Chandigarh

StateCommission

CC/688/2016

Arvind Batra - Complainant(s)

Versus

Emaar MGF land - Opp.Party(s)

S.s.Gill, Adv.

27 Feb 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                    UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	688 of 2016
Date of Institution	14.10.2016
Date of Decision	27.02.2017

 

 

1. Arvind Batra s/o Late Sh. M. R. Batra R/o J-152, Sarita Vihar, New Delhi.
2. Saru Batra w/o Sh. Arvind Batra R/o J-152, Sarita Vihar, New Delhi.

 

                                                .…Complainants.

Versus

 

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

…..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 DEV RAJ, MEMBER

            In brief, the facts of the case, are that since the complainants were willing to own a commercial unit in Mohali for the purpose of earning livelihood by means of self-employment as complainant No.1 had already incurred losses in his previous self-employed venture, they applied for a commercial unit measuring 1216 sq. ft. in Central Plaza, Mohali Mills, Sector 105, Mohali by filing application form and depositing Rs.6,60,096/- with the Opposite Parties on 22.10.2007 as booking amount for provisional allotment of the unit, in question. Accordingly, the complainants were allotted Unit No.2 on Second Floor measuring 1216 sq. ft. in the said project vide allotment letter dated 30.04.2008 (Annexure C-2) for a total consideration of Rs.46,48,963/-.

2.         It was further stated that a Central Plaza Premises Buyer’s Agreement was executed between the complainants and the Opposite Parties on 31.03.2008 (Annexure C-3). It was further stated that as per Clause 22 of the Agreement, possession of the unit, in question, was to be handed over by the Opposite Parties within 36 months from the date of signing of the said Agreement. It was further stated that as per Clause 24 of the said Agreement, for failure of the Opposite Parties in handing over possession within the stipulated period, the complainants were entitled to penalty @Rs.50/- per sq. ft. per month of the super area till the date of final notice offering possession. As per detail regarding payments made to the Opposite Parties in the chart given in Para 5 of the complaint, a sum of Rs.37,26,510/- was paid by the complainants to the Opposite Parties from 21.07.2008 up-till 11.10.2011. Thus, adding booking amount paid by the complainants, in the sum of Rs.6,60,096/-, the total amount comes to Rs.43,86,606/-. 

3.         It was further stated that thereafter, the Opposite Parties sent an intimation of possession letter dated 18.05.2016 (Annexure C-6) raising another demand of Rs.18,90,906/- under various heads. It was further stated that the complainants strongly objected to the said intimation of possession terming the same a paper possession, as the entry points of Sector 105, Mohali have been sealed by the Forest Department by digging trenches and putting barbed wires as the Opposite Parties did not have the necessary approvals from the said Authority.

4.         It was further stated that the Opposite Parties even refused to credit delayed compensation in the account of the complainants. It was further stated that possession was to be delivered by 30.03.2011 but even after a lapse of five years, the intimation of possession sent is merely a paper possession. It was further stated that as was evident from the photographs sent by the Opposite Parties from time to time regarding updates of construction, no development was taking place due to which, the complainants withheld the payments. It was further stated that moreover, the Opposite Parties in February 2011 waived off the delayed interest to be paid by the complainants but the intimation of possession letter is mentioning that delayed interest payment is to payable by the complainants, which has been done to evade liability of paying penalty amount.

5.         It was further stated that the aforesaid acts 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 (hereinafter to be called as ‘1986 Act’), was filed, seeking directions to the Opposite Parties, to offer legal and complete possession of the commercial unit, in question, complete in all aspects, alongwith penalty @Rs.50/- per Sq. ft. per month of the super area with 12% interest from stipulated date of possession till handing over the complete and legal possession of the unit, in question; pay Rs.3,00,000/- as compensation for mental agony and harassment and Rs.1,00,000/- as litigation costs.

6.         The Opposite Parties, in their written statement, took up preliminary objections, firstly that the complainants are not consumers, as they purchased the unit, in question, for commercial purposes; that due to existence of arbitration clause in the Buyer’s Agreement, the matter be referred to the sole Arbitrator and that this Commission did not have the territorial and pecuniary jurisdiction to entertain and try the present complaint.

            The Opposite Parties also moved a Miscellaneous Application under Section 8 of Arbitration and Conciliation Act, 1996, for referring the matter to the sole arbitration, which was disposed of by this Commission vide order dated 21.12.2016, by holding that the applicability of the arbitration process would be seen at the time of final arguments in the main case.  

