Chandigarh

StateCommission

CC/284/2019

Shefali - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Savinder Singh Gill, Hoshiar Chand Adv.

22 Sep 2020

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	284 of 2019
Date of Institution	:	17.12.2019
Date of Decision	:	22.09.2020

 

1. Shefali w/o Sh. Amit Sharma r/o House No. 2233/2, Sector-45 C, Chandigarh.
2. Amit Sharma s/o Sh. Narendra Mohan Sharma r/o House No. 2233/2, Sector-45 C, Chandigarh.

. ...Complainants

 

Versus

 

1. Emaar MGF Land Ltd, 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. 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. Prashant Gupta, Chief Executive Officer of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali 160062.
4. Shivani Bhasin, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali-160062.
5. Mohamed Ali Rashed Alabbar, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali, 160062.
6. Haroon Saeed Siddiqui, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali-160062.
7. Sudip Mullick, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali-160062.
8. Jason Ashok Kothari, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali-1 60062.
9. Jamal Majed Khalfan Bin Theniyah, Director of Emaar MGF Land Limited, having its office at: Mohali Hills, Office No. 40, Central Plaza, Sector-105, Mohali-160062.

…..Opposite Parties No.1 to 9

10. Housing Development Finance Corporation Limited, SCO 153-154-155, Sector-8 C, Madhya Marg, Chandigarh-160008.

...Proforma Opposite Party

 

BEFORE:       JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                      MRS. PADMA PANDEY, MEMBER.

 

Present through Video Conferencing:-    

                      Sh.Savinder Singh Gill, Advocate for the complainants.

Sh.Arshdeep Arora, Advocate, proxy for Sh.Anuj Kohli, Advocate for opposite parties no.1 to 9.

Ms.Neetu Singh, Advocate for proforma opposite party no.10.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   The above captioned complaint has been instituted seeking directions to opposite parties no.1 to 9, to refund the amount of Rs.33,06,846/- paid by the complainants towards purchase of plot bearing no.109-AP-562-159, , in the project named “Mohali Hills”, Augusta Park, SAS Nagar, Mohali, Punjab. Total sale consideration of the plot was fixed at Rs.36,41,776.15 ps.. It is the case of the complainants that despite the fact that they have paid substantial amount of Rs.33,06,846/- which is about 90% of the total sale consideration, yet, possession of the said plot was not delivered to them by 17.06.2015 i.e. within a maximum period of 24 months (18 months plus 6 months) from the date of execution of agreement dated 18.06.2013, Annexure C-3) as envisaged under Clause 8 thereof.  It has been stated that though after a huge delay, possession of the plot in question was offered to the complainants, vide letter dated 19.11.2019, Annexure C-6, yet, that was mere a paper possession, as there were no basic amenities at the project site and also opposite parties no.1 to 9 failed to obtain completion certificate from the competent authorities.  Furthermore, even the entries of the project in question were sealed by the Forest Department for want of permissions/sanctions.  It has been stated that for making payment towards the said plot, the complainants had obtained loan from proforma opposite party no.10 and out of the total sanctioned amount, an amount of Rs.25,14,448/- stood released to the Company and remaining amount has been paid by the complainants, totaling to Rs.33,06,846/-. It has been pleaded that on receipt of the paper possession aforesaid, the complainants raised their grievance with opposite parties no.1 to 9 but to no avail.

