STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Anjali Dogra W/o Sh.Sunil Kumar Awasthi R/o VPO & Tehsil Jaisinghpur, Distt. Kangra, Himachal Pradesh.

……Complainant

V e r s u s

1. Emerging Valley Private Limited, Head Office at SCO No.46-47, First Floor, Sector 9-D, Chandigarh through its Director Sh.Gurpreet Singh Sidhu

Email:- ei.md@hotmail.com.

2. Sh.Gurpreet Singh Sidhu, Director, Emerging Valley Private Limited, Head Office at SCO No.46-47, First Floor, Sector 9-D, Chandigarh.

Email:- ei.md@hotmail.com.

…..Opposite parties

Present through video conferencing:

Sh.Ravinder Pal Singh, Advocate for the complainant. Sh.J.S. Rattu, Advocate for the opposite parties, alongwith Sh.Gurpreet Singh Sidhu, Managing Director of Emerging Valley Private Limited.

============================================================

1

Ashok Kumar S/o Bihari Lal, resident of B1/250, Royal City, Jagraon, Punjab. ……Complainant

V e r s u s

1. Emerging Valley (P) Ltd. a unit of Emerging India Housing Corporation (P) Ltd. Registered Office B- 57, Lower Ground South Extension, Part-II, New Delhi-49, through its Managing Director/Authorized Signatory, Email Id:-iinfo@emergingindia.in

2. Emerging Valley (P) Ltd. a unit of Emerging India Housing Corporation (P) Ltd. through its Authorized Signatory, Corp. Office: SCO 46-47, Near Matka Chowk, Madhya Marg, Sector 9 D, Chandigarh 160009

Email Id:-iinfo@emergingindia.in

3. Managing Director, Gurpreet Singh Sidhu, C/o M/s Emerging Valley (P) Ltd. a unit of Emerging India Housing Corporation (P) Ltd., R/o House No.208, Sector 9, Chandigarh-160009.

4. Additional Director Kamaljit Singh C/o M/s Emerging Valley (P) Ltd., a unit of Emerging India Housing Corporation (P) Ltd. R/o House No.26, Hira Bagh, Chaura, University Patiala 147002. …..Opposite parties

Present through video conferencing:

Ms. Kavita Arora, Advocate for the complainant. Sh.J.S. Rattu, Advocate for opposite parties no.1 to 3, alongwith Sh.Gurpreet Singh Sidhu, Managing Director of Emerging India Housing Corporation (P) Ltd. Opposite party no.4 exparte vide order dated 12.02.2020.

============================================================

2

BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

MRS. PADMA PANDEY, MEMBER.

MR.RAJESH K. ARYA, MEMBER.

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

By this order, we propose to dispose of the aforesaid two consumer complaints. Since, the facts involved in the above complaints, except minor variations, here and there, of law and facts are the same, therefore, we are of the opinion that these complaints can be disposed of, by passing a consolidated order.

2. The aforesaid complaints have been filed by the respective complainants, seeking refund of the amount paid alongwith interest; compensation etc., as they are aggrieved of deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties, because there has been an inordinate delay with regard to delivery of possession of the respective plots booked by them, in their (opposite parties) project, for dearth of construction; development activities and also necessary permissions/sanctions/approvals have not been obtained from the competent Authorities for launching the project, wherein the plots in dispute are located. Details with regard to the project in dispute; plots booked; payments made by the complainants; etc. of these complaints are given below:-

Plot booked on 24.10.2013 12.12.2011

Area of the plot 100 square yards 200 square yards

Total cost 1643500.00 2635000.00

Amount paid 1201074.00 1806750.00

Agreement Not executed Not executed

Possession offered or Not offered Not offerednot

More than 6 years from the date More than 8 years from the date Delay in years of booking of plot of booking of plot

3

Allottee Original allottee Original allottee

3. By stating that the aforesaid act and conduct of the opposite parties, in both the complaints, amount to deficiency in providing service and adoption of unfair trade practice, these complaints have been filed by the complainants.

