Chandigarh

StateCommission

CC/147/2015

Dharam Pal Gupta - Complainant(s)

Versus

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

Sandeep Bhardwaj, Adv.

13 Oct 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

                                                      

Complaint case No.	:	147 of 2015
Date of Institution	:	22.07.2015
Date of Decision	:	13.10.2015

 

Sh.Dharam Pal Gupta son of Sh.Gopi Ram.

Correspondence Address:- House No.3304, Sector 46-C, Chandigarh.

……Complainant

V e r s u s

1. M/s Emaar MGF Land Ltd., having its ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001, through its Managing Director/Director/Principal Officer/Officer-in-Charge.
2. M/s Emaar MGF Land Limited, Corporate Office- SCO No.120-122, 1st Floor, Sector 17-C, Chandigarh-160017, through its Managing Director/Director/ Principal Officer/Officer-in-Charge.

….Opposite Parties No.1 and 2

3. HDFC Limited, SCO No.153-155, Sector 8-C, Madhya Marg, Chandigarh, through its General Manager/ Authorized Signatory

 

.....Proforma Opposite Party No.3

 

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:  JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                 MR. DEV RAJ, MEMBER

                 MRS. PADMA PANDEY, MEMBER

               

Argued by:  Sh.Sandeep Bhardwaj, Advocate for the complainant.

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

              Ms.Rupali Shekhar Verma, Advocate for Opposite Party No.3

 

JUSTICE JASBIR SINGH (RETD.), PRESIDENT   

               

                The complainant is a poor consumer, who was allured by number of assurances given by Opposite Parties No.1 and 2, through various newspapers and media, with regard to launching of their integrated residential township, named as Mohali Hills, Mohali, in Sectors 104, 105, 108 and 109, Mohali, Punjab. Very rosy picture of the project was shown, which attracted the complainant to move an application on 28.07.2010, to Opposite Parties No.1 and 2, for allotment of a plot, measuring 250 square yards, in the above said project. The amount of Rs.5 lacs, as booking amount was paid, vide cheque No.940266 dated 20.07.2010, alongwith the said application. It is stated that as it was not possible for the complainant to pay the entire amount, he wanted to raise loan, as a result whereof, he specifically asked a representative of Opposite Parties No.1 and 2, as to how loan can be raised. He was told that the project, in question, is empanelled with various banks, including HDFC Limited/Proforma Opposite Party No.3, and, as such, he could easily get loan therefrom, if he so desires. Further assurance was given that development is in full swing and, may be, after completing the same, possession of plot will be delivered to the complainant, within maximum period of 12 months.

2.        Vide Allotment Letter dated 08.09.2010 (Annexure C-1), the complainant was allotted plot No.104-EP-170-250, measuring 250 square yards, Sector 104, in Mohali Plots at Mohali Hills, Mohali, Punjab (in short the project). In the allotment letter dated 08.09.2010, it was stated that allotment was provisional. The basic price of the plot was fixed at Rs.42,50,000/-. Alongwith the above letter, Schedule of Payment Annexure C-2 of the even date was annexed, mandating the complainant to make payment in the following manner:-

	Linked stages		Due Date
	Within 30 days	20% of the Basic
	Within 3 months from the date of booking	15% of Basic, 50% of PLC
	Within 6 months from the date of booking	15% of Basic, 50% of PLC
	Within 9 months from the date of booking	15% of Basic, 50% of PLC
	Within 12 months from the date of booking	15% of Basic, 50% of PLC
	Within 15 months from the date of booking	10% of Basic
	Within 18 months from the date of booking	5% of  Basic
	Intimation of possession	5% of the Basic

 

