Chandigarh

StateCommission

CC/134/2020

Dr. Bhavna Sobat Trikha - Complainant(s)

Versus

Greater Mohali Development Authority - Opp.Party(s)

Sandeep Bhardwaj Adv.

31 Mar 2021

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	134 of 2020
Date of Institution	:	07.09.2020
Date of Decision	:	31.03.2021

 

Dr.Bhavna Sobat Trikha D/o Dr.Vijay Kumar Sobat, resident of House no.3436, Sector 24-D, Chandigarh.

……Complainant

V e r s u s

Greater Mohali Area Development Authority, PUDA Bhawan, Sector 62, SAS Nagar, Mohali, Punjab.

 

…..Opposite party

 

BEFORE:             JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS. PADMA PANDEY, MEMBER.

                             MR.RAJESH K. ARYA, MEMBER

 

Present through video conferencing:                

                             Sh.Sandeep Bhardwaj, Advocate for the complainant.

       Sh.Anuj Kohli, Advocate for the opposite party.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                  

                   Greater Mohali Area Development Authority  (in short the GMADA), is a Statutory Authority, which planned to develop a project named ECO City, Phase-II, New Chandigarh, Punjab and sell the plots/units therein to the general public and undertook to complete the development work in the stipulated period but it failed to do so. As such, the GMADA can also be held liable for deficiency in providing service to the complainant and other prospective buyers, who have invested in the said project,  in view of principle of law laid down by the Hon’ble Supreme Court of India in Lucknow Development Authority Vs. M.K.Gupta, Civil Appeal No.6237 of 1990, decided on 5.11.1993, wherein it was held that when a statutory authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service made available to potential users'.

2.           Instant complaint has been filed under section 47 of the Consumer Protection Act, 2019 (in short the Act, 2019), seeking refund of the amount paid by her to the opposite party towards purchase of a plot measuring 500 square yards, located in its project, launched under the name and style ‘ECO City’, Phase-II, New Chandigarh, Punjab. It is the case of the complainant that despite the fact that against the total sale consideration of Rs.1,15,00,000/-, she had paid substantial amount of Rs.1,13,28,500/- to the opposite party, as per demands raised by it from time to time, for the period from 28.04.2015 to 22.09.2015, yet, it failed to offer and deliver possession of the said plot latest by 10.08.2018 i.e. within a period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, as envisaged under Clause 14 (I) thereof or even thereafter, for want of construction and development activities. Various letters written to the opposite party by the complainant, in the matter,  did not yield any result. It has been stated that for making payment towards price of the said plot, the complainant raised housing loan, for which she had paid huge amount of monthly installments.

                   By stating that the aforesaid act and conduct of the opposite party,  in not offering possession of the plot within the committed period or thereafter, thereby causing inordinate delay, amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainant seeking refund of amount paid alongwith interest, compensation etc. 

