Chandigarh

StateCommission

CC/180/2018

Deepak Mehra - Complainant(s)

Versus

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

In Person

08 Oct 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	180 of 2018
Date of Institution	:	24.04.2018
Date of Decision	:	08.10.2018

Mr. Deepak Mehra s/o Mr.S.L.Mehra, resident of Flat No.D-4, Ground Floor, Uppal Marble Arch, Manimajra, Chandigarh, U.T.

Ms.Sonal Mehra, d/o Mr.Deepak Mehra, resident of Flat No.D-4, Ground Floor, Uppal Marble Arch, Manimajra, Chandigarh, U.T.

Ms. Minal Mehra d/o Mr.Deepak Mehra, resident of Flat No.D-4, Ground Floor, Uppal Marble Arch, Manimajra, Chandigarh, U.T.

……Complainants

V e r s u s

M/s EMAAR MGF Land Limited, SCO No.120-122, Sector 17-C, Chandigarh - 160017, through its Managing Director.
M/s EMAAR MGF Land Limited, ECE House, #28, Kasturba Gandhi Marg, New Delhi, through its Director.
Housing Development Finance Corporation Limited (HDFC) Bank, SCO No.153-155, Sector 8-C, Madhya Marg, Chandigarh, through its Branch Manager.

... Opposite Parties

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT

MRS. PADMA PANDEY, MEMBER

Argued by:

Sh. Deepak Mehra, complainant No.1 in person and on behalf of

complainants No.2 and 3.

Sh. Sanjeev Sharma, Advocate for Opposite Parties No.1 and 2.

Ms. Anjali Moudgil, Advocate for Opposite Party No.3.

PER PADMA PANDEY, MEMBER

The facts, in brief, are that the complainants applied for allotment of residential unit by paying the booking amount of Rs.7 lakhs in the project of Opposite Parties No.1 and 2, namely, “The Views” at Sector 105, Mohali. The complainants were allotted unit No.L3-F03-303 having area of 1750 Sq. ft. Thereafter, Apartment Buyer’s Agreement was executed between the parties at Chandigarh on 29.02.2008 (Annexure C-1). The total cost of the flat was Rs.55,98,292.5, out of which, the complainants paid the total amount of Rs.48,49,719/-. After receipt of the huge amount, Opposite Parties No.1 & 2 neither delivered possession of the unit nor refunded the amount to the complainants, despite receipt of email dated 28.07.2016 and legal notice dated 20.04.2017. The aforesaid act of Opposite Parties No.1 & 2 amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, 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. Opposite Parties No.1 & 2, 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 further stated that the complainants did not fall within the definition of “Consumer” as prescribed under Section 2(d) of the Consumer Protection Act, 1986, as they are residing at Chandigarh and are having their own house, as such, they purchased the flat solely for speculation purposes. It was further stated that this Commission has no territorial jurisdiction to try this complaint, as the property is located at Punjab, registered office of the replying Opposite Parties is at New Delhi and no cause of action accrued at Chandigarh. It was further stated that this Commission has no pecuniary jurisdiction to entertain the complaint, as value of unit and compensation including interest exceeds Rs.1 crore. It was further stated that as per Clause 21 of the Agreement, subject to force majeure conditions, the replying Opposite Parties “endeavor” to hand over possession of the unit within 36 months from the date of allotment and further grace period of 90 days was also granted after expiry of 3 months for applying and obtaining the occupation certificate in respect of Group Housing Project. Thus, there was no definitive agreement stating possession would definitely be delivered within 36 months or extended period thereof. It is settled law that in cases of sale of immovable property and construction, time is never regarded as the essence of the contract. It was further stated that the complainants never approached the replying Opposite Parties for possession of the flat and never even enquired as to status of development etc., which implies that they have accepted the alleged delay. It was further stated that the replying Opposite Parties have already offered possession in three of the towers in the project and work is being expedited to hand over the balance towers at the earliest. It was further stated that the parties are bound by the terms and conditions of the Agreement and in case of delay, the replying Opposite Parties are liable to pay compensation @Rs.5/- per sq. feet per month and the said amount is payable at the time of intimation of possession. It was further stated that the complaint is not maintainable as the same has been filed beyond the period of limitation, as envisaged under Section 24-A of the Consumer Protection Act, 1986. It was further stated that the complainants were allotted unit No.TVM L3-F03-303 vide letter dated 20.07.2007 (Exhibit OP-3). It was admitted regarding execution of the Agreement and receipt of Rs.48,49,719/- from the complainants. It was further stated that neither there was any deficiency, in rendering service, on the part of the replying Opposite Parties, nor they indulged into unfair trade practice.

3. Opposite Party No.3 (HDFC Limited) in its written statement, has been stated that there is no allegation of deficiency in service as regards the replying Opposite Party. It was stated that the finance advanced by the HDFC Limited is concerned, the rights of the parties to the present lis are governed by the Tripartite Agreement (Annexure R-3/1) and in case of cancellation of the unit or in the contingency of termination of the Agreement, the HDFC Limited has the first charge/right to seek apportionment of its dues. It was further stated that neither there was any deficiency, in rendering service, on the part of the replying Opposite Party, nor it indulged into unfair trade practice.

