Chandigarh

StateCommission

CC/339/2018

Anil Chauhan - Complainant(s)

Versus

Amazing Real Estate Private Limited - Opp.Party(s)

Arun Kumar & Varun Bhardwaj, Adv.

04 Feb 2020

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	339 of 2018
Date of Institution	:	05.09.2018
Date of Decision	:	04.02.2020

 

1. Anil Chauhan son of Shri Siyaram Chauhan aged 36 years, resident of House no.455, First Floor, Sector 32-A, Chandigarh.
2. Poonam Chauhan wife of Anil Chauhan aged 32 years, resident of House no.455, First Floor, Sector 32-A, Chandigarh.

……Complainants

V e r s u s

1. Amazing Real Estate Private Limited, Unit No.B-107, Business Complex at Elante Mall, First Floor, Industrial Area, Phase-1, Chandigarh, through its Managing Director/Director/Authorized Signatory.
2. Binder Pal Mittal, Director, Amazing Real Estate Private Limited, Unit No.B-107, Business Complex at Elante Mall, First Floor, Industrial Area, Phase-1, Chandigarh.
3. Bharat Mittal, Director, Amazing Real Estate Private Limited, Unit No.B-107, Business Complex at Elante Mall, First Floor, Industrial Area, Phase-1, Chandigarh

….Opposite Parties

Complaint under Section 17 of the Consumer Protection Act, 1986

 

BEFORE:       JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                      MRS. PADMA PANDEY, MEMBER.

                      MR. RAJESH K. ARYA, MEMBER.

 

Present:        Sh.Varun Bhardwaj, Advocate for the complainants.

Sh.Sanjeev Sharma, Advocate for the opposite parties.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   The above captioned complaint has been instituted by the complainants seeking directions to the opposite parties, to restore the allotment of flat no.B-408 (3BHK), Tower No.B, 4^th Floor, admeasuring 1340 square feet, purchased by them in the project named “Joynest Moh-1, PR-7, Airport Ring Road, Near Aerocity, Distt. SAS Nagar, Mohali, Punjab, which was illegally cancelled by the opposite parties vide letter dated 27.06.2018. Basic sale price of the said unit was fixed at Rs.35,90,000/- plus miscellaneous charges i.e. totaling to Rs.38,71,747/-. As per Clause 11.1 of the Agreement dated 25.11.2017 (Annexure C-5), possession of the unit in question is to be delivered by the opposite parties within a maximum period of 48 months i.e. 42 months plus 6 months grace period from the date of execution thereof, which comes to 24.11.2021 and the complainants were required to make payment as per construction linked payment plan. It has been stated that as per demands raised by the opposite parties, the complainants paid an amount of Rs.28,68,000/- between 14.04.2016 to 28.02.2018 i.e. within a short period of 7 months from the date of booking. It has been averred that for making payment towards price of the said unit, the complainants have availed housing loan from India Infoline Housing Finance Limited.

