STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH Consumer Complaint No. 306 of 2019 Date of Institution : 22.04.2019 Date of Reserve : 05.09.2019 Date of Decision : 20.09.2019
1. Gurnam Singh son of Sh.Kanwal Mohan Singh
2. Arvind Kaur D/o Gian Chand wife of Kanwal Mohan Singh. Both residents of H.No.503, S.S.T. Nagar, Patiala, Punjab 147001. .Complainants Versus
1. Best Zone Builders & Developers C/o Orchid Greens, Kharar- Landran Road, Sector-115, Mohali, Punjab through its Director.
2. Best Zone Builders and Developers Pvt. Ltd., through its Managing Director, Shop No.1-2-3, Orchid Greens, Kharar- Landran Road, Sector-115, Mohali, Punjab. Email id : info@bestzonebuilders.com .Opposite parties Consumer Complaint under Section 17 of the Consumer Protection Act, 1986. Quorum:- Honble Mr. Justice Paramjeet Singh Dhaliwal, President Mr.Rajinder Kumar Goyal, Member, Present:- For the complainants : Sh.Arun Sharma, Advocate For the opposite parties : Sh.Mohinder Singh, Advocate RAJINDER KUMAR GOYAL, MEMBER The complainants have filed this complaint, under Section
17 of the Consumer Protection Act, 1986 (in short the Act) seeking following directions to the opposite parties: Consumer Complaint No.306 of 2019
i) to handover the possession of the flat within stipulated time and if the opposite parties fail to deliver the flat as per the plans and conditions be directed to refund the amount with 18% rate of interest; ii) to pay Rs.8,00,000/- as interest on the amount deposited by the complainants; iii) to pay Rs.5,00,000/- for physical and mental harassment suffered by the complainants; iv) to pay Rs.55,000/- as litigation expenses;
v) to handover the possession of the flat as per drawings and proper sanctions from the competent authorities within a stipulated time; and vi) any other direction which this Commission may deem fit. Facts of the Complaint
2. Brief facts, as averred in the complaint are that the complainants vide Registration-cum-Application Form and Apartment Allottee(s) Arrangement Agreement executed between the parties booked an apartment No.E-101, Block-E, First Floor, Type 2 BHK, in the project named Orchid Greens for a total amount of Rs.22,50,000/-. The unit was financed through India Bulls and a Tripartite Agreement dated 28.03.2014, signed by the complainants, opposite parties and the financer i.e. India Bulls Housing Finance Limited was executed. The complainants have paid 90% of the sale consideration. Vide letters dated 21.12.2015, 15.04.2017, 25.07.2017 and 06.10.2017, the opposite parties Consumer Complaint No.306 of 2019 demanded unnecessary payments which were replied by the complainants. Also the letters issued by India Bulls have also been replied. Vide letter dated 01.12.2016, the complainants sought the information under RTI from Municipal Corporation, Kharar and found that no application for approval of the Corporation for completion and possession of the said units was received. As per the terms and conditions of the agreement, the opposite parties were to handover the fully developed flat. The complainants requested the opposite parties to handover the flat within a period of 3 months from the date of signing of the agreement and gave reminders for various incompletion works in the flat. The complainants are paying the instalments to the Bank regularly. The possession of the flat has not been delivered to the complainants as it was to be delivered in the year 2017. As per agreement, the pre-EMI for the delayed period was to be paid by the opposite parties till the offer of possession of flat, which was not paid. The possession letter issued to the complainants without completing the building as per plan and not having complied with the requirements of the authorities. The opposite parties have not obtained any completion certificate as well as other requisite approvals from the competent authority. No STP plan, no electricity connection and no boundary wall. Even reply to the letters/emails of the complainants was not given. The opposite parties completely failed to handover the possession complete in all respects after getting statutory approvals from the competent authorities. Alleging deficiency in service and unfair trade practice on the part of the opposite parties, Consumer Complaint No.306 of 2019 the complainants filed the complaint seeking the above mentioned reliefs. Defence of the Opposite Parties
3. Upon notice, the opposite parties appeared and filed their written statement by taking preliminary objections that the complaint is not maintainable in the present form. The complainants have not approached this Commission with clean hands and suppressed the material facts in the complaint. The complainants do not fall within the ambit of consumer. On merits, it is admitted that the complainants booked Apartment NO.E-101, Block E, First Floor, Type 2 BHK in Orchid Greens for a total sale consideration of Rs.22,50,000/-. It is denied that opposite paties issued possession letter without completion of the work. The complainants themselves after being satisfied instructed the Financer-India Bulls to release the remaining 5% of the loan availed. It is contended that the complainants have not got executed the sale deed in their favour, therefore, the completion certificate could not be issued to them by the M.C. Kharar. The flat is complete in all respects including electricity connection. It was contended that there is no deficiency in service or unfair trade practice on the part of the opposite parties. Rest all the averments as averred by the complainants in their complaint were denied and prayed to dismiss the complaint being devoid of merits. Evidence of the Parties
4. To prove their claim, the complainants have filed their affidavits along with documents as Ex.C-1 to Ex.C-10. Consumer Complaint No.306 of 2019
5. On the other hand, the opposite parties filed the affidavit of Sh.Manmohan Singh, Director, along with documents Ex.R-1 to Ex.R-5. Contentions of the Parties
