Delhi

StateCommission

CC/12/143

VIDUSH MEHTA - Complainant(s)

Versus

EMAAR MGF LAND PRIVATE LTD. - Opp.Party(s)

23 Mar 2018

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under section 9 of the Consumer Protection Act, 1986)

 

 

Date of Hearing: 23.03.2018

                                                                                                              

                                                                   Date of decision:03.04.2018

 

Complaint No.143/2012

 

 

IN THE MATTER OF:

 

          Sh. Vidush Mehta,

          534, first floor,

          Kanishka Residency,

          Sector 35, Faridabad-121003                                         ….Complainant

                                                                                                                  

VERSUS

 

M/s EMAAR MGF LAND PRIVATE LTD.,

Through their chairman and directors,

ECE House, 28, Kasturba Gandhi Marg,

          New Delhi-110001

         

          Also at

          1^st Floor SCO 120-122,

          Sector 17C, Chandigarh                                                ….Opposite Parties

 

HON’BLE  SH. O.P. GUPTA, MEMBER(JUDICIAL)

HON’BLE  SH. ANIL SRIVASTAVA, MEMBER

 

 

 1.   Whether reporters of local newspaper be allowed to see the judgment? Yes     

 2.   To be referred to the reporter or not?                                            Yes

 

 

Present:       Sh. B.S. Dheer, Counsel for the complainant

                   Sh. Rajiv Aggarwal, Counsel for the Opposite Parties.            

 

PER: SHRI ANIL SRIVASTAVA, MEMBER (G)

JUDGEMENT

 

1.             Sh. Vidhush Mehta resident of Faridabad, has filed this complaint (for short complainant) under Section 17 of the Consumer Protection Act 1986 (the Act) against M/S Emaar MGF Land Private Ltd. hereinafter referred to as opposite parties alleging deficiency of service on two accounts, firstly, in not handing over the possession of the flat booked by him within the time as agreed to, and, secondly, in not refunding the amount when requested which request was made owing to the delay in delivery of the flat and praying for the relief as under:

 

1. To refund Rs.19,62,500 along with interest @ 24% p.a. to be calculated from the date of deposit till realization to the complainant; and
2. To pay Rs.10,00,000/- to the complainant as compensation on account of harassment, mental agony and pain apart from the litigation expenses.
3. To pay Rs. 1,00,000/- to the complainant towards the cost of the litigation expenses.
4. To pass an order or direction to the OP to come out with a publication from its own funds in the two news papers widely circulated in Delhi NCR and Chandigarh/Mohali making beware the general public and its various bonafide flat purchaser that the OP is not having valid ownership title of the entire land on which the project the views at Mohali Hills in Sector 105, S.A.S. Nagar, District Mohali, Punjab is being proposed and is also not having the permissions/sanctions of the entire project.
5. To pass an order/direction imposing the maximum/exemplary penalty/sentence stipulated under the statute, severally on all the Directors of the OP for deliberately committing an offence of unfair trade practices.
6. To pass an order directing the OP to furnish a written apology to the complainant, for the mental agony, pain, anguish and depression suffered by the complainant due to the illegal and unlawful conduct of the OP and their directors/officials.
7. To pass any other order or Direction against the OP and in favour of the complainant, which this Hon’ble Commission may deem fir and proper in the facts and circumstances of the present case, in the interest of justice, equity, good conscience and fair play.

