Chandigarh

StateCommission

CC/151/2016

Kamlesh - Complainant(s)

Versus

Emaar MGF Land - Opp.Party(s)

Sh. Gaurav Chopra, Adv.

06 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                    UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	151 of 2016
Date of Institution	20.04.2016
Date of Decision	06.09.2016

 

 

Mrs. Kamlesh Gomber w/o Dr. K. L. Gomber resident of H.No.983, Sector 7, Urban Estate, Ambala City, Haryana.

 

                                                .…Complainant.

Versus

 

1. M/s Emaar MGF Land Limited having its registered office at ECE House, 28 Kasturba Gandhi Marg, New Delhi – 110001 through its authorized representative.
2. M/s Emaar MGF Land Limited having its branch office at SCO No.120-122, First Floor, Sector 17C, Chandigarh – 160017 through its authorized representative.

…..Opposite Parties.

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

MR. DEV RAJ, MEMBER

            MRS. PADMA PANDEY, MEMBER.

 

Argued by: Sh. Gaurav Chopra, Advocate for the complainant.

            Sh. Sanjeev Sharma, Advocate for the Opposite Parties. 

              

PER DEV RAJ, MEMBER

            In brief, the facts of the case, are that one Shri Shivanand Narain was allotted Unit No.53, Second Floor, measuring 1282 sq. ft., in the commercial project of the Opposite Parties, namely Central Plaza situated at Mohali Hills in Sector 105, SAS Nagar, Mohali, vide allotment letter dated 09.04.2008 (Annexure C-3), the total sale price whereof was Rs.44,53,614/- inclusive of External Development Charges (in short ‘EDC’) and the Interest Bearing Maintenance Security. Before allotment, Sh. Shivanand Narain had paid an amount of Rs.6,73,050/- as booking amount alongwith the application form dated 08.01.2008.Buyer’s Agreement was executed between Sh. Shivanand Narain and the Opposite Parties on 16.06.2008 (Annexure C-5). Apart from the booking amount of Rs.6,73,050/-, Sh. Shivanand Narain also paid an amount of Rs.10,96,431/- to the Opposite Parties uptil 30.01.2009, as per detail given in para 7 of the complaint, totaling Rs.17,69,481/-.

2.         The unit, in question, was then purchased by the complainant from the original allottee on 26.02.2009 for the sole purpose of settling her son, namely Mr. Nitin Gomber, who, in the year 2009, was pursuing his B.A. LL.B (Hons.) from Panjab University, Chandigarh. The unit, in question, was transferred in the name of the complainant vide transfer letter dated 26.02.2009 and endorsement to this effect was also made on the Agreement dated 16.06.2008. Subsequent to transfer of the unit in her name, the complainant deposited the amounts on demands being raised by the Opposite Parties from time to time. The complainant, in all, paid an amount of Rs.41,98,432/- to the Opposite Parties uptil October 2011.

3.         As per Clause 22.1 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 with a grace period of 90 days, which meant that possession was to be handed over on or before 16.09.2011. The Opposite Parties issued letter dated 26.2.2009 (Annexure C-12) stating that the complainant had qualified for the “Pay On Time” reward i.e. waiver of last installment of 5% of the basic sale price of the unit, as she had cleared all the principal amount. Since possession was not offered within the stipulated period, the complainant could not settle her son. The Opposite Parties vide their letter dated 12.08.2015 (Annexure C-13) informed the complainant that they had received the occupation certificate in respect of the unit allotted to her and thus, the unit was ready to be offered for possession. However, the super area of the allotted unit was revised from 1282 sq. ft. to 1315.03 sq. ft. As per the complainant, she is also entitled to compensation @Rs.50/- per sq. ft. per month of the super area of the unit, on account of delay in handing over possession of the unit.  It was stated that as per Clause 24.1 of the Agreement, roughly an amount in excess of Rs.30 Lacs was payable by the Opposite Parties to the complainant as on 12.08.2015 and in this view of the matter, the demand of Rs.16,02,752/- raised by the Opposite Parties was legally untenable.  The complainant agitated the demand vide email dated 27.08.2015, which was replied vide email dated 05.09.2015, vide which, the Opposite Parties rejected the claim of the complainant for being entitled to the Pay On Time Reward/rebate on the ground that the payments were not made on time by the previous allottee.