7.         On merits, it was admitted that the unit, in question, was booked by the complainants on 05.09.2007 and they purchased Unit No.CPM 02-A5-F0202 in September 2007 after remitting the booking amount of Rs.6,60,096/-. It was also admitted that Buyer Agreement was executed on 31.03.2008 at Delhi. It was also admitted that as per Clause 22 of the Agreement, the Opposite Parties were supposed to try and endeavor to hand over the possession within 3 years from the date of signing the said Agreement with a grace period of 90 days i.e. by 01.07.2011. It was admitted that under Clause 24 of the Agreement, the Opposite Parties were liable to pay compensation for delay but since despite numerous reminders & final notices, the complainants failed to remit installments, they were not entitled to any such compensation. 

8.         It was further stated that the Opposite Parties restructured the payment plan to construction linked plan vide letter dated 04.09.2009 (Annexure R-5), to which, the complainants never objected. It was further stated that the complainant paid Rs.48,45,396/- to the Opposite Parties against the unit till date. It was further stated that possession was offered to the complainants vide letter dated 18.05.2016 after obtaining occupation certificate (Annexure R-6) and in case of immovable property, for handing over of possession, time was never an essence.  It was further stated that the alleged case with the Forest Department has come to an end as the said case has been withdrawn by the Forest Department and the allegation leveled by the complainants is no more sustainable. It was further stated that the complainants should take over the possession after payment of Rs.17,61,806/-, which is due towards them. It was further stated that the Opposite Parties offered possession in May 2016 and sent possession reminder letters on 04.08.2016 and 22.08.2016 (Annexure R-9 colly.) but the complainants had not completed the formalities or remitted the amounts demanded. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

9.         The complainants filed replication, wherein, they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.

10.       The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.

11.       The Opposite Parties, in support of their case, submitted the affidavit of Sh. Subrat Kumar Pradhan, their Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

12.       We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

13.       It is evident on record that the complainants were allotted Unit No.2 on Second Floor in Commercial Project “CENTRAL PLAZA” situated at Mohali Hills in Sector 105, SAS Nagar, District Mohali, Punjab by the Opposite Parties vide allotment letter dated 30.04.2008 (Annexure C-2) after making payment of Rs.6,60,096/- as booking deposit vide receipt dated 22.10.2007 (Annexure C-1). Central Plaza Premises Buyer’s Agreement (Annexure C-3) was executed between the complainants and the Opposite Parties on 31.03.2008. As per clause 22.1 of the said Agreement, possession of the unit was to be handed over  within a period of 36 months from the date of signing of the said Agreement + grace period of 90 days beyond 36 months i.e. up to 30.06.2011. The total sale price of the allotted unit, in question, was Rs.48,39,428/- and by adding stamp duty, registration, other charges, service tax and enhanced area, total cost of property was Rs.60,07,283/-, against which, the complainants paid an amount of Rs.43,86,606/- uptil 11.10.2011 (Annexure R-4). Vide letter dated 11.05.2016 (Annexure C-6), the Opposite Parties informed that they have received the occupation certificate of the unit, in question, on 18.11.2014 and physical possession of the unit is ready. Vide this letter, the complainants were also informed that super area of the unit had been increased from 1216 sq. ft. to 1238.42 sq. ft. and the basic sale price stood revised, and they (complainants) were asked to remit an amount of Rs.18,90,906/- immediately and take possession of the unit, to avoid any further penal provisions of the Agreement. However, the complainants did not make payment towards demand raised. The Opposite Parties, in their written statement, have categorically denied that delayed interest was waived of in February 2011.

14.       An objection has been raised by the Opposite Parties that the complainants are not consumers as the unit, in question, has been purchased for commercial/ investment purposes. It may be stated here that the complainants have specifically averred in the opening para of the complaint that since the complainants were willing to own a commercial unit in Mohali for the purpose of earning livelihood by means of self-employment, they applied for a commercial unit in the project of the Opposite Parties. This averment of theirs (complainants) has also been supported by their respective affidavits. It may be stated here that there is nothing, on record to show, that  the  complainants are

 

property dealer(s), and are indulged in sale and purchase of property, on regular basis. Moreover, in the rejoinder, the complainants have stated that the unit, in question, was purchased by them for the purpose of self employment and the complainants are still seeking possession and are only aggrieved qua the compensation for delay in offering possession of the said unit. Thus, in the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. Recently, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the Hon’ble National Commission as under:-

“Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

It may be stated here that in Laxmi Engineering Works Vs. P.S.G. Industrial Institutes, 1995 (2) CPC 2 (Supreme Court), the Hon’ble Apex Court, in Paras 10 and 18, inter-alia, held as under:-

“The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly  clear, that the goods

 

bought must be used by the buyer himself, by employing himself for earning his livelihood”.