2.           It has been further averred that during the period intervening, it came to the knowledge of the complainants, through various advertisements given by the Govt. of India, that the builders are required to pass on the benefit of lower tax burden under the GST regime to all the buyers of the property. As such, the complainants contacted the opposite parties to avail the said benefit. Number of emails were exchanged between the parties, as a result whereof, the opposite parties vide email dated 09.01.2018, agreed to give rebate of 3% on the GST, whereas, on the other hand, they were required to give  100% rebate thereon. After much persuasion, the opposite parties agreed to give rebate to the extent of 4% on the GST and thereafter did not pay any heed to extend more rebate to the complainants. Under these circumstances, the complainants again started making follow-ups with the opposite parties, by way of writing emails and also making physical visits to their office, in the matter.
3.           However, instead of redressing their grievance, the opposite parties vide letter dated 12.06.2018, issued show cause notice, for cancellation of allotment of the unit in question. The complainants replied the said show cause notice and also sought information, as to on what ground they are going to cancel the allotment, especially, when there is no fault on their part in making payment towards price of the said unit. To the utter shock of the complainants, the opposite parties vide email dated 20.07.2018, intimated that because they failed to make payment demanded, as such unit had been cancelled vide letter dated 27.06.2018; whereas on the other hand, no such letter was ever received by the complainants. Under above circumstances, the complainants visited the office of the opposite parties on 06.08.2018 and requested to waive off the delayed payment interest, but to no avail. Thereafter, the complainants were shocked when they received letter dated 07.08.2018, wherein it was intimated that the allotment of unit stood cancelled and they were asked to collect the remaining amount after forfeiting substantial amount out of the deposited one. The complainants contacted the opposite parties through every possible means, with a request to restore cancellation of allotment and also to extend rebate on GST referred to above but to no avail.
4.           By stating that the aforesaid act and conduct of the opposite parties amount to deficiency in providing service, negligence and adoption of unfair trade practice, the complainants have filed the present case seeking direction to the opposite parties to restore allotment of the unit in question; waive of delayed payment interest; to give rebate of 12% on GST; payment of compensation etc.
5.           Their claim has been contested by the opposite parties, on numerous grounds, inter alia, that the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act; that this Commission did not vest with pecuniary and territorial jurisdiction; and that they are defaulters.
6.           On merits, purchase of the unit by the complainants; payments made as mentioned in the complaint; execution of agreement has not been disputed by the opposite parties. It has been averred that allotment of the unit in question was cancelled because despite issuance of show cause notice followed by number of reminders, the complainants failed to make remaining payments demanded by the opposite parties. It has been stated that on the issue raised with regard to GST, 4% rebate thereon was given to the complainants.  It was also made clear to the complainants that rebate of 4% aforesaid shall be applicable on the payments and the excess payment received will be adjusted in the next demands raised but they were adamant to get waived of the entire GST amount, on the basis of some recommendations, which has no authenticity. It has been pleaded that since the allotment of unit was cancelled, the complainants were told to collect the remaining amount after forfeiture of earnest money out of the deposited one and also to deposit the original documents but they failed to do so. Prayer was made to dismiss the complaint with cost.
7.           In the replication filed, the complainants reiterated all the averments contained in the complaint and controverted those, contained in written version of the opposite parties.
8.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence and also produced numerous documents.
9.           We have heard the contesting parties and have carefully gone through record of the case, very carefully.
10.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
    1. Whether this Commission has pecuniary and territorial jurisdiction to entertain this complaint?
    2. Whether the complainants fall under the definition of consumer?
    3. Whether the action taken by the opposite parties with regard to cancellation of allotment of unit was correct?
    4. Whether the complainants are entitled to get rebate in respect of GST?

 

11.           The first question which needs consideration is with regard to pecuniary jurisdiction, it may be stated here that if the total value of the unit in question i.e. Rs.38,71,747/- for which directions have been sought for restoration of allotment; plus other reliefs claimed in the complaint are clubbed together, the same exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide this complaint. Objection taken in this regard stands rejected.
12.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that in the instant case, perusal of almost all the documents placed on record reveal that the same have been issued by the opposite parties from their Chandigarh Corporate Office i.e. Unit No.B-107, Business Complex, Elante Mall, 1^st Floor, Industrial Area, Phase-1, Chandigarh. Even the Agreement in respect of the unit in dispute containing detailed terms and conditions has been executed at Chandigarh Office of the Company, meaning thereby that the opposite parties were actually and voluntarily residing and carrying on business from their Corporate Office at Chandigarh and personally work for gain hereat. As such, objection taken in this regard is rejected. 
13.           As far as 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 have purchased the unit/flat in question to indulge in ‘purchase and sale of flats’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since it failed to discharge that onus, hence we hold that the complainants are consumers as defined under Section 2(1)(d) of the Act. On the other hand, still the complainants are seeking directions to the opposite parties, to restore allotment of the unit in question and not seeking refund of amount paid. Objection taken in this regard is rejected.
14.           The next question that falls for consideration is, as to whether, the opposite parties were justified in cancelling the allotment of the unit in question or not? To justify their stand of cancellation of the unit vide letter dated 27.06.2018, the opposite parties have placed reliance on demand letters dated 11.12.2017, 31.03.2018, 24.05.2018 (termination letter) and 12.06.2018 (show cause notice).

