ORDER DR. S. M. KANTIKAR, MEMBER 1. This appeal has been filed under Section 19 of the Consumer Protection Act, 1986 against the order dated 21.8.2015 passed in complaint case No. 105 of 2015 by U.T. Chandigarh State Consumer Disputes Redressal Commission (for short, ‘the State Commission’) whereby the complaint of the complainants was allowed; the OP 1 and 2 were directed to refund the amount of Rs.39,37,941/- to the complainants, alongwith interest @ 12% per annum from the respective dates of deposits onwards. OPs were also directed to pay compensation in the sum of Rs.1,50,000/- towards mental agony and physical harassment with costs of Rs.20,000/-. 2. The brief facts relevant to dispose of this appeal are that the complainants, Simi Gupta and Gagan Gupta booked a residential apartment in the upcoming project “The Views” of M/s Emaaar MGF Land Limited in Mohali. The basic sale price of said apartment was Rs.36,48,105/-. Apart from this, the complainants were required to pay Rs.1,50,000/- for parking bay, Rs.1,51,619/- towards External Development Charges (EDC), Rs.1,18,800/- towards preferential location charges and Rs.13,500/- towards maintenance charges. Accordingly, the buyer’s agreement with respect to the said apartment was executed on 24.8.2011 at Chandigarh. The complainants opted for down payment plan, and availed a loan of Rs.29,50,000/-from the Housing Development Finance Corporation Limited/OP-3 (for short, ‘HDFC Ltd.’ proforma party). The tri-partite agreement amongst the parties was executed on 30.8.2011. The complainants had already made payment of Rs.39,37,941/- towards the price of their apartment. As per the buyers’ agreement, OPs 1 and 2 were required to hand over the physical possession of the said apartment within 36 months from the date of execution of the agreement. It was also agreed that the OP was liable to pay the penalty/compensation to the complainants @ Rs.5/- sq. ft. per month of the super area for the period of delay. In the instant case, OPs 1 and 2 failed to deliver the possession latest by 23.8.2014. The OPs did not appraise about the status of the project despite email request from the complainants. The OPs vide email dated 22.4.2015 (annexure 7) had intimated that they were not in a position to deliver the possession for want of basic amenities and the same could only be delivered by the first quarter of 2016. The conduct of the OPs in not delivering the flat on time nor refunding the money, amounts to deficiency in service and unfair trade practice. Due to the negligence of the OPs, the complainants have been paying huge interest alongwith installments to HDFC Ltd. It was alleged that, the grievance of the complainants was not redressed by OPs 1 and 2. Therefore, a complaint under Section 17 of the Consumer Protection Act, 1986 (herein after referred as the ‘Act’) was filed before the State Commission for refund of amount of deposit by complainants alongwith interest from the respective dates @18% per annum. The complainants also prayed for compensation of Rs. 2 lakh towards mental agony and the cost of litigation about Rs.55,000/-. 3. The OPs 1 and 2 filed their written version and pleaded that the complainants did not fall within the definition of “Consumer” as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. They already owned a house and had purchased the apartment with the intention to earn profits when there was escalation in the prices of real estate. Also, as per Arbitration clause in the buyers’ agreement and in case of any dispute, the matter was to be referred to Arbitration. This was the case for suit of specific performance, for the enforcement of the agreement. Therefore, it would not fall under consumer jurisdiction. 4. OP further submitted that as per clause 23.1 of the agreement, they were ready to pay the penalty or compensation @ Rs. 5 per square ft. per month of the super area for the period of delay. It was stated that time was not the essence of the contract. The possession was not handed over to the complainant for want of basic amenities. As the final finishing work was under progress, the possession was expected to be delivered by 1st quarter of 2016. As the complainants were seeking refund of the amount, the same would be considered as surrender of the unit. This attracts forfeiture charges, as per clause 21.10 read with clause 3.2 of the buyers’ agreement. Thus, there was no deficiency or any unfair trade practice on the part of OP-2. 5. The OP-3 also filed a written version and stated that the complainants had sought refund of Rs.39,37,941/-, which included the loan amount of Rs.27 lakh availed by them from OP-3. As on 30.6.2015, the complainants were liable to pay an amount of Rs. 17,48,436/- to the OP-3. OP 3 submitted that there is a right of apportionment of its dues/loan amount, if the commission decides the complaint against OPs 1 and 2. OP-3 had only been impleaded as pro-forma party; therefore, the complaint against it was liable to be dismissed. 6. On the basis of pleadings and evidence, the State Commission allowed the complaint and directed the OPs 1 and 2 to refund the amount of Rs.39,37,941/- alongwith interest @ 12% per annum to the complainants, also directed to pay Rs.1.5 lakhs towards mental agony and physical harassment alongwith costs of Rs.20,000/-. 7. Being aggrieved, the OPs 1 and 2/appellants have filed this appeal. 