Chandigarh

StateCommission

CC/304/2015

Pawan Kumar Singla - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Ramandeep Singh Pandher, Adv.

16 May 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	304 of 2015
Date of Institution	:	17.12.2015
Date of Decision	:	16.05.2016

 

1. Pawan Kumar Singla s/o Sh. Niranjan Dass, r/o H.No.3122, First Floor, Sector 35-D, Chandigarh, presently at House No.222, Second Floor, Sector 40-A,  Chandigarh.

 

2. Saroj Singla wife of Sh. Pawan Kumar Singla, r/o H.No.3122, First Floor, Sector 35-D, Chandigarh, presently at House No.222, Second Floor, Sector 40-A,  Chandigarh.

 

……Complainants

V e r s u s

1. Emaar MGF Land Limited, SCO No.120-122, 1st Floor, Sector 17-C, Chandigarh, through its Chairman/Manager.  
2. Emaar MGF Land Limited, Head Office ECE House, 28, K.G.Marg, New Delhi – 110001, through its Managing Director.

                                                    .... Opposite Parties

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh. Ramandeep Singh Pandher, Advocate for the complainants.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that the complainants were allotted/transferred plot No.166 of approximate area of 300 sq. yards in Augusta Park, Sector 109, Mohali Hills, SAS Nagar (Mohali) and the total consideration of the price of the unit was Rs.36,19,104/- including additional payment of Rs.1,69,104/- as External Development Charges, as per the payment plan. Copy of the allotment letter alongwith installment payment plan is Annexure C-1. It was stated that the Opposite Parties issued transfer letter dated 19.05.2010 in favour of the complainants (Annexure C-2). It was further stated that the Opposite Parties already received an amount of Rs.35,96,604/- vide receipts (Annexure C-4 colly. & Annexure C-4/A), after giving 5% price waiver off, as per letter dated 04.02.2009 (Annexure C-3). Thereafter, Plot Buyer’s Agreement was executed between M/s Span Enterprises Pvt. Ltd. (original buyer) and the Opposite Parties on 19.06.2007 (Annexure C-5), which was endorsed in favour of the complainants on 19.05.2010. Copy of the application for transfer of plot is Annexure C-5/A. It was further stated that as per Clause 8 of the Agreement, possession of the unit was to be delivered within a period of two years from the date of Agreement, but not later than three years and, as such, possession of the same was due on 19.06.2010 but even after the delay of more than 5 years from the promised time of handing over of possession, the Opposite Parties failed to deliver the same, despite repeated requests. The complainants sent numerous emails i.e. dated 05.03.2015, 20.03.2015 and 12.09.2015 to the Opposite Parties, which was replied only vide email dated 22.09.2015 and informed the complainants that their request for refund of the amount was taken up and would take 15 to 20 days for decision but no decision was communicated to them. Copies of the emails are Annexure C-6 (Colly.). Thereafter, the complainants also sent a legal notice dated 26.11.2015 (Annexure C-7 colly.) to the Opposite Parties but to no avail. 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 a specific objection regarding arbitration clause in the Agreement for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement. It was stated that in case of seeking refund of the amount and cancellation by the complainants, the forfeiture clause, as per the Agreement, would be applicable. It was further stated that the complainants are subsequent purchasers of the plot, in question and they purchased it in the year 2010, when they are alleging that possession was to be handed over in June, 2010. It was further stated that the complainants were aware of the fact that plot was not ready in May, 2010, still they purchased the same from secondary market. It was denied that the complainants have purchased the said plot for their residence as they are already having their own house at Chandigarh. It was denied that the complainants paid an amount of Rs.35,96,604/- because the Company received only an amount of Rs.34,46,604/- towards the price of the plot, as reflected in Annexure C-2, and this amount does not include the transfer charges of Rs.1,50,000/- paid by the earlier allottee. It was further stated that the complainants purchased the plot from open market in May, 2010 and as per the Agreement, possession was to be delivered within a period of 36 months from the date of execution of the Agreement and in case, possession was delayed beyond 36 months, the Company was to pay delayed compensation. It was further stated that when the complainants purchased the plot, the time period of 35 months had already elapsed from the date of Agreement and the complainants were well aware that possession of the plot was nowhere near completion and they purchased the same knowing the ground reality. It was further stated that the complainants are speculators and have purchased the plot for investment and now when the prices of property have fallen considerably, the complainants are seeking refund with interest. It was averred that the Opposite Parties gave options to the complainants for relocation but they refused to accept the same. It was further stated that since the amenities are not completed in the area, where the unit of the complainants is located, so possession has not been offered. 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.           Admittedly, the complainants purchased the plot bearing No.166 in Augusta Park, Sector 109, Mohali Hills, Mohali from M/s Span Enterprises Pvt. Ltd. and the total consideration of the unit was Rs.36,19,104/-, as stipulated from Plot Buyer’s Agreement, which was executed between M/s Span Enterprises Pvt. Ltd. and the Opposite Parties on 19.6.2007 (Annexure C-5). It is also the admitted fact that the said unit was endorsed in favour of the complainants on 19.05.2010. It is also the admitted fact that as per Clause 8 of the Agreement, possession of the unit was to be delivered within a period of 2 years from the date of execution of the Agreement but not later than 3 years but the Opposite Parties neither delivered possession of the unit to the complainants, within the stipulated period, as mentioned in the Agreement nor refunded the amount to them, despite repeated requests.

