
Monika Jain filed a consumer case on 22 Nov 2016 against Emaar MGF Land Ltd. in the StateCommission Consumer Court. The case no is CC/307/2016 and the judgment uploaded on 23 Nov 2016.
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Complaint case No. | : | 307 of 2016 |
Date of Institution | : | 28.06.2016 |
Date of Decision | : | 22.11.2016 |
……Complainants
.... Opposite Parties
BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT
MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER
Argued by:
Sh. Savinder Singh Gill, Advocate for the complainants.
Sh. Sanjeev Sharma, Advocate for the Opposite Parties.
PER PADMA PANDEY, MEMBER
The facts, in brief, are that the complainants were willing to own a residential plot for their family and personal use and accordingly, they applied for a plot in Sector 108, Mohali Hills, SAS Nagar, Mohali and paid the booking amount of Rs.5 lacs on 24.07.2012 vide receipt (Annexure C-1). Accordingly, plot bearing No.541, measuring 279.74 sq. yards was provisionally allotted to the complainants vide provisional allotment letter dated 03.10.2012 (Annexure C-2). Subsequently, Plot Buyer’s Agreement was executed between the parties on 26.10.2012 (Annexure C-3). It was stated that as per Clause 8 of the Agreement, possession of the unit was to be delivered within a period of 12 months from the date of execution of the Agreement i.e. latest by 26.10.2013. It was further stated that the complainants made the total payment of Rs.44,43,075/- to the Opposite Parties in respect of the unit, in question. It was further stated that the complainants time and again requested the Opposite Parties to hand over possession of the unit but they tried to delay the matter on one pretext or the other. It was further stated that the Opposite Parties sent letter of intimation of possession dated 23.05.2016 to the complainants, in which, it was stated that possession of the said plot/unit would be handed over within 60 days of the said letter and further a demand for an amount of Rs.5,18,884/- was raised (Annexure C-5). It was further stated that the said plot was offered by the Opposite Parties after more than 2 ½ years of delay and even still there is no development at the site. 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 joint written version, have not taken objection regarding arbitration clause in the Agreement, and it 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 this Commission has no pecuniary jurisdiction to entertain and try the complaint, as the claim amount together with reasonable interest and compensation would exceed Rs.1 crore. It was stated that this Commission has got no territorial jurisdiction to entertain and decide the complaint as plot is situated at Mohali and registered office of the Opposite Parties is situated at Delhi. 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 have purchased the plot, in question, for commercial purposes/speculation. It was further stated that the possession of the plot was offered to the complainants after completion of amenities and the Opposite Parties committed to pay the compensation for delay in offer of possession for the period of delay beyond the agreed time. It was further stated that the Opposite Parties failed to take possession of the plot in November, 2009 and the possession was taken in the year 2013, without any protest but later on, the complainants requested for change of location of plot and the same was changed. It was admitted regarding booking of the unit ; issuance of provisional allotment letter ; execution of Agreement and the payment of Rs.44,43,078/- made by the complainants in respect of the unit, in question. It was further stated that as per Clause 8 of the Agreement, the Company was supposed to try and endeavor to hand over the unit within 18 months from the date of execution of the Agreement. It was further stated that the Opposite Parties issued the intimation of possession letter dated 23.05.2016 (Annexure R-3) after the services were completed and the complainants were asked to complete the documentation and remit the amounts. It was further stated that in the request for refund should not be entertained and if the complainants sought refund, then forfeiture clause would be applicable upon them. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor it 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 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.
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 Plot Buyer’s Agreement was executed between the parties at Chandigarh on 26.10.2012 (Annexure C-3). Not only this, the payment of the booking amount of Rs.5 lacs vide receipt (Annexure C-1), provisional allotment letter (Annexure C-2), Acknowledgment-cum-receipts (Annexure C-4 Colly.) were sent by the Opposite Parties from 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 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. Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here, that the complainants have sought refund of an amount of Rs.44,43,075/- paid by them, towards price of the unit, alongwith interest @24% p.a. from the date of respective deposits; compensation to the tune of Rs.5 lacs for mental agony and harassment and cost of litigation, to the tune of Rs.1,00,000/-, 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 complainants, 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.
9. The next question, that falls for consideration is, as to whether, the complainants fall within the definition of “Consumer” as prescribed under the Consumer Protection Act, 1986. The Counsel for the Opposite Parties submitted that the complainants did not fall within the definition of “Consumer” as they purchased the unit/plot for commercial/speculation purposes. After going through the record, we are not agreeing with the contention of the Counsel for the Opposite Parties because the complainants have specifically stated in their complaint that they were willing to own a residential plot for their family and personal use. Even there is nothing, on the record, that the complainants are property dealers, and deal in the sale and purchase of property. 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, by way of investment, with a view to earn profit, in future. 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.
10. Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company shall endeavour to deliver possession of the plot within maximum period of 18 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 8 of the Agreement that possession of the plot will be delivered by the Opposite Parties, within a maximum period of 18 months i.e. latest by 25.04.2014, 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 18 months 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, the complainants were bound to accept offer of possession, in respect of the unit, in question, when the same was offered to them vide letter of intimation of possession dated 23.05.2016 (Annexure R-3), i.e. after a long delay and that too, in the absence of any force majeure circumstances. It is pertinent to note that possession of the unit was to be delivered to the complainants within a maximum period of 18 months from the date of execution of the Agreement i.e. latest by 25.04.2014. However, the Opposite Parties sent letter of intimation of possession only vide letter dated 23.05.2016 to the complainants i.e. about more than 2 years after the completion of the stipulated period of 18 months. It may be stated here that non-delivery of possession of the unit, in question, by the stipulated date, 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 them, on account of some stay or any other valid reason. Under similar circumstances, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon`ble National Commission, held 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. It was so held by the National Commission in Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-
“I am of the prima facie view that even if the said offer was genuine, yet, the Complainant was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.
The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.
Moreover, the judgment passed by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi titled as ‘Emaar MGF Land Ltd. & Anr. Vs. Dyal Singh, First Appeal No.462 of 2014, decided on 03.07.2015.’ The relevant portion of the judgment reads thus :-
“16. Admittedly, appellants did not offer possession of the apartment within the prescribed period, in terms of Clause 21 of the “Apartment Buyer’s Agreement”, Moreover, no explanation has been given by the appellants as to why they did not offer the possession of the apartment by the stipulated period, though respondents had paid substantial amount. As per copy of the Statement of Account filed by the appellants, as on 04-Sep-2012 (Page No.133 of Paper Book of F.A. No.462 of 2014), the respondent has paid a sum of Rs.41,45,068/- out of the total sale price of the apartment, which was Rs.48,65,580.50. Thus, deficiency on the part of the appellants started right from that very moment. It is an admitted fact, that as per the agreement possession of the apartment was to be handed over latest by 23.8.2011. But the appellants admittedly offered the possession of the apartment for the first time only in the year 2013. When the appellants did not offer the possession of the apartment in question within the specified period, under these circumstances, the respondents were fully justified to refuse the offer of possession, as late as in the year 2013. Thus, appellants themselves have violated the relevant terms and conditions with regard to handing over of the possession. Now it does not lie in their mouth to blame the respondents for their own negligence (i.e. of the appellants). Therefore, appellants by not delivering the legal physical possession of the apartment within the prescribed period, are not only deficient in rendering service but are also guilty of indulging into unfair trade practice. The appellants in the present case are enjoying the hard earned money of the respondents since 2008. Now on one pretext or the other, appellants do not want to refund the same, though negligence on the part of the appellants, is writ large in this case.”
The aforesaid appeal was dismissed by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi with punitive damages. Aggrieved against the aforesaid order, Emaar MGF Land Limited filed Special Leave to Appeal (C) No(s). 32492/2015 before the Hon’ble Supreme Court of India and the same was also dismissed.
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, were right by seeking refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.
12. The next question, that falls for consideration, is, as to within which period, the delivery of possession of the plot, was to be given to the complainants. According to Clause 8 of the Plot Buyer’s Agreement (Annexure C-3), subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, it was to deliver possession of the plot, in question, within a maximum period of 18 months, from the date of execution of the Agreement but the Opposite Parties failed to deliver the same within the stipulated period, as mentioned in the Agreement. On the other hand, the Opposite Parties have already received the huge amount of Rs.45,43,078/-, towards the said plot, as is evident from the statement of account (at page No.57 of the file). By making a misleading statement, that possession of the plot, was to be delivered within a maximum period of 18 months, from the date of execution of the Agreement, and by not abiding by the commitments, made by the Opposite Parties, they (Opposite Parties) were not only deficient, in rendering service, but also indulged into unfair trade practice.
13. The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.44,43,078/-, deposited by them. It is an admitted fact that the Opposite Parties are unable to deliver possession of the unit, in question, within the stipulated period, as mentioned in the Agreement, and firm date of delivery of possession of the unit, could not be given to them (complainants). The complainants cannot be made to wait for an indefinite period, for delivery of actual physical possession of the plot purchased by them. The Opposite Parties, therefore, had no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are thus, entitled to get refund of amount of Rs.44,43,075/- (as prayed) 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.
14. 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 the huge amount 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. There is no dispute that for making delayed payments, the Opposite Parties were charging heavy rate of interest (compounded quarterly @24%) as per Clause 3 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 complainants are certainly entitled to get refund of the amount prayed by them, to the tune of Rs.44,43,075/- alongwith interest @15% compounded quarterly, from the respective dates of deposits till realization.
15. As far as the plea taken by 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 plot, to be delivered to the complainants, 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 the Opposite Parties, only in those circumstances, it would have been held that since the complainants themselves are rescinding the contract, as such, they are 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 Opposite Parties, in this regard, has no legs to stand and is accordingly rejected.
16. No other point, was urged, by the Counsel for the parties.
17. For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally directed, as under:-
18. However, it is made clear that, if the complainants have 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 them (complainants).
19. Certified Copies of this order be sent to the parties, free of charge.
20. The file be consigned to Record Room, after completion.
Pronounced.
November 22, 2016. Sd/-
[JUSTICE JASBIR SINGH (RETD.)]
[PRESIDENT]
Sd/-
[DEV RAJ]
MEMBER
Sd/-
(PADMA PANDEY)
MEMBER
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