Chandigarh

StateCommission

CC/333/2016

Sundeep Singh - Complainant(s)

Versus

Emaar MGF Land Limited - Opp.Party(s)

Munish Goel Adv.

09 Nov 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	333 of 2016
Date of Institution	:	06.07.2016
Date of Decision	:	09.11.2016

 

Sundeep Singh s/o Col S.D.Singh r/o 5779-A, Sector 38 West, Chandigarh.

……Complainant

V e r s u s

1. Emaar    MGF   Land Limited, ECE House, 28 Kasturba Gandhi Marg, New Delhi - 110001, through its Managing Director/Director/ Partner/Authorized Signatory.
2. Emaar   MGF   Land   Limited, SCO   No.120-122, First  Floor,  Sector 17-C,   Chandigarh,  through   its Managing Director/Director/Regional Manager/ Branch Manager/ Authorized Signatory.  

                                                    .... Opposite Parties

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Munish Goel, Advocate for the complainant.

Sh.  Ashim Aggarwal, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that father of the complainant duly went to the Opposite Parties and inquired about their project i.e. “The Views at Mohali Hills”, Sector 105, who assured regarding clearance of the project and development of the whole area and possession would be provided within 36 months. The father of the complainant had agreed to purchase 3 bedroom flat at the cost of Rs.57,01,543/- and made the initial payment of Rs.7 lacs on 16.01.2008 (Annexure C-1). Thereafter, Buyer’s Agreement (Annexure C-7) was executed between father of the complainant and the Opposite Parties. It was stated that father of the complainant made an endorsement in favour of his son i.e. present complainant and transferred the flat in his favour due to love and affection. The Opposite Parties duly made endorsement on receipts and Buyer’s Agreement. It was further stated that as per Buyer’s Agreement, Opposite Parties duly allotted flat in Tower F, Unit No.F3-F03-301 having 3 bedroom with super area of 1750 sq. ft. and a car parking bay at a total sale price of Rs.57,01,543/- to the complainant. As per Clause 21 of the Agreement, possession of the unit was to be delivered within a period of 36 months from the date of allotment i.e. latest by 18.03.2011 and as per Clause 23.1 of the Agreement, the Opposite Parties would be liable to pay a penalty of Rs.5/- per sq. ft. per month of the super area to the allottee on account of delay in offering possession to the complainant. It was further stated that the complainant received letter dated 04.02.2009 from the Opposite Parties congratulating the complainant on having qualified for the “pay on time” reward as per letter dated 29.11.2008 (Annexures C-8 & C-9). It was further stated that the complainant further received a letter dated 08.05.2012 (Annexure C-10) from the Opposite Parties to make the payment of Rs.6,10,808.25 and  also mentioned in the said letter that previous balance was Rs.-96.00 and, therefore, it is clear that the complainant had made the payments well in time. It was further stated that the complainant made the payments, as and when demanded by the Opposite Parties (Annexures C-11 to C-18). Therefore, the complainants has made the total payment of Rs.49,73,396/- against the total cost of Rs.57,01,543/-. It was further stated that the complainant contacted the Opposite Parties a number of times regarding possession of the unit, 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 complainant, 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 that complainant did not fall within the definition of “Consumer” as envisaged in the Consumer Protection Act, 1996, as he purchased the same for commercial/speculation purposes.  It was further stated that the complainant is residing abroad and there is no averment that when he would be back in India or that whether he has any other house in India. It was further stated that this Commission has no territorial jurisdiction to entertain the complaint, as Agreement has been executed at Mohali and flat is located at Mohali. It was further stated that this Commission has no pecuniary jurisdiction to entertain and decide the complaint, as the claimed amount together with interest exceeds Rs.1 crore. It was further stated that the complaint is time barred having been filed more than 2 years after alleged cause of action, which allegedly arose in 2011.       Though objection qua existence of arbitration clause has not been taken by the Opposite Parties in their written statement but they have separately moved an application u/s 8 of Arbitration and Conciliation Act, 1996 for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement.

