Rakesh Kumar Sharma v. Emerging India Housing Corporation (P) Ltd.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 318 of 2018 Date of Institution : 13.08.2018 Date of Decision : 14.10.2019 Rakesh Kumar Sharma son of Krishan Chand Sharma, resident of House No.321, New Azad Nagar, near Bus Stand, Ferozepur City presently residing at Flat A, 1/F, 257, Temple Street, Kowloon, Hongkong through General Power of Attorney Sh.Daljinder Singh son of Late Sh.Harbans Singh resident of House No.6046, Sunny Enclave, Kharar, District SAS Nagar. Complainant V e r s u s Emerging India Housing Corporation (P) Ltd., SCO 46-47, First Floor, Sector 9-D, Near Matka Chowk, Madhya Marg, Chandigarh-160009, through its Director/Authorized Signatory. .. Opposite Party Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MRS. PADMA PANDEY, MEMBER. MR.RAJESH K. ARYA, MEMBER. : Sh.Kamaldip Singh, Advocate with Sh.Amardeep Singh, AdvocateArgued by for the complainant. Sh. J.S. Rattu, Advocate for the opposite party. JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT The complainant has filed this complaint under Section 17 of the Consumer Protection Act, 1986 (in short the Act) alleging that he is aggrieved of deficiency in providing service, negligence and unfair trade practice at the hands of the opposite party, as it failed to deliver possession of residential pent house no.F-804, despite the fact that he paid an amount of Rs.49,90,000/- towards the same, which comes more than 90% of the total sale consideration of Rs.53 lacs. Shorn off unnecessary facts, it is the case of the complainant that on 17.07.2014, he booked 4 BHK pent house no.F-804, measuring 1998 square feet in the project of the opposite party, named Emerging Heights III, situated at sector 115, Mohali, Punjab, on making payment of Rs.1 lac, as booking amount, against receipt dated 17.07.2014 (Annexure C-2). Total price of the pent house was fixed at Rs.53 lacs. As per demands raised by the opposite party, he made following payments vide receipts (Annexures C-2 to C-10):- S. No. Ann. (Receipts) Date of payment (Receipts) Amount (Rs.)

1. C-2 17.07.2014 1,00,000.00

8. C-10 27.01.2017 50,000.00 Total: 49,90,000.00 It is clearly averred that at the time of booking of the above said pent house, the opposite party made tall claims and assured the innocent complainant that actual physical possession thereof would be delivered after 16 months, from the date of booking. Apart from this, on asking of the opposite party, the complainant provided one chimney and one LCD

42 inches, through his father Sh.Krishan Chand, but later on, he came to know that there is no tower at the project site. Rather, the opposite party was yet to start construction. Thus, it collected huge amount of Rs.49,90,000/- in a fraudulent manner and misappropriated the same with malafide intention. However, when the opposite party was contacted, it denied to provide necessary documents, which were required before handing over of possession of the pent house. It was stated that, in this manner, the opposite party has played fraud with numerous prospective buyers. At the time of booking, the opposite party allured the complainant and other prospective buyers by stating that its project is duly approved by the competent authorities and they have issued relevant licences/permissions but it transpired from the information under Right to Information Act, 2005 (in short the Act, 2005), placed on record that no such licences/permissions were ever granted to it, rather, money has been collected in an illegal and unfair manner. Under above circumstances, the complainant has filed this complaint seeking refund of amount of Rs.49,90,000/- alongwith interest @18% p.a. from the respective dates of deposits till realization; compensation to the tune of Rs.5 lacs for deficiency in rendering service and causing mental agony; and cost of litigation of Rs.1,11,000/-. His claim has been contested by the opposite party, on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that the complainant was a habitual defaulter and not entitled to any relief for equity; that he did not fall within the definition of consumer; that this Commission is not vested with territorial jurisdiction; that the complaint is bad for non-joinder of necessary party, as registered office of the Company has not been impleaded; that the general power of attorney placed on record is defective; that the Company was to make endeavor to deliver possession of the unit in question within a period of 36 months from the date of receipt of amount equal to 90% of the total sale consideration. Paradoxically, a plea has been taken in the reply that the complainant had already taken possession of the pent house no.G-802 and residing therein with his family members, for the last two years. By adding in the reply that infact the complainant had booked only one pent house no.F-804 and some payments were made for the same, but he pleaded his urgent need and requested to allot another pent house immediately, as a result whereof, pent house no.G-802 was allotted and its possession was delivered to him about two years earlier. In nutshell, it is pleaded by the opposite party that because pent house no.F-804 which was booked by the complainant was not constructed, as such, on the request made by him, new pent house no.G-802 was allotted in lieu of pent house no.F-804 and he accepted the same, in which, he alongwith his family members are residing therein. Remaining averments were denied being wrong. The parties have been afforded adequate opportunities to adduce evidence in support of their