4. The claim of the complainants, in both complaints has been contested by the opposite parties, on numerous similar grounds, inter alia, that the complainants have concealed material facts from this Commission; that they did not fall within the definition of "consumer" as the plots in question were purchased for commercial purposes; that this Commission did not have pecuniary and territorial jurisdiction to entertain these complaints; that the complaints filed are barred by time; that the complaints contain disputed questions of fact and law and as such cannot be adjudicated by this Commission under summary proceedings; that the project was delayed on account of red-tapism in the offices of different departments of the Government and that was why; the competent authorities delayed in granting approvals/sanctions. While applying the theory of force majeure circumstances (which means irresistible circumstances beyond ones control such like act of God), it has been alleged that delay in delivery of possession of plots occurred, also on account of high cost of labour, material etc.; that the company is endeavoring to complete the project at the earliest alongwith handing over possession; that the complainants defaulted in making payments, resulting into delay in development activities and possession of the plots in question; that the complainants were requested number of times to come forward for execution of agreements and to make remaining payment towards price of their respective plots, but they failed to do so.

5. In CC No.156 of 2019 it has been additionally stated that opposite party no.3 has been wrongly impleaded in his personal capacity; that in the face of existence of provision to settle disputes between the parties through Arbitration, in case, the agreement would have been executed between the parties, this Commission has no jurisdiction to entertain this consumer complaint; that the complaint is bad for misjoinder of necessary parties; that letter dated Annexure C-4 has not been issued by the opposite parties; that the payments made are denied in the absence of payment receipts; that the brochure Annexure C-1 reliance whereupon has been placed by the complainant is incomplete; that the complainant failed to send back the allotment letter dated 12.10.2013 sent to him for signatures; that possession of the plot in question was offered vide letter dated 06.11.2017 but the complainant failed to take over the same on making payment of the remaining amount; that possession was to be delivered within a period of 36 months from the date of making payment equal to 90% of the total sale consideration; that all permissions/approvals were shown to the complainant at the time of booking of the plot in question; that still the opposite parties are ready to adjust the complainant in the said project. Remaining averments were denied being wrong.

6. None put in appearance on behalf of opposite party no.4, in CC No.156 of 2019, as a result whereof, it was proceeded against exparte vide order dated 12.02.2020.

7. Rejoinder was filed by the complainant in consumer complaint bearing no.156 of 2019, wherein he reiterated all the averments contained in the complaint and controverted those contained in written reply filed by the opposite parties.

8. The parties led evidence in support of their cases.

9. We have heard the contesting parties and have gone through the entire record of these cases, very carefully.

10. First of all, coming to the objection raised with regard to jurisdiction of this Commission in the face of existence of Arbitration clause in the allotment letter is concerned, it may be stated here that though we did not find any such clause of arbitration in any of the document placed on record, still, we want to mention here that this issue has already been dealt with by the larger Bench of the Hon'ble National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been 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

4

Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon'ble 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 Hon'ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by opposite parties no.1 to 3, otherwise also, in this regard, stands rejected.

11. Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant cases, record reveals that almost all the letters/documents placed on record which have been issued by the opposite parties i.e. payment confirmation letter dated 05.01.2017, Annexure C-2 colly., payment receipts dated 25.10.2013, 20.11.2013, 24.10.2013, 02.01.2015, 26.03.2016, 01.04.2015, 17.06.2014, 08.11.2013, provisional allotment letter dated 19.11.2013, Annexure C-3 (in CC No.80 of 2019) and certificate dated 14.02.2012, Annexure C-2, allotment letter dated 12.10.2013; payment confirmation letter dated 10.09.2015, Annexure C-4; alleged offer of possession letter dated 06.11.2017, Annexure C-5 (in CC No.156 of 2019) were issued by the opposite parties, mentioning the address of the company thereon as SCO No.46-47, First Floor, Sector 9-D, Chandigarh. Even as per condition no.O. of the allotment letters in both the complaints, it was agreed that all the disputes shall be subject to the courts of competent jurisdiction at Chandigarh only, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Office at Chandigarh and personally work for gain thereat. Thus, it is held that this Commission at Chandigarh has got territorial jurisdiction to entertain and decide these complaints. Objection taken in this regard stands rejected.

12. Now coming to the objection taken regarding pecuniary jurisdiction, it may be stated here that these complaints have been filed under the Consumer Protection Act, 1986, under which, for determining pecuniary jurisdiction, the Consumer Foras were required to take into consideration the value of the goods and compensation claimed if any. In the present cases, if the total value of the respective plots in question and compensation claimed are clubbed together, the same exceeds Rs.20 lacs and fell below Rs.1 crore, respectively. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide these complaints. Objection taken in this regard stands rejected.

13. Now coming to the objection taken to the effect that the complainants did not fall within the definition of 'consumer', it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainants, in both the complaints, have purchased the plots in question, in the manner explained above, to indulge in 'purchase and sale of plots' as was held by the Hon'ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their onus, hence we hold that the complainants are consumer as defined under the Act. Mere fact that the complainants are living in another house or that they have other properties in their names, is not a ground to shove them out of purview of consumer. Objection taken in this regard as such stands rejected.

