State Consumer Disputes Redressal Commission
Mrs. Jugnu R Singh vs Parsvnath Developers Limited on 20 March, 2012
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
UNION
TERRITORY, CHANDIGARH.
Complaint
Case No. 80 of 2011
Date of institution: 19.12.2011
Date of decision : 20.3.2012
Mrs.
Jugnu R Singh W/o Sh.Ravinder Singh
Mrs.
Karanjit Singh Sawhney W/o Sh.D.S.Sawhney
Ms.
Sheetal Singh D/o Sh.Ravinder Singh
All residents of House No.317,
Sector-9-D, Chandigarh.
Complainants
Versus
1.
Parsvnath Developers Limited, Registered & Corporate Office, 6th Floor,
Arunachal Building, 19, Barakhamba Road,
New Delhi through its Managing Director.
2.
The Manager, Parsvnath Developers Ltd., SCO No.1, First Floor, Sector-26,
Madhya Marg, Chandigarh.
3.
Chandigarh Housing Board, Sector-9, Chandigarh through its Chairman
Opposite
Parties.
Complaint
U/s 17 of Consumer Protection Act,1986.
Present: Ms.Heena Talwar, Advocate, for the complainants.
Sh.Sandeep Bhardwaj, Advocate, proxy for
Sh.Ashwani Talwar, Advocate, for OP
Nos.1&2.
Sh.N.P. Sharma, Advocate, proxy for
Ms.Smiriti Dhir,Advocate for OP
No.3.
CORAM: Justice
Sham Sunder, President
Mrs.Neena
Sandhu, Member
Per Justice Sham Sunder , President The facts, in brief, are that the complainants, attracted by the advertisement given by the Opposite Parties, describing their project as an exquisitely designed luxurious township in the backdrop of the Shivalik Range to provide value living to its residents, applied for the allotment of a flat measuring 740sq.ft. of super built area, in Parsvnath Prideasia IT Park, Kishangarh, U.T. Chandigarh, and submitted their application alongwith cheque No.004176 dated 12.9.2007, in the sum of Rs.5,90,000/- drawn in favour of the Opposite Parties. Thereafter, the complainants were allotted residential flat No.204 on 2nd floor, Block No.E-1 vide allotment letter dated 11/15.10.2007, a copy whereof is annexure C1. Later on, on the request of the complainants, they were allotted residential unit in category D, bearing No.102, on first floor in Block No.D-9, having an approx. 1700 sq.ft. area, with the basic price of Rs.1,20,07,000/-. A copy of the allotment letter dated 12.9.2008 is annexure C2. The complainants then deposited Rs.5,90,000/- vide cheque dated 12.9.2007, Rs.9,95,750/- vide cheque dated 12.11.2007, Rs.5,14,300/- vide cheque dated 11.1.2008, Rs.5,14,300/- vide cheque dated 5.4.2008 and Rs.10,14,300/- vide cheque dated 9.7.2008. Copies of the receipts issued by the Opposite Parties, are attached as annexure C3(colly). In this way, the complainants deposited a total amount of Rs.36,28,650/- upto 9.7.2008. A Flat Buyer Agreement dated 15.1.2007, was entered into amongst the parties, copy whereof is annexure C-4. After the change of residential unit, a supplementary Flat Buyer Agreement dated 3.11.2008, was entered into amongst the parties, copy whereof is annexure C5. The terms and conditions of the earlier Agreement annexure C4, remained unchanged/unaltered . There was only change of number of residential unit, and its price. However, the amount paid by the complainants was also admitted by the Opposite Parties, in the supplementary Agreement C5. It was stated that according to the Development Agreement dated 6.10.2006, entered into between the developer and the Chandigarh Housing Board, the construction of the residential units, was to be completed within 36 months. It was further stated that the Opposite Parties, failed to construct the flats and even the site plan had not been approved. It was further stated that when the Opposite Parties failed to deliver possession, as per the terms and conditions of the Agreements C4/C5 aforesaid, the complainants sent notice to the Opposite Parties, seeking refund of the amount, deposited alongwith interest and compensation, but to no avail. A copy of the notice dated 7.10.2010 is annexure C6. Instead of refunding the deposited amount, Opposite Party No.3, wrote a letter to Opposite Parties No.1 & 2 to look into the matter, copy whereof is annexure C7. It was further stated that the Opposite Parties were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act,1986(hereinafter to be called as the Act only), was filed by them, claiming refund of the deposited amount of Rs.36,28,650/- alongwith interest @24% p.a, and Rs.2 lacs as compensation, for mental agony and physical harassment, besides Rs.2 lacs as damages, for depriving them of use and enjoyment of their money, and litigation costs of Rs.25,000/-.
