STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Sandeep Kumar S/o Sh.Jaipal Singh, R/o VPO Kosli, Old Post Office, Tehsil Kosli, Distt. Rewari, Haryana. …… Complainant

V e r s u s

1. Sandwoods Infratech Projects Pvt. Limited through its Managing Director, SCO 222-223, 3^rdFloor, Sector 34-A, Chandigarh.

2. Shiv Kumar Bagolia, Managing Director, Sandwoods Infratech Projects Pvt. Limited, SCO 222-223, 3^rdFloor, Sector 34-A, Chandigarh.

3. The Regional Manager, Sandwoods Opulencia, Sector 110, Mohali. …..Opposite parties

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1. Suman Sorabh Solanki w/o Sh.Virender Saini.

2. Virender Saini S/o Sh.Nasib Singh Saini Both residents of House No.104, Top Floor, Sector 40-A, Chandigarh.

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…… Complainants

V e r s u s

1. Sandwoods Infratech Projects Pvt. Limited through its Managing Director, SCO 222-223, 3^rdFloor, Sector 34-A, Chandigarh.

2. Shiv Kumar Bagolia, Managing Director, Sandwoods Infratech Projects Pvt. Limited, SCO 222-223, 3^rdFloor, Sector 34-A, Chandigarh.

3. The Regional Manager, Sandwoods Opulencia, Sector 110, Mohali. …..Opposite parties

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BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

MRS.PADMA PANDEY, MEMBER

MR. RAJESH K. ARYA, MEMBER.

Present through Video Conferencing:-

Sh.Abhineet Taneja, Advocate for the complainant(s). Sh.Munish Gupta, Advocate for the opposite parties.

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

By this order, we propose to dispose of the aforesaid two consumer complaints. Since, the issues involved in these complaints, except minor variations, here and there, of law and facts are the same, therefore, we are of the opinion that the same 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 by them, 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 units booked by them, in the project in question, for dearth of construction and development activities. Details with regard to the project in dispute; units booked by the complainants; payments made by them etc. of these complaints are given below:-

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Unit booked on 13.03.2015 13.03.2015

th 26, Tower No.A, 13 th Unit No. 68, Tower No.D-2, 5 Floor Floor

Area of the unit 1325 square feet 1950 square feet

Total cost 4173750.00 6142500.00

Amount paid 1892388.00 2785025.00

Agreement dt. 25.05.2015 (C-4) 25.05.2015 (C-4)

Payment plan Time linked Time linked

24.11.201824.11.2018

Due date of possession (36 months + 6 months (36 months + 6 months as per as per Clause 6 (a) of Clause 6 (a) of agreement) agreement)

committed date ½ years from the committed date

Email written by the 12.06.2019, 22.06.2019 and complainants for 05.07.201930.06.2019possession

Allottee Original allottees Original allottees

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3. It has been pleaded that despite the fact that substantial amounts, as mentioned in the chart above, stood paid to the opposite parties, yet, actual physical possession of the units purchased by the complainants, has not been delivered by the committed date or by the date these complaints have been filed. It has been stated that it has also come to the knowledge of the complainants that the opposite parties did not possess requisite permissions/sanctions in respect of the project in question and the same was launched in violation of provisions of relevant Acts, Rules etc. applicable to the projects situated in Punjab. Hence these complaints.

4. The claim of the complainants, in both the 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 in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain these consumer complaints; that this Commission did not vest with territorial and pecuniary jurisdiction to entertain these complaints; that they did not fall within the definition of 'consumer', as they are speculators; that since no joint application has been filed in consumer complaint bearing no.202 of 2019, as such, the same is liable to be dismissed on this ground alone; and that the complaints are bad for non-joinder of financial institution as necessary party, from which the complainants had taken housing loan for making payment of installments towards their respective units.

5. However, an additional objection has been raised by the opposite parties, in consumer complaint bearing no.202 of 2019 to the effect that since the complainants themselves have written letter dated 08.03.2018, Annexure OP-1, to surrender the unit in question, on account of family circumstances, as such, now no relationship exists between them and the opposite parties and the consumer complaint is not maintainable; that the complainants in this complaint were asked number of times to come forward for submission of certain documents, so that the opposite parties could move further in the matter but they did not visit the office of the opposite parties in the matter; and that email dated 05.07.2019 written by the complainants seeking status of the project is of no use.