14. There is no dispute with regard to purchase of plots by the complainants, as per the details mentioned in the chart above. There is also no dispute with regard to the fact that despite the fact that in both the cases, substantial amount equal to about 70% of the total sale consideration stood received by the opposite parties from the complainants, yet, agreements have not been executed between the parties and in the absence of agreements, possession thereof has also not been offered and delivered within a reasonable period from the date of booking.

15. In both the complaints aforesaid, the complainants, through their Counsel, have submitted that the opposite parties failed to provide agreements for signatures of the complainants, within a reasonable period after booking of the plots and also that the project of the opposite parties was not approved and the same has been launched in violation of the provisions of relevant Rules, Regulations and Act. Whereas, on the other hand, the opposite parties, through their Counsel, except opposite party no.4 in CC No.156 of 2019, have stated that they have obtained all the approvals/sanctions from the competent Authorities; that from the very beginning, the complainants were requested number of times to come forward for execution of the agreements and also to take over possession of their plots but they failed to do so.

5

16. It may be stated here that once the opposite parties, in the first instance, had already received substantial amount, which was equal to about 70% of the total sale consideration, from the complainants, it was required of them to execute agreements under law within a reasonable period say two to three months; raise demands in accordance with the stage of development at the project site; complete the development work; obtain completion certificate from the competent authorities; and then deliver possession of the plots in dispute to the complainants. However, instead of doing that, it is evident from the record that the opposite parties were interested only in raising demands from the complainants. Thus, the act of raising demands and receiving substantial amounts in the respective complaints, as referred to above, without executing the agreements, was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite parties to execute the agreements for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -

"6. Contents of agreement of sale:- (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906) ;

Provided that, if only a refundable application fee is collected from the applicant before draw of lots for allotment, such agreement will be required only after such draw of lots.

(2) xxxxxxxxxxxxxxxx……………...

(3) xxxxxxxxxxxxxxxxx………………." The opposite parties were legally bound under law to execute the agreement and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but in these cases, the said provision has been violated. The opposite parties were deficient in providing service and adopted unfair trade practice on this count.

17. Now the moot question which falls for consideration is, as to whether, the opposite parties were competent to launch the project in question and also to sell the units/plots therein or not. In the instant cases, the complainants while placing reliance on RTI/document dated 19.12.2017, Annexure C-8 (in CC No.156 of 2019) and 20.06.2017, Annexure C-5 in (CC No.80 of 2019), supplied by Greater Mohali Area Development Authority (GMADA) i.e. the competent Authority, wherein, it was intimated that the said Company (Emerging Valley Pvt. Ltd.), had applied to get licence to develop a colony; Letter of Intent (LOI) was issued, but, since the company failed to fulfill the conditions contained in the said LOI, licence was not issued to it and that it cannot sell plot or flat in the said project without obtaining the same (license). Translated copy of the said letters read as under:-

"GREATER MOHALI AREA DEVELOPMENT AUTHORITY, PUDA BHAWA,

SECTOR 62, S.A.S. NAGAR

(Town Planning and Licensing Shakha) To

6

Sh.Manvir Singh Home No.447, Type-2, Punjab Mandi Board Complex Sector 66, S.A.S. Nagar Letter No.STP/GMADA/A-2/2016/1866 dt. 20/06/2017 Subject: Sh.Manvir Singh (File No.10919) through RTI Act, 2005 for information (Diary No.465 dated 05.06.2017)

The information sought Regarding the above subject, it is stated that M/S Emerging Valley Private Limited applied for setting up a colony at Village Nogiari district SAS Nagar and for taking up the license in this office but the promoter of the colony could not fulfil the conditions of letter of intent, the licence was not issued to the promoter. The promoter of the colony cannot sell a plot, flat and boths without taking the license.

Sd/- Administrative Office Licensing

GMADA, S.A.S. Nagar

Endorsement No.GMADA STP/2016 dated

copy of the above is hereby sent to Administrative officer (Coordination) SAS Nagar with reference to his letter No.1222 dated 08/06/2017 for information." The opposite parties failed to place on record any evidence to rebut the contentions made by the complainants or to the RTI referred to above. From the contents of RTI aforesaid, it has been proved that the project in question has been launched with complete violation of the provisions of the PAPR Act and other relevant Rules and Regulations. Even licence to launch the said project has not been obtained by the opposite parties. The said violation amounts to adoption of an unfair trade practice, which is glaring and vivid on the part of the opposite parties.

