Chandigarh

StateCommission

CC/20/2016

Charan Singh - Complainant(s)

Versus

M/s Emaar MGF Land Limited - Opp.Party(s)

Nandan Jindal & Amrainderjit S Sandhu, Adv.

13 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	20 of 2016
Date of Institution	:	14.01.2016
Date of Decision	:	13.10.2016

 

Charan Singh Saini son of Sh.Shiv Singh, resident of 74, Bellchase Trail, Brampton,Ontario, Canada, through Special Power of Attorney Shri Sukhjit Singh son of Baldev Singh, resident of Village Nabha Sahib, Tehsil Dera Bassi, District Mohali. 

……Complainant

V e r s u s

1. M/s Emaar MGF Land Limited, ECE House, 28, Kasturba Gandhi Marg, New Delhi – 110001, through its CEO.
2. M/s Emaar MGF Land Limited, SCO No. 120-122, Sector 17-C, Chandigarh, through its Local Branch Head.  

                                                    .... Opposite Parties

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Nandan Jindal, Advocate for the complainant.

Sh.  Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that earlier Sh.Gursharan Singh purchased plot bearing No.104-EP-92-250, measuring 250 sq. yards, Mohali Hills, Sector 104, Mohali and, thereafter, the complainant purchased the said plot from the earlier allottee and the same was endorsed in the name of the complainant on 03.05.2012. It was stated that provisional allotment of the aforesaid plot was made in the name of Sh.Gursharan Singh (initial allottee) for the total consideration of Rs.52,34,000/- (Annexure C-1). The complainant paid the total amount of Rs.55,82,000/- for the unit, in question vide receipts (Annexure C-2 colly.). Thereafter, Plot Buyer’s Agreement was executed between the parties on 27.04.2012 (Annexure C-3). As per Clause 8 of the Agreement, the Opposite Parties should endeavour to deliver possession of the plot to the complainant within one year from the date of execution of the Agreement but not later than 18 months and if they failed to deliver the possession then the Company is liable to pay a penalty of Rs.50/- per sq. yard per month for such period of delay beyond 18 months from the date of execution of the Agreement. It was further stated that the entire sale consideration has already been made till the year 2012. It was further stated that when no possession was handed over to the complainant, as per the Agreement, he filed the complaint before the District Forum and after the issuance of notice, the Opposite Parties issued letter dated 16.10.2014 regarding intimation of possession and demanded an amount of Rs.9,62,266/- including delayed payment charges, after adjusting the reversed EDC i.e. Rs.2,51,000/- (Annexure C-4). Thereafter, the complainant approached the Opposite Parties and protested regarding delayed payment charges, as there was no delay on his part. The Opposite Parties accepted the request of the complainant and the delayed payment charges has been deducted. However, the Opposite Parties did not adjust the EDC while demanding the delayed payment charges. Copy of the letter dated 18.11.2014 is Annexure C-5. It was further stated that the complainant sent a letter dated 19.11.2014 (Annexure C-6) and requested that he is ready to pay the whole amount, as demanded by the Opposite Parties but, however, the CLU charges, late fee charges and delayed payment charges be deducted from the said calculated amount.   It was further stated that after the arguments were heard, the District Forum dismissed the complaint due to lack of pecuniary jurisdiction and returned the original documents. Copy of order passed by the District Forum is Annexure C-7. It was further stated that the Opposite Parties failed to deliver possession of the plot within the stipulated time frame as mentioned in the Agreement. It was further stated that the Opposite Parties offered possession of the plot vide letter dated 16.10.2014 with a rider to deposit Rs.9,74,626/-, which is totally illegal demand. It was further stated that when the possession was discussed by the complainant with the Opposite Parties then they adjusted the amount of Rs.3,44,635/- as delayed, payment charges and issued a new letter dated 18.11.2014 for depositing Rs.8,63,631/-. However, while issuing the letter dated 18.11.2014, they have not reversed the EDC i.e. Rs.2,51,000/-, which the complainant had already given in excess, as per the Government Policy. It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