respective contentions, by way of affidavit and they also produced numerous documents. We have heard the contesting parties and have carefully gone through record of the case, including the written arguments filed by the party concerned. In this case, following points have been emerged for consideration: - Whether the arbitration clause if any in the allotment letter bars the jurisdiction of this Commission? Whether the complainant booked two pent houses i.e. pent house no.F-804 and pent house no.G-802 separately? Whether the amount of Rs.49,90,000/- was made for pent house no.F-804 only? Whether this Commission has territorial jurisdiction to entertain this complaint? Whether the complainant falls under the definition of consumer? Whether the opposite party was in position to offer and deliver possession of the pent house in question? Whether this complaint is bad for non-joinder of parties? Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest? First, we would like to deal with the objection raised by the opposite party, to the effect that in the face of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaint. In the first instance, the opposite party failed to place on record any document, to prove that any contract with regard to arbitration was available to settle any dispute between the parties, as far as the present transaction is concerned. Even otherwise, this issue has already been dealt with, by the larger Bench of the Honble National Commission in a case titled as Aftab vide orderSingh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Honble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Honble Supreme Court of India, vide order dated 10.12.2018. In this view of the matter, objection raised by the opposite party, stands rejected. Now coming to the objection raised with regard to territorial jurisdiction of this Commission, it may be stated here that according to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident that the entire documents pertaining to the pent house in question have been issued by Corporate Office of the Company at Chandigarh i.e. SCO 46-47, First Floor, Sector 9-D, Chandigarh. Not only as above, even the parties themselves, by way of the provisional allotment letter dated 25.07.2014 (Annexure C-4 colly.) have agreed that All legal disputes shall be subject to the courts of competent jurisdiction at Under these circumstances, this Commission has got territorialChandigarh only. Jurisdiction to entertain and decide this complaint. Objection taken in this regard, therefore stands rejected. In view of the above fact, it is also held that the complaint filed is not bad for non-joinder of any party, especially, when it is proved that the entire correspondence in respect of the unit in dispute took place between the parties, at Chandigarh office of the Company. The next question under our consideration is as to whether the complainant falls within the definition of a consumer, as defined by Section 2 (1) (d) of the Act? It may be stated here that mere bald objection of the opposite party that the complainant had purchased the unit in dispute, by way of investment, to gain huge profits, does not carry any weight and is liable to be rejected. There is nothing on the record that the complainant is a property dealer and deals in the sale and purchase of property, on regular basis. Mere fact that the complainant is having another house is not sufficient to debar him from the purview of a consumer. A person cannot be said to have purchased a house for a commercial purpose only by proving that he/she has purchased more than one houses or plots. Separate plots may be purchased by a person for the individual use of his/her family members. A person may buy more than one house as per his requirements. The opposite party failed to adduce an iota of evidence to recluse the complainant from the definition of consumer under the Act. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna , decided by the Honble National ConsumerEstate Developer Pvt. Ltd. 2016 (1) CPJ 31 Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the Honble National Commission, in and DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316 Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on

14 Sep 2016. It is the case of the complainant that he booked two separate pent houses i.e. pent house no.F-804 and pent house no.G-802. The opposite party admits that pent house no.F-804 was booked and some amounts have been paid but on the request and demand of the complainant, possession of pent house no.G-802 (which was in lieu of pent house no.F-804) was given to him and sale deed dated 06.10.2016 was got registered before the Sub Registrar, Kharar, Punjab. It has been argued by Counsel for the opposite party that amount paid for pent house no.F-804 had been adjusted against pent house no.G-802. We are of the considered view that the plea taken by the opposite party in this regard is not only false and misrepresentation on their part rather is fraudulent. We have already given the chart of payment in paragraph no.2 of this judgment in respect of payments made by the complainant towards pent house no.F-804, whereas, the sale deed placed on record by the opposite party itself establishes that sale consideration qua pent house no.G-802 is duly mentioned therein and those amounts are paid on different dates and through RTGS. A bare perusal of the sale deed dated 06.10.2016 transpires that pent house no.G-802 was sold only for a sum of Rs.18,73,800/- and sale consideration was received as under:- Amount Date Mode 200000.0016.02.2016 RTGS 