ORDER
JUSTICE DEEPA SHARMA, PRESIDING MEMBER
The present Appeal has been filed against the order dated 28.06.2018 in CC No. 737 of
2017.
2. The brief admitted facts of the case are that Appellant had advertised a project under the name and style of Palm Garden situated at Mullanpur Garibdas, New Chandigarh, Punjab for sale of 250 sq.yds. of residential plot at basic sale price of Rs.46,25,000. The complainant booked a residential plot in the said project. On various dates, undisputedly, the complainant had paid a sum of Rs.13,87,500/- to the Appellant but no residential plot had been allotted to him despite waiting for several years. The complainant learnt that at the time when the project was advertised, the Appellant did not have requisite permission from the concerned authorities to sell the plot and being aggrieved, they filed the complaint.
3. In its written version, the Appellant had not disputed that at the time when the project was launched and the application for residential plots were invited, they did not have the requisite permission from PAPRA and it was granted to them in the year 2017. It was, however, contended before the State Commission that since the permission had been granted and relate back to the original date and, therefore, it cannot be said that there was any unfair trade practice on their part. It was submitted that it was the complainant who had defaulted in
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making the payment and executing the Builder Buyer Agreement.
4. Parties led their evidences before the State Commission and the State Commission after going through the evidences of the parties and hearing the arguments of the learned counsel and perusing the record found the Appellant deficient in providing the service and, therefore, directed refund of deposited amount to the complainant.
5. The State Commission vide impugned order has disposed of 7 complaints and it had taken the facts of complaint bearing No.659 of 2017 titled as Veena Ghai and Anr. Vs. Manohar Infrastructure and Constructions Pvt. Ltd. as a lead case and all these 7 complaints were taken for consideration together by the State Commission because the facts and circumstances in all these cases were identical except few things like dates and amounts. It has held as under:
11. There is no dispute that a plot was sold to the complainants in a project propagated and marketed by the opposite party, against sale consideration of Rs.43.75 lacs. An amount of Rs.13,12,500/- was received by the opposite party from the complainants, as booking amount, which was acknowledged vide receipt dated 03.10.2011 Annexure C-1. The payment made was 30% of the total sale consideration, for a plot measuring 250 square yards, in the project named 'Palm Springs, Mullanpur, Punjab. Thereafter, it is an admitted fact that as per demands raised by the opposite parties,
Thereafter, the complainants again made payment of Rs.9,00,000/-. There is no dispute that when this complaint was filed, the complainants had already paid an amount of Rs.23,62,500/-. There is nothing on record to show that by that time, before grant of exemption from the provisions of applicability of PAPRA, any permission was available with the opposite party, to sell the project. It is specifically brought to our notice, at the time of arguments, by Counsel for the complainants that as per Guidelines to launch project in the mega housing project, (Palm Garden situated in mega housing project), it is not open to the project proponent like the opposite party to sell the project to general public without getting proper sanctions/approvals from the Competent Authorities. Condition no.4 of the said Guidelines reads thus:-
"4 Conditions for grant of concessions:-
i. ……….
ii. The project shall not be advertised/launched and no money will be collected from general public for allotment of land/plot/flat/any space till such time the layout/zoning plans are cleared from the competent authority and exemption u/s 44 of PAPRA is issued by the Government."
It is mandated that the project can only be launched when layout/zoning plans are cleared from the Competent Authorities and exemption is granted from operation of the provisions of PAPRA, by the Government concerned. It was also so said in the 'Letter of Intent' for the Grant of Special Package of Incentives under Industrial Policy 2009,
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issued on 03.05.2013 (the said document is available in some of the paper books of connected cases) issued in favour of the opposite party, by the Chief Administrator, PUDA, SAS Nagar, Mohali.