7.           The principal 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. It may be stated here that under similar circumstances, in the cases titled as Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016 and Praveen Kumar Arora & Anr. Vs. Emaar MGF Land Limited, Complaint case No.198 of 2015, decided on 04.04.2016 decided alongwith other connected cases, the issue regarding the arbitration has been dealt with in detail by this Commission and after giving detailed findings, the argument raised on behalf of the Builder that 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, the State Commission has no jurisdiction to entertain the consumer complaint, has been rejected. In view of the above, it is held that this Commission has jurisdiction to entertain this complaint. 

8.           To defeat claim of the complainants, another objection was raised by the Opposite Parties that the complainants are speculators and have purchased the plot for investment and now when the prices of property have fallen considerably, they are seeking refund. The Opposite Parties further objected that the complainants purchased the said plot for their residence, as they are already having their own house at Chandigarh. After going through the documents and record of the case, we do not find any merit in the contention of the Opposite Parties that the complainants purchased the unit, in question, for the purpose of investment/speculation because the complainants have specifically mentioned in their replication/rejoinder that they purchased the house, in which, they are residing in June, 2011, after the failure of the Opposite Parties in handing over the possession of the plot, in dispute, which was due on 19.06.2010 and prior to that, they were residing in rented accommodation, as such, they purchased the unit for the purpose of their residence. 

              It may be stated here that there is nothing, on the record to show, that the complainants are property dealers, and are involved in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, 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 Hon’ble 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. The principle of law, laid down, in Kavita Ahuja’s case (supra) 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 investment/speculative purposes. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected. 

9.           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 8 of the Plot Buyer’s Agreement dated 19.06.2007 (Annexure C-5), subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were to deliver possession of the unit, in question, within a period of 2 (two) years, from the date of execution of the Agreement, but not later than 3 (three) years. It is, thus, evident, from this Clause, that the Opposite Parties were required to deliver possession of the unit, in question, in favour of the complainants,  within the maximum period of 3 years, from the date of execution of the Plot Buyer’s Agreement dated 19.06.2007, i.e. latest by 19.06.2010 but the Opposite Parties failed to deliver physical possession of the unit, in question, to the complainants, within the stipulated period, as contained in the terms and conditions of the Agreement.  The Opposite Parties have also already received a huge amount, towards the said unit, from the complainants. It is pertinent to note that the Opposite Parties admitted in their written statement that since the amenities are not completed in the area, where the unit is located, possession has not been offered. By making a misleading statement, that possession of the unit, was to be delivered within a maximum period of 3 years, from the  date of execution of the  Agreement, and by not abiding by the commitments, made by the Opposite Parties, they (Opposite Parties) were not only deficient, in rendering service, but also indulged into unfair trade practice.

