Prakash Kaur v. RKM Housing Limited

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH.

Consumer Complaint No.128 of 2019

Date of institution : 11.02.2019

Date of decision : 22.04.2019

Parkash Kaur, aged about 80 years, W/o Late Sh. Harbhajan Singh, R/o H.No.782, Sector 78, Mohali. ….Complainant

Versus

1. R.K.M. Housing Ltd., through its Director, Kanwaljit Singh, Regd. Office, SCO No.1,2,3,4, Behind CGC, RKM City, Sector 112, Landran, SAS Nagar, Mohali, 140307.

E-mail: rkmsales@redmiffmail.com

2. Kanwaljit Singh, Director of R.K.M. Housing Ltd., R/o H.No.1568, Sector 34-D, Chandigarh. E-mail: rkmsales@redmiffmail.com

3. Manpreet Kaur, Director of R.K.M. Housing Ltd., Regd. Office SCO No.1,2,3,4, Behind CGC, RKM City, Sector 112, Landran, SAS Nagar, Mohali, 140307.

E-mail: rkmsales@redmiffmail.com

4. Jagroop Kaur, Director of R.K.M. Housing Ltd., Regd. Office SCO No.1,2,3,4, Behind CGC, RKM City, Sector 112, Landran, SAS Nagar, Mohali, 140307.

E-mail: rkmsales@redmiffmail.com

.…Opposite Parties

Consumer Complaint under Section 17 of the Consumer Protection Act, 1986.

Quorum:-

Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President

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Mrs. Kiran Sibal, Member. Present:-

For the complainant : Sh. Abinashi Singh, Advocate For the opposite parties: Ex parte.

JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:

The complainant has filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short, "the Act"), against the opposite parties, seeking following directions to them:

i) to deliver possession of the flat, on the ground floor, complete in all respects at the earliest; OR in the Alternative:

to pay ₹46,16,167.12 (i.e. the total amount paid by the complainant, along with interest at the rate of 18% from the respects dates of payments calculated up to 08.11.2018);

ii) to pay ₹3,00,000/- as damages on account of mental agony and harassment suffered by the complainant; and

iii) to pay ₹55,000/- towards litigation expenses.

Facts of the Complaint

2. Brief facts, as set out in the complaint, are that the in the month of August, 2012, the complainant was looking for an apartment for her own use and occupation. She approached opposite party No.2-Kanwaljit Singh, Director of opposite party No.2-R.K.M. Housing Limited and he vehemently tried to convince her to buy an apartment from opposite party No.1, assuring the apartment to be a world class ideal and its possession within one year. Believing his words, the complainant booked a three bedroom finished floor, measuring 2250 sq.ft. on the ground floor in the residential colony/township referred to as 'Future Project" in Sector 111-112, Mohali, on 14.09.2012. The total sale price of the said unit was ₹55,00,000/- and the complainant deposited ₹16,50,000/- (30% of total sale price) with the opposite parties at the time of booking. Although the possession was agreed to be delivered within one year, yet as per the terms of the Memorandum of Understanding (MoU) executed between the parties on 14.09.2012, it was to be delivered within 3 year. On raising query, the opposite parties told that it was a just formality and that the possession would be delivered within one

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year, as promised. Thereafter, as per demand raised by the opposite parties, the complainant deposited another amount of ₹5,50,000/- with them, vide cheque No.405347 dated 20.12.2012. Thus, she deposited a total sum of ₹22,00,000/- with them towards the price of the flat, as per details given in Para No.10 of the complaint. However, even after passing of four years, they failed to start any development activity at the project site as well as to deliver possession of the said flat to the complainant. They showed their inability to deliver possession of the flat in the said project or to return the money of the complainant. However, on 09.11.2016, opposite party No.2 arranged a meeting with the complainant and gave her an option to shift her investment in their another project i.e. 'Ishan Apartments', Sector 112, Mohali towards two bedroom apartment, measuring 1255 sq.ft., with the assurance that the said project would be completed within 3 months. The total price of that flat was unilaterally fixed by the opposite parties as ₹40,00,000/-. The amount of ₹22,00,000/- paid by the complainant towards earlier flat was adjusted as advance in the fresh allotted flat in the project 'Ishan Heights' on 09.11.2016 itself. The complainant requested the opposite parties to provide in writing regarding the promise made by them regarding delivery of possession at that time, but they avoided the same. Thereafter, the opposite parties issued demand notice dated 22.09.2017, claiming therein that the flats were almost ready for delivery of possession and that the same would be delivered by October, 2017. However, vide similar demand notice dated 25.11.2017, they claimed more money, stating that they were ready to deliver possession by 15.12.2017. On visiting the site, the complainant came to know that apart from bare structure of the building, no other amenities were provided. There was no water, electricity, plaster, flooring and paints on the walls etc. No family was residing in the building. No electricity connection has been granted to any individual in the said project, as per information obtained by another allottee under Right to Information (RTI) Act, Ex.C-9 and Ex.C-10. The complainant brought this fact to the notice of the opposite parties, vide her letter dated 27.12.2017, and she undertook to make payment of the demanded amount only as and when the possession would be given. It was further averred that no licence has been granted by GMADA regarding the said project to the opposite parties, nor any Occupation Certificate has been issued to them. The opposite parties are still in arrears of EDC amounting to ₹1816.77 lac payable to GMADA, apart from licence fee of ₹484.48 lac as on 02.11.2018. Interest amount of ₹459 lac is also due against them on account of outstanding EDC and ₹124.54 lac towards licence fee, as per information obtained under RTI, Ex.C-11. The complainant sent notice dated 02.10.2018 to the opposite parties, calling upon them to deliver possession of the flat, complete in all respects or in the alternative to refund the entire amount along with interest at the rate of 18%, but to no effect. Hence, the present complaint.