18. Not only as above, recently also when a similar controversy came up for adjudication in respect of the same project in Gurdev Kaur Thind Vs. Emerging Valley Pvt. Ltd. and ors., CC No. 15 of 2020 decided on 21.12.2020, to convince ourselves, as to whether the allegations of similar nature as have been leveled by the complainants in these complaints to the effect that the project has been launched without necessary approvals and licence and that the opposite parties are not in a position to deliver possession of the plots in question, in near future also, are correct or not, this Commission, during

7

pendency of that complaint (Gurdev Kaur Thind, supra), ordered an enquiry to be conducted by the Deputy Commissioner, SAS Nagar, Mohali and also by Chief Administrator Mohali Area Development Authority (GMADA), as to whether Emerging Valley Private Limited was in fact the owner of plots sold in the project- Emerging Valley, Village Naugiari, Tehsil and District Mohali or not and was shocked to receive enquiry report dated 27.11.2020 from the Additional Chief Administrator, GMADA, wherein, it was in a very candid manner stated that under the garb of permission of Change of Land Use (CLU), the opposite parties constructed unauthorized colony (the project- Emerging Valley Private Limited) without obtaining licence in that regard, as a result whereof, FIR has also been registered against the Directors of the Company and also they have been directed to demolish the unauthorized construction in the said project but they failed to take any action in that regard. Other serious allegations alongwith documentary evidence were also leveled by the GMADA, in the said enquiry report. Relevant part of the case Gurdev Kaur Thind, supra, reads as under:-

"Now coming to the main dispute qua non delivery of actual physical possession of the plot to the complainant, it may be stated here that to convince ourselves, as to whether the allegations leveled by the complainant in this complaint to the effect that the project has been launched without necessary approvals and licence and that the opposite parties are not in a position to deliver possession of the plot in question, in near future, this Commission, during pendency of this complaint, ordered an enquiry to be conducted by the Deputy Commissioner, SAS Nagar, Mohali and also by Chief Administrator Mohali Area Development Authority (GMADA), as to whether the opposite Parties i.e. Emerging Valley Private Limited were in fact the owner of plot No.55, Emerging Valley, Village Naugiari, Tehsil and District Mohali or not? However, this Commission was surprised, when enquiry report dated 27.11.2020 was received from the Additional Chief Administrator, GMADA, wherein, it was in a very candid manner stated that under the garb of permission of Change of Land Use (CLU), the opposite parties constructed unauthorized colony (the project in question) without obtaining licence in that regard, as a result whereof, FIR has also been registered against the Directors of the Company and also they have been directed to demolish the unauthorized construction in the said project but they failed to take any action in that regard. Other serious allegations alongwith documentary evidence (Annexure A-1 to A-13) has also been leveled by the GMADA, in the said enquiry report, relevant contents whereof are reproduced hereunder:-

"…Enquiry Report

1. That in this regard, it is humbly submitted that the facts of the case are that on 05.07.2012 field staff of office of GMADA reported the matter that an unauthorised colony namely 'Emerging Valley' is being developed, on Landran-Banur scheduled road. On the basis of this field staff report, vide letter no. 1425 dated 17.07.2012 (Annexure A-I), a complaint was made to the SSP, SAS Nagar for registration of FIR for violation of the provisions of the Punjab Apartment and Property Regulation Act, 1995(hereinafter PAPRA, 1995).

2. That thereafter, vide letter no. 2728 dated 02.11.2012, the Assistant Public Relation Officer, GMADA, Ajitgarh (SAS Nagar) was directed by Estate Officer, GMADA to give the public notice in English and Punjabi newspapers about the development of unauthorised colonies/ Projects falling within the jurisdiction of GMADA and consequently public notices were given in various newspapers making the general public aware that 'M/s Emerging India Housing Corporation Private Ltd' has not been issued any License for the development as an approved colony by GMADA, as such no plot/ apartment can be offered for sale by the said company. Copy of letter dated 02.11.2012 and clips of newspapers have been annexed herewith as (Annexure A-2) colly.

3. That thereafter, M/s Emerging Valley Pvt. Ltd, after depositing tentative charges Rs. 1,45,66000( One Crore, Forty Five Lakh and Sixty Six Thousands only), obtained the permission for Change of

8

Land Use (CLU) vide letter no. 1983 dated 04.07.2013 (Annexure A-3) Colly. This CLU was valid for two years from the date of grant of permission. As per the conditions v,vi and vii of CLU, the promoter company was bound to get License under PAPRA, 1995 before making any development/construction at the site.

