Chandigarh

StateCommission

CC/151/2019

Simranpreet Singh Aujla - Complainant(s)

Versus

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

Savinder Singh Gill, Hoshiar Chand Adv.

19 Dec 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	151 of 2019
Date of Institution	:	08.07.2019
Date of Decision	:	19.12.2019

 

Simranpreet Singh Aujla s/o Sh.Karam Jit Singh Aujla, R/o 9516, Joshi Nagar, Haibowal, Ludhiana, Punjab – 141001.

…… Complainant

V e r s u s

1. Ansal Lotus Melange Projects Private Limited, SCO 183-184, Sector 9-C, Chandigarh, through its Directors, Sh.Pradeep Bansal and Vishva Prakash.

 

Also at:-  Ansal Lotus Melange Projects Private Limited, A-1/18B, Asaf Ali Road, New Delhi-110002 through its Director Sh.Pradeep Bansal and Vishva Prakash.

 

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

 

3. Vishva Prakash, Director of Ansal Lotus Melange Projects Private Limited, SCO 183-184, Sector 9-C, Chandigarh.

…..Opposite Parties

 

4. Housing Development Finance Corporation Limited having its office at: SC0 153-155, Sector 8C, Madhya Marg, Chandigarh.

…..Performa party

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.

 

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

                         Sh.Sandeep Kumar, Advocate for opposite parties no.1 to 3.

                         Sh.Ajay Pal Singh, Advocate for opposite party no.3 (Vishva Prakash, Director of Ansal Lotus Melange Projects Private Limited).

                         Sh.Kamal Kant, Advocate proxy for Ms.Neetu Singh, Advocate for opposite party no.4

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

         

                   The above captioned complaint has been filed by the complainant seeking refund of amount of Rs.21,98,869/-, paid by him  towards purchase of flat bearing no.1203, 12^th Floor, in a project launched by  opposite parties no.1 to 3, under the name and style ‘Orchard County”, Sector 115, SAS Nagar, Mohali, Punjab (in short the unit). It is the case of the complainant that opposite parties no.1 to 3 failed to deliver possession of the unit in question by 09.05.2019  i.e. within a period of 54 months (48 months plus (+) 6 months extended period) as per Clause 5.1 of the Agreement dated 10.11.2014 (Annexure C-1) or even by the date of filing this complaint for dearth of construction and development works at the project site. For making payment towards price of the said unit, the complainant had also availed housing loan from opposite party no.4. It is further case of the complainant that construction at the project site has been put to standstill for the last three to four years. Requests made by the complainant to complete construction work; deliver possession of the unit; and also to pay compensation for the period of delay, did not yield any result. Hence this complaint.

2.           The claim of the complainant has been contested by opposite parties no.1 to 3, on numerous grounds, inter alia, that he has concealed material facts from this Commission; he did not fall within the definition of consumer, as defined under Section 2 (1) (d) of the Act; that because  the period of 54 months, for delivering possession of the unit was tentative, as such, time was not to be considered as essence of the contract; that payments were not made in time, by the complainant; that the complaint filed is beyond limitation; and that opposite parties no.2 and 3 cannot be made personally liable for any act of the Company.
3.           On merits, payments made by the complainant as mentioned in the complaint; execution of buyer and tripartite agreements; and non delivery of possession even by the date when this complaint has been filed has not been disputed. However, it has been stated that opposite parties no.1 to 3 are committed to pay Pre-EMI to the Bank concerned, under subvention scheme and also  compensation, for the period of delay till offer of possession is made to the complainant. Prayer has been made to dismiss the complaint.
4.           Opposite party no.4 in its written version pleaded that since no specific allegations have been levelled against it, as such, it has no concern, with the dispute, qua the complainant and opposite parties no.1 to 3. However, it has been pleaded that in case, this Commission comes to the conclusion that the complainant is entitled to refund of amount paid, then first charge be ordered, in favour of opposite party no.4, so that it is able to seek apportionment of its dues, as per terms and conditions governed under the Tripartite Agreement.  
5.           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 by way of affidavits and also produced numerous documents.
6.           We have heard the contesting parties and have gone through the evidence and record of the case, very carefully.
7.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
   1. Whether the complainant falls under the definition of consumer?
   2. Whether time was essence of the contract?
   3. Whether the complaint filed is within limitation?
   4. Whether the complainant was defaulter in making payment?
   5. Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?