              On merits, it was stated that the unit was earlier booked in the name of Col. S.D.Singh and he was issued provisional allotment letter dated 24.01.2008. It was further stated that the total sale consideration of the said unit was Rs.57,01,543/- (excluding service tax) and Buyer’s Agreement was executed between the parties on 19.03.2008. It was further stated that the unit was transferred from Col.S.D.Singh to the complainant on completion of relevant formalities, as such, allotment letter and Buyer’s Agreement were also endorsed accordingly. It was further stated that as per Clause 21.1 of the Agreement, the Opposite Parties proposed to deliver physical possession of the unit within a period of 36 months from the date of allotment plus grace period of 90 days for applying and obtaining the occupation certificate. Thus, possession was only proposed as it is well settled 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 terms and conditions attached with letter dated 04.02.2009 clearly stated that the complainant qualified for 5% incentive and he should continue paying the future installments on time to avail the waiver. It was further stated that as per statement of accounts attached, the complainant has delayed in remitting the installments after 2009. Copy of statement of account is Exhibit OP/2. It was further stated that the complainant made the payment of Rs.49,73,396/- against the said unit having total cost of Rs.57,01,543/-. It was averred that the structure work of Tower F has been completed and finishing works are being undertaken and the possession would be handed over as soon as possible.  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 complainant filed rejoinder to the written statement of the Opposite Parties, wherein he 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 unit was booked by Col.S.D.Singh, who is father of the complainant and Apartment Buyer’s Agreement was also executed between Col.S.D.Singh and the Opposite Parties (Annexure C-7), which was thereafter, endorsed in favour of the complainant vide endorsement dated 19.03.2008. As per the Agreement, total consideration of the unit was Rs.57,01,543/-, out of which, the complainant paid the amount of Rs.49,73,396/-, as is evident from statement of account (Exhibit OP/2). It was admitted by the Opposite Parties in their written statement that provisional allotment letter dated 24.01.2008 was issued to Col. S.D.Singh (initial allottee).

7.           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 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 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.

9.           The next question, that falls for consideration is, as to whether, the complainant falls within the definition of “Consumer” as prescribed under the Consumer Protection Act, 1986. The Counsel for the Opposite Parties submitted that the complainant did not fall within the definition of “Consumer” as he purchased the unit for commercial/speculation purposes. He further submitted that the complainant is residing in abroad and there is no averment when he would be back in India or he has no other house in India. After going through the record, we are not agreeing with the contention of the Counsel for the Opposite Parties because the complainant has specifically stated in his complaint that he has purchased the flat for personal use/self-living. Not only this, the complainant in his rejoinder has admitted that he is presently living in Canada and he did not have any other flat/plot in his name in India except the flat duly booked by him with the Opposite Parties with sole intention to live therein during his visit in India and further to live therein after his retirement. Even there is nothing, on the record, that the complainant is property dealer, 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 complainant is residing in abroad and there is no averment when he would be back in India, has no value, at all. 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 hand 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, being residing outside India or NRI, the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, falls 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.

10.          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 complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident from the record, that the receipt (Annexure C-6), letters dated 29.11.2008 and 04.02.2009 (Annexures C-8 and C-9), payment request letter dated 08.05.2012 (Annexure C-10), acknowledgment – cum – receipts (Annexures C-11, C-13 & C-14) and payment request for service tax on past payments dated 24.07.2012 (Annexure C-12) was 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 160017”. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the Opposite Parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.          Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here, that the complainant has sought refund of an amount of Rs.49,73,396/- paid by him, towards price of the unit, alongwith interest @18% p.a. compounded from the date of deposits;  to pay Rs.5/- per sq. ft. per month as per Clause 23.1 of the Agreement till the deposited amount be refunded to the complainant ; compensation to the tune of Rs.5 lacs for mental tension, harassment and mental agony; and cost of litigation, to the tune of Rs.33,000/-, aggregate value whereof [excluding the interest claimed] fell above Rs.50 lacs and below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint.