4. The complainants, filed rejoinder to the written statement of Opposite Parties No.1 and 2, wherein they reiterated all the averments, contained in the complaint, and refuted those, contained in the written version of Opposite Parties No.1 and 2.

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

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

7. During the course of arguments, Counsel for Opposite Parties No.1 and 2 raised an objection that complainants No.2 and 3 have not signed the present complaint. Therefore, complainants No.2 and 3, namely, Ms.Sonal Mehra & Ms. Minal Mehra, daughters of Mr. Deepak Mehra (complainant No.1) were orally directed to file their affidavit certifying that with their consent, the complaint was filed by their father Sh.Deepak Mehra (complainant No.1) and also acknowledging that they are seeking refund of the money alongwith interest. In this regard, Sh.Deepak Mehra filed Miscellaneous Application No.497 of 2018 for placing on record affidavits of both complainants No.2 & 3. On 12.09.2018, notice of this application was accepted by Sh.Savinder Singh Gill, Advocate, proxy for Sh.Sanjeev Sharma, Advocate, Counsel for Opposite Parties No.1 and 2. However, no reply to the application was filed by him.

After going through the contents of the application, we are of the view that affidavits of both complainants No.2 and 3 are necessary for the just decision of this case.

In view of above, this application is allowed and both the affidavits are taken on record.

Office is directed to put both the aforesaid affidavits at the proper place in the main complaint.

This application stands disposed of.

8. First, we will deal with an objection, raised by Opposite Parties No.1 and 2 , that in the face of existence of provision to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint.

It may be stated here that this issue has already been dealt with, by this Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6 SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), and held that even in the face of existence of arbitration clause in an Agreement/Allotment Letter, 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. Recently, the larger Bench of the National Commission in a case titled as Aftab Singh Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants 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.

In view of above, the objection raised by Opposite Parties No.1 and 2, in this regard, being devoid of merit is rejected.

9. The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not.

According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident from the record, that Apartment Buyer’s Agreement was executed between the parties at Chandigarh on 29.02.2008 (Annexure C-1). Not only this, Tripartite Agreement was executed between the parties, in which, it has been clearly mentioned branch office of Opposite Parties No.1 and 2 as SCO No.120-122, Sector 17-C, Chandigarh. Since, as per the document, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint. The objection taken by Opposite Parties No.1 and 2, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

10. The next question, that falls for consideration, is, as to whether, the complainants fall within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. Opposite Parties No.1 and 2 in their written statement stated that complainants did not fall within the definition of “Consumer”, as they purchased the unit, in question, solely for speculation purposes. After going through the record, we are of the view that the objection taken by Opposite Parties No.1 and 2 does not carry any weight and is liable to be rejected. It is pertinent to note that the complainants have mentioned in their complaint as well as rejoinder that they are not having their own house and residing in rented accommodation. Copies of Lease Deed dated 01.05.1999 & 09.06.2017 and the eviction orders dated 28.10.2015 are also annexed as Annexure C-7 (Colly.). Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainants, was sufficient to prove that it was to be used for the purpose of residence, by the complainants. There is nothing, on the record, that the complainants are property dealers. Thus, in the absence of any cogent evidence, in support of the objection raised by Opposite Parties No.1 and 2, mere bald assertion i.e. simply saying that the complainants purchased the property for speculation purposes, as such, they did not fall within the definition of a consumer, cannot be taken into consideration. Further, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the 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, 2016 (2) CPJ 316. The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Opposite Parties No.1 and 2, in their written reply, therefore, being devoid of merit, is rejected.

11. Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection. It may be stated here that as per Section 17 (1) (a) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016. Relevant part of the said order reads thus:-

“It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum. The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer. Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction. If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint. For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum. Similarly, if for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. ”

In the present case, if total cost of the unit, in question i.e. Rs.55,98,292.5 plus compensation claimed by way of interest @8% p.a. on the amount deposited to the tune of Rs.48,49,719/-; compensation to the tune of Rs.2 lacs claimed for mental agony and physical harassment, till the date of filing this complaint, is taken into consideration, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide this complaint. The objection taken by Opposite Parties No.1 and 2 that this Commission lacks pecuniary jurisdiction, being devoid of merit, must fail and the same stands rejected.

12. The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not. It is the admitted fact that offer of possession of the unit, in question, could not be made till date and on the other hand, amount deposited was also not refunded to the complainants alongwith interest, when request for the same was made by them, vide email dated 28.07.2016 and legal notice dated 20.04.2017, as such, there is continuing cause of action, in their favour, in view of principle 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). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for Opposite Parties No.1 and 2, in this regard, being devoid of merit, must fail, and the same stands rejected.

