State Consumer Disputes Redressal Commission
Prem Kumar Kapila vs Aerens Entertainment Zone Pvt. Ltd. on 23 May, 2016
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
Consumer Complaint No. 65 of 2015
Date of institution: 20.3.2015
Date of Decision: 23.5.2016
1. Prem Kumar Kapila s/o Bishan Das Kapila
2. Raj Rani Kapila wife of Prem Kumar Kapila
Both residents of H. No. 5897, Modern Housing Complex,
Manimajra, Chandigarh.
Complainants
Versus
1. Aerens Entertainment Zone Limited, # 12, Ajit Singh House, 5th
Floor, Yusuf Sarai Commercial Complex, New Delhi - 110 016
2. Dr. Rajesh Promoter/Director of Aerens Entertainment Zone Ltd., 6th
Floor, Mahindra Towers, 2A, Bhikaji Cama Place, New Delhi - 110
066
Opposite Parties
Consumer Complaint under Section 17 of the
Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Harcharan Singh Guram, Member
Present:-
For the complainants : Sh. Balkar Singh, Advocate
For the Ops : None.
Gurcharan Singh Saran, Presiding Judicial Member
ORDER
Complainants have filed this complaint under Section 17 of the Consumer Protection Act, 1986 (in short Act) alleging that Ops Consumer Complaint No. 65 of 2015 2 had launched their Mall Festival City, Punjab's First Theme Destination Mall at Ludhiana. Ops contacted the complainant in March, 2006 and spoke very high about their project and stated that there are number of Malls in this Mall i.e. Kidz Mall, Fashion and Lifestyle Mall, Interiorz Mall, Entertainment Mall and Leisure Mall. Allured by the project of Ops, they expressed to wish their own one shop with a view to earn their livelihood for the purpose of self employment in the old age, they booked one shop bearing No. F- 25(first floor), which was construction linked plan, having super area of 378.20 sq. ft. against the price of Rs. 23,60,000/-. They paid Rs. 1.50 lac on 20.4.2006 vide cheque No. 069183, Rs. 1.50 lacs on 20.4.2006 vide cheque No. 126307, Rs. 2,90,000/- cash on 6.5.2006, Rs. 1 lac on 6.5.06 vide cheque No. 100757, Rs. 1 lac on 6.5.2006 vide cheque No. 100360, Rs. 95,000/- on 6.5.2006 vide cheque No. 069185, Rs. 1,45,000/- on 4.7.2006 vide cheque No. 26310, Rs. 3 lac cash on 20.12.2006, Rs. 3 lacs on 27.5.2007 vide cheque No. 339630, Rs. 2,26,000/- on 25.11.08 vide cheque No. 180326, Rs. 3 lac on 30.6.2008 vide cheque No. 69192, totalling a sum of Rs. 21,56,000/-. Complainants were assured to give possession within 2- 3 years but they did not receive any response relating to delivery of the possession. Complainants asked respondent No. 1 to hand over the possession of the shop or to refund their money. Ops after receiving the major amount have failed to deliver the possession within a reasonable period of three years. The project is still incomplete and cannot be completed as Ops are not making any effort to complete it. Complainants had written number of emails to Consumer Complaint No. 65 of 2015 3 Ops for refund of their amount alongwith interest but with no result. It was pleaded that as per the prevalent price in the market, the price of such similarly situated property goes upto Rs. 55 lacs. It was alleged that there is unfair trade practice on the part of Ops as well as deficiency in service, hence, the complaint with the direction to Ops to give the possession of the booked shop immediately or refund their principal amount of Rs. 21,56,000/- alongwith interest @ 18% p.a. from the date of payment till realization, Rs. 10 lacs due to escalation in the price of similar shops, Rs. 5 lacs as compensation on account of deficiency in service, Rs. 5 lacs on account of unfair trade practice and Rs. 33,000/- on account of cost of litigation.