4.         It was further stated that there are lot of defects in the unit, in question, as the same was not constructed as per specifications appended with the Agreement. It was further stated that till date, sewerage treatment plant has not been commissioned and no regular water and electricity connection is available. It was further stated that possession of the unit is none else but a paper possession and thus, the Opposite Parties are liable to complete possession alongwith basic infrastructure facilities/amenities. It was further stated that subsequently, vide letter dated 01.10.2015 (Annexure C-17), the Opposite Parties asked the complainant to pay an amount of Rs.15,88,983/-, without waiving the last installment of 5% of the basic sale price.  

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 complainant, 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 hand over possession of the unit, complete in all respects, after providing all the basic amenities and infrastructure at the site; pay compensation for the delayed period in offering possession as per Clause 24.1 of the Agreement; pay Rs.10,00,000/- as compensation for mental agony and physical harassment; give benefit of ‘Pay On Time’ Reward in accordance with letter dated 26.02.2009 and pay Rs.1,00,000/- as litigation costs.

6.         The Opposite Parties, in their written statement, took up preliminary objections, firstly that the complainant is not a consumer, as she purchased the unit, in question, for commercial purposes and further failed to place, on record, any documentation to show that her son is running his legal practice, or pursuing profession and how she is going to use the shop, in question, for earning livelihood, by way of self employment; that due to existence of arbitration clause in the Buyer’s Agreement, the matter be referred to the sole Arbitrator; that this Commission did not have the territorial and pecuniary jurisdiction to entertain and try the present complaint.  A separate application under Section 8 of Arbitration and Conciliation Act, 1996 for referring the matter to the sole arbitration was also filed by the Opposite Parties.

7.         On merits, it was admitted that the unit, in question, was initially allotted to Mr. Shivanand Narain vide letter dated 09.04.2008 and Buyer’s Agreement was executed on 16.06.2008. It was also admitted that the said unit was transferred in the name of the complainant on 26.02.2009. It was further stated that the total sale consideration mentioned in the Agreement was Rs.44,53,614/- excluding service tax. It was further stated that the demands were raised in accordance with the payment schedule shared with the initial allottee at the time of booking and with the complainant at the time of transfer. It was further stated that as mentioned in the Agreement, the Opposite Parties, were to endeavor to handover possession but no definite time line was given. It was further stated that in case of immovable property for handing over possession, time was never an essence. It was further stated that possession was offered to the complainant vide letter dated 12.08.2015 on completion of the unit. It was further stated that the complainant has not taken possession till date and has not paid the due amount. It was further stated that since the complainant has defaulted in remitting certain installments on or before the due dates, neither she is entitled to any compensation nor waiver of last installment of 5% of the basic sale price of the unit, in question. It was further stated that mere issuance of a wrong letter dated 26.02.2009 by some official, against the agreed terms and conditions, cannot be considered as an estopple and the complainant is bound to pay the agreed amounts. It was further stated that the Oppostie Parties have got all the necessary approvals from the Deptt. of Forest (Annexure R/6 colly.). It was further stated that the Opposite Parties have also received partial completion certificate dated 16.10.2015 (Annexure R-7) from GAMADA. 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.

8.         The complainant filed replication, wherein, she reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.

9.         The complainant, in support of her case, submitted her own affidavit, by way of evidence, alongwith which, a number of documents were attached.

10.       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. 

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

 

12.       It is evident on record that the unit, in question, was initially allotted to Mr. Shivanand Narain vide letter dated 09.04.2008 and Buyer’s Agreement was executed on 16.06.2008. The said unit was transferred in the name of the complainant on 26.02.2009. As per clause 22.1 of the Agreement, possession of the unit was to be handed over  within a period of 36 moths from the date of signing of the said Agreement + grace period of 90 days beyond 36 months i.e. up to 15.09.2011. The total sale price of the allotted unit, in question, was Rs.44,53,614/-, against which, the complainant paid an amount of Rs.41,98,432/- uptil 10.10.2011. Vide letter dated 12.8.2015 (Annexure C-13), 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 complainant was also informed that super area of the unit had been increased from 1282 sq. ft. to 1315.03 sq. ft. and the basic sale price stood revised. Subsequently, vide letter dated 01.10.2015 (Annexure C-17), the complainant was asked to remit an amount of Rs.15,88,983/- immediately and take possession of the unit, to avoid any further penal provisions of the Agreement. The complainant did not make payment and sought waiver of 5% of price and compensation. The request was declined by the Opposite Parties on the ground that the complainant defaulted in making payments of installments in time.