                As far as the interest claimed by the complainant, on the deposited amount is concerned, it is not required to be added, at this stage, to the value of the reliefs claimed, for determining the pecuniary Jurisdiction of this Commission, in view of law laid down by three Member Bench of the National Commission, in a case titled as Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), wherein it was clearly held that since rate and the period for which interest has to be allowed, is within the discretion of Consumer Foras, and that too at the stage, when the complaint is finally disposed of, as such, the same being imaginary would not be taken into consideration, at the time of filing of the same (complaint), for the purpose of determination of pecuniary jurisdiction. Not only as above, in the case of Denis Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided on 08 March 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the objection taken by the Opposite Parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

12.           The next question, that falls for consideration, is, as to whether, the complaint filed by the complainant, was within limitation or not.  It may be stated here that since it has been frankly admitted by the Opposite Parties, in their joint written statement that offer of possession of the unit, in question, could not be made till date, as such, there is continuing cause of action, in his 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.

13.          Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company proposes to deliver possession of the unit within maximum period of 36 months, as such, time was not the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 21.1 of the Agreement that possession of the unit was to be delivered to the complainant within a period of 36 months from the date of allotment. The grace period of 90 days mentioned in the aforesaid clause is after the expiry of 36 months for applying and obtaining the occupation certificate. As such, possession was to be delivered within a maximum period of 36 months from the date of allotment. In the instant case, it is admitted by the Opposite Parties in para No.1 of their written statement that provisional allotment letter was issued vide letter dated 24.01.2008 and, as such, possession was to be delivered latest by 23.01.2011 and not more than that. In the instant case, the Opposite Parties did not raise any force majeure circumstances, if any, encountered by them. In the absence of any force majeure circumstances having been faced by the Opposite Parties or any other valid and legal reason beyond their control, the stand taken by them, in this regard, for condonation of delay in delivery of possession of the unit, to the complainant, cannot be taken into consideration. Thus, under these circumstances, since as per Clause 21.1 of the Agreement, the Opposite Parties were bound to deliver possession of the unit, within a maximum period of 36 months from the date of allotment, as such, time was,  unequivocally made the essence of contract.

                Even otherwise, the Opposite Parties cannot evade their liability, merely by saying that since the word 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.

14.           The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.49,73,396/-, deposited by him. It is an admitted fact that the Opposite Parties are unable to deliver  possession of the unit, in question, because they clearly stated in their written statement that “structure work of Tower F has been completed and finishing works are being undertaken and the possession would be handed over as soon as possible” and firm date of delivery of possession of the unit, could not be given to him (complainant). The complainant cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit purchased by him. The  Opposite Parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the unit, in question. The complainant is thus, entitled to get refund of amount deposited by him. In view of above facts of the case, the  Opposite Parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him.

15.          It is to be further seen, as to whether, interest on the amount refunded, can be granted, in favour of the  complainant. It is not in dispute that an amount of Rs.49,73,396/-, was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the  Opposite Parties, for their own benefit. There is no dispute that for making delayed payments, the  Opposite Parties were charging heavy rate of interest (compounded @15% p.a.) as per Clause 20.1 of the Agreement, for the period of delay in making payment of installments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335). In view of above, the  complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.49,73,396/-alongwith interest @15% p.a. compounded, from the date of endorsement of the unit i.e. 19.03.2008 in favour of the complainant till realization.  

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

17.          Since we are refunding whole of the deposited amount to the complainant alongwith interest @15% p.a. compounded as well as sufficient granting compensation and litigation expenses, therefore, he is not entitled to claim any other relief, as prayed in the prayer clause of the complaint.

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

19.          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.49,73,396/-, to  the  complainant, alongwith interest @15% p.a. compounded,  from the respective  date of endorsement of the unit dated 19.03.2008 onwards.
2. To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainant.
3. To pay cost of litigation, to the tune of Rs.33,000/- to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of two months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @18% p.a. compounded, instead of @15% p.a., from the respective date of endorsement of the unit onwards, and interest @15% p.a. compounded, on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

20.          However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).

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

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

Pronounced.

November 9, 2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

Sd/-

(PADMA PANDEY)

        MEMBER

 rb