JUSTICE V.K. JAIN, PRESIDING MEMBER

                The complainant booked a residential apartment in a Project “The Views”, which the opposite party was developing at Mohali Hills in Sector 105, SAS Nagar, District Mohali Punjab on 12.08.2006.  The flat No.K3/904 in the aforesaid project was allotted to him on 13.10.2006. Subsequently, the allotment was modified and Apartment No. H1/1003 was allotted to the complainant in lieu of the initially allotted flat.  Later on, the complainant changed the booking from an apartment to a Villa and consequently a villa admeasuring 300 sq. yards was allotted to him on 09.01.2009, for a total consideration of Rs.1,20,73,300/-.  The parties then entered into a Buyers Agreement dated 23.9.2009, incorporating their respective contractual obligations.  As per Clause-8 of the Buyers Agreement, the opposite party was to endeavour to deliver possession of the villa within a period of 24 months from the date of the said agreement but not later than 30 months.  In case of delay, due to an act of God or reasons beyond the control of the opposite party, including Government strike, civil commotion, war, enemy action or earthquake or any act, notice, order, rule or Notification of the Government or any other public or Competent Authority, the opposite party was entitled to extension of time till such event or reasons extended.  It was also stipulated in the aforesaid clause that on failure of the opposite party to deliver possession for reasons other than the exempted reasons, within three years from the date of agreement it shall be liable to pay a penalty of Rs.50/- per sq. yard per month for delay beyond three years.

2.      The case of the complainant, as set out in the complaint,  is that though the committed date of possession expired on 23.3.2012, and he had already paid a sum of Rs.1,15,78,537/-, the opposite party did not delivered possession of the villa booked by him.  The complainant is therefore before this Commission, seeking refund of the amount paid by him, along with interest and compensation. 

3.      In its reply, the opposite party has taken a preliminary objection that since the buyer’s agreement contains an arbitration clause, the complaint is not maintainable and the dispute should be resolved by arbitration.  It is also alleged that the complainant was a regular defaulter in payment of the instalments, though the allotment made to him was not cancelled.  On merits, the opposite party has admitted the payment received from the complainant as well as the allotment of the villa to him.  It is further stated in the reply that structural work of the unit has already been completed and finishing work is going on after which the opposite party shall apply for the occupancy certificate and offer possession of the villa.  It is also alleged that a ban on mining had affected the construction activities.

4.      Clause 8 and 33 of the Buyers Agreement read as under:

          “8.     Subject to Force Majeure conditions and reasons beyond the control of the company, the company shall endeavour to deliver possession of the Built up Villa to the Allottee within a period of 24 months from the date of execution of this Agreement, but not later than 30 months.  In the event that the possession of the Built up villa is likely to be delayed for reasons of any force majeure event or any other reason beyond the control of the company including government 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 events, the company shall upon notice claiming force majeure to the Allottee be entitled to such extension of time till the force majeure event persists or the reason beyond the control of the company exists. In the event that the Company fails to deliver possession of the Built up villa without existence of any force majeure event or reason beyond the control of the company within a maximum period of three years from the date of execution of this Agreement, the company shall be liable to pay to the allottee, a penalty of the sum of Rs.50/- per sq. yards per month for such period of delay beyond three years from the date of execution of this Agreement”.

33.    The company shall not be held responsible or liable for not performing any obligation or undertaking provided for in this Agreement if such performance is prevented, delayed or hindered by an act of God, fire flood, explosion, war, riot, terrorist acts, sabotage, inability to procure or general shortage of energy, labour, equipment, facilities, materials or supplies, failure of transportation, strikes, lock outs, action of labour unions or any other cause (whether similar or dissimilar to the foregoing) not within the reasonable control of the company.  (“Force Majeure Conditions”).  The allottee agrees and understands that if due to any Force Majeure Conditions, the whole or part of the Project is abandoned or abnormally delayed, the allottee shall not be entitled to prefer any claim whatsoever except that the company shall on demand refund the Allottee’s money with simple interest @ 12% per annum from the date of occurrence of such Force Majeure Conditions”.

