C.C. No.761 of 2018 1 STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH. Consumer Complaint No.761 of 2018 Date of institution : 26.09.2018 Date of decision : 15.01.2019
1. Mrs. Anita Batra, aged 56 years, wife of Col Alok Batra;
2. Col Alok Batra, aged 60 years, son of late Dr. Dharamvir Batra. Both residents of Flat No.604, Block No.D-2, GH-79, Sector 20, Panchkula (Haryana), Pin Code: 134116. .Complainants. Versus
1. Ansal Housing and Construction Ltd; (Ansals Woodbury Apartments), Zirakpur, through its Managing Director, Regd. and Head Office: 15 UGF, Indraprakash, 21 Barakhamba Road, New Delhi-110001. Email: ancl@ansals.com.
2. Sunrise Estate Management Services; through its General Manager (A Division of GEO-connect Ltd;) Head Office: 115, Indra Prakash, 21, Barakhamba Road, New Delhi-110001. Email: sunrise@ansal.com .Opposite Parties. Consumer Complaint under Section 17 of the Consumer Protection Act, 1986. Quorum:- Honble Mr. Justice Paramjeet Singh Dhaliwal, President Mrs. Kiran Sibal, Member. Present:- For the complainants : Sh. R.K. Gautam, Advocate For the opposite parties : Sh. Vikas Chatrath, Advocate MRS.KIRAN SIBAL, MEMBER The complainants have filed this complaint, under Section 17 of the Act, 1986, (in short C.P. Act) seeking following directions to the opposite parties (in short OPs):- C.C. No.761 of 2018 2
i) to refund the total amount of Rs.55,29,981.05 along with interest @ 18% per annum from the date of deposit. ii) OP No.2 be directed not to charge service charges of the aforesaid Unit from the complainants.. iii) to pay Rs.10,00,000/- as compensation for mental torture and physical harassment along with litigation costs. iv) Any other relief, which this Commission may deem fit. Facts of the Complaint:-
2. Brief facts, as set out in the complaint, are that the complainants, who are wife and husband made a plan to buy a house near Chandigarh, for their residence and to settle for life in the peaceful area. In the year 2008, they came to know about the project of OP No.1 in Zirakpur, District Mohali under the name and style of Woodburry Apartments for allotment of residential flats. Allured by the advertisements published by the opposite parties, they applied for a residential unit jointly on 05.05.2008 and deposited an amount of Rs.20,000/- through a cheque dated 06.05.2008. Complainants were allotted Unit No. PALM-503, by OP No.1, vide allotment letter dated 17.07.2008, as per the terms and conditions stipulated therein. The total basic sale price of the said unit was fixed as Rs.36,13,515/-. Apart from this Rs.88,350/- were also added in the allotment letter as Preferred Location Charges (P.L.C.) and after giving special discount, shown the total C.C. No.761 of 2018 3 unit price as Rs.37,01,865/-. They deposited an amount of Rs.5,44,280/- through cheque vide receipt No.386848 dated 19.06.2008 with OP No.1. As per terms and conditions of letter of allotment, it was assured by OP No.1 to the complainants that the physical possession of the allotted unit shall be given within the period of two/three years of its allotment after getting completion certificate and occupation certificate from the competent authorities. OP No.1 issued undated letter in the month of July 2008 to HDFC Limited when the complainants opted for HDFC Scheme Plan for making the payment of the allotted unit. A Tripartite agreement was executed between the parties and a loan of Rs.29,95,000/- was approved and sanctioned in favour of the complainants by HDFC Limited which was disbursed to OP No.1. Representation was made on 30.05.2013 by the complainants to OP No.1 with the request to change their address in the record. The offer for possession of the Unit No.PALM-503 was issued by OP No.1 as per letter dated 08.08.2013, mentioning therein that the physical possession of the Unit would be handed over subject to clearing all outstanding dues and after execution of sale deed. Vide letter dated 27.09.2013, M.C. Zirakpur has issued instructions to OP No.1 to stop the process of issuing the possession letter without completion of project. OP No.1 issued a reminder letter dated 01.02.2014 vide which it was informed that an amount of Rs.8,52,470.44 