Chandigarh

StateCommission

CC/248/2016

Amarjit Singh Mahal - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Capt. Arun Sharma , Ranbir Singh, adv.

15 Dec 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	248 of 2016
Date of Institution	:	31.05.2016
Date of Decision	:	15.12.2016

Amarjit Singh Mahal aged 55 years son of Sh. Labh Singh Mahal.

Mrs. Lakhmir Kaur, aged 50 years wife of Sh. Amarjit Singh Mahal.

Both residents of House No.47, Officers Colony, Ludhiana (Punjab).

……Complainants

V e r s u s

Emaar MGF Land Ltd., SCO No.120-122, 1^st Floor, Sector 17-C, Chandigarh, through its Branch Manager.
Emaar MGF Land Ltd., Regd. Office ECE House, 28, Kasturba Gandhi Marg, New Delhi, through its Managing Director.

.... Opposite Parties

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT

MR. DEV RAJ, MEMBER.

MRS. PADMA PANDEY, MEMBER

Argued by:

Capt. Arun Sharma, Advocate for the complainants.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

PER PADMA PANDEY, MEMBER

The facts, in brief, are that the Opposite Parties had offered welcome letter vide letter dated 30.04.2011 alongwith schedule of payment (Annexures C-1 & C-2) and paid a sum of Rs.7 lacs on 19.04.2011 (Annexure C-3). Thereafter, Buyer Agreement was executed between the parties on 23.05.2011 (Annexure C-6). It was stated that the complainants sought permission to mortgage the property for availing loan, which was granted vide letter dated 08.06.2011 (Annexure C-7) and loan was sanctioned on 15.05.2011. It was further stated that the complainants made several payments to the Opposite Parties in respect of the unit, in question (Annexures C-8 to C-14). It was further stated that the complainants liquidated the bank loan and there is nothing due towards them from the bank side. It was further stated that the complainants also paid income tax by selling the properties (Annexures C-15 & C-16). As per Clause 21 of the Agreement, possession of the unit was to be delivered within a period of 36 months from the date of allotment and a grace period of 90 days was also granted for applying and obtaining occupation certificate. It was further stated that as per Clause 23.1 of the Agreement, if the Opposite Parties fail to hand over possession of the unit then they would pay an amount of Rs.5/- per sq. ft. per month, as compensation to the complainants. The Opposite Parties also allotted flat No.TVM K2-GF-GF03 of 1550 sq. ft. to the complainants at the basic price of Rs.45,72,500/-. The complainants paid the amount as per the schedule/demand and, as such, they paid the amount of Rs.43,68,867/-. It was further stated that the Opposite Parties did not give any date or schedule for handing over the possession. The complainants sent various reminders with regard to possession of the unit but no satisfactory reply was given by the Opposite Parties. Therefore, the complainants approached the Opposite Parties and requested for refund of money with interest as they have failed to hand over possession of the unit, inspite of the fact that all the payments, as demanded by the Opposite Parties have been paid well in time. It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

2. The Opposite Parties, in their written version, have taken objection regarding arbitration clause in the Agreement, and they separately, moved an application u/s 8 of Arbitration and Conciliation Act, 1996 taking a specific objection in this regard for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement. It was further stated that the complaint is time-barred, as the cause of action accrued in favour of the complainants in the year 2014 because they were informed in 2014 with regard to the non completion of the construction of unit and the present complaint now being filed is barred by limitation. It was further stated that as per Clause 21 of the Agreement, the possession was “endeavored” to be handed over within 36 months from the date of execution of Agreement and, thus, there was no definitive commitment to hand over possession within 36 months, as time was not the essence of the contract more so when there is penalty clause under the Agreement for any alleged delay. It was further stated that the complainants did not fall within the definition of “consumer”, as envisaged under the Consumer Protection Act, 1986, as they purchased the unit, in question, for commercial purposes/speculation, as they have their own house at Ludhiana and the present unit has been purchased merely for speculation purposes. It was admitted regarding booking of the unit ; issuance of provisional allotment letter and execution of the Agreement. It was further stated that the complainants had paid an amount of Rs.43,68,867-, as per statement of accounts (Annexure R-1). It was further stated that the Company has not received any NOC in this regard from HDFC Limited, which confirmed that the loan is fully paid up. It was further stated that the Company stood committed to honour the terms of the Agreement, which states that compensation for delay would be applicable and payable @Rs.5/- per sq. feet per month for all period of delay. It was further stated that possession of the unit is delayed and the Opposite Parties are expediting the development and committed to hand over the possession of the unit to the complainants. It was further stated that the structure work on Tower K, wherein, unit of the complainants is situated, have already been completed and final finishing works are in progress and the handing over of the unit is expected by 31.05.2017. It was further stated that the Opposite Parties could offer an alternate unit (not necessarily of similar size) where possession would be offered shortly. It was further stated that the Agreement was executed at Chandigarh but, however, the unit is situated at Mohali and the registered office of the Opposite Parties is situated at Delhi, as such, this Commission has no territorial jurisdiction to try and entertain the complaint. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor it indulged into unfair trade practice.