6. On merits, it has been admitted by the opposite parties that they received the amounts, as asserted by the complainants for the sale of units aforesaid, in the said project. It has been pleaded that since the project, which is being developed by the opposite parties is very big, some delay is to be ignored; that construction work is going on in full flow and is near completion; that the opposite parties are entitled to get extension of time for delivery of possession in view of clause 6 (b) of the agreements; that possession of the unit in question will be delivered to the complainants in consumer complaint bearing no.201 of 2019 in the near future; and that for any delays, the complainant will be compensated as per terms and conditions of the agreements. Remaining averments of the complaints have been denied. Prayer has been made to dismiss the complaints with cost.

7. The parties led evidence in support of their cases. The parties, in both the complaints, have filed written arguments.

8. We have heard the contesting parties and have gone through the evidence and record of the cases, including the written arguments, very carefully.

9. First, we would like to deal with the objection raised by the opposite parties to the effect that in the face of existence of provision in the agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain these consumer complaints. It may be stated 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 decided on 13.07.2017, wherein it was 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 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 the opposite parties in this regard stands rejected.

10. Now, we will deal with the objection raised 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

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any documentary evidence and as such the onus shifts to the opposite parties, to establish that the complainants, in these complaints, have purchased the respective units in question to indulge in 'purchase and sale of units/flats' 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 consumers. Objection taken in this regard, as such, stands rejected.

11. As far as objection taken by the opposite parties in consumer complaint bearing no.202 of 2019 is concerned, it may be stated here that no doubt, in the first instance, during pendency of the possession period, the complainants vide email dated 08.03.2018, Annexure OP-1 requested the opposite parties to surrender their unit and refund the amount paid. However, there is nothing on record that the said email was even responded by the opposite parties, what to speak of refunding the amount paid. On the other hand, it is coming out from the record that when the opposite parties failed to cancel the allotment and also the amount paid was not refunded to the complainants, they decided to retain the said unit, and vide email dated 05.07.2019, Annexure C-7, sought information from the opposite parties, with regard to latest status of the unit booked by them, in the said project. However, deficiency in providing service and negligence on the part of the opposite parties is writ large as they failed to respond that email also. In the written reply filed by the opposite parties, in this complaint, they have not denied the receipt of said email dated 05.07.2019, Annexure C-7. Relevant part of the said email is reproduced hereunder:-

'…….I advise that I have allotted flat no.26-A, 13^th floor, Tower A at SANDWOODS OPULENCIA, SECTOR 110 Mohali.

In this connection, please refer various visits on different dates, telecoms and verbal communications, I have had with your representatives and kindly, advise me the latest status of flat/project by return mail… '

Perusal of contents of email aforesaid, clearly shows that the complainants had paid various visits to the office of the opposite parties and also telecom and verbal communications were exchanged between the parties, as a result whereof, the complainants decided to retain the said unit and as such, sought latest status of their unit/project. On the other hand, had there been no exchange of communication between the parties and had the complainants not visited the office of the opposite parties before sending email dated 05.07.2019, the opposite parties could have easily denied the contents of the said email, while replying the same on the very same day or within a short span of time but there is nothing on record that they did so. Thus, in our considered opinion, once the opposite parties on receipt of request of the complainants, vide email dated 08.03.2018, Annexure OP-1, regarding surrender of their unit and refund the amount paid, did not cancel the allotment thereof and on the other hand, kept on utilizing the amount paid by the complainants, as such, at this stage, they cannot take a bald stand that since the complainants have sought surrender of the unit in question, therefore, there exists no relationship between them and the opposite parties and that consumer complaint bearing no.202 of 2019 is not maintainable, as they are no more consumers. Had the opposite parties cancelled the allotment in respect of the unit in question and had they refunded the entire amount to the complainants, alongwith interest, the matter would have been different. Once the opposite parties kept mum on receipt of letter dated 08.03.2018, Annexure OP-1 and when the complainants, thereafter, decided to retain allotment of the unit in question and made their intention clear, vide email dated 05.07.2019, Annexure C-7, as such, now the opposite parties are barred from taking objection in that regard. Not even a single proof in the shape of email or any registered letter has been placed on record to prove that the opposite parties even contacted the complainants, in the matter. They could have placed on record the telephone details, on which they allegedly contacted the complainants for submission of the alleged documents related to surrender of the unit in question but they miserably failed to do so. In the absence of any evidence on record, an adverse inference can easily be drawn that the opposite parties did not contact the complainants at any point of time, in the matter, after receipt of the emails,

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referred to above. It is therefore held that since the unit in question was not cancelled by the opposite parties despite making request by the complainants in that regard, as such, they were entitled to get possession of the unit in question by the committed date mentioned in the agreement executed in respect thereof. In this view of the matter, objection taken by the opposite parties to the effect that the complainants in this complaint are not consumers, as it had no relationship with the opposite parties, especially, in the face of the fact that the amount paid by them is still being utilized by the company without providing them anything, is not sustainable in the eyes of law and is accordingly rejected.

