Chandigarh

StateCommission

CC/145/2019

Puneet Gupta - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Savinder Singh Gill, Hoshiar Chand Adv.

22 Jan 2020

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	145 of 2019
Date of Institution	:	18.06.2019
Date of Decision	:	22.01.2020

 

1. Puneet Gupta S/o Sh.S.K. Gupta R/o #900 A, Sector 8, Panchkula, Haryana.
2. Maneesh Mittal S/o Sh.S.P. Mitgtal R/o #594, Sector 16, Panchkula, Haryana.

……Complainants

V e r s u s

1. Emaar MGF Land Limited, Mohali Hills, Office No.40, Central Plaza, Sector 105, Mohali, through its Managing Director, Sh.Hadi Mohd. Taher Badri and Chief Executive Officer Sh.Prashant Gupta.
2. Sh. Hadi Mohd. Taher Badri , Managing Director of Emaar MGF Land Limited, having its Office at Mohali Hills, Office No.40, Central Plaza, Sector 105, Mohali-160062.
3. Sh.Prashant Gupta, Chief Executive Officer of Emaar MGF Land Limited, R/o G-1, Fine Home Apartments, Mayur Vihar, Phase-1, Delhi-110092.

….Opposite Parties

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:       JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                      MRS. PADMA PANDEY, MEMBER.

                      MR. RAJESH K. ARYA, MEMBER.

 

Argued by:    Sh.Savinder Singh Gill, Advocate for the complainants.

Sh.Sanjeev Sharma, Advocate for the opposite parties.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   The above captioned complaint has been instituted seeking directions to the opposite parties, to refund the amount of Rs.34,52,085/- paid by the complainants towards purchase of plot no.507, measuring 300 square yards, in the project named “Mohali Hills”,  Augusta Park, Sector 109, SAS Nagar, Mohali. Total sale consideration of the plot was fixed at Rs.36,19,104/-. It is the case of the complainants that on making payment of booking amount to the tune of Rs.10,35,000/- on 05.09.2006, they were allotted plot no.507, measuring 300 square in the said project, vide provisional allotment  letter dated 09.05.2007 (Annexure C-1) and Plot Buyers’ Agreement dated 04.07.2007 (Annexure C-4) was also executed between the parties. As per Clause 8 of the said Agreement, the opposite parties committed to deliver possession of the said plot within a maximum period of three years from the date of execution thereof i.e. on or before 03.07.2010. It is further the case of the complainants that despite the fact that on demands made by the opposite parties from time to time they paid total amount of Rs.34,52,085/-, for the period between 05.09.2006 to 16.03.2009, yet, actual physical possession of plot no.507 was not delivered by 03.07.2010, whereas, on the other hand, on account of non-development at the project site, the complainants were relocated to plot no.254, measuring 300 square yards, in adjoining project named ‘Pinewood Park’, Sector 108, Mohali, Punjab.  Addendum Agreement in respect of the relocated plot was executed between the parties, whereby  except plot no. and location thereof, remaining terms and conditions contained in the agreement dated 04.07.2007 were kept intact. However, possession of the relocated plot was also not offered by the committed date. On the other hand, after a long delay, the opposite parties sent a letter dated 27.06.2014  (Annexure C-8), wherein the complainants were asked to make payment of Rs.7,96,238/-, so that possession of the relocated plot can be delivered to them within 60 days therefrom.

                   It has been stated that the said letter was nothing but a paper possession, as by that time development work at the project site was not complete. Thereafter, the complainants sent number of emails to the opposite parties in the matter, as a result whereof vide email dated 23.06.2017 (Annexure C-11 colly.) they sent a fresh offer of possession letter, stating therein that now the relocated plot is ready for physical possession. It has been pleaded that the project of the opposite parties was sealed by the Forest Department, as they failed to obtained necessary permissions.