          In my view, despite use of the words “the company shall endeavour to deliver possession” unless prevented by act of God or the reasons specifically stated in Clause 8 or 33 of the Buyers Agreement, the opposite party was under a contractual obligation to complete the construction, obtain the occupancy certificate, and hand over possession of the villa, complete in all respects to the complainant within thirty months from the date of the buyers agreement. Therefore, the question which arises for consideration is as to whether the completion of the construction and offer of possession has been delayed for the reasons specifically stated in Clause 8 or 33 of the Buyers Agreement or not.  The only factual cause alleged by the opposite party for the delay in completion of the construction is a bald allegation of ban on the mining.  However, no particulars of the alleged ban have been given in the written version. Vide letter dated 10.9.2012, the opposite party informed the complainant that the work was affected due to a sudden imposition of ban on mining since March, 2012.  The said letter however, contains no details as to by whom the alleged ban was imposed and what was the duration of the said ban.  The buyers agreement between the parties in respect of the villa was executed on 23.9.2009.  The initial period of 24 months mentioned in para 8 of the buyers agreement had already expired before January, 2012 when the ban on mining allegedly happened.  In fact, even the extended period of thirty months, computed from the date of the buyer agreement, had expired in March, 2012.  Therefore, the alleged ban on mining in March, 2012, could not have affected the pace of construction on or before the date committed for the delivery of possession of the villa to the complainant.  In any case, there is no evidence of the opposite party having tried to procure sand from the alternative sources and sand having not become available even from the alternative sources, after the alleged ban on March, 2012.  None of the other reasons referred in Clause 8 or 33 of the buyers agreement has even been claimed by the opposite party, to justify the delay in completing the construction and offering possession of the villa to the complainant.

5.      During the course of arguments, the learned counsel for the opposite party vehemently contended that since the complainant owns a number of residential properties, he cannot stated to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act.  Reliance in this regard was placed upon the affidavit of the complainant dated 27.6.2016.  I find that in the written version filed by the opposite party it did not claim that the complainant is not a consumer within the meaning of the Consumer Protection Act.  The said plea was sought to be taken by way of amendment of the written version and Interim Application No.4623/2016 was filed for this purpose.  However, when the aforesaid application came up for hearing, the learned counsel for the opposite party stated that he only wanted to place on record three documents i.e. (i) Occupancy Certificate in respect of the flat agreed to be sold to the complainant, (ii) the letter whereby possession was offered to the complainant during the pendency of the complaint and (iii) a copy of the order passed by this Commission in another Consumer Complaint filed by the complainant.   The aforesaid documents were allowed to be filed, along with a supporting affidavit.  In view of the limited prayer made on 20.5.2016, and lack of pleadings to this effect, the opposite party cannot be allowed to contend that the complainant is not a consumer as defined in the Consumer Protection Act.  However, even if I take into consideration the affidavit filed by the complainant on 27.6.2016, it would be difficult to say that the complainant had hired or availed the services of the opposite party for a commercial purpose and therefore, he is not a consumer as defined in Section 2(1)(d) of the Consumer Protection Act.

6.      The term ‘commercial purpose’ came to be considered by a Three-Members Bench of this Commission in Crompton Greaves Limited & Anr. Vs. Daimler Chrysler India Private Limited & Ors. Consumer Complaint No. 51 of 2006 and the following view was taken:

          “4.      The term ‘commercial purpose’ has not been defined in the Consumer Protection Act and as held in Laxmi Engineering Works v. P.S.G. Industrial Institute [(1995) 3 SCC 583], in the absence of a statutory definition, we have to go by its ordinary meaning. ‘Commercial’ denotes ‘pertaining to commerce’ (Chamber’s Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile, having profit as the main aim” (Collin’s English Dictionary) and the word ‘commerce’ means “financial transactions, especially buying and selling of merchandise on a large scale” (Concise Oxford Dictionary)”.