13.       An objection has been raised by the Opposite Parties that the complainant is not a consumer as the unit, in question, has been purchased for commercial/ investment purposes. It may be stated here that the complainant has specifically averred in Para 5 of the complaint that with a view to find a suitable commercial/office space in order to enable her son Mr. Nitin Gomber, who at the relevant time, in the year 2009 was pursuing his B.A. LL.B (Hons.) Graduation Course from the Panjab University, Chandigarh, to set up his office/business in Mohali for earning his livelihood and self-employment, she had purchased the unit, in question. The complainant has also, by way of replication brought on record, certificate of passing of B.A. LL.B (Honours) 5 Years Integrated Course in the year 2009 from Panjab University and Master of Laws in Intellectual Property of her son (Exhibits C-18 and C-19). The Opposite Parties have stated that the complainant, besides the aforesaid shop, was also allotted a plot in the project of the Opposite Parties at Gurgaon and besides, they owned a house at Ambala. Insofar as house at Ambala is concerned, as per Occupation Certificate (Annexure C-23), it is not in the name of the complainant but in the name of Sh. K. L. Gomber. The unit at Gurgaon is a residential property and the shop, in question, area of which is 1282 sq. ft. (enhanced to 1315.03 sq. ft.), as averred by the complainant, was for the purpose of establishing an office and for business activities of her son. 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.”

 

14.       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. In the instant case, when the area of the shop is not very huge, price thereof in the sum of Rs.44,53,614/- is also not very huge and is more or less equivalent to a residential property, there is no reason to say that shop, in question, was not purchased for the purpose of establishing office/earning livelihood by the son of the complainant. The complainant, thus, falls within the definition of a consumer. The objection raised by the Opposite Parties, being devoid of merit, stands rejected.

15.       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. A separate miscellaneous application bearing No.216 of 2016 under Section 8 of Arbitration and Conciliation Act, 1996 for referring the matter to Arbitration was also moved by the Opposite Parties.

16.        This question has already been elaborately dealt with by this Commission in Consumer Complaint No.213 of 2016 titled ‘Gobind Paul Vs. Emaar MGF Land Limited & Another’ decided on 16.08.2016. Paras 8 to 15 of the said order, being relevant, are inter-alia extracted hereunder:-

                    “8……….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.”

                    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.”

9.                 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.

10.               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.”

 

11.               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.

12.               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-à-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.

13.               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 have spent his life savings to get a unit, for their 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 up-to 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.

14.               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 unit, in the said project, launched by the opposite parties. However, his hopes were shattered, when despite making substantial payment of the sale consideration, they failed to get possession of the unit, 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.

15.               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.””

             In view of the above, the objection raised by Counsel for the opposite parties 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.

 

17.       The next question, which falls for consideration, is, as to whether the complainant is entitled to 5% rebate in terms of letter dated 26.02.2009 (Annexure C-12). The Counsel for the complainant relying upon the aforesaid letter dated 26.02.2009 stated that the complainant qualified for the ‘Pay On Time’ reward on account of the fact that she had cleared all the principal amount payable towards the installments due from her. Undoubtedly, the complainant was entitled to such rebate only in case payments had been made in time.

 

18.       Now it is to be seen, whether the complainant made the payments in time. As per Statement of Account  as on 05.02.2016 (Exhibit C-11) annexed by the complainant alongwith her complaint, there have been delayed payments on account of which delayed interest in the sum of Rs.803/-, Rs.6,931/-, Rs.12,991/-, Rs.2,026/-, Rs.675/-, Rs.1,182/-, Rs.33/- and Rs.31,411/-, totaling Rs.56,052/- has been levied. The Counsel for the complainant during arguments pointed out that in the aforesaid statement of account, qua demand raised on 02.01.2009 it has been wrongly mentioned as if the same was made on 02.03.2009. On perusal of Receipt No.136406 dated 02.03.2009 (at Page 95 of the file), it is evident that payment was made vide cheque dated 30.01.2009 and the receipt was issued on 02.03.2009. No doubt, the date of receipt of aforesaid amount on 02.03.2009 is apparently incorrect but the fact remains that the payment was made after about a month. It, therefore, emerges that there was delay in remitting some of the installments and in such a situation, 5% rebate was not admissible and consequently, the complainant is held not entitled to the same.

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.  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 16.06.2008, 36 months plus 3 months period, expired on 15.09.2011. There has been inordinate delay. Intimation of possession of the unit, in question, was given to the complainant by the Opposite Parties vide letter dated 12.08.2015 (Annexure C-13), 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 1,315.03 sq. ft. (122.17 sq. mtrs.) from the earlier area of 1282 sq. ft. (119.1 sq. mtr.). Accordingly the basic sale price, EDC/IDC, etc.  of the Unit/now stands revised…….”