At the time of arguments, it has also come to our notice that when the project was advertised and sold in the years 2011-2012, the opposite party was not even registered with the GMADA, SAS Nagar, as a qualified project proponent, to obtain license under Section 5 of the PAPRA. Certificate of Registration was granted by the GMADA only on 27.06.2014, permitting the opposite party to setup a colony subject to its obtaining requisite licenses, as mandated under the provisions of PAPRA. In view of above, contention of Counsel for the complainants that the project, in question, was sold without any permission(s)/sanction(s) from the Competent Authorities and also violating the provisions of Sections 4 (1) (a) and (b) and 6 of the PAPRA appears to be correct. The said provisions reads thus:-
"4. Issuing of advertisement or prospectus:-
(1) No promoter shall issue an advertisement or prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and (b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication………………".
"6.(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 for together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act no. 16 of 1908)" ;"
12. The fact that the project was launched without obtaining necessary permissions/sanctions having been obtained from the Competent Authorities, is further fortified from a document of the opposite parties, placed on record as Annexure O-12 (at page 89 of the file), showing in a tabular format, as to by which dates, approvals, NOCs were granted to them, by the Competent Authorities. Relevant part of the said table is reproduced hereunder:-
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| Sr.No. |
Approval |
Dated |
| 1. |
Approval of project |
25.04.2013 |
| 2. |
NOC from Forest Department |
14.07.2014 |
| 3. |
Approval of layout plan |
06.10.2015 |
| 4. |
Approval of zoning plan |
24.11.2015 |
| 5. |
Permission for solid water, sewerage and storm water disposal |
06.07.2015 |
| 6. |
Approval of detailed project/services plans of roads, water supply, sewerage, storm water drainage, treated water supply and electrification |
27.11.2015 |
| 7. |
Grant of Consent to Establish (NOC) Water and Air |
1.12.2015 |
| 8. |
NOC from Pollution Angle |
15.02.2016 |
| 9. |
Environment Clearance |
03.06.2016 |
| 10. |
NOC for electricity connection |
15.03.2017 |
| 11. |
Extension of Grant of Consent (NOC) Water and Air |
17.04.2017 |
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Permission for Solid Waste
12. Disposal and Storm Water 19.05.2017 Disposal
13. Perusal of the aforextracted table clearly reveals that not even a single permission was available with the opposite parties, when the project, in question, was launched and sold to the customers, including the complainants, in March 2011. As such, the project, in question, was launched in complete derogation of the above said provisions.
Collecting money from the perspective buyers without obtaining the required permissions and sanctions is an unfair trade practice on the part of the project proponent. It is well settled law 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 was also so said by the 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 thus:-
"…………….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…………"
14. Furthermore, amount accepted at the time of booking was more than 25% i.e. Rs.13,12,500/- against Rs.43,75,000/-. No Agreement was got signed, as is mandatory under the above said provisions. As such, there is a complete violation of the provisions of the PAPRA. It is an admitted case of the opposite parties that permission seeking exemption from the applicability of provisions of PAPRA has finally been granted only in the year 2017, which cannot be said to have any retrospective effect. As such, it could very well be said that by selling the units without authority, the opposite parties violated the provisions of PAPRA, and the said violation amounts to adoption of an unfair trade practice, which is glaring and vivid on their part.
Similar controversy came up for consideration, qua this project owned by the opposite parties, in the case of Shaminder Walia and another Vs. M/s Manohar Infrastructure and Constructions Pvt. Limited, Consumer Complaint no.918 of 2016, decided on 08.05.2017 (alongwith six connected cases). Noting similar contentions, this
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Commission observed as under:-
"To get a plot allotted in the project named as 'Palm Garden', first payment was received by the opposite party on 11.01.2012. It is virtually admitted on record that when the project was sold, not even a single permission was available with the opposite party. It is admitted in the written version that part of the project of the opposite party was approved much later, in the year March 2013. Formal Agreement was signed with the Govt. of Punjab on 14.06.2013. Thereafter, additional area was added and supplementary agreement was signed on 16.06.2016. Notification granting exemption from the applicability of the provisions of PAPRA was issued only on 25.01.2017. Perusal of the said notification makes it very clear that exemption given was conditional, as has been referred in para no.5 of the said notification. Besides other conditions, condition no.5 (iii to vii), reads thus:-
"(iii). The promoter shall deposit the entire amount in respect of the contribution to the Punjab Urban Development Fund, created under section 32 of the Punjab Apartment and Property Regulations Act, 1995 (Act No.14 of 1995), within a period of 30 days of the sanctioning of their layout plan.
