Chandigarh

StateCommission

CC/449/2017

Mrs. Yogesh Dhuper - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Paras Money Goyal, Adv.

28 Sep 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	449 of 2017
Date of Institution	:	25.05.2017
Date of Decision	:	28.09.2017

 

1. Mrs. Yogesh Dhupar W/o Sh. Rajinder Dhupar, resident of Hd. No. 93, Sector 7, Panchkula, Haryana.
2. Mr. Rajinder Dhupar S/o Sh. Hari Chand Capt., resident of Hd. No. 93, Sector 7, Panchkula, Haryana

……Complainants

V e r s u s

1. Emaar MGF Land Pvt. Ltd., through its Managing Director, SCO No. 120-122, First Floor, Sector 17-C, Chandigarh.
2. The Regional Manager, Emaar MGF Land Pvt. Ltd., SCO No.120-122, First Floor, Sector 17-C, Chandigarh.                                                              .... Opposite Parties

 

BEFORE:         MR. DEV RAJ, PRESIDING MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh. Gaurav Bhardwaj, Advocate, proxy for Sh. Paras Money Goyal, Advocate for the complainants.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

              The facts, in brief, are that being impressed by the tall claims made by the Opposite Parties regarding the project, the complainants booked a flat for the total consideration of Rs.42,91,790/-. Unit Buyer Agreement dated 08.06.2011 (Annexure C-1) was executed between the parties, in which, the complainants were allotted unit No.TVM-K2-F03-302. The complainants also took a loan from HDFC Bank for a total sum of Rs.13,86,068/-. The complainants paid the total amount of Rs.40,77,858/- against the total consideration of Rs.42,91,790/-. As per condition No.21.1 of the Agreement, possession of the unit was to be delivered within a period of 36 months i.e. by 08.06.2014 or subject to further extension of 3 months i.e. by 08.09.2014. It was further stated that the complainants visited the site in April, 2017 and it was observed that level of construction at the site is nowhere near completion and in fact the Opposite Parties have left the project in lurch and it cannot be completed within a period of one year. It was further stated that the Opposite Parties are developing the project in a phase-wise manner and even if they deliver possession within one year, even then the tower would be in the middle of the site, upon which, the construction is going on, as the other towers are still in the process of construction.  It was further stated that the Opposite Parties failed to deliver possession of the unit, to the complainants, within the stipulated time frame, as mentioned in the Agreement. 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 joint written version, have taken objection regarding arbitration clause in the Agreement, and also, 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 stated that the complainants did not fall within the definition of “Consumer” as envisaged under the Consumer Protection Act, 1986, as they are resident of Panchkula and are having own house, as such they purchased the said unit only for speculation purposes. It was further stated that the complainants availed the facility of housing loan from Housing Development Finance Limited, therefore, it is necessary to make it a proper party in the said complaint but the complainants failed to implead it. It was further stated that this Commission has no territorial jurisdiction to entertain the complaint, as the property is located in Punjab and registered office of the Opposite Parties is also at New Delhi. It was further stated that this Commission has no pecuniary jurisdiction to try the complaint, as the complainants are claiming refund of Rs.40,78,858/- plus interest, compensation and litigation expenses. As per the judgment of Larger Bench of the Hon'ble National Consumer Disputes Redressal Commission, New Delhi , if the claim included with interest and the value of flat, then the same exceeds Rs.1 crore. It was further stated that as per Clause 21 of the Agreement, the Opposite Parties “endeavored” to handover possession of the unit within a period of 36 months from the date of allotment, with a grace period of 90 days after expiry of 3 months for applying and obtaining the occupation certificate in respect of Group Housing Project. Thus, there was no definitive agreement stating that possession would definitely be delivered within 3 years or extended period thereof. It is well settled law that in cases of sale of immovable property, time is never regarded as the essence of the contract. It was further stated that structural work on Tower K has been completed and the work upto the external paint has been completed in the said tower. Further, Partial Completion Certificate has been obtained. It was further stated that both the parties are bound by the terms and conditions of the Agreement and in case of delay, compensation @Rs.5/- per sq. feet per month is payable subject to the complainant having complied with all conditions of the Agreement and the said amount is payable at the time of intimation of possession. It was further stated that the compensation till 31.07.2017 i.e. Rs.2,73,140/- would be credited in the statement of account at the time of intimation of possession. It was further stated that the present complaint is beyond the period of limitation, as envisaged under Section 24-A of the Consumer Protection Act. It was admitted purchase of unit bearing No.TVM K2-F03-302 (1550 sq. ft.) for total sale consideration of Rs.42,91,790/-. The complainants had opted Down Payment Plan.  It was also admitted regarding execution of the Agreement. It was further stated that the complainants never approached the Opposite Parties for possession of unit and never enquired regarding the status of development. It was further stated that both the parties are bound by terms and conditions of the Agreement and it is clearly stipulated in the said Agreement that in case of failure of the allottee to perform all obligations, as set out in the Agreement, they are entitled to refund the amount paid after deducting the earnest money, as mentioned in the Agreement. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they 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 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 Mrs.Anjani Dass Vs. DLF Universal Limited, Complaint Case No.295 of 2017, decided on 19.07.2017. Para No.12 of the said order, inter-alia, being relevant, is extracted hereunder:-