3.        It is necessary to mention here that other than the basic price, the complainant was also required to pay Rs.5,31,250/- as Preferential Location Charges (PLC) and Rs.4,52,750/- towards External Development Charges (EDC). In this manner, the total amount of Rs.52,34,000/- was required to be paid by the complainant, towards price of the said plot.  
4.        In a very arbitrary manner, in the Provisional Allotment Letter dated 08.09.2010 and schedule of payment aforesaid, date of handing over possession of the plot, after developing the site, was not given. Plot Buyer’s Agreement was not offered for execution, which was expected to be so, in the near future. Instead, the complainant received letters dated 14.10.2010 (Annexure C-3) and 03.11.2010 (Annexure C-4) asking him to make payment of Rs.3,50,000/-. In those letters, it was specifically mentioned that “delay in payment will attract  Delayed Interest charges as per agreement”. (By that time, no Agreement was in existence). Under above threat, an amount of Rs.3,50,000/- vide cheque No.940269 dated 18.11.2010 was paid. The complainant again received a letter dated 24.12.2010 (Annexure C-5) asking him to pay an amount of Rs.9,03,125/-, with a similar threat as above.
5.        Part of the sale consideration was again demanded vide letters dated 09.05.2011 (Annexure C-6) and 05.08.2011 (Annexure C-7), with a threat of imposition of penal interest, as per Agreement, in case of default. The complainant asked Opposite Parties No.1 and 2 to get the Buyer’s Agreement signed. However, it was not done. In the month of August 2011, the complainant visited the  project and found that no development was in site.
6.        It is case of the complainant that as he wanted to raise loan, to make payment towards price of the plot, as per disclosure made by Opposite Parties No.1 and 2, at the time of allotment that the project is empanelled with Proforma Opposite Party No.3, for obtaining loan, he approached it for the said purpose. However, loan was not sanctioned for want of execution of Buyer’s Agreement. Compelled under the circumstances, the complainant paid an amount Rs.10 lacs, vide cheque No.939757 dated 30.09.2011.
7.        Despite request, when the Buyer’s Agreement was not executed; there was no development at the site; and want of empanelment with Proforma Opposite Party No.3, the complainant failed to get loan, he sent a detailed email dated 09.11.2011 (Annexure C-8), to Opposite Parties No.1 and 2. The relevant portion of the said email reads thus:-

“D.P. GUPTA, owned a plot in one of your project at Mohali Location last year by paying the initial Payment to one of your dealer at sector 22 who assured me:-

1. That in the next 3 months, Emaar MGF   will take all the approvals required.
2. That maximum by end of 2010, Loans will be available through banks for the owned property as it is very difficult to arrange all the money in one go for middle class family.

         We are getting reminders from your side for the due payment and the INTEREST on the due payment levied against the owned property on the regular basis.

We checked with GMADA last month and they told us that your project is still not approved and will take another month or so.”

“As we all know company failed to get all the approvals on time or get the plan passed from the Govt. which actually harassed customer like us by way of charging interest on the due installment which is not liable to pay be me.

So, it is requested to waive off the interest amount as promised, on the due installments till the date you will get the approvals from GMADA.”

8.        It was specifically stated that without execution of the Buyer’s Agreement and also for want of development at the site, interest cannot be imposed. The complainant received an email dated 11.11.2011 (Annexure C-9) from Opposite Parties No.1 and 2, assuring him, that after looking into the details of his case, he will get reply within a week. When nothing was done, the complainant sent reminder email dated 16.11.2011 (Annexure C-10), to which he received reply, vide email dated 17.11.2011 (Annexure C-11). Relevant portion of email Annexure C-11 reads thus:-

“We would like to inform you that the company has all the necessary approvals to develop the project and work is being expedited to complete all the amenities within the defined timelines.

We have already initiated the process of sending the buyer’s agreement and we will be sending the same for your unit by tomorrow. We would request you to sign both copies and return them for final execution at our end.

With regard to the interest, we would like to inform you that the same shall be looked into at the time of possession. We again request you to remit the outstanding and enable us to regularize your account with regard to the Principal amount due.”

