Chandigarh

StateCommission

CC/19/2020

Varun Watts - Complainant(s)

Versus

M/s Ansal Lotus Melange Projects Pvt. Ltd. - Opp.Party(s)

Rachit Kaushal Adv.

29 May 2020

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	19 of 2020
Date of Institution	:	15.01.2020
Date of Decision	:	29.05.2020

 

1. Varun Watts R/o H.No.108, Street No.3, Setia Colony, Near Ganesh Mandir, Sriganganagar, Rajasthan, currently residing at Flat No.124, Al Zamil Suits, 12^th Floor, Building 3358, Road 2845, Block 428, Al Seef Dist, Manama, Bahrain.
2. Sabrina Watts W/o Varun Watts, R/o H.No.108, Street No.3, Setia Colony, Near Ganesh Mandir, Sriganganagar, Rajasthan, currently residing at Flat No.124, Al Zamil Suits, 12^th Floor, Building 3358, Road 2845, Block 428, Al Seef Dist, Manama, Bahrain.

…… Complainants

V e r s u s

 

1. M/s Ansal Lotus Melange Projects Private Limited, having its Corporate Office now shifted at M/s Ansal Lotus Melange Projects Private Limited, 4648/21, Room No.302, 3^rd Floor, Shadumal Building, Daryagang, New Delhi-110002 through its Director. (Email Id:-info@almprojects.com)
2. M/s Ansal Lotus Melange Projects Private Limited, having its Corporate Office at SCO No.12A, Ansal City Centre, Sector 115, Kharar-Landran Road, S.A.S. Nagar, Mohali. (Email Id:-info@almprojects.com)

…..Opposite Parties No.1 and 2

 

3. Housing Development Finance Corporation Limited through Sh.Deepak S. Parekh, Chairman/Managing Director/Authorized Signatory, Branch Office Address:- HDFC Ltd., SCO 153-155, Sector 8C, Madhya Marg, Chandigarh. (Email Id: CHAND@HDFC.com).

…..Opposite party  no.3

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.

 

Present through Video Conferencing:-

                         Sh.Savinder Singh Gill, Advocate for the complainants.

                         Sh.Sandeep Kumar, Advocate for opposite parties no.1 and 2.

                         Ms.Neetu Singh, Advocate for opposite party no.3

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

         

                   The above captioned complaint has been filed by the complainants seeking refund of amount of Rs.20,87,248/-, paid by them towards purchase of flat bearing no.902, Tower No.1, 9^th Floor, measuring 1664 square feet, in a project launched by  opposite parties no.1 and 2, under the name and style ‘Orchard County”, Sector 115, SAS Nagar, Mohali, Punjab (in short the unit), total sale price whereof was fixed at Rs.50,25,693/-. It is the case of the complainants that opposite parties no.1 and 2 failed to deliver possession of the unit in question by 01.08.2018 i.e. within a period of 54 months (48 months plus (+) 6 months extended period) as per Clause 5.1 of the Agreement dated 01.02.2014 (Annexure C-1) for dearth of construction and development works at the project site.

                   It has been averred that for making payment towards price of the said unit, the complainants have availed housing loan from opposite party no.3, under subvention scheme, under which, opposite parties no.1 and 2 committed to pay EMIs till possession of the unit is delivered, yet, it has also come to the knowledge of the complainants that opposite parties no.1 and 2 have defaulted in making payment of the said EMIs to opposite party no.3. It has been pleaded that already a period of more than one and a half years has lapsed neither possession of the unit has been offered for want of construction and development activities and also necessary occupation and completion certificates nor the amount paid has been refunded. Number of requests made in the matter and also legal notice dated 02.08.2019 (Annexure C-10) served upon  opposite parties no.1 and 2 did not yield any result.

                   By stating that the aforesaid act and conduct of opposite parties no.1 and 2,  amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainants seeking directions to opposite parties no.1 and 2 to refund the entire amount paid alongwith interest, compensation; litigation expenses etc. 