12. Now we will deal with the objection regarding territorial jurisdiction of this Commission, 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. Perusal of following documents placed on record by the complainants in their respective complaints, clearly go to show that the same were executed/issued at Chandigarh office of the opposite parties i.e. SCO Nos.222-223, 3^rdFloor, Sector 34-A, Chandigarh:-

CC No.201 of 2019:-

1. Payment receipts dated 31.03.2015 and 07.05.2015, Annexure C-1 and C-2 respectively.

2. Allotment letter dated 09.05.2015, Annexure C-3

3. Apartment buyer's agreement dated 25.05.2015, Annexure C-4

4. Payment receipts dated 15.07.2015, 09.09.2015, 28.01.2016, 08.02.2016 and 07.04.2016, Annexure C-5 colly.

CC No.202 of 2019:-

1. Payment receipts dated 13.03.2015 and 24.04.2015, Annexure C-1 and C-2 respectively.

2. Allotment letter dated 09.05.2015, Annexure C-3

3. Apartment buyer's agreement dated 25.05.2015, Annexure C-4

4. Payment receipts dated 14.07.2015, 25.09.2015, 28.01.2016 and 08.02.2016 Annexure C-5 colly. Thus, from the documents referred to above, it is clearly proved that the company was actually and voluntarily residing and carrying on its business, from the said Chandigarh Office i.e. SCO Nos.222-223, Sector 34-A, Chandigarh and personally works for gain thereat. As such, objection taken with regard to territorial jurisdiction of this Commission stands rejected.

13. Now, we will like to deal with the objection raised by the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate these complaints. It may be stated here that as per Section 17 (1) (a) (i) of the Act, 1986, under which these complaints have been filed, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. As such, in the present cases, if total value of the respective units, in question, i.e. Rs.41,73,750/- and Rs.61,42,500/- plus compensation claimed by way of interest on the deposited amounts aforesaid and other reliefs claimed, are clubbed together, it exceeds Rs.20 lacs and fell below Rs.1 crore, respectively. Thus, this Commission has pecuniary Jurisdiction to entertain and decide these complaints. Objection taken by the opposite parties in this regard stands rejected.

14. There is no dispute with regard to the fact that the complainants had booked the units, in question, in the project of the opposite parties, against which substantial amounts, referred to in the chart above, have been received by the Company. It is also not in dispute that possession of the units booked by the complainants, in both the complaints, has not been offered to them by the promised i.e. latest by 24.11.2018 or even by the dates when these complaints were filed or thereafter. This fact has

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also not been disputed by the opposite parties, in the written replies filed in these complaints. However, in the written replies filed, no firm commitment to hand over possession of the units has been made by the Company. Not even a single reason has been given, as to why possession of the respective units has been delayed. However, on the other hand, it has been stated that since the project is a big one, as such, some delay needs to be ignored; and that the construction work is going on in full swing and possession will be delivered in the near future.

15. It is settled law that onus to prove the stage and status of construction and development work at the project site, is on the builder/developer. It was so said by the Hon'ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. It is very strange that in the present cases, not even an iota of evidence has been placed on record by the opposite parties to prove as to at what stage, construction and development work has reached at the project site. In case, the development/construction activities are being undertaken and are about to complete at the project site, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, are being undertaken and almost complete at the site or not, but they failed to do so.

16. Furthermore, there is nothing on record to show that the opposite parties suffered any force majeure circumstances, on account of which, construction and development work at the project site could not be completed and possession of units was not delivered to the complainants by the committed date, referred to above, or even thereafter.