3.           The claim of the complainant has been contested by the opposite party, on numerous grounds, inter alia, that the complainant has concealed material facts from this Commission; that she being investor, did not fall within the definition of “consumer”; that this Commission did not vest with pecuniary and territorial jurisdiction to entertain and decide this complaint; that because disputed questions of facts and law are involved in this complaint,  as such, the same cannot be entertained by this Commission under summary proceedings; that in the face of existence of arbitration clause in the LOI this consumer complaint is not maintainable; that this complaint is bad for misjoinder/nonjoinder of necessary parties; that since the time of completion of development work  mentioned in the LOI was tentative as such time was not to be considered as essence of the contract; that since allotment letter in respect of plot no.276 in the said project has been sent to the complainant on 21.09.2020, Annexure OP-1, and she is not willing to take over possession and has returned the same, as such, she is not entitled to get refund of the amount paid; and that since the project of the opposite party was exempted from the provisions of PAPR Act, as such there was no requirement of obtaining occupation or completion certificates in respect thereof.
4.           On merits, booking of the plot in question in the project aforesaid; payments made by the complainant as mentioned in the complaint; and that possession of the plot in question was not offered till the date of filing of this complaint has not been disputed by the opposite party. However, remaining averments of the complaint have been denied. Prayer has been made to dismiss the complaint with costs.
5.           In the rejoinder filed the complainant reiterated all the averments contained in her complaint and controverted those of the written reply of the opposite party.
6.           The parties led evidence in support of their respective versions.
7.           We have heard the contesting parties and have gone through the evidence and record of the case, including the written arguments filed by the parties, very carefully.
8.           First we will deal with the objection raised by the opposite party with regard territorial jurisdiction of this Commission. It may be stated here that since the complainant is residing at House No.3436, Sector 24-D, Chandigarh, which fact is not disputed by the opposite party, as such, she has the right to file this complaint before this Commission, at Chandigarh, in view of the provisions of sub-section (d) of Section 47 (4)  of the Act, 2019, which says that a complaint can be filed before a State Commission within the limits of whose jurisdiction, the complainant resides or personally works for gain. In this view of the matter, this Commission at Chandigarh has territorial jurisdiction to entertain this complaint. Objection taken by the opposite party in this regard stands rejected.
9.           As far as objection raised by the opposite party with regard pecuniary jurisdiction of this Commission is concerned, it may be stated here that since the complainant has paid an amount of Rs.1,13,28,500/- in respect of the plot in question to the opposite party, which fact is not disputed by it (opposite party), as such, she has the right to file this complaint before this Commission, at Chandigarh, in view of the provisions of Section 47 (1) (a) (i) of the Act, 2019, which says that the State Commission shall have jurisdiction  to entertain complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore. In this view of the matter, this Commission has pecuniary jurisdiction to entertain this complaint. Objection taken by the opposite party in this regard stands rejected.
10.           Now we will deal with the objection taken to the effect that the complainant did not fall within the definition of ‘consumer’. It may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite party to establish that the complainant has purchased the plot in question to indulge in ‘purchase and sale of plots as was held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since it failed to discharge its onus, hence we hold that the complainant is a consumer as defined under the Act. In this view of the matter, objection taken by the opposite party stands rejected. 
11.           Now coming to the  objection taken by the opposite party to the effect that in the face of existence of Arbitration clause in the LOI, jurisdiction of this Commission is barred; it may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as  Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements between the buyer and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos.2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection taken in this regard stands rejected.
12.           There is no dispute with regard to purchase of the plot in question by the complainant in the project of the opposite party, as per the details mentioned above. There is also no dispute with regard to the fact that despite the fact that substantial amount of Rs.1,13,28,500/- stood received by the opposite party against total sale consideration of Rs.1,15,00,000/-, yet, possession of the plot in question has not been offered latest by 10.08.2018 i.e. within a period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, as envisaged under Clause 14 (I) thereof. 

                   In the written reply filed by the opposite party nothing has been mentioned as to why such an inordinate delay in completing the development activities and delivering possession of the plot in question took place, especially, when the huge amount of Rs.1,13,28,500/- stood received by it in the year 2015 itself. Even this much has not been proved by placing on record any cogent and convincing evidence, as to whether development work and basic amenities such as roads, electricity, sewerage etc. are available at the project site or near completion. It may be stated here that burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the opposite party, who was to develop the project. 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 party to prove as to at what stage, construction and development work has reached at the project site. In case, the development/construction activities are being undertaken and are about to complete or it is complete at the project site, then it was for the opposite party, 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 or about to complete, but the opposite party failed to do so.

13.           However, to wriggle out of the situation, without giving any cogent reason for the delay aforesaid, the opposite party, through its Counsel, contended that since allotment letter in respect of plot no.276 has been issued in favour of the complainant on 21.09.2020, after completing the development work but she has concealed this fact from this Commission and further she is deliberately avoiding the same and has returned it, as such, she is not entitled to claim refund at this stage.

                   In the first instance, it is submitted that since the said allotment letter has been issued in favour of the complainant during pendency of this complaint by the opposite party, as such, there was no concealment on her part because to bring this fact to the notice of this Commission, she had to wait for the reply to be filed in the complaint and thereafter only, she could have brought this fact before this Commission, by way of filing rejoinder. Thus, contention raised by the opposite party to the effect that the complainant has concealed this fact, being devoid of merit, stands rejected.