 

2.           Facts of the case necessary for the disposal of the complaint are these.
3.           The complainant had preferred an application with the OP on 12.08.2006 booking a flat in the proposed project of the OP, namely, “The Views” at Mohali Hills in Sector 105, S.A.S Nagar, Distt. Mohali, Punjab and for this purpose paid a sum of Rs. 7,00,000/- as booking amount which amount was acknowledged. As a consequence thereof OPs had confirmed the allotment of one unit/apartment bearing no. JI/401, The Views, at Mohali, Hills in Sector 105, S.A.S Nagar, Distt. Mohali, Punjab. Further demands of Rs. 2,62,500/-, Rs.2,07,375/-, Rs.5,62,625 and Rs.2,30,000/- were raised by the OPs and the complainant paid the said amount on different dates, namely, 24.10.2006, 12.12.2006 and finally on 10.02.2007 which means total amount of Rs. 19,62,500/- out of the total sale consideration of Rs.51.42 Lakhs was paid for the purpose.
4.           The complainant has alleged that the OPs thereafter without obtaining his consent changed the allotment of the unit twice first from the Unit No:JI/401 to F1/GF-04 and second from unit no:F1/GF-04 to AI/401 on 4^th floor. This as alleged by the complainant is for extraneous reasons and consideration which the OPs after having received substantial amount and after having allotted a unit as agreed to between them, are not competent to do so without obtaining his explicit consent. Further the OPs have not returned the duly executed agreement despite the complainant having signed it. This way OPs were deficient in rendering service.
5.           The complainant has alleged that worse happened when on his visit to the site in December 2009 he found no progress in the construction of the project and, secondly, he was informed that the OPs are not the lawful owner of the part on which the construction was proposed to be done. Faced with this situation the complainant demanded refund vide his letter dated 30.12.2009 (Annexure 6 of the complaint) or alternatively for allotment of flat in Delhi NCR region and in response thereto the OPs vide their letter dated 15.10.2010, while admitting the delay on their part in completing the construction in the project and keeping silent on the point of refund, averred that the request of the complainant for shifting the allotment cannot be acceded to. The letter so sent is reproduced below:

 

With reference to your request for shifting to an apartment in Delhi NCR, we regretfully inform you that in line with the company policy that does not allow adjustment of funds from one project to another.

We do understand that there is some delay in your particular unit and keeping this in mind we can offer you an alternate unit of the same specifications in the towers under construction. Please let us know incase you would like to explore the option of shifting so we can initiate an action in this regard.

 

6.           Legal notice was issued to the OPs demanding refund of the amount deposited with interest 24 per annum and Rs. 10 Lakhs as damage which legal notice could evoke no response. This led to the filing of this complaint before this Commission for the redressal of the grievances.
7.           The OPs were noticed and in response thereto they have filed written statement resisting the complaint both on merit and on technical grounds. Their first leg of the argument is that the project being at Mohali, this Commission lacks the territorial jurisdiction. For this purpose we may advert to the provisions contained under Section 17 (2) of the Act. The said provision of the Act Posits as under:
8.  

A complaint shall be instituted in a State Commission within the limits of whose jurisdiction-

1. The opposite party or each of the opposite parties where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or
2. Any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution, or
3. The cause of action, wholly or in part, arises.

 

8.           The registered office of the company being at Delhi, this Commission, relying on the provision of 17(2)(a) of the Act, enjoys the territorial to hear and dispose of this complaint and accordingly the contention of the OP to this effect is rejected.
9.           The OPs relying Clause 43.1 of the agreement have averred that this complaint needs to be referred to for an award by an Arbitrator. This argument, keeping in view the judgment of the Hon’ble NCDRC in the matter of Aftab Singh and Anr as reported in III (2017) CPJ 270(NC), is unsustainable. Para 53 of the said judgment holding that the Consumer Fora would enjoy the jurisdiction to hear the case notwithstanding the amendments made to Section 8 of the Arbitration Act, is indicated Below:

 

“Consequently we unhesitatingly reject the arguments on behalf of the Builder and hold that an Arbitration Clause in the aforestated kind of agreements between the complainants and the Builder cannot circumscribe the jurisdiction of the Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.”

