STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH. Consumer Complaint No.343 of 2016 Date of institution : 26.10.2016 Reserved On : 26.05.2017 Date of decision : 02.06.2017 Sharanjeet Kaur wife of Sh. Surinder Pal Singh Shahid; Pritpal Aujla S/o Sh. Didar Singh: Correspondence Address: House No.392, Phase-1, Sector-55, Mohali, Punjab. .Complainants Versus
1. C & C Towers Ltd., Site Office: C & C Towers, ISBT-cum- Commercial Complex, opposite Verka Milk Plant, Gate No.5, Phase-6 (Sector-57), Mohali, through its Director/Managing Director/Manager/Authorized Representative.
2. C & C Towers Ltd., Corporate Office, Plot No.70, Sector 32, Gurgaon, Haryana, through its Director/Managing Director/Manager/Authorized Representative. .Opposite Parties Consumer Complaint under Section 17 of the Consumer Protection Act, 1986. Quorum:- Honble Mr. Justice Paramjeet Singh Dhaliwal, President Mr. Harcharan Singh Guram, Member Present:- For the complainants : Sh. Sandeep Bhardwaj, Advocate For the opposite parties: Sh. Kabir Sarin, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT : The complainants have filed this complaint, under Section
17 of the Consumer Protection Act, 1986 (in short, the Act).
2. Brief facts, as set out in the complaint, are that the opposite parties issued various advertisements in newspapers, marketing e- mails and telemarketing with regard to launching of their integrated Consumer Complaint No.343 of 2016 project under the name and style of C & C Towers and the tower namely C & C Capital, having the salient features, as given in the brochure Ex.C-1. The complainants, being allured by the said advertisement of the opposite parties, applied for purchasing a unit, vide application dated 10.05.2011 Ex.C-2, exclusively for the purpose of creating the source of livelihood by means of self-employment. Along with the said application, a sum of 10,54,350/- was paid towards registration charges, vide cheques dated 30.04.2011, 11.05.2011 and 11.05.2011 Ex.C-3 to Ex.C-5. It was further averred that the opposite parties, ignoring the provisions of the Punjab Apartment and Property Regulation Act, 1995 (hereinafter to be referred as the PAPRA), started receiving the sale consideration from the complainants, against receipts. The complainants further paid 7,90,763/- to the opposite parties, vide cheques dated 02.08.2011 and 03.08.2011 Ex.C-7 and Ex.C-8. Complainant No.2 has to start his business in the unit, in question, in order to earn his livelihood by means of self-employment. Undertaking dated 24.08.2011 in this regard was placed on the record as Ex.C-9. The opposite parties agreed to complete the construction of the unit within 30 months from the date of allotment. Ultimately, the complainant was allotted the unit No.9, 5th Floor, having super area of 781 sq.ft., for the total BSP of 52,71,750/- on 24.08.2011 and the construction was to be completed by 23.02.2014, but the opposite parties failed to disclose any reason for not completing the project in time. No development was started at the site and the work is still abandoned by the opposite parties. Consumer Complaint No.343 of 2016 Besides this, other charges were payable such as 2,50,000/- towards covered parking space; 78,100 towards IFMS; 78,100/- towards power backup charges; 39,050/- as External Electrification and Fire Fighting Charges; and 1,17,150/- as one time lease administration fee; thereby making the total cost of the unit as 58,34,150/-. The complainants opted for Construction Linked Plan, as per which 20% was to be paid at the time of booking and 15% was to be paid at the time of allotment. They paid 35% of the amount in time, as per the payment plan and since the construction was not started as per the payment plan, there was no occasion for the complainants to pay further the instalments to the opposite parties. The complainants came to know, through public notice in the newspaper, that opposite parties No.1 & 2 have been served with a notice by GMADA, due to non- completion of construction and also about the cancellation of the agreement. The complainants continued to approach the opposite parties to do the needful or to refund the amount. The opposite parties issued letter dated 07.05.2015, Ex.C-15, informing that Bankers, GMADA and other stakeholders are committed to extend their financial support and also informed to restart the construction by July, 2015 and completion of the project by mid 2017. Since the agreement between GMADA and the opposite parties was cancelled, the complainants became apprehensive about the safety of their financial interest. It was further averred that the Government had given permission to the opposite parties, keeping in view the safety of the financial interests of the consumers. The complainants sent various e- Consumer Complaint No.343 of 2016 mails to the opposite parties to know about the status of the construction. The opposite parties, vide letter dated 28.06.2016, informed about the start of construction with effect from February, 2016 and completion of AC Bus Stand by the end of July, 2016 and balance project by December, 2017. No force majeure event was stated in that letter. They did not even mention about Tower-C, in which the unit, in question, is situated. However, till date no construction was going on at the site. Accordingly, the complainants requested the opposite parties, vide letter dated 25.07.2006, to refund the amount deposited by them. The complainants obtained information from GMADA, through Right to Information Act, and came to know that neither any licence was granted to the opposite parties, nor any agreement was entered by them with the Government. The opposite parties received an amount of 18,45,113/- from the complainants, without completing the project, in question, within the stipulated period. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, due to which the complainants suffered mental agony and harassment. Accordingly, the complainants have filed the present complaint, seeking the following directions to the opposite parties:
i) to refund 18,45,113/-, deposited by the complainants towards the unit, in question, along with interest at the rate of 18% per annum from the respective dates of deposits till realization; ii) to pay 2,00,000/-, as compensation; and iii) to pay 50,000/-, as litigation expenses. Consumer Complaint No.343 of 2016
3. In pursuance to the notices, the opposite parties appeared and filed joint written reply, taking preliminary objections that the complainants cannot claim the relief beyond the terms of the agreement. They have purchased the unit, in question, which is of commercial nature, solely for investment purpose to earn profits and, thus, they are not consumers. As per the allotment letter, the complainants were bound to clear all the instalments in time, but they are clearing the instalments in a staggered manner. As per the allotment entered into between the parties, the complainants have an option to surrender the commercial space, in question, subject to certain terms and conditions qua forfeiture. Complainant No.1 is running tuition service and it cannot be said that the commercial space, in question, was required by her for livelihood. Complainant No.2, who is a Non-resident Indian retiree, is residing in United Kingdom and cannot claim to require the commercial space, in question, for his livelihood. No permission to file joint complaint has been sought or granted. The complaint is liable to be dismissed for non-joinder of necessary parties, as Safeway Real Estate has not been made party in the complaint, as the complainants have made all payments, as per the advice and guidance of their real estate dealer i.e. Safeway Real Estates and he is the middleman. The complainants have no cause of action to file the complaint. On merits, it was admitted that the commercial space, in question, was allotted to the complainants by the opposite parties. It was pleaded that the entire space, measuring approximately 781 sq.ft., cannot be used simultaneously by two Consumer Complaint No.343 of 2016 separate individuals for running a tutorial and a spare parts business in such a space. The formal letter of allotment, including payment plan opted by the complainants, formal draft agreement/contract, was supplied to the complainants. The complainants, being educationally qualified persons, cannot plead ignorance and term the same as biased allotment. It was further pleaded that the construction of the said unit was likely to be completed within 30 months, failing which the complainants were bound by clause 1.3.5 of the allotment, which stipulates a case of delay. It was denied that the agreement between the opposite parties and GMADA was cancelled. The newspaper articles are baseless and unsubstantiated. The said cancellation has never been enforced nor the licence has been terminated till date. It was further pleaded that the main bus terminus has been inaugurated by the Deputy Chief Minister of Punjab in the first week of December, 2016. The opposite parties are undertaking construction work, in accordance with the permissible construction, as per the sanctioned building plans and in compliance of the Municipal laws, regulating the construction. The delay in construction of the project cannot be directly attributed to the opposite parties, which was beyond their control. It was further pleaded that the project, in question, is a Develop Build Operate Transfer (DBOT) basis and has all the necessary approvals, licenses and grants from the Government as well as the competent authorities. Other allegations, contained in the complaint, were denied and it was prayed that the complaint be dismissed. Consumer Complaint No.343 of 2016
4. To prove their claim, the complainants tendered in evidence affidavit of Smt. Sharanjit Kaur, complainant No.1 and being GPA Holder of complainant No.2 as Ex.C-A, along with documents Ex.C-1 to Ex.C-28. On the other hand, the opposite parties tendered affidavit of Sh. Yash Paul Dua, Authorized Representative, as Ex.OP/A.
5. We have heard learned counsel for the parties and have gone through the record carefully as well as the written arguments submitted on behalf of the parties.