                   By stating that the aforesaid act and conduct of the opposite parties in not handing over possession of the plot in question, by the committed date, amount to deficiency in providing service and adoption of unfair trade practice, the complainants have filed the present case seeking refund of amount paid alongwith interest, compensation etc.

2.           Their claim has been contested by the opposite parties, on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act; that this Commission did not vest with pecuniary and territorial jurisdiction; that the complaint filed is beyond limitation; that time was not the essence of contract as it was mentioned in the agreement that the Company will only endeavor to complete development work within three years from the date of execution thereof; that for any delays, stipulated penalty has been provided in the agreement, which safeguarded the interest of the complainants; that the complainants were defaulters in making payment; and that names of opposite parties no.2 and 3 need to be deleted from the array of parties.
3.           On merits, the facts that the complainants agreed to purchase plot in the aforesaid project; payments made by him; relocation to plot no.254, ‘Pinewood Park’, Sector 108, Mohali, Punjab, from plot no.507, “Mohali Hills”,  Augusta Park, Sector 109, as mentioned above are not in dispute. It has been stated in the reply that exemption to the project was granted by the State Government to the Company from applicability of the provisions of Punjab Apartment and Property Regulation Act, 1995 (in short the PAPRA); that though not required even then partial completion certificate has been obtained from the Competent Authorities vide letter dated 16.10.2015; that the complainants were relocated to plot no.254 in Sector 108, on their request only; that they were offered possession of relocated plot no.254 vide letter dated 27.06.2014  (Annexure C-8) but they failed to take over the same, despite reminder having been sent to them vide email dated 23.06.2017 (Annexure C-11 colly.).

                   It has been submitted that though one entry of the project was sealed by the Forest Department but there was enough access to enter into the project. Still, vide order dated 03.11.2016, the Court concerned has discharged the Company and also vide letter dated 16.01.2018 (Annexure R-14), the Forest Department has issued No Objection Certificate to develop the project in question. It has been stated that still, if the complainants want refund of the deposited amount, forfeiture clause contained in the agreement will be applicable. Prayer was made to dismiss the complaint.

4.           In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and controverted those of the written reply filed by the opposite parties.
5.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence by way of affidavits and also produced numerous documents.
6.           We have heard the contesting parties and have carefully gone through record of the case, very carefully.
7.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
   1. Whether the arbitration clause contained  in the agreement bars the jurisdiction of this Commission?
   2. Whether this Commission has pecuniary and territorial jurisdiction to entertain this complaint?
   3. Whether the complainants fall under the definition of consumer?
   4. Whether time was essence of the contract?
   5. Whether actual physical possession of plot agreed to be purchased by the complainants was ever offered to them by the opposite parties?
   6. Whether the complaint filed is within limitation?
   7. Whether the complainants are entitled to get refund of the amount deposited and if yes, at what rate of interest?
   8. Whether forfeiture clause will be applicable to the present case?

 

