Chandigarh

StateCommission

CC/43/2018

Veena Kundra - Complainant(s)

Versus

Ansal Lotus Melange Projects Private Limited - Opp.Party(s)

Savinder Singh Gill, Adv.

10 Dec 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	43 of 2018
Date of Institution	:	30.01.2018
Date of Decision	:	10.12.2018

 

Veena Kundra, w/o Late Sh.Ashok Kumar Kundra, R/o House No.1076, Sector 71, Mohali.

……Complainant

V e r s u s

1. Ansal Lotus Melange Projects Pvt. Ltd., SCO 183-184, Sector 9-C, Chandigarh, through its Director Sh.Pradeep Bansal.

Also at: - Ansal Lotus Melange Projects Pvt. Ltd., A-1/18, Asaf Ali Road, New Delhi-110002, through its Director/Additional Director.

2. Pradeep Bansal, Director of Ansal Lotus Melange Projects Pvt. Ltd., SCO 183-184, Sector 9-C, Chandigarh.

              .... Opposite Parties

Complaint under Section 17 of the Consumer Protection Act, 1986.

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                MRS. PADMA PANDEY, MEMBER

                MR. RAJESH K. ARYA, MEMBER.

 

Argued by: Sh.Savinder Singh Gill, Advocate for the complainant.

                  Sh.Sandeep Kumar, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The complainant has filed this complaint, seeking refund of amount of Rs.21,33,181/- received by the opposite parties, towards a shop bearing no.SH-27-LGF, measuring 572.09 square feet (in short the unit), located in their project named ‘City Centre’, Mohali Business and Shopping Centre, Kharar-Landran Road, Mohali, Punjab. Total cost of the said unit was fixed at Rs.22,45,453/-. It is definite case of the complainant that the said unit was purchased by her son, for her (complainant) use, for earning her livelihood, by way of self-employment. The said unit was transferred in the name of the complainant on 04.09.2012, on making payment of transfer charges to the tune of Rs.8,427/- to the opposite parties. In this manner, the complainant became absolute owner of the said unit. By the time, transfer of the unit was made in favour of the complainant, an amount of Rs.21,33,181/-, stood received by the opposite parties. As per Clause 12 of the allotment letter/agreement, the opposite parties committed to hand over possession of the constructed unit, within a period of 36 months, from the date of booking/allotment i.e. on or before 19.10.2013 (date of allotment being 20.10.2010 as is evident from page 10 forming part of the allotment letter). As per Clause 5 of the allotment letter, the opposite parties committed to pay periodical payment @11% p.a. on quarterly basis (Assured Return), from the date of receipt of entire payment, till the date of handing over possession of the unit, in question, so as to compensate the complainant. Despite making payment of substantial amount, delivery of possession of the unit was not offered to the complainant, by the committed date or even thereafter. Hence this complaint has been filed by the complainant, seeking refund of the amount paid, alongwith interest, compensation etc.

2.         Upon notice, reply was filed by the opposite parties, wherein, it was pleaded that in view of Section 8 of the Arbitration and Conciliation Act, 1996 [as amended vide the Arbitration and Conciliation (Amendment) Act, 2015], to settle disputes between the parties, the matter is required to be referred to an Arbitrator, as such, this Commission has no jurisdiction to entertain the same (complaint). It was stated that the complainant being an investor, has purchased the unit in dispute, for selling the same, to earn profits and not for personal use, as such, she would not fall within the definition of consumer, as defined under the Act.
3.         On merits, booking of the unit, in question, by son of the complainant; transfer thereof in the name of complainant; receipt of amount, referred to above, towards price of the said unit, is not disputed. It is also not disputed that as per Clause 12 of the allotment letter, possession of the unit was to be delivered within a period of 36 months, from the date of booking/allotment, subject to force majeure circumstances. It was pleaded that 36 months for delivery of possession of the unit was only tentative period, as such, time was not the essence of contract. The said period of 36 months was to be counted from the date of booking/allotment, once all necessary approvals and sanctions have been obtained from Competent Authorities. It was averred that since the complainant has concealed material facts from this Commission, as such, the complaint is liable to be dismissed. The remaining averments were denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
4.         In the rejoinder filed, the complainant reiterated all the averments contained in the complaint and controverted those, contained in written version of the opposite parties.
5.         The parties led evidence in support of their case.
6.         We have heard Counsel for the parties, and have also gone through the evidence and record of the case, very carefully.
7.         It has vehemently been contended by Counsel for the opposite parties that the complainant would not fall within the definition of consumer, as defined under the Act, as she had made investment by way of purchasing the said unit, to gain profit in future, after selling the same in open market.

