Punjab State Consumer Dispute Redressal Commission Dakshan Marg, Sector 37-A , Chandigarh Complaint Case No. CC/836/2018
( Date of Filing : 22 Oct 2018 )
1. Mr.Sonika Phaugat r/o c-32,AWHO ,Sector 4,MDC,Panchkula ...........Complainant(s) Versus
1. M/s ATS Estates Pvt. Ltd. Derabassi ,sas nagar mohali ............Opp.Party(s)
BEFORE:
J.S.Klar PRESIDING MEMBER Rajinder Kumar Goyal MEMBER For the Complainant:
For the Opp. Party:
Dated : 23 Apr 2019 Final Order / Judgement
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, SECTOR
37-A, DAKSHIN MARG, CHANDIGARH.
Consumer Complaint No.836 of 2018
Date of Institution: 22.10.2018 Order reserved on:11.04.2019 Date of Decision : 23.04.2019
1. Mrs. Sonika Phaugat W/o Mr. Jasbir Solanki, reisdent of C-32, AWHO, Sector 4, MDC, Panchkula, Haryana.
2. Mr. Raj Singh Phaugat S/o Mr. M.S. Phaugat, resident of U-298, Mahinder Vihar, MDC, Sector-4, (Army Flats), Panchkula, Haryana-134109. .….Complainants
Versus
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1. M/s ATS Estate Private Limited, having its site office at ATS Golf Meadows, Derabassi, District S.A.S. Nagar (Mohali), through its Managing Director/authorized officer/Branch officer. Email-harpreet.kaur1@atsgreens.com.
2. M/s ATS Estate Private Limited, having its Corporate Office at ATS Tower, Plot no.16, Sector 135, Noida, through its Managing Director/Authorized Officer. Email- email@ atsgreens.com
3. Mr. Geetamber Anand, Managing Director, M/s ATS Estate Private Limited, having its Corporate Office at ATS Tower, Plot no.16, Sector 135, Noida. Email- getamber@ atsgreens.com.
.....Opposite Parties
Complaint U/s 17(1)(a) of the Consumer Protection Act, 1986 (as amended up to date).
Quorum:-
Shri J. S. Klar, Presiding Judicial Member Shri Rajinder Kumar Goyal, Member
Present:-
For the complainants : Sh. Sandeep Khunger, Advocate For the opposite parties : Sh. Balwinder Sangwan, Advocate ……………………………………………………………………….
J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
The complainants have filed this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act") against opposite parties (in short the 'OPs') on the premise, that complainant no.1 being IT consultant served in Delhi, whereas her husband served in Private Defence System Company. They wanted to reside permanently near Chandigarh by shifting therefrom. Allured by the publication and advertisement of OPs, they booked flat no.7143, 14th floor, tower no.7 in ATS Golf Meadows situated at Barwala Road Derabassi, District SAS Nagar (Punjab) by depositing Rs.7,49,625/-, vide two separate cheques of IDBI Bank. The total sale price of the unit was Rs.49,97,500/- with additional charges of Rs.50,000/- for maintenance deposit and Rs.One Lakh for power back up. The booking was confirmed by OPs, vide letter dated 31.05.2013 after issuance of allotment letter by them. As per clause 14 of the buyers agreement, possession was assured to be handed over to them within 36 months by OPs with further grace period of six months from the date of buyers agreement. OPs were required to deliver the possession of the allotted unit to them on or before 30.11.2016. They obtained loan of Rs.39,98,000/- from Housing Development Finance Corporation Limited (HDFC) and a tripartite agreement was accordingly executed on 31.05.2013 between
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complainants, OPs and HDFC Bank. The above said loan amount was released by HDFC Bank in favour of OPs, vide cheque no.920283 dated 19.06.2013. They paid an amount of Rs.47,70,788/- to OPs except the small amount of Rs.3,69,710/- payable at the time of offer of possession of the allotted unit. The OPs failed to hand over the possession of the allotted unit after completing it. The complainants cleared the loan amount taken from HDFC Bank. On 25.07.2015, HDFC bank issued no due letter to them. Complainant no.2 requested OPs to intimate the stage of construction of flat in tower no.7, vide letter dated 28.10.2016. There was no progress on the spot and complainants were in dire need of accommodation. OPs started paying compensation in the shape of penalty @9500/- per month from January 2017 till August 2018 only, as per penalty clause of buyers agreement and under pressure of letter dated 29.01.2017 and 26.02.2017 by complainants to them. They have been living in rented accommodation. They have alleged deficiency in service and unfair trade practice on the part of OPs. They have prayed that OPs be directed to refund Rs.47,70,788/- deposited by them with interest @15% per annum from the date of their respective deposits till actual payment; further to pay compensation of Rs.Five Lakh for mental harassment; besides to pay Rs.One Lakh as litigation expenses to them.