10.          The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.35,96,604/-, deposited by them,  towards the unit, in question.  The Opposite Parties in their written statement, denied the receipt of the amount of Rs.35,96,604/- from the complainants and stated that they had received an amount of Rs.34,46,604/-, as stipulated from Annexure C-2, and the amount towards transfer charges does not include in the name.  The complainants have also placed on record copies of the receipts (Annexure C-4 colly.). A bare perusal of the receipts shows that the Opposite Parties received an amount of Rs.11,10,000/- vide receipt dated 23.09.2006, Rs.1,72,500/- vide receipt dated 09.07.2007, Rs.1,72,500/- vide receipt dated 10.09.2007, Rs.3,45,000/- vide receipt dated 15.12.2007, Rs.3,45,000/- vide receipt dated 24.03.2008, Rs.3,45,000/- vide receipt dated 12.06.2008, Rs.4,29,552/- vide receipt dated 19.09.2008, Rs.4,29,552/- vide receipt dated 12.12.2008, Rs.1,72,500/- vide receipt dated 25.02.2009. So, it is clearly proved from the aforesaid receipts that the complainants paid an amount of Rs.35,21,604/- to the Opposite Parties, with regard to the unit, in question. The complainants also placed on record copy of acknowledgment-cum-receipt dated 20.05.2010 in the sum of Rs.75,000/- towards transfer charges (Annexure C-4/A). It is clearly stipulated that the said amount of Rs.75,000/- was paid towards statutory transfer charges for the purchase of the unit, in question, from the open market and, therefore, we are of the view that they are not entitled for the same. Moreover, the complainants have already paid huge amount of Rs.35,21,604/-, out of the total sale consideration of Rs.36,19,104/-. It is clearly proved that the Opposite Parties failed to deliver physical possession of the unit, in question,  to the complainants, within the stipulated period of 3 years, as mentioned in the Agreement.  So, the Opposite Parties had no right, to retain the hard earned money of the complainants, without rendering them, any service. Even the Opposite Parties already admitted that since the amenities are not completed in the area, where the unit is located, so, possession has not been offered. So, it is clearly proved that the Opposite Parties failed to deliver physical possession of the unit, in question, to the complainants.  In our considered opinion, the complainants are entitled to refund of amount of Rs.35,21,604/-, deposited by them.

              At the time of arguments, Counsel for the Opposite Parties submitted that when complainants sought refund of the amount, forfeiture clause is applicable upon the complainants.   In a similar case relating to delayed possession, titled as Guninder Jeet Singh Salh Vs M/s Emaar MGF Land Limited and another, Consumer Complaint No. 113 of 2015, decided by this Commission on 23.09.2015, noting ratio of the judgment of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in the case of Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), it was said that the consumer can claim refund. The National Commission was dealing with a similar situation, in the above case. In that case also, possession was not offered within the stipulated period. The consumer complaint was filed by the complainant, before this Commission, claiming refund of the amount paid by him. This Commission took it as a case of rescinding of contract and allowed the Opposite Parties to forfeit 10% of the deposited amount. The above named builder went in appeal, which was dismissed, by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, holding as under:-

 

 “It is apparent from the above clause, that possession of the apartment was to be handed over within a period of 36 months from the date of allotment,  with  grace period of 3 months. Admittedly, no possession was offered to the original allottee or to the respondent, till 26.11.2011 when she stepped into the shoes of original allottee. Thus, on the date of accepting the present respondent as allottee on 26.11.2011, the apartment in question was not complete.

 

23.    As appellants did not offer possession within the period prescribed under Clause 21 of the ‘Apartment Buyer Agreement’, the deficiency on the part of appellants,  started right from that very moment. It is an admitted fact, that while offering the possession even in the year 2013, appellants sent letter dated 13.5.2013 and  respondent was asked to deposit sum of Rs.3,05,969.70, within 30 days. When payment of the instalments is construction linked,  then we fail to understand as to how  before completing the construction appellants demanded the aforesaid amount.  This act of appellants goes on to show, that even on 13.5.2013 construction of apartment was not complete. It was only vide letter dated 16.8.2013, appellants offered possession of the apartment,  subject to certain payments.

