Chandigarh

StateCommission

CC/470/2016

Mr. Rajinder Singh Pahwa - Complainant(s)

Versus

Ansal Lotus Melange Projects Pvt. Ltd. - Opp.Party(s)

Gautam Pathania, Adv.

16 Feb 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	470 of 2016
Date of Institution	:	17.08.2016
Date of Decision	:	16.02.2017

 

1. Mr.Rajinder Singh Pahwa son of Late Shri Gurbax Singh Pahwa, resident of 33, Second Floor, Niti Khand-11 (Near Swaran Jayanti Park) Indirapuram, Ghaziabad, UP.
2. Randeep Pahwa son of Rajinder Singh Pahwa, resident of 33, Second Floor, Niti Khand-11 (Near Swaran Jayanti Park) Indirapuram, Ghaziabad, UP. Through power of attorney holder Shri Rajinder Singh Pahwa.

……Complainants

V e r s u s

1. Ansal Lotus Melange Projects Pvt. Ltd., A-1/18, Asaf Ali Road, New Delhi-110015, through its MD.
2. Ansal Lotus Melange Projects Pvt. Ltd., SCO No.183-184, Sector 9-C, Chandigarh-160009, through its MD/Authorized Signatory.

              .... Opposite Parties

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

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

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by:Sh.Shubash Chand, Advocate Proxy for Sh.Gautam Pathania, Advocate for the complainants.

                 Ms.Kashika Kaur, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                Complainants no.1 and 2 are father and son respectively. Complainant no.1 was working with World Health Organization (WHO), at Delhi. He was to retire on 28.02.2014. After retirement, he wanted to settle in or around Chandigarh. To keep him busy and to earn his livelihood, he wanted to purchase a shop site and also a plot for residential purpose. Allured by the advertisements and promises made by the opposite parties, the complainants booked a shop measuring 572.09 square feet, in a project, launched by the opposite parties, under the name and style of ‘City Centre’, at Kharar-Landran Road, Mohali, Punjab, for an amount of Rs.24,31,383/-. He paid booking amount of Rs.2,36,300/- vide receipt Annexure C-2 on 28.08.2009. Allotment Letter/Agreement was issued on 05.11.2009. It is stated in the complaint that to settle down near to the place of his work, complainant no.1 also purchased one plot in Sector 116, Mohali, in a residential  project, launched by the opposite parties, so that he can avoid travelling from his work place to his house, in old age.  For making payment of amount fixed towards the price of the shop/unit, the complainants were given construction linked plan. It is their case that by the end of March 2015, they made payment of huge amount, in the following manner:-

 

	At Booking	31.8.09	2,36,300/-	Cheque no. 367884 dt.28.08.09
	Within 45 days of booking	20.11.09	2,49,977/-	Cheque no.229774 dt.16.11.09
	On start of Excavation	31.12.09	1,12,570/-	Cheque no.177177 dt.02.11.09
	On casting Lower Ground floor rood slab	24.01.11	2,43,148/-
	On casting Ground floor roof slab	27.05.11	2,49,402/-	Cheque no.177177 dt.23.05.11
	On casting upper Ground floor roof slab	14.06.12	2,50,655/-	Cheque no.192211 dt.11.06.12
	On casting First floor roof slab	12.12.12	2,50,654/-	Cheque no.44816 dt.4.12.12
	On start of internal plastering	24.01.13	2,50,651/-	Cheque no. 085050 dt.21.01.13
	On start of common area flooring	20.08.13	2,43,139/-
	On completion of all services	25.03.15	2,47,554/-	Cheque no.000030 dt.25.03.15

 