                   Now we will discuss the fact as to whether, the allotment letter so issued by the opposite party on 21.09.2020 could be said to be genuine or not and as to whether, the complainant was obliged to accept the same, after an inordinate delay. It may be stated here that as per terms and conditions of the LOI, such allotment letter was to be issued by the opposite party, after completing the development work at the project site, within a period of 36 months and thereafter possession, complete in all respects, was to be taken over by the complainant, within a period of 30 days, from the date of issuance of the said allotment letter. However, we are surprised to note from the information dated 30.12.2020 (Annexure C-19) having been furnished by Superintendent-cum-Assistant PIO of the opposite party, under the orders of Punjab State Information Commission, under RTI (which has not been seriously disputed by the opposite party by placing on record any document contrary to that information), that by the said date i.e. 30.12.2020, neither internal roads network was complete; nor water supply system was available; nor sewerage system was available; work with regard to street lights, landscaping has not even been started. Relevant part of the said information is reproduced hereunder:-

 

Particulars of Information solicited (Point 5 of RTI application dated 31.8.2020	Reply of Suptd.-cum-APIO
Internal Road Network of Ecocity 2-   a.       Date of completion of Internal Road Network of Ecocity-2. b.       Copy of Completion certificate of works related to Internal road network issued by the competent authority.	a. Time extension till 31.12.2020 has been approved to the contractor vide letter dated 14.7.2020 b.   Relevant documents are not available in the office record.
Water supply system of Ecocity 2   c.       Date of completion of water supply network (including OHWR) of Ecocity-2.  d.      Copy of Completion certificate of works related to water supply system issued by the competent authority	No record related to the work is available in their office.
Sewerage system of Ecocity 2-   e.       Date of completion of Sewerage System of Ecocity-2. f.        Copy of Completion certificate of works related to sewerage system issued by the competent authority.	No record related to the work is available in their office.
Street Lighting of Ecocity 2-   g.       Date of completion of Internal Street lighting (including installation of lights) of Ecocity-2. h.      Copy of Completion certificate of works related to Internal Street Lighting issued by the competent authority.	The work is in progress. The completion certificate has not been issued for this work yet.
Landscaping (Internal Parks) of Ecocity 2:   Date of completion of works related to development of Internal Parks of Ecocity 2. Copy of Completion Certificate of works related to internal parks issued by the competent authority	No work related to landscaping of internal parks in Ecocity 2 has been done till date. An estimate pertaining to works related to development and maintenance of Horticulture works has been submitted vide this office latter no.1671 dated 25.09.2020 to higher officials for approval
Copy of Letter, if any, informing the allottees w.r.t. status of developmental works of Ecocity 2	No reply has been given by APIO

 

