Chandigarh

StateCommission

CC/18/2019

Ravikant Sharma - Complainant(s)

Versus

Emerging Valley Private Limited - Opp.Party(s)

Lajpat Sharma Adv.

14 Oct 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	18 of 2019
Date of Institution	:	21.01.2019
Date of Decision	:	14.10.2019

 

Ravikant Sharma son of Sh.Tirath Ram, R/o H.No.15-B, Sector 5, Nanak Nagar, Jammu, District Jammu (J & K).

……Complainant

V e r s u s

1. Emerging Valley Private Limited, Corporate Office: SCO 46-47, Near Mattka Chowk, Madhya Marg, Sector 9-D, Chandigarh-160009, through its Managing Director.
2. Gurpreet Singh Sidhu, Managing Director, Emerging Valley Private Limited, Corporate Office: SCO 46-47, Near Mattka Chowk, Madhya Marg, Sector 9-D, Chandigarh-160009.

….. Opposite Parties

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                MRS. PADMA PANDEY, MEMBER.

                MR.RAJESH K. ARYA, MEMBER.

 

Argued by:  Sh.Lajpat Sharma, Advocate for the complainant.

                    Sh. J.S. Rattu, Advocate for the opposite parties.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT                

                   The complainant has filed this complaint, seeking refund of amount of Rs.16,25,000/- paid by him, to the opposite parties, towards purchase of residential flat bearing no.EV/TRP/1007, measuring super area 720 square feet, vide Provisional Allotment Letter dated 17.09.2014, (Annexure C-2), against total sale consideration of Rs.16,25,000/-, in their project named “Premium Trinity Homes”, Emerging Valley, Landran Banur Road, Mohali, Punjab, on the ground that despite receiving the said amount, possession thereof was not delivered for want of construction and basic amenities. To prove the fact of making payment of Rs.16,25,000/-, the complainant has placed on record copies of receipts issued by the opposite parties and also statement of account of the bank concerned. It is case of the complainant that it was promised that possession of the built-up flat will be delivered within a maximum period of three years, from the date of allotment, which stood expired on 16.09.2017 but of no avail. At one point of time, the opposite parties issued letter dated 04.05.2017 (Annexure C-6) asking him to take possession of the flat but it was not handed over. Thereafter, letter dated 22.03.2018 was issued by them saying that possession will be given on or before 21.04.2018. Another letter was sent by them on 05.06.2018 saying that possession will be given on 06.07.2018. On receipt of letters aforesaid, he visited the project site and found that construction of the flat was not complete and basic amenities promised to be provided were not in existence. Under above circumstances, the complainant served legal notice dated 26.11.2018 seeking refund of amount paid alongwith interest, compensation etc. but the same was not even replied by the opposite parties.   

2.           His claim has been contested by the opposite parties, on numerous grounds, inter alia, that that this Commission has no territorial jurisdiction to deal with the matter;  that the complainant did not fall within the definition of ‘consumer’: that the complaint filed is time barred; that this Commission adjudicate this complaint under summary proceedings; and that no proper court fees has been paid by the complainant.
3.           On merits, it has been admitted that the complainant agreed to purchase the flat in question in the said project. It has been contended that possession of the flat was offered to be complainant, a number of times, but he did not come forward to take over the same. Delay, if any, in construction was caused, as the competent authority delayed in issuing approvals; that there was shortage of labour and construction material; and that the complainant alongwith other similar located allottees delayed in making payment towards price of their respective units. It has been stated that the opposite parties are making endeavor to complete the said project. However, payment of Rs.1 lac, out of deposited amount of Rs.16,25,000/- has been disputed.
4.           The parties have been afforded adequate opportunities to adduce evidence in support of their respective contentions, by way of affidavit and they also produced numerous documents.
5.           We have heard the contesting parties and have carefully gone through record of the case.
6.           In this case, following points have been emerged for consideration:-
   1. Whether this Commission is competent to decide this complaint?
   2. Whether this Commission has territorial jurisdiction to entertain this complaint?
   3. Whether the complainant falls under the definition of consumer?
   4. Whether the complaint filed is with limitation?
   5. Whether the opposite parties were in position to offer and deliver possession of the flat in question by the stipulated date or not?
   6. Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?

 