4. That, but under the garb of permission for Change of Land Use the Promoter Company constructed the unauthorised colony without getting license from the Competent Authority.

5. That thereafter, when the Promoter company did not stop unauthorised construction and the Police Department did not take any action on the earlier complaint dated 17.07.2012, another" complaint, vide letter no. 1115 dated 23.04.2014 (Annexure A-4), was made to SSP, SAS Nagar to register FIR under PAPRA,1995 against the Promoter Company.

6. That thereafter, in reference to Promoter Company's application for issue of License of Colony, dated 28.01.2013 ,over 25 acres of land for which the Promoter Company had already obtained permission for change of land use, the Competent Authority-cum-Chief Administrator issued Letter of Intent (LOI) to the Promoter Company vide memo no. 1303 dated 06.05.2015 (Annexure A-5). This LOI was issued subject to certain conditions mentioned therein and these conditions were to be fulfilled within thirty days from the date of issue of the notice. However the Promoter Company failed to fulfill the conditions laid down in LOI, consequently LOI was cancelled vide letter no. 2465 dated 11.08.2015 and License of Colony could not be issued.

7. That thereafter, when even without getting the License of Colony, the Promoter Company started the development of unauthorised colony, a show cause notice, regarding demolition of unauthorised construction, was issued vide letter no. 4801 dated 01.12.2015, directing thereby to stop the unauthorised construction immediately and to come present, within thirty days, before the Competent Authority and show cause why the unauthorised construction made by the Promoter Company should not be demolished. This show cause notice was issued for violating the provisions of the Punjab Apartment and Property Regulation Act, 1995, the Punjab Regional and Town Planning and Development Act, 1995 and the Punjab New Capital(Periphery) Control Act, 1952. Copy of Show cause notice dated 01.12.2015 has been annexed herewith as Annexure A-6.

8. That thereafter, Senior Town Planner, Punjab Bureau of Investment Promotion(PBIP) vide letter no. 1424 dated 23.06.2016 (AnnexureA-7) intimated to Chief Administrator, GMADA that M/s Emerging Valley Pvt. Ltd has applied in the office of Punjab Bureau of Investment Promotion (PBIP) for getting License. Through this letter Senior Town Planner has sought some legal opinion on the question as to whether the unauthorised construction made by the applicant may be considered under the compounding policy or in the process of issuing of License. In response to this query, Legal Cell GMADA opined that as the applicant is willing to develop his project as per law and if the applicant fulfils all the prescribed legal formalities, he may be allowed to join the main stream by issuing the License. This opinion was duly intimated to Senior Town Planner, Punjab Bureau of Investment Promotion(PBIP) vide letter no. 5530 dated 15.11.2016 (Annexure A-8), further through this letter it was also intimated that the applicant, by making application at the office of Punjab Bureau of Investment Promotion(PBIP), was just trying to buy time for making unauthorised construction because if he had bona fide intention for taking license he would have deposited all the due charges which were requisite under the conditions of LOI issued earlier on 06.05.2015.

9. That thereafter, when the Promoter Company did not stop the unauthorised construction, then Estate Officer, GMADA vide letter no. 5908 dated 30.11.2016 (Annexure A-9) directed the Subdivisional Engineer to immediately seal the project of the Promoter Company and further directed to ensure that in future, unless the Promoter Company gets the License, no construction takes place and if the Promoter company makes further construction without license and this matter is not reported to the office of GMADA, then Sub-divisional Engineer shall be held liable personally.

10. That thereafter, vide Notification no. 12/04/165-Hg2/891764/1 dated 15.12.2016, the Govt. of Punjab, Department of Housing and Urban Development, notified the regularization policy for the purpose of regularization of unauthorised colonies. The Promoter Company, for getting its unauthorised colony regularised, applied to the Senior Town Planner, Punjab Bureau of Investment Promotion (PBIP) on 16.12.2016 (Annexure A-10) for transferring its case to the office of GMADA. However, this policy was not applicable in this case because this colony falls within Periphery Controlled area.

9

11. That thereafter, in 2017, the people who had purchased plots/property, from the Promoter Company, filed complaints in consumer forums against the Promoter Company. Firstly, because of this litigation and investment made by the innocent people' and secondly it was seeming that the Promoter Company may get the due License of colony because it has been making representations in this regard in the office of GMADA (Annexure A-11) colly. Due to these reasons, at that time GMADA hold the process of demolition and only kept the project sealed for stopping further unauthorised construction at the site.