2. Opposite Parties No.1&2, in their written version, admitted the factual matrix of the case, with regard to the allotment of flat No.204 on 2nd floor Block No.E-1 in their project, and then allotment of flat in higher Category D, bearing No.102, on first floor, Block No.D-9. It was also admitted that the complainants deposited Rs.36,28,650/- upto 9.7.2008. It was also admitted that Flat Buyer Agreement dated 15.1.2007, and supplementary Flat Buyer Agreement dated 3.11.2008, were executed, amongst the parties. It was stated that after the execution of the Development Agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to Opposite Parties No.1&2, by the Chandigarh Housing Board. It was further stated that, when Opposite Parties No.1&2, were fencing the land, possession whereof, was delivered to them, for the development of project, a dispute arose, as the Haryana Government, claimed ownership, with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to Opposite Parties No.1&2, but it was discovered to be the land of Forest Department, on which, there existed more than 200 full grown trees, and restrictions were imposed by the Forest Department with regard to felling of trees, and use of this land for the project. It was further stated that a period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same.
It was further stated that the complainants did not deposit all the instalments and, as such, violated the provisions of clause 5(a) of the aforesaid Agreements. It was further stated that the complainants were entitled to the refund of amount, after deduction of 5% of the basic price of the flat, in question, as per the provisions of clause 5(a) of the Agreements annexures C4 and C5. It was further stated that the dispute between the Opposite Parties, inter-se, had already been referred to the arbitrators, and their decision was awaited and, as such, the jurisdiction of the Consumer Fora was barred. It was denied that Opposite Parties No. 1&2 were deficient, in rendering service, and indulged into unfair trade practice. The remaining averments, were denied, being wrong.
3. Opposite Party NO.3, Chandigarh Housing Board, in its written version, also admitted the factual matrix of the case. It was stated that, as per Clause 9(e) of the Flat Buyer Agreement, Opposite Party No.3, was only to handover the land to the developer, and the whole responsibility of construction at the site was of Opposite Party No.1. It was further stated that the developer was solely responsible, for constructing the residential units, within the stipulated period, and delivering possession of the flat, to the complainants. It was further stated that, in view of the Escrow Agreement, executed between the Opposite Parties , refund of 30% share i.e. Rs.10,88,595/- of Opposite Party No.3 was under process and would be made shortly. It was denied that Opposite Party NO.3, was deficient, in rendering service, or it indulged into unfair trade practice.
The remaining allegations, were denied, being wrong.
4. The complainants, in support of their case, led evidence by way of affidavit of Mrs.Jugnu R.Singh, Complainant No1, alongwith which, a number of documents were attached.
5. Opposite Parties No.1&2, filed the affidavit of Sh.Prehlad Kumar Jain, President, M/s Parsvnath Developers Limited, Parsvnath Metro Tower, Delhi by way of evidence, and also attached a number of documents therewith.
6. Opposite Party No.3, filed the affidavit of Sh.M.M. Sabharwal, its Secretary, by way of evidence.
7. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.
8. The Counsel for the complainants, submitted that the complainants, after going through the attractive advertisements, given by the Opposite Parties, applied for the allotment of a flat. They were allotted flat No.204 in Block No.E-1. Subsequently, on their request, they were allotted higher category flat, bearing No.102 in Block D-9 in lieu of the earlier flat. She further submitted that, as per the Agreement annexure C-4 dated 15.1.2007, the construction of the residential units, was likely to be completed within 36 months of the signing of the Development Agreement R-1/1 dated 6.10.2006, between the developer, and the Chandigarh Housing Board. She further submitted that though a sum of Rs.36,28,650/- was deposited by the complainants, towards part payment of the price of flat, yet not even a brick was laid, at the spot, what to speak of construction of flats.
