Chandigarh

StateCommission

CC/75/2018

Jagjiwan Sood - Complainant(s)

Versus

Emaar MGF Land Ltd. - Opp.Party(s)

Savinder Singh Gill, Adv.

10 Sep 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	75 of 2018
Date of Institution	:	19.02.2018
Date of Decision	:	10.09.2018

Jagjiwan Sood S/o Sh. Kulwant Rai Sood, resident of Jeevan Eye & Maternity Hospital, 33 G.T.B. Market, Khanna – 141401, Punjab.
Gaurav Sood S/o Sh.Jagjiwan Sood, resident of Jeevan Eye & Maternity Hospital, 33 G.T.B. Market, Khanna – 141401, Punjab, currently residing in 2-2825, 159 Street, Surrey, BC, Canada, through his Power of Attorney Holder, Sh.Jagjiwan Sood s/o Sh.Kulwant Rai Sood, resident of Jeevan Eye & Maternity Hospital, 33 G.T.B. Market, Khanna – 141401, Punjab.

……Complainants

V e r s u s

Emaar MGF Land Ltd., Mohali Hiis, Office No.40, Central Plaza, Sector 105, Mohali through its Managing Director Sh.Shravan Gupta.

Also At: ECE House, 28, Kasturba Gandhi Marg, New Delhi – 110001, through its CEO Sh.Sanjay Malhotra.

Sh.Shravan Gupta, Director of Emaar MGF Land Ltd., ECE House, 28, Kasturba Gandhi Marg, New Delhi – 110001.
Sh.Sanjay Malhotra, CEO of Emaar MGF Land Ltd., Mohali Hills, Office No.40, Central Plaza, Sector 105, Mohali. .... Opposite Parties

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT

MRS. PADMA PANDEY, MEMBER

Argued by:

Sh. Savinder Singh Gill, Advocate for the complainants.

Sh. Ashim Aggarwal, Advocate for the Opposite Parties.

PER PADMA PANDEY, MEMBER

The facts, in brief, are that the complainants applied for an apartment measuring 1350 sq. ft. in the project of the Opposite Parties under the name and style of “The Views at Mohali Hills” situated at Sector 105, SAS Nagar, Mohali on 05.03.2008 by paying booking amount of Rs.7,00,000/-. It was stated that apartment No.H2-F07-703 was allotted to the complainants vide provisional allotment letter dated 24.03.2008 (Annexure C-2). The total consideration of the unit was Rs.43,52,969/-, out of which, the complainants paid an amount of Rs.37,46,416/- in respect of the unit in question. Thereafter, Apartment Buyer’s Agreement was executed between the parties on 07.05.2008 (Annexure C-5). As per Clause 21.1 of the Agreement, possession of the unit was to be delivered within a period of 36 months from the date of allotment, failing which, to pay compensation for delay @Rs.5/- per sq. ft. per month of the super area to the allottee till the notice offering the possession. It was further stated that when the Opposite Parties failed to deliver possession of the unit, in question, to the complainants within the stipulated time frame, as mentioned in the Agreement, the complainants requested for refund of the amount but the Opposite Parties flatly refused to refund the same (Annexure C-6 colly.). 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 stated that the complainants did not fall within the definition of “Consumer” as defined in the Consumer Protection Act, 1986, as complainant No.1 is residing at Khanna, Punjab and complainant No.2 is a Canadian Citizen, therefore, purchase of the subject property in this case is purely for investment/speculative purposes. It was further stated that this Commission has no territorial jurisdiction to try this complaint as the registered office of the Opposite Parties is at New Delhi, the payments were made at Delhi and receipts issued from there. As per the Agreement, a Company can be sued only at the place its registered office is located. It was further stated that this Commission has no pecuniary jurisdiction to entertain and try the complaint, as value of the claim exceeds Rs.1 crore. It was further stated that the complaint is time barred. It was admitted regarding booking of the amount ; execution of the Agreement and receipt of the amount deposited by the complainants. It was denied that the possession was to be delivered within a period of 36 months. It was further stated that as per Clause 21.1 of the Agreement, the Company “proposes” to hand over possession. Thus, there no definitive Agreement stating that possession would definitely be delivered within 36 months, which means to try/make effort. 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 Company has already offered possession in three of the towers J, G & K in the project and the work is being expedited to hand over the balance towers at the earliest. It was further stated that the complainants were offered relocation of the unit but they refused to accept the same. It was further stated that neither there was any deficiency, in rendering service, on the part of the replying 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. First, we will deal with an objection, raised by the Opposite Parties, that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

It may be stated here that this issue has already been dealt with, by this Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), and held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, 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. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants 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.

In view of above, the objection raised by the Opposite Parties, in this regard, being devoid of merit is rejected.

7. 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 Unit Buyer’s Agreement was executed between the parties at Chandigarh on 07.05.2008. Not only this, the complainants have also annexed receipts/acknowledgment cum receipts & allotment letter (Annexures C-2 & C-3) were sent by the Opposite Parties from their Chandigarh Office, as the aforesaid documents bore the address 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 complainants, 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.

8. The next question, that falls for consideration, is, as to whether, the complainants fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. The Opposite Parties in their written statement stated that complainant No.1 is residing at Khanna, Punjab and complainant No.2 is a Canadian Citizen, therefore, purchase of the subject property in this case is purely for investment/speculative purposes. After going through the record, we are of the view that the objection taken by the Opposite Parties does not carry any weight and is liable to be rejected. It is pertinent to note that the complainants have mentioned in their complaint that they applied for an apartment measuring 1350 sq. ft. for their family and personal use and with an intention to move to a less polluted city in the project being developed by the Opposite Parties. Even otherwise, the mere fact that it was a residential unit, 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. Thus, in the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion i.e. simply saying that the complainants purchased the property for speculation purposes, as such, they did not fall within the definition of a consumer, cannot be taken into consideration. Further, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided 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, 2016 (2) CPJ 316.

