Chandigarh

StateCommission

CC/271/2018

Jang Bahadur Singh - Complainant(s)

Versus

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

Savinder Singh Gill, Adv.

17 Dec 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	271 of 2018
Date of Institution	:	26.06.2018
Date of Decision	:	17.12.2018

Jang Bahadur Singh S/o Sh.Ranjit Singh Walia, r/o H.No.2432, Sector 70, Mundi Complex, Mohali, Punjab.
Amanpreet Kaur w/o Sh. Jang Bahadur Singh r/o H.No.2432, Sector 70, Mundi Complex, Mohali, Punjab.

……Complainants

V e r s u s

Emaar MGF Land Ltd., Mohali Hills, 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: MRS. PADMA PANDEY, PRESIDING MEMBER

MR. RAJESH K. ARYA, 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 allotment of an apartment measuring 1750 sq. ft. for their family and personal use and for the future prospects of her daughter in the project being developed by the Opposite Parties under the name of “The Views at Mohai Hills” situated at Sector 105, SAS Nagar, Mohali on 16.08.2006 by paying the booking amount of Rs.7 lakhs. Accordingly, apartment No.TVM H1-F08-802 was provisionally allotted to the complainants vide provisional allotment letter dated 19.03.2007 (Annexure C-1). Thereafter, on the request of the complainants, apartment of the complainants was changed to L1-F10-1003 measuring 1930 sq. ft. vide letter dated 12.08.2008 (Annexure C-2). It was further stated that the total sale price of the apartment, in question, is Rs.53,17,750/-, out of which, the complainants paid the total amount of Rs.51,36,376/- (Annexure C-3). Thereafter, Apartment Buyer’s Agreement was executed between the parties on 26.02.2008 (Annexure C-4). As per Clause 21.1 of the Agreement, possession of the said unit was to be delivered within a period of 36 months from the date of allotment, failing which, it was liable 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 the complainants also availed loan against the said apartment from Housing Development Finance Corporation Limited vide Tripartite Agreement dated 30.03.2007 (Annexure C-5). It was further stated that possession of the said apartment was to be handed over to the complainants by 11.08.2011 but despite receipt of the huge amount, the Opposite Parties failed to deliver possession of the said unit, despite repeated requests and visits. The aforesaid act 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 joint written version, have taken objection that as per Clause 43.1 of the Agreement, all the disputes should be referred to an Arbitrator to be appointed as per provisions of Arbitration and Conciliation Act, 1996. 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, 1986, as complainant No.1 is an NRI ; the complainants admitted that they have another plot with the Opposite Parties in Sector 105 possession of which has been taken and the complainants also have a house at Sector 70, Mundi Complex, Mohali, as such, they purchased the flat solely for commercial/speculation purposes. It was further stated that this Commission has no territorial jurisdiction to try this complaint, as the property is located at Punjab, registered office of the replying Opposite Parties is at New Delhi, payments were made at Delhi and as per settled law, 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 the complaint, as value of the claim exceeds Rs.1 crore. It was further stated that the complaint is time barred. It was further stated that as per Clause 21.1 of the Agreement, subject to force majeure conditions, the replying Opposite Parties “proposes” to hand over possession of the unit within 36 months from the date of allotment. Thus, there was no definitive agreement stating possession would definitely be delivered within 36 months from the date of allotment. It is settled law that in cases of sale of immovable property and construction, time is never regarded as the essence of the contract. It was further stated that the Opposite Parties duly replied to every mail and even offered relocation to unit where possession was readily available. It was further stated that the parties are bound by the terms and conditions of the Agreement and in case of delay, the replying Opposite Parties are liable to pay compensation @Rs.5/- per sq. feet per month. It was admitted regarding booking of the unit ; execution of the Agreement and receipt of the amount. It was further stated that the Opposite Parties offered possession to the complainants upon completion of amenities and obtaining of Occupation Certificate vide letter dated 31.08.2018 (Exhibit OP/9) but they did not come forward to accept the same. Copy of Partial Completion Certificate dated 27.07.2018 is Exhibit OP/8. 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 Apartment Buyer’s Agreement was executed between the parties at Chandigarh on 26.02.2008 (Annexure C-4). Not only this, Tripartite Agreement was executed between the parties at Chandigarh. Moreover, letters (Annexures C-1 & C-2) were sent by the Opposite Parties from their Chandigarh Office as the same bore the address of the Company as “SCO No.120-122, Sector 17-C, Chandigarh, 160017.” Since, as per the document, 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 fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here that the mere objection of the Opposite Parties that since complainant No.1 is a Non-Resident Indian (NRI), purchase of another plot by the complainant with the Opposite Parties in Sector 105 and they also have a house at Sector 70, Mundi Complex, Mohali, as such they purchased the unit for commercial/speculation purposes, does not carry any weight and is liable to be rejected. It has been clearly mentioned by the complainants, in para no.8 of their complaint that the apartment in dispute has been purchased by the complainants for residential purposes. It is also admitted by the complainants that they have purchased plot No.236 in Sector 105, Mohali in the project being developed by the Opposite Parties for other daughter (as the complainants have two daughters). On the other hand, nothing contrary to this, has been proved by the Opposite Parties, by placing on record, any document. 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. Even the complainants have mentioned in para No.3 of their rejoinder that complainant No.1 is not an NRI. 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 complainant No.1 being investor because he is an NRI, or the complainants had purchased another property in the project of the Opposite Parties, as such, they did not fall within the definition of a consumer, cannot be taken into consideration. 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.”

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. Not only this, recently in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-

“In the case of the purchase of the houses 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.”

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. 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 cost of the unit, in question i.e. Rs.53,17,750/- plus compensation claimed by way of interest @9% p.a. on the amount deposited to the tune of Rs.51,36,376/-; compensation to the tune of Rs.1,50,000/- 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.

10. 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 maximum period of 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, 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, 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.

11. 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, unit was allotted to the complainants vide provisional allotment letter dated 19.03.2007 (Annexure C-1) and, as such, possession was to be delivered to the complainants latest by 18.03.2010 and not more than that.

12. The next question that falls for consideration, is, as to whether, the complainant was bound to accept offer of possession, in respect of the unit, in question, when the same was offered to him vide intimation of possession letter dated 31.08.2018 (Exhibit OP/9), i.e. after a huge delay of more than eight years and that too, in the absence of any force majeure circumstances. Since, in the instant case, the allotment was made in favour of the complainants vide allotment letter dated 19.03.2007 and the Opposite Parties were bound to give possession within a maximum period of 36 months from the date of allotment, which was expired on 18.03.2010. The Opposite Parties offered intimation of possession only vide letter dated 19.03.2007 i.e. after a huge delay of more than eight years. It may be stated here that non-delivery of possession of the unit, in question, by the stipulated date, complete in all respects, is a material violation of the terms and conditions of the Agreement. It is not the case of the Opposite Parties that the said delay occurred, on account of force majeure circumstances, met by it, on account of some stay or any other valid reason. Our view is supported by the law laid down by the National Commission, in the case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016,wherein, under similar circumstances, while negating the plea taken by the builder, it was held as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same.

Furthermore, in another case titled as M/s. Emaar MGF Land Ltd. &Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the Hon’ble National Commission, under similar circumstances, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

The above view taken by the National Commission, has been reiterated by it, 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.Relevant part of the said order reads thus: -

“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”.

In view of the above, it is held that since there was a material violation on the part of the Opposite Parties, in not handing over physical possession of the unit, complete in all respects, by the stipulated date, as mentioned in the Agreement, the complainants were at liberty, not to accept the offer made after a long delay, and on the other hand, was right by seeking refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.