                   At the time of arguments also, it has been fervently contended by Counsel for the opposite parties that cancellation of the unit in question was solely done on the ground that the complainants defaulted in making remaining payment, which fact could have delayed the project. On the other hand, Counsel for the complainants contended that the opposite parties raised frequent demands and that too against the payment schedule, just with a view to harass the complainants and are able to pressurize them to withdraw their constant requests being made by them to the opposite parties to give 100% rebate on GST, in view of public notice issued by the competent authorities, and ultimately cancelled the allotment of unit in an illegal manner.

                   It is an admitted fact that as per Clause 11.1 of the Agreement dated 25.11.2017 (Annexure C-5), construction of the unit was to be completed and possession was to be delivered to the complainants with a period of 48 months i.e. 42 months plus 6 months grace period from the date of execution thereof i.e. by 24.11.2021. The complainants were required to make payment as per construction linked payment plan, which was attached alongwith the said agreement. Obviously, the opposite parties had committed the period of 48 months for completion of construction and development works at the project site and offering possession, after consulting their architects and also engineering and planning department. Keeping in mind the said period of 48 months, the sale consideration to be received towards the said unit, was segregated into construction linked plan as per the stages of construction and the complainants were required to arrange and make payments, accordingly. Thus, at this stage, a crucial question now arises for consideration is, as to by which date/month, construction at the project site took place. Admittedly, as per payment plan, booking amount of Rs.3,50,000/- was paid by the complainants alongwith application on 14.04.2016. Thereafter, another amount of Rs.2,10,000/- and Rs.90,000/- was paid by the complainants, on 24.04.2017 and 25.04.2017. By the said date, there is nothing on record, to say that construction had taken place. Even as per the payment plan, construction was to take place after receipt of amount referred to above. In our considered opinion, construction of the said unit took place only after 25.11.2017, as it was clearly mentioned in clause B. of the agreement dated 25.11.2017 that “The Developer intends to construct upon the said Plot of Land the “Said Complex”. Thus, it can easily be said that construction of the unit would have started only on/after 25.11.2017 and not before that, which was to be completed in 48 months i.e. by 24.11.2021. It is also coming out from the record that the last demand was raised by the opposite parties on 28.02.2018, by which date, already an amount of Rs.28,68,000/- against basic sale price of Rs.35,90,000/- stood received  from the complainants i.e. about 80% of the basic sale price, within a period of about three (3) months from the date of start of construction and 7 months from the date of booking of the unit in question.  

                   Under above circumstances, it has not been clarified by the opposite parties in their written reply or by their Counsel, as to why such a huge amount of Rs.28,68,000/- i.e. about 80% of the basic sale price of Rs.35,90,000/- was demanded and received from the complainants between 14.04.2016 to 28.02.2018 i.e. within a short period of about 7 months from the date of  booking and 3 months from the date of execution of agreement. It cannot be imagined that once the opposite parties have made clear by way of agreement that they need 48 months (42 months plus 6 months grace period) i.e. 4 years to complete construction and development work, then it is possible for them to complete the construction within a period of three (3) months only. Despite opportunity having been given to the opposite parties, through their Counsel, even this much has not been proved, as to at what stage, construction had reached by the date of filing of written reply by the opposite parties.

                   Furthermore, during the course of proceedings, when it transpired from Annexure C-5 i.e. Unit Buyer’s Agreement that basic columns are lying vacant especially in second page; clause A of the said document showing granting license to the developer was also lying vacant, as such, vide order dated 18.12.2019, this Commission gave opportunity to the opposite parties, to produce the following documents, duly authenticated, alongwith latest photographs of the project site, to know as to whether the project has been launched after obtaining necessary approvals and as to at what stage construction of the units in the said project has reached:-   

1. “Registration Certificate of the project with the competent authority.
2. Copy of requisite Licence issued by the Competent Authority under Punjab Apartment and Property Regulation Act 1995.
3. Change of Land Use (CLU) pertaining to the project in question.
4. Letter of Intent (LOI).
5. Copy of approved site plan of the project.
6. Completion Certificate of the project.
7. Latest photographs of the site/unit in dispute.
8. Current list of Managing Director/Director(s) of the Company.
9. Detail of Bank Accounts of the Company.
10. List of properties both moveable and immoveable of the company and its Managing Director/Director(s) which can be attached in execution of the decree. 