173800.0004.07.2016 RTGS 1500000.0005.10.2016 RTGS Thus, it is made clear that the amount paid towards pent house no.G-802 was entirely different and that was paid, as per above given chart and as such has no concerned, with the payment made towards pent house no.F-804. Therefore, it is well established that an amount of Rs.49,90,000/- was paid only qua pent house no.F-804 and that has not relevancy with the payments made in respect of pent house no.G-802. Furthermore, from the information dated 21.03.2016 (Annexure C-14 colly.) obtained under the RTI Act, 2005, it transpires that neither any approval nor any sanction has been granted to M/s Emerging Heights-III, Sector 115, Greater Mohali i.e. the opposite party. Furthermore, it also transpires that for launching mega housing project, no licence has been issued to the Company by the Greater Mohali Area Development Authority (GMADA). These documents remained unrebutted by the opposite party. Thus, it transpires that neither any licence was issued by the competent authority to the opposite party, to raise construction nor any completion or occupation certificate has been issued, as required under Section 14 of the Punjab Apartment and Property Regulation Act, 1995 (in short the PAPR Act). The opposite party was not competent to sell plots or flats and to collect money from the complainant and other prospective buyers, as far as the present project is concerned. It is well settled law that before offering and delivering possession of residential plots/units to the allottees, builder is required to obtain occupation and completion certificates. At the same time, burden to prove that the area/site of the project or that the construction of unit, is fully developed is on the builder. It was so said by the Honble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander . It is very strange that in theChandna, First Appeal No.873 of 2013 decided on 29.09.2014 present case, not even an iota of evidence has been placed on record by the opposite party, to prove that construction and development work in respect of pent house no.F-804 was even started at the project site. The pent house no.F-804 was booked as far as back in the year 2014, allotment whereof was made vide letter dated 25.07.2014 (Annexure C-4 colly.) Now it is October 2019. Already a period of more than four and a half years has lapsed, yet the complainant is empty handed. There has been an inordinate delay in the matter. The act and conduct of the opposite party amounts to negligence and deficiency in rendering service. Now, the question under our consideration is as to whether if the Developer fails to deliver possession of the allotted unit within a reasonable period, the allottee is under obligation to accept the same, or he/she can seek refund of the amount paid. It may be stated here that it is well settled law that where there is no period mentioned in the allotment letter/agreement with regard to date/period of delivery of possession of the unit, then reasonable period of two years from the date of allotment has to be taken into consideration. In the present case, if two years are counted from 25.07.2014, then the Company was liable to deliver possession of pent house no.F-804 on or before 24.07.2016 but even as on today, it was not so done. Non-delivery of possession of plots/units in a developed project by the stipulated date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was so said by the Honble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Relevant part of the saidLtd., Consumer Case No.1814 of 2017 decided on 05.07.2018. order is reproduced hereunder:- This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal decided on 30.03.2015, has held that if the Developer fails toNo.250 of 2014), deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment. The above view taken is further supported by the principle of law laid down by the Honble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. In that case,Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. possession of the unit had been offered during pendency of the complaint after obtaining occupation certificate, though after a delay of 2 years of the stipulated date. The Honble Supreme Court upheld the order of refund of amount paid alongwith interest, passed by the Honble National Commission, while holding as under: - In the present case, admittedly the Appellant Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyers Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the Honble National Commission. In Lucknow Development Authority v. M.K Gupta.. Gupta, this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a service as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service. In Fortune Infrastructure & Anr. v. Trevor DLima & Ors., this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation. The Respondent Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant Builder. The Respondent Flat Purchaser was justified in terminating the Apartment Buyers Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation. Under these circumstances, we are of the considered opinion that the complainant is well within his right to terminate the contract and seek refund of the entire amount paid, by way of filing this complaint. It is to be further seen, as to whether interest on the amount refunded can be granted in favour of the complainant. It may be stated here that, it is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was so said by the Hon`ble Supreme Court of India, in , (2014) 6 SCC 335.UOI vs. Tata Chemicals Ltd (Supreme Court) The complainant