8.           First of all, coming to the objection raised with regard to jurisdiction of this Commission in the face of existence of Arbitration clause contained in the agreement, it may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by the opposite parties in this regard stands rejected.
9.           The next question which needs consideration is with regard to pecuniary jurisdiction, it may be stated here that if the total value of the plot agreed to be purchased by the complainants; plus other reliefs claimed in the complaint are clubbed together, the same exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide this complaint. Objection taken in this regard stands rejected.
10.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that in the instant case, perusal of almost all the documents placed on record reveal that the same have been issued by the opposite parties from their Chandigarh Office i.e. SCO No.120-122, 1^st Floor, Sector 17-C, Chandigarh. Even the Agreement in respect of plot in dispute, containing detailed terms and conditions has been executed at Chandigarh Office of the Company, meaning thereby  that the opposite parties were actually and voluntarily residing and carrying on their business from their  branch office at Chandigarh and personally work for gain hereat. As such, objection taken in this regard is rejected. 
11.           As far as objection taken to the effect that the complainants did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainants have purchased the plot in question to indulge in ‘purchase and sale of plots’ as was held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their  onus, hence we hold that the complainants are consumers as defined under Section 2(1)(d) of the Act. Mere fact that the complainants are residing in a house at Panchkula, or anywhere else, cannot be made a ground to shove them out of the definition of a consumer. Objection taken in this regard is rejected.
12.           It is an admitted fact that in the first instance, vide letter dated 09.05.2007 (Annexure C-1), the complainants were provisionally allotted plot no.507 in “Augusta Park”, Sector 109, Mohali Hills, Mohali, by the opposite parties, possession whereof was to be delivered within a maximum period of 3 years i.e. latest by 03.07.2010, as committed vide Clause 8 of the agreement dated 04.07.2007 (Annexure C-4).
13.           However, it is on record that possession of plot no.507 was not offered by the committed date of even thereafter, for want of development activities. It is also coming out from record that vide letter dated 24.05.2011 (Annexure C-7), the complainants were relocated to plot No.254, “Pinewood Park”, Sector 108, Mohali, in lieu of plot no.507 referred to above. However, it was further made clear in the said letter that the original agreement and allotment letter stood changed to the extent of plot no., location and payment plan only, meaning thereby that except these changes, all other terms and conditions contained in the agreement dated 04.07.2007 (Annexure C-4) with regard to date of delivery of possession etc. were kept intact. As per payment plan attached alongwith the letter dated 24.05.2011 (Annexure C-7), it was also intimated that total price of relocated plot no.254 has been fixed at Rs.35,97,249/-.
14.           Counsel for the complainants contended that relocation to plot no.254 was never asked for by the complainants and, on the other hand, possession of plot no.507 referred to above was not offered to them by the stipulated date i.e. 03.07.2010 or thereafter, for want of development activities at the project site, and also development in the project wherein the complainants were relocated, was also not complete, as such, they are entitled to refund of the amount paid. Whereas, on the other hand, counsel for the opposite parties contended that the complainants were relocated to plot no.254 on their request having been made by them, yet, when, possession thereof was offered to them vide letter dated 27.06.2014  (Annexure C-8) followed by reminder email dated 23.06.2017 (Annexure C-11 colly.), even then they failed to take over the same, and have now filed this complaint seeking refund of the amount paid.    
15.           First coming to the contention regarding relocation to plot no.254 from plot no.507, it may be stated here that not a single documents has been placed on record by the opposite parties, to convince this Commission that any request was made by the complainants, to relocate them from plot no.507 to plot no.254. Therefore, the contention raised by Counsel for the opposite parties that the complainants opted for relocation to plot no.254 being devoid of merit is rejected. No cogent reason has been assigned by the opposite parties, as to what were the reasons, which forced them to relocate the complainants from plot no.507 to plot no.254. Under these circumstances, an adverse inference could very well be drawn against the opposite parties that the development work in Section 109 was not complete  and that the project was not habitable, as a result whereof, they relocated the complainants from Sector 109 to Sector 108 i.e. from plot no.507 to plot no.254. Thus, the act and conduct of the opposite parties to usurp the entire sale consideration from the complainants, in respect of plot no.507 in Sector 109; not delivering possession thereof by the committed date; and thereafter relocating them arbitrarily to plot no.254 in May 2011, amounts to unfair trade practice.
16.           Now the next question which needs consideration is, as to by which date, possession of the relocated plot bearing no.254 was to be delivered to the complainants. As stated above, when vide letter dated 24.05.2011 (Annexure C-7), an intimation regarding relocation to plot no.254, measuring 300 square yards Pinewood Park, Sector 108, from plot no.507 aforesaid, was given to the complainants, it was  made clear by the opposite parties that the original agreement and allotment letter stood changed only to the extent of plot no., location and payment plan, meaning thereby that except these changes, all other terms and conditions contained in the agreement dated 04.07.2007 (Annexure C-4) with regard to date of delivery of possession etc. were kept intact and as such, possession of relocated plot no.254 was to be delivered to the complainants within a period of 3 years only, in consonance with Clause 8 of the agreement. At the most, the opposite parties could have delivered possession of the relocated plot immediately, when the complainants were relocated in the year May 2011 but they miserably failed to do so and no reasons have been given by them in their written reply in that regard. 
17.           Now the moot question which arises for consideration is, as to whether, actual physical possession of relocated plot no.254 was ever offered to the complainants or not? No doubt, the opposite parties are claiming that possession of relocated plot no.254 was offered vide letter dated 27.06.2014  (Annexure C-8), yet, when we go through the contents of the said letter, it cannot be said to be an offer of possession. It has been clearly mentioned in the said letter that only temporary electric and water connections have been sanctioned in respect of the project in question and furthermore the complainants were asked to make payment of Rs.7,96,238/- towards remaining sale consideration of the relocated plot no.254. It was further clearly mentioned in the said letter that process of handing over possession of the plot will commence within 60 days, from the date of issuance of the same.             However, as per Counsel for the complainants, on receipt of the letter dated 27.06.2014, the complainants visited the project site and were shocked to see that there was no development and also the main entries of the project site were sealed by the Forest Department, as the opposite parties failed to take necessary permissions/approvals, from the said Department. Thereafter, the complainants took up the matter with the opposite parties, as a result whereof  the opposite parties sent email dated 23.06.2017 (Annexure C-11 colly.) i.e. after about three years of letter dated 27.06.2014  (Annexure C-8), intimating the complainants that now the relocated plot no.254 is ready for physical possession. Relevant contents of letter dated 23.06.2017 are reproduced hereunder:-