“12.  At the time of arguments, it was also argued by Counsel for the opposite parties that in view of Section 8 of the Arbitration and Conciliation Act, 1996, this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitrator for adjudication.

                We are not going to agree with the argument raised. This Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126 has already elaborately dealt with this question, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as 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), 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), and held that even in the face of existence of arbitration clause in an 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. Furthermore, under similar circumstances, 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, held as under:-

“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.”

Furthermore, the National Commission in a case titled Omaxe Limited Vs. Dinesh Lal Tarachandani, First Appeal No.1433 of 2016, decided on 24.11.2016, while dismissing the appeal filed by the builder (Omaxe), held as under:-

“We are unable to persuade ourselves to agree with the Learned Counsel.  In our opinion, the decision of the State Commission being based on the authoritative pronouncements by the Hon’ble Supreme Court and also on the decision dated 02.05.2016, rendered by this Bench in the case of Lt. Col. Anil Raj & Ors. Vs. M/s Unitech Limited & Ors. in CC No. 346/2013, in which we have held that notwithstanding the amendments in the Arbitration Act, the reasoning and ratio of the decision of the Hon’ble Supreme Court, in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Ors.  (Supra) still holds good, no fault can be found with the view taken by the State Commission. 

Consequently, the Appeal fails and is dismissed accordingly.”

                Recently, the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.

                In view of the above, argument raised by Counsel for the opposite parties, in this regard, being devoid of merit is rejected.”

            In view of the above, the objection raised by Counsel for the Opposite Parties, being devoid of merit, is rejected.

7.           The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.

              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, it is evident from the record, that Unit Buyer’s Agreement was executed between the parties at Chandigarh on 08.06.2011 (Annexure C-1). Not only this, Acknowledgment-cum-receipts/receipts (Annexures C-4 to C-7) and letter Annexure C-8 were sent by the Opposite Parties from their Chandigarh Office, as the same bore the address of the Company as “SCO 120-122, First Floor, Sector 17-C, Chandigarh 160017”. Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  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. 

8.           Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection. In the present case, even if the interest component is added to the amount claimed, as brought out in Hon'ble National Consumer Disputes Redressal Commission, New Delhi judgment titled as  M/s Omaxe Chandigarh Extension Developers Private Limited & Ors. Vs. Lalitha Saini, First Appeal No.1364 of 2017, decided on 21.08.2017, the case is well within the pecuniary jurisdiction of this Commission. In view of above, this objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.

9.           The next question, that falls for consideration, is, as to whether, the complainants fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here that the mere objection of the Opposite Parties that since the complainants are resident of Panchkula and having their own house, as such, they purchased the unit for speculation purposes, does not carry any weight and is liable to be rejected. It has been mentioned by the complainants, in para no.1 of their complaint that the complainant wanted a independent accommodation where he could reside alongwith his wife and children. Not only this, the complainants in para No.10 of their complaint stated that they have parted with hard earned money for the purchase of a flat with a dream of residing in the said flat alongwith family. Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainants, was sufficient to prove that it was to be used for the purpose of residence, by the complainants. There is nothing, on the record, that the complainants are property dealers. Thus, in the absence of any cogent evidence, in support of the objection raised by the  Opposite Parties, mere bald assertion i.e. simply saying that the  complainants purchased the property for speculation purposes, as such, they did not fall within the definition of a consumer, cannot be taken into consideration. Further, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided 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,  2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. 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 Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

10.          It is to be further seen as to whether there was continuing cause of action to file the present complaint or not. It may be stated here that it is very clear from the record that possession of the unit, in question, has not been offered to the complainants, despite receipt of the huge amount from them, so it is clearly proved that 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.