2.         In a way, they claimed to pay an amount of Rs.21,88,243/-, against total sale price of the unit of Rs.24,31,383/-. Statement of account has been placed on record as Annexure P-10, which was issued by the opposite parties. It is their further case, that as per allotment letter dated 05.11.2009, the opposite parties proposed to give possession of the constructed unit, within a period of three years, from the date of booking/allotment i.e. on or before 29.08.2012 (date of allotment being 30.08.2009 as is evident from page 21 forming part of the allotment letter). When despite making payment of substantial amount, delivery of possession of the unit was not in sight, they took up the matter with the opposite parties, however, failed to get any satisfactory answer, as to when, possession of the unit is going to be delivered to the complainants. Construction and development work at the spot was not in progress. It was only stated that work of construction is going to commence soon. Stating that this Commission has got territorial and pecuniary jurisdiction, to try this complaint, it was filed claiming refund of amount paid with interest; Rs.5 lacs, as compensation for mental agony and physical harassment and also for unfair trade practice adopted by the opposite parties, by launching the project without obtaining permissions from the Competent Authorities; and cost of litigation of Rs.50,000/-.  
3.         Upon notice, reply was filed by the opposite parties. 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). Many other preliminary objections were taken to say that this Commission has got no territorial jurisdiction to entertain and decide this complaint. It was pleaded that the complainants being investors, have purchased the shop in dispute, for selling the same to earn profits and not for personal use, as such, they would not fall within the definition of consumer, as defined under the Act. No explanation has been given by them, as to why, they wanted to shift to Chandigarh. It was averred that besides, the shop in dispute, the complainants have also purchased a residential plot in another project of the opposite parties.
4.         On merits, booking of the unit, in question, and fact of making payments aforesaid by the complainants, is admitted. It is also admitted that as per Clause 11 of the allotment letter, possession of the shop was to be delivered within a period of three years, from the date of booking/allotment, subject to force majeure circumstances. It is stated that three years for delivery of possession of the unit was only tentative period, as such, time was not the essence of contract. It was stated that not only as above, it was agreed to between the parties, that the said three years were to be counted from the date of booking/allotment, once all necessary approvals and sanctions have been obtained from Competent Authorities, whichever is later. It was further stated that the complainants even defaulted in making payment towards the said unit, which resulted into slow progress of construction at the site. It was averred that the complainants never approached the opposite parties, seeking delivery of possession of the units. It was stated that possession of the unit, in question, will be delivered to the complainants shortly .The remaining averments were denied, being wrong. It is prayed that the complaint having no substance, be dismissed.
5.         Despite opportunities given, the complainants did not file rejoinder to the written statement filed by the opposite parties.
6.         The parties led evidence in support of their case.
7.         We have heard Counsel for the parties, and have also gone through the evidence and record of the case, very carefully.
8.         It has vehemently been contended by Counsel for the opposite parties that the complainants would not fall within the definition of consumer, as defined under the Act, as they had made investment to gain profit in future. They failed to give explanation, as to why, they wish to shift from Delhi/Ghaziabad to Chandigarh. It was also stated that besides the shop, in dispute, they had also purchased a residential plot, in another project of the opposite parties. Be that as it may, sufficient explanation has been given on record, as to why, the complainants wish to shift to Chandigarh. Para nos.1 and 2 of the complaint read thus:-

“1. That the complainant is peaceful and law abiding citizen of India and was doing job in WHO office Delhi and got retired from his job on 28.02.2014. As the complainant was aware that he was going to retire from his job in the year 2014, as such, the complainant has planned to purchase a residential as well as commercial property in Mohali to earn his livelihood in his retired life.

 

2. That after the retirement the complainant wanted to spend his entire retired life in Chandigarh or in the vicinity, looking at the facilities available city and its environment in comparison to citizen of India. As such, to fulfil his desire the complainant decided to settle down in Mohali post retirement.”

 

9.         The complainants have conceded the fact of purchase of a plot in the residential project of the opposite parties. It was specifically disclosed by them, in pa ra no.6 of their complaint, contents of which read thus:-

“It would be pertinent to mention here that along with the shop complainant has also bought one plot No.B-158, Sector 116 Mohali, Punjab measuring 225 Sq.yds. developed  by Ansal group only. The complainant No.1 was having a plan that he will construct a house in the same project and will have a shop near to his residence so that in his old age be can avoid travelling.”

                The explanation given by the complainants is perfectly justified and leaves no scope of doubt. Otherwise also, it is open to any individual to fix his place of work and resides at any place within India, may be during service or after retirement. 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. The 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 complainants are property dealers, and are 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 Harpreet Singh Sidhu Vs. Ansal Lotus Melange Projects Pvt. Limited and another, complaint case no.96 of 2016 decided on 26.07.2016. This Commission allowed the said complaint, while giving similar findings, as has been given in the preceding part of this order. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future.

10.         The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. It may be stated here that according to Section 17 (2) (b) of the Consumer Protection Act, 1986 (in short the Act) a complaint can be filed in the State Commission, within the limits of whose jurisdiction, any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution. Further, as per Section 17 (2) (c) of the Act, a complaint can also be filed in the State Commission, where the cause of action, wholly or in part, arises to the party, filing the complaint. It is an admitted fact that the opposite parties are having their Corporate Office at SCO 183-184, Sector 9-C, Chandigarh. At the same time perusal of almost all the documents including the payment receipts, placed on record by the complainants, issued by the opposite parties, also reveals that the same bears the said address thereon. In these circumstances, it could easily be said that the opposite parties were carrying on business and personally working for gain, from their Corporate Office at Chandigarh. Besides as above, in the case titled as Harpreet Singh Sidhu (supra), it had been clearly admitted by the opposite parties, that they are having their office at Chandigarh, wherefrom, they have received payments from the complainants, therein. The present case filed by the complainants also relates to the same project, facts of which are almost identical. Therefore, in our considered view, the complaint can be entertained and adjudicated upon by this Commission, at Chandigarh, in view of the provisions of Sections 17(2)(b) and 17 (2) (c) of the Act. The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 
11.         It is not in dispute that a shop was allotted to the complainants by the opposite parties vide allotment letter dated 05.11.2009, against total sale consideration of Rs.24,31,383/-. It is proved on record that by the end of March 2015, the complainants had paid an amount of Rs.21,88,243/-, which fact is also not disputed by the opposite parties. Possession of the shop was agreed to be delivered within three years, from the date of booking/allotment, once all necessary approvals and sanctions had been obtained from the sanctioning authority . Clause 11 of the Allotment Letter reads thus:-

“That the possession of the Unit is proposed to be delivered by the COMPANY to the Allottee in Three years’ 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.”