3. The complainants, filed rejoinder to the written statement of the Opposite Parties, wherein they reiterated all the averments, contained in the complaint, and refuted those, contained in the written version of the Opposite Parties.

4. The Parties led evidence, in support of their case.

5. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.

6. The first 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 Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Parties, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even i n 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 jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, 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.”

In view of the above, and also in the face of ratio of judgments, referred to above, passed by the National Commission and this Commission, the arguments raised by Counsel for the Opposite Parties, stands rejected.

7. The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not. It may be stated here that since it has been frankly admitted by the Opposite Parties, in number of paragraphs of their joint written statement that they are not in a position to hand over possession of the unit to the complainants and on the other hand, amount deposited was also not refunded to the complainants alongwith interest, as such, there is continuing cause of action, in their favour, in view of principle 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). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

8. Another frivolous objection was taken by the Opposite Parties, by stating that Agreement was executed at Chandigarh, however, the unit, in question, is situated at Mohali and registered office of the Opposite Parties situated at Delhi, as such, this Commission has no territorial Jurisdiction to entertain and decide the complaint.

According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction, whereof a part of cause of action arose to them. In the instant case, welcome letter, schedule of payment, provisional allotment letter, receipt, letter dated 02.05.2011, Unit Buyer’s Agreement, permission to mortgage letter dated 08.06.2011, acknowledgment-cum-receipts (Annexures C-1 to C-14), were sent by Chandigarh office of the Opposite Parties, as the same had the address “Emaar MGF Land Limited, SCO 120-122, First Floor, Sector 17-C, Chandigarh-160017”. It means that a part of cause of action arose to the complainants, within the territorial Jurisdiction of this Commission. This Commission has, therefore, got territorial Jurisdiction to entertain and decide the complaint. The objection taken by the Opposite Parties, also stands rejected.

9. The next question, that falls for consideration is, as to whether, the complainants fall within the definition of “Consumer” as prescribed under the Consumer Protection Act, 1986. The Counsel for the Opposite Parties submitted that the complainants did not fall within the definition of “Consumer” as they have own house at Ludhiana, as such, they purchased the unit for commercial purposes/speculation and did not fall within the definition of ‘consumer’. After going through the record, we are not agreeing with the contention of the Counsel for the Opposite Parties because the complainants have specifically stated in their rejoinder that the unit has been purchased for the self living and the house mentioned therein at Ludhiana is a Govt. house, as such, they are not speculators. Even there is nothing, on the record, that the complainants are property dealers, and deal in the sale and purchase of property. Thus, in the absence of any cogent evidence, in support of the objection raised by the Counsel for the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, Revision Petition No. 3861 of 2014, decided on 26.08.2015. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house 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.”

The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainants, for commercial/ investment purpose. The complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Counsel for the Opposite Parties in this regard, being devoid of merit, is rejected.

10. Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company shall endeavour to deliver possession of the unit within maximum period of 36 months, as such, time was not the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 21.1 of the Agreement that possession of the unit will be delivered by the Opposite Parties, within a period of 36 months from the date of allotment, subject to force majeure circumstances or reason beyond the control of the Opposite Parties. Further, the Company shall be entitled to a grace period of 90 days after the expiry of 3 months for applying and obtaining the occupation certificate in respect of the Group Housing Complex. In the instant case, the Opposite Parties did not raise any force majeure circumstances, if any, encountered by them. 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 condonation of delay in delivery of possession of the unit, to the complainants, cannot be taken into consideration. Thus, under these circumstances, since as per Clause 21.1 of the Agreement, the Opposite Parties were bound to deliver possession of the unit, within a maximum period of 36 months from the date of allotment, as such, time was, unequivocally made the essence of contract.

Even otherwise, the Opposite Parties cannot evade their liability, merely by saying that since the word tentative/ proposed/tentative was mentioned in the Agreement, for delivery of possession of the unit and, therefore, 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, 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.