5.      …. The acquisition of the goods or the hiring or availing of services, in order to bring the transaction within the purview of section 2 (1) (d) of the Consumer Protection Act, therefore, should be aimed at generating profits for the company or should otherwise be connected or interwoven with the business activities of the company. The purpose behind such acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or services”.   

          In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In a given case, separate houses may be purchased by a person for the individual use of his family members.  A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house.  Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose.  In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015.    

7.      As per the affidavit of the complainant he constructed house on Plot 154 in Sector 15A of Noida about twenty years ago and is staying in that house.  He also purchased a plot on 15.10.2009 in Sector 105 of the Noida for his elder daughter who has already attained the age of maturity.  He also booked a residential apartment in a project namely “Burgundy” which Unitech Ltd. was to develop in Sector 96, 97 and 98 of Noida.  The complainant has stated in his affidavit that the said property was booked by him for his personal residence since he intended to shift from his current residence in Sector 15A of Noida to the aforesaid property.  As regards property in question, the complainant has stated in his affidavit that the villa in question was booked by him for his parents, who were staying at Panchkula.

          It would be pertinent to note that there is no evidence of the complainant having purchased and then sold any residential property.  Therefore, it would be difficult to say that he was engaged in the business of the buying and selling of the property or that villa in question was booked by him for speculative purposes.  Despite booking villa in question in the year 2009 and the opposite party having failed to deliver possession, he made no attempt to transfer the allotment of the villa to a third party.  The plot in Sector 105 of the Noida was purchased for his daughter way back on 15.10.2009.  The complainant continues to hold the said plot though almost seven years have since expired.  This clearly shows that he genuinely purchased the plot for his daughter and not for speculative purposes.  As far as apartment in Sector 96, 98 of Noida is concerned, there is no reason to disbelieve the explanation of the complainant that the said apartment was booked for the purpose of shifting from his present residence.  Moreover, no attempt was made by him to transfer the booking of the said apartment despite the builder having failed to deliver possession and this Commission vide order dated 12.10.2015, having now directed the builder to deliver possession by 31.10.2017.  I therefore, find no merit in the contention that the complainant is not a consumer as defined in Section 2(1)(d) of the Consumer Protection Act.

8.      The learned counsel for the opposite party referred to the decision of the Hon’ble Supreme Court in Chand Rani Vs. Kamal Rani Civil Appeal No. 3377 of 1979 and contended that the time is not the essence of the contract in a transaction for sale of the immovable property.  This contention came to be considered by this Commission in Consumer Complaint No. 315 of 2015 Pradeep Narula Vs. M/s. Granite Gate Properties Pvt. Ltd. & Anr. decided on 23.8.2016 and was rejected taking the following view:

          “10…….………Moreover, the decision in Chand Rani (supra) was rendered in the context of a suit for specific performance of an agreement to sell the first floor of an existing house, whereas the decision in the Hind Construction (supra) was rendered in the context of a Government contract. In neither of these cases, the Hon’ble Supreme Court was called upon to decide as to whether an unjustified and explained delay on the part of the builder/service provider in construction of a residential flat booked by a person seeking to have a shelter over his head amount to a deficiency in the service rendered by him to the consumer, or not. The primary purpose of a consumer in booking a residential flat which the builder is to construct for him, is to start living in that house on or about the date committed to him by the builder for delivering possession of the flat booked by him. If the builder does not deliver upon his contractual obligation and at the same time, is unable to show that the delay in completion of the flat and offering its possession to the consumer was on account on circumstances beyond his control, this would constitute deficiency on the part of the builder/service provider in rendering services to the consumer. If I accept the contention that the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice and result in a situation where the flat buyer is left at the mercy of the builder, without recourse to an appropriate legal remedy. Such an interpretation, if taken, is bound to defeat the very objective behind the enactment of the Consumer Protection Act, as far as housing construction is concerned. Therefore, I am unable to accept the contention advanced by the learned counsel for the opposite party. In my view, wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, though a minor delay may not constitute deficiency in the service rendered by him to the buyer. Of course, if the builder is able to how that the delay in completion of the construction and offering possession to the buyer is attributable wholly to the circumstances beyond his control, that may not be a case of deficiency in the services rendered to the consumer”.