3. Upon notice, the opposite parties did not appear despite their service and, as such, they were proceeded against ex parte, vide order dated 01.04.2019.

Evidence of the Complainant

4. To prove her claim, the complainant, along with the complaint, filed her own affidavit and documents Ex.C-1 to Ex.C-13.

Contentions of the Parties

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5. We have heard learned counsel for the complainant and have gone through the record carefully.

6. Learned counsel for the complainant has vehemently contended that the opposite parties failed to deliver possession of the flat, in question, within the stipulated period despite receipt of substantial amount from the complainant towards the price thereof. No development activity was started at the site and the opposite parties kept on utilizing the hard earned money of the complainant, for their own cause. It has been further contended that earlier the complainant allotted the unit in Future Project of the opposite parties, which they failed to develop and, as such, the said allotment was shifted to the unit, in question. However, the opposite parties have not developed even the said unit nor have provided any agreed basic amenities or other facilities at the site. They have also not obtained the requisite approvals and permissions from the competent authorities before launching their project, which amounts to violation of various provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"). There is deficiency in grave service on the part of the opposite parties and, as such, the complainant is entitled to all the reliefs, as prayed for in the complaint.

Consideration of Contentions

7. We have given our thoughtful consideration to the contentions raised by the learned counsel for the complainant.

8. Undisputedly, the complainant booked a finished floor (Ground) measuring 2250 sq.ft.; regarding which MoU, Ex.C-1, was executed between the parties on 14.09.2012. The total cost of the said floor was ₹55,00,000/-, excluding development charges etc. The complainant deposited a total sum of ₹16,50,000/- towards the price of the said floor, as per details given in Clause-4 of the MoU. As per Clause-7 of the MoU, if the opposite parties failed to reserve the developed floor for any reasons within a period of 36 months, the complainant was to become entitled to get refund of the deposited amount, with simple interest at the rate of 10% per annum from the date of the MoU. The opposite parties expressed their inability to deliver possession of that floor and asked the complainant to get her allotment of earlier flat shifted to another flat measuring 1255 sq.ft. and on their asking the complainant made application, Ex.C-2, on which they made endorsement regarding transfer of earlier allotment to the flat measuring 1255 sq.ft., situated in their project namely "Ishan Heights" in favour of the complainant on 09.11.2016 and the amount paid towards earlier booking was adjusted. Thereafter, they issued demand notice dated 22.09.2017, Ex.C-3, to the complainant; in which they admitted the payment of amount of ₹22,00,000/- by the complainant and demanded the due amount of ₹17,61,500/-. It is mentioned in this letter that possession was hopefully to be delivered by the end of October, 2017. However, they issued another demand notice dated 25.11.2017, Ex.C-4, raising demand of balance amount of ₹20,37,980/-, and mentioned therein that they were ready to deliver possession on 15.12.2017. The complainant visited the site and found that there was no development at the project site, so she wrote letter dated 27.12.2017, Ex.C-5, to the opposite parties, raising the issue of slow pace of work at the site. She asked them to give in writing about exact period for delivery of possession and she undertook to make payment of the due amount within one month only thereafter. However, the opposite parties failed to do the needful and to deliver possession of the unit allotted to the complainant despite her repeated requests. As per information obtained under RTI Act by Sh. Abinashi Singh, vide letter dated 10.01.2019, Ex.C-6, it stands proved that no licence was issued to the opposite parties to set up colony under the name and style of "Ishan Heights" in Sector 112, Mohali. However, licence No.7/2012 to set up colony under the