8. We have heard the learned counsel for both the parties. Both the counsel have made their submissions as written in their pleadings and evidence. We have given thoughtful consideration to the arguments advanced by both the parties. Firstly, we have to see whether complainants are consumers as defined under Section 2(1)(d)(ii) of the Act or not. The complainants filed a complaint with their addresses mentioned in the head note of the complaint. Mere mention of the addresses in the head note of the complaint does not mean that the complainants are owners. Moreover, OP has not produced any reliable evidence to show us that the complainants have number of other residential units or commercial plots. There is no evidence that the complainants are property dealers, who deal with sale and purchase of the property. Moreover, there is nothing on record to prove that the complainants have purchased the said property for investment, with a view to earn huge profits. Therefore, in our view, the complainants are ‘Consumers’. The second point on maintainability, that on account of Arbitration clause which existed in the buyer’s agreement, the complaint before consumer fora is not maintainable. On considering Section 3 of Consumer Protection Act, 1986, the complaint is maintainable as the section says that 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. Thus, mere existence of an Arbitration clause would not oust the jurisdiction of this Commission. This view dovetails from the judgment of Hon’ble Supreme Court in Fair Engg. Pvt. Ltd. & another vs. N. K. Modi III (1996) CPJ 1 (SC) and C.C.I. Chambers Coop. Housing Society Ltd. vs. Development Credit Bank Ltd. III (2003) CPJ 9 (SC). Thirdly, whether the time was the essence of contract or not. In the instant case, as per clause 21.1 of the Agreement, OPs 1 and 2 were to hand over the physical possession of the apartment to the complainant within 36 months from the date of execution of the agreement. Also, under clause 23.1 of the Agreement, OPs were liable to pay penalty to the complainants @ Rs. 5/- per sq. ft. of the super area per month for the period of delay. Therefore, time was unequivocally made the essence of the contract. Counsel for OPs 1 and 2 placed reliance on Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs AIR 1993 SC 1742, a case decided by the Hon’ble Supreme Court to contend that time was not the essence of the contract. The facts of Smt. Chand Rani’s case (supra) are distinguishable, from the facts of the instant case. Smt. Chand Rani’s case (supra), related to the specific performance of contract. It was held that intention to make time as an essence of contract, must be expressed in unequivocal terms in the Agreement. Since the time for delivery of possession was not mentioned in the Agreement in that case, it was held that time was not the essence of the contract, whereas, in the instant case, as per Clause 21.1 of the Unit Buyer’s Agreement dated 24.08.2011 Annexure C-3, opposite parties No. 1 and 2 were to hand over the physical possession of the said apartment, in favour of the complainants, within a period of 36 months from the date of execution of the same (Unit Buyer’s Agreement), i.e. latest by 23.08.2014. Even after the expiry of more than about 4 years, from the date of allotment of their apartment and about 12 months, from the stipulated date, the possession thereof was not delivered to the complainants. The time was, thus, unequivocally made the essence of contract. 9. It is an admitted fact that possession of the apartment was not offered to the complainants on account of non-construction at site and non-availability of basic amenities; according to OPs 1 and 2, the same was expected to be delivered by 1st quarter of 2016. Thus, it means, still the OPs were not sure as to on which exact date, the possession of the apartment would be delivered to the complainants. Admittedly, the complainants had made payment of about 90% of the sale consideration, but the possession was still pending. Thus, it was deficiency and unfair trade practice on the part of OPs 1 and 2. For the next point, the complainants sought enforcement of the Buyer’s Agreement in respect of the immovable property. Now, we have to decide whether only a suit for specific performance under Specific Relief Act, 1963 was maintainable or not. It should be borne in mind that the complainants hired the services of OPs 1 and 2 for purchasing the apartment and as per Section 2(1)(O) of the Act, the ‘housing construction’ also comes within the definition of service. Even if it is assumed that the complainants have refrained themselves from filing a suit for specific performance in a civil court, the alternative remedy provided under Section 3 of the Act can be availed by them as they fall within the definition of “Consumer” as discussed (supra). 10. In the present case, undoubtedly, the complainants had deposited Rs.39,37,941 towards part payment of the flat, having total consideration of Rs.40,82,024 (inclusive of charges for parking, external developmental charges, preferential location and maintenance charges). The complainant was to get the possession of the flat by 24-8-2014 as stated in Clause 21.1 of the Unit Buyer’s Agreement i.e possession was to be handed over within 36 months of the execution of the same. Clause 23.1 of the Unit Buyer’s Agreement comes into effect only when the allottees are prepared to wait for the possession. Nonetheless, the waiting period cannot be incalculable. Thus, in our view, the plea of the Appellant that they are only liable to pay penalty/compensation @ Rs.5 /- per sq. feet , per month of the super area for the period of delay is unsustainable/unjustified and deserves to be rejected. Our view dovetails from decisions of Hon’ble Supreme Court in Lucknow Development Authority Vs M.K Gupta (1994) 1 SCC 243 & Ghaziabad Development Authority Vs Balbir Singh (2004) 5 SCC 65. 