2. Upon notice, OPs filed written reply in the shape of affidavit of Shubhum Gaur, Senior Manager of OPs on the record, alleging the complaint to be not maintainable. Preliminary objections were raised by them that the clauses of buyers agreement are binding upon the parties and the Forum under C.P. Act has no jurisdiction to direct any modification of the terms of buyers agreement. This Forum has no territorial jurisdiction to try the complaint, as per clause 35 of buyers agreement. The Forum at Noida (U.P.) has jurisdiction to decide it. The complainants are not consumers, as they purchased the units for the purpose of investment only and not for their purpose of self residence. The complaint is alleged to be barred by time, because the cause of action accrued to complainants on 31.05.2013, when the buyers agreement was executed and the complaint has been filed after more than two years period, which is barred under Section 24-A of the C.P. Act. There is arbitration clause in the buyers agreement, vide clause 35 thereof and hence the Consumer Forum has no jurisdiction to try the complaint. Clause 14 of buyers agreement is only promissory clause and has no legal obligation upon OPs to deliver the possession within 36 months period from the date of buyers agreement. The presence of force majeure circumstances automatically lead to extension of time in delivery of possession. The possession of the allotted unit could not be offered due to force majeure and unseen circumstances in this case on account of non-availability of adequate supply of steel, cement and other building materials, labour and so on. The time for performance of the agreement between the parties stood extended by Section 63 of Contract Act, 1872. The complainants are debarred from seeking refund of the amounts, as they have failed to comply with the terms and conditions of the agreement. The OPs have prayed for dismissal of the complaint by contesting it on merits by denying any deficiency in service and unfair trade practice on their part.
3. We have heard the learned counsel for the parties and have also examined the record of the case. The first point raised by counsel for the OPs is that there is an arbitration clause in Master Brochure of July 1987 and hence consumer complaint is not maintainable. We find no force in this submission of OPs. The matter has been settled by larger bench of Hon'ble National Commission in consumer complaint no.701 of 2015, decided on 13.07.2017 titled as
"Aftab Singh Vs. EMAAR MGF Land Limited and another". The National Commission has
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held in this authority that an arbitration clause in the afore-stated kind of Agreements between the complainants and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the Arbitration Act, 1996. Against this order of the National Commission, Civil Appeal nos.23512-23513 of 2017 titled as EMAAR MGF Land Limited and another Vs. Aftab Singh" was filed by OP before the Top Court of the country, which has since been dismissed by the Apex Court, vide order dated 13.02.2018. Consequently, the presence of an arbitration clause is not a bar to resolution of this dispute by the Consumer Forum. Even otherwise, the Apex Court has also so held in "National Seeds Corporation Limited Vs. M. Madhusudhan Reddy and another" 2012(2)CLT-382/383 and in
Fair Air Engineers (P) Ltd. vs. N. K. Modi (1996) 6 SCC 385 that Section 3 of C.P. Act gives additional remedy to consumers to avail of his remedy as per his choice. In view of Section 3 of the Act conferring the additional remedy on the consumers, we find no force in this submission of OPs and reject the same. The complainants are husband and wife and they have filed the complaint jointly for their self residence purposes. It is a residential project, which is being developed by OPs, wherein they booked an apartment. It is not a commercial project, but it is a purely a residential project and in view of affidavit of complainant no.1 on the record, the contention of OPs is not accepted that complainants purchased the unit for investment purposes. The OPs failed to rebut the assertion of complainants by leading any rebuttal evidence. There is mere plea of the OPs without any substantiation thereof by means of any evidence and as such OPs failed to demolish this version of the complainants. What is need for complainants to live in a rented accommodation at Panchkula, if they have purchased it for investment purposes. This statement cumulatively establish that they purchased the unit for their residence. The contention of OPs is not accepted by us. There is no dispute of this fact that complainants booked the unit with OPs and paid the amounts to them. The counsel for OPs could not rebut this assertion of complainants regarding payment of sale amount except some small amount to be paid at the time of offer of possession. As per Annexure-II at page no.64 of the file, the amounts for maintenance deposit, power back up and basic selling price, totaling Rs.3,50,000/- is payable by complainants to OPs at the time of possession. Different annexure issued by OPs to complainants, as receipts for payments from page no.81 to 84 are on the record. Ex.C-7 is the copy of no due certificate issued by HDFC Bank to complainants on completion of repayment of loan amount of Rs.39,98,000/-. The OPs have not controverted the fact of payments of the amounts by complainants to them. Consequently, this finding is returned that