“This is in furtherance to our letter dated 27-JUN-2014. We are glad to inform you that your aforementioned plot is now ready for physical possession as per the terms and conditions of the Buyer’s Agreement.”

 

It may be stated here that the contents of letter dated 23.06.2017 (Annexure C-11 colly.) speak themselves that before that date (23.06.2017), the opposite parties were not ready to deliver actual physical possession of relocated plot no.254 aforesaid. The act of the opposite parties in not delivering actual physical possession of the relocated plot no.254 in the said project, by the stipulated period or thereafter, and on the other hand, offering a paper possession, in the year 2014 amounts to deficiency in providing service and at the same time, an attempt to defeat the genuine claim of the complainants by placing reliance on letter dated 27.06.2014  (Annexure C-8), the date when they were not in a position to offer possession, further amounts to unfair trade practice on their part.

18.           It has also been vehemently contended by Counsel for the complainants that since even the entries of the project in question were sealed by the Forest Department for want of necessary permissions/approvals, as such, the opposite parties were legally not entitled to offer possession of the plot allotted in favour of the complainants. The fact that the entry points of the project were sealed by the Forest Department, has been candidly admitted by the opposite parties, in para no.9 of their written statement, relevant contents of which read as under:-

“Merely because one entry point had been sealed due to reasons not attributable to the OP’s, same does not imply that complainant could not take over possession as there are adequate alternative accesses to the plot….”

 