11. We are in complete agreement with the view of the State Commission that non- delivery of possession of the flat after receiving more than 90 % of the total consideration, amounts not only to deficiency in service, but also unfair trade practice. The complainants were justified in praying for refund of the amount alongwith interest, compensation and cost of litigation. As regards the question of award of interest on the amount deposited by the complainants, on the point, the State Commission observed in para 22 of the impugned order as follows: “22. The next question that rises for consideration is as to whether the complainants are entitled to interest, if so, at what rate and from which date. The complainants were deprived of their hard earned money, to the tune of Rs.39,37,941/-, on the basis of misleading information given by opposite parties 1 and 2 that they would be handed over legal physical possession of the residential apartment, in question, on or before 23.08.2014, but they failed to do so. The complainants were, thus, caused financial loss. The hard earned money of the complainants was utilized by opposite parties 1 and 2, for a sufficient longer period. Had this amount been deposited by the complainants, in some bank or had they invested the same, in some business, they would have earned handsome returns thereon. In case of delay, in deposit of instalment(s), opposite parties No. 1 and 2 had been charging compound interest @15% p.a. from the complainants, as per Clause 20.1 of the Unit Buyer’s Agreement dated 24.08.2011 Annexure C-3. The complainants are, thus, held entitled to interest on the amount ordered to be refunded to them. Under these circumstances, in our considered opinion, if interest @12% p.a. on the amount, referred to above, from the respective dates of deposits, is granted, that will serve the ends of justice.” 12. In our view, the factor taken into account for awarding interest of 12 % p.a on the amount is reasonable. Similarly, being deprived of the possession of the flat after paying more than 90 % of the consideration causes mental agony and harassment. A petty amount of Rs.1,50,000 cannot be said to be unreasonable by any standard. 13. This Commission in the case of Emaar MGF Land Ltd. & Anr. vs. Amit Puri, first appeal No. 250 of 2014 decided on 30.03.2015, has held in paras 8 and 9 as under: 8. We are of the opinion that the Appeal is devoid of any substance. It is trite that the word ‘Compensation’ is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. Explaining the general meaning and amplitude of the word ‘Compensation’ in the context of the Act, in Lucknow Development Authority Vs. M.K. Gupta - (1994) 1 SCC 243, the Hon’ble Supreme Court observed as follows:- “ The word ‘compensation’ is again of very wide connotation. It has not been defined in the Act. According to dictionary, it means, ‘compensating or being compensated; thing given as recompense;’. In legal sense it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Commission has been vested with the jurisdiction to award value of goods or services and compensation it has to be construed widely enabling the Commission to determine compensation for any loss or damage suffered by a consumer which in law is otherwise included in wide meaning of compensation. The provision in our opinion enables a consumer to claim and empowers the Commission to redress any injustice done to him. Any other construction would defeat the very purpose of the Act. The Commission or the Forum in the Act is thus entitled to award not only value of the goods or services but also to compensate a consumer for injustice suffered by him.” (Emphasis supplied) 9. Endorsing the said observations, in Ghaziabad Development Authority Vs. Balbir Singh - (2004) 5 SCC 65, the Supreme Court held that the provisions of the Act enable a Consumer to claim and empower the Commission to redress any injustice done. A Consumer Fora is entitled to award not only value of goods or services but also to compensate a consumer to injustice suffered by him. However, sounding a note of caution to the effect that the compensation cannot be awarded in all cases on a uniform basis or at a uniform rate, the Court has observed that loss has to be determined by the Fora keeping in view a number of factors like loss of rent which could have been earned if possession had been delivered or the rent a consumer had to pay because of non-delivery of possession on time etc. Emphasizing that compensation in a case where delivery of possession is being directed would be different from a case where only refund of amount is being directed, the Hon’ble Court observed thus :- “ That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher.” 14. Based on the discussion above, the order of the State Commission does not suffer from any irregularity, illegality or jurisdictional error. In our view, there is no merit in this appeal and the same is ordered to be dismissed and the order passed by the State Commission is upheld. However, there shall be no order as to costs. |