As far as contention raised by the Opposite Parties, to the effect that since complainant No.2 is Citizen of Canada (NRI), as such, in that event also, he would not fall within the definition of consumer, it may be stated here that, no law debars NRIs, with roots in 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.”

The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. 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 Opposite Parties, in their written reply, therefore, being devoid of merit, is 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 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 and on the other hand, amount deposited was also not refunded to the complainants alongwith interest, when request for the same was made by them vide email (Annexure C-6 colly.), 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.

At the same time, once a plea has been taken by the Opposite Parties that the complaint filed is beyond limitation, as such, in the same breath, taking another plea to say that time is not to be considered as essence of the contract, in case of immovable property, has no legs to stand and, is accordingly rejected.

10. Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here that as per Section 17 (1) (a) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016. Relevant part of the said order reads thus:-

“It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum. The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer. Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction. If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint. For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum. Similarly, if for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. ”

In the present case, if total consideration of unit, in question i.e. Rs.43,52,969/- (mentioned in the Agreement), plus compensation claimed by way of interest @12% p.a. on the amount deposited to the tune of Rs.37,46,416/-; compensation to the tune of Rs.3 lacs claimed for mental agony and physical harassment, till the date of filing this complaint, is taken into consideration, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide this complaint. The objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, must fail and the same stands rejected.

11. With regard to offer of relocation of the unit is concerned, the Hon'ble National Consumer Disputes Redressal Commission, New Delhi recently in the case titled as Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No. 1814 of 2017 decided on 05.07.2018 held as under:-

“This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment”.

The Opposite Parties, therefore, have no right, to retain the hard-earned money of the complainants, deposited towards price of the relocated unit, in question. The complainants are thus, entitled to get refund of amount deposited by them.

12. Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company only proposes to deliver possession of the unit within maximum period of 36 months, from the date of allotment thereof, as such, no definite assurance was given, therefore, time was not to be considered as 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 will be delivered by the Opposite Parties, within a period of maximum 36 months, from the date of allotment, 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 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 of the unit, as such, time was, unequivocally made the essence of contract.

At the same time, the Opposite Parties, also cannot evade their liability, merely by saying that since the words “shall endeavor/try/propose etc.” 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. The act of non-mentioning of exact date in the Agreement is violation of CHAPTER II Regulation of Promotion of Construction, Sale, Transfer and Management of Apartments, Plots and Properties, Condition no. 3(2) (g) of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which says that the project proponent is duty bound to specify, in writing, the date by which possession of the unit is to be handed over and it shall hand over such possession accordingly. Relevant contents of condition no.3(2) (g) of PAPRA are reproduced below:-

“(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly”;

Furthermore, non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement/allotment letter, 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 plots/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.

13. The next question, that falls for consideration, is, as to within which period, the delivery of possession of the unit, was to be given to the complainants. As per Clause 21.1 of the Agreement, possession of the unit was to be delivered to the complainants within a maximum period of 36 months from the date of allotment. In the instant case, the allotment was made vide allotment letter dated 24.03.2008 (Annexure C-2) and, as such, possession was to be delivered to the complainants latest by 23.03.2011 and not more than that. However, the Opposite Parties failed to deliver possession of the unit, in question, to the complainants within the stipulated time frame, as mentioned in the Agreement or even the time when the complaint was filed.

14. The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the deposited amount. It is the admitted fact that the complainants deposited the total amount of Rs.37,46,416/- in respect of the unit, in question, as is evident from statement of account (Annexure C-4). As per the Agreement, possession was to be delivered by the Opposite Parties within a period of 36 months from the date of allotment, which expired on 23.03.2011 but after receipt of the huge amount from the complainants, the Opposite Parties failed to deliver possession of the unit to the complainants within the stipulated time frame as mentioned in the Agreement or even the time when the complaint was filed. So, the complainants are thus, entitled to get refund of amount deposited by them. In view of above facts of the case, the Opposite Parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them.

15. It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.37,46,416/-, was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the Opposite Parties, for their own benefit. The Opposite Parties were charging rate of interest @15% p.a. compounded, 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. In the facts and circumstances of the case, the complainants are held entitled to get refund of the amount deposited by them, to the tune of Rs.37,46,416/- alongwith simple interest @12% p.a. (as prayed for), from the respective dates of deposits till realization.

16. As far as the plea taken by Counsel for the Opposite Parties at the time of arguments, regarding forfeiture clause 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 complainants, complete in all respects, as per terms and conditions contained in the Agreement, by the stipulated date but it was they (complainants) who wanted to rescind the contract, on account of some unavoidable circumstances/ financial constraints or for any personal reason, and are seeking refund of the amount deposited. Had this been the case of Opposite Parties, only in those circumstances, it would have been held that since the complainants themselves are rescinding the contract, as such, he is entitled to the amount deposited, after deduction of some amount, as per the terms and conditions of the Agreement. In this view of the matter, the plea taken by Opposite Parties, in this regard, have no legs to stand and are accordingly rejected.

17. Since, it has already been held that the complainants are entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by the Opposite Parties to the effect that they are ready to pay penalty amount for the period of delay, in delivery of possession cannot be considered, at this stage. If the Opposite Parties are allowed to invoke this Clause of the Agreement, in the instant case, regarding payment of penalty, that would amount to enriching them, at the cost of the complainants. The defence taken is accordingly rejected.

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

19. For the reasons recorded above, the complaint is partly accepted, with costs. Opposite Parties are jointly and severally directed, as under:-