14.           Under these circumstances, we are of the considered opinion that in the absence of completion of development work with regard to water, sewerage, street lights, landscaping etc. which are the basic amenities required for smooth habitation, the allotment letter dated 21.09.2020 was sent by the opposite party to the complainant and that too during pendency of this complaint, just with a view to defeat her  genuine claim by giving a cosmetic appearance to this case to say that it was the complainant who is at fault in not accepting the allotment letter and not the opposite party. Under these circumstances, it is held that irrespective of the fact that the project of the opposite party was exempted from the provisions of PAPR Act and as such it was allegedly not liable to obtain completion certificate (though we are not going into such question and the same is left open) yet,  in our considered opinion it was bound to first complete the development works referred to above at the project site and only then should have issued allotment letter because it has been agreed to between the parties by way of terms and conditions of the LOI aforesaid that possession of the plot was to be taken over by the complainant within a period of 30 days from the date of issuance of the said allotment letter.  It is therefore held that in the face of RTI information referred to above, the complainant was not obliged to retain the allotment letter in the absence of development work aforesaid because had she retained the same, the opposite party would have taken advantage of  Clause 14 (II) of the LOI, wherein it was mentioned that if the allottee failed to take possession of the plot after issuance of the said allotment letter in respect thereof, it shall be deemed to have been handed over to the allottee on expiry of the said period of 30 days. As such, plea taken by the opposite party to the effect that the complainant was at fault in not accepting the allotment letter, (especially, when the development was not complete by the said date which fact is evident from the said RTI information), being devoid of merit stands rejected.
15.           Now coming to the objection taken by the opposite party with regard to jurisdiction of this Commission and maintainability of this complaint, on the ground that disputed questions of facts and law are allegedly contained therein, it may be stated here that this is a simple case of non delivery of possession of the plot in question by the opposite party by 10.08.2018 i.e. within a period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, as envisaged under Clause 14 (I) thereof, for want of construction and development activities, thereby causing financial loss, mental agony and harassment to the complainant. As such, it can very well be said that there is a denial of service to the complainant on the part of the opposite party, for which she was at liberty to avail remedy by way of filing this consumer complaint. Our this view is supported by the principle of law laid down in Lucknow Development Authority’s case (supra)  wherein the Hon’ble Supreme Court held that where the developer is at fault in not delivering possession of a property, the act so amounts to denial of service, and consumer complaint is maintainable before the Consumer Fora. It was further held in Lucknow Development Authority’s case (supra) that when a statutory authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service made available to potential users'. In this view of the matter, this Commission is competent to decide this complaint. Objection taken in this regard therefore stands rejected. 
16.           At the same time, it is also held that since a specific period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, was envisaged under Clause 14 (I) thereof, for completing the development work and delivering possession of the plot in question to the complainant, as such, now at this stage, the opposite party cannot be heard to say that time was not the essence of the contract. At the same time, the opposite party failed to show any other clause or document with regard to the period of delivery of possession of the plot in question. Under these circumstances, the possession period has to be reckoned from the period specified in the contract i.e. the period mentioned in the LOI.  Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in M/s. Imperia Structures Ltd. Versus Anil Patni and Another, Civil Appeal Diary No.9796/2019, decided on November 02, 2020, wherein it was held that the period of possession has to be reckoned in terms of the contract/agreement only. In this view of the matter, it is held that the objection taken by the opposite party to the effect that time is not to be considered as essence of the contract, especially in the face of Clause 14 (I) saying that development will be completed within a period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, being devoid of merit stands rejected. 
17.           As stated above, the plot in question was booked as far as back in 2015 and now it is March 2021. Still the complainant is empty handed despite the fact that against the total sale consideration of Rs.1,15,00,000/-, she had paid substantial amount of Rs.1,13,28,500/- to the opposite party, for the period from 28.04.2015 to 22.09.2015. Under these circumstances, we are of the considered opinion that we cannot make the complainant to wait for an indefinite period, in the matter. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date is a material violation and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was also 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. 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 and also  in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. In the present case also, since there has been an inordinate delay in the matter, and still it is evident from the RTI information aforesaid that development work is not complete and still under progress which will take a long time, as such, we are of the considered opinion that if we order refund of the amount paid alongwith interest, that will meet the ends of justice.
18.           Now, we will deal with the question, as to what rate of interest should be awarded to the complainant, while ordering refund of amount paid.  It may be stated here 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. The party concerned in refund cases is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot but he is deprived of same; he is deprived of the benefit of escalation of the price of that flat/plot; and also he would have to take out more money from his pocket for beating the escalation in price, for buying a new flat/plot and as such, compensation to be granted by way of interest on the deposited amount in such cases would necessarily have to be higher. Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court in  Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65 wherein it was held that in a case where money is being simply returned, the purchaser is suffering a loss in as much as he/she had deposited the money in the hope of getting a flat/plot and therefore has been deprived of the benefit of escalation of the price. The compensation in such cases, therefore, would necessarily have to be higher.

                   Furthermore, a similar question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the developer fails to deliver actual physical possession of residential units/plots, 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, the 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. The Hon’ble National Commission also, in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019  and Anil Kumar Jain & Anr  Vs. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23^rd Dec 2019, awarded interest @12% p.a. to the complainants, on the amounts to be refunded to them from the respective dates of deposits.    It is therefore held that in the present case, if interest @12% p.a. is awarded on the amount to be refunded to the complainant, that will meet the ends of justice.

19.           As far objection taken by the opposite party to the effect that this complaint is bad for misjoinder/nonjoinder of necessary parties, it may be stated here that it has failed to apprise this Commission, as to which was the other necessary party other than the opposite party, who was responsible to deliver possession of the plot the complainant, especially, in the face of the fact that the project in question had been launched by the opposite party;  against the total sale consideration of Rs.1,15,00,000/-, an amount of Rs.1,13,28,500/-  had also been received by it; and also promise to deliver possession thereof latest by 10.08.2018 i.e. within a period of 36 months from the date of issuance of Letter of Intent (LOI) dated 11.08.2015, Annexure C-3, was also made by it. As such, in this view of the matter, objection taken in this regard stands rejected.
20.           For the reasons recorded above, this compliant is partly accepted with costs and the opposite party is directed as under:-

1. Refund the amount of Rs.1,13,28,500/- to the complainant, alongwith interest @12% p.a., without deducting any TDS, from the respective dates of deposit 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.1,13,28,500/- 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. 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.1,00,000/- 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.1,00,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.

21.           The Bank(s)/financial institution(s), if any, from which the complainant has raised housing loan for making payment towards price of the plot in question, shall have the first charge of the amount payable, to the extent, the same is due to be paid by the 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.

31.03.2021

 

Sd/-

 [RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

 

Sd/-

(RAJESH K. ARYA)

 MEMBER

Rg.