9.        It was intimated that necessary approvals to develop the project is being expedited and further the complainant will receive Buyer's Agreement for his signatures, within a week and after signing it, the same be returned to Opposite Parties No.1 and 2. Regarding imposition of penal interest, it was said that the question will be looked into at the time of offer of possession.
10.        Plot Buyer's Agreement was sent to the complainant vide letter dated 17.11.2011 (Annexure C-12). The complainant again received a reminder vide letter dated 19.12.2011 (Annexure C-13), cautioning him to sign the Buyer’s Agreement and return the same to Opposite Parties No.1 and 2.  In the meantime, the complainant sent email dated 24.11.2011 (Annexure C-14) to Opposite Parties No.1 and 2 with a request not to charge penal interest, on delayed payment. In response thereto, it was said that question of penal interest will be taken up, at the time of handing over possession of the plot, in question. The complainant was asked to contact HDFC Limited/Proforma Opposite Party No.3, for raising loan. Vide final notice dated 24.11.2011 (Annexure C-16), he was asked to make payment of Rs.25,34,000/- within 30 days, failing which the allotment of his plot shall be cancelled. As per statement of account (Annexure C-17), the complainant was asked to pay an amount of Rs.4,09,115/- towards delayed payment interest.
11.        The complainant vide email dated 13.12.2011 (Annexure C-18) informed Opposite Parties No.1 and 2 that he had already paid substantial amount, but when he approached HDFC Limited/Proforma OP No.3  for obtaining loan, it (Opposite Party No.3), vide  email dated 12/9/11 (Annexure C-20) informed him (complainant) that the project is not yet empanelled to raise loan. Relevant contents of the email Annexure C-20  reads thus:-

“Dear Mr. Gupta,

As discussed with our marketing team, The project is not yet empanelled with us for funding. As if now we can process your loan application inn property yet to be decided form. Once the builder gets its project empanelled as per HDFC terms and conditions we will start disbursement of the loan”.

12.        By writing an email dated 23.12.2011 (Annexure C-21), it was stated by the complainant that he has approached the Bank to raise loan, however, on account of non-empanelment of the project with the Bank, loan was not disbursed. Without attending to the grievance raised by the complainant, vide email dated 23.12.2011 (Annexure C-22), he was asked to sign Buyer’s Agreement and return to Opposite Parties No.1 and 2. Under compulsion, the Buyer’s Agreement Annexure C-23 was signed on 05.01.2012 and it was sent to Opposite Parties No.1 and 2 thereafter.
13.        It is stated that the terms and conditions of the Agreement were one sided, favouring Opposite Parties No.1 and 2. However, on account of fear of cancellation of the plot and forfeiture of substantial amount it was signed. In the Buyer’s Agreement, for the first time, a commitment was made as per Clause (8) that possession of the plot, in question, will be handed over within 12 months, from the date of execution of the same, subject to force majeure conditions. It was further stated that, in case, possession is not handed over by the stipulated date/period, Opposite Parties No.1 and 2 will pay penalty for the same. Vide letter dated 23.01.2012 (Annexure C-24), the complainant was asked to pay an amount of Rs.24,59,000/- within 30 days, failing which the allotment was to be cancelled and the remaining amount shall be refunded after forfeiture of the booking amount. Ultimately, the plot was cancelled vide letter dated 24.02.2012 (Annexure C-25), for want of payment of installments.
14.        Thereafter, Tripartite Loan Agreement dated 29.02.2012 (Annexure C-26) was executed between the complainant, Opposite Parties No.1 and 2 and HDFC/Proforma Opposite Party No.3.  In terms of the above Tripartite Agreement, an amount of Rs.21,50,000/- was paid to Opposite Parties No.1 and 2. They accepted the same without raising any murmur. By that time, the complainant had already paid Rs.45 lacs, i.e. about 90% of the sale consideration. Site visit indicated that there was no development at the project. The complainant sent emails dated 16.06.2012 (Annexure C-27) and 13.07.2012 (Annexure C-28) to Opposite Parties No.1 and 2, stating the above fact. In response to above emails, instead of giving positive assurance of delivery of possession, Opposite Parties No.1 and 2 vide email dated 13.08.2012 (Annexure C-29), replied in the following manner:-

“This is with reference to your email dated 7^th August 2012.