19.           However, to strengthen their case that now the said entry point has been opened, Counsel for the opposite parties has placed reliance on letter dated 16.01.2018 (Annexure R-14) whereby the Forest Department, Govt. of Punjab has given in writing to the opposite parties that it has no objection if the Company develops approach road for the project in Sector 109. This candid admission on the part of the opposite parties itself makes it very clear that till January 2018, even the approach road to the project was not available and there was some objection pending with the Forest Department, and the said objection was got removed only on 16.01.2018.  The act of launching and selling the project, without getting prior permission for approach road from the Forest Department, and on the other hand, launching the project and selling units therein before that, in itself amounts to negligence and unfair trade practice on the part of the opposite parties. As such, no help can be drawn by the opposite parties from letter dated 16.01.2018 aforesaid.
20.           Furthermore, even if, for the sake of arguments (though not holding so), if we presume that the possession so offered in the year 2014 was a genuine offer, even then there is a delay of about four years, from the promised date i.e. from 03.07.2010. In those circumstances also, the complainants are entitled to get refund of amount paid, in view of settled law that non-delivery of possession of plots/units in a developed project by the promised date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also so said by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. The above view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. In the present case also, since there has been an inordinate delay in the matter, as such, we are of the considered opinion that if we order refund of the amount paid alongwith suitable interest that will meet the ends of justice. 
21.           The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units/plots, by the stipulated date, fell for determination before the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, the Hon`ble Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Recently also, under similar circumstances, the Hon’ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 ordered refund of the amount paid, alongwith interest @12% p.a.
22.           As such, in view of principle of law laid down by the Hon`ble Supreme Court of India and also the National Commission, this Commission is of the consideration opinion that if the complainants are granted interest @12% p.a. from the respective dates of deposits that will meet the ends of justice. In no way the opposite parties can forfeit any amount out of the deposited one, as it is not their case that the complainants have sought refund of amount paid on account of some personal reasons and are quitting before expiry of the period committed for possession, as contained in the agreement. At the same time, the opposite parties are also held liable to compensate the complainants for deficiency in providing service, negligence and adoption of unfair trade practice and also causing them mental agony; harassment and financial loss.
23.           As far as objection raised by the opposite parties, to the effect that this complaint is time barred, it may be stated here that the same is devoid of merit, in view of observations made by the Hon’ble National Commission in a case titled as Ansal Housing And Construction Ltd. Vs.  Tulika Gupta & Anr., First Appeal No. 545 of 2017, decided on 24 Aug 2017, to the effect that till the time either the possession is given to the allottees or the amount paid by them is refunded, there will be a continuing cause of action to file a consumer complaint. Relevant part of the said order is reproduced hereunder:-

“As regards the plea of limitation, ordinarily if the  possession is not given to the allottees, they would have a recurrent cause of action to file the complaint till the time either the possession was given to them or the amount paid by them was refunded.  Of course, the complainants would also have an earlier cause of action in case allotment is cancelled.”

 

24.           The next question under our consideration is as to whether, time for handing over possession of the plot to the complainants, was essence of the contract or not? It may be stated here that a specific period of three years for delivering possession of the plot to the complainants with every endeavor, has been mentioned in Clause 8 of the Agreement.  Other than this Clause contained in the agreement, there is no Clause, which speaks about the period/date for delivery of possession of the plot to the complainants. It is not the case of the opposite parties that they encountered any force majeure circumstances, as a result whereof, they were legally entitled for extension of time for delivering possession of the plots to the allottees, including the complainants. The opposite parties cannot wriggle out of the commitments made vide Clause 8 of the agreement with regard to time period for delivery of possession. It is therefore held that time was unequivocally made the essence of contract. In view of above, plea of the opposite parties in this regard stands rejected.
25.           An argument was also raised by Counsel for the opposite parties to the effect that opposite parties no.2 and 3 have been wrongly impleaded as parties, in their personal capacity. We do not agree with the objection raised. It may be stated here that it is not the proven case of the opposite parties that the above-named persons are not their Directors/Officers. As such, it is held that these persons are holding such important positions in the Company, where they are directly involved with the decision-making process in the Company and will be jointly and severally liable alongwith the Company, for all the acts done. Similar view was taken by the Hon’ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017.  Objection taken in this regard is rejected.
26.           For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-

1. To refund the amount of Rs.34,52,085/- to the complainants, alongwith interest @12% p.a. from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.34,52,085/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization.

27.           However, it is made clear that if the complainants have availed loan facility from any Bank/Financial Institution, for making payment towards price of the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants.
28.           Certified Copies of this order be sent to the parties, free of charge.
29.           The file be consigned to Record Room, after completion.

Pronounced

22.01.2020

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

 

Sd/-

(RAJESH K. ARYA)

MEMBER

 Rg.