11. The next question, that falls for consideration, is, as to within which period, the delivery of possession of the unit, was to be given to the complainants. According to Clause 21.1 of the Agreement, possession of the unit was to be delivered within the period of 36 months from the date of allotment. In the present case, provisional allotment letter was issued to the complainants vide letter dated 30.04.2011 (Annexure C-4), as such, possession was to be delivered to be complainants latest by 29.04.2014. However, the Opposite Parties failed to deliver possession of the unit to the complainants, despite repeated requests. Moreover, the Opposite Parties already received a huge amount of Rs.43,68,867/-, towards the said unit, as is evident from the statement of account (Annexure R-1). By making a misleading statement, that possession of the unit, was to be delivered within a period of 36 months, from the date of the allotment, the Opposite Parties failed to abide the commitments, as such, it was not only deficient, in rendering service, but also indulged into unfair trade practice.

12. The next question, that falls for consideration, is, as to whether, the complainants are entitled to interest, on the deposited amount of Rs.43,68,867/-, if so, at what rate. A bare perusal of the prayer clause reveals that the complainants sought interest @18% on the deposited amount of Rs.43,68,867/- for the delay in handing over of possession. It is, no doubt, true that the complainants booked the unit in the project of the Opposite Parties in the year 2011 and paid the huge amount of Rs.43,68,867/-, as is evident from statement of account (Annexure R-1). It is pertinent to mention here that the Opposite Parties in para No.11 of their written statement admitted that “structure works on Tower K, wherein flat of complainants is situated, have already been completed and final finishing works are in progress. The handover of the unit is expected by 31^st May, 2017.” So, it is clearly proved that the Opposite Parties are not in a position to hand over physical possession of the unit, in question, to the complainants. Even the complainants were deprived of their hard earned money, to the tune of Rs.43,68,867/-, on the basis of misleading information, given by the Opposite Parties, that it would be handed over legal physical possession of the unit, in question, within a period of 36 months from the date of allotment i.e. by 29.04.2014. However, the Opposite Parties failed to deliver physical possession of the unit to the complainants, despite receipt of the huge amount. The complainants were, thus, caused financial loss. Hard earned money, deposited by the complainants, towards price of unit, in question, was utilized by the Opposite Parties, for a number of years. Had this amount been deposited by the complainants, in some bank, or had they invested the same, in some business, they would have earned handsome returns thereon. It is therefore, held that the Opposite Parties, by neither delivering possession of the unit, by the stipulated date, nor refunding the amount to the complainants, were not only deficient, in rendering service, but also indulged into unfair trade practice. Under these circumstances, in our considered opinion, if interest @12% P.A., on the amount deposited by the complainants, from the respective dates of deposits, is granted, that will serve the ends of justice.

13. The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account of mental agony and physical harassment caused to them. It may be stated here, that according to Section 14(d) of the Act, the Consumer Foras can grant compensation, to the complainant(s). The word ‘compensation’ is again of very wide connotation. It has not been defined, in the Act. According to the dictionary, it means compensating or being compensated, thing given as recompense. In legal sense, it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Consumer Foras have been vested with the Jurisdiction to award the value of goods or services and compensation, it has to be construed widely enabling them (Consumer Foras), to determine compensation, for any loss or damage suffered by the consumers, which in law is otherwise, the wide meaning of ‘compensation’. The provision, in our considered opinion, enables the consumers to claim and empowers the Consumer Foras to redress any injustice done to the complainant(s). The Commission or the Forum in the Act, is, thus, entitled to award not only the value of the goods or services, but also to compensate the consumers, for injustice suffered by them. In the instant case, the complainants suffered a lot of mental agony and harassment, at the hands of the Opposite Parties, for a number of years, as they failed to deliver physical possession of unit to them, despite repeated requests. The complainants, thus, underwent a lot of mental agony and harassment, on account of the acts of omission and commission of the Opposite Parties. Compensation to the tune of Rs.2,00,000/- if granted, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.2,00,000/-.

14. With regard to claiming the amount of Rs.4 lacs approx. from the Opposite Parties towards interest on borrowed money paid to the bank and payment of income tax, is concerned, we are of the view that the complainants are not entitled for the same because they purchased the unit on their own wish and the Opposite Parties did not compel them to book the unit in their project and even borrowed the money/took the loan from the Bank was as per their need. Since we are granting sufficient interest, compensation and litigation expenses to the complainants, so, we are of the view that they are not entitled for any other relief, as claimed by them, in the prayer clause.

15. No other point, was urged, by the Counsel for the parties.

16. For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally directed, as under:-