 

8.           First coming to the objection raised to the effect that the complainant 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 opposite parties no.1 to 3 to establish that the complainant has purchased the unit 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 they failed to discharge their  onus, hence we hold that the complainant is a consumer as defined under Section 2(1)(d) of the Act.
9.           It is not in dispute that the complainant purchased the unit in question in the project of opposite parties no.1 to 3, possession whereof was to be delivered within a total period of 54 months (48 months plus 6 months extended period) from the date of execution of the agreement dated 10.11.2014. End date to hand over possession stood expired on 09.05.2019, however, nothing was done. Even in the written reply also, no commitment to hand over possession of the unit in near future has been made by opposite parties no.1 to 3. At the time of argument also, we specifically asked to Counsel for opposite parties no.1 to 3, as to by which date, construction will be completed and possession of the unit, can be handed over to the complainant: he was having no answer and stated that the Company is ready to compensate him, till possession is not delivered. Above fact clearly goes to show that opposite parties no.1 to 3 were not serious in completing the construction and handing over possession of the built-up unit to the complainant.
10.           Furthermore, there is nothing on record to show that opposite parties no.1 to 3  suffered any force majeure circumstances, on account of which, development at the project site could not be completed by the stipulated date. In the absence of any force majeure circumstances having been faced by opposite parties no.1 to 3, they were bound to deliver possession of the unit in question, by 09.05.2019, as such, time was unequivocally made the essence of contract, by way of Clause 5.1 of the Agreement, referred to above.  The opposite parties no.1 to 3 cannot evade their liability, merely by saying that since the word “endeavor” was mentioned in Clause 5.1 of the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. It may be stated here that the act of non-mentioning of exact date in the Agreement is violation of CHAPTER II Regulation of Promotion of Construction, Sale, Transfer and Management of Apartments, Plots and Properties, Condition no. 3(2) (g) of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which says that the project proponent is duty bound to specify, in writing, the date by which possession of the residential plot/unit is to be handed over and it shall hand over such possession accordingly. Relevant contents of Condition no.3(2) (g) of the PAPR Act are reproduced below:-

“(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly”;

 

                   Furthermore, non-mentioning of exact date of delivery of possession of the plot/unit in the Buyer’s Agreement 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 plot/unit 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 opposite parties no.1 to 3 in this regard stands rejected.

11.           The complainant has booked the unit as far as back on 15.07.2014 and now it is December 2019, and still he is empty handed despite the fact that substantial amount of Rs.21,98,869/-  stood paid to opposite parties no.1 to 3. Still the opposite parties no.1 to 3 are not sure, as to by which date, possession of the built-up flat can be delivered to the complainant. The complainant cannot be made to wait for an indefinite period on the ground  taken by opposite parties no.1 to 3 that they are ready to pay compensation for the period of delay in delivering possession or that they are committed to pay Pre-EMI to the Bank concerned from where loan has been obtained by him, under subvention scheme. The complainant has not booked the unit for getting paltry compensation as mentioned in the agreement for the period of delay, for an indefinite period. Thus, the aforesaid act of opposite parties no.1 to 3 amounts to deficiency in providing service, negligence and unfair trade practice on their part.
12.           It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. In the present case also, since there has been delay in the matter and still no exact period, as to when possession of the unit can be delivered in future has been given by opposite parties no.1 to 3, as such, we are of the considered opinion that if we order refund of the amount paid alongwith suitable interest that will meet the ends of justice. 
13.           The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units/plots by the stipulated date, fell for determination before the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, the Hon`ble Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Recently also, under similar circumstances, the Hon’ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 while ordering refund of the amount paid, awarded interest @12% p.a.
14.           Thus, in view of principle of law laid down by the Hon`ble Supreme Court of India and also the National Commission, we are of the considered opinion that if interest @12% p.a. on the deposited amount is awarded to the complainant, it will meet the ends of justice. 
15.           Since, it is an admitted fact that possession of the unit, in question, had not been offered to the complainant by the time, this complaint was filed or even thereafter, nor the Company is in position to do so, as explained above, as such, there is a continuing cause of action in his favour to file the consumer complaint in view of law laid down in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal   Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC),  wherein it was held that when possession of the residential units is not offered, there is a continuing cause of action in favour of the allottee/buyer. Objection raised in this regard, as such, is rejected.
16.           Since, it has already been held that the complainant is entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by  opposite parties no.1 to 3 to the effect that they are ready to pay penalty amount for the period of delay, in delivery of possession of the unit cannot be considered. Plea taken in this regard is accordingly rejected.     
17.           As far as objection taken to the effect that the complainant did not make timely payments, it may be stated here that not even a single  document has been placed on record by opposite parties no.1 to 3,  whereby it can be proved that the complainant failed to make payment demanded by them, as a result whereof, reminders in that regard were issued  to him. As such, bald plea taken in this regard stands rejected.
18.           Now we will like to decide the miscellaneous application bearing no.1068 of 2019 filed by opposite party no.3 i.e. Sh.Vishwa Prakash with a request to delete his name  from the memorandum of complaint, as he has resigned from his duties, as Director of the Company, on 09.05.2018. It is alleged in the application that Sh.Vishwa Prakash was earlier the Director of the Company but he resigned on 09.05.2018 and the said resignation was duly submitted to the Registrar of Companies (ROC)   on 27.09.2019. Now the same has been uploaded on the website of the ROC on 06.12.2019 and from the date of submission of the resignation, he is not in connection with the affairs of the Company and, therefore, he is not liable for any act of the Company.
19.           This application has been strongly contested by Counsel for the complainant on the ground that, at the relevant time, Sh.Vishwa Prakash was actively participating in the affairs of the Company, and, as such, his subsequent resignation from the Company will not provide him any immunity.
20.           Admittedly, in this case, booking of the unit was made in July 2014. Sh.Vishwa Prakash was also working in the Company but he was notified as Director thereof on 28.07.2017. At the time of filing of this case, he was a Director of the Company. His resignation was notified by ROC only on 06.12.2019. No notice was issued to the complainant including other allottees regarding resignation of Sh.Vishwa Prakash from the Company. Counsel for opposite party no.3 has placed reliance on a case titled as Harshendra Kumar D. Vs. Rebatilata Koley etc., 2011 (1) BC 685,  to contend that opposite party no.3 cannot be made personally liable for the act of the Company, after his resignation. This Commission has considered the contention raised. Infact the precedent in Harshendra Kumar D. case (supra) pertains to the provisions of Sections 141 of the Negotiable Instruments Act. This Section  reads as under:-