12. That thereafter, vide letter no. 5683 dated 22.08.2019 (Annexure A-12), Estate Officer GMADA wrote to the SSP, SAS Nagar to provide information about the registration of FIR against the Promoter Company. Finally, taking action on the earlier complaints and on this letter, FIR has been registered on 21.08.2019 at Police Station, Sohana, Distt. SAS Nagar, under section 36(1) of Punjab Apartment and Property Regulation Act, 1995, against Sh. Gurpreet Singh and Sh. Kamaljit Singh, Directors of the Promoter Company M/s Emerging Valley Pvt. Ltd. A copy of FIR has been annexed herewith as (Annexure A-13) co11y.

13. That thereafter, when the Promoter Company did not get the license of colony, the Competent Authority-cum- Additional Chief Administrator, GMADA vide order no. 1324 dated 17.07.2020 directed to Sh. Gurpreet Singh and Sh. Kamaljit Singh, the Directors of the Promoter Company to demolish the unauthorised construction within the period of thirty days from the date of issue of demolition orders. But the Directors of the Promoter Company did not take any action in compliance of demolition order. Thereafter, on 17.09.2020 and 18.09.2020 this unauthorised construction has been demolished by GMADA and in this regard in EA/446/2017 (Kuldeep Singh Negi Vs M/s Emerging Housing Corporation Pvt. Ltd.) due compliance report has been filed on 07.10.2020. Therefore, it is respectfully submitted that the office of GMADA, from the very initial stage of development of unauthorised colony, has been taking action, the Promoter Company has been making construction inspite of giving notices and sealing of project Though they had applied for CLU, LOI, regularization of colony under the Policy notified by the Govt. Of Punjab, but they were not able to get any approval from the Competent Authority. Therefore ' GMADA office has written to SSP, SAS Nagar vide letter 1425 dated 17.07.2012, vide letter no. 1115 dated 23.04.2014 and letter no. 5683 dated 22.08.2019. There is no laxity in efforts from GMADA office against the Promoter Company. Therefore, it is respectfully prayed that in view of the facts and circumstances narrated above this Compliance Report may_ kindly be allowed to be taken on- record and proceedings against GMADA may be dropped, in the interest of justice. Place: S.A.S Nagar Addition Chief Administrator GMADA

Dated:27.11.2020"

It is settled law that before launching the project and selling the units therein, the project proponent is legally bound to obtain all necessary approvals/permissions/clearances from the Competent Authorities. Whereas, in the present case, as is evident from the afore-extracted information culled out from the enquiry report submitted by the GMADA, it has been proved that the project launched by the opposite parties was farce. Not even licence for launching the project in question has been obtained by the opposite parties, what to speak of obtaining remaining approvals/permissions/clearances from the Competent Authorities. The office of GMADA, from the very initial stage of development of unauthorized project in question, initiated various legal actions with a view to stop the construction and development there but the company did not stop in doing so. Though, the company had applied for CLU, LOI for regularization of the project in question under the Policy notified by the Govt. of Punjab, but they were not able to get any approval from the Competent Authority in that regard. Written complaints by the GMADA office were also given to SSP, SAS Nagar vide letter 1425 dated 17.07.2012, vide letter no. 1115 dated 23.04.2014 and letter no. 5683 dated 22.08.2019, yet, the company did not stop and kept on booking the units/plots in the unauthorized project and usurped substantial amount from the buyers including the complainant. Collecting money from the perspective buyers and selling the project, without obtaining the required

10

permissions and sanctions is an unfair trade practice on the part of the project proponent. It was so said by the Hon'ble National Commission, in a case titled as M/s Ittina Properties Pvt. Ltd. & 3 Ors. Vs. Vidya Raghupathi & Anr., First Appeal No. 1787 of 2016, decided on 31 May 2018. Relevant part of the said order reads as under:-

"…………….This Commission in Brig. (Retd.) Kamal Sood Vs. M/s. DLF Universal Ltd., (2007) SCC Online NCDRC 28, has observed that it is unfair trade practice on the part of the Builder to collect money from the perspective buyers without obtaining the required permission and that it is duty of the Builder to first obtain the requisite permissions and sanctions and only thereafter collect the consideration money from the purchasers.