(iv). The promoter shall acquire the ownership of project land in its name including land under agreement to develop and land under agreement to sell. The plots falling under land proposed to be acquired if any through Govt. acquisition, plot through which revenue rasta or khali passes shall not be developed and sold till these pockets are acquired and ownership is transferred in the name of the Promoter.
(v) The plots/land to which the access is proposed through the land to be acquired if any by the Government shall not be developed and sold till that land under the access is acquired and transferred in the name of the promoter and access is provided.
(vi) The promoter shall be responsible for obtaining the final NOC from Punjab Pollution Control Board.
(vii) Before starting the development of the proposed project promoter shall obtain environmental clearance from the Ministry of Environment and Forest Government of India as required under EIA notification dated 14.9.2006 as well as consent to establish (NOC) from the Punjab Pollution Control Board."
It is specifically mentioned that before starting development of the proposed project, promoter was to obtain environmental clearance from the Ministry of Environment and Forest Government of India, in terms of EIA notification dated 14.09.2006. There is nothing on record that such clearance was obtained by the opposite party. Further, it was also mentioned that requisite amount be paid towards Punjab Urban Development fund, within a period of 30 days, from the date of sanctioning of layout plans. No evidence has been placed on record, showing payment of the aforesaid amount. Furthermore, it is mandated that the promoter shall also be responsible for getting 'No Objection Certificate' from Punjab Pollution Control Board. No document exists on record, showing that such approval was obtained by the opposite party.".
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15. At the time of arguments, Sh.I.P. Singh, Advocate, argued with vehemence that issuance of notification dated 25.01.2017 granting exemption from the applicability of many provisions of PAPRA qua mega project, in question, will relate back to 12.09.2011, the date, on which application was filed to get licence, under the mega housing policy. In a way, it was said that when the above notification was issued, it ratifies all the mistakes/irregularities committed by the opposite parties, qua sale of plots in the year 2011-2012, without obtaining necessary sanctions and approvals from the Competent Authorities. To so say, reliance has been placed upon the ratio of judgment in the case of M/s Murudeshwara Ceramics Ltd. Vs. State of Karnataka, 2002
(1) SCC Page 116. On perusal of the entire record and documents, we are not going to accept the said arguments. In the case of Shaminder Walia (supra), similar contention was raised and the same was rejected by this Commission, by observing as under:-
"It was contended by Counsel for the opposite party that after issuance of notification dated 25.01.2017 exempting applicability of many provisions of PAPRA qua mega project, the irregularities adopted by it qua sale of plots in the year 2012, etc. stands rectified. In para no.16 of its reply, it was specifically stated by the opposite party that irregularity in accepting expression of interest for sale of the plot in the said project, will have no adverse effect.
