PER MRS. M. SHREESHA, MEMBER

          Aggrieved by the orders dated 05.12.2016 in Consumer Complaints No.  382 to 390 of 2016, dated 27.10.2016 in Consumer Complaints No. 472 to 478 of 2016 and dated 22.12.2016 in Consumer Complaints No. 557 to 561 of 2016  passed by U.T. Chandigarh State Consumer Disputes Redressal Commission, (in short “the State Commission”), the Opposite Parties No. 1 to 3 namely, BCL Homes Ltd.  (hereinafter referred to as “the Developer”) preferred these Appeals under Section 19 of the Consumer Protection Act, 1986 (in short “the Act”). By the impugned order, the State Commission has allowed the Complaints in part directing the Developer to refund to the Complainants the amounts paid by them with simple interest @ 12% p.a. from the respective dates of deposit together with compensation of ₹2,00,000/- and  costs of ₹50,000/-. The Complaint against  Canara Bank was dismissed. The State Commission has also directed that if the amounts were not paid within two months from the date of receipt of a certified copy of the order, the amount shall carry interest @ 15% p.a. for the same period.

2.       All these 21 Appeals are being disposed of by this Common order. For the sake of convenience, First Appeal No. 175 of 2017 in Consumer Complaint No. 382 of 2016 is being taken as the lead case.

3.       The Complainant purchased an Apartment in a project launched by the Developer under the name and style of ‘Chinar Homes’, Zirakpur, Mohali and paid an amount of ₹8,30,000/- on 21.09.2011. The total sale consideration was agreed at ₹41,50,000/- and the Complainant paid a substantial amount of ₹37,73,472/- by 13.03.2013 and the Allotment Letter was issued on 21.09.2011 for Apartment No. 625, admeasuring 2170 sq. ft. in the 6^th Floor of Tower T-13, Chinar Homes. It is stated that the amounts were paid as per schedule in the following manner:

          It is averred that the balance amount is to be paid on offer of possession of flat and that as per Clause 9 of the Allotment Letter, the possession was to be delivered to the Complainants by the Developer within a period of 18 to 24 months with a grace period of 3 months from the date of issuance of the Allotment Letter i.e. on or before 20.12.2013 after providing all the basic amenities. It is also stipulated in Clause 9 that in case the Developer failed to deliver possession of the unit by the said date, they were liable to pay ₹10,000/- per month to the Complainants towards rent for the period of delay beyond 27 months. It is stated that when the Complainants visited the site in the year 2014 and 2015, they were shocked to see that not even one tower in the said project was complete. The Complainant were living in a rented accommodation and wanted to shift into their own flat at the earliest and requested the Developer to give possession and also pay delayed compensation for the period of delay as per Clause 9 of the Allotment Letter. But there was no response. Even the internal Development like laying of roads, sewerage treatment plant was not complete. Hence the Complainant sought refund of the amount paid together with interest, compensation and costs.

4.       The Developer filed their Written Version stating that the State Commission did not have the jurisdiction to entertain the Complaint as there was an arbitration clause in the Allotment Letter dated 21.09.2011; that the Complainant had already invoked the jurisdiction of the Debt Recovery Tribunal and sought stay orders and also that the Complainant was not a Consumer as it is a case of a simple transaction of sale of flat and does not involve any hiring of services. It is also averred that no transaction had taken place at Chandigarh and that the properties are at Mohali and therefore the State Commission did not have territorial jurisdiction to entertain the Complaint.