 

12.         When we look into the contents of condition no.11 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 three years, from the date of booking/allotment, once all necessary approvals and sanctions have been obtained from the Competent Authorities. At the time of arguments, Counsel for the opposite parties failed to give any specific time, within which, possession of the unit can even now be offered. It was only said that it will take some more time to complete the project. The unit was purchased in the year 2009. More than seven years have gone and even now, delivery of possession is not in sight. The complainants cannot be made to wait till eternity. In the written statement also, it is not controverted that when unit 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. Similar view was expressed by the National Commission in  a case titled as Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016. In that case, it was held 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 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. ”

                 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. For committing that default, which is not approved under the Act/Law, as claimed by the complainants, compensation in the sum of Rs.1.50 lacs, can safely be granted to them, on this count.

13.         An objection raised by Counsel for the opposite parties that since it was mentioned in the Allotment Letter that the Company shall propose to deliver possession of the unit within maximum period of three years 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. 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 complainants, on the ground aforesaid, cannot be taken into consideration. Under these circumstances, the opposite parties were bound to deliver possession of the unit, within a maximum period of three years from the date of allotment of unit, 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” was 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. V/S 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, the plea of the opposite parties in this regard also stands rejected.

14.         As far as the plea taken by the opposite parties to the effect that delay took place on account of the reason that there was delay in making payment on the part of the complainants, it may be stated here that, in the first instance, no cogent and convincing evidence has been brought on record, in the shape of any copy of customer ledger or statement of account, pertaining to the account of the complainants, to prove that they were regular defaulters in making payment towards price of the said shop.  However, perusal of statement of account Annexure P-10, reveals that there was only a petty delay of 37 days (twice), in making payment, which, in no way can be said to be so huge, that the project was delayed for 09 years, from the booking of the shop, in question, in 2009. Not only this, it is very pertinent to add here that for the said petty delay, the opposite parties have already received delayed interest @18% p.a., to the tune of Rs.8,873/- which stood adjusted in favour of the opposite parties, as is evident from the said document Annexure P-10. As such, it is held that, delay in construction and offer of possession of the unit, in question, was not on account of delay in making payments by the complainants (in the present case minor delay), but it was on account of non-obtaining of necessary permissions/sanctions by the opposite parties, in respect of the project, in question, from the Competent Authorities. In the present case, the opposite parties are trying to shift their deficiencies, on the shoulders of the complainants, by taking bald pleas, which is not sustainable in the eyes of law. As such, it is held that the opposite parties, in not offering possession of the unit, in question, even as on today, despite receiving substantial amount from the complainants, and that too, in the absence of any force majeure circumstances, amounted to deficiency in providing service and also adoption of unfair trade practice.

                Secondly, such a plea has no legs to stand, also in view of decision rendered by the National Commission, in a case titled as Puneet Malhotra Vs Parsvnath Developers Ltd., II (2015) CPJ 18 (NC), wherein under similar circumstances it was observed and held as under:-

“If some of the allottees had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating Inventory at a lower price”.

 

                No help, therefore, can be drawn by the opposite parties out of the objection, raised by them, in this regard.

15.         The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.21,88,243/- deposited by them. It is an admitted fact that the  opposite parties are unable to deliver  possession of the constructed unit, in question, for want of construction and basic amenities etc., necessary approvals/sanctions from the Competent Authorities  and firm date of delivery of possession of the unit, could not be given to them (complainants), even as on today. As stated above, the complainants cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit purchased by them. The  opposite parties, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are thus, entitled to get refund of amount deposited by them. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.
16.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.21,88,243/- was paid by the complainants, without getting anything, in lieu thereof. 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 5 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). In view of above, the  complainants are certainly entitled to get refund of the amount deposited by them, alongwith interest, from the respective dates of deposits till realization. 
17.         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 no jurisdiction to entertain the consumer complaint. 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. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

 

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

27.                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

28.      Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of 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) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

29.       In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

30.   Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

31.        Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

32.        We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of 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), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

35.   In  view of the above, the plea taken by the opposite party, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

                In view of the above, the plea taken by the opposite parties in this regard, being devoid of merit, is rejected.

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

1. To refund the amount Rs.21,88,243/- to  the  complainants, alongwith interest @ 12 % p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.1.5 lacs, for adopting unfair trade practice, in launching the project, without obtaining necessary approvals/sanctions from the competent authorities.
3. To pay compensation, in the sum of Rs.1 lac, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
4. To pay cost of litigation, to the tune of Rs.30,000/- to the  complainants.
5. The payment of awarded amounts mentioned at sr.nos.(i) to (iv), 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) shall carry penal interest @ 15% p.a., instead of @12%, from the respective dates of deposits onwards, and interest @ 15% p.a., on the amounts mentioned at sr.nos.(ii) to (iv), from the date of filing of this complaint, till realization.

20.         However, it is made clear that, if the complainants have 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 them (complainants).
21.         Certified Copies of this order be sent to the parties, free of charge.
22.         The file be consigned to Record Room, after completion.

Pronounced.

16.02.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

Rg.