complainants have paid the amounts of sale consideration to OPs except some small amounts to be paid at the time of delivery of possession. The buyers agreement was executed between the parties on 31.05.2013, vide Ex.C-2. As per clause 14 of it, OPs undertook to deliver the possession within 36 months with further grace period of six months from the date of buyers agreement. The possession by counting the grace period of six months was to be delivered to complainants on 30.11.2016 and it was the dead line for delivery of possession by OPs to complainants, when they have cleared the payments of sale amount except some marginal amounts to be paid at the time of delivery of possession. The submission of counsel for OPs is that clause 14 of buyers agreement did not create any legal obligation upon OPs to deliver the possession within the above stipulated period and it is without consequence. This buyers agreement pertains to housing service, wherein OPs were to deliver the possession to allottees after obtaining occupancy certificate from the competent authority under Punjab Apartment Property and Regulations Act, 1995. The parties are strictly governed by the provision of PAPRA Act, 1995 in this case and the Rules framed thereunder. Clause 16 of the buyer agreement specifically made time as essence of contract with regard to immovable
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property, the time has been specifically made the essence for delivery of possession in this case with the consent of both the parties, as per clause 16 of buyers agreement. The contention of counsel for OPs that there were force majeure circumstances leading to the automatic extension of time is without any substance. Evidence of OPs has been duly considered by us and the omnibus plea of universal slump in real estate and non-availability of material is the usual plea which finds no legs to stand in this case. The OPs have been utilizing the hard earned money of the complainants without bothering to correspondingly develop the apartments and to deliver the possession thereof to the complainants within the scheduled time, as agreed upon. The OPs are strictly governed by the provisions of PAPRA Act 1995 and the Rules framed thereunder. In these circumstances, non-delivery of possession by OPs within scheduled time to allottee, when the period of more than two years and six months had already expired from the scheduled date of delivery of possession, which tantamounts to unfair trade practice on the part of OPs.
4. The further submission of counsel for OPs is that complaint is barred by time, as cause of action to file the complaint accrued to complainants from the date of buyers agreement only. The contention of counsel for OPs is misconceived. Three years period was scheduled for delivery for possession in buyers agreement with further grace period of six months and dead line of the expiry of the above referred period of possession came to an end on 30.11.2016. The cause of action in these type of cases is continuing one and it cannot be said to be barred by time. Even, otherwise the complaint was instituted before this Commission on 22.10.2018 within two years period commencing from 30.11.2016. The complaint is, thus, held to be within time and contention of OPs is repelled on this point.
5. The complainants obtained loan to the tune of Rs.39,98,000/- from HDFC Bank, vide loan agreement dated 29.06.2013, vide Ex.C-4. The complainants cleared the loan amount from their own pocket and received no due certificate from the financer, vide Ex.C-7. The OPs have been utilizing the hard earned money of complainants, whereas they were put to undue hardships in this case for clearance of loan amount and this circumstances is taken into account by this Commission, as it amounts to violation of Section 9 of PAPRA Act, 1995.
6. The counsel for OPs have argued that the parties are governed by the terms and conditions of the buyers agreement. Even by going by the terms and conditions of buyers agreement, when complainants have paid the sale amount to OPs by taking loan from HDFC Bank to the tune of Rs.39,98,000/- and loan amount was repaid by them, but OPs just sat over the money of the complainants and had not obtained the occupancy or completion certificate from the competent authority to establish the fact that they have completed the apartments in particular and the project generally. Even by going by the terms and conditions of buyers agreement, time has been made the essence of the contract for delivery of the possession by clause 16 of the buyers agreement and OPs cannot back out the same in any way.
7. The next submission of counsel for OPs is that this Forum has no territorial jurisdiction to try the complaint. There is no dispute of existence of clause 37 in the buyer agreement, but the submission of OPs cannot be accepted on this point. This Commission has territorial jurisdiction to try the complaint under C.P. Act, because the subject matter of the lis in this case is situated within the territorial jurisdiction of this Commission and when statutory provision under the C.P. Act conferred jurisdiction on this Commission to try the complaint, the same cannot be taken away by the insertion of clause 37 in buyer agreement. C.P. Act is a specially enacted Act for the protection of the consumers from undue exploitation by the big
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traders. The contention of OPs on this point is rejected by us.