2.           The Opposite Parties, in their written version, have taken objection regarding arbitration clause in the Agreement, and also they separately moved an application u/s 8 of Arbitration and Conciliation Act, 1996 taking a specific objection in this regard for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement. It was stated that the complainant is a resident of Canada and he purchased the plot only for speculation purposes. It was further stated that the plot has already been offered to the complainant and moreover, the terms and conditions of the Agreement duly provided various safeguards to safeguard interest of consumers, in case of delay. So, the complainant could not be granted any interest on the amount deposited by him as both the parties were bound by the terms and conditions of the same and the said Agreement nowhere stipulated payment of interest. It was further stated that the plot has already been offered to the complainant on 16.10.2014 but the complainant instead of taking possession and clearing the outstanding amounts, still pursued the complaint. The complainant has not made the due payments and the Opposite Parties also sent reminder letter dated 18.11.2014  to the complainant to make the payments but he did not do so. It was further stated that the complaint is not maintainable as on the one hand, the complainant is seeking compensation for delayed possession and on the other hand, he sought interest on the deposited amount, as such, the relief claimed by the complainant are contrary and could not be awarded to him. It was admitted regarding purchase of the plot ; issuance of provisional allotment ; execution of the Agreement and endorsement of the plot in favour of the complainant. It was further stated that the compensation for delay in handing over possession is applicable only to those customer(s) who have remitted the installments on or before the due dates mentioned in the payment schedule/demand letter.  It was further stated that the payments demanded by the Opposite Parties, as per the payment schedule and delayed interest has been charged since the payments were not paid on due dates mentioned in the payment schedule. It was further stated that the Company has already received an amount of Rs.5.60 lacs towards the delayed payment charges and the case could be considered for waiver of the balance delayed payment charges with indemnity subject to remittance of balance outstanding by the complainant. It was further stated that the EDC are payable to Government Authorities and the complainant could not claim to get them waived and he is liable to pay EDC charges, as per the Agreement. It was further stated that the letter/email dated 19.11.2014 was duly responded by the Company on 11.12.2014, in which, it was stated that the balance delayed payment charges would be waived off subject to submission of indemnity which was attached and sent to the complainant. It was further stated that the original allottee had delayed the payments beyond due dates, so he was charged delayed interest, as per the terms and conditions of the Agreement. It was further stated that the excess EDC amount has already been adjusted in the total demanded amount. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice.

3.           The Parties led evidence, in support of their case.

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

5.           Admittedly, plot/unit bearing No.104-EP-92-250 in the project Mohali Plots at Mohali Hills, Mohali was allotted to the initial allottee i.e. Sh. Gursharan Singh vide provisional allotment letter dated 15.09.2010 (Annexure C-1). It is also the admitted fact that Plot Buyer’s Agreement was executed between Sh.Gursharan Singh (initial allottee) and the Opposite Partiers on 27.04.2012 (Annexure C-3). Thereafter, the plot was endorsed in favour of the complainant on 03.05.2012. It is also the admitted fact the complainant deposited the amount of Rs.55,82,000/-, as is evident from statement of account (at page No.81 of the file). As per Clause 8 of the Agreement, possession of the plot was to be delivered within a maximum period of 18 months from the date of execution of the Agreement i.e. latest by 26.10.2013. It is also the admitted fact that the Opposite Parties offered possession of the plot to the complainant vide letter dated 16.10.2014 (Annexure C-4) i.e. after the delay of about 11 months.  

6.           The first question that falls for consideration is, as to whether, in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of Arbitration Act 1996, this Commission has no jurisdiction to entertain the present complaint. It may be stated here that the objection raised by the Opposite Parties, in this regard, deserves rejection, in view of the judgment passed by this Commission in Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, wherein this issue was dealt, in detail, while referring various judgments of the Hon'ble Supreme Court of India; the National Commission, New Delhi, and also Section 3 of the Consumer Protection Act, 1986. Ultimately it was held by this Commission that even in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. It was also so said by the National Commission, recently, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No. 346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.” 