 

“Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.”

 

15.       The Hon’ble Apex Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institutes’s case (supra), held that commercial purpose is to be established in the facts and circumstances of each case. When the area of the shop is not very huge, there is no reason to say that the unit, in question, was not purchased for the purpose of earning livelihood. The complainants, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in the written reply, therefore, being devoid of merit, is rejected.  

16.       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. 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.

17.       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 the complainants. In the instant case, it is evident from the record, that letter of allotment dated 30.04.2008 (Annexure C-2) was 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”. Not only this, the receipts Annexure C-4 colly. (at Pages 63 to 65) bore the Stamp of Chandigarh office of the Opposite Parties. 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. 

18.       The next question that falls for consideration, is as to whether, this Commission has pecuniary jurisdiction to entertain and decide the complaint or not. It was stated by the Opposite Parties that apart from possession, the complainants have also claimed delayed compensation @Rs.50/- per sq. ft. for the unit measuring 1238 sq. ft. for delay of more than 5 years alongwith interest @12% per annum and since the value of unit is Rs.60,07,283/- and delayed compensation for five years amounts to more than Rs.40 Lacs and on addition of 12% interest on the amount claimed, the total value exceeds Rs.One Crore, which is beyond pecuniary jurisdiction of this Commission. The Opposite Parties placed reliance on the ratio of judgment in case titled AMBRISH KUMAR SHUKLA & 21 ORS. Vs. FERROUS INFRASTRUCTURE PVT. LTD., Consumer Case No.97 of 2016, decided on 07.10.2016. It may be stated here that to clarify the position, a similar question fell for determination before this Commission in Surjit Singh Thadwal Vs. M/s Emaar MGF Land Pvt. Ltd. & Anr., Complaint Case No.484 of 2016, decided by this Commission on 15.12.2016, wherein while negating the said plea, it was held as under:-

“13.        Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.

14.        In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer :

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.”

15.       It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

                As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

                In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

 “12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

 (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

 (2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

 (3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and

 (ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.”

16.         In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.`s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.”

            In view of above, this objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.

19.       The next question, which falls for consideration, is, as to whether there is delay in offering/handing over of possession. It is admitted case of the parties that as per Clause 22.1 of the Buyer’s Agreement, possession of the premises was to be handed over within a period of 36 months from the date of signing of the said Agreement plus grace period of 90 days after expiry of 36 months. Clause 22.1 of the Agreement reads as under:-

“22.1        Subject to Force Majeure conditions and reasons beyond the control of the Developer 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 Developer proposes to hand over the possession oF the premises within a period of thirty-six (36) months from the date of signing of this Agreement. The Allottee agrees and understands that the Developer shall be entitled to grace period of ninety (90) days, after the expiry of thirty-six (36) months for applying and obtaining the occupation certificate in respect of the CENTRAL PLAZA.”

 

Since the Agreement was executed on 31.03.2008, 36 months plus 3 months period, expired on 30.06.2011. There has been inordinate delay. Intimation of possession of the unit, in question, was given to the complainants by the Opposite Parties vide letter dated 11.05.2016 (Annexure C-6), relevant part of which is extracted hereunder:-

“This is in reference to the captioned Unit allotted in your favor. We are pleased to inform you that the Company has received the occupation certificate for the captioned unit/complex vide letter dated in the Project dated 18-Nov-14 and the process of handing over physical possession of the Units, as your unit is ready to be handed over for possession.

 

Kindly note that on the final computation of the super area, there has been a change in the area of the Unit and Super Area of the captioned Unit now stands revised to 1,238.42 sq. ft. (115.05 sq. mtrs.) from the earlier area of 1216 sq. ft. (112.97 sq. mtr.). Accordingly the basic sale price, EDC/IDC, etc.  of the Unit/now stands revised…….”

 

Clearly, there is delay of around 5 years in offering possession by the Opposite Parties to the complainants.

