Chandigarh

StateCommission

CC/271/2016

Joginder Singh - Complainant(s)

Versus

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

Varun Katyal,Adv.

27 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	271 of 2016
Date of Institution	:	14.06.2016
Date of Decision	:	27.10.2016

 

Joginder Singh son of Sh. Makhan Singh r/o New Suraj Nagri Street No.5, 7^th Crossing, Boparai House, Abohar, Punjab 152116.

……Complainant

V e r s u s

1. Emaar MGF Land Pvt. Ltd., through its Managing Director, Registered Office at ECE House 28, Kasturba Gandhi Marg, New Delhi 110001.  
2. Branch Manager, Emaar MGF Land Pvt. Ltd., SCO No.120-122, First Floor, Sector 17-C, Chandigarh.

                                                    .... Opposite Parties

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Varun Katyal, Advocate for the complainant.

Sh.  Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that the complainant influenced by the advertisements of the Opposite Parties had approached them for the purchase of flat having super area approximately 1550 sq. ft. in Tower No. K-3, Unit No.TVM K3-F04-402 in their project Elevated Living, The Views at Mohali. The complainant paid an amount of Rs.7 lacs as booking amount to the Opposite Parties vide receipt (Annexure C-1). Thereafter, Agreement was executed between the parties on 11.05.2011 (Annexure C-2). As per Clause 21.1 of the Agreement, possession of the unit was to be given within a period of 3 years from the date of Agreement and there was also a grace period of 90 days for handing over of possession of the unit. The complainant opted Down Payment Plan (Annexure C-3) and as per the plan, the complainant was to pay a sum of Rs.45,11,046/-, out of which, he paid the total amount of Rs.43,68,867.41 and the remaining amount was to be paid at the time of intimation of possession. It was further stated that the complainant visited many times in the office of the Opposite Parties and inquired about the possession of the said unit but they postponed the matter on one pretext or the other. It was further stated that the Opposite Parties failed to deliver possession of the unit within the stipulated time frame, despite receipt of legal notice (Annexure C-6). 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 written version, have taken objection regarding arbitration clause in the Agreement, and also they separately, moved an application u/s 8 of Arbitration and Conciliation Act, 1996 taking a specific objection in this regard for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement. It was stated that the complainant did not fall within the definition of “consumer” as he is already having his own residence and, as such, he purchased the unit in the project of the Opposite Parties only for speculation purposes. It was further stated that the Opposite Parties offered relocation to the complainant in another tower but he refused to accept the same. It was further stated that as per Clause 21.1 of the Agreement, the Opposite Parties had proposed to hand over possession of the unit within 36 months from the allotment with a further grace period of 90 days for applying and obtaining occupation certificate. It was further stated that it is well settled principle of law that in cases of sale of immovable property, time is never regarded as the essence of the contract. It was further stated that the term “proposes” duly indicated that there was no definitive commitment to hand over possession within 36 months, as time was not essence of the contract. It was further stated that the complainant has accepted the alleged delay, as his interest was safeguarded by the compensation clause in the Agreement. It was further stated that the complaint is barred by limitation, as the consumer complaint can be filed within 2 years from the date of cause of action and in the present case, the cause of action, if any, arose to the complainant for seeking possession/refund after 3 years from the date of Buyer’s Agreement, as such, the cause of action arose long ago and the present complaint now being filed is barred by limitation. It was further stated that in case the complainant seeking refund of the amount then forfeiture clause would be applicable, as per the Agreement. It was admitted regarding the booking of the unit ; execution of the Agreement and receipt of the amount of Rs.43,68,867/-.  It was further stated that the complainant never visited the proposed site of Tower K. It was further stated that the construction activity has been completed in Tower K, where the unit is located and internal finishing works are in progress and expected to hand over possession of the unit in the next 6-8 months to the complainant. 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 replication 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 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 objection taken by the Opposite Parties, to the effect that the complainant being speculator, did not fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, also deserves rejection. 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, mere bald assertion i.e. simply saying that the  complainant being speculator, 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 its written reply, therefore, being devoid of merit, is rejected. 