7.           First, we would like to deal with the objection raised by the opposite parties, to the effect that this complaint cannot be decided by this Commission under summary proceedings, as complicated questions of facts and law are involved therein. We do not agree with the objection raised. It may be stated here that it is a simple case of non-delivery of possession of the flat by the stipulated date, as a result whereof, the complainant has sought refund of the amount paid. In Narne Construction P. Ltd., etc. etc. Vs.  Union of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute and the same is maintainable before this Commission. Had there been any complications in this case, which could have taken a very long process to adjudicate the same, thereby defeating the very purpose of Section 13 3 (A) of the Act, this Commission itself, would have relegated the complainant to civil court at the preliminary stage only. As such, it is held that this compliant is maintainable before this Commission. Objection raised in this regard, stands rejected.
8.           Now coming to the objection raised with regard to territorial jurisdiction of this Commission, it may be stated here that according to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident that the entire documents pertaining to the flat in question have been issued by Corporate Office of the Company at Chandigarh i.e. SCO 46-47. First Floor, Sector 9-D, Chandigarh.  Not only as above, even the parties themselves, by way of the allotment letters dated 17.09.2014 and 05.11.2015 have agreed that ‘All legal disputes shall be subject to the courts of competent jurisdiction at Chandigarh only”. Under these circumstances, this Commission has got territorial Jurisdiction to entertain and decide this complaint.  Objection taken in this regard, therefore stands rejected. 
9.           The next question under our consideration is as to whether the complainant falls within the definition of a consumer, as defined by Section 2 (1) (d) of the Act? It may be stated here that mere bald objection of the opposite parties that the complainant had purchased the flat, by way of investment, to gain huge profits, does not carry any weight and is liable to be rejected. The complainant, in para no.13 of his complaint, supported by his affidavit, has clearly stated that the flat in question was purchased for residential purposes. There is nothing on the record that the complainant is a property dealer and deals in the sale and purchase of property, on regular basis. Mere fact that the complainant is living in a house at Jammu is not sufficient to debar him from the purview of a ‘consumer’. A person cannot be said to have purchased a house for a commercial purpose only by proving that he/she has purchased more than one houses or plots.  Separate plots may be purchased by a person for the individual use of his/her family members.  A person may buy more than one house as per his requirements. 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. Apart from it, the opposite parties failed to adduce an iota of evidence to recluse the complainant from the definition of ‘consumer’ under the Act. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the Hon’ble National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316 and Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016.
10.           It is not in dispute that the complainant agreed to purchase the flat in question  in the manner, referred to above, for which, entire sale consideration to the tune of Rs.16,25,000/- stood paid but possession thereof was not delivered to him by 16.09.2017 i.e. within a period of three years from the date of allotment being 17.09.2014. However, to defeat the claim of the complainant, Counsel for the opposite parties while placing reliance on letters dated 04.05.2017, 22.03.2018 and 05.06.2018 (Annexure C-6 colly.) vehemently contended that he was offered possession of the flat, repeatedly, but he failed to take over the same. We have perused contents of the said letters and found that in letter dated 04.05.2017, the opposite parties are saying that they will be going to offer possession by 30.05.2017. Thereafter, vide letter 22.03.2018, it was promised that possession will be delivered on or before 21.04.2018. Thereafter, vide another letter dated 05.06.2018, it was promised that possession will be delivered on or before 06.07.2018. After these letters, there is nothing on record, which could prove that the opposite parties ever intimated the complainant to take over possession of the flat in question. The plea taken by the opposite parties that they were ready to deliver possession of the flat is falsified from their own candid admission made in para no.10 of their written reply that the Company is making endeavor to complete the project. It is well settled law that before offering and delivering possession of residential plots/units to the allottees, builder is required to obtain occupation and completion certificates. At the same time, burden to prove that the area/site of the project or that the construction of flats, is fully developed is on the builder. It was so said by the Hon’ble National Commission in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. It is very strange that in the present case, not even an iota of evidence has been placed on record by the opposite parties, to prove that construction and development work is complete and that all the basic amenities are in existence, at the project site or that the same are about to complete. In case, all the development/construction activities had been undertaken and completed at the site, by the said date, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, had been undertaken and completed at the site or not, but they failed to do so.
11.           To buttress their case, a plea was also taken by the opposite parties that delay in construction took place on account of reasons that competent authorities delay in sanctioning approvals; that there was shortage of labour and building material; and that the complainant alongwith other allottees delayed in making payment towards price of their respective units. We do not agree with the said plea.
12.           First coming to the plea regarding delay on the part of the competent authorities in sanctioning approvals, it may be stated here that not even a single document has been placed on record by the opposite parties, to substantiate their plea. They could have placed on record letters written to the competent authorities, in the matter, in case there was any delay on their part but they failed to do so. Even this much has not been proved, as to whether, they have applied for permission to launch and sell the said project or not. Except one authority letter, no other document has been placed alongwith the reply filed by the opposite parties.
13.           As far as plea taken with regard to shortage of labour or building material is concerned, the same stands rejected, in view of law laid down by the Hon’ble National Commission in a case titled as Swaran Talwar & 2 others v. M/s Unitech Limited (along three connected complaints), 2015 (4) CPR 34, wherein similar plea was rejected by it, while holding as under:-

“Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.

Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainant. There is no allegation of any lock-out or strike by the labour at the site of the project. There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement. It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector. I, however, find no merit in this contention. The word ‘slow down’ having been used alongwith the words lock-out and strike, has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.”.

 

The principle of law laid down in the aforesaid case is fully applicable to the facts of the present case. The opposite parties, therefore, cannot take shelter under the garb of force majeure circumstances, for extension of period, for delivery of possession of the unit. By making a misleading statement, that  possession of the unit, in question, would be delivered on or before 16.09.2017 and  by not abiding by the commitments made, the opposite parties are not only deficient in providing service but also indulged into unfair trade practice.