As communicated earlier, we would again like to inform you that we are working on the completion of the amenities in the concerned area and expediting the same to deliver the unit allotted in your favour at the earliest.

Further, in case of any delays in giving possession beyond the time frame mentioned in Buyer's Agreement, the Company stands by its commitment to pay a penalty for the entire period of such delay, as per the clauses mentioned in the Agreement which shall be adjusted at the time of possession.”

15.        Vide emails dated  29.01.2013 to 23.05.2014 Annexure C-30 (colly.) the complainant requested Opposite Parties No.1 and  2 to give status of development and delivery of possession of the plot but they kept on giving vague replies. The complainant even requested that if the plot, in question, is not ready for possession, he be relocated to some other project, which is already developed, or process his case for refund of money with interest.  In response, he received no positive commitment.
16.         Suddenly without developing the site, Opposite Parties No.1 and  2  with a view to save their skin, wrote letter dated 15.10.2014 (Annexure C-31), intimating the complainant that the process of handing over possession of the plot shall commence within 60 days, from that letter. He was advised to deposit an amount of Rs.21,32,651/-, which included club membership charges, delayed payment charges, revised EDC, maintenance security etc. After receipt of above letter, the complainant, visited the site and noticed that site was not developed. He sent emails dated 27.12.2014 to 05.02.2015 Annexure C-32 (colly.), however, failed to get any response. Detailed email sent on 05.02.2015 Annexure C-33 failed to elicit any result. Compelled under circumstances, he asked for refund of the amount paid. However prayer of the complainant was rejected. Left with no option, the instant complaint was filed by the complainant, against Opposite Parties No.1 and 2, claiming refund of amount paid and compensation etc.
17.        Upon notice, joint reply was filed by Opposite Parties No.1 and 2, wherein the assertions made by the complainant was controverted. It was stated that possession of the plot was offered to the complainant on 15.10.2014, but he never opted to take the same and on the other hand, in a malicious manner, this complaint was filed by him. It was stated that development at the site was complete and the allegations qua non-development of the area, were false and baseless. It was also stated that claim made by the complainant for refund of the amount deposited by him, amounts to rescinding of contract and in that case, Opposite Parties No.1 and 2 are entitled to forfeit certain amount, as per terms and conditions of the Buyer's Agreement. It was further averred that as the complainant already owned a property in Chandigarh, address whereof has been mentioned in head-note of the complaint, as such, he did not fall within the definition of ‘consumer’, as given under Section 2 (1) (d) of the Consumer Protection Act, 1986 (in short the 1986 Act), meaning thereby that he had purchased the plot for resale, as and when there is escalation in prices of the real estate, in future, to earn profit. It was stated that delivery of possession of the plot, in question, within the stipulated period was not essence of the contract, in the face of penalty Clause for delayed possession. It was also stated that on account of Arbitration Clause contained in the Buyer's Agreement, this Commission has no Jurisdiction to entertain and decide the complaint, and let the matter be placed before an Arbitrator for adjudication. Pecuniary and territorial Jurisdiction of this Commission was also disputed. Allegation of deficiency in service was refuted.
18.       Proforma Opposite Party No.3, in its reply stated that no cause of action, whatsoever, arose in favour of the complainant against it. It was averred that in the absence of requisite documents, Opposite Party No.3 was not bound to consider loan application of the complainant. Execution of the Tripartite Agreement amongst the parties was admitted. It was stated that, as per the Tripartite Agreement, in case of cancellation of the plot, in question, it was entitled to refund of the entire loan amount disbursed to the complainant. Out of the sanctioned loan amount of Rs.22 lacs, the complainant is required to repay an amount of Rs.16,16,921/-, as on 10.08.2015. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.3 nor it indulged into unfair trade practice as alleged. The remaining averments were denied, being wrong.