She further submitted that there was no breach of the Agreements, on the part of the complainants, yet, they were not given possession of the flat. She further submitted that the complainants, therefore, could not wait for an indefinite period, and were entitled to the refund of amount, deposited by them, with interest, as also compensation for harassment.
She further submitted that the Opposite Parties could not deduct 5% of the basic price, from the amount, deposited by the complainants, in the event of refund of the same, as the payment was made according to the construction linked plan, and there was no default, in making part payment of the price of the flat. She further submitted that the complainants were also entitled to compensation, as per the terms and conditions of the said Agreement. She further submitted that the Opposite Parties, were certainly deficient, in rendering service, to the complainants, by neither refunding the amount, deposited by them, nor paying them the compensation, and they also indulged into unfair trade practice.
9. On the other hand, the Counsel for Opposite Parties No.1&2, submitted that, no doubt, the Development Agreement R-1/1 dated 6.10.06, was executed between the Opposite Parties , as a result whereof, the possession of the entire unencumbered land for the project, was to be provided by Opposite Party No.3. He further submitted that since Opposite Party No.3, did not hand over the possession of the entire unencumbered chunk of land, required for the development of project, the construction could not be undertaken. He further submitted that there was, thus, dispute between the parties, as a result whereof, the matter was referred to the arbitrators, and their final decision was still awaited and, as such, this Commission has no jurisdiction to entertain and decide the complaint. He further submitted that, since there was default, on the part of the complainants, in depositing the remaining instalments, towards the price of flat, they were only entitled to the refund of amount, if they applied for the cancellation of allotment, after deduction of 5% of the basic price, as per Clause 5(a) of the Agreement C4 dated 15.1.2007. He further submitted that though a period of 36 months, was provided, under Article 2.2.1 of the Agreement R-1/1 dated 6.10.2006, and under Clause 9(a) of the Agreement C4, for the completion of construction, yet the same was to commence, only after the possession of entire unencumbered land, had been handed over to Opposite Parties No.1&2 , for the development of project, by Opposite Party NO.3, but it (Opposite Party NO.3) failed to do so. He further submitted that, under these circumstances, Opposite Parties No.1&2, were not at all deficient, in rendering service, nor they were liable to pay any compensation, nor they indulged into unfair trade practice.
10. The Counsel for Opposite Party No.3, submitted that, it was the responsibility of the developer Opposite Party No.1, to complete the construction in 36 months, commencing from 6.10.2006, as per the Agreements R-1/1 and C4. He further submitted that the possession of the entire unencumbered land, on which the residential complex, was to be developed, had already been handed over to the developer, according to the Agreement, executed between the Opposite Parties . He further submitted that the construction of residential flats, could certainly be started by Opposite Parties No.1&2, on that land, but they did not do so intentionally. He further submitted that, as per the Escrow Agreement, Opposite Party No.3, was ready to refund Rs.10,88,595/-, being 30% of the principal amount, and the remaining amount, was to be paid by the developer.
11. The first question, that arises for consideration, is, as to, within which period, the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainants were allotted the flat, in question, and they deposited Rs.36,28,650/-, towards the part price thereof, as admitted by the Opposite Parties .
Clause 9(a) of the Flat Buyer Agreement annexure C4, referred to above, which is relevant, for answering the question, posed, at the outset of this paragraph, reads as under
;
Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.
12. The plain reading of Clause 9(a) of the Flat Buyer Agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the Development Agreement dated 06.10.2006 annexure R1/1. The time could be extended, in terms of the Development Agreement, dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the developer. Opposite Parties No.1&2 admitted, in their written reply, that, in the first instance, the possession of the entire project land was handed over to them, by Opposite Party No.3, and when the fencing was being done, the Haryana Govt. raised a dispute, with regard to the ownership of a portion of the same. It is the case of Opposite Parties No.1&2, that when that dispute was resolved, and, in lieu of the disputed portion of the land, possession of some other land, was given to them, the same was discovered to be the ownership of the Forest Department. No evidence was, however, produced, by Opposite Parties No.1&2, in this regard. Even if, it is assumed for the sake of arguments, that the ownership of a small portion of the land, was disputed, that did not mean that the construction of residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the developer, that the delay was caused, in the construction of residential units.