2.           The claim of the complainants has been contested by opposite parties no.1 and 2, on numerous grounds, inter alia, that they have concealed material facts from this Commission; that they being NRI did not fall within the definition of ‘consumer’, as defined under Section 2 (1) (d) of the Act; that this Commission did not vest with territorial jurisdiction to entertain this complaint; that because  the period of 54 months, for delivering possession of the unit was tentative, as such, time was not to be considered as essence of the contract; and that the complaint filed is beyond limitation
3.           On merits, payments made by the complainants as mentioned in the complaint; raising of housing loan by the complainants under subvention scheme; execution of buyer agreement; non delivery of possession of the unit in question by the promised date or even by the date when this complaint has been filed, has not been disputed. However, it has been stated that opposite parties no.1 and 2 are committed to pay Pre-EMI to opposite party no.3, under subvention scheme till offer of possession of the unit is delivered to the complainants; that construction work at the project site is in full swing and possession of the unit will be delivered very soon. Prayer has been made to dismiss the complaint.
4.           Opposite party no.3 in its written version pleaded that it has no concern, with the dispute, qua the complainants and opposite parties no.1 and 2; that the loan account of the complainant is irregular; and that as on 28.05.2020 an amount of Rs.9,94,198/- is recoverable from the complainants. It has been pleaded that, in case, this Commission comes to the conclusion that the complainants are entitled to refund of amount paid, then first charge be ordered in favour of opposite party no.3, so that it is able to seek apportionment of its dues.  
5.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence and also produced numerous documents.
6.           We have heard the contesting parties and have gone through the evidence and record of the case, very carefully.
7.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
   1. Whether the complainants fall under the definition of consumer?
   2. Whether this Commission is vested with territorial jurisdiction to entertain this complaint or not?
   3. Whether time was essence of the contract?
   4. Whether the complaint filed is within limitation?
   5. Whether there was any deficiency in rendering service on the part of opposite parties no.1 and 2?
   6. Whether the complainants are entitled to get refund of the amount deposited and if yes, at what rate of interest?

 

8.           First coming to the objection raised to the effect that the complainants 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 opposite parties no.1 and 2 to establish that the complainants have purchased the unit in question to indulge in ‘purchase and sale of units/flats’ as was held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their  onus, hence we hold that the complainants are consumers as defined under Section 2(1)(d) of the Act. Furthermore, the mere fact that the complainants are, at present, residing in Bahrain is not a sufficient ground to snub them out of the purview of ‘consumer’. No law debars NRI and any other person sitting abroad, with roots in India, to purchase a residential property in India for his/her personal use. NRIs do come to India, every now and then. Most of the NRIs have to return to their native land. Each NRI wants a house in India. The complainants are independent persons and can purchase any house in India, in their own name. Similar view was expressed by the Hon’ble National Commission in Smt. Reshma Bhagat & Anr. Vs. M/s Supertech Ltd. Consumer Complaint No. 118 of 2012, decided on 04.01.2016. Objection taken in this regard is rejected.
9.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that Sub-section 2 of Section 17 of the Act envisages that person aggrieved have remedy to file a complaint before a State Commission within the limits of whose jurisdiction:-

“(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or

 

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or

 

(c) the cause of action, wholly or in part, arises”.

 

In the instant case, Agreement in respect of the unit in question, containing detailed terms and conditions, has been executed at Chandigarh Office of the Company. Furthermore, even on the payment receipts Annexure C-5 and C-6 colly, address of Chandigarh Office of the Company is found mentioned, meaning thereby that opposite parties no.1 and 2 were actually and voluntarily residing and carrying on their business, from their corporate office at Chandigarh and personally work for gain hereat. As such, objection taken in this regard is rejected. 

10.           There is no dispute with regard to the fact that  the complainants booked the unit in question, in the aforesaid project for which they had  already paid an amount of Rs.20,87,248/- against total sale consideration of Rs.50,25,693/-. It is also an admitted fact that opposite parties no.1 and 2 failed to deliver possession of the unit in question by the promised date i.e. 01.08.2018 (within a period of 54 months as per Clause 5.1 of the Agreement dated 01.02.2014), for dearth of construction and development works. Even in the joint written reply filed, no commitment to hand over possession of the unit in the near future has been made by opposite parties no.1 and 2. It has only been casually stated that work is in full swing and that possession  of the unit will be delivered soon.

