Chandigarh

StateCommission

CC/347/2016

Shivkumar Sawhney - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

In Person

16 Dec 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	347 of 2016
Date of Institution	:	12.07.2016
Date of Decision	:	15.12.2016

Shiv Kumar Sawhney s/o Sh. Jagindernath Sawhney, resident of H.No.4132, Ground Floor, Customs and Central Excise Colony, Sector 37-C, Chandigarh – 160036, a retired person.
Anita Sawhney w/o Sh. Shiv Kumar Sawhney, resident of H.No.4132, Ground Floor, Customs and Central Excise Colony, Sector 37-C, Chandigarh – 160036.

……Complainants

V e r s u s

Emaar MGF Land Limited, (Mohali Hills), SCO No.120-122, 1^st Floor, Sector 17-C, Chandigarh – 160017, through its Authorized Signatory.
Emaar MGF Land Limited, ECE House, 28, Kasturba Gandhi 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. Shiv Kumar Sawhney and Mrs. Anita Sawhney, complainants in person.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

PER PADMA PANDEY, MEMBER

The facts, in brief, are that in response to the advertisements made by the Opposite Parties in the leading newspapers with regard to the project, Mr.Devilal Banga and Mrs. Kiran Kumari Banga (initial allottees) moved an application, which was accepted by the Opposite Parties, as a result whereof, plot No.CG158, measuring approximately 300 Sq. Yard in Sector 105, SAS Nagar, Mohali was provisionally allotted on 10.04.2007 (Annexure C-1), for which, they paid the booking amount of Rs.10,35,000/-. It was stated that after more than one year of booking amount and provisional allotment, Plot Buyer’s Agreement dated 06.02.2008 was executed between the initial allottees and the Opposite Parties (Annexure C-2). The total sale price of the said plot was to the tune of Rs.40,82,394/- including PLC and EDC. It was further stated that the said amount of Rs.40,82,394/- was paid by May, 2010 and No Dues Certificate was also issued by the Opposite Parties (Annexure C-3). Thereafter, the said plot was purchased by the complainants in resale and, as such, the same was got transferred in their name on 24.06.2010 (Annexure C-4). It was further stated that the complainants visited the site in the year 2010 but there was no progress at the site. It was further stated that the complainants came to know in May, 2015 that there was dispute in portion of park facing their plot, for which, they paid Prime Location Charges and it was not to be delivered in near future and also there was a revenue rasta problem. It was further stated that this fact was concealed by the Opposite Parties for 5 long years and when the complainants confronted with the officials of the Opposite Parties, they suggested to take an alternative plot CP 208, Sector 105, Mohali. It was further stated that though the plot was not park facing and they had to succumb and accordingly entered into an Amended Agreement dated 01.10.2015 for the said unit (Annexure C-6). It was further stated that the complainants after constant follow ups and mails, were given possession of plot No.CP 208, Sector 105, Mohali on 31.12.2015. It was further stated that after umpteen reminders and follow ups for six months, their conveyance deed/registration of Agreement has still not been done. It was further stated that the complainants have not been paid compensation/penalty for delay in possession, inspite of frequent demands. It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

2. The Opposite Parties, in their written version, have taken objection regarding arbitration clause in the Agreement, and 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 further stated that the complainants, who had delayed payment of agreed installments were liable to pay Rs.4,70,432/- towards delayed payment to the Opposite Parties. It was further stated that a sum of Rs.7,85,589/- have already been credited in the account of the complainants recently in February, 2015 with regard to compensation/penalty. It was further stated that as per Clause 8 of the Agreement, possession was “endeavored” to be handed over within 3 years of execution of the Agreement. Thus, there was no definite agreement stating that possession would definitely be delivered within 3 years. It is well settled principle of law that in cases of sale of immovable property and construction, time is never regarded as the essence of the contract, more so, when there is penalty clause under the Agreement for any alleged delay. It was further stated that the complainants did not fall within the definition of “Consumer”, as prescribed under Section 2(d) of the Consumer Protection Act, as they had purchased the plot for commercial purposes/speculation. It was further stated that the complainants are resident of Australia and, as such, they are speculators because they filed the instant complaint after possession being offered and accepted by them. It was admitted the fact regarding purchase of the unit by the complainants ; issuance of provisional allotment letter ; execution of the Agreement ; relocation of the unit ; execution of the Amended Agreement dated 01.10.2015 with regard to change in location and handing over of the unit on 31.12.2015. It was further stated that the complainants had to pay the delayed payment interest towards the delay in making payments and also to pay the stamp duty and registration charges for execution of sale deed in their favour. Copies of statement of accounts and the stamp papers purchased are Annexures R-1 & R-2. It was further stated that the registration of conveyance deed was scheduled for the complainants on 22.07.2016 but they never turned up for getting the sale deed executed in their favour. It was further stated that this Commission has no jurisdiction to entertain the complaint and also the complaint is not maintainable being barred by limitation. It was further stated that the main motive behind filing this complaint is that they just want to take undue benefits from the Company because they want compensation and interest both and also want to retain the unit. The complainants are only entitled for delayed compensation and the same has already been credited in their account and the excess payment made by them would have been paid at the time of registration of plot, however, they instead of getting the conveyance deed executed chose to file the complaint. 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 Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Parties, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even i n the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra. In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986. [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