                We do not agree with the contention raised. In the complaint supported by affidavit of the complainant, it has been clearly stated by her that purpose of purchase of the said unit was to run the same by means of self-employment, for earning her livelihood. It is evident from headnote of the complaint that the complainant is a widow. Definitely, she needed to do some work, for running her livelihood. As such, explanation given by the complainant that the unit in question had been purchased by her, in the manner, referred to above, for her personal use, is perfectly justified and leaves no scope of doubt. In Laxmi Engineering Works Vs. P.S.G. Industrial Institute,  1995 AIR 1428, 1995 SCC (3) 583, the Hon’ble Supreme Court of India has specifically stated that if the commercial use is by the purchaser himself/herself, for the purpose of earning livelihood, by means of self-employment, such a purchaser of goods is yet a consumer. It was further said that to know that whether the goods have been purchased for commercial purpose, it is to be decided in the facts of each case. It is not value of the goods that matters, but the purpose, to which the goods bought, are put to. The principle of law laid down in Laxmi Engineering Works` case (supra)  is fully applicable to the facts of the present case. Objection raised by the opposite parties, in this regard, therefore being devoid of merit is rejected.

                At the same time, there is nothing on record to show that the complainant is a property dealer, and is indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. It is settled law that a purchaser of property falls under the definition of a consumer, if any dispute arose out of the same, unless it is proved that the said property has been purchased by him or her, for commercial purpose i.e. reselling the same, for earning profits therefrom. Earlier also, a similar question fell for determination, before this Commission, in a case titled as Mr.Rajinder Singh Pahwa and anr. Vs. Ansal Lotus Melange Projects Pvt. Ltd. and anr., complaint case no. 470 of 2016, decided on 16.02.2017. This Commission allowed the said complaint, while giving similar findings, as has been given in the preceding part of this order. The said order has attained finality, as no appeal has been filed by the opposite parties therein, which fact is evident from Official website of the National Commission. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainant, in the manner, referred to above, by way of investment, with a view to earn profit, in future.

8.         It is not in dispute that the unit, in question, was, in the first instance, purchased by son of the complainant vide allotment letter dated 20.10.2010 and later on, it was got transferred in the name of the complainant on 04.09.2012, by which time,  an amount of Rs.21,33,181/-, stood received by the opposite parties. Possession of the unit was agreed to be delivered within 36 moths, from the date of booking/allotment, once all necessary approvals and sanctions had been obtained from the sanctioning Authority. Clause 12 of the Allotment Letter reads thus:-

“That the possession of the Unit is proposed to be delivered by the COMPANY to the Allottee in 36 (Thirty Six) months time from the date of booking/allotment once all necessary approvals and sanctions have been obtained from Sanctioning authority, whichever is later, subject however, to force majeure circumstances and reasons beyond the control of the Company. If the completion of the said Complex is delayed by reason of non availability of steel and/or cement or other building materials, or water supply or electric power slow down, strike or due to civil commotion or by reason of war or enemy action or earthquake or any act of God or if non delivery is as a result of any act, notice, order, rule or notification of the Govt. and any other public or Competent Authority or for any reason beyond the control of the COMPANY, then in any of the aforesaid event, the COMPANY shall be entitled to a reasonable extension of time for delivery of possession of the Unit.”

 

                When we look into the contents of Clause 12 of the Allotment Letter, it becomes apparently clear that the project was launched by the opposite parties, without having necessary sanctions in their hands. It was promised that possession of constructed unit will be given within a period of 36 months, from the date of booking/allotment, once all necessary approvals and sanctions have been obtained from the Competent Authorities. At the time of arguments also, it is not controverted that when the unit, in question, was sold, all necessary sanctions were not available with the opposite parties, to launch the project. A builder is bound to take all necessary approvals/clearances from the Competent Authorities before launching and selling the project, and if it fails to do so, it amounts to an unfair trade practice, on its part. At the same time collecting money from the perspective buyers without obtaining the required permissions and sanctions is also 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…………”

 

                The principle of law, laid down in the aforesaid case, is fully applicable to the present case. In view of above, it can safely be said that by adopting unfair trade practice, the project was sold/launched by the opposite parties.