20.       The next question, which falls for consideration, is as to whether the demand raised by the Opposite Parties vide Possession Reminder dated 22.08.2016 (at Page No.35 of written statement) was justified. The demand in the sum of Rs.17,82,389.00 raised vide aforesaid Possession Reminder dated 22.08.2016 was on account of following:-

 

Particulars	Amount in (rs.)
Installment overdue.	3,72,067
EDC/IDC	10,169.00
IFMS/IFSC	1,23,842.00
Stamp Duty & Registration Charges	11,14,600.00
Delayed Payment Charges	1,27,531.00
MMC (Monthly Maintenance Charges)-	34,180
Total	17,82,389.00

 

 

The major demand in the sum of Rs.11,14,600/- was towards stamp duty and registration charges, which could very well be paid by the complainants afterwards at the time of registration of sale deed after taking over possession. It was only balance sum of Rs.6,67,789/-, which the complainants ought to have immediately paid to facilitate the process of handing over/taking over possession. It may also be stated here that the complainants never objected to the aforesaid demand and as stated in the rejoinder, their (complainants’) only grievance was qua compensation for delay in offering possession and that possession offered was a mere paper possession. Thus, demand raised by the Opposite Parties vide aforesaid letter was justified. Since payment has been delayed by the complainants, except stamp duty and registration charges, the complainants are liable to make payment of Rs.6,67,789/- alongwith 12% interest within 15 days from the date of receipt of certified copy of this order.

21.       The next question, which falls for consideration, is, as to whether the possession offered was only a paper possession. To prove their contention, the complainants have placed on record information obtained under Right to Information Act, 2005 by one Navneet Mishra, dated 30.06.2015 (Annexure C-7), which reads thus:-

“1. For the approval under FCA, 1980, the case has been applied.

2. The entry points of Sector-105 project of M/s Emaar MGF Land Ltd. have been sealed by barbed wired and digging trenches by the Forest Department.

3. The above mentioned entry points have been sealed due to the reason that the user agency has not got permission to use forest Department’s land under FCA, 1980 from government of India.

4. Subject to final approval from the Government of India, the entry points will be opened.

5. Regarding the entry to Sector-109, a cse is pending before Hon’ble Civil Court, Kharar from 03-07-2012 u/s 29, 33 and 63 of IFA, 1927 and for violating the Hon’ble Supreme Court’s order dated 12-12-1996. The copies of the documents in regard to the same are annexed herewith.”

22.       On the other hand, the case of the Opposite Parties is that the alleged case was withdrawn by the Forest Department and, as such, the allegation of the complainants is not sustainable. The Opposite Parties have also placed on record copy of Completion/ Occupation Certificate dated 22.03.2016 of Central Plaza at Sector 105, in Mohali Hills, SAS Nagar and copies of necessary approvals from the Forest Department dated 22.06.2016 for diversion of 0.000486 Hectare (instead of 0.010 hectare) of forest land in favour of M/s Emaar MGF Land Ltd. for construction of approach road to integrated township Special Education and Wellness zone, Sector 105, Vill. Raipur Kalan dhool on Kharar-Banur-Tepla Road, subject to certain conditions. Since this approval was received by the Opposite Parties on 22.06.2016, the possession offered vide letter dated 11.05.2016 was incomplete. There is only gap of a month or so in receiving approval from Forest Department and offer of possession. After receipt of approval, the possession was complete on 22.06.2016 and the complainants were required to take the possession.

23.       The next question, which falls for consideration, is, as to whether the complainants are entitled to compensation for delayed period. As submitted above, in terms of Agreement, the Opposite Parties were duty bound to hand over possession of the unit to the complainants by 30.06.2011. The intimation of possession was given vide letter dated 11.05.2016 (Annexure C-6) wherein it was mentioned that the Opposite Parties had received occupation certificate on 18.11.2014. The complainants were also informed of increase in the area and demand was also raised. Again demands were reiterated vide Possession Reminders dated 04.08.2016 and 22.08.2016 (Annexure R-9 colly.) asking the complainants to take possession on completion of formalities and clearing of all the outstanding dues as per schedule of payment and the Buyer’s Agreement. The complainants, as already submitted above, did not remit any payment, which evidently delayed process of possession. Giving one month grace period, after issue of letter dated 11.05.2016 and at best, up-to 22.06.2016 when approval for diversion of 0.000486 hectares land was accorded by Govt. of India (Forest Department) (Annexure R-7 colly.),  had the complainants made the payments, the process of handing over/taking over of possession would have been complete. Thus, delay beyond 22.06.2016, is attributable to the complainants and the Opposite Parties cannot be held liable for the same. The Counsel for the Opposite Parties vehemently argued that since there was significant delay in remittance of installment(s), the compensation in terms of Clause 24.1 was not payable. It is noted from Annexure R-4 that there has been significant delay in remitting payments against the due installments by the complainants, as is evident from the following table:-