8.             The next question, that falls for consideration, is, as to whether, the complaint filed by the complainant, was within limitation or not.  It may be stated here that since it has been frankly admitted by the Opposite Parties, in para No.11 of their joint written statement that possession has been delayed since the final finishing works are not complete and unit was expected to be handed over in the next 6-8 months time. So, it is clear that Opposite Parties neither delivered physical possession of the unit, complete in all respects to the complainant, within stipulated time frame nor delivered till the date of filing of the complaint and never refunded the deposited amount to the complainant, despite receipt of the legal notice dated 19.05.2016 and, as such, there is a continuing cause of action, in his favour, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for  the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

9.           Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company “proposes” to deliver possession of the unit within a period of 36 months from the date of allotment, 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 21.1 of the Agreement that subject to force majeure conditions and reasons beyond the control of the Company, the Company proposes to hand over possession of the unit within a period of 36 month and further, the Company shall be entitled to a grace period of ninety (90) days, after the expiry of 3 months for applying and obtaining the occupation certificate in respect of the Group Housing Complex. 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 complainant, 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.

                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.

10.           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 complainant. In this regard Clause 21.1 of the  Agreement reads thus :-

“21.1 Subject to Force Majeure conditions and reasons beyond the control of the Company and subject to the Allottee not being in default of any of the provisions of this Agreement and having complied with all provisions, formalities, documentation etc. and the terms and conditions of this Agreement, the Company proposes to hand over the possession of the unit within a period of 36 months from the date of allotment. The Allottee agrees and understands that the Company shall be entitled to a grace period of ninety (90) days, after the expiry of 3 months for applying and obtaining the occupation certificate in respect of the Group Housing Complex.”

 

In view of the afore-extracted clause, it is clear that possession of the unit was to be delivered to the complainant within a period of 36 months from the date of allotment. The grace period of 90 days mentioned in the aforesaid clause is after the expiry of three months for applying and obtaining the occupation certificate. As such, possession was to be delivered within a maximum period of 36 months from the date of allotment. It is pertinent to note that neither the complainant nor the Opposite Parties placed on record allotment letter and even not a single word regarding the date of the allotment letter was mentioned in the complaint as well as in the written statement. In the instant case, the complainant paid an amount of Rs.7 lacs towards the booking amount on 14.03.2011, as is evident from the receipt (Annexure C-1) and statement of account (Annexure R-1). Thereafter, Unit Buyer’s Agreement was executed between the parties on 11.05.2011 (Annexure C-2). So, it is presumed that the allotment was made between the date of booking amount i.e. on 14.03.2011 and Buyer’s Agreement which was executed on 11.05.2011 i.e. in March or April, 2011 and, as such, when 36 months counted from the aforesaid period, possession was to be delivered latest by March/April, 2014 and not more than that. However, the Opposite Parties failed to offer/deliver possession of the unit to the complainant within the stipulated time frame, as mentioned in the Agreement. Moreover, the Opposite Parties already received a huge amount of Rs.43,68,867/-, towards the said unit, as is evident from statement of account (Annexure R-1). By making a misleading statement, that possession of the unit, was to be delivered within a period of 36 months, from the date of allotment, the Opposite Parties failed to abide by the commitments, as such, they were not only deficient, in rendering service, but also indulged into unfair trade practice.

11.          The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.43,68,867.41, as claimed by him. It is an admitted fact that the complainant deposited an amount of Rs.43,68,867/-, as is evident from statement of account (Annexure R-1) and after receipt of the aforesaid huge amount, the Opposite Parties failed to deliver  possession of the unit, in question, and firm date of delivery of possession of the unit, could not be given to him (complainant). It is well settled law that the purchaser/allottee cannot be forced for relocation to any other unit, unless and until the allottee(s) wishes to do so. The complainant cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. The  Opposite Parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the 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.

12.          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.43,68,867/-, 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 20.1 of the Agreement, for the period of delay in making payment of installments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. 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.43,68,867/- alongwith interest @12% p.a., as prayed by the complainant in the prayer clause of the complaint, from the respective dates of deposits till realization. 

13.          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 unit, 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.

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

15.          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.43,68,867/-, to  the complainant, alongwith interest @ 12% p.a. (as prayed), from the respective  dates of deposits onwards, within 45 days, from   the  date of receipt of a certified copy of  this   order.
2. To pay compensation, in the sum of Rs.2,00,000/- for causing mental agony and harassment, to the complainant, within 45 days, from the date of receipt of a certified copy of this order.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the complainant.
4. In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties shall be liable to pay the amount mentioned in Clause (i) with interest @15% p.a., instead of     @12% p.a., from the respective dates of deposits, till realization, and interest @12 %p.a., on the  amount of compensation, mentioned in Clause (ii), from the date of filing the complaint, till realization, besides payment of litigation costs.

 

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.

October 27, 2016.                                          Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

Sd/-

 [DEV RAJ]

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

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