“[ 141 Offences by companies. —

(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:  [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]

 

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”

 

21.           It has been provided on record that Sh.Vishwa Prakash had joined the Company as Manager. Thereafter, he was promoted to Senior Manager and then Director of the Company. Sh.Vishwa Prakash has filed this application just with a view to absolve himself from the liability of the Company but it has come into evidence that he always participated in the affairs of the Company and, as such, his resignation is not binding upon the complainant to whom no notice was issued. Under these circumstances, it is held that opposite party no.3 alongwith opposite parties no.1 and 2 is also equally liable in this case. In this view of the matter, miscellaneous application bearing no.1068 of 2019 stands dismissed with no order as to cost.
22.           For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties  no.1 to 3, jointly and severally, are directed as under:-

1. To refund the entire amount, actually paid by the complainant from his own sources/pocket, at the time of booking and thereafter also, towards part price of unit, alongwith interest @12% p.a., from the respective dates of deposits onwards.
2. To refund the amount to the complainant, if any pending, which had been paid by him to opposite party no.4, towards equated monthly installments, on the loan amount, as it was the liability of opposite parties no.1 to 3, under subvention scheme, as admitted by them in their written statement.  
3. To repay the entire loan amount to opposite party no.4, released by it in favour of Company, in respect of the unit in question alongwith pre-EMI installments, if any due, till date. It is also made clear that till the time, the entire loan amount is not repaid to opposite party no.4, opposite parties no.1 to 3 shall be bound to pay the equated monthly installments/Pre-EMI interest to opposite party no.4, till realization.
4. To pay compensation for causing mental agony and physical harassment and also litigation expenses, in lumpusum, to the tune of Rs.50,000/- to the complainant.
5. The payment of awarded amounts mentioned at sr.nos.(i), (ii) (if any) and (iv) shall be made by opposite parties no.1 to 3 to the complainant within a period of 30 days from the date of receipt of a certified copy of this order failing which the amount mentioned at sr.nos.(i) and (ii) (if any), thereafter shall carry penal interest @15% p.a., instead of @12%, from the date of default and interest @12 % p.a., on the amount mentioned at sr.no. (iv) from the date of filing of the complaint, till realization, besides compliance of other directions given.
6. Complaint against opposite party no.4 is dismissed with no order as to costs, subject to directions aforesaid.

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

Pronounced.

19.12.2019

 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

          Sd/-

(PADMA PANDEY)

          MEMBER

 

 

          Sd/-

(RAJESH K. ARYA)

MEMBER

 Rg