5.       It is also stated that the Canara Bank had sanctioned a term loan of ₹32.00 crore on 29.03.2012, the cost of construction of  project was 111.95 crores, that the bank share was 22.46% and the major contribution was on behalf of the Developer which was  44.28% and that of flat buyers 33.26%. The Developer had handed over to the Bank the Title Deeds on 30.03.2012. The Bank had forged a fabricated documents called “Letter Evidencing Deposit of Title Deeds”  dated 30.03.2012. Though the Title Deeds had been handed over to the Bank on 30.03.2012, yet fraudulently the Bank had recorded therein that the same stood deposited on 29.03.2012. It is averred that in the Title Deed there is no mention of building or building project and there is mention of land only. The letter dated 30.03.2012 sought to create mortgage against buildings also. This addition of word ‘buildings’ requires registration under  Section 17 of the Registration Act. It is pleaded that non operatable mortgage stood in favour of Bank. Due to reasons beyond the control of the Developer, namely, the prices of building material, slowdown in the real estate and failure of the Bank to extend the loan and on account of the  of lethargic approach of the Bank, the Developer underwent severe financial stress. The Bank had proceeded to take action against Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (in short “SARFAESI Act”) by issuing demand notice dated 14.07.2015. In this regard the Developer sought to explain to the flat purchasers that the project could be completed if the final amounts due and payable by them could be paid to the Developer. They were also explained that since the claim of the Bank regarding mortgage of the constructed flat was not tenable, the rights of the flat buyers would not be affected. The Complainant had agreed to pay ₹4,15,000/- towards balance amount along with interest on the delayed payment to the tune of ₹74,449/- and ₹10,083/- towards interest on the delayed payment of service tax. However, the Complainants instead of cooperating file this Complaint before the State Commission. 

6.       The State Commission based on the evidence adduced allowed the Complaints observing as follows:

“ 22. …… It is virtually admitted on record that till today, no offer has been made to hand over possession of the constructed unit by the opposite parties no.1 to 3 to the complainants. Rather perusal of documents, as also photographs placed on record depicts that the project is not complete and construction is virtually stopped at the site. In a case titled as Chand Berry and another Vs. BCL Homes Limited and others, consumer complaint no.292 of 2015, decided by this Commission on 19.02.2016, under similar circumstances, when deciding that complaint filed by the complainants stating that for non-delivery of possession, directions be issued to refund amount with interest, this Commission has observed as under:-

“It is a case of failed promise and virtually deceit has been committed by opposite parties no.1 to 3, with the complainants. It was never disclosed to the complainants, by opposite parties no.1 to 3,  that the entire project land and construction to be raised thereon, stood mortgaged with opposite party no.5. Virtually after making more than 95% of the price of unit, delivery of possession thereof is not expected even in near future. Above fact clearly amounted to deficiency in providing service on the part of opposite parties no.1 to 3, which entitles the complainants  to get refund of amount paid by them, towards the unit.”

 23. It was noted as a matter of concern that the entire project site and the construction raised thereon stood mortgaged with the Bank namely Canara Bank/opposite party no.4. At the time of arguments, it also transpires that for committing default in repayment of loan, dispute has been raised by the financial institutions in various Courts, Debt Recovery Tribunal etc. This act of opposite parties no.1 to 3, in committing default in repayment of loan, in no manner can be termed as force majeure circumstances, and as such, they cannot claim any immunity, under the said plea. Even otherwise, the complainants have no concern, whatsoever, with the dispute, if any, arose between opposite parties no.1 to 3 and opposite party no.4 (third party, with which there is no privity of contract with the complainants). If that is so, one cannot visualize handing over possession of the units, in near future. Neither in the written statement nor at the time of arguments, any commitment was made, giving exact time-frame, within which period, possession of the unit can be delivered to the complainants. It is on record that despite request made by the complainants, through legal notice dated 10.06.2016 (through registered post) to refund the amount with interest thereon or in the alternative to deliver possession of the unit, even reply was not given by opposite parties no.1 to 3. Above facts clearly amounted to deficiency in providing service on the part of opposite parties no.1 to 3, which entitle the complainants to get refund of amount paid by them, towards the unit.

24.  As far as the plea taken by the opposite parties no.1 to 3 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, nothing has been brought on record, in the shape of any customer ledger or statement of account, pertaining to the account of the complainants, to prove that they were defaulters in making payment towards price of the said flat. In the absence of any evidence, a bald plea taken by opposite parties no.1 to 3, in this regard, cannot be considered. 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., Consumer Complaint No.  232 of 2014, Decided on 29.01.2015, 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 no.1 to 3 out of the plea, raised by them, in this regard.”