We are not going to agree with the contention raised. There is nothing on record that the said notification is retrospective in nature. As stated above, when the project was sold, not even a single permission was available with the opposite party. The sale was made in contravention of the provisions of PAPRA and upon issuance of notification in the month of January 2017, violation committed or admitted irregularities made, cannot be rectified. Similar question qua this very project, came up for consideration before this Commission in Sukhvinder Singh Hayer Vs. M/s Manohar Infrastructure and Constructions Pvt. Limited, Complaint case no.775 of 2016 decided on 23.03.2017 (02 connected cases), wherein it was observed as under:-
"It is specifically mentioned that before starting development of the proposed project, promoter was to obtain environmental clearance from the Ministry of Environment and Forest Government of India, in terms of EIA notification dated 14.09.2006. There is nothing on record that such clearance was obtained by the opposite party. Further, it was also mentioned that requisite amount be paid towards Punjab Urban Development fund, within a period of 30 days, from the date of sanctioning of layout plans. No evidence has been placed on record, showing payment of the aforesaid amount. Furthermore, it is mandated that the promoter shall also be responsible for getting No Objection Certificate from Punjab Pollution Control Board. No document exists on record, showing that such approval was obtained by the opposite party. Contention of Counsel for the opposite party that notification dated 25.01.2017 exempting applicability of many provisions of PAPRA qua mega project, the sale of plots in the year 2011 etc. stands rectified. We are not going to agree with the contention raised. There is nothing on record that the said notification is retrospective in nature. When project was sold, not even a single permission was available with the opposite party. The sale was made in contravention of the provisions of PAPRA and upon issuance of
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notification in the month of January 2017, violation committed cannot be rectified. Similar question qua this very project, came up for consideration before this Commission in Monika Vs. M/s Manohar Infrastructure and Construction Pvt. Limited, Complaint case no.251 of 2016 decided on 27.09.2016, wherein it was observed as under:-
"The pleadings of the parties indicate that when project was marketed and sold, not even a single permission was available with the project proponent/opposite party. There is a complete violation of the provisions of the PAPRA. It is an admitted case of the opposite party that application seeking exemption from the applicability of provisions of PAPRA is still pending under consideration, with the Authorities concerned. Unless exemption is granted, its violation would amount to adoption of an unfair trade practice, which is glaring and vivid on the part of the opposite party, in this complaint. Qua a similar project launched by the opposite party in the same area, in Appeal No.248 of 2016, decided on 31.08.2016, titled as M/s Manohar Infrastructure and Constructions Pvt. Limited Vs. Sh.Tilak Raj Bakshi, under similar circumstances, this Commission, while dismissing the said appeal, has observed as under:-
"The documents placed on record clearly show that the project was launched without getting any permission from the Competent Authorities. Detailed brochure was issued showing facilities to be made available in the project launched and its layout plan. It is also on record that when it came to the notice of GMADA that the plots/flats are being sold unauthorizedly by the appellant, it gave a notice in the newspaper 'Hindustan Times' dated 18.08.2012, which reads thus:-
"PUBLIC NOTICE
This is for the information of one and all that it has come to the notice of the Competent Authority that one company named as M/s Manohar Singh & Co. is allegedly booking/selling plots in the Mullanpur- Siswan region near Chandigarh border in the State of Punjab. This is being intimated that the above said project is not approved by the State Government. The Competent Authority is initiating legal proceedings in this regard.
If anybody has booked or purchased any plot in the locality mentioned above he/she is advised to contact the undersigned along with documentary proof for further legal action against the said promoter. Further, while buying any plot in any locality falling under the jurisdiction of GMADA, all are advised to visit the website www.gmada.gov.in to verify if the colony/project is approved or not.
Chief Administrator GREATER MOHALI AREA DEVELOPMENT AUTHORITY, PUDA Bhawan, Sector 62, SAS Nagar".