6. We have heard the learned counsel for the parties and have carefully gone through the record.
7. It has been vehemently argued by the learned counsel for the complainants that complainants got booked an Apartment No.E- 101, Block-E, First Floor, Type 2 BHK, in the project named Orchid Greens for a total amount of Rs.22,50,000/- and agreement was executed between the parties. To make the timely payments, the complainants availed housing loan from India Bulls Housing Finance Limited and a Tripartite Agreement was executed between all the three parties on 28.03.2014. As per the Apartment Allottee(s) Arrangement agreement, the unit was to be delivered within 36 months from the date of execution of the agreement. The complainants have also made the payment of 90% and above to the opposite parties of the total sale consideration but still the opposite parties are demanding raising demands of payments without justification. In the RTI, it came to the knowledge of the complainants that the opposite parties were not having any completion certificate and reason detailed in their reply for not issuing the completion certificate is an abuse of process of law. The opposite parties till today have failed to hand over the possession complete in all respects as per the agreement executed. The possession letter issued to the complainants without Consumer Complaint No.306 of 2019 completing the building as per plan and not having complied with the requirements of the authorities. The complainants have suffered a lot. It is prayed to allow the complaint and the reliefs as prayed be allowed in the favour of the complainants.
8. Per contra, learned counsel for the opposite parties argued That the complainants do not fall within the ambit of consumer. The opposite parties issued possession letter to the complainants after completing all the works. It is argued that the completion certificate could not be issued to the complainants as they have not come forward to execute the sale deed in their favour. All the internal and external facilities are complete. There is no deficiency in service or unfair trade practice on the part of the opposite parties and prayed to dismiss the complaint. Consideration of the Contentions
9. We have given our thoughtful consideration to the respective contentions raised by the learned counsel for the parties.
10. The only objection raised by the opposite parties is that the complainants do not fall within the ambit of Consumer. The opposite parties has not mentioned anywhere in their written statement that why they do not fall within the ambit of consumer, whether they are investors or for any commercial purpose. No cogent reasoning has been given in their objection. We are of the view that without any cogent reasoning raising an objection should not be discussed at length. Hence, this objection raised by the opposite parties is straightway rejected. Consumer Complaint No.306 of 2019
11. Admittedly, the complainants booked Apartment No.E-101, Block No.E, Floor First, Type 2 BHK in Group Housing development named Orchid Greens having super area of approx
950 sq. ft. An Apartment Allottee(s) Arrangement has been executed between the complainants and opposite parties on 11.01.2014 (Ex.C-3) and as per the said agreement the opposite parties promised to deliver the apartment within a period of 36 months with an extended period of six months from the date of execution of the agreement, which expired on 11.07.2017. To make the timely payments, the complainants availed a housing loan of Rs.18,00,000/-. As per receipts No.0086 dated 11.01.2014 annexed at Page 79 with Ex.C-4, the complainants deposited a sum of Rs.4,63,905/- from his own pocket, whereas they have availed loan of Rs.18,00,000/-. Accordingly, the total amount paid by the complainants to the opposite parties is Rs.22,63,905/-. The complainants chose Subvention Plan and as per clause 4.8 of the agreement, the interest part Till the offer of possession against the loan was to be paid by the builder on monthly basis directly into the Borrowers Loan Account, whereas the fact has been denied by the opposite parties in their written statement. As per letter dated 21.12.2015, Ex.C-6, a demand for payment of balance dues was made by the opposite parties, wherein the payment of detail to be paid by the complainants is mentioned in a tabular form, in which it showed that Rs.58,100/- is to be paid on account of Other Charges, Rs.71,517/- for Service Tax, Rs.25,000/- for IFMS and Rs.8,745/- on account of interest on delayed payment, whereas the Consumer Complaint No.306 of 2019 basic sale price of the unit is Rs.22,50,000/-. The total due worked out by the opposite parties is Rs.2,61,957/-. No doubt, the complainants are entitled to pay Rs.25,000/- for Interest Free Maintenance Charges (in short IFMS) but it can be taken only after possession is handed over and Rs.71,517/- for service tax but for the payment of Rs.58,100/- on account of other charges and Rs.8,745/- the complainants cannot be held responsible to pay as there is no detail with regard to other charges and for interest on delayed payment, the opposite parties themselves on back foot by not obtaining the requisite approvals and completion certificate for the said unit. In this way, the total amount payable by the complainants is Rs.23,46,517/-. The complainants have already made the payment of Rs.22,63,905/-, accordingly, the total outstanding towards the complainants is Rs.57,612/-. Further, from the perusal of the record the opposite parties tried annexed the photographs (Ex.R-2 to Ex.R-4) of the their project to prove that the project has been completed. The opposite parties also placed a letter (Ex.R-5) written to the Executive Officer, Municipal Council, Kharar with the request for issuing Partial Completion. The letter placed on record is undated, whereas date of receiving by the department put on the letter is 19.07.2019 i.e. approximate four months later of filing the complaint. It means the opposite parties were not having any completion certificate or occupation certificate with them at the time of offering the possession of flat, which is a deficiency in service on the part of the opposite parties.