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name and style of R.K.M. City was given to issued on 07.03.2012. Perusal of photographs, Ex.C-7 (colly.) shows that the project of the opposite parties is incomplete. Similarly, as per another information obtained by one Sh. Jaspal Singh under RTI Act, vide letter dated 25.10.2018, Ex.C-8, no sewerage connection has been issued for R.K.M. Housing Project, Sector 112, Mohali, nor the Occupancy Certificate has been issued to any allottee. As per letter dated 08.10.2018, Ex.C-9, issued by PSPCL, Mohali, it stands proved that there is no permanent/regular electricity connection issued in the residential houses/plots in RKM Housing Ltd. However, there is a temporary connection released for construction purpose in the name of the developer. Since residential units have no individual connections, hence there is no living. Similar type of information was supplied by PSPCL, vide letter dated 07.01.2019, Ex.C-10. Still further, perusal of information obtained under the RTI Act by Sh. Jaspal Singh, vide letter dated 02.11.2018, Ex.C-11, it stands proved that the opposite parties are still in arrears of EDC of ₹1816.77 lac payable to GMADA, apart from licence fee of ₹484.48 along with interest as on 02.11.2018. Interest amount of ₹459 lac is also due against them on account of outstanding EDC and ₹124.54 lac towards interest on licence fee.

9. The whole purpose of pleadings is to give fair notice to each party of what the opponent's case is and to ascertain with precision the point(s) on which the parties agree and those on which they differ. The purpose is to eradicate irrelevancy. The complaint is a concise statement of facts and if no reply is filed to the complaint, the averments made therein are deemed to have been admitted. For the sake of repetition, it is relevant to mention that the opposite parties failed to appear before this Commission, despite their service and, as such, they were proceeded against ex parte. Thus, all the averments made in the complaint are deemed to have been admitted by the opposite parties and the evidence led by the complainant stands unrebutted; for which an adverse inference is to be drawn against the opposite parties. Since the opposite parties are ex parte, so no evidence has come on record, whether they have obtained the requisite approvals and permissions from the competent authorities, before launching their project.

10. As per Section 5 (Development of land into Colony) of Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"), the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they violated Section 5 of PAPRA.

11. As per Section 3 (General Liabilities of Promoter) of the PAPRA, they were required to make full and true disclosure of the nature of their title to the land, on which such colony 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 colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with Section 3 of the PAPRA.

12. 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 respect. As such, they also violated Section 9 of the PAPRA.

13. 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

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from the date of receipt of amount so collected till the date of re-payment."

14. The Act came into being in the year 1986. It is one of the benevolent pieces 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 complainant has made payment of substantial amount to the opposite parties, with the hope to get the possession of the flat within 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 development thereof within 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 injury and loss of opportunity to the complainant. Had the complainant not invested her money with the opposite parties, she 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 within a reasonable period. 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 various provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period and, thus, by misrepresentation induced the complainant to book the flat, due to which the complainant has 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 builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. In such circumstances, the complainant is entitled to the delivery of actual and physical possession of the flat, in question, complete in all respects, along with agreed facilities/amenities and Completion/Occupation Certificate issued by the competent authority, subject to payment of balance sale consideration, without any interest or penalty. Allotment of earlier flat was transferred towards the allotment of the flat, in question, by the opposite parties, as they themselves were unable to deliver possession of that flat. No such agreement was executed regarding allotment of the flat, in question, by the opposite parties and, as such, for delay in delivery of possession, she will also be entitled to interest at the rate of 12% on the deposited amount from 14.09.2015 (36 months after execution of MoU dated 14.09.2012, Ex.C-1, as no separate agreement/MoU was executed regarding the flat in question) till delivery of possession, as ordered above, as well as compensation. However, the opposite parties will not be able to deliver the possession of the flat, as ordered above, then they would refund the entire amount deposited by the complainant, along with interest at the rate of 12% per annum from the respective dates of deposit till realization and compensation.

15. In view of our above discussion, the complaint is allowed and following directions are issued to the opposite parties:

i) to deliver possession of the flat, in question, complete in all respects, along with agreed facilities/amenities and Completion/Occupation Certificate from the competent authority, and to execute the Sale/Conveyance Deed in her favour, subject to payment of balance sale consideration, without any interest/penalty;

ii) to pay interest at the rate of 12% on the deposited amount of ₹22,00,000/- from 14.09.2015 (36 months after execution of MoU dated 14.09.2012, Ex.C-1) till delivery of possession, as ordered above; and

iii) to pay ₹30,000/-, as compensation for the harassment and mental agony suffered by the complainant, including the cost of litigation. Remaining sale consideration payable by the opposite parties shall be adjusted from aforesaid liability of the opposite parties.

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16. In case the opposite parties fail to comply the directions, as ordered above, then in the alternative, they shall:

i) refund the entire amount deposited by the complainant i.e. ₹22,00,000/-, along with interest at the rate of 12% per annum from the respective dates of deposit till realization as per Rule 17 of PAPRA; and

ii) pay ₹30,000/-, as compensation for the harassment and mental agony suffered by the complainant, including cost of litigation.

17. The compliance of this order shall be made by the opposite parties within a period of 60 days of the receipt of certified copy of the order.

(JUSTICE PARAMJEET SINGH DHALIWAL)

PRESIDENT

(KIRAN SIBAL)

MEMBER

April 22, 2019.

(Gurmeet S)

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