was outstanding against their allotted unit. Correspondence exchange between the Department of Town C.C. No.761 of 2018 4 Planning and M.C. Zirakpur showing that the project of OP No.1 was still incomplete and the file for grant of completion certificate was under various objections. The receipts dated 09.07.2014 show that an amount of Rs.3,90,757/- and Rs.65,355/- were again paid by the complainants as desired by the OPs and this amount was paid by the complainants under protest, because they were eager to get physical possession of their allotted unit from OPs. Correspondence exchanged between Department of Town Planning and M.C. Zirakpur and the information sought by Sh. Y.P. Kathial under RTI Act about the completion certificate of the project of OP No.1 established on the record that OP No.1 does not possess the completion/occupation certificate of the project till date and failed to remove the various objections raised by the competent authority. Complainants have been making efforts to get the physical possession of their allotted Unit from OP No.1 and made various visits at the Head office of OP No.1 but always false assurance was given to them. Complainant No.2 thereafter sent representation dated 18th July, 2018 to Managing Director of OP No.1 with the request to waive of all the charges levied incorrectly by OP No.2 and to issue instructions regarding the handing over of the possession. Complainants had paid total interest and processing/conversion fees to HDFC Ltd of Rs.15,09,390/- upto the month of September, 2018 against the loan amount of Rs.29,95,000/- which had been paid by the Bank, to OP No.1 as per the plan of the allotment letter. OP No.2 is still raising the C.C. No.761 of 2018 5 demands, to the complainants, for making the payment of maintenance and service charges of the allotted unit, without there being any physical possession of the complainants in the aforesaid allotted unit, which was just like a symbolic or paper possession. The last notice dated 22.08.2018, received by the complainants, vide which demand of Rs.13,12,537/- was raised by OP No.2, which is wrong and illegal. Complainants had made detailed representation to the OP with the request to refund the whole amount with interest as they did not wish to take possession of the apartment anymore. On 17.09.2018 (Ex.C-29) certificate issued by HDFC Ltd; showing that apart from loan interest, the complainants have paid addition amount of Rs.14,34,54/- to the HDFC Ltd. The act and conduct of these opposite parties amounts to deficiency in service and unfair trade practice. Hence, the present complaint. Defence of the Opposite Parties
3. Upon notice, the opposite parties appeared and filed reply to the complaint, raising preliminary objections that the complainants have grossly failed to make out/substantiate any case or cause of action for filing the present complaint. As a matter of fact, flat of the complainants is complete and offer of possession was sent to the complainants dated 08.08.2013 subject to clearance of dues payable by the complainants. The flat in question was being maintained by the opposite parties, as such, maintenance charges C.C. No.761 of 2018 6 and other allied charges were liable to be paid in terms of the contractual obligations. As per allotment letter, it has clearly laid down that possession would be delivered within a reasonable time. Complainants were well aware of the said fact that possession could take some time as the OP was developing a big society in question; however, present complaint has been filed and has made the company defend an unwarranted litigation. The jurisdiction of this Honble Commission is barred on the ground that the society in question is registered under RERA Punjab formed under the Real Estate (Regulation and Development) Act, 2016. Section 79 of the Act reads as follows:
79. Bar of Jurisdiction: No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act. Complainants have approached this court with unclean hands and material suppression. Relevant clauses in respect of possession of allotment letter are referred in their written statement. The jurisdiction of this Commission barred as the dispute, if any, between the parties shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereof for the time being in force. The OPs had offered the possession way back in 2013 and it was only the complainants C.C. No.761 of 2018 7 who did not come forward to make the payment for the remaining amount thereby concealing the material facts from this Commission. Reliance is placed on Dayanand Dayal Vs. State of Haryana, 1999 (2) RSJ 465 and Kasi Nathi Sharma and Others Vs. Secretary to Government, Punjab Health Department and others, 2001 (2) RSJ 309 to substantiate that in view of the complainants conduct, the present complaint is liable to be dismissed. It is admitted that complainants were allotted Unit No.Palm-503 in Ansals Woodbury Apartments, Zirakpur, District SAS Nagar, Mohali measuring 1767 sq. feet @ Rs.2045/- at basic sale price Rs.36,13,515/- on 17.07.2008. The offer of possession had been sent to the complainants on 08.08.2013 (C-8) as such in said given circumstances, the complaint is liable to be dismissed. Complainants are liable to pay further maintenance charges for providing necessary services being provided and availed as per terms and conditions in the general clause issued by Sunrise Estate Management Services. From bare perusal of the complaint it is abundantly clear that complainants are not consumers rather they are investors, as such, the complaint is absolutely beyond the purview of the Consumer Protection Act, 1986. The booking of Unit in question, by the complainants is an investment for financial gains by renting out the same, thus, it has the trappings of being commercial. It was stated that company has paid charges for sewerage connection and delay if any is at the hands of the Municipal Council, Zirakpur through Sewerage C.C. No.761 of 2018 8 Treatment Plant (STP) is already working in the Society in question. Further M.C. Zirkapur has already written to Department of Town Planning, Punjab that the construction of 176 flats was over along with documents like structural safety certificate, pollution certificate and completion drawing vide letter dated 27.05.2014 (Annexure R-2). All the requisite documents stood submitted again on 15.02.2017 and reminder regarding granting of completion certificate was again sent on 16.04.2018. Reliance in this regard is placed on Section 193 of the Punjab Municipal Act, 1911. Reference is made to the letter dated 27.05.2014 (R-2) shows that Company has been continuously representing to local authorities for issuance of completion certificate and possession certificate and has brought to the notice of the Authorities the said provision of Punjab Municipal Act, 1911. Denying any deficiency and adoption of unfair trade practice and all other allegations made in the complaint, the OPs prayed for dismissal of the complaint.
4. The complainants filed replication to the reply filed by the OPs controverting the allegations levelled in the reply and reiterated the averments made in the complaint. Evidence of the Parties
5. To prove their claim, the complainants annexure their affidavits along with documents Ex.C-1 to Ex.C-29. C.C. No.761 of 2018 9
6. OPs along with their reply filed affidavit of Vaibhav Chaudhary, Manager (Legal) and Authorized Signatory along with documents i.e. Ex.R1 to Ex.R-5. Contentions of the Parties
7. We have heard learned counsel for the parties and have gone through the record carefully.
8. Learned counsel for the complainants vehemently argued that the complainants have paid total amount of Rs.40,15,392-05 against the total sale price of Rs.37,01,865/-. Despite having received the substantial amount from the complainants the OPs have failed to get completion and occupation certificate from the competent authorities. In this regard, the counsel drew the attention of this Commission towards Ex.R-4 and Ex.R-5 (exhibits of OPs) wherein the OPs have filed a petition in the Honble High Court for the issuance of completion certificate in the year 2012 but the same has not been granted to them. The OPs have failed to deliver the possession within the stipulated time. Averring on similar lines as stated in the complaint, counsel prayed for allowing the complaint.