11.          With regard to non-joinder of Housing Development Finance Limited is concerned, the complainants only took loan from the aforesaid financial institution for purchase of the unit and paying the installment, as and when required by the Builder. So, we are of the view that Housing Development Finance Limited has no role to play in booking and possession of the unit and, therefore, the objection by the Opposite Parties with regard to non-joinder of the aforesaid financial institution is rejected. 

12.          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 from the date of allotment, 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 maximum period of 36 months from the date of allotment, subject to force majeure circumstances or reason beyond the control of the Opposite Parties. In the present case, the Opposite Parties sent provisional allotment letter dated 25.05.2011 (Exhibit OP-3) to the complainants in respect of apartment No.TVM K2-F03-302, as such, possession was to be delivered to the complainants latest by 24.05.2014 and not more than that. 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 endeavour/tentative/ proposed was mentioned in the Agreement, 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, 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.

13.         As far as the plea taken by the Counsel for the Opposite Parties, at the time of arguments, regarding forfeiture of earnest money is concerned, it may be stated here that the same stands rejected, because it is not their (Opposite Parties) case, that it was ready with possession of the unit, complete in all respects, to be delivered to the complainants, by the stipulated date or even by the time when the complaint was filed but it was they (complainants) who wanted to rescind the contract, on account of some unavoidable circumstances/ financial constraints or for any personal reason, and are seeking refund of the amount deposited. Had this been the case of the Opposite Parties, that they were willing to offer possession complete in all respects by the stipulated time, only in those circumstances, it would have been held that since the complainants themselves are rescinding the contract, as such, they are entitled to the amount deposited, after deduction of the earnest money, as per the terms and conditions of the Agreement. In this view of the matter, the plea taken by the Opposite Parties, in this regard, has no legs to stand and is accordingly rejected.

14.         The next question, that falls for consideration, is, as to whether, the complainants are entitled for the refund of the amount of Rs.40,78,858/-, as claimed by them. It is clearly mentioned in letter dated 19.07.2012 (Annexure C-8) that the complainants paid an amount of Rs.40,77,858/- instead of Rs.40,78,858/-, as claimed by them. After receipt of the aforesaid huge amount, the Opposite Parties failed to deliver  actual physical possession of the unit, complete in all respects, to the complainants, within the stipulated period, as mentioned in the Agreement or even by the time when the complaint was filed. Even at the time of arguments, Counsel for the Opposite Parties admitted that possession has not been offered to the complainants and he never made any promise regarding possession of the unit in near future. Thus, the complainants cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. 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.

15.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the  complainants. It is clear that the complainants deposited the total amount of Rs.40,77,858/-, 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 (compounded @15% p.a.) as per Clause 20.1 of the Agreement, for the period of delay in making payment of installments.  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, to the tune of Rs.40,77,858/- alongwith interest @11% p.a., from the respective dates of deposit, till realization. 

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

17.         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 of Rs.40,77,858/- to  the  complainants, alongwith interest @11% p.a.,  from the respective  dates  of  deposits onwards.
2. To  pay  compensation,  in the sum   of       Rs.1.50 lacs, for causing mental agony and physical harassment, to the complainants.
3. To pay cost of litigation, to the tune of Rs.33,000/- to the  complainants.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), 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 @13% p.a.,  instead of @11% p.a. from the date of default, and interest @11% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

18.         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 the complainants.

19.         Certified Copies of this order be sent to the parties, free of charge.

20.         The file be consigned to Record Room, after completion.

Pronounced.

September 28^th, 2017.                                   

 [DEV RAJ]

PRESIDING MEMBER

 

 

 (PADMA PANDEY)

        MEMBER

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                           STATE COMMISSION

(Complaint Case No.449 of 2017)

[ Yogesh Dhuper & Anr. Vs.   Emaar MGF Land Pvt. Ltd. & Anr.]

 

Argued by:      

 

Sh. Gaurav Bhardwaj, Advocate, proxy for Sh. Paras Money Goyal, Advocate for the complainants.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

 

Dated the 28^th  day of September, 2017

 

ORDER

 

            Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted, with costs.

 

(DEV RAJ) PRESIDING MEMBER

(PADMA PANDEY) MEMBER

 

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