                   At the time of arguments also, Counsel for opposite parties no.1 and 2 failed to apprise this Commission, as to by which date, construction will be completed and possession of the unit, can be handed over to the complainants. Not even a single reason has been given for delay in offering possession of the unit in question to the complainants. It may be stated here that during pendency of this complaint, this Commission vide order dated 23.01.2020, directed opposite parties no.1 and 2 through their Counsel, to produce on record the following documents, duly authenticated, to apprise us, as to whether, the Company was competent to launch the project and sell units/plots therein to the general public including the complainants or not:-

 

1. “Registration Certificate of the project with the competent authority.
2. Copy of requisite Licence issued by the Competent Authority under Punjab Apartment and Property Regulation Act 1995.
3. Change of Land Use (CLU) pertaining to the project in question.
4. Letter of Intent (LOI).
5. Copy of approved site plan of the project.
6. Completion Certificate of the project.
7. Latest photographs of the site/unit in dispute.
8. Current list of Managing Director/Director(s) of the Company.
9. Detail of Bank Accounts of the Company.
10. List of properties both moveable and immoveable of the company and its Managing Director/Director(s) which can be attached in execution of the decree. ”

 

However,  it is significant to mention here that even thereafter also during pendency of this complaint, despite the fact that number of opportunities were given to opposite parties no.1 and 2 to place on record the aforesaid documents, yet, they failed to furnish the same for the reasons best known to them. Under these circumstances, we are of the considered view that by not placing on record the aforesaid documents, opposite parties no.1 and 2 have attracted an adverse inference against them that the project in question had been launched in contravention of the Punjab Apartment and Property Regulation Act, 1995 i.e. they have failed to obtain necessary approvals/sanctions for launching the  said project and selling the units therein to the prospective buyers. Our view is further fortified from the joint written reply filed by opposite parties no.1 and 2, wherein, in para no.4 it has been candidly stated that period of possession was to run from the date when all approvals/sanctions/permissions in respect of the project in question were received, which clearly means that the same had not been obtained before launching the project in question. This act of opposite parties no.1 and 2 amounts to deficiency in providing service and adoption of unfair trade practice.

11.           It is settled law that onus to prove the stage and status of construction and development work at the project site and that all the permissions/approvals have been obtained in respect thereof, is on the builder/developer. 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 opposite parties no.1 and 2 to prove as to at what stage, construction and development work has reached at the project site and that as to whether approvals/sanctions have been obtained by them from the competent Authorities to launch the said project. In case, the development/construction activities are being undertaken and are about to complete at the project site, then it was for opposite parties no.1 and 2, 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, are being undertaken and about to complete at the site or not, but they failed to do so.

                   Furthermore, there is nothing on record to show that opposite parties no.1 and 2 suffered any force majeure circumstances, on account of which, construction and development work at the project site could not be completed and possession of unit was not delivered to the complainants by the committed date, referred to above or even thereafter.

12.           From the peculiar circumstances of this case, it has been proved that opposite parties no.1 and 2 made false representations, which were materially incorrect and were made in such a way that the complainants, to whom it was made, were entitled to rely upon it and they may act in reliance on it. The complainants are thereby involved in a disadvantageous contract with opposite parties no.1 and 2 and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true. All the facts established that from the very inception there was intent to induce the complainants to enter into the contract by way of signing agreement, referred to above, and also intent to deceive them, which act amounts to grave deficiency in providing service, negligence and adoption of unfair trade practice on the part of opposite parties no.1 and 2.
13.           As far as objection taken by opposite parties no.1 and 2 to the effect that  time was not the essence of contract, it may be stated here that, in the absence of any force majeure circumstances, having been faced by opposite parties no.1 and 2, they were legally bound to deliver possession of the unit in question, by the committed date i.e. 01.08.2018 (within a period of 54 months as per Clause 5.1 of the Agreement dated 01.02.2014).  Other than this Clause referred to above, there is no Clause, which speaks about the period/date for delivery of possession of the unit to the complainants. Thus, opposite parties no.1 and 2 cannot wriggle out of the commitments made vide the Clause aforesaid, with regard to time period for delivery of possession of the unit. It is therefore held that time was unequivocally made the essence of contract. In view of above, plea of opposite parties no.1 and 2 to the effect that time was not essence of the contract or that no definite period was given to offer possession of the unit, being devoid of merit stands rejected.
14.           The complainants had booked the unit as far as back in the year 2013 and now it is 2020, and still they are empty handed despite the fact that substantial amount of Rs.20,87,248/- against total sale consideration of Rs.50,25,693/- stood paid to opposite parties no.1 and 2. Still, opposite parties no.1 and 2 are not sure, as to by which date, possession of the unit can be delivered to the complainants. The complainants cannot be made to wait for an indefinite period on the bald assurances given by opposite parties no.1 and 2 that they are ready to pay compensation for the period of delay in delivering possession or that they are committed to pay Pre-EMI to opposite party no.3 from where loan has been obtained by the complainants, under subvention scheme.