9. Learned counsel for the OPs vehemently argued that the complaint is not maintainable and is devoid of merits, baseless and is liable to be dismissed. The delay in handing over the possession was due to the fault of the various Government C.C. No.761 of 2018 10 departments in according the required sanctions/approvals to the project of the OPs. Learned counsel also drew our attention towards Ex.R-2 which was a correspondence with the Municipal Council, Zirakpur wherein the Director Town Planning had been requested to issue the completion certificate for the project of the OPs on 27.05.2014. Ex.R-3 was also referred to regarding the request of the OPs for issuance of completion certificate. It was brought to the notice of this Commission vide Ex.R-5 that CWP No.25853 of 2018 was filed before the Honble High Court for issuance of completion certificate to the OPs. The counsel also submitted that the jurisdiction of this Commission is barred on the ground that the society in question is registered under Section 79 of the RERA, Punjab Act, 2016. Averring on similar lines as in the written statement, counsel for the OPs prayed for dismissal of the complaint. Consideration of Contentions
10. We have considered the respective contentions raised by the learned counsel for the parties.
11. From appraisal of evidence on the record and hearing the respective submissions of counsel for the parties, we proceed to settle the controversy in this case. Ex.C-2 is the allotment letter containing terms and conditions of the allotment. Clause 22 and
23 thereof are quite material, which deal with delivery of possession by the developer. No particular period of delivery of C.C. No.761 of 2018 11 possession has been stated in it and only reasonable time from the date of allotment letter for delivery of possession is recorded. We are of the view that a period of three years from the date of allotment i.e. 17.07.2008 would be considered to be a reasonable period to hand over the possession, if no specific time period is mentioned. Regarding the subject of completion certificate, a stipulated period of three years is to be taken for the delivery of possession for the said unit which according to us should not be later than July, 2011. The complainants have not received the delivery of possession of the unit in the instant case despite having paid an amount of Rs.40,15,392-05 against the total sale price of Rs.37,01,865/-. Tripartite agreement was executed between the parties on 31.07.2008 for a loan amount of Rs. 31,45,000/-. Thereafter, an amount of Rs.29,95,000/- was disbursed to OP No.1 by HDFC Limited (Ex.C-5 colly) and Ex.C-6. Undoubtedly, OP No.1 made an offer of possession for the said unit on 08.08.2013 to the complainants vide Ex.C-8 subject to clearing of outstanding dues and after execution of sale deed. This offer of possession letter does not prove that OP No.1 had completed the entire development work by obtaining the requisite approvals from the competent authorities under law at the time when offer of possession was made. The OPs have themselves admitted vide Ex.R-2 which was a correspondence with the Municipal Council, Zirakpur wherein the Director Town Planning had been requested to issue the completion certificate for the C.C. No.761 of 2018 12 project of the OPs dated 27.05.2014. Ex.R-3 was also referred to regarding the request of the OPs for the issuance of completion certificate. It was brought to the notice of this Commission vide Ex.R-5 that CWP No.25853 of 2018 was pending before the Honble High Court for issuance of completion certificate to the OPs. This clearly shows that the OPs had not taken prior approvals before the launch of the said project from the competent authority in the year 2011 when a period of three years had already passed from the date of allotment of the said unit. By not delivering the legal physical possession of the fully developed residential flat to the complainants in the year 2011, even after receipt of a considerable amount towards the price of the unit thereof, the opposite party was not only deficient in rendering services but also indulged in unfair trade practice. The same view has also been held by the Honble National Commission in F.A. No.342 of 2014 titled as Emaar MGF Land Limited Vs. Karnail Singh 2014(4) R.C.R. (Civil) 136/137. As such, an inference can be drawn that the letter of offer of possession was only a paper possession and not an actual or physical possession of the unit in the absence of the requisite approvals from the competent authority.
12. Learned counsel for the opposite parties raised another objection that the Society is registered under RERA, Punjab, therefore this Commission has no jurisdiction to entertain the C.C. No.761 of 2018 13 complaint. In this regard, it is worthwhile to mention here that the complainants purchased a unit and entered into a Buyers agreement. This is an additional remedy under Section 3 of the C.P. Act, 1986 provided to the Consumers. The relevant Section 3 of the Act is reproduced as below:
3. Act not in derogation of any other law The provisions of this Act shall be made in addition to and not in derogation of the provisions of any other law for the time being in force.