14.           Now coming to the objection taken with regard to court fees, we have gone through the requisite documents and found that correct fees to the tune of Rs.2,000/- being the claim of the complainant above Rs.20 lacs and below Rs.50 lacs, has been paid by him. Objection taken in this regard, as such, being frivolous, is rejected.
15.           Now coming to the objection raised by the opposite parties, to the effect that this complaint  is time barred, it may be stated here that since it has been proved from the documents on record (especially in the face of candid admission of the opposite parties in para no.10 of the written reply that the Company is still making endeavor to complete the project), that actual physical possession of the flat in question has not been delivered to the complainant, even by the date, when arguments were heard in this complaint,  as such, there is a continuing cause of action in his favour, in view of principle of law down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal   Shah  and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC),  wherein it was held that when possession of the residential units is not offered, there is a continuing cause of action, in favour of the allottee/buyer. Objection raised in this regard, as such, is rejected.
16.           Now, the question under our consideration is as to whether if the Developer fails to deliver possession of the allotted flat within the stipulated time, the allottee is under obligation to accept the same, if made after belated stage or he/she can seek refund of the amount paid. It may be stated here that it is well settled law that non-delivery of possession of plots/units in a developed project by the stipulated date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was so said by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. Relevant part of the said order is reproduced hereunder:-

“This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment”.

The above view taken is further supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. In that case, possession of the unit had been offered during pendency of the complaint after obtaining occupation certificate, though after a delay of 2 years of the stipulated date. The Supreme Court upheld the order of refund of amount paid alongwith interest, passed by the Hon’ble National Commission, while holding as under:-

        “In the present case, admittedly the Appellant – Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent – Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the  National Commission.

         In Lucknow Development Authority v. M.K. Gupta,  this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.

        In Fortune Infrastructure & Anr. v. Trevor D’Lima & Ors.,  this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

        The Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant –

Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent – Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.”

 

In the present case also, there has been an inordinate delay in offering possession of the flat in question. Under these circumstances, we are of the considered opinion that the complainant is well within his right to terminate the allotment letter/agreement and seek refund of the entire amount paid, by way of filing this complaint. In these circumstances, forfeiture clause contained in the agreement will not be made applicable, as the fault, if any, lays on the part of the opposite parties and not the complainant. The opposite parties cannot be benefited out of the deficiency flown out from their part.

17.           It is to be further seen, as to whether interest on the amount refunded can be granted in favour of the complainant. It may be stated here that, it is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335. The complainant is, thus, entitled to get refund of the amount paid, alongwith interest, from the respective dates of deposits, till realization.
18.           The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units, by the stipulated date, fell for determination before the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, Hon`ble Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Relevant part of the said order is reproduced hereunder:-

 “We have in our Judgment in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65 held that in case the amounts have to be refunded, the Interest Act would apply.  In our view, in these matters as it is not possible for us to ascertain what was the prevailing rate of interest,  we have been directing payment of interest @ 12% from the date the amounts were deposited till repayment.”

Furthermore, the Hon`ble Supreme Court of India in H.P. Housing Board Vs. Janak Gupta, (2009) INSC 627, granted interest @12% p.a. on the amount to be refunded by the builder, while holding as under:-

 “We may note that in Haryana Urban Development Authority vs. Darsh Kumar (2005) 9 SCC 449, this Court has said that in future the Forum/Commission will follow the principles laid down by it in the case of Balbir Singh-I(supra).In the light of the aforenoted decisions, the order of the Commission, awarding interest at the rate of 18% per annum cannot be sustained. We are of the view that having regard to the facts and the circumstances of the instant  case, award of interest @ 12% per annum would meet the ends of justice. …………………….”.

In view of principle of law laid down by the Hon`ble Supreme Court of India, in the cases referred to in this paragraph, if interest @12% p.a. is awarded to the complainant, from the respective dates of deposits, till realization, that will meet the ends of justice.

                   At the same time, the complainant is also held entitled for compensation towards mental agony and physical harassment, caused to him, at the hands of the opposite parties and also cost of litigation. In our considered opinion, if an amount of Rs.50,000/-, in lumpsum, as compensation and cost of litigation is granted, that will meet the ends of justice. The view taken by this Commission with regard to grant of lumpsum compensation and cost of litigation to the tune of Rs.50,000/-, is supported by the case titled as  DLF Homes Panchkula Pvt. Ltd. & Anr. Vs. Col. Daljit Singh, First Appeal No. 1239 of 2017, decided by the Hon’ble National Commission, under similar circumstances, on 01.08.2019. 

19.           No other point was urged by the contesting parties.
20.           For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under:-

1. To refund the amount of Rs.16,25,000/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.16,25,000/-  shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization.

 

21.           However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
22.           Certified Copies of this order be sent to the parties, free of charge.
23.           The file be consigned to Record Room, after completion.

Pronounced.

14.10.2019

 

Sd/-

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 

Sd/-

 (RAJESH K. ARYA)

 MEMBER

 

 

Rg.