            In view of the above, and also in the face of ratio of judgments, referred to above, passed by the National Commission and this Commission, the arguments raised by Counsel for the Opposite Parties, stands rejected.

7.           The objection taken by Counsel the Opposite Parties, to the effect that the complainant is a resident of Canada and he purchased the plot only for speculation purposes being speculator, did not fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, also deserves rejection. The complainant in his complaint has clearly stated that he is interested to shift near the house of his daughter, who is residing in Sector 68, Mohali. Even otherwise, the mere fact that it was a residential plot, which was allotted, in favour of the complainant, was sufficient to prove that it was to be used for the purpose of residence, by the complainant. There is nothing, on the record, that the complainant is a property dealer, and deal in the sale and purchase of property. Moreover, with regard to the objection taken by the Counsel for the Opposite Parties that the complainant is a resident of Canada and purchased the said plot for speculation purposes, has no value, at all. Even no law debars an NRI, who basically belonged to India, to purchase a residential property in India. Under similar circumstances, the Hon'ble National Commission, in a case titled as Smt. Reshma Bhagat & Anr. Vs. M/s Supertech Ltd. Consumer Complaint No. 118 of 2012, decided on 04.01.2016, held as under:-

“We are unable to clap any significance with these faint arguments.  It must  be borne in mind that after selling the property at Bangalore, and  in order  to save  the money from riggers  of capital gain tax, under  Section 54 of the Income Tax Act, 1961, there lies no rub in getting the property, anywhere, in whole of India.  There is not even an iota of evidence that they are going to earn anything from the flat in dispute.  From the evidence, it is apparent that the same had been  purchased  for  the residence of  the complainants.  Moreover, Sh. Tarun S. Bhagat, who is an independent person. It cannot be made a ‘rule of thumb’ that every NRI cannot own a property in India.  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.  He is an independent  person  and  can  purchase any  house in India,  in his own name.”

                   Thus, in the absence of any cogent evidence, in support of the objection raised by the Counsel for the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. Consumer Complaint No.137 of 2010, decided on 12.02.2015, by the 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 National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  Revision Petition No. 3861 of 2014, decided on 26.08.2015. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that, being residing outside India or NRI, the unit, in question, was purchased by the complainant, by way of investment, with a view to earn profit, in future. The complainant, thus, falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Counsel for the Opposite Parties in this regard, being devoid of merit, is rejected. 

8.           The next question, that falls for consideration, is, as to what amount is required to be deposited by the complainant for taking possession of the plot.  It is an admitted fact that the Opposite Parties offered possession of the plot to the complainant vide letter dated 16.10.2014 (Annexure C-4), vide which, they demanded an amount of Rs.9,74,626/- from the complainant. However, out of the demanded amount, the amount of Rs.1,12,360/- with regard to club membership is required to be paid by the complainant as and when the club is constructed and facilities are provided therein. So far as the demand regarding the delayed payment charges is concerned, it may be stated here that in the first instance, admittedly the complainant had already paid an excess amount of Rs.3,48,000/- (Rs.55,82,000/- i.e. amount paid by the complainant – Rs.52,34,000/- i.e. total consideration, as mentioned in the Agreement) over and above the sale consideration of Rs.52,34,000/-, as mentioned in the Agreement. If this is so, the question of charging of more delayed payment charges does not, at all, arise. Otherwise also, no justification with regard to charging of such charges by placing on record detailed calculation sheet has been placed on record to convince this Commission. The authenticity thereof, thus, the demand raised without any justification and a calculation cannot be considered. As such, the complainant is only required to pay an amount of Rs.5,17,631/- (i.e. Rs.9,74,626/- (as demanded vide letter of intimation of possession) - Rs.1,12,360/- (Club Membership Charges) – Rs.3,44,635/- (Delayed Payment Charges) out of the demanded amount, as per the intimation of possession.