13. So far as the objection of opposite parties that as per the allotment letter, Ex.C-2, the disputes between the parties is liable to be referred to the Arbitrator, is concerned, it is relevant to mention here that the Larger Bench of the Honble National Commission, vide order dated 13.07.2017, passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh v. EMAAR MGF Land Limited & Anr., also held that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act, 1996. The Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed against the said order of the Honble National Commission has also been dismissed by the Apex Court, vide order dated 13.02.2018. The Review Petitions(C) bearing No.2629-2690 of 2018 preferred by M/s EMAAR MGF Land Limited has also recently been dismissed vide order dated 10.12.2018. C.C. No.761 of 2018 14 Consequently, the existence of an Arbitration Clause is not a bar to resolution of this dispute by this Commission. Accordingly, the said objection of the opposite parties is rejected.
14. The OPs have also raised the plea that the complainants do not fall within the definition of Consumers as they have purchased the unit for investment purposes to earn profit and they are not a consumer under the C.P. Act. It is relevant to mention opposite parties failed to prove that the complainants indulged in sale purchase of units for commercial purpose. Honble National Commission in M/s IREO FIVERIVER PVT. LTD. v. SURINDER KUMAR SINGLA & OTHERS First Appeal No.1358 of 2016, decided on 29.11.2016, while relying upon its earlier decision in 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, held the complainants as consumers, observing 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 flats in the development project undertaken by the appellant with the intention to sell the flat on subsequent date for profit. In the case in hand also, there is no evidence led by the opposite parties to prove that the complainants indulged in commercial activities to earn profits and C.C. No.761 of 2018 15 that they have purchased the unit, in question, for further commercial purpose to gain profits. Therefore, the said objection of opposite parties is also rejected.
15. The C.P. Act came into being in the year 1986. It is one of 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 time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and construction in a stipulated period and ultimate delivery of possession. 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 complainants have suffered loss, as discussed above. The builder is under obligation to deliver the possession of the flat within a reasonable period. The complainants cannot be made to wait indefinitely to get possession of the allotment. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builder knew from the very C.C. No.761 of 2018 16 beginning that it had not complied with the provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period, thus by misrepresenting induced the complainants to the flat, due to which the complainants have suffered mental agony 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 complainants and it should be used for the purpose of development of the project site, 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 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 C.C. No.761 of 2018 17 by the opposite parties in shattering their hope of getting the flat by waiting for all this period.
16. The complainants are claiming Rs.15,09,390/- as Pre-EMI interest paid by them to the HDFC Bank on the amount advanced by the bank. Since we are awarding the interest @ 12% on the amount paid by the complainants as well as the amount disbursed by the bank, so he is not entitled for refund of the amount of Rs.15,09,390/- with interest therein.
17. Perusal of receipts Ex.C-1, Ex.C-3, Ex.C-13, Ex.C-14, Ex.C-
26 show that a sum of Rs.40,15,392/- was deposited by the complainants with the OPs on different dates, towards the price of the unit. However, as mentioned above, the OPs failed to deliver the possession of the unit, in question, to the complainants within the stipulated period, without any sufficient cause and, thus, the complainants are entitled to the refund of the amount deposited by them, along with interest and compensation.
18. Accordingly, the complaint is allowed against opposite parties with the following directions:-
i) to refund the amount of Rs.40,15,392/-, along with interest at the rate of 12% per annum from the respective various dates of deposits till realization. It is also made clear that, first of all, opposite parties shall pay the outstanding amount to HDFC Limited towards the C.C. No.761 of 2018 18 loan advanced by it to the complainants and the bank shall issue the NOC to the complainants, thereafter, the remaining amount, if any, shall be paid to the complainants. ii) to pay Rs.50,000/-, as compensation for the mental agony and harassment suffered by the complainants as well as litigation expenses.
19. Compliance of the order passed in the complaint shall be made by the opposite parties within 30 days of the receipt of certified copy of the order. (JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER January 15, 2019. SK/-