2. Written reply was filed by Ops in which the averments as alleged in the complaint were totally denied and preliminary objections were taken that the complainant is not a consumer as the property in question is commercial property, which does not come within the domain of the Act; complaint was filed jointly and no permission of the Commission was taken as required under the Act; complaint is a gross abuse of the process of this Commission as complainants have not approached with clean hands, various material facts were concealed by the complainant in its complaint, there is no evidence worth to name that there was any negligence or deficiency in service on the part of Ops, Consumer Fora cannot become a tool at the hands of unscrupulous persons, who file complaint merely with a view to extract money in the garb of compensation, the complaint is false, frivolous and vexatious to the knowledge of the complainants, therefore, it is liable to be dismissed Consumer Complaint No. 65 of 2015 4 with special costs as required under Section 26 of the Act; complaint is bad for mis-joinder and non-joinder of necessary parties. According to the agreement to sell dated 14.12.2006, all or any dispute that may arise with respect to the provisions of the agreement including the interpretation and validity of the terms thereof, the matter shall be settled by mutual discussion, failing which the same shall be referred to the Arbitrator to carry out by a Sole Arbitrator to be appointed by the Developer, under the Arbitration and Conciliation Act, therefore, the dispute is required to be referred to the Arbitration. As per the agreement only the Courts at Delhi has jurisdiction, therefore, this State Commission does not have any territorial jurisdiction to entertain this complaint. Till date the agreement between the parties has not been cancelled, therefore, the claim for refund of money is not maintainable. SARFAESI proceedings in respect of the project in question have been initiated and the Ops are not in a position to deliver the possession for the time being and once the SARFAESI proceedings were initiated, then the Consumer Fora does not have any jurisdiction to entertain this complaint and that Op No. 1 is a private limited company, therefore, no individual can be impleaded as a party in his/her individual capacity. On merits, it has been stated that Op No. 1 has changed its structure w.e.f. 5.3.2009 and now it is "M/s Aerens Entertainment Zone Private Ltd." Ops are bound only by terms and conditions as mentioned in the agreement between the parties. No false assurance was given by Ops to the complainant. It was denied that the shop was purchased by the complainant with a view to earn their livelihood in the old age for their present use. The Consumer Complaint No. 65 of 2015 5 shop in question was purchased exclusively for commercial purposes, therefore, the dispute does not come within the domain of Consumer Fora. By 2008 Ops had completed 80% of the construction and due to force majeure condition, Ops were unable to complete the construction. Ops had approached investment company called Mondon Investments Limited called Mondon, which is a Cyprus based company and is a 100% subsidiary of Fishman Group. They allured the Promoters of Ops to enter into a Shareholders and Investment Agreement with M/s Mondon Investment Limited under which they were to make investments in Op No. 1, which was to be utilized towards the construction and development and made investment of Rs. 38.2 crores was to be invested by them as on 1.1.2009 but they wanted to take over the entire project to which Ops did not agree. However, at the time of entry, out of the total saleable areas in the Mall 30% stood sold out of various persons. The Mall was financed by the Consortium of Banks, who also permitted sale upto 30% of the total area, thereafter, Mondon Investment Limited refused to pay their money. Due to non-infusion of funds by Mondon Investment, the Mall could not be completed. Further Mondon Investment prevailed upon the Consortium of Banks and illegally got issued notice under SARFAESI Act, 2002. The Consortium of Banks and Mondon's on realizing their weak position before the DRT, Delhi quickly assigned the debits to two companies i.e. ARC Private Limited and M/s Energee Reality Venture Limited. The said assignments have also been challenged before the DRT. It was denied that complainants have suffered any mental torture, Consumer Complaint No. 65 of 2015 6 harassment and financial loss due to any act of Ops. Although territorial jurisdiction of the Commission was not dispute but the matter cannot be tried by the Commission as no cause of action had accrued to the Complainant. Complaint is without merit, it be dismissed.
3. The parties were allowed to lead their evidence.
4. In support of his allegations, the complainant had tendered into evidence his affidavit of Prem Kumar Kapila Ex. CA, brochure and site plans Ex. C-1, buyers agreement Ex. C-2, payment details & cash receipts Exs. C-3 & C-4, letter Ex. C-4/A, Form No. 26- A Ex. C-5/A, letter Ex. C-5/B, senior Citizenship Card Ex. C-5. On the other hand, Op Nos. 1 & 2 had tendered into evidence affidavit of S.S. Chawla Ex. Op-1/A, resolution Ex. Op-1/1, certificate of incorporation Ex. Op-1/2.
5. However, on 19.5.2016, none had come present on behalf of Ops, therefore, they were proceeded ex-parte and we have heard the learned counsel for the complainant and have carefully gone through the allegations as alleged in the complaint, written reply filed by Ops, evidence and documents on the record as well as written arguments filed by the complainant.