7.       Heard both sides at length.

8.       Learned counsel appearing for the Developer submitted that the Developer is in a financial crunch; have not cancelled the allotment of any flat purchaser; that if eight months’ time is given, the construction can be completed and possession can be handed over; that the Debt Recovery Tribunal has ordered a status quo on the property vide order dated 08.02.2016 and that Canara Bank has initiated proceedings under Section 13(4) of SARFAESI Act, in which the Complainants had participated. He further contended that on account of the matter pending between the same parties before the Debt Recovery Tribunal, the State Commission ought not to have entertained the Consumer Complaint. It was also submitted that though Clause 9 of the Allotment Letter states that if there is any delay beyond 27 months, the Developer shall pay monthly rent of ₹10,000/- for the period of delay beyond the 27 months, the entitlement of the said rent is subject to the flat purchaser not being in default in making the timely payment of installments as agreed to. He vehemently contended that the grant of compensation by way of interest is beyond the terms of binding inter se Agreement between the parties. It was further submitted that the Bank fraudulently created Mortgage not only against land, on which the construction of the project had to be carried out but also against the building which was required to be constructed. This fraudulent act by the Bank created a non operatable mortgage in their favour against the buildings.

9.       Learned counsel appearing for the Complainants submitted that even as on date only the super structure is existing and not even the basic amenities are completed; that all the Complainants did not participate in the proceedings before the Debt Recovery Tribunal; that NCLAT had in the matter between the Developer and the Canara Bank in Company Appeal (AT) (insolvency) No. 02 of 2018 had, vide order dated 08.03.2018, set aside the impugned order dated 28.11.2017 and remitted the matter back to the NCLT to consider the Application under Section 10 of ‘I & B Code’ afresh.

10.     We observe from the copy of the order that the matter was remanded back to NCLT and thereafter on a pointed query from the Bench whether the matter was admitted or any moratorium was granted by NCLT, the counsel replied in the negative. As regarding the contention of the learned counsel that on account of ‘status quo’ ordered by DRT, the State Commission cannot entertain the matter, having regard to the facts and circumstances of the subject matter, we observe that this order will not have any effect on the proceedings before the DRT.

11.        We first address ourselves to the objections raised by the learned counsel for the Appellant/ Developer that the clause of Arbitration bars the State Commission from entertaining the Complaint. The Hon’ble Supreme court in its order dated 10.12.2018 in M/S Emaar MGF Land Limited vs Aftab Singh (Review Petition (C) Nos. 2629-2630 OF 2018 in Civil Appeal Nos. 23512-23513 OF 2017) has laid down the law that the Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint. The second objection with respect to territorial jurisdiction that the unit in question was situated at Mohali, Punjab and that all payments were made on that place and therefore the State Commission at Chandigarh does not have the jurisdiction to entertain the Complaint, is also  untenable since according to section 17 (c) of the Act the Consumer can file  a Complaint where part of cause of action has arisen and in the instant case, the material on record evidences that large amounts were received at the Registered Office at Chandigarh and therefore we are of the considered view that part of cause of action has arisen at Chandigarh and the State Commission has territorial jurisdiction to entertain the Complaint. 

12.     Admittedly, the Complainant had paid an amount of ₹37,73,472/- by 13.03.2013 and as per Clause 9 of the Allotment Letter dated 21.09.2011, the possession of the subject unit was to be delivered within 18 to 24 months from the date of Allotment Letter with a grace period of 3 months. For better understanding of the case, Clause 9 is reproduced as hereunder:

“The possession of the said flat shall be delivered to the Allottee(s) in 18-24 months from the date of this Agreement/allotment, with a grace period of 03 months. However, in the event there is a delay in offering the possession/permissive possession of the Flat in the said period, for any reason not directly attributable to BCL Homes Ltd. shall be entitled to reasonable extension in time for delivery of possession/permissive possession. In the event of completion of the said Flat being delayed beyond 27 months from the date of this Agreement/allotment, for reasons directly attributable to BCL Homes Ltd. shall be liable to pay to the Allottee(s) monthly rent of Rs.10,000/- for the period of delay beyond the said 27 months period on the amount paid to BCL Homes Ltd. by the Allottee. The possession of the Flat shall be handed over on receipt of the all dues, documents, and on fulfillment of conditions as stipulated herein. If the physical possession is not taken over at site within 45 days of the issue of the possession letter, the Allottee shall pay watch and ward charges @0.1% of the total cost of the flat per month. Notwithstanding anything contained in this Agreement, if the allottee fails to take over possession of the said flat within six months from the date of issue of possession letter, even if other portions of Project are not complete or are in the course of construction the allotment would be liable for cancellation”.

13.     From the aforenoted Clause 9, it is clear that if possession is not delivered within 27 months as committed, the Developer is liable to pay an amount of ₹10,000/- per month for the period of delay beyond 27 months. The contention of the learned counsel for the Appellants that even this Clause is subject to amounts due from the Complainants is totally unsustainable as the record evidences that substantial amounts have been paid by the flat purchasers and that even till date the project is not complete. Further the material on record does not establish that the small amounts due was the main cause for the delay in the completion of the project.  Further, there is also a statement in the clause that if the physical possession is not taken over by the flat purchasers within 45 days of the issue of the letter, the allottee shall pay watch and ward charges at 0.1% of the total cost of the flat per month.

14.     It is an admitted fact that the entire project site and the construction raised thereon is mortgaged with Canara Bank and a dispute has been raised by the financial institutions in various courts including Debt Recovery Tribunal. The default of payments by the Developer to Canara Bank cannot, viewed from any angle, be construed as ‘Force Majeure’ conditions.

15.     During the course of arguments learned counsel appearing for the Developer submitted that Appellants are in a financial crunch and if eight months’ time is given, possession can be offered or flats can be sold and the amounts can be paid. This offer was not acceptable to the Complainants and the counsel submitted that they cannot be made to wait for the completion as they had lost confidence in the Developer. We rely on the judgement of the Hon’ble Supreme Court dated  25.03.2019 in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra (Civil Appeal NO. 3182 of 2019), in which the Hon’ble Supreme Court has observed that the flat purchasers cannot be made to wait for an inordinate period of time hoping to seek possession. The Hon’ble Supreme Court in judgement dated 02.04.2019 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan  (CIVIL APPEAL NO. 12238 OF 2018), has held that even if the offer of possession is given during the pendency of the Complaint,  the Complainant, cannot be compelled to accept the possession.

16.     The award of ₹2,00,000/- towards compensation is just and reasonable as the Complainants suffered financially and mentally not only on account of loss of rent but also because the Complainants could not fulfill their dream of owning a house despite having taken loans and paid substantial amounts.

17.     It is relevant to note that this Commission vide order dated 10.08.2017 has noted that an offer was made by the Appellants herein to deliver the possession of the subject Apartments by August 2018 or refund the amount with simple interest @ 9% p.a. after one year. It was observed by us that majority of the Complainants are already paying interest on loans raised by them from the Banks and the Apartments which were promised to be delivered to the Complainants in December 2013, still not complete, the Appellants were directed to deposit in the State Commission, the principal amounts paid by each of the Complainant with simple interest @ 9% p.a. from the date of each deposit till 31.08.2017. This order was not complied with and a notice was issued under Section 25 of the Act vide order dated 14.09.2017. Keeping in view the back ground of the case, the conduct of the Appellants and also the non-compliance of the order dated 10.08.2017 together with the statement of the learned counsel representing the flat purchasers that even as on date there is no Occupation Certificate/ and or a commitment from the Appellants regarding the exact date of delivery of possession and also keeping in view the principle laid down by the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. (supra),  that the flat purchasers cannot be made to wait endlessly for inordinate period of time for seeking delivery of possession, we are of the considered view that there is no illegality or infirmity in the orders passed by the State Commission and therefore these Appeals are dismissed. No order as to costs.

18.     The statutory deposit in each of these Appeals shall stand transferred to the Consumer Legal Aid Account of this Commission.