The developer also could not take shelter of force majeure clause. No document was produced by Opposite Parties No.1&2, that any restriction was imposed by any Court or Authority, upon them, as a result whereof, they could not raise construction of residential units, in time.
Even, it was not proved, that there was delay in the grant of environmental clearance. Opposite Parties No.1&2, without first confirming the clear title of the entire land, over which the project, was to be developed, started booking the flats, and allotting the same, to the prospective buyers, by fleecing them of huge amounts, and making misleading statement, that the construction of residential units, will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. Opposite Parties No.1&2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009.
13. The next question, that arises for consideration, is, as to whether the complainants are entitled to the refund of amount, deposited by them, with interest or not ? Clause 9(d) of the Flat Buyer Agreement, which is relevant, to answer this question, reads as under;
9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.
14. The complainants deposited the amount towards part payment of the price of flat in the hope of getting its possession, within a period of 36 months from 10.6.2006, but by the end of 2010, not even a single brick, had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof, to the buyers. In these circumstances, the complainants could not wait for an indefinite period. The only option with the complainants, in such circumstances, was to ask for the refund of the amount. They, thus, issued a notice dated 7.10.2010 , Annexure C-6 for the refund of amount with interest, but the Opposite Parties, failed to do so. The plain reading of Clause 9(d) extracted above, reveals that if the developer, for whatever the reasons may be, fails to deliver the possession of residential unit, to the buyer, the developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI term deposit rate, as applicable on the date of refund. The Opposite Parties were, thus, deficient, in rendering service, by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount, with interest, as provided under Clause 9(d) of the Agreement, referred to above. The complainants are, thus, held entitled to the refund of amount of Rs.326,28,650/- with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement C4, referred to above.
15. Coming to the submission of the Counsel for Opposite Parties No.1&2, that since there was breach of Clause 5(a) of the Flat Buyer Agreement, by the complainants, they were only entitled to the refund of the remaining amount, deposited by them, after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument, advanced by the Counsel for Opposite Parties No.1&2, is misconceived. Clause 5(a) of the Agreement C4 dated 15.1.2007, reads as under ;
5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.
16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the Agreement, and if the payment, was not made, within the stipulated period or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in the payment of instalments, or of any other term and condition of the Agreement, aforesaid, on the part of the complainants, or not ? It was proved, as also admitted by the Opposite Parties , that the payment of instalments was made by the complainants, from time to time, as and when the same fell due. There was no delay, in making payment of the part price of flat, through instalments, on the part of the complainants. Since, after the expiry of the period of 36 months from 6.10.2006, not even a single brick, had been laid, the complainants were not required to deposit the amount of remaining instalments. The complainants had, thus, to ask for the refund of amount. There was also no breach of any other term and condition of the Agreement, referred to above, on the part of the complainants. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainants were, thus, entitled to the refund of entire amount, deposited by them, with interest, as held above. The submission of the Counsel for the Opposite Parties ,in this regard, being without merit, must fail, and the same stands rejected.
17. The next question, that arises for consideration, is, as to whether, the complainants are entitled to compensation, for not handing over possession to them, as per the terms and conditions of the Agreement C4 dated 15.1.2007, referred to above, and for causing physical harassment and mental agony, or not ? Clause 9 ( C ) of the Agreement, referred to above, which is relevant for answering the question, reads as under :
9(c) In case of possession of the built up area is not offered to the Buyer within a period of 36 months or extended period as stipulated in sub-clause (a) above the Buyer shall be entitled to receive from Developer compensation @ Rs.107.60 per sq.mtr (Rs.10/- per sq.ft) of the super area of the unit per month and to no other compensation of any kind. In case the Buyer fails to clear his account and take possession of the unit within30 days of offer, the Buyer shall be liable to pay to the Developer holding charges @ 107.60 per sq.mtr. (Rs.10/- per sq.ft) of the super area of the unit per month in addition to the liability to pay interest to the sellers and other consequences of default in payment.