6. Learned counsel for the complainants has vehemently contended that the complainants are not in the business of sale and purchase of the properties. Complainant No.1 earns her source of livelihood by imparting tuitions and was looking for an office to attend the parents and maintain her record of studies. Complainant No.2, who is real brother of complainant No.1, wants to make office for running his business of automobile parts, as his business got closed at abroad. Therefore, the complainants fall under the definition of consumers. The opposite parties failed to prove that the unit, in question, was purchased by them for generating profits. It was further contended that along with the application for allotment of the unit, in question, an undertaking was duly taken from the complainant, to the effect that the unit was not purchased with an intention to support or assist in any kind of price manipulation or unfair trade practice as to the real estate sector. It was further contended that as per clause 1.3.5 of allotment letter, Ex.C-10, the construction of the unit was to be completed within Consumer Complaint No.343 of 2016
30 months from the date of start of the lease period, after obtaining necessary approvals and sanctions, subject to force majeure circumstances. The lease started on 15.12.2009. However, the opposite parties failed to complete the project, in question, within the said stipulated period, without disclosing any cogent reasons. No development was carried on at the site. The complainants came to know from the newspapers that the agreement between the opposite parties and GMADA has been cancelled and apprehending safety of their financial interest, they sought refund of the amount deposited from the opposite parties. The opposite parties committed deficiency in service and unfair trade practice, by not honoring their commitments, as per the allotment letter. Accordingly, it has been contended that the complaint be allowed and all the reliefs, as prayed for in the complaint, be awarded in favour of the complainants. In support of his contentions, learned counsel relied upon the following cases:
i) M/s IREO FIVERIVER PVT. LTD. v. SURINDER KUMAR SINGLA & OTHERS First Appeal No.1358 of 2016, decided on 29.11.2016 (National Commission); ii) Kushal K. Rana v. M/s DLF Commercial Complexes Ltd. Consumer Complaint No.88 of 2012, decided on 09.09.2014 (National Commission); iii) KAVITA AHUJA & OTHERS v. SHIPRA ESTATE LTD. & JAI KRISHNA ESTATE DEVELOPERS PVT. LTD. & OTHERS Consumer Case No.137 of 2010, decided on 12.02.2015 (National Commission); Consumer Complaint No.343 of 2016 iv) RESHMA BHAGAT v. SUPERTECH LTD. II (2016 ) CPJ 548 (NC);
v) Raksha Devi v. Yellow stone Builders Pvt. Ltd. & Others Complaint Case No.99 of 2016, decided on 10.06.2016 (State Commission, U.T., Chandigarh; and vi) Mr. Sukhminder Singh v. M/s Emaar MGF Land Private Limited Complaint Case No.321 of 2016, decided on 12.01.2017 (State Commission, U.T., Chandigarh);
7. Per contra, learned counsel for the opposite parties contended that the commercial space, in question, was purchased by the complainants for commercial purpose. Complainant No.1, who is running tuition service, cannot be require the present commercial office space for her livelihood and complainant No.2, who is a Non-resident Indian retiree, is residing in United Kingdom and he cannot claim to require the commercial space, in question, for his livelihood. The law regarding commercial purpose cannot be loosely interpreted and all the cases are to be dealt with in view of their own peculiar facts and circumstances. The entire space, measuring approximately 781 sq.ft., cannot be used simultaneously by two separate individuals for running a tutorial and a spare parts business in such a space. Thus, the complaint is liable to be dismissed on this score alone. It was further contended that the agreement between the opposite parties and GMADA was not cancelled and the newspaper articles to this effect are unsubstantiated. The said cancellation has never been enforced nor the licence has been terminated till date. It was further contended Consumer Complaint No.343 of 2016 that the main bus terminus has been inaugurated by the Deputy Chief Minister of Punjab in the first week of December, 2016. The construction work is going in full swing, as per the sanctioned building plans and in compliance of the Municipal laws, regulating the construction. The delay in construction was beyond their control. The project, in question, is a Develop Build Operate Transfer (DBOT) basis and has all the necessary approvals, licenses from the Government as well as the competent authorities. There is no deficiency in service on the part of the opposite parties and the complaint is liable to be dismissed. In support of his contentions, learned counsel relied upon the following cases:
i) Sahil Chaudhary v. Bhasin Infotech & Infrastructure Private Limited 2017 (1) CPR 436 (NC); ii) Kamal Kumar Jain & Anr. v. M/s DLF Commercial Complexes Ltd. & Anr. 2017 (1) CPR 253 (NC); iii) Dnyandeo Patiba Bhosale v. Terex Equipments Pvt. Ltd. & Ors. 2017 (1) CPR 63 (NC); and iv) Rohit Chaudhary & Anr. v. M/s Vipul Ltd. 2015 (3) CPR 53 (NC);