2.           By stating that the aforesaid act and conduct of opposite parties no.1 to 9 in not handing over possession of the plot in question, by the committed date and, on the other hand, offering paper possession and that too after an inordinate delay, amount to deficiency in providing service, negligence and adoption of unfair trade practice, the complainants have filed the present case seeking refund of amount paid alongwith interest, compensation and litigation expenses.
3. Their claim has been contested by opposite parties no.1 to 9, 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 they are speculators; that this Commission did not vest with pecuniary and territorial jurisdiction; that the complaint filed is beyond limitation; that only the civil court has jurisdiction to entertain this complaint; that for any delay in offering possession, stipulated penalty has been provided in the agreement, which safeguarded the interest of the complainants, which will be adjusted in the last payment; that the names of opposite parties no.2 and 9 need to be deleted from the array of parties, as they are not running affairs of the Company and therefore the complaint is bad for mis-joinder of parties.
4.           On merits, purchase of the plot in question by the complainants; payments made as mentioned in the complaint; execution of agreement; and that there was delay in offering possession of the plot has not been disputed by opposite parties no.1 to 9. It has been stated that the project in question is exempted from the provisions of PAPR Act (Punjab Apartment and Property Regulation Act, 1995); possession of the plot in question was offered to the complainants vide letter dated 19.11.2019, Annexure C-6, after obtaining partial completion certificate dated 16.10.2015, Annexure OP/7 but they failed to take over the same; that though it was not mandatory for the company to obtain partial completion certificate, as it was exempted from the provisions of PAPR Act, yet, as an abundant caution, partial completion certificate was obtained in view of Notification dated 02.09.2014, having been issued by the Government concerned. While admitting the fact that the entry points of project in question were sealed by the Forest Department, it has been stated that there was adequate access to the project in question and that the Forest Department has released ‘No Objection Certificate’, vide letter dated 16.01.2018. Prayer has been made to dismiss the complaint with costs.
5.           Proforma opposite party no.10 in its written statement pleaded that there is no allegation leveled against it, as such, the complaint deserves to be dismissed against it. However, in case, refund is ordered to be made to the complainants, first lien be marked in favour of  Proforma opposite party no.10, to the extent of amount due towards them (complainants).
6.           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 including the written submissions.
7.           We have heard the contesting parties and have gone through record of the case, including the written submissions, very carefully.
8.           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 the complainants are bound to take over possession offered after an inordinate delay of more than about 4  years from the stipulated date?
   5. Whether the complaint filed is within limitation?
   6. Whether the complainants are entitled to get refund of the amount deposited and if yes, at what rate of interest?
   7. Whether this complaint is bad for mis-joinder of parties i.e. opposite parties no.2 to 9?

 

9.           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 opposite parties no.1 to 9 in this regard stands rejected.
10.           The next question which needs consideration is with regard to pecuniary jurisdiction, it may be stated here that this complaint had been filed under the Consumer Protection Act, 1986, under which, for determining pecuniary jurisdiction, the Consumer Foras were required to take into consideration the value of the goods and compensation claimed if any. In the present case, if the total value of the plot purchased by the complainants and compensation claimed  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.
11.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that the agreement (Annexure C-3) was executed between the parties at Chandigarh office of opposite parties no.1 to 9. Furthermore, it also reveals that the application form dated 24.04.2013, Annexure C-1 was addressed to the Chandigarh office of opposite parties no.1 to 9 i.e. SCO No.120-122, 1^st Floor, Sector 17-C, Chandigarh; provisional allotment letter dated 04.06.2013, Annexure C-2 and payment receipt dated 29.05.2013 were also issued by Chandigarh office of opposite parties no.1 to 9, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its branch office at Chandigarh and personally work for gain hereat. Thus, a part of cause of action arose within the territorial jurisdiction of this Commission. As such, it is held that this Commission at Chandigarh has got territorial jurisdiction to entertain and decide this complaint. Objection taken in this regard, stands rejected.
12.           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 opposite parties no.1 to 9 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 that onus, hence we hold that the complainants are consumers.
13.           There is no dispute with regard to the fact that against total sale consideration of Rs.36,41,776.15 ps., the complainants paid an amount of Rs.33,06,846/- i.e. about 90% of the total sale consideration, for the period between 24.04.2013 to 28.11.2013, to opposite parties no.1 to 9. Despite the fact that it was in a clear-cut manner, committed by opposite parties no.1 to 9, vide Clause 8 of the agreement that possession of the plot will be delivered within a period of 24 months from the date of execution thereof i.e. on or before 17.06.2015 (date of execution of agreement being 18.06.2013), yet, they miserably failed to do so and, on the other hand, possession was offered to the complainants on 19.11.2019 i.e. after an inordinate delay of more than 4 years of the stipulated date (17.06.2015). Opposite parties no.1 to 9 have not disputed the said inordinate delay in offering possession of the plot in question to the complainants. However, without giving any convincing justification of such an inordinate delay; to wriggle out of the situation, it has been simply stated in the written reply that the Company is ready to compensate the complainants for the period of delay.  
14.           At the time of arguments also, we asked the Counsel for opposite parties no.1 to 9 to apprise this Commission, as to why such a huge delay of more than 4 years took place in offering possession of the plot in question; he was having no answer and said that because the possession so offered was a genuine one, though belatedly, the complainants are bound to take over the same. On the other hand, Counsel for the complainants contended that since there has been an inordinate delay in the matter and also the basic amenities are still not in existence at the project site, the complainants were not bound to take over possession of the plot and are entitled to seek refund of the amount paid.