12. The complainants contended in their complaint that the flat Consumer Complaint No.306 of 2019 allotted to them is not as per layout plan shown to them. As per clause E of the agreement, say that the location allotted to the Allottee(s) is tentative and is subject to change till the final layout / Building Plans and demarcation the Apartment. The relevant clause E is reproduced hereunder:- E. The Allottee(s) agree and understands that the area of the Apartment subject matter of this Apartment Allottee(s) Arrangement and its location allotted to the Allottee(s) tentative and is subject to change till the final layout/Building Plans and demarcation the Apartment before handing over the possession is completed by the Developer.
13. From the perusal of the above, the contention of the complainants for not allotting the apartment, as per plan shown to them, is hereby rejected.
14. Further, in the agreement there is no penalty clause incorporated by the opposite parties on the point that if the builder fails to handover the possession to the complainants within the prescribed period then how they would be compensated. The terms and conditions of the agreement are unilateral just to deprive the valuable rights of the complainants by the opposite parties. We are fortified with the judgment passed by the Honble Supreme Court, reported in II(2019) CPJ 34 titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Geetu Gidwani Verma & Anr. wherein it has been held that the Builder could not seek to bind flat purchaser with such one sided contractual terms. The relevant para of the judgment is reproduced hereunder:- 6.7 A term of a contract will not be final and binding if it is Consumer Complaint No.306 of 2019 shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 8.5.2012 are ex facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. XX XX XX XX XX XX
9. We see no illegality in the impugned dated 23.10.2018 passed by the National Commission. The Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent-Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest. It amounts to unfair trade practice to impose one sided contractual terms upon the purchasers.
15. The amount has been utilized by the opposite parties, which is trust money, for earning profits in their business. Moreover, the complainants had already paid the substantial amount but there was no development at the site. There is no fun in first paying the Consumer Complaint No.306 of 2019 instalments and thereafter seeking refund of the same. Opposite parties have also violated the provisions of the PAPRA by not obtaining the necessary sanctions/permissions from the competent authority before launching the scheme and collecting money from the people. Therefore, opposite parties No.1 & 2 violated Sections 3, 5, 9 and 12 of PAPRA.
16. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainants-buyers were required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. They are not to play the game at the cost of others. When they insist 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.
17. 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 opposite parties with the hope to get the possession of the unit 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 unit 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 Consumer Complaint No.306 of 2019 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. 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 beginning that they had not complied with the provisions of the PAPRA and Rules and would not be able to complete the unit and 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 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 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.
18. Now the point is to decide from which date the complainants are entitled to interest on the deposited amount. It is not disputed Consumer Complaint No.306 of 2019 that the complainants chose Subvention Plan and as per clause 4.8 of the agreement the interest part was to be paid by the builder till the offer of possession. Clause 4.8 is reproduced hereunder:- 4.8 In Subvention Plan, the interest part Till the offer of possession against the loan will be paid by the builder on monthly basis directly into the Borrowers Loan Account. From the perusal of the above clause, the complainants are entitled to be compensated from the date when the complainants availed a housing loan from India Bulls Housing Finance Ltd. which is 28.03.2014. Accordingly, the compensation is to be paid by the opposite parties to the complainants from 28.03.2014.
19. In view of the above, the complaint filed by the complainants is partly allowed and the following directions are issued against the opposite parties:-
1) i) to handover the possession of Apartment No.E-101, Block No.E, First Floor, Type 2 BHK in Orchid Greens, complete in all respects as per agreement, subject to the balance sale consideration i.e.Rs.57,612/- without interest and penalty and along with Completion and Occupation Certificate within a period of two months. ii) to pay compensation at the rate of 12% per annum on the deposited amount from the date when the complainants availed the loan i.e. 28.03.2014, till the Consumer Complaint No.306 of 2019 handing over the possession complete in all respects as per relief (i). iii) to pay Rs.35,000/- as compensation on account of mental agony and harassment as well as litigation expenses. It is made clear that the balance amount towards sale consideration payable by the complainants shall be adjusted from the above said liability of the opposite parties and after the said adjustment, they shall pay the remaining amount, if any, as directed above, to the complainants. In case the opposite parties fail to deliver the possession within two months, as ordered above, then in the alternative
2) i) to refund the amount of Rs.22,63,905/- along with compensation at the rate of 12% per annum from the respective dates of deposit till realization; Further, the opposite parties shall pay the outstanding loan amount to India Bulls Housing Finance Ltd. towards the loan advanced by it to the complainants after deducting the pre-EMI, if any paid by the opposite parties, and, thereafter, the remaining amount, if any, shall be paid to the complainants; Consumer Complaint No.306 of 2019 ii) to pay Rs.35,000/- as compensation on account of mental agony and harassment as well as litigation expenses.
20. The complaint could not be decided within the statutory period due to heavy pendency of court cases. (JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER September 20, 2019 parmod