24.    Thus, appellants themselves have violated the material conditions with regard to handing over of the possession, now it does not lie in their mouth to demand further payment from  the respondent. Even assuming for arguments sake, that payment as demanded vide letter dated 16.8.2013 was due, but the respondent was fully justified in not making the payment, when appellants failed to complete the construction and handover the possession, within the agreed period.  Appellants could not force the respondent, after having accepting money from the original allottee in the year 2006 and  part payment from present respondent in the year 2011, to accept possession of the apartment in the year 2013,  which was against the terms of the Agreement.  The above facts clearly goes on to show, that appellants have been enjoying the substantial amount of money received by them in the year 2006, till 2013.  Therefore, this plea of appellants, that they have done their part of the duty and it is the respondent who is defaulter, does not hold any water.

25.    The deficiency on the part of appellants is writ large in this case. We may note, that under such circumstances there was no occasion for the State Commission to have deducted 10% of the deposited amount as respondent was not at fault at all. On the other hand, appellants were deficient when they themselves have violated the terms and conditions of ‘Apartment Buyer Agreement’, The case law relied by ld. counsel for appellants are not applicable at all to the facts of the present case.”

It was clearly stated by the Hon’ble National Commission, in Emaar MGF Land Limited and another Vs. Dilshad Gill’s case (supra), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date. Moreover, the Opposite Parties in their written statement clearly stated since the amenities are not completed in the area, where the unit is located, so, possession has not been offered.  Even the plea of the Opposite Parties that the complainants were aware of the fact that plot was not ready in May, 2010 still they purchased the same from secondary market, has no value, at all because the complainants in their rejoinder has clearly stated that the Opposite Parties assured them that very soon the possession of plot would be handed over.  It is clearly proved that the Opposite Parties have not fulfilled their part of the Agreement and failed to develop the infrastructure alongwith other amenities and nor given possession of the unit to the complainants, within the stipulated period, as mentioned in the Agreement. So, it is clearly proved that the Opposite Parties are, thus, in breach of their part of the obligation and are deficient in providing services even after receipt of the huge amount and, as such, the Opposite Parties are not entitled to forfeit any amount, and refund the deposited amount to the complainants. 

11.          The next question, that falls for consideration, is, as to whether, the complainants are entitled to interest, on the amount of Rs.35,21,604/-, if so, at what rate. The complainants were deprived of their hard earned money, to the tune of Rs.35,21,604/-, on the basis of misleading information, given by the Opposite Parties, that they would be handed over legal physical possession of the unit, in question, after the completion of maximum period of three years i.e. by 19.06.2010, but they failed to do so. The complainants, thus, incurred 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. As per Clause 3 of the Agreement, the Opposite Parties were charging interest @15% per annum compounded from the complainants, under these circumstances, in our considered opinion, if  interest  compounded @15% P.A., on the amount deposited by the complainants, from the respective dates of deposits, is granted, that will serve the ends of justice.  

12.          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. Similar principle of law was laid down, in Ghaziabad Development Authority v. Balbir Singh, II (2004) CPJ 12 (SC)=III (2004) SLT 161=(2004) 5 SCC 65. In the instant case, the complainants suffered a lot of mental agony and physical harassment, at the hands of the Opposite Parties, for a number of years, as they failed to deliver physical possession of unit, in question, to them, by the promised date i.e. 19.06.2010. The complainants purchased the unit, with the hope to have a roof over their head, by raising construction thereon, but their hopes were dashed to the ground. The complainants, thus, underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Parties. Compensation to the tune of Rs.3,00,000/- if granted, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.3,00,000/-.

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

14.          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 Rs.35,21,604/-, to  the complainants, alongwith interest compounded @ 15% per annum, from the respective  dates of deposits onwards, within 45 days, from   the  date of receipt of a certified copy of  this   order.
2. To pay compensation, in the sum of Rs.3,00,000/- for causing mental agony and physical harassment, to the complainants, within 45 days, from the date of receipt of a certified copy of this order.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the complainants.
4. In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties shall be liable to pay the amount mentioned in Clause (i) with interest compounded     @18% P.A., instead of interest compounded @ 15% P.A., from the respective dates of deposits, till realization, and interest compounded @15% P.A., on the  amount of compensation, mentioned in Clause (ii), from the date of filing the complaint, till realization, besides payment of litigation costs.

 

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

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

Pronounced.

May  16, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

 

 [DEV RAJ]

MEMBER

 

 

 (PADMA PANDEY)

        MEMBER