18. The possession of the flat was not offered, to the buyers, within a period of 36 months from 6.10.2006. As stated above, even till date, not even a single brick, has been laid, at the spot. In these circumstances, as per Clause 9( c) of the aforesaid Agreement, the complainants only became entitled to compensation @107.60 per sq.mtr(Rs.10/- per sq.ft. ) of the super area of the unit, per month. The language of Clause 9(c) is unambiguous and clear. The parties executed the Agreement, aforesaid with eyes wide open, and, thus, they are bound by the terms and conditions of the same. No compensation, beyond the terms and conditions, contained in Clause 9( c) of the aforesaid Agreement, could be claimed by the complainants. It is, thus, held that the complainants are entitled to compensation @ Rs107.60 per sq. mtr (Rs.10/- per sq. ft.) of the super area of the unit per month, from 5.10.2009, the last date of completion of the project, till the actual payment was made to them.
In this view of the matter, the compensation claimed to the tune of Rs.2 lacs for mental agony & physical harassment and Rs.2 lacs for depriving the complainants of use of their money, cannot be granted to them.
19. Coming to the factum, as to whether, the complainants are entitled to interest @ 24% p.a., claimed by them, in the complaint , it may be stated here, that this relief cannot be granted to them. It has been held in para 14 above, that the Opposite Parties are liable to refund the amount , received from the complainants, with interest, at the SBI term deposit rate, as applicable, on the date of refund, in terms of Clause 9(d) of the Agreement C4 dated 15.1.2007. No interest, beyond the terms and conditions, contained in Clause 9( d) of the aforesaid Agreement, could be allowed to the complainants.
20. Coming to the submission of Counsel for Opposite Parties No.1&2, that since the remedy for settlement of dispute, by way of arbitration, has already been availed of, by the Opposite Parties, in accordance with clause 18 of the Escrow Agreement dated 1.6.2007 Annexure R1/3 executed between them, the complaint under Section 17 of the Consumer Protection Act,1986 was barred, it may be stated here, that the same does not merit acceptance. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act,1986, is required to be made, which reads as under ;
3.Act not in derogation of any other law.
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be in addition to, and not in derogation of any other law, for the time being, in force.
The mere fact that the remedy of arbitration, which was provided, in the Agreement dated 1.6.2007 annexure R1/3, has already been availed of, by the Opposite Parties , that would not oust the jurisdiction of the Consumer Fora, in view of Section 3 of the Act. Similar principle of law was laid down in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6 SCC385 and C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233. In this view of the matter, the submission of the Counsel for Opposite Parties No.1 & 2, being devoid of merit, must fail, and same stands rejected.
21. For the reasons, recorded above, the complaint is partly accepted with costs of Rs.5000/- , in the following terms ;
(i)Parsvnath Developers Limited and the Chandigarh Housing Board are held liable jointly and severally to refund the amount of Rs.36,28,650/- deposited by the complainants alongwith interest at the SBI term deposit rate, as applicable, on the date of refund, with effect from the respective dates of deposits, till actual realization, as provided by Clause 9(d) of the flat buyer agreement ;
(ii)Parsvnath Developers Limited shall also pay compensation, for not offering the built up flat within 36 months @ Rs.107.60 per sq. mtr (Rs.10/- per sq.ft) of the super area of the unit, per month, from 5.10.2009, the last date of completion of the project, till actual payment to the complainants is made, as provided by Clause 9( C) of the flat buyer agreement.
(iii)The aforesaid directions shall be complied with, by the Opposite Parties, within 30 days, from the date of receipt of a copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a, on the aforesaid payable amounts.
22. Certified Copies of this order be sent to the parties, free of charge.
23. The file be consigned to record room.
Sd/-
Announced (JUSTICE SHAM SUNDER) March 20,2012 President Sd/-
( NEENA SANDHU) Member *Js STATE COMMISSION Complaint case NO.80/2011 Present: Ms.Heena Talwar, Advocate, for the complainants.
Sh.Sandeep Bhardwaj, Advocate, proxy for Sh.Ashwani Talwar, Advocate, for OP Nos.1&2.
Sh.N.P. Sharma, Advocate, proxy for Ms.Smiriti Dhir,Advocate for OP No.3.
Dated the 20th March ,2012 ORDER Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted with costs, in the manner, depicted therein.
(Neena Sandhu) (Justice Sham Sunder) Member President