                   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 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. Our view is 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 offering possession of the unit, in question, and the same is still continuing one, as opposite parties no.1 and 2 are not sure as to by which date/year possession of the unit could be delivered to the complainants, as such, we are of the considered opinion that if we order refund of the amount paid by the complainants alongwith interest, that will meet the ends of justice. 

15.           Now, we will deal with the question, as to what rate of interest should be awarded to the complainants, while ordering refund of amount paid. It may be stated here that a similar 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/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. Recently also, under similar circumstances, the Hon’ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 while ordering refund of the amount paid, awarded interest @12% p.a.  

                   Not only as above, even under Section 12 of the PAPR Act, read with Rule 17 of the Rules thereunder,  it has been specifically mentioned that if the amount is to be refunded, it is to be refunded alongwith interest @12% p.a. It is therefore held that if interest @12% p.a. is awarded on the amount to be refunded to the complainants, that will meet the ends of justice.

16.           Since, it is an admitted fact that possession of unit in question has not been offered to the complainants by the date this complaint has been filed or even thereafter, nor the Company is in position to do so, as explained above, as such, there is a continuing cause of action in their favour to file this complaint in view of law laid 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.
17.           For the reasons recorded above, this complaint is partly accepted, with costs and opposite parties  no.1 and 2, jointly and severally, are directed as under:-

1. To refund the entire amount, actually paid by the complainants from their own sources/pocket, at the time of booking and thereafter also, towards part price of the unit in question, alongwith interest @12% p.a., from the respective  dates  of  deposits onwards.
2. To refund the amount to the complainants, if any, paid by them to opposite party no.3, towards equated monthly installments, on the loan amount, as it was the liability of opposite parties no.1 and 2, under subvention scheme, as admitted by them in their written statement also.  
3. To repay the entire loan amount to opposite party no.3, released by it in favour of the Company, in respect of the unit in question alongwith pre-EMI installments, if any due, till date. It is also made clear that till the time, the entire loan amount is not repaid to opposite party no.3, opposite parties no.1 and 2 shall be bound to pay the equated monthly installments/Pre-EMI interest to opposite party no.3,  with up-to-date interest on the loan account, till realization.
4. To pay compensation for causing mental agony and physical harassment and also litigation expenses, in lumpsum, to the tune of Rs.50,000/- to the complainants.
5. The payment of amounts mentioned at sr.nos.(i), (ii) (if any) and (iv) shall be made by opposite parties no.1 and 2 to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which the amount mentioned at sr.nos.(i) and (ii) (if any), thereafter shall carry interest @15% p.a., from the date of  default and interest @9 % p.a., on the amount mentioned at sr.no. (iv) from the date of filing of this complaint, till realization, besides compliance of other directions given.
6. Complaint against opposite party no.3 is dismissed with no order as to costs, subject to directions aforesaid.

18.           Certified copies of this order be sent to the parties, free of charge.
19.           The file be consigned to Record Room, after completion.

Pronounced.

29.05.2020

 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

          [PADMA PANDEY]

MEMBER

         

 

Sd/-

[RAJESH K. ARYA]

MEMBER

 Rg