 

Clearly, there is delay of around 4 years in offering possession by the Opposite Parties to the complainant.

20.       The next question, which falls for consideration, is, as to whether the demand raised by the Opposite Parties vide letter dated 12.08.2015/01.10.2015 was justified. The demand in the sum of Rs.15,88,983/- as raised vide letter dated 01.10.2015 (Annexure C-17) was on account of following:-

Particulars	Amount in (rs.)
Installment overdue.	371346
EDC/IDC	11,887
IFMS/IFSC	131,503
Stamp Duty & Registration Charges	1,012,660.00
Delayed Payment Charges	25,608
MMC (Monthly Maintenance Charges)-	35,979
Total	1,588,983

 

It would be seen that major demand was on account of stamp duty and registration charges. On receipt of letter of offer of possession, the objection of the complainant was with regard to waiver of one installment and it seemed that the complainant was agreeable to pay the balance amount. The complainant vide email dated 20.09.2015 (Page 119) requested the Opposite Parties to waive of the last installment and stated that the desired payment will be made as soon as the issue was settled. Relevant paras of email are extracted hereunder:-

“In view of this, I shall request you to waive off the last installment as promised.

 

You have not replied to the issue of inordinate delay on your part in issuance of the possession letter.

 

The desired payment will be made to you as soon as you settle the issues raised by me and send to me duly corrected demand letter.”

 

In the email so sent, nothing was said about non-development of the amenities at the project site. It is further evident from Annexure R-1, which is letter dated 01.01.2016 that the complainant only wanted waiver of 5% basic price and adjustment of compensation for delay in possession and nothing was pointed out with regard to non-development, and deficiency in construction and amenities. The contents of Annexure R-1 (Page 133) are extracted hereunder:-

1. This is in reference to your letter date 12.08.2015, for the possession of Unit No.CPM-53-A1-F0253.
2. Being a proud repeat customer of Emaar MGF (also hold a unit in Palm Garden, Sector 83, Gurgaon), I write to you to point out two major errors in the computation of your last demand.
3. Firstly,  We had an agreement in place, whereby e had agreed that you would waive off the last installments (5% Basic Price)  as per the “Pay on time: reward initiated by you. Accordingly, I request you to deduct the said amount from the last demand you’ve raised.
4. Secondly,  we also agreed that possession was to be handed over to me within 36 months from the date of signing of the agreement. in the said agreement, you also agreed to pay compensation to me for the period of delay. Now, given that there;s been more than three years delay in handing over the possession, I request you to deduct the said amount from the last demand you’ve raised.
5. Once I receive a fresh demand letter from you after deducting the forgoing amounts, I will honour the demand forthwith.

21.       The complainant in Para 17 of the complaint has stated that the Opposite parties were unable to offer and hand over possession of the allotted unit within the stipulated time period as per Clause 23.1 of the Agreement; have belatedly denied ‘Pay On Time Reward’ as committed vide letter dated 26.02.2009; though the complainant was not in default of any terms and conditions of the Agreement; the Opposite Parties failed to compensate the complainant for delay in offering possession; non-construction as per specifications appended with the Buyer’s Agreement; shoddy workmanship in construction of the allotted unit; approach roads to the Central Plaza were in a bad shape; Storage treatment plant was not commissioned and there was no regular water and electricity connections and the possession offered was termed as paper possession.

22.       The Opposite Parties, in their written statement, categorically stated that the complainant was informed that she did not qualify for 5% incentive or compensation for delays. The statement of account was self-reflective and showed that there was delay in making payments. Regarding deficiencies in construction, they offered joint inspection; with regard to roads, it was stated that the same were complete and motor-able; they submitted that the complainant was making vague and baseless allegations; the Opposite Parties got all necessary approvals from the Department of Forest (Annexure R-6 Colly.) and that the Opposite Parties also received Partial Completion Certificate from GMADA.

23.       The contents of email sent by the complainant on receipt of demand with the letter of offer of possession and specifically letter on 01.01.2016, clearly reveal that nothing was said regarding deficiencies now pointed out in Para 17 of the complaint and the same are apparently afterthought.

24.       The averment of the complainant with regard to non-development and deficiencies in construction, is not only afterthought but the same is also without any cogent evidence. Had the complainant adduced report of some Architect/Engineer in support of her contention, the position would have been different and her contention could have been accepted. The possession so offered cannot be said to be a paper possession.