                   It may be stated here that in the written reply filed, not even a single cogent and convincing reason has been assigned by opposite parties no.1 to 9, as to what stopped them, to complete development and construction activities at the project site and deliver possession of the plot in question by the stipulated date. Even this much has not been proved, as to whether, when the project in question had been launched and plots/units were sold therein to the general public, in the years 2012-13, opposite parties no.1 to 9 had obtained necessary permissions/ approvals from the competent authorities. This Commission, vide order dated 20.12.2019, directed opposite parties no.1 to 9 to produce on record various documents, in relation to the said project i.e. Registration Certificate of the project with the competent authority; copy of requisite Licence issued by the Competent Authority under Punjab Apartment and Property Regulation Act 1995; change of Land Use (CLU) pertaining to the project in question; letter of Intent (LOI); copy of approved site plan of the project; completion certificate of the project etc. but they failed to do so. The action of non-placing on record the said documents, attracts adverse inference against opposite parties no.1 to 9 that the project in question had been launched and units/plots were sold therein, without obtaining approvals/sanctions from the competent authorities. Furthermore, the contention raised by the complainants to the effect that the entry points of the project in question were sealed by the Forest Department for want of permissions/sanctions, has been endorsed by opposite parties no.1 to 9 only, by way of candid admission in para no.7 of their written reply stating that “Forest Department had sealed entry certain entry points”. It has further been stated in the said para that now vide letter dated 16.01.2018, the Forest Department has issued “No Objection Certificate” to the Company, as no land remains with it (Forest Department), meaning thereby that till 16.01.2018, opposite parties no.1 to 9 were not in possession of the land even and also permission from the Forest Department to develop the said project. It is very strange and also not understood that when no permission/NOC had been obtained by the Company from the Forest Department, then how the Greater Mohali Area Development Authority (GMADA) has issued partial completion certificate to it. The candid admission of opposite parties no.1 to 9 leaves no doubt, to believe that they had launched the project in question without obtaining necessary permissions and sanctions from the competent authorities especially from the Forest Department and that is why they ignored to place on record the documents, referred to above, before this Commission, which were asked for, vide order dated 20.12.2019.

15.           The facts of the case transpire that opposite parties no.1 to 9 made false representations, which were materially incorrect and were made in such a way that the complainants, to whom it was made, were entitled to rely upon it and they may act in reliance on it. The complainants are thereby involved in a disadvantageous contract with opposite parties no.1 to 9 and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true. All the facts established that from the very inception there was intent of opposite parties no.1 to 9 to induce the complainants to enter into a contract and also intent to deceive them. Infact, the acts committed by the Company are not only fraud but also amounts to misrepresentation of facts. This act of opposite parties no.1 to 9 needs to be deprecated. 

                   Be that as it may, under above circumstances, the moot question which needs consideration is, as to whether, the complainants were bound to take over possession of the plot in question, offered after an inordinate delay of more than 4 years. It may be stated here that a similar question as to whether an allottee is obliged to take possession, in case there is a delay in offering the same, fell for determination before the Hon’ble National Commission in Govindan Raghavan Vs. Pioneer Urban Land And Infrastructure Ltd., Consumer Case No. 239 of 2017, decided on 23 Oct 2018, wherein while negating the plea taken by the builder, refund of the amount paid was ordered, by holding as under:-

“16.    The learned counsel for the OP submits that in CC No.239 of 2017, not only the construction of the apartment has already been completed, even the requisite Occupancy Certificate has been obtained on 23.07.2018 and therefore, the complainant should now take possession of the allotted flat instead of insisting upon the refund of the amount paid by him towards the cost of the flat.  The learned counsel for the said complainant states on instructions that the complainant is no more interested in taking possession of the allotted flat and wants refund of the amount paid by him alongwith appropriate compensation.  Considering that the last date for completion of the construction expired about three years before the Occupancy Certificate was obtained, and in fact, it had expired more than one year before this complaint was instituted, the complainant, in my opinion, cannot be compelled to accept possession of the flat at this belated stage.”