is, thus, entitled to get refund of the amount paid, alongwith interest @12% p.a., from the respective dates of deposits, till realization, in view of principle of law laid down by the Honble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil wherein it was held that in case of refund ofAppeal no.3417 of 2003 decided on 18.08.2004, amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Furthermore, the Honble Supreme Court of India in H.P. also granted interest @12% p.a. on theHousing Board Vs. Janak Gupta, (2009) INSC 627, amount to be refunded by the builder, while holding as under:- We may note that in Haryana Urban Development Authority vs. Darsh Kumar (2005) 9 SCC 449, this Court has said that in future the Forum/Commission will follow the principles laid down by it in the case of Balbir Singh-I(supra).In the light of the aforenoted decisions, the order of the Commission, awarding interest at the rate of 18% per annum cannot be sustained. We are of the view that having regard to the facts and the circumstances of the instant case, award of interest @ 12% per annum would meet the ends of justice. . . In view of principle of law laid down by the Supreme Court of India, in the cases referred to in this paragraph, if interest @12% p.a. is awarded to the complainant from the respective dates of deposits, till realization, that will meet the ends of justice. At the same time, the complainant is also held entitled for compensation towards mental agony and physical harassment, caused to him, at the hands of the opposite party and also cost of litigation. In our considered opinion, if an amount of Rs.50,000/-, in lumpsum, as compensation and cost of litigation is granted, that will meet the ends of justice. The view taken by this Commission with regard to grant of lumpsum compensation and cost of litigation to the tune of Rs.50,000/-, is supported by the case titled as DLF Homes Panchkula Pvt. Ltd. & Anr. Vs. Col. decided by the Honble National Commission, underDaljit Singh, First Appeal No. 1239 of 2017, similar circumstances, on 01.08.2019. As far as plea taken by the opposite party to the effect that the complainant defaulted in making payment, as such, he is not entitled to any relief, it may be stated here that is settled law that the allottees of units/plots could not be expected to go on making payments to the builder as per the payment plan, when they could discover that it is not in a position to hand over possession of the property in time, for want of construction and development at the project site. It was so said by the Honble National Commission in Rakesh Anand & Anr. Vs M/S. Royal Empires (Royal Minaar), First Appeal No. 1378 of 2016, decided on 09 . This view is further supported by the judgment of the Honble Supreme Court ofApr 2018 India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of , wherein, it was held that if the builder is at fault in not2002, decided on 24.09.2004 delivering possession of the unit by the stipulated date, it cannot expect the allottee(s) to go on paying instalments to it. Objection taken in this regard, stands rejected. As far as objection taken by the opposite party to the effect that the general power of attorney filed is defective, as the same was required to be embossed by the Indian Embassy, it may be stated here that we have gone through the same and found that it was executed by the complainant at Chandigarh. He was identified by the Notary Sh.Rajesh Singh. As such, once the said general power of attorney was executed between the parties at Chandigarh only

i.e. in India, the question of getting it embossed from the Indian Embassy did not arise. Even otherwise, the Consumer Protection Act is a beneficial legislation, to provide speedy, inexpensive and hassle-free redressal to the grievance of the consumers. The provisions of the Code of Civil Procedure, except the one, provided under Section 13(4) of the Act, and . Unnecessary technicalitiesthe Evidence Act are not applicable to the consumer disputes deter an individual consumer from approaching the consumer fora, thereby frustrating the objective of the Act. The Consumer Foras are to evolve their own procedure, for adjudicating the consumer disputes, by resorting to the principles of natural justice, but are not required to enter into technicalities, with a view to deny the substantial justice to the parties. It was also so said by the Honble Supreme Court of India, in the case of V. Kishan Rao Vs. Nikhil Super Speciality Hospital and another, Civil Appeal No.2641 of 2010, Relevant contents of(Arising out of SLP(C) No.15084/2009), decided on March 8, 2010. the said order are reproduced hereunder:- The Forum overruled the objection, and in our view rightly, that complaints before . Thisconsumer are tried summarily and Evidence Act in terms does not apply Court held in the case of Malay Kumar Ganguly vs. Dr. Sukumar Mukherjee and reported in (2009) 9 SCC 221 that provisions of others Evidence Act are not .applicable and the Fora under the Act are to follow principles of natural justice No other point was urged by the contesting parties. For the reasons recorded above, this complaint is partly accepted, with costs. The opposite party is directed as under:- To refund the amount of Rs.49,90,000/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.49,90,000/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization. However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to Record Room, after completion. Pronounced. 14.10.2019 Sd/- [RAJ SHEKHAR ATTRI] PRESIDENT Sd/- (PADMA PANDEY) MEMBER Sd/- ( RAJESH K. ARYA ) MEMBER -10- -11-