9.         Objection raised by Counsel for the opposite parties that since it was mentioned in Clause 12 of the Allotment Letter that the Company shall propose to deliver possession of the unit within a maximum period of 36 months from the date of booking/allotment, as such, time was not the essence of contract, is also devoid of merit. In the first instance, it is submitted that in the instant case, the opposite parties did not raise any force majeure circumstances, if any, encountered by them, as a result whereof, construction could not be completed, within the stipulated period. In the absence of any force majeure circumstances having been faced by the opposite parties or any other valid and legal reason beyond their control, the stand taken by them, in this regard, for condoning the delay in delivery of possession of the unit, to the complainant, cannot be taken into consideration. Under these circumstances, the opposite parties were bound to deliver possession of the unit, within a maximum period of 36 months from the date of allotment thereof, as such, time was, unequivocally made the essence of contract.

                The opposite parties also cannot evade their liability, merely by saying that since the words proposed to be delivered/tentative/likely etc. were mentioned in the Allotment Letter, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement/Allotment Letter, is an unfair trade practice, on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof. It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. Vs. Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus: -

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

 

                In view of above, plea of the opposite parties in this regard also stands rejected.

10.         During pendency of this complaint, it was stated by Counsel for the opposite parties that possession of the unit has been offered to the complainant vide letter dated 30.10.2018, which fact has not been denied by Counsel for the complainant.  Under these circumstances, the question that falls for consideration, is, as to whether, the complainant is bound to take possession of the unit or she can still stick to her prayer, with regard to refund of the amount of Rs.21,33,181/- or not. As stated above, as per Clause 12 of the allotment letter/agreement, the opposite parties committed to hand over possession of the constructed unit, within a period of 36 months, from the date of booking/allotment i.e. on or before 19.10.2013. However, admittedly, it was not done and on the other hand, possession of the unit, in question, was ultimately offered after a huge delay, on 30.10.2018 and that too, during pendency of this complaint. Under above circumstances, it can be said that there is a material violation on the part of the opposite parties, in not offering and delivering possession of the unit, in question, to the complainant, by the promised date. It is settled law that when there is a material violation on the part of the builder, in not handing over possession by the stipulated date, the purchaser is not bound to accept the offer, even if the same is made at a belated stage and on the other hand, can seek refund of amount paid. It was so said by the Hon’ble National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, under similar circumstances, while negating the plea taken by the builder, it was held  as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon’ble National Commission, ordered refund to the complainants, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same.

 

Furthermore, in another case titled as M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the Hon’ble National Commission, under similar circumstances, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

 

                The complainant, is, thus, held entitled to get refund of amount, which stood paid to the opposite parties, in the manner, referred to above, towards price of the said unit. In view of above facts of the case, the opposite parties are under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to her, as also escalation in prices.

11.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainant and if yes, from which date. It is not in dispute that an amount of Rs.21,33,181/- was received by the opposite parties, in the abovesaid manner. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest @18% p.a. as per Clause 6 of the Allotment Letter, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335).

                It is significant to add here that it is evident from Clause 5 of the Allotment Letter, that the opposite parties had agreed to pay periodical payment @11% p.a., on quarterly basis (Assured Return) to the complainant, from the date of receipt of entire payment, so as to compensate her, till offer of possession of the unit, in question. It is also an admitted fact that interest aforesaid, has been paid by the opposite parties till September 2012 and thereafter, they stopped paying the same. Under above circumstances, ends of justice will meet, if we grant interest to the complainant, on the deposited amount, after deducting the period, for which assured return has been received by the complainant in the shape of interest @11% p.a. on the deposited amount, till realization.

12.         The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the allotment letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has jurisdiction to entertain the consumer complaint or not. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, wherein, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), it was held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants 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.

                As such, objection raised by the opposite parties, in this regard, stands rejected.

13.         No other point was urged by Counsel for the parties.
14.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-

1. To refund the amount of Rs.21,33,181/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards. However, it is made clear that the payment of interest aforesaid (12% p.a.) shall be made, after deducting the period, for which assured return has been received by the complainant in the shape of interest @11% p.a. on the deposited amount, as per Clause 5 of the Agreement.
2. To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainant, as also deficiency in providing service and adoption of unfair trade practice.
3. To pay cost of litigation, to the tune of Rs.33,000/- to the complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) thereafter shall carry penal interest @ 15% p.a., from the date of default, and interest @ 12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

15.         However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by her (complainant).
16.         Certified Copies of this order be sent to the parties, free of charge.
17.         The file be consigned to Record Room, after completion.

Pronounced.

10.12.2018

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

 

 (PADMA PANDEY)

        MEMBER

 

 

Sd/-

 

 (RAJESH K. ARYA)

MEMBER

 

 

Rg.