19.       In the rejoinder filed by the complainant, he reiterated all the averments, contained in the complaint, and repudiated those, contained in the written reply of Opposite Parties No.1 and 2. It was also stated that some facts in the reply have falsely been mentioned by Opposite Parties No.1 and 2.
20.       On 06.10.2015, an application was also filed by Opposite Parties No.1 and 2, before this Commission, for placing on record, additional documents, to which reply was filed.
21.       After taking note of the said documents, the application was allowed and the documents were taken on record.
22.          The parties led evidence, in support of their case by filing their affidavits and placing on record numerous documents.
23.       We have heard Counsel for the parties, and, have gone through the evidence and record of the case, very minutely. 
24.       At the time of arguments, Counsel for the complainant reiterated the facts given in the complaint.  
25.       It is an allegation against Opposite Parties No.1 and 2 to adopt unfair trade practice. To say so, reference has been made to the facts, as stated in the preceding part of this order. It was further argued that the Buyer’s Agreement was one sided. It was got executed at a belated stage. In the meantime, Opposite Parties No.1 and 2, despite request made, not to impose penal interest, imposed the same.
26.       Counsel for Opposite Parties No.1 and 2 reiterated the arguments, including that this Commission in the face of existence of an Arbitration Clause in the Buyer’s Agreement executed between the parties; has no Jurisdiction to hear the complaint; possession has already been offered to the complainant; and that the complainant is not a consumer being speculator etc., it was prayed that the complaint be dismissed.  
27.       First of all, we will have to consider, whether Opposite Party No.3 was guilty of unfair trade practice or not. It is not in dispute, that the plot, in question, was allotted to the complainant, vide provisional allotment letter dated 08.09.2010, for the total sale consideration of Rs.52,34,000/-. Schedule of payment was also given. Entire amount was to be paid by the complainant, by 01.03.2012, alongwith interest. He received letter from Opposite Parties No.1 and 2, to deposit the amount, failing which, he was to be burdened with penal interest. It is specifically stated by the complainant that for want of empanelment of the project of Opposite Parties No.1 and 2 with Proforma Opposite Party No.3, he has failed to raise loan, which has delayed the payment. He requested that, for want of execution of the Buyer’s Agreement, such an interest cannot be imposed. He was assured that question of imposition of penal interest will be taken up when possession of the plot, in question, will be offered. He continued to knock at the doors of Opposite Parties No.1 and 2, however, nothing was done. It is an admitted fact that at the time when allotment was made, it was represented, that to raise loan, the project, in question, is empanelled with Proforma Opposite Party No.3. However it was not true. It is so depicted in various documents, which are on record. Under threat, plot was cancelled on 24.02.2012 with a stipulation that substantial amount deposited would be forfeited, whereafter, he was only entitled to refund of an amount of Rs.11,70,053/-, against paid amount of Rs.23,50,000/-. Buyer’s Agreement was sent for execution, vide letter dated 17.11.2011 (Annexure C-12). The complainant objected to the same, stating that it favours Opposite Parties No.1 and 2. However, under threat of cancellation, as stated above, the complainant signed the Buyer’s Agreement on 05.01.2012. Thereafter, loan was raised. Entire amount was paid and he continued to wait for delivery of possession of the plot. It was even not offered within the stipulated time.
28.       The very action of Opposite Parties No.1 and 2, allotting a plot without giving any firm date of delivery of possession, amounts to unfair trade practice and deficiency, in rendering service. Similar view was taken by the National Consumer Disputes Redressal Commission, New Delhi (in short the National Commission), in First Appeal No.342 of 2014, Emaar MGF Land Limited and another Vs. Karnail Singh and another, decided on 25.07.2014. The facts of the above case are similar to the one in hand. By noting that at the time of allotment and accepting money, no firm date of possession was given, the National Commission observed as under:-

