i.e. Rs. 71,05,000/-. It has not been stated by counsel for the Ops that even after adding the compensation amount, its aggregate amount exceeds Rs. One Crore. Therefore, counsel for Ops failed to prove how the Commission does not have the pecuniary jurisdiction to entertain and adjudicate the complaint.
11. As per the averments in the complaint, the complainant booked one residential floor with Ops No.1 to 4. Ex. C-1 is the brochure giving various features of the scheme. Ex. C-2 is the application for provisional allotment of residential floor with Ops moved on 16.10.2013 in their scheme in Sector 85 having saleable area of 1350 sq. ft. under subvention scheme. Ex. C-5 is the account summary vide which total demand of Rs. 66,16,660/- had already been deposited by the complainant. Ex. C-3 is the agreement of residential floor allottees arrangement executed between the parties on 11.12.2013. According to Clause 5.1, the possession was to be delivered as under:-
"5.1 Subject to Clause 5.2 and further subject to all the Allottee(s) of the said "Residential Floor" in the "Said Project"
making timely payment(s), the Developer shall endeavor to Consumer Complaint No. 481 of 2017 15 complete the development of the "Said Project" in general and the said "Residential Floor" in particular as far as possible within 24 (twenty four) months along with an extended period of (6) six months from the date of execution of this "Residential Floor" Allottee(s)Arrangement and/or from the date of start of construction of "Residential Floor", which is later."
In case of non-compliance then Clause No. 5.5 is relevant, which reads as under:-
"5.5 Subject to Clause 5.1 and 5.2 above and further the Allottee(s) having complied with its obligations under the Application Form as well as this "Residential Floor" Allottee(s) Arrangement, including but not limited to timely payment of the entire Consideration and other charges as per the payment plan opted by the Allottee(s), in the event of willful delay in construction of the "Residential Floor" for reason attributable solely to the Developer, delay charges would be payable to the Allottee(s) at the rate of Rs. 5/- per square feet per month on Saleable/Super Area. It is hereby clarified that the aforesaid delay charges shall be payable, subject to demand being raised by the Allottee(s) for the same (and will be calculated from the date of the said demand), till the date when possession of the said "Residential Floor" is offered to the Allottee(s). Further, all payments towards the delay charges, as due from the Developer, would be adjusted from the payment due to the Developer from the Allottee(s) at the Consumer Complaint No. 481 of 2017 16 time of the final settlement of Sale Consideration of the said "Residential Floor". Provided specifically that the Developer shall be entitled, without the payment of any delay charges, not to offer the possession of the said "Residential Floor", to the Allottee(s), till all payments/amount due and payable by the Allottee(s), as of such date, including all default, payment of interest etc. have been paid by the Allottee(s)."
Under the subvention scheme schedule, payment was to be made as under:-
Schedule of Payments Subvention Payment Plan On Booking 5 Lacs Within 45 days of booking 15% 15% of Sale Price less booking amount On start of Construction/ 30% Excavation On completion of First Floor roof 30% + 100% PLC, 50% slab EDC, 50% Club Membership On completion of Brick Works & 15% +50% EDC, 50% plaster works Club Membership On intimation of Possession 10% IFMS + Stamp Duty + Registration Charges + Other Charges 100% In para No. 7 of the written reply, it has been admitted that a sum of Rs. 66,16,660/- has been paid by the complainant to Op Nos. 1 to 4 and the same amount has been claimed by the complainant in this complaint. It is nowhere stated that payment made by the complainant was late and the said fact stand proved from the Consumer Complaint No. 481 of 2017 17 statement of account Ex. C-5. However, within the stipulated period, the Ops failed to deliver the possession. In case, the possession is not delivered within the time then the complainant has a right to ask for the refund. A reference has been taken from the judgment of the Hon'ble National Commission reported as II (2014) CPJ 131 "PUDA versus Kanwalpreet Singh" that in case there is delay in handing over the possession, it amounts to deficiency in service and refund order can be passed. A reference has also been made to I (2017) CPJ 513 (NC) "Neha Suri versus Unitech Reliable Project Pvt. Ltd." In that case, the possession of the flat was not given as agreed. It amounts to deficiency in service. Amount deposited alongwith interest was ordered to be refunded. Similar order was passed in I (2017) CPJ 113 "Vishal Issar v. Park Wood Developers Pvt. Ltd.". This Commission has already held in Consumer Complaint No. 164 of 2016 "Harmit Singh Arora versus M/s Country Colonisers Private Limited", decided on 2.2.2017 against the same opposite party that in case possession of the apartment has not been given as agreed then it amounts to deficiency in service and that the complainants are not bound to pay further payments when the project is not coming at the site and refund alongwith interest order was ordered.