9.      I also do not find any merit in the contention of the opposite party that in view of Clause 8 of the Buyers Agreement, they are required to pay only the agreed compensation.  A similar contention came to be rejected by this Commission in Swarn Talwer & Ors. Vs. Unitech Limited, Consumer Complaint No. 347 of 2014 decided on 14.8.2015.  The following was the view taken by this Commission:

          ……. As regards the plea that in terms of Clause (c) of the allotment letter the opposite party is required to pay only the holding charges calculated at the rate of Rs.5/- per sq.ft. per month of the super area for the period the possession is delayed, such a contention was expressly rejected by us in Puneet Malhotra (supra) holding that such clause applies only in a case where construction of the flat is delayed but despite delay the buyer accepts the possession of the flat from the seller and consequently the accounts have to be settled between the parties. We observed in this regard that the buyer would have to pay the agreed holding charges to the seller and the seller to pay the agreed compensation on account of delaying the construction of the flat. The said clause, however, does not apply to a case where the buyer on account of delay on the part of the seller in constructing the flat is left with no option but to seek refund of the amount which he had paid to the seller. We further held that such a clause where the seller in case of default on the part of the buyer seeks to recover interest from him at the rate of 24% per annum will amount to an unfair trade practice since it gives an unfair advantage to the seller over the buyer. We also noted in this regard that enumeration of the unfair trade practices in Section 2(r) of the Act is inclusive and not exhaustive.

10.      Being aggrieved from the order passed by this Commission, the opposite party approached the Hon’ble Supreme Court by way of an appeal. The said Appeal being Civil Appeal D.No.35562/2015 was dismissed by the Hon’ble Supreme Court vide its order dated 11.12.2015 which reads as under:-

“We have heard learned counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgement impugned does not warrant any interference.

The Civil Appeal is dismissed.”

11.    The written version in this case, came to be filed on 25.3.2015.  Section 8 of the Arbitration and Conciliation Act has been amended with effect from 23.10.2015, by Arbitration and Conciliation (Amendment) Act, 2015.  Therefore, the provisions of the amended Act would not apply to this complaint.  In view of the decision of the Hon’ble Supreme Court in Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. (2000) 5 SCC 294, Thirumurugan Coop. Agricultural Credit Society Vs. M. Lalitha (2004) 1 SCC 305, Fair Air Engineers Pvt. Ltd. & Anr. Vs. N.K. Modi (1996) 6 SCC 385 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. (2012) 2 SCC 506, which had been rendered before the aforesaid amendment came into force, the complainant cannot be compelled to resort to the arbitration, in terms of the Arbitration Clause contained in the Buyer’s Agreement.

12.    During the course of hearing, it was contended by the learned counsel for the opposite party that on 06.4.2016, they have already obtained post-completion certificate in respect of the villa allotted to the complainant.  He also submitted that vide letter dated 06.5.2016, they have already informed the complainant about grant of the part occupancy certificate and asked him to pay an additional amount of Rs.3,01,200/- on account of revision of EDC by Government of Punjab.  The learned counsel for the complainants however, maintained that considering the breach of its contractual obligation by the opposite party, the complainant is not obliged to accept the offer of possession at such a belated stage, particularly when the said offer is not accompanied by an offer to pay adequate compensation for the delay in offering possession of the villa.  I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant 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.

13.    For the reasons stated hereinabove, the opposite party is directed to refund the entire principal amount of Rs.1,15,78,537/-, received from the complainant, along with compensation in the form of interest @ 9% per annum from the date of the individual deposit, till the date of payment.  The opposite party shall also pay Rs.10,000/- as cost of litigation to the complainant.  The payment, in terms of this order, shall be made within six weeks from today.          The complaint stands disposed of accordingly.