6. No doubt that none had appeared on behalf of Ops on 19.5.2016 but their written reply and evidence is on the record. In view of the written reply filed by Ops, some preliminary objections with regard to maintainability of the complaint has been raised, those are required to be dealt with before dealing the complaint on merits. It has been stated that complainants booked one shop with Ops in their Consumer Complaint No. 65 of 2015 7 Mall launched by them, therefore, the property in question is commercial in nature and as per Section 2(1)(d)(ii) of the Act, the commercial aspect of the matter is not covered under the Consumer Fora. For ready reference, Section 2(1)(d)(ii) of the Act is reproduced as under:-
2. Definitions. - (1) In this Act, unless the context otherwise requires,--
(d) "consumer" means any person who--
(i) xxxx xxxx xxxx xxxx
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly prom-
ised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;
Explanation.-- For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;"
Consumer Complaint No. 65 of 2015 8
No doubt that Section 2(1)(d)(ii) of the Act does not cover the commercial aspect of the services availed by the complainants but under the explanation, the services availed to earn livelihood by means of self employment themselves, those, services are covered under the Act. In complaint in para No. 2, it has been specifically mentioned that complainants expressed their wish to own one shop with the view to earn livelihood for the purpose of self employment in their old age for personal use. No doubt, that aspect has been simply denied by Ops. Complainant No. 1 is 71 years of age at the time of filing the complaint and complainant No. 2 is his wife, therefore, both are Senior Citizens. Counsel for Ops has not placed on the record that they are engaged in any other avocation and that this shop was booked for commercial purpose to earn the profits. Apart from the affidavit of Sukhwinder Singh Chawla, who is one of the authorised signatory. No other evidence has been placed on the record and affidavit is also not proper because there is written reply supported by short affidavit of Sukhwinder Singh Chawla and copy of the resolution dated 10.3.2015 and registered name of the company. Counsel for the complainant has relied upon the judgment of the Hon'ble Supreme Court reported in 1995(3) SCC 583 "Laxmi Engineering Works versus P.S.G. Industrial Institute" wherein it was observed that in case a person, who buys goods or uses them himself, exclusively for the purpose of livelihood, by means of self employment is within the definition of consumer. Similar matter was decided by this bench in Consumer Complaint No. 91 of 2012 "Mukhtiar Singh Bal versus Aerens Entertainment Zone Ltd. & Anr.", Consumer Complaint No. 65 of 2015 9 decided on 28.11.2014. In that case, one shop was booked by the complainant with the Ops and similar was the pleading and it was held by this Commission that the complainant comes within the definition of the consumer. Ops had preferred an appeal before the Hon'ble National Commission in Appeal No. 372 of 2015, which was dismissed by Hon'ble National Commission with punitive damages of Rs. 50,000/- and the order passed by this Commission was affirmed. Therefore, we are of the opinion that in view of the pleadings on the record and no contrary evidence on behalf of Op, we hold that the complainants come within the definition of the consumer.
7. Another objection has been taken by Ops that joint complaint has been filed by the complainants without permission of the Commission. It is pertinent to mention here that agreement to sell was executed between Ops and both the complainants, who had jointly booked this shop. Section 12(1)(c) of the Act provides that where one or more consumers, where there are numerous consumers have the same interest then complaint is to be filed with the permission of the Consumer Fora. Since both the complainants had applied for one property against Ops, therefore, they are the joint complainants and they are not the numerous complainants having same interest against the Ops, where the permission was required, therefore, in case the complainants, who had jointly booked this property with Ops cannot be said to be numerous consumers and complaint on their behalf is maintainable and permission of the consumer Fora is not required.Consumer Complaint No. 65 of 2015 10
8. It has been further argued that according to Clause 43 of the agreement, in case of any dispute that may arise with respect of the provisions of the agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties, shall be settled by mutual discussion, failing which shall be referred to the Arbitration. In case Ops wanted to refer the matter to the Arbitration as per Clause 43 of the Agreement alongwith the written statement they were required to file application under Section 8 of the Arbitration and Conciliation Act, 1996 but no such application was filed. Moreover, under Section 3 of the Act, additional remedy has been provided under the Act to file the complaint before the Consumer Fora, which is not in derogation of provisions of any other law for the time being in force. Therefore, in view of the provisions under Section 3 of the Act, where additional remedy has been provided under the Act, Consumer Complaint is maintainable before the Consumer Fora. In 2005(2) CPC 162 "Juliet V. Quadros versus Mrs. Malti Kumar & Ors." the Hon'ble National Commission observed on the point of Arbitration in para No. 9 as under:-
"9. Last ditch plea appears to be of the application of clause 9 of the agreement, that is, reference the dispute to an arbitrator, in case any dispute between the parties arises. This point has been very ably dealt with by the District Forum in its order and endorsed by the State Commission. We are in full agreement with that. Section 3 of the Consumer Protection Act provided additional remedy and relief in view of which the clause 9 loses its significance."Consumer Complaint No. 65 of 2015 11
9. It has been further contended that according to Clause 44 of the agreement, the Courts of Delhi alone shall have the jurisdiction for the purpose of this agreement. According to Section 11 of the Act, the complaint can be filed where a cause of action wholly or in part arises. The property is located at Ludhiana, therefore, a part of cause action arose within the territorial jurisdiction of this Commission. It has also been admitted by Ops in para No. 8 of the written reply on merits, in case Commission has the jurisdiction as per Section 11(c) of the Act, whether that can be taken away by way of agreement. In the judgment IV (2006) CPJ 172(NC) "Polymech Plast Machines Ltd. & Anr. Vs. Apple Plast Pvt. Ltd." In that case, the parties had agreed "subject to Barodara jurisdiction". It was observed that Section 11 of the Act determines the jurisdiction, therefore, the words 'subject to Barodara jurisdiction' used in the invoice could not oust the jurisdiction of the Consumer Fora. In case the jurisdiction of the Commission is made out on the basis of allegations in the complaint then the jurisdiction cannot be ousted by way of agreement because no agreement can exclude the jurisdiction, which has been conferred under the Act. Therefore, we do not agree with the contention raised by the counsel for the Ops that the State Commission does not have the jurisdiction to entertain this complaint.