Demand		Collection
Date	Amount (Rs.)	Date	Amount (Rs.)
04-DEC-07	433680.00	21-JUL-08	433680.00
03-MAR-08	433680.00	11-AUG-08	424104.00
01-JUN-08	583680.00	11-AUG-08	583680.00
30-NOV-09	433680.00	28-JAN-10	433680.00
26-FEB-11	390312.00	20-APR-11	390824.00
11-JUN-16	1602434.00	Not Paid
11-JUN-16	18,534.00	Not Paid

24.       No doubt, there has been delay in remitting various installments by the complainants but we are not inclined to accept the contention of the Opposite Parties that the complainants are not entitled to delayed compensation, in toto, due to the reasons that delay in offering possession is inordinate and it would operate very harshly qua the interest of the complainants. The Hon’ble National Commission in cases where compensation provided in the Buyer’s Agreement for delayed possession was considered to be on the lower side, granted 12% interest for the delayed period. In the instant case, taking into account the fact that payment of some of the installments was delayed by the complainants, grant of compensation @Rs.50/- per sq. ft. would be on the higher side especially when the amount deposited by the complainants is in the sum of Rs.43,86,606/-. In this manner, despite delay in remitting the installments, the complainants would get compensation (for the period 01.07.2011 till 22.06.2016)  in the sum of Rs.36,95,000/- approx. It is not the case of the complainants that due to non-delivery of possession of the unit, in question, in the time stipulated, there is any loss to them (complainants) on account of non-utilizing the space for earning livelihood. In Surendra Kumar Tyagi Vs. Jagat Nursing Home and Hospital and Another, IV (2010) CPJ 199 (N.C.), it was held by the National Consumer Disputes Redressal Commission, New Delhi, that the compensation should commensurate with loss and injury, suffered by the complainants. The Consumer Foras are not meant to enrich the consumers, at the hands of the service providers, by awarding excessive compensation. At the same time, we are not inclined to accept the argument of the counsel for the Opposite Parties that the complainants should be denied the compensation in its entirety.

25.       Recently in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

 

            Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the case, referred to above, as also facts and circumstances of the case, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay i.e. 01.07.2011 to 22.06.2016, would serve the ends of justice. Even with grant of interest @12% per annum for the delayed period (01.07.2011 till 22.06.2016), the complainants shall get Rs.26,16,000/- approx. on the deposited amount of Rs.43,86,606/-, which in the facts and circumstances of the case is adequate.

26.       The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to them. The claim of Rs.3 Lacs on this account is on the higher side. The complainants shall also get benefit of escalation in the cost of the unit, in question. The complainants delayed payment of some of the installments. Such delay has a bearing in completion of the project timely. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainants, due to the acts of omission and commission of the Opposite Parties, if granted, to the tune of Rs.1,00,000/-, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.1,00,000/-.

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

28.        For the reasons, recorded above, the complaint is partly accepted, with costs. The Opposite Parties are, jointly and severally, held liable and directed in the following manner:-

 

(i)	On payment of Rs.6,67,789/- alongwith interest @12% p.a. w.e.f. 22.06.2016 till payment, by the complainants to the Opposite Parties within 15 days from the date of receipt of certified copy of the order, the Opposite Parties shall hand over physical possession of the unit, allotted in favour of the complainants, to the complainants, within next 30 days from the date of such deposit.
(ii)	Execute and get registered the sale deed in respect of the unit, in question, within one month from the date of handing over of possession to the complainants. The stamp duty, registration charges and incidental expenses, if any, shall be borne by the complainants.
(iii)	To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, for the period from  01.07.2011 to 22.06.2016, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a., instead of 12% p.a., from the date of filing the complaint, till realization.
(iv)	Pay compensation in the sum of Rs.1,00,000/- to the complainants, on account of mental agony, physical harassment and deficiency in service, within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @12% p.a., from the date of filing the complaint till realization.
(vi)	Pay an amount of Rs.40,000/- to the complainants, as litigation costs, within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @12% p.a., from the date of filing the complaint till realization.

 

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

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

Pronounced

27.02.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

[DEV RAJ]

MEMBER

 

 

[PADMA PANDEY]

 MEMBER

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