8. We have given thoughtful consideration to the contentions of the learned counsel for the parties.
9. So far as the contention of the learned counsel for the opposite parties that the unit, in question, is a commercial space and the complainants had purchased the same with the sole purpose of earning profits for all intents and purposes, is concerned, the same Consumer Complaint No.343 of 2016 cannot be accepted on the face of it; specifically in view of the fact that it is the categorical averment of the complainants that they have purchased the commercial space for earning their livelihood, by way of self-employment. No cogent evidence has been led by the opposite parties to dislodge the said averment. Merely purchasing a space, which is commercial in nature, will not always lead to the fact that it is purchased only for gains. When a person takes the property for self- employment to earn his livelihood, then certainly such a property will not come under the definition of commercial. The further contention of the opposite parties is that complainant No.1, who is running tuition service, cannot require commercial space for earning her livelihood and the complainant No.2, who is a Non-Resident Indian, does not require the space, in question, for his livelihood. The fact remains that the complainant No.1, is doing the tuition work to earn her livelihood by way of self-employment and no element of commercial is involved in the same. It is a matter of common knowledge that when tuition service is permitted in residential area, some objections are raised by the authorities, for that reason the complainant must have applied for the unit, in question, in the project of the opposite parties for carrying on the tuition activities smoothly. The true spirit behind the purchase of the unit, in question, is to be seen. Rather it is clearly proved that she is already running tuition service for earning her livelihood and not for any other purpose. The opposite parties failed to produce any evidence on record to rebut this fact. It is true that that the law regarding commercial purpose cannot be loosely interpreted, but Consumer Complaint No.343 of 2016 keeping in view the evidence led by the parties, we have come to the conclusion that the unit, in question, was purchased by the complainants for earning their livelihood, by way of self-employment. Honble National Commission in M/s IREO FIVERIVER PVT. LTD.s case (supra), while relying upon its earlier decision in KAVITA AHUJAs case (supra) held the complainants as consumers, observing that that the appellant failed to show any cogent evidence, which may indicate that the respondents complainants or any of them has been indulging in sale purchase of the properties or that the complainants or any one of them had booked the subject plots in the development project undertaken by the appellant with the intention to sell the plot on subsequent date for profit. In the case in hand also, there is no evidence led by the opposite parties to prove that the complainant indulged in sale purchase of properties and that they have purchased the unit, in question, for further sale or for earning benefits.
10. Similarly, in Raksha Devis case (supra), Honble National Commission held that this is not a case that the complainant booked the plot to undertake the business on a large scale by employing number of persons. As per the specific averment, the business was to be carried out by the complainant, her husband and son to earn livelihood. In view of the law settled by the Apex Court in Laxmi Engineering Works v. P.S.G Industrial Institute 1995 SCC (3) 583, the complainant clearly falls within the definition of a consumer as defined in Section 2 (1) (d) (ii) of the Act. Therefore, this sole objection raised by the opposite parties, being devoid of merit, stands rejected. Consumer Complaint No.343 of 2016 In the present case also, the complainants, who are brother and sister, wanted to start their business in the unit, in question, by not employing any other person, to earn their livelihood. Complainant No.1 is only running the tuition service and it can be run without employing many persons. In RESHMA BHAGATs case (supra), it was held by the Honble National Commission that it cannot be a rule of thumb that every NRI cannot own a property in India. NRIs do come to India, every now and then. Most of the NRIs have to return to their native land. The authorities relied upon by the learned counsel for the opposite parties are not applicable to the facts and circumstances of the present case.
11. In view of above discussion as well as the law on the subject, the contention of the opposite parties is rejected and the complainants are held to be consumers, under the Act.
12. Now, coming to the merits of the case, admittedly, the complainants applied for allotment of the unit, in question, vide application form Ex.C-2, along with 10,54,350/- paid, vide cheques Ex.C-3 to Ex.C-5. Thereafter, vide allotment letter dated 24.08.2011 Ex.C-10, the unit, in question, was allotted to the complainants by the opposite parties. They further paid 3,90,763/-, vide cheque dated 03.08.2011 Ex.C-7 and 4,00,000/-, vide cheque dated 02.08.2011 Ex.C-8; thereby making the total amount deposited as 18,45,113/-. As per clause 1.3.5 of the allotment letter, Ex.C-10, the construction of the unit was likely to be completed within 30 months from the date of start of lease period, subject to force majeure circumstances. However, they Consumer Complaint No.343 of 2016 failed to complete the construction of project/unit within the stipulated period. The complainants have produced copies of the newspapers cuttings, Ex.C-12 to Ex.C-14, which shows that the GMADA served notice upon the opposite parties, due to non-completion of the project with the stipulated period and that the agreement between GMADA and the opposite parties would be cancelled. The complainants sent e- mails, Ex.C-17 to Ex.C-20, to the opposite parties to know the exact status of the construction and to know the actual date of delivering the possession of the unit to them. The opposite parties, vide letter dated 28.06.2016, Ex.C-22 replied the AC bus stand would be completed by the end of July, 2016 and the balance project by December, 2017. The unit, in question, was allotted vide allotment letter dated 24.08.2011 and a period of five and a half years has elapsed, but the opposite parties are not in a position to deliver the possession of the complete unit allotted to the complainant. Complainant No.1, vide letter dated 15.09.2016 Ex.C-26, sought certain information from GMADA, Mohali, under the Right to Information Act, who vide letter dated 29.09.2016 Ex.C-27, informed her that no licence of construction was granted to C & C Tower Ltd. and no agreement was entered with Government by C & C Tower Ltd. From this information supplied by GMADA, it is clear that the opposite parties were not having any licence for raising construction nor any agreement was entered into by them with the Government. The opposite parties, except the affidavit of Sh. Yash Paul Dua, their Authorized Representative Ex.OP/A, has not produced Consumer Complaint No.343 of 2016 any other evidence on record to rebut the evidence led by the complainant.