10. Another objection has been taken that SARFAESI proceedings are pending against Ops and the banks, who had advanced the loan for completion of the project. It is internal matter of Ops with their banks, complainants have no concern with them. Complainants had paid the money for raising construction of the shop Consumer Complaint No. 65 of 2015 12 in the Mall of Ops. In case Ops have taken any loan from any investment Company or the bank, it is their internal matter, therefore, SARFAESI proceedings pending between Banks and Ops does not have any bearing upon the rights of the complainants.
11. The next question arises whether the complainants are entitled for refund of the amount paid by him to Ops on the basis of agreement between the parties Ex. C-2. According to this agreement, Op was to raise the construction and to deliver the possession. Although in Clause No. 6, no outer date has been given but it must be some reasonable time. In case the payment was given in 2006 and now we are in 2016 even by this date the project is not complete. According to the averments made in the complaint, a sum of Rs. 21,56,000/- has been paid by the complainant against the total sale consideration of Rs. 23,60,660/-. In case major amount has been paid by the complainants and Op is unable to raise the construction of the Mall and to deliver the possession even after a gap of 10 years then complainants were justified to withhold the further payments. Whereas Ops in their written reply have stated that they had some agreement with M/s Mondon Investment Limited, although they had sold 30% of the Mall Area but they failed to make the payment as agreed. It is again reiterated that the complainants have paid major part of the amount, which was agreed between the parties for construction/delivery of possession of the shop to the complainants. In case any investment adventure with any Investment Company is not successful for which the complainants cannot be allowed to suffer. In case he has taken money from the various consumers then Consumer Complaint No. 65 of 2015 13 it is the duty of the Ops either to raise the construction of the shop or to refund the amount. He has also referred to force majeure circumstances, which has been referred in the agreement. It has been simply stated that due to force majeure, he could not complete the construction but no specific force majeure circumstances has been referred. Therefore, we cannot say without proper pleading on the record, which force majeure was with Ops under which they could not complete the construction within a reasonable time. In case Ops has failed to raise the construction and deliver the possession within a reasonable time then complainant is entitled for refund of the amount i.e. Rs. 21,56,000/- deposited by the complainant with Ops.
12. In the complaint, complainants have demanded interest @ 18% p.a. on the deposited amount. However, rate of interest @ 18% is on the higher side. This Commission in Consumer Complaint No. 91 of 2012 "Mukhtiar Singh Bal versus Aerens Entertainment Zone Ltd. & Anr." (supra) had allowed the interest to the complainant @ 12% p.a. from the date of deposit till payment and that rate of interest has been upheld by the Hon'ble National Commission in Appeal No. 372 of 2015, which was dismissed by Hon'ble National Commission with punitive damages of Rs. 50,000/- and the order passed by this Commission was affirmed. Therefore, complainant will be entitled to interest @ 12% p.a.
13. Complainant has further demanded compensation on account of price escalation but no such data how much price has been increased from the date of booking till date has been placed on the record. He has further demanded Rs. 5 lacs on account of mental Consumer Complaint No. 65 of 2015 14 agony and harassment and Rs. 5 lacs on account of unfair trade practice. On both the counts, we are of the opinion that a sum of Rs. 5 lacs as compensation would be just and reasonable. Same amount was allowed by this Commission in Consumer Complaint No. 91 of 2012 "Mukhtiar Singh Bal versus Aerens Entertainment Zone Ltd. & Anr." (supra) and the same has been upheld by the Hon'ble National Commission in Appeal No. 372 of 2015(supra).
14. In view of the above, we allow the complaint and direct the Ops as under:-
(i) to pay Rs.21,56,000/-;
(ii) to pay interest @ 12% from the date of deposit till
payment;
(iii) pay Rs. 5 lacs as compensation; and
(iv) Rs. 11,000/- as litigation expenses.
15. Opposite parties are directed to comply with the above directions within 45 days from the receipt of copy of the order, otherwise proceedings under Section 27 of the CP Act shall be initiated against them by the complainant.
16. The arguments in this consumer complaint were heard on 19.5.2016 and the order was reserved. Now the order be communicated to the parties as per rules.
17. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
(Gurcharan Singh Saran)
Presiding Judicial Member
May 23, 2016. (Harcharan Singh Guram)
as Member
Consumer Complaint No. 65 of 2015 15