Chandigarh

StateCommission

CC/17/2017

Vishal Bhola - Complainant(s)

Versus

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

Savinder Singh Gill, Adv.

21 Apr 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	17 of 2017
Date of Institution	:	09.01.2017
Date of Decision	:	21.04.2017

 

Vishal Bhola S/o Sh. Ved Prakash Bhola r/o C-8/8541, Vasant Kunj, New Delhi through his Power of Attorney Holder, Sh. Ishwar Lal Syal, S/o S. Tarlok Chand Syal R/o 2204, Plot No.15, Sector 4, Sanchar Vihar Apartments, Dwarka, New Delhi – 110078.

……Complainant

V e r s u s

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

                                                    .... 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 complainant.

Sh.  Ajiteshwar Singh, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

 

              The facts, in brief, are that the complainant purchased a plot in the project being developed by the Opposite Parties under the name and style of “Augusta Green” situated at Sector 109, Mohali in resale from the original allottee Ms. Hema Sharma on 09.08.2007. The complainant has executed a power of attorney in the name of Sh.Ishwar Lal Syal S/o S.Tarlok Chand Syal, R/o 2204, Plot No.15, Sector 4, Sanchar Vihar Apartments, Dwarka, New Delhi – 110078 for the purposes of the present case. The said plot was endorsed in favour of the complainant on 09.08.2007 (Annexure C-2). The complainant made the total payment of Rs. 38,77,854/- in respect of the plot, in question, as is evident from account statement (Annexure C-3). Plot Buyer’s Agreement was executed between the parties on 04.07.2007 (Annexure C-4). According to Clause 8 of the Agreement, possession of the plot was to be delivered within a period of two years from the date of execution of the said Agreement but not later than three years i.e. latest by 03.07.2010 but despite receipt of the huge amount from the complainant, the Opposite Parties failed to deliver possession of the plot. It was further stated that when the complainant visited India in December, 2016, the Opposite Parties expressed their inability to hand over possession of the said plot. After enquiring about the reasons and going through the master plan of Sector 109, Mohali, the complainant came to know that the Opposite Parties did not have the land for the said plot and such plot number was non-existent in the master plan of the said sector duly approved by the competent authorities. Copy of the master plan is Annexure C-5. It was further stated that the Opposite Parties even charged PLC for a non-existent plot.  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 joint written version, have taken objection that purported power of attorney does not even contain the specimen signatures of the person to whom the complainant has purportedly vested powers to act on his behalf. It was admitted regarding purchase of the plot from Mrs. Hema Sharma, endorsement of the plot in his favour and execution of the Agreement. It was further stated that the complainant, who already has a dwelling unit in New Delhi, has purchased the subject property purely for investment purposes and, thus, did not fall within the definition of Consumer, as per the Consumer Protection Act, 1986. It was further stated that the Opposite Parties had even offered the complainant an alternate site through its email on 27.05.2016, however, no response was received from him.  It was further stated that the subject property is located in Punjab and, as such, this Commission has no jurisdiction to entertain the complaint. Even the Opposite Parties took specific objection, by filing separate Miscellaneous Application No.255 of 2017 that this Commission has no jurisdiction to entertain the complaint, as it has been specifically mentioned in the Agreement that 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 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.           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 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. This question has already been elaborately dealt with by this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        The next 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  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

26.        To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

27.                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

28.      Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of 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) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

29.       In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

 “8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

30.     Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.

31.        Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.

32.        We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for his residential purpose. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, it is admissible to an Arbitrator, to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of 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), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, 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.”

35.     In  view of the above, the plea taken by the opposite party, that 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 no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.”

            In view of the above, the objection raised by Counsel for the Opposite Parties, being devoid of merit, is rejected.

7.           The next objection taken by the Opposite Parties that the subject property is located in Punjab, as such, this Commission has no jurisdiction to entertain and decide the complaint. 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 Plot Buyer’s Agreement was executed between the allottee(s) and the Opposite Parties at Chandigarh on 04.07.2007 (Annexure C-4). Not only this, even the provisional allotment letter dated 09.05.2007 (Annexure C-2) was also 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”. 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. 

8.           The objection taken by the Opposite Parties, to the effect that the complainant did not fall within the definition of “Consumer”, as per the Consumer Protection Act, 1986, as the complainant already have a dwelling unit in New Delhi, as such, the said unit purchased by him for purely for investment purposes, also deserves rejection. The complainant in para No.1 of the complaint clearly stated that he purchased a plot measuring 300 sq. yards for his family and personal use. It may be stated here that there is nothing, on the record, that the complainant is the property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Thus, in the absence of any cogent evidence, in support of the objection raised by the Opposite Parties that the complainant, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, 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. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. 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 Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

9.           Another objection raised by Counsel for the Opposite Parties at the time of arguments that since it was mentioned in the Agreement that the Company shall endeavour to deliver possession of the plot within maximum period of three years, 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 3 years from the date of execution of the Agreement, subject to force majeure circumstances or reason beyond the control of the Opposite Parties. In the instant case, the Opposite Parties did not raise any force majeure circumstances, if any, encountered by them. In the absence of any force majeure circumstances having been faced by the Opposite Parties or any other valid and legal reason beyond their control, the stand taken by them, in this regard, for condonation of delay in delivery of possession of the plot/unit, to the complainant, 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 plot/unit, within a maximum period of 3 years from the date of execution of the same i.e. latest by 03.07.2010, 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 was mentioned in the Agreement, for delivery of possession of the plot/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.

10.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.38,77,854/-, as claimed by him. It is an admitted fact that the complainant deposited an amount of Rs.38,77,854/-, as is evident from statement of account (Annexure C-3) and after receipt of the aforesaid huge amount, the Opposite Parties failed to deliver  actual physical possession of the plot/unit, complete in all respects, to the complainant, within the stipulated period, as mentioned in the Agreement or even by the time when the complaint was filed. The complainant cannot be made to wait for an indefinite period, for delivery of actual physical possession of the plot/unit. In fact, the Opposite Parties did not have the land for the said plot and such plot number was non-existent in the master plan of the said sector duly approved by the competent authorities. The Opposite Parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the plot/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.

11.         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.38,77,854/-, 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 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  complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.38,77,854/- alongwith interest compounded @15% p.a., from the date of endorsement of the plot i.e. 09.08.2007, till realization. 

12.         As far as the plea taken by the Counsel for the Opposite Parties, at the time of arguments, 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 it was ready with possession of the plot/unit, complete in all respects, 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, due to deficiency in the services of the Opposite Parties or for any personal reason, and is seeking refund of the amount deposited. Had this been the case of the Opposite Parties, that they were willing to offer possession complete in all respects by the stipulated time, 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 Opposite Parties, in this regard, has no legs to stand and is accordingly rejected.

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

14.         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 of Rs.38,77,854/- to  the  complainant, alongwith interest compounded @15% p.a.,  from the date of endorsement of the plot i.e. 09.08.2007 onwards.
2. To pay compensation, in the sum of Rs.2.00 lacs, for causing mental agony and physical harassment, to the complainant.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (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 compounded @18% p.a.,  instead of @15% p.a. compounded from the date of endorsement of the plot onwards, and interest compounded @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

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

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

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

Pronounced.

April 21, 2017.                                             

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

 

 [DEV RAJ]

MEMBER

 

 

 (PADMA PANDEY)

        MEMBER

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