“23. This act of the appellants in asking the respondents to pay a sum of Rs.5 lakh as booking amount and Rs.5.78 lakh as part payment towards the provisional allotment in the year 2011, without giving them any firm date of handing over of the possession of the plot is a “Deceptive Practice” which falls within the meaning of “unfair trade practice” as defined under the Consumer Protection Act, 1986. The appellants should have given firm date of handing over the possession at the time of taking the booking amount itself. By not indicating the true picture with regard to their project to the respondents, the appellants induced them to part with their hard earned money, which also amounts to unfair trade practice.” 

29.       Keeping in view the above, the mere act of signing the Buyer’s Agreement will not disentitle the complainant from seeking refund of the amount, paid by him. Before execution of the Buyer’s Agreement, through an email, the complainant had already demanded refund of amount paid, stating that due to fault on the part of Opposite Parties No.1 and 2, he failed to raise loan. The project was not empanelled with Proforma Opposite Party No.3, as projected by Opposite Parties No.1 and 2, when allotment of  the plot was made to him.
30.       Buyer’s Agreement appeared to have been signed under duress. To say so, we are referring to Clauses 10 and 36 of the Buyer’s Agreement, which read thus:-

“10. Should the Allottee(s)  commits a default leading to termination of this Agreement, including but not limited to send the duly signed copy of this Agreement within thirty (30) days of receipt of the same, the Company will be released and discharged of all liabilities and obligations under the Application and/or this Buyer’s Agreement and the Company at any stage shall have the right to resell the Plot to any third party or deal with the same in any other manner as the Company may in its sole discretion deem fit, as if the Application and/or this Buyer’s Agreement had never been executed. On happening of such event, the Company will refund to the Allottee(s) the amount paid by the Allottee(s) without any interest after deducting the Earnest Money along-with interest, if any, paid. The Allottee(s) agrees that in case of such cancellation all refund shall be made only after realization of such refundable amount on further sale/resale of the Plot to any other party”

“36. If the Allottee(s) fails to execute and deliver to the Company this Agreement within a period of 30 (thirty) days from the date of its dispatch by the Company, then the application of the Allottee(s) shall be treated as cancelled and the money paid by the Allottee(s) to the Company towards the Plot shall stand forfeited. If the counterpart of this Agreement is not executed by the Company and dispatched to the Allottee(s) within 30 (Thirty) days from the date of its receipt from the Allottee(s), then this Agreement shall be deemed to have been rejected and cancelled and all the sums deposited by the Allottee(s) in connection therewith shall be returned to the Allottee(s) without any interest or compensation whatsoever. Upon such refund being made, neither Party shall have any further rights, obligations or liabilities hereunder against the other Party”.