It is an admitted fact that the sale deeds were executed in the year 2006 and by 2009 the completion certificate was not issued. The Occupancy Certificate was issued only on 25.09.2017 during the pendency of these Appeals before this Commission. Allotting Plots or Apartments before procuring the relevant sanctions and approvals is per se deficiency…………"

In this view of the matter, plea taken by Counsel for the opposite parties that the company was in legal position to deliver possession in June 2017 or that the complainant failed to take over possession of the plot in question, being devoid merit stands rejected……"

19. Since, the present complaints also relate to the same project i.e. Emerging Valley Private Limited, Kharar Landran Road, wherein the complainants have purchased the plots in question, and the complainants have also proved by way of documentary evidence that even licence for launching the project in question has not been obtained by the opposite parties, what to speak of obtaining remaining approvals/permissions/clearances from the Competent Authorities and also in view of the information culled out from the Enquiry Report referred to and discussed in Gurdev Kaur case (supra) having been issued by the GMADA, to the effect that from the very initial stage of development of unauthorized project in question, initiated various legal actions with a view to stop the construction and development there but the company did not stop in doing so; that though, the company had applied for CLU, LOI for regularization of the project in question under the Policy notified by the Govt. of Punjab, but they were not able to get any approval from the Competent Authority in that regard; that written complaints by the GMADA office were also given to SSP, SAS Nagar vide letter 1425 dated 17.07.2012, vide letter no. 1115 dated 23.04.2014 and letter no. 5683 dated 22.08.2019, yet, the company did not stop and kept on booking the units/plots in the unauthorized project and usurped substantial amount from the buyers including the complainants; we are of the considered view that the complainants were right in filing these complaints, seeking refund of amount paid alongwith interest etc.

20. Now coming to the objection raised by the opposite parties, to the effect that these complaints are time barred, it may be stated here that not even a single document has been placed on record to prove that actual legal physical possession of the plots in question, in a developed project was ever delivered to the complainants and also at the same time, once it has been proved from the afore- extracted information culled out from the enquiry report of GMADA and also the RTI, that the project in question was farce and the opposite parties were not even in a position to launch the same, what to speak of offering possession of units/plots therein; and especially in view of candid admission by the opposite parties in para no.9 of CC No.80 of 2019 to the effect that the opposite parties are endeavoring to complete the entire project at the earliest, alongwith hand over the possession to respective allottees, as such, there was a continuing cause of action in favour of the complainants to

11

file these complaints, in view of principle of law down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), wherein it was held that when possession of the residential units/plots is not offered, there is a continuing cause of action, in favour of the allottee/buyer.

Under above circumstances, the plea taken by the opposite parties, in their written statements to the effect that the complainants were requested number of times, to take possession on making remaining payment is nothing but a bald plea taken, just with a view to defeat the genuine claim of the complainants and this act needs to be deprecated.

21. Now coming to the objection raised to the effect that the complainants were defaulter in making payment of remaining amount towards price of the said plots, it may be stated here that not even a single document has been placed on record by the opposite parties, wherefrom, it could reveal that there was any default on the part of the complainants in making payment towards the said plots. Furthermore, in view of the findings given in para nos.17 to 20 above, it is evident that even the respective amounts in each complaints, as mentioned in the chart above, have been received by the company with animus of cheating and fraud. The facts of both the cases transpire that the opposite parties made false representations, which were materially incorrect and were made in such a way that the complainants were entitled to rely upon it and may act in reliance on it. The complainants are thereby involved in a disadvantageous contract (allotment letters in these cases) with the opposite parties and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true. All the facts established that from the very inception there was intent of the opposite parties to induce the buyers to enter into a contract and also intent to deceive in the matter. The project in question is farce. As such, objection taken in this regard also stands rejected.

22. As far as objection taken to the effect that Sh.Gurpreet Singh Sidhu, or other Directors have been wrongly impleaded in their personal capacity, it may be stated here that these persons, in our considered opinion, are holding such important positions in the Company, where they are directly involved with the decision-making process in the Company and will be jointly and severally liable alongwith the Company, for all the acts done. Similar view was taken by the Hon'ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017. As such, objection taken in this regard stands rejected.

23. In view of above, it is held that the opposite parties, by launching and selling the project, in question, without obtaining necessary licence/permissions, were deficient in rendering service and also adopted unfair trade practice. Money was usurped from the complainants, by duping them, on false assurances that possession of the plots in a developed project will be delivered to them, whereas, it was not so done. Letter dated 06.11.2017 in CC No.156 of 2019 issued by the opposite parties, intimating the complainant that the company is ready to deliver possession of the plot, in the absence of any evidence in that regard, in the shape of occupation and completion certificates and that too in the face of RTI and also the enquiry report submitted by GMADA referred to above, has no significant value in the eyes of law.