 

Feeling aggrieved, against the order dated 23.10.2018, the builder went in Civil Appeal No.12238 of 2018 (Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan), before the Hon’ble Supreme Court, which was dismissed by it vide order dated 02.04.2019, while holding as under:-

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired…….”

16.           Similar view had been expressed by the Hon’ble Supreme Court of India in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. Because in the present case, there is an inordinate delay of more than  4  years in offering possession of the plot in question, as such, 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, if we order refund of the amount paid alongwith suitable interest that will meet the ends of justice. The complainants are therefore held entitled to get refund of the amount paid alongwith interest, from the respective dates of deposits till realization.

                   In view of above, the contentions raised by Counsel for opposite parties no.1 to 9 that the Company is ready to compensate the complainants, for the period of delay in offering possession, does not merit acceptance and is accordingly rejected. 

17.           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. Under similar circumstances, the Hon`ble National Commission in Anil Kumar Jain & Anr. Vs. M/S. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 2^3rd Dec 2019, ordered refund of the amount paid, alongwith interest @12% p.a. As such, it is held that the complainants are entitled to get interest @12% p.a. from the respective dates of deposit on the amount of Rs.33,06,846/-.
18.           As far as objection raised by opposite parties no.1 to 9, 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 handed over to the allottees or the amount paid by them was 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.”

 

                   Even otherwise, in the present case, if period of two years is counted from 19.11.2019 i.e. the date when possession was offered to the complainants, even then this complaint having been filed on 17.12.2019 is within limitation.

19.           As far as objection taken by opposite parties no.1 to 9 to the effect that this Commission has no jurisdiction to entertain this complaint, and the matter needs to be relegated to the civil court, it may be stated here that it is a simple case of non-delivery of physical possession of the plot to the complainants by the promised date, referred to above, thereby causing financial loss, mental agony and harassment to the complainants. The acts, omissions and commissions on the part of opposite parties no.1 to 9 amount to deficiency in providing service as well as negligence and adoption of unfair trade practice. In Narne Construction P. Ltd., etc. etc. Vs.  Union of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of the Act. Similar principle of law was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766).

                   Furthermore, merely taking a plea that the allotment was tentative and as such the consumer complaint is not maintainable, especially, in the face of the fact of having received more than 90% of the total sale consideration in respect of the plot in question, from the complainants, will not absolve the liability of opposite parties no.1 to 9. Under these circumstances, this complaint involves the consumer dispute and the same is maintainable before this Commission. Objection taken in this regard is rejected.

20.           As far as objection taken to the effect that opposite parties no.2 and 9 have been wrongly impleaded as parties to this complaint, it may be stated here that the complainants by way of placing on record signatory details (Annexure C-11) of the Company (wherein the CIN/LLPIN has been mentioned), has proved that opposite parties no.2 and 9 remained active in the capacity of Directors/CEOs of the Company, respectively. Document-Annexure C-11 has gone unrebutted by opposite parties no.1 to 9, as nothing contrary to it has been placed on record. At the same time, the complainants in para no.9 of their complaint have specifically averred that these persons are managing the affairs of the Company. In our considered opinion, 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. In this view of the matter, reliance placed by opposite parties no.1 to 9 on Ashutosh Gangwar Vs. M/s Emaar MGF Land Limited and 6 Ors., consumer complaint no.1069 of 2017, decided by the Hon’ble National Commission, is misplaced. 
21.           For the reasons recorded above, this complaint is partly accepted with costs and opposite parties no.1 to 9, jointly and severally, are directed as under:-

1. To refund the amount of Rs.33,06,846/- 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.33,06,846/- 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 cost of litigation 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 @9% p.a. from the date of passing of this order, till realization.

22.           However, it is made clear that since the complainants have availed loan facility from proforma opposite party no.10, for making payment towards price of the said plot, as such, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants. Complaint against proforma opposite party no.10 stands dismissed with no order as to costs, subject to directions aforesaid.
23.           Certified Copies of this order be sent to the parties, free of charge.
24.           The file be consigned to Record Room, after completion.

Pronounced

22.09.2020

 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

Sd/-

(PADMA PANDEY)

MEMBER

 Rg.