13. Keeping in view of the above circumstances, we hold that the opposite parties have failed to comply with the provisions of the PAPRA. As per section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to make full and true disclosure of the nature of his title to the land, on which such project is developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days, notice or demand of the layout of the colony and plan of development works to be executed in a project, as approved by the prescribed authority in the case of a project. However, the opposite parties failed to comply with section 3 of the PAPRA.
14. As per section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the project, but they failed to produce on record any such permission. So, they also violated Section
5 of PAPRA.
15. As per section 9 of papra, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this Consumer Complaint No.343 of 2016 respect. As such, the opposite parties also violated Section 9 of the PAPRA.
16. Further, as per Section 12 of the PAPRA, if the builder fails to deliver possession of the plot/apartment by the specified date, then the builder is liable to refund the amount deposited by the buyer with interest.
17. As per Rule 17 of the Punjab Apartment and Property Regulation Rules, 1995, framed under Section 45 of the PAPRA, 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.
18. The opposite parties had been collecting huge amounts from the buyers for the development of the project. The amount received from the complainants-buyers was required to be deposited in the schedule Bank, as per section 9 of papra and we wonder where that amount had been going. The opposite parties are not to play the game at the cost of others. When it insists upon the performance of the promise by the consumers, it is to be bound by the reciprocal promises of performing their part of the agreement. The opposite parties have failed to comply the aforementioned provisions of PAPRA, while launching and promising to develop their project. Thus, the delay in not delivering the possession of unit, in question, within the agreed Consumer Complaint No.343 of 2016 period amounts to deficiency in service on the part of the opposite parties, for which the complainants are to be suitably compensated.
19. The Consumer Protection Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The complainants have made payment of substantial amount to the opposite parties, with the hope to get the possession of the flat in a reasonable period. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of plot and delivery of possession in a stipulated period. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainants. Had the complainants not invested their money with the opposite parties, they would have invested the same elsewhere. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the plot/unit/flat within a reasonable period. The complainants cannot be made to wait indefinitely to get possession of the plot booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builders knew from the very beginning that they had not complied with the provisions of the PAPRA and Rules and would not be able to deliver the possession within the stipulated period, thus by misrepresentation induced the complainants to book the unit, due to which the complainants have suffered mental agony Consumer Complaint No.343 of 2016 and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainants is a deposit held by the opposite parties in trust of complainant and it should be used for the purpose of building the plots, as mentioned in section 9 of papra. The builder is bound to compensate for the loss and injury suffered by the complainants for failure to deliver the possession, so has been held in catena of judgments by the Honble Supreme Court and the Honble National Commission. To get the relief, the complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainants, are also required to be taken into consideration for awarding compensation. In addition to that, they are also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by them, on account of the betrayal by the opposite parties in shattering their hope of getting the unit by waiting for all this period. In these circumstances, the complainants are entitled to the refund of the amount deposited by them, along with interest and suitable compensation.
20. In view of our above discussion, the complaint is allowed and the following directions are issued to the opposite parties: Consumer Complaint No.343 of 2016
i) to refund 18,45,113/- deposited by the complainants, along with interest at the rate of 12% per annum from the respective dates of deposits till realization, as per Rule 17 of PAPRA. ii) to pay 1,50,000/-, as compensation for the mental agony and harassment suffered by the complainants; and iii) to pay 22,000/-, as litigation expenses.
21. The opposite parties are directed to comply with the order within 30 days of the receipt of the certified copy of the order, failing which the compensation amount shall also carry interest at the rate of 12% per annum from the date of this order till realization.
22. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases. (JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER June 02, 2017. (Gurmeet S)