24. At the same time, it is also held that plea taken by the opposite parties to the effect that delay took place in offering possession because there was delay on the part of the Govt. Departments to sanction approvals/permissions; increase in price of building material etc. does not carry out any weight for the reasons recorded hereinafter.

First coming to delay in approvals on the part of the Govt. Departments, it may be stated here that not even a single letter has been placed on record by the opposite parties showing that they ever reported the Govt. Authorities concerned that there is a delay on their part in granting sanctions/approvals in respect of the project in question on account of business rivalries or red-tapism or that any such letter, by which they have given notice to the said Authorities that in case the needful is not done in a prescribed time, the Company shall move to the appropriate platform of law, in the matter.

12

Now coming to the plea regarding increase in prices of construction material, it may be stated here that if the opposite parties did not develop the project in a time bound manner, because of their own fault in not taking permissions/approvals from the govt. concerned, and now at this stage, after a period of more than 8 years, they cannot wriggle out of the situation by taking such a bald plea.

25. As per settled principle of law laid down by the Hon'ble Supreme Court of India that, in the cases, where no agreement has been executed by the builder after booking of the plot/unit, then the reasonable period of two to three years has to be taken into account for completion of the construction and development activities and delivery of possession to the allottees/buyers thereof. Since, in the present cases also, no agreement has been executed between the parties, as such, possession of the plots in question should have been delivered to the complainants by the opposite parties, within a maximum period of three years from the respective dates of booking thereof i.e. latest by 23.10.2016 in CC No.80 of 2019 booking date being 24.10.2013 and 11.12.2014 in CC No.156 of 2019 booking date being 12.12.2011, which have not been do so and also it is not feasible even, for the reasons explained above.

26. Now coming to the objection taken by the opposite parties with regard to jurisdiction of this Commission and maintainability of these complaints, on the ground that complicated questions of facts and law are allegedly contained therein, it may be stated here that these are the simple cases of non-execution of agreements under the provisions of Section 6 of the PAPR Act within the reasonable time; non obtaining of necessary approvals before launching the project in question; and non-delivery of actual legal possession of plots to the complainants by the opposite parties within a reasonable period from the date of bookings, thereby causing them financial loss, mental agony and harassment. The acts, omissions and commissions on the part of the opposite parties amount to deficiency in providing service as well as negligence and adoption of unfair trade practice. In Narne Construction P. Ltd., etc. etc. Vs. Union of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act. Similar principle of law was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766).

27. We are of the considered opinion that we cannot make the complainants to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if there is no agreement, within a reasonable period say two to three years from the date of booking, 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 also so said by the Hon'ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon'ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also in Fortune Infrastructure Versus Trevor D' Lima & Ors. (2018)

5 SCC 442. In the present cases also, since there has been an inordinate delay in the matter, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest @12% p.a. from the respective dates of deposits in view of principle of law laid down by the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited, in the respective complaints, that will meet the ends of justice.

28. For the reasons recorded above, these complaints are partly accepted with costs, in the following manner:-

In CC No.80 of 2019, the opposite parties, jointly and severally, are directed as under:-

13

i. To refund the amount of Rs.12,01,074/- (admittedly paid to the opposite parties) to the complainant, alongwith interest @12% p.a., without deducting any TDS, from the respective dates of deposit 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.12,01,074/- 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.

ii. 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 @9% p.a. from the date of passing of this order, till realization.

In CC No.156 of 2019, the opposite parties, jointly and severally, are directed as under:-

i. To refund the amount of Rs.18,06,750/- (which payment has been admitted to be received by the opposite parties in para no.2 of their preliminary objections) to the complainant, alongwith interest @12% p.a., without deducting any TDS, from the respective dates of deposit 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.18,06,750/- 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.

ii. 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 @9% p.a. from the date of passing of this order, till realization.

29. However, it is made clear that in case the complainants, in any of the complaint above, have availed housing loan from any Bank(s)/financial institution(s) for making payment towards price of their respective plots, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants against their respective plots.

30. Certified Copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case file.

31. The files be consigned to Record Room, after completion. Pronounced.

04.01.2021

Sd/-

[RAJ SHEKHAR ATTRI]

PRESIDENT

14

Sd/-

(PADMA PANDEY)

MEMBER

Sd/-

(RAJESH K. ARYA)

MEMBER

Rg.

15