8. The next contention of OPs is that time stood extended for performance of the agreement under Section 63 of the Contract Act, 1872. Clause 16 of buyer agreement specifically made the time as the essence for delivery of possession in this case on the part of OPs and they under any such excuse cannot escape from this legal obligation cast upon them by the PAPRA Act, 1995. The OPs being builders/promoters is bound to deliver the possession within the stipulated period, when allottees have cleared the payments on time. The non- delivery of possession by the builder/promoter to allottees within scheduled time tantamounts to unfair trade practice and deficiency in service, justifying the refund of the deposited amount by the allottees. Reference be made to law laid down by the National Commission in "Emaar MGF Land Ltd & another Vs. Dyal Singh" 2015(4)CPJ-294, wherein it has been held that non delivery of possession by stipulated date in terms of clause 21 of Apartment Buyer's Agreement. No explanation has been given by appellants as to why they did not offer possession of apartment by stipulated period to the allottee. The National Commission held in this authority that appellants by not delivering the legal physical possession of apartment within prescribed period, are not only deficient in rendering service, but are also guilty of indulging in unfair trade practice. The deposited amount was ordered to be refunded with interest by the National Commission in the cited authority. Matter was also taken to Supreme Court in the cited case by filing special leave petition no.32492/2015, which was decided on 11.12.2015 by Apex Court, wherein special leave petition was dismissed by affirming above order of the National Commission. Even Apex Court has approved the ratio of cited authority handed down by the National Commission in the above authority. The National Commission also held in
"EMAAR MGF Land Limited and another Vs. Dilshad Gill" III(2015)CPJ-329(NC) that non-delivery of possession amounts to unfair trade practice and deficiency in service on the part of builder/promoter.
9. The further submission of counsel for OPs is that complainants are not the entitled to refund of the deposited amounts, because they were paid the penalty in the shape of compensation from January 2017 to August 2018 @Rs.9500/- per month. The counsel for complainants have not disputed this fact regarding receipt of the above penalties of Rs.1,90,000/- for 20 months period. Now the point for adjudication is whether payments of penalty clause by OPs for some period from January 2017 to August 2018 estops the complainants from seeking refund of the amounts or not. Undoubtedly, the OPs paid the above referred penalty to them, but complainants suffered greater hardship, as they paid the loan amount and the interest thereupon to HDFC Bank for this period. In view of judgment in Puneet Malhotra & another Vs. Parsvnath Developers Limited" II(2015)CPJ-18(NC) by the National Commission, the penalty is applicable, where the allottee seeks possession of the allotted property. Herein, even during arguments of this complaint in the year 2019, OP's counsel could not produce any completion certificate of this project granted by the competent authority under PAPRA Act, 1995. It is implied that OPs have not yet completed the project without completion certificate. The OPs cannot take any excuse under this penalty clause for all the period to come. The allottee cannot wait for an indefinite period for receiving the possession of the allotted property from the promoter/builder. In this view of the matter, the complainants are held entitled to refund of the entire deposited amounts from OPs with interest @12% per annum from the date of their respective deposits till actual payment under Rule 17 of PAPRA Act 1995, minus the amount of penalty received by complainants from OPs for the above referred
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period of 20 months.
10. The next submission of counsel for OPs is that they have filed the application for dismissal of this complaint against OP no.3. The counsel for OPs contended that OP no.3 has no role to play in this case and he needs to be struck off from the array of complaint in this case. This application has been seriously contested by counsel for complainant by contending that OP no.3 is the Managing Director of OP no.2, as per the pleaded case of complainant and merely on the contention of OPs, the complaint cannot be dismissed against him and there is no such resolution of the Board of Directors of OPs on the record to prove this fact that OP no.3 is totally unconcerned with this matter. The application is, thus, dismissed.
11. As a result of our above discussion, the complaint is accepted and OPs are directed to refund the entire deposited amounts of complainants with interest @12% per annum from the date of their respective deposits till actual payment by deducting the amount of Rs.1,90,000/- already paid to complainants by OPs in the shape of penalty from January 2017 till August 2018 therefrom. The complainants are also held entitled to compensation of Rs.50,000/- for mental harassment and Rs.20,000/- as cost of litigation to be payable by OPs to the complainants. The above amounts shall be payable by OPs to complainants within 45 days from the date of receipt of certified copy of the order.
12. Arguments in this complaint were heard on 11.04.2019 and the order was reserved. The certified copies of the order be communicated to the parties, as per rules.
13. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR)
PRESIDING JUDICIAL MEMBER
(RAJINDER KUMAR GOYAL)
MEMBER
April 23, 2019.
(MM)
[ J.S.Klar]
PRESIDING MEMBER
[ Rajinder Kumar Goyal]
MEMBER
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