17. From the peculiar circumstances of this case, it has been proved that the builder-Company made false representations, which were materially incorrect and were made in such a way that the complainants, to whom it was made, were entitled to rely upon it and they may act in reliance on it. The complainants are thereby involved in a disadvantageous contract with builder-Company 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 to induce the complainants to enter into the contract by way of signing agreements, referred to above, and also intent to deceive them, which act amounts to grave deficiency in providing service, negligence and adoption of unfair trade practice on the part of the builder-Company.

18. As stated above, still the opposite parties are not sure, as to by which date, possession of the units can be delivered to the complainants, in each complaint. The complainants cannot be made to wait for an indefinite period, at the whims and fancies of the opposite parties i.e. on the ground that they are ready to compensate the complainants for the period of delay in delivering possession of the units in question. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised 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. Our view is 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 offering possession of the units, in question, and the same is still continuing one, as such, we are of the considered opinion that if we order refund of the amount paid by the complainants alongwith interest, in each complaint, that will meet the ends of justice.

19. As far as objection taken to the effect that the complaint is bad for non-joinder of financial institution(s) from which the complainants have obtained housing loan, as necessary parties, it may be stated here that the opposite parties have failed to clarify, as to what prejudice has been caused to them in such a situation. However, irrespective of the fact that the bank/financial institution has been made party to the complaints or not, this Commission in each and every complaint filed before it, wherein refund is ordered, gives direction to the effect that the bank/financial institution, if any, from which the complainant(s) has raised housing loan for payment of installment, shall have the first charge of the amount payable. In these complaints also, this Commission is going to pass such directions. As such, objection taken in this regard stands rejected.

20. Now coming to the objection taken by the opposite parties, in consumer complaint bearing

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no.202 of 2019, to the effect that application seeking permission to file joint complaint has not been filed by the complainants, as such, it is liable to be dismissed on this ground alone, it may be stated here that because the unit in question, in this complaint, stood purchased jointly by the complainants, they were not required to file any application seeking permission to file a joint complaint. The view taken by this Commission is supported by the judgment of the Hon'ble National Commission titled as Karnail Singh & 2 Ors. Vs. M/s. Emerald Lands (India) Private Limited & 5 ors., Consumer Case No. 2809 of 2018, decided on 02 Jan 2019, wherein the three complainants who had jointly been allotted plot in a project, moved an application under Section 12(1)(c) of the Act, which was rejected by it saying that it is wholly misconceived and the complaint was treated to have been filed under Section 12(1)(a) of the Act. Relevant part of the said order is reproduced hereunder:-

"..The present Complaint appears to have wrongly been filed along with an Application under Section 12(1)(c) of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) on behalf of three Complainants. As all the three Complainants have jointly been allotted Plot No. D-110, admeasuring 1290.98 sq. yards in Imperial Golf Estate at Village Mullanpur and Talwandi Khurd, District Ludhiana (Punjab) by Opposite Party No.1, the Application filed under Section 12(1)(c) of the Act is wholly misconceived and is hereby rejected. The Complaint is treated to have been filed under Section 12(1)(a) of the Act…"

21. Now, we will deal with the question, as to what rate of interest should be awarded to the complainants, while ordering refund of amount paid, in each case. It may be stated here that a similar question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units/plots, by the stipulated date, fell for determination before 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. In the said case, the Hon`ble Supreme Court 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 till repayment. The Hon'ble National Commission also, in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 and Anil Kumar Jain & Anr Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23^rdDec 2019, while ordering refund of the amount paid, awarded interest @12% p.a.

Not only as above, even under Section 12 of the PAPR Act, read with Rule 17 of the Rules thereunder, it has been specifically mentioned that if the amount is to be refunded, it is to be refunded alongwith interest @12% p.a. It is therefore held that if interest @12% p.a. is awarded on the amount to be refunded to the complainants, in each case, that will meet the ends of justice.

22. For the reasons recorded above, these complaints are partly accepted, with costs, as under:-

In consumer complaint bearing No.201 of 2019, the opposite parties, jointly and severally, are directed as under:-

i. To refund the amount of Rs.18,92,388/- to the complainant, alongwith compensation by way of 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.18,92,388/- 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.

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In consumer complaint bearing No.202 of 2019, the opposite parties, jointly and severally, are directed as under:-

i. To refund the amount of Rs.27,85,025/- to the complainants, alongwith compensation by way of 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.27,85,025/- 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 complainants 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.

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

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

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

08.07.2021

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

Sd/-

[PADMA PANDEY]

MEMBER

Sd/-

(RAJESH K. ARYA)

MEMBER

Rg

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