12. After taking the approximate 95% of the amount, Ops No. 1 to 4 failed to construct and deliver the possession of the flat to the complainant, therefore, Op Nos. 1 to 4 are deficient in service. Therefore, the complaint is liable to be allowed. Consumer Complaint No. 481 of 2017 18
13. It has been further argued by the counsel for the Ops that according to Clause No. 5.5, in case there is delay in delivery of the possession then the Ops are liable to pay the penalty as per Clause 5.5 i.e. @ Rs. 5/- per sq. ft. per month of super area from the date, the possession was to be delivered upto the date of payment. Whereas it has been contended by the counsel for the complainant that in case of late payment, the Ops are claiming interest @ 18% then similar treatment be given to the complainant. It is one sided agreement and in case of default on the part of complainant, he has to pay 18% interest whereas Ops are to pay just 3%. This question has been dealt in detail by the Hon'ble National Commission in CC No. 427 of 2014 "Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd." decided on 8.6.2015 wherein the Hon'ble National Commission observed as under:-
"However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted Consumer Complaint No. 481 of 2017 19 that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyer's Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer's Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer's Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer's Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment.Consumer Complaint No. 481 of 2017 20
It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer's Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Consumer Complaint No. 481 of 2017 21 Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word "including" before the words "any of the following practices".
The same view was upheld by the Hon'ble National Commission in CC No. 347 of 2014, "Swarn Talwar & Ors. Vs. Unitech Ltd." decided on 14.8.2015. A reference has also been made to the judgment of the Hon'ble Supreme Court in "K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board", C.A. No. 6730-6731, decided on 19.9.2012. In that case, the District Forum has allowed interest @ 12% p.a. and its appeal was dismissed by the State Commission as well as the Hon'ble National Commission and after relying upon the judgment of "Ghaziabad Development Authority Vs. Balbir Singh", (2004) 5 SCC 65, the interest @ 18% per annum on the deposited amount was allowed alongwith Rs. 50,000/- as compensation. Against the judgment of the Hon'ble National Commission in "Swarn Talwar & Ors. Vs. Unitech Ltd.", C.C. No. 347 of 2014 (supra), Op preferred the appeal before the Hon'ble Supreme Court i.e. Civil Appeal No. 35562 of 2015, decided on 11.12.2015 and passed the order as under:-
"We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference.
The Civil Appeal is dismissed."Consumer Complaint No. 481 of 2017 22
14. However, it was further observed by the Hon'ble National Commission in another judgment 2017(3) CLT 520 (NC) "Ankur Goswami versus Supertech and another" wherein the Hon'ble National Commission observed that this clause in the allotment letter would be applied to the case where allottee is seeking possession of the flat and where allottee is not seeking refund of the amount. However, in the present case, the allottee is seeking the refund, therefore, the penalty @ Rs. 5/- per sq. ft. will not be applicable. Further under Rule 17 i.e. Rate of Interest on refund of advance money upon cancellation of agreement of Punjab Apartment and Property Regulation Rules, 1995, it has been provided as under:-
"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."
In the above rule it has been observed to refund the amount alongwith interest @ 12% p.a. The complainant has taken a loan from Op No. 5 and the interest rate varied from 11% to 9%. In number of similar complaints, we have allowed the interest @ 12% p.a. i.e. Consumer Complaint No. 386 of 2016 "Meenakshi Puri versus Country Colonizers Pvt. Ltd. & Ors.", decided on 28.11.2017 and 'Consumer Complaint No. 3 of 2017 "Lt. Gurnur Singh Mahiwal Consumer Complaint No. 481 of 2017 23 & Anr. Versus M/s Country Colonisers Pvt. Ltd. & Ors.", decided on 4.1.2018. Therefore, to be just and reasonable, the complainant will be entitled to interest @ 12% on the deposited amount.
15. No other point was argued.
16. Sequel to the above, we allow the complaint and direct Ops No. 1 to 4 as under:-
(i) to refund a sum of Rs. 66,16,660/- alongwith interest @ 12% from the various dates of deposit till actual payment, minus Pre-EMI interest already paid by Op Nos. 1 to 4 to Op No. 5 under subvention scheme;
(ii) Op No. 5-HDFC Bank will have the first charge whatever amount has been received by Op Nos. 1 to 4 from Op No. 5/proforma respondent. Firstly the account of Op No. 5 will be cleared and the remaining amount will be paid to the complainant.
(iii) Op Nos. 1 to 4 are directed to pay a sum of Rs.
1 Lac on account of mental and physical harassment by making arrangements of various payments, visiting the Ops but Ops failed to complete the project.
(iv) Ops No. 1 to 4 pay Rs. 21,000/- towards litigation expenses.
The above directions be complied by Ops No. 1 to 4 within a period of 45 days from the date of receiving of the copy of the order, failing which the complainant shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
Consumer Complaint No. 481 of 2017 24
17. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
18. The counsel for the parties/parties are directed to collect free certified copy of the order from the office of the Commission within a period of 15 days from the date of pronouncement.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER February 21, 2018.
as Consumer Complaint No. 481 of 2017 25