It is specifically stated in the notice dated 18.08.2012 that the appellant was allegedly booking/selling the plots in Mullanpur, near Chandigarh Border, in the State of Punjab,
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unauthorizedly. It was further stated that the project is not approved by the Competent Authority and it (Competent Authority) is initiating legal proceedings against the project proponent for its activity. Above said notice makes it very clear that when the plot was sold on 13.04.2012, the project was not approved by the Competent Authorities. It is also so reflected in the details given by the appellant with this appeal, which is available at page 33 of the paper book. Reading of above said document, makes it very clear that the project was approved by the Government on 25.04.2013; Letter of Intent (LOI) was issued on 03.05.2013; Change of Land Use (CLU) certificate was granted on 31.03.2014; project was registered on 21.06.2014; No Objection Certificate by the District Forest Officer, SAS Nagar, Mohali, was issued on 14.07.2014; Zoning plan was approved by the Chief Town Planner, Punjab on 24.11.2015 and Detailed Project Report (DPR)/Service Plans were approved by the Chief Engineer, GMADA, Mohali, on 27.11.2015. As per established law, if the project proponent sells the project without obtaining necessary permissions or clear title of the acquired land, it would amount to adopting unfair trade practice. It was so said by the Hon'ble National Commission in Atul Maheshwari and ors. Vs. Yamuna Expressway Industrial Development Authority, II (2016) CPJ 623 (NC). Relevant portion of the said judgment reads thus:-
"OP should not have announced the scheme, until or unless they got clear title of the acquired land".
Similar view was expressed by the National Commission in Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.756 of 2016, decided on 30.03.2016. In that case, when upholding the findings given by this Commission, that the project cannot be even marketed before getting approvals/sanctions, from the Competent Authorities, to launch it, it was observed by the National Commission, as under:-
"We are unable to persuade ourselves to agree with the ld. counsel. While affirming the order passed by the District Forum and commenting and deprecating the conduct of the Opposite Parties in the complaint, in launching the project and selling the farmhouses, even without obtaining sanction/approval from the competent authority, the State Commission has observed as follows:-
If a marketing agency sells out a project, for which, no approvals/sanctions have been granted by the Govt. Authorities, the said agency has to face the music and consequences of duping the gullible buyers, of their hard-earned money. In the public notice, it has specifically been mentioned by the GMADA that respondent no.2 and appellant no.1 are the sister concern. It is also apparent on record that before appellant no.1 started marketing the project, not even an application has been filed by respondent no.2, to get approval/sanction from the competent authorities, to launch the project. The information supplied vide letter dated 26.08.2014, referred to above, clearly states that not even a single application qua granting sanction to the project, has been received and dealt with, by the Competent Authority. In connivance with each other, the appellants and respondent no.2 committed a criminal offence of cheating. As per
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established law, builder cannot sell its property, unless and until proper approvals/sanctions have been obtained by it, from the Competent Authorities. It appears from the reading of documents on record that instead of selling a unit in a project, respondent no.2 in a very arbitrary manner, sold its share in a joint land measuring approx. 3807 acres, bearing hadbast No.326, Khewat No.92, Khatauni no.254-352, at Village Mirzapur, District Mohali, Punjab. There is nothing on record that said land was ever partitioned.
6. We are in complete agreement with the view taken by the State Commission. As noted above, the petitioners happen to be body corporate. Before offering the farmhouses in the said project as Agent of Respondent No. 2, they must be aware about the status of the sanction for launch of the project. Therefore, it is beyond one's comprehension that the present Petitioner was not aware about the actual state of affairs for which only the developer could be held responsible." In the present case also, there is nothing on record that when expression of interest/applications were invited to sell the said project, clear intimation was given to the intending purchasers that the project sold was in infancy stage and it will take years together before necessary permissions will be provided by the Competent Authorities."