 

10. The next objection of the OP is that the complainant has purchased the said properly for the purpose of investment to earn the financial benefit. For this purpose we may advert to Section 2(1) (d) (ii) of the Act which says that if the services have been availed for any commercial purpose the person shall not be consumer. However no evidence to this effect has been led which means we have no material to reach to a conclusion that the complainant while availing the services of the OP was in anyway aiming at profit making. Infact the complainant in his compliant has categorically stated that the unit proposed to be purchased is for his own residential purpose. This averment remains uncontroverted and thus the argument of the OP to this effect has no legs to stand and is accordingly rejected.
11.  The next objection of the OP is that there exists no cause of action as against them as they have committed no deficiency of service. The complainant has deposited the amount as per the demand raised by the OP. for the purpose of owning a residential unit. This fact is undisputed. OPs have not delivered the unit giving rise to the cause of action in favour of the complainant and against the OPs. The cause of action is dealt with in detail by The Hon’ble Supreme Court in Kandimalla Raghavaiah and Co versus National Insurance Company Ltd. and another reported in 2009 CTJ 951 (SC) holding as under:

 

“The terms cause of action is neither defined in the Act nor in the CPC but is of wide import. It has different meanings in different contexts that is when used in the context of territorial jurisdiction or limitation or accrual of right to due. Generally it is described as bundle of facts which if proved a admitted entitled the plaintiff to the relief prayed for. Pithily stated, cause of action means the cause of action for which the suit is brought. Cause of action is cause of action which gives occasion for and forms the foundation of the suit.”

Having regard to these facts and the law laid down the objection of the OP to this effect being unsustainable is rejected.

12.  On merits the OPs have denied the averments made in the complaint. As regards change of the units on two occasions, they have clarified that the change of the unit was only once and on the other occasion it was only a typographical error.
13.  Both the parties had thereafter filed evidence and written arguments reiterating the submissions made in the complaint or in the written statements. Matter was listed before us for final hearing on 23.03.2018 when the Counsel from both sides appeared and advanced their arguments. We have perused the records of the case and given a careful consideration to the subject matter. 
14.  The ld. Counsel for the complainant, based on the pleadings deficiency of service, prayed for a direction for refund, the construction of flats booked by him since appears to be nowhere near completion. The ld. Counsel for the OP on the point of refund, argued that the same cannot be allowed since barred by limitation. His argument is that the cause of action in the matter arose in August 2006 and thus, the complaint having been filed on 19.04.2012, is, relying on Section 24 A of the Consumer Protection Act 1986, barred by limitation. Section 24 A of the Act posits as under:

 

Limitation period-

1. The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
2. Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period.

Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

 

15.   On reading of the above provision it is clear that the period of two year shall count from the date the cause of action arose. The terms cause of action used in Section 24 A has not been defined in the Act. The same has to be interpreted keeping in view the context in which it has been used and object of the legislation. There lordships in the Apex Court were pleased to observe in the matter of Kandimalla Raghavaiah and Co(supra) that cause of action is cause of action which gives occasion for and forms the foundation of the suit.
16.  The Hon’ble NCDRC in the matter of Santa Banta Co. Ltd. vs. Parsche cars as reported in I (2014) CPJ 516 (NC) has held as under:

 

“Bundle of essential facts necessary for plaintiff to prove and obtain a decree but does not comprise evidence necessary to prove such facts. Cause of action thus gives occasion for and forms the foundation of suit.”

 