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

7. The objection taken by Counsel the Opposite Parties, to the effect that the complainants are residents of Australia and they purchased the plot only for commercial/speculation purposes, did not fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, also deserves rejection. The complainants in their rejoinder have clearly stated that they are citizens and residents of India and have never visited Australia in their lifetime. They also enclosed the copies of the passport (Annexure A-19) to prove the said fact. The complainants further stated that they settled for inferior plot at the time of relocation itself is a clear indication of the fact that the main motive of the complainants was to take possession of the plot by any means and build a house on it for residential purposes. Even otherwise, the mere fact that it was a residential plot, 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, and deal in the sale and purchase of property. Moreover, with regard to the objection taken by the Counsel for the Opposite Parties that the complainants are residents of Australia and purchased the said plot for commercial/speculation purposes, has no value, at all. If for the sake of arguments, we believe that the complainants are residents of Australia, even no law debars an NRI, who basically belonged to India, to purchase a residential property in India. Under similar circumstances, the Hon'ble National Commission, in a case titled as Smt. Reshma Bhagat & Anr. Vs. M/s Supertech Ltd. Consumer Complaint No. 118 of 2012, decided on 04.01.2016, held as under:-

“We are unable to clap any significance with these faint arguments. It must be borne in mind that after selling the property at Bangalore, and in order to save the money from riggers of capital gain tax, under Section 54 of the Income Tax Act, 1961, there lies no rub in getting the property, anywhere, in whole of India. There is not even an iota of evidence that they are going to earn anything from the flat in dispute. From the evidence, it is apparent that the same had been purchased for the residence of the complainants. Moreover, Sh. Tarun S. Bhagat, who is an independent person. It cannot be made a ‘rule of thumb’ that every NRI cannot own a property in India. NRIs do come to India, every now and then. Most of the NRIs have to return to their native land. Each NRI wants a house in India. He is an independent person and can purchase any house in India, in his own name.”

Thus, in the absence of any cogent evidence, in support of the objection raised by the Counsel for the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, Revision Petition No. 3861 of 2014, decided on 26.08.2015. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”

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

8. 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 the Plot Buyer’s Agreement (Annexure C-2) was executed between the allottee and the Opposite Party at Chandigarh. Not only this, even the provisional allotment letter (Annexure C-1), acknowledgment-cum-receipt (Annexure C-6), Plot Handing-over Letter, Possession Certificate and Possession Offer Letter (Annexure C-8) were also sent by the Opposite Parties form their Chandigarh Office, as the same bore the address of the Company as “SCO 120-122, First Floor, Sector 17-C, Chandigarh”. 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 this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

9. The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not. It may be stated here that since the Opposite Parties failed to give possession of the earlier plot, purchased by the complainants, so they reallocate another plot and possession letter was also sent to them. However, inspite of giving possession, they failed to execute the sale deed in favour of the complainants. In the present case, hard earned money was deposited by the complainants for the purchase of the plot but they are now empty handed because the sale deed was not executed in their favour, as such, there is continuing cause of action, in their favour, in view of principle of law laid down, in Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

10. Another objection raised by Opposite Parties that since as per Clause 8 of the Agreement, possession was “endeavoured” to be handed over within 3 years of execution of the Agreement, as such, time was not the essence of contract, is also devoid of merit. A bare perusal of Clause 8 of the Plot Buyer’s Agreement (Annexure C-2), which was executed between Mr. Devi Lal Banga and Mrs. Kiran Kumar (initial allottees) with the Opposite Parties on 06.02.2008, reveals that possession of the plot will be delivered by the Opposite Parties, within a maximum period of 3 years from the date of execution of the Agreement, subject to force majeure circumstances or reason beyond the control of the Opposite Parties. 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 8 of the Agreement, the Opposite Parties were bound to deliver possession of the unit, within a maximum period of 3 years from the date of execution of the same, as such, time was, unequivocally made the essence of contract.