 

15.           However, except the permission with regard to CLU dated 31.03.2016 and Letter of Regulatory Clearance dated 28.03.2017 issued by Punjab Bureau of Investment Promotion, no other documents including the latest photographs of the project site were placed on record by the opposite parties. As per condition no. iv) contained in the CLU it was made clear by the competent Authority that the permission of CLU doesn’t in any manner grant or effect ownership right of the land, which was to be determined by the competent Authority. As such, the act of non-submission of the above said remaining documents alongwith latest photographs of the project site by the opposite parties, which could have material bearing to the root of the case, inclines this Commission to draw an adverse inference against them that the project in question was launched  and units therein were sold without necessary approvals/sanctions and also that the demands raised from the complainants were contrary to the construction stages/payment schedule as explained above. As such, the complainants were well within their right not to make payment of remaining sale consideration, in view of principle of law laid down by the Hon’ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the residential units by the stipulated date, it cannot expect the allottee to go on paying installments to it. Similar view has also been taken by the Hon’ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser.

                   Under above circumstances, it is held that by cancelling the allotment of unit in question, on the ground that the complainants were defaulter in making remaining payment, especially in the face of the reason that within a period of three months of execution of the agreement, already substantial amount equal to about 80% of the basic sale price stood paid; the opposite parties adopted unfair trade practice and are also guilty of providing deficient services to the complainants. As such, if we order restoration of allotment of the unit in question, that will meet the ends of justice. The cancellation/termination letters issued by the opposite parties in respect of the said unit stand quashed.

                   Since, it has already been held that payments were received by the opposite parties, contrary to the payment schedule/stage of construction and also about 80% of the basic sale price already stood paid by the complainants within three months from the date of execution of agreement, as such, it is held that the complainants are not liable to pay any delayed payment interest to the opposite parties on the payments already made. The opposite parties are warned to be cautioned in future while raising further demands, strictly as per the payment schedule/stages of construction and development at the project site.   

16.           As far as plea taken by the complainants to the effect that they are entitled to get 100% rebate on GST is concerned, it may be stated here that the complainants have failed to place on record any authentic document in the shape of gazette notification or any order having been passed by the Competent Authority, in that regard. Merely on the basis of a newspaper cutting (Annexure C-8) and also the typed document running into four pages (Annexure C-12) which is without any date and signatures of any competent Authority, this Commission did not deem fit to pass any order in favour of the complainants. Though, in the instant case, admittedly, the opposite parties have already given rebate on GST to the extent of 4%, yet, in the interest of justice, it is ordered that in case, as per any Statutory Rules/Guidelines or any order having been passed by the competent Authority, that the buyers  of residential units are entitled to get 100% rebate on the GST, the opposite parties shall be bound to refund the excess amount received towards the GST and also to give the said rebate on future payments also, to the complainants, failing which the complainants shall be at liberty to file fresh consumer complaint to that extent.
17.           For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-

1. To restore the allotment of unit in question, within a period of one week from the date of receipt of a certified copy of this order, without demanding any interest on the payments already made, failing which they shall be liable to pay interest @12% p.a. on the deposited amount from the date of cancellation of the unit in question till restoration thereof. The opposite parties are further directed to raise future demands strictly as per the stages of construction/payment schedule and shall update the complainants on regular basis before each demand is raised, till possession of the unit in question is offered to them, complete in all respects, strictly as per terms and conditions of the agreement.
2. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice by cancelling the allotment of unit in an illegal manner and also cost of litigation, in lumpsum, to the tune of Rs.1,00,000/-, 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.1,00,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization.

18.           Certified Copies of this order be sent to the parties, free of charge.
19.           The file be consigned to Record Room, after completion.

Pronounced

04.02.2020

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

Sd/-

 

(RAJESH K. ARYA)

MEMBER

 Rg.