16. In the present case also, as stated above, there is nothing on record to show that when the project, in question, was sold, any permission was available with the opposite parties. It is also not proved on record that the said fact of selling the project without permissions/approvals was brought to the notice of the intending purchasers. The purchasers were not informed that it will take years for obtaining necessary sanctions and approvals, after sale of the said project. In the present case, there is nothing on record to show that when notification dated 25.01.2017 granting exemption to the opposite parties from the applicability of some provisions of the PAPRA was granted, violations committed were brought to the notice of the Competent Authorities/Govt. The mega housing policy and the provisions of PAPRA debars any builder to advertise and sell the project before getting necessary sanctions. Merely because in some newspaper, a notice had appeared on behalf of the GMADA intimating the general public that Manohar Singh and Company is selling the project unauthorizedly, would not amount to intimation to the Competent Authorities i.e. the Govt. of Punjab, that the opposite parties have committed many mistakes, while selling the project, in question. Had those mistakes been brought to the notice of the Competent Authorities, at the relevant time, the license to launch the said project, was bound to be rejected, being in violation of provisions of the PAPRA; Special Package of Incentives under Industrial Policy 2009 and mega housing policy. Any ratification is possible, in case, the mistake committed is brought to the notice of the Competent Authorities. Thereafter, only the Competent Authorities by passing a conscious order can ratify the said mistake. In the present case, merely issuance of notification aforesaid, by the Competent Authorities, on 25.01.2017, would not ratify the mistakes committed in law by the opposite parties.
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6. It is, therefore, clear that State Commission had duly considered all the arguments of the learned counsel for the Appellant as well as of the complainant while giving its findings relying on various case laws.
7. While impugning this order, learned counsel for the Appellant has contended that State Commission while ordering refund has granted interest @ 13% p.a which is on the higher side. It has also contended that besides granting compensation in the form of interest has also awarded compensation under the head of mental agony and physical harassment, which is contrary to the findings of the Hon'ble Supreme Court in the case of DLF Homes Panchkula Pvt Limited Vs. D.S.Dhanda Etc. Etc. (2020) 16 SCC 318.
8. Learned counsel for the complainant has relied on the findings in the case M/s Manohar Infrastructure and Constructions Pvt. Ltd. & Anr. Vs. Ankit Jain, First Appeal No. 185 of 2020 decided on 17.05.2022 and submitted that it is covered matter. It is submitted that project Palm Garden and Palm Springs are part of one project called "Palm Spaces" and there is no difference in the project Palm Garden and Palm Springs.
9. I have heard the arguments of learned counsels for the parties and have perused the record. The appellant has raised a similar arguments which has already been considered and rejected by the State Commission. I found no infirmity in the findings of the State Commission regarding deficiency in service on the part of the Appellant. From the facts, it stands duly proved on record that at the time when the project was promulgated and applications were invited for booking the residential plots by the Appellant, it did not have the requisite permission from the concerned authorities and, therefore, they had acted in violation of the expressed provisions of the rules and regulations governing them. The fact that Appellant did not have the requisite permission was never brought to the notice of the complainant who believed that project was having a requisite sanction and applied for booking of the residential plot. It certainly amounts to unfair trade practices and also amounts to deficiency in service. The complainant had been left in limbo for many years without being sure whether he would get the residential plot or not. After waiting for considerable time, the complainant had opted for refund of his money and, therefore, findings of the State Commission on this count cannot be said to be suffering with any illegality or infirmity. It is a settled proposition of law as held by Hon'ble Supreme Court in Dhanda's case ( supra ) where compensation in terms of interest is awarded, no compensation under any other head should be granted. Compensation awarded towards mental agony etc. is, therefore, quashed.
10. It is apparent that it is a covered case, covered by the case of Ankit Jain ( supra). This Commission in that case while ordering the refund of the deposited amount had granted interest @ 9% p.a. and penal interest @ 12% p.a..
11. I, therefore, partly allow the present Appeal and issue the following directions:
1. The Appellant is directed to refund deposited amount of Rs.13,87,500/- to the respondent / complainant along with interest @ 9% p.a. from the respective dates of deposit till the date of payment.
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2. To pay cost of litigation to the tune of Rs.22,000/- as awarded by the State Commission.
3. While disposing of the present Appeal, I also award a litigation cost of Rs.50,000/- to the complainant.
4. The entire payment shall be made within four months from the date of this order, failing which it will attract penal interest at the rate of 12% per annum.
12. The Appeal is partly allowed.
......................J
DEEPA SHARMA
PRESIDING MEMBER
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