25.       The major demand in the sum of Rs.10,12,660/- was towards stamp duty and registration charges, which could very well be paid by the complainant afterwards at the time of registration of sale deed after taking over possession. It was only balance sum of Rs.5,76,323/- approximately, which the complainant ought to have immediately paid to facilitate the process of handing over/taking over possession. Delay in remittance of last installment included in Rs.5,76,323/- was to attract delayed interest. The complainant, however, lingered the issue firstly on the ground of non-waiver of 5% amount to which she was not entitled to and secondly, for payment of compensation.

26.       The complainant is, therefore, liable to make payment in the sum of Rs.5,76,323/- immediately and insofar as the payment on account of stamp duty and registration charges is concerned, the same shall be payable by her at the time of registration after she takes over possession of the unit in question.

27.       The next question, which falls for consideration, is, as to whether the Opposite Parties could raise demand on account of increase in area. The initial area of the unit, in question, was 1282 sq. ft. and the same was revised to 1315.03 sq. ft. meaning thereby that there was marginal increase of only 33 sq. ft., which constituted 2.5% increase from the original area. It is not the case of the complainant that the Opposite Parties for the enhanced area charged her (complainant) at a higher rate and increased area was not in existence. The complainant is seeking possession and dispute raised is not on sound footing.

28.       The next question, which falls for consideration, is, as to whether the complainant is 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 complainant by 15.09.2011. The intimation of possession was given vide letter dated 12.08.2015 (Annexure C-13) wherein it was mentioned that the Opposite Parties had received occupation certificate on 18.11.2014, the complainant was also informed of increase in the area and demand was also raised. Again demand was reiterated (revised to Rs.15,88,983/-) vide letter dated 01.10.2015 asking the complainant 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 complainant, 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 01.10.2015, had the complainant made the payments, the process of handing over/taking over of possession would have been complete. Thus, delay beyond 31.10.2015, is attributable to the complainant and the Opposite Parties cannot be held liable for the same. The complainant has stated that as per Clause 24.1 of the Buyer’s Agreement, roughly an amount in excess of Rs.30 Lacs was payable by the Opposite Parties to the complainant as on 12.08.2015. Clause 24.1 of the Buyer’s Agreement reads as under:-

“24.1 Subject to the Allottee having fulfilled all the terms of this Agreement and having complied with all the terms and conditions of this Agreement and not being in default of any provisions thereof and having met all his obligations, in the event of the Developer not being able to hand over the possession of the Apartment to the Allottee under the time stipultd in this Agreement or any extensions thereof and in the event that the delay is not for reason of existence of any force Majeure event, the Developer shall be liable to pay compensation payment of compensation for delay at the rate of Rs.50/- (Rupees Fifty only) per sq. ft. per month of the Super Area to the Allottee till the date of notice offering the possession to the Allottee in accordance with the terms of this Agreement. Any amount payable to the Allottee under this Clause shall be adjusted in the last installment payable by Allottee.”

 

29.       The compensation as per clause aforesaid, uptil 31.10.2015 works out to Rs.32.55 lacs approximately. The Counsel for the Opposite Parties vehemently argued that since there was delay in remittance of installment(s), the compensation in terms of Clause 24.1 was not payable. If this contention of the Opposite Parties is accepted, despite the fact that delay in offering possession, in the instant case is inordinate, it would operate very harshly qua the interest of the consumer(s). 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 complainant, grant of compensation @Rs.50/- per sq. ft. would be on the higher side especially when the amount deposited by the complainant is in the sum of Rs.42 lacs approximately (Rs.41,98,432/-). In this manner, despite delay in remitting the installments, the complainant would get compensation in the sum of Rs.32,54,625/-. It is not the case of the complainant that due to non-delivery of possession of the unit, in question, in the time stipulated, there is any loss to the complainant 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 complainant. 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 complainant should be denied the compensation in its entirety.

30.       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. 15.09.2011 to 31.10.2015, would meet the ends of justice. By grant of interest @12%, the complainant shall be getting an amount of Rs.20.78 lacs approx., which shall be fair and equitable.

31.       The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to her. The claim of Rs.10 Lacs on this account is on the higher side. The complainant shall also get benefit of escalation in the cost of the unit, in question. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, due to the acts of omission and commission of the Opposite Parties, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.

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

33.        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.5,76,323/- by the complainant 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 complainant, to the complainant, 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 complainant. The stamp duty, registration charges and incidental expenses, if any, shall be borne by the complainant.
(iii)	To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, for the period from 15.09.2011 to 31.10.2015, 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.1,50,000/- to the complainant, 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.50,000/- to the complainant, 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.

 

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

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

Pronounced

06.09.2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

[DEV RAJ]

MEMBER

 

 

[PADMA PANDEY]

 MEMBER

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