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

11. The next question, that falls for consideration, is, as to whether there was delay in delivery of possession of the plot to the complainants. According to Clause 8 of the Plot Buyer`s Agreement dated 06.02.2008 (Annexure C-2), subject to force majeure conditions and reasons, beyond the control of the Company, it was to deliver physical possession of the plot, within a period of 2 years but not later than 3 years, from the date of execution of the same (Agreement). It is, thus, evident, from this Clause, that the Opposite Parties were required to deliver possession of the plot, in question, in favour of the complainants, within a maximum period of 3 years, from the date of execution of the Agreement i.e. latest by 05.02.2011. It may be stated here that earlier the plot was allotted in favour of Mr.Devi Lal Banga and Ms. Kiran Kumari (initial allottees) vide provisional allotment letter dated 10.04.2007 (Annexure C-2) and even Plot Buyer’s Agreement was also executed between the initial allottees and the Opposite Parties on 06.02.2008 (Annexure C-2). It is relevant to mention here that the initial allottees have already made the total amount pending against them, as such, the Opposite Parties issued No Dues Certificate dated 22.06.2010 (Annexure C-3). Thereafter, the complainants, stepped into the shoes of the earlier allottees, and purchased the plot from initial allottees vide Sale Agreement in June, 2010 (Annexure C-4). It is pertinent to note that the Opposite Parties were unable to give possession of the earlier plot, so they suggested to take an alternative plot bearing No.CP 208, Sector 105, Mohali and, as such, Amended Agreement dated 01.10.2015 (Annexure C-7) was also executed between the complainants and the Opposite Parties. It is the admitted fact that the unit bearing No.105-CP-208-300 was handed over to the complainants vide Plot Handover Letter dated 31.12.2015 (Annexure C-8) i.e. after a delay of 4 years and 10 months, which amounted to deficiency in service and indulgence into unfair trade practice.

12. The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit in question within the maximum stipulated period of 3 years. As stated above, in the instant case, the Opposite Parties have not delivered possession within the maximum period of 3 years as stipulated in the Agreement i.e. by 05.02.2011. No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainants for delay, was incorporated but it does not mean that the intention was that even in the event of inordinate delay, delivering the possession, the complainants would be entitled to meagre compensation/penalty of Rs.50/- per sq. yds. per month, which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view, Clause 8 was meant for computing penalty/compensation, in case of a delay in delivery of possession. If the argument of the Opposite Parties is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount paid by the buyer meant to finance the project, for its other business venture. This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act. Recently in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8. If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9. xxxxxxxxxxxxx

10. For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1) xxxxxxxxxxxxxx

(2) The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3) No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the case, referred to above, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, would meet the ends of justice.

13. The next question, that falls for consideration, is, as to whether, the complainants were at fault for not executing the sale deed of their plot. The answer, to this, question, is in the negative. It is, no doubt, true that the complainants purchased the plot from the initial allottees and the Opposite Parties were unable to deliver possession of the said plot. Therefore, the Opposite Parties offered alternative plot, which was accepted by the complainants and possession of the said plot was handed over to them vide letter dated 31.12.2015 (Annexure C-8). The objection of the Opposite Parties are that they purchased the stamp papers on 22.07.2016 for registration of the sale deed but the complainants themselves are at fault and did not come forward to execute the registration of sale deed. It is not understood that why the Opposite Parties have purchased the stamp papers for execution of the sale deed after filing of this complaint, without the consent of the complainants. It is relevant to mention here the complainants filed the complaint in this Commission on 12.07.2016 and the Opposite Parties sent an email on 15.07.2016 (Annexure A-9) by which they intimated the complainants that the registration of the plot was scheduled on 22.07.2016 at 11.30 AM. Immediately the very next date i.e. 16.07.2016 (Annexure A-10) the complainants vide their email clearly intimated the Opposite Parties, that the registration of the plot may be kept in abeyance since the matter is subjudice. The Opposite Parties did not pay any heed of the request of the complainants and purchased the stamp papers on 22.07.2016. Not only this, the complainants after taking possession of the plot, sent umpteen emails (Annexures A-2 to A-8) and also notice/emails (Annexure C-9) for registration of the plot but they (Opposite Parties) did not bother on the request of the complainants made from time to time for registration of the sale deed, in question. So, it is clearly proved that there was no fault on the part of the complainants.