9.           As far as the EDC is concerned, since it is a statutory amount and it tends to increase or decrease as such the same cannot be challenged by the complainant. Otherwise also, contents of letter of intimation depicts that the excess EDC has been reversed while calculating the amount, in question.

10.           The next question, that falls for consideration, is, as to whether there was delay in delivery of possession of the plot to the complainant. According to Clause 8 of the Plot Buyer’s Agreement dated 27.04.2012 (Annexure C-3), subject to force majeure conditions and reasons, beyond the control of the Company, it was to deliver physical possession of the plot, within a period of 12 months but not later than 18 months, from the date of execution of the same (Agreement). It is, thus, evident, from this Clause, that the Opposite Parties were required to deliver possession of the plot, in question, in favour of the complainant, within a maximum period of 18 months, from the date of execution of the Agreement i.e. latest by 26.10.2013. Admittedly, the possession of plot, in question, was not delivered to the complainant, by the stipulated date, as mentioned in the Agreement. Thus, the huge amount of Rs.55,82,000/- paid by the complainant to the Opposite Parties in respect of the unit, in question, as is evident from the statement of account (at page No.81 of the file). The Opposite Parties offered possession of the plot to the complainant vide letter of intimation of possession dated 16.10.2014 i.e. after the delay of 11 months, which amounted to deficiency in service and indulgence into unfair trade practice.

11.          The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, if so, at what rate, for non-delivery of physical possession of the unit in question within the maximum stipulated period of 18 months on account of force majeure conditions. As stated above, in the instant case, the Opposite Parties have not delivered possession within the period of 12 months as stipulated in the Agreement and thereafter within extended period of 18 months, from execution of the Agreement on 27.04.2012 i.e. by 26.10.2013. No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainant for delay, was incorporated but it does not mean that the intention was that even in the event of inordinate delay, delivering the possession, the complainant would be entitled to meagre compensation/penalty of Rs.50/- per sq. ft. per month, which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view, Clause 8 was meant for computing penalty/compensation, in case of a delay in delivery of possession.  If the argument of the Opposite Parties is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act. Recently in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the case, referred to above, grant of compensation in the form of simple interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, would meet the ends of justice.

12.          The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment and injury caused to him, by not delivering the physical possession of plot, to him, within the stipulated period, as mentioned in the Agreement. As per the Agreement, the Opposite Parties were bound to deliver possession of the plot to the complainant within a maximum period of 18 months from the date of execution of the Agreement i.e. latest by 26.10.2013. It is pertinent to note that the Opposite Parties offered possession of the plot to the complainant vide letter dated 16.10.2014 (Annexure C-4) i.e. after about delay of 11 months of promised date, as per the Agreement. Even the Opposite Parties used the money of the complainant for about 11 months more. The complainant  underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Parties. Compensation,  to the tune of Rs.2 lacs, on account of mental agony and physical harassment, caused to the complainant, due to the acts of omission and commission of the Opposite Parties, if granted, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.2 lacs, as indicated above.

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

14.         For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally held liable and directed as under:-

1. To hand over physical possession of  the plot, complete in all respects, to the complainant, within a period of three months, from the date of receipt of a certified copy of this order, on payment of the amount, legally due against him, which works out to Rs.5,17,631/- as brought out in para No.8 above.
2. To execute and get registered the sale deed, in respect of the plot, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of registration charges and stamp duty, by the complainant.
3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainant, from 26.10.2013 (stipulated time, as per the Agreement), till 30.10.2016, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., from the date of default, till realization.
4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainant  w.e.f. 01.11.2016, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @15 % p.a., instead of 12% p.a.,  from the date of default, till payment is made.
5. To pay compensation, in the sum of Rs.2,00,000/- on account of mental agony and physical harassment, caused to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.
6. To pay cost of litigation, to the tune of Rs.50,000/- to the complainant, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

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

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

Pronounced.

October   13, 2016.                                        Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

Sd/-

 [DEV RAJ]

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

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