17.   The complainant observing no development in the construction of the flat booked by him, made his request for refund on 30.12.2009. No response was received. The complainant addressed another letter on 12.07.2010 for an alternate accommodation in the NCR region Delhi and in response there to the OP by way their letter dated 15.07.2010 regretted their inability to do so. According to us the cause of action in the matter arose on 15.07.2010 the date on which the OPs finally put their foot down. The complaint was filed on 19.04.2012 which is within the period of two years as admissible under Section 24 A of the Act. Having regard to this we are of the considered view that the objection of the OP to the effect that the claim of the complainant regarding refund is barred by limitation, is not tenable and we overrule it.
18.  The reliance of the ld. Counsel for the OPs on two following judgments, one by the Hon’ble Apex Court in the matter of State Bank of India versus M/s B.S. Agricultural Industries (I), CA No 2067/2002 decided on 20.03.2009 and the other by the Hon’ble NCDRC in the matter of M/s Yeturn Biotech Ltd. versus National Insurance Company Ltd. and Anr, RP 4506/2013 decided on 28.04.2014, holding that the question of limitation was a mandate to the forum and, irrespective of the fact whether it was raised or not, the forum must consider and apply it, is misplaced since in both the above referred cases, there existed delay which in the given case, having regard to the date on which cause of action arose, is non-existent and thus facts of this case are not apposite to the facts of the aforementioned two cases.
19.  The ld. Counsel for the complainant stressed the point that despite he having made the payment as required and despite the agreed time having elapsed, the OP have not adhered to the terms of the agreement in handing over the physical possession of the flat which they were under an obligation to do so.
20.  The ld. Counsel for the Complainant has alleged deficiency in service and unfair trade practice on the part of the OPs in not handing over the possession of the flat in question within the time, resulting in the financial loss and mental agony to the complainant. In that view of the matter the inevitable conclusion is that there was gross “deficiency”, as defined in Section 2(1)(g) of the Act, on the part of OP in its failure to deliver possession of the subject flat to the complainants in terms of the agreement to sell. It is a trite law that where possession of property is not delivered within the stipulated period, the delay so caused is not only deficiency in rendering of service, such deficiencies or omissions tantamount to unfair trade as defined, under Section 2(r) (ii) of the act, as well. (See: Lucknow Development Authority vs. M.K. Gupta-(1994) 1 SCC 243).
21.  Having bestowed our anxious consideration to the facts at hand, we are of the opinion, that the complaint deserves to be accepted.
22.  Having arrived at the said conclusion, the core question for consideration is as to how the complainants are to be compensated for the monetary loss, mental and physical harassment they have suffered at the hands of OP on account of non-delivery of the allotted flat.
23.  The provisions of the act enable a consumer to claim and empower the Commission/Forum to redress any injustice done to a consumer. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The word compensation is of very wide connotation. It may constitute actual loss or expected loss and may extend the compensation for physical, mental, or even emotional suffering, insult or injury or loss. Therefore, for the purpose of determining the amount of compensation, the Commission/Forum must determine the extent of sufferance by the consumer due to action of the part of the part of the OP. In Ghaziabad Development Authority vs. Balbir Singh-(2004) 5CC 65, while observing that the power and duty to award compensation does not mean that irrespective of facts of the case, compensation can be awarded in all matters on a uniform basis, the Hon’ble Supreme Court gave certain instances and indicated the factors, which could be kept in view while determining adequate compensation. One of the illustrations, given in the said decision was between the cases, where possession of a booked/ allotted property was directed to be delivered and the cases where only monies paid as sale consideration, are directed to be refunded. The Hon’ble Court observed, in this behalf, that in cases where possession is directed to be delivered to the complainant, the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply refunded, then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is not only deprived of the flat/plot, he has been deprived of the benefit of escalation of the price of the flat/plot. Additionally, in our view, in such a situation, he also suffers substantial monetary loss on account of payment of interest on the loans raised; depreciation in the money value and escalation in the cost of construction etc.
24.  We have given our careful consideration to the subject matter, as also the law laid down by their Lordship. The complainant has prayed for the refund. Physical possession of the flat at this stage is out of question.
25.  Accordingly we direct the OP to refund the principal amount with simple interest @ 10% per annum. This refund and the interest be paid to the complainant by the OP within a period of three months from the date of receipt of this order.
26.  We order accordingly.
27.  Copy of this order may be forwarded to the parties to the case free of cost as statutorily required.
28.  The file be consigned to records.

 

                                                                                                                                      

(ANIL SRIVASTAVA)                                                                                           (O.P.GUPTA)

MEMBER (GENERAL)                                                                            MEMBER (JUDICIAL)