13. Another objection raised by Counsel for Opposite Parties No.1 and 2 that since it was mentioned in the Agreement that the Company only “endeavored” to deliver possession of the unit within maximum period of 36 months from the date of allotment thereof, as such, no definite assurance was given, therefore, time was not to be considered as the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 21.1 of the Agreement that possession of the unit will be delivered by Opposite Parties No.1 and 2, within a maximum period of 36 months, from the date of allotment, subject to force majeure circumstances or reason beyond the control of Opposite Parties No.1 and 2. In the instant case, Opposite Parties No.1 and 2 did not raise any force majeure circumstances, if any, encountered by them. In the absence of any force majeure circumstances having been faced by Opposite Parties No.1 and 2 or any other valid and legal reason beyond their control, the stand taken by them, in this regard, for condonation of delay in delivery of possession of the unit, to the complainants, cannot be taken into consideration. Thus, under these circumstances, since as per Clause 21.1 of the Agreement, Opposite Parties No.1 and 2 were bound to deliver possession of the unit, within a maximum period of 36 months, from the date of allotment, as such, time was, unequivocally made the essence of contract.

At the same time, Opposite Parties No.1 and 2, also cannot evade their liability, merely by saying that since the words “shall endeavor/try/propose etc.” was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. The act of non-mentioning of exact date in the Agreement is violation of CHAPTER II Regulation of Promotion of Construction, Sale, Transfer and Management of Apartments, Plots and Properties, Condition no. 3(2) (g) of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which says that the project proponent is duty bound to specify, in writing, the date by which possession of the unit is to be handed over and it shall hand over such possession accordingly. Relevant contents of condition no.3(2) (g) of PAPRA are reproduced below:-

“(g) specify, in writing, the date by which possession of the plot or apartment is to be handed over and he shall hand over such possession accordingly”;

Furthermore, non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement/allotment letter, is an unfair trade practice on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the plots/unit(s) to the allottees/purchasers thereof. It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

In view of above, the plea of Opposite Parties No.1 and 2 in this regard also stands rejected.

14. The next question, that falls for consideration, is, as to within which period, the delivery of possession of the unit, was to be given to the complainants. As per Clause 21.1 of the Agreement, possession of the unit was to be delivered to the complainants within a maximum period of 36 months from the date of allotment. In the instant case, unit was allotted to the complainants vide provisional allotment letter dated 20.07.2007 (Exhibit OP-3) and, as such, possession was to be delivered to the complainants latest by 19.07.2010 and not more than that.

15. The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the deposited amount. It is the admitted fact that the complainants deposited the total amount of Rs.48,49,719/-, as is evident from statement of account (Annexure C-3) in respect of the unit, in question. As per the Agreement, possession was to be delivered by Opposite Parties No.1 and 2 within a maximum period of 36 months from the date of allotment, which expired on 19.07.2010 but after receipt of the huge amount from the complainants, Opposite Parties No.1 and 2 failed to deliver possession of the unit, in question, complete in all respects to the complainants within the stipulated time frame as mentioned in the Agreement or even by the time when the complaint was filed. So, the complainants are certainly entitled to get refund of amount of Rs.48,49,719/- deposited by them. In view of above facts of the case, Opposite Parties No.1 and 2 are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them.

16. It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.48,49,719/-, was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by Opposite Parties No.1 and 2, for their own benefit. Opposite Parties No.1 and 2 were charging rate of interest @15% p.a. compounded, as per Clause 20.1 of the Agreement, for the period of delay in making payment of installments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. In the facts and circumstances of the case, the complainants are held entitled to get refund of the amount deposited by them, to the tune of Rs.48,49,719/- alongwith simple interest @8% p.a. (as prayed for), from the respective dates of deposits till realization.

17. As far as the plea taken by Counsel for Opposite Parties No.1 and 2 at the time of arguments, regarding forfeiture clause is concerned, it may be stated here that the same stands rejected, because it is not their (Opposite Parties No.1 and 2) case, that they were ready with possession of the unit, to be delivered to the complainants, complete in all respects, as per terms and conditions contained in the Agreement, by the stipulated date but it was they (complainants) who wanted to rescind the contract, on account of some unavoidable circumstances/ financial constraints or for any personal reason, and are seeking refund of the amount deposited. Since it was Opposite Parties No.1 and 2, who had defaulted in honouring the terms and conditions of the Agreement, hence, Opposite Parties No.1 and 2 cannot forfeit any amount of money paid by the complainants. In this view of the matter, the plea taken by Opposite Parties No.1 and 2, in this regard, have no legs to stand and are accordingly rejected.

18. Since, it has already been held that the complainants are entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by Opposite Parties No.1 and 2 to the effect that they are ready to pay penalty amount for the period of delay, in delivery of possession cannot be considered, at this stage. If Opposite Parties No.1 and 2 are allowed to invoke this Clause of the Agreement, in the instant case, regarding payment of penalty, that would amount to enriching them, at the cost of the complainants. The defence taken is accordingly rejected.

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

20. For the reasons recorded above, the complaint is allowed, with costs. Opposite Parties No.1 and 2 are jointly and severally directed, as under:-