31.       In the above-extracted Clauses, it is clearly mentioned that in case, the Buyer’s Agreement is not signed, the allotment of plot will be cancelled and earnest money will be forfeited. The remaining amount will be refunded without any interest. The complainant had already paid huge amount. He is a common man. Faced with fear of forfeiture and cancellation of plot, he might have signed the Buyer’s Agreement. Merely doing so, will not distract him, seeking refund of the amount.
32.       Furthermore, facts of the case clearly show that Opposite Parties No.1 and 2 were guilty of providing deficient services to the complainant. Plot was allotted in the month of September 2010. Buyer’s Agreement was sent for signing after about one year and two months of allotment of plot, it was signed on 05.01.2012. Without there being any stipulation in the allotment letter, penal interest was imposed by Opposite Parties No.1 and 2. As per Schedule of Payment annexed with the allotment letter, last payment was to be made by 01.03.2012. Alongwith the Buyer’s Agreement, as per Annexure C-3, the same Schedule of Payment was fixed (as reproduced in the preceding paragraph of this order) the same time schedule annexed with allotment letter was retained. In a very arbitrary manner, Clause 3 was incorporated in the Buyer’s Agreement, to say that, in case of default of payment, penal interest @24% P.A. compounded quarterly shall be imposed.
33.       It was a case of highhandedness. Such a stipulation was not there in the allotment letter. A buyer may commit a mistake by not depositing the amount, under an impression that there are no penal consequences. In the present case, it may have happened in that manner. Opposite Parties No.1 and 2 are, thus, guilty of unfair trade practice, by not offering the execution of Buyer’s Agreement, within a reasonable time, say within a month or two after allotment of the plot. Above action was deceptive and needs to be deprecated.
34.       Opposite Parties No.1 and 2 have also failed to discharge their part of the contract in not offering possession of the plot, in question, within the stipulated time. As per Buyer’s Agreement dated 05.01.2012, possession was to be delivered within 12 months, from the date of execution thereof. However, as per facts on record, possession was offered only on 15.10.2014. Whether mere offer of possession of plot, will disentitle the complainant, to claim refund of the amount deposited by him or not. In a similar case, titled as Guninder Jeet Singh Salh Vs M/s Emaar MGF Land Limited and another, Consumer Complaint No. 113 of 2015, was decided by this Commission on 23.09.2015, noting ratio of the judgment of the National Commission, in the case of Emaar MGF Land Limited and another Vs. Dilshad Gill, III (2015) CPJ 329 (NC), it was said that the consumer can claim refund.

The National Commission was dealing with a similar situation, in the above case. In that case also, possession was not offered within the stipulated date. The consumer complaint was filed by the complainant, before this Commission, claiming refund of the amount paid by him. This Commission took it as a case of rescinding of contract and allowed the Opposite Parties to forfeit 10% of the deposited amount. The above named builder went in appeal, which was dismissed, by the National Commission, holding as under:-

 “It is apparent from the above clause, that possession of the apartment was to be handed over within a period of 36 months from the date of allotment,  with  grace period of 3 months. Admittedly, no possession was offered to the original allottee or to the respondent, till 26.11.2011 when she stepped into the shoes of original allottee. Thus, on the date of accepting the present respondent as allottee on 26.11.2011, the apartment in question was not complete.

23.    As appellants did not offer possession within the period prescribed under Clause 21 of the ‘Apartment Buyer Agreement’, the deficiency on the part of appellants,  started right from that very moment. It is an admitted fact, that while offering the possession even in the year 2013, appellants sent letter dated 13.5.2013 and  respondent was asked to deposit sum of Rs.3,05,969.70, within 30 days. When payment of the instalments is construction linked,  then we fail to understand as to how  before completing the construction appellants demanded the aforesaid amount.  This act of appellants goes on to show, that even on 13.5.2013 construction of apartment was not complete. It was only vide letter dated 16.8.2013, appellants offered possession of the apartment,  subject to certain payments.

24.    Thus, appellants themselves have violated the material conditions with regard to handing over of the possession, now it does not lie in their mouth to demand further payment from  the respondent. Even assuming for arguments sake, that payment as demanded vide letter dated 16.8.2013 was due, but the respondent was fully justified in not making the payment, when appellants failed to complete the construction and handover the possession, within the agreed period.  Appellants could not force the respondent, after having accepting money from the original allottee in the year 2006 and  part payment from present respondent in the year 2011, to accept possession of the apartment in the year 2013,  which was against the terms of the Agreement.  The above facts clearly goes on to show, that appellants have been enjoying the substantial amount of money received by them in the year 2006, till 2013.  Therefore, this plea of appellants, that they have done their part of the duty and it is the respondent who is defaulter, does not hold any water.

25.    The deficiency on the part of appellants is writ large in this case. We may note, that under such circumstances there was no occasion for the State Commission to have deducted 10% of the deposited amount as respondent was not at fault at all. On the other hand, appellants were deficient when they themselves have violated the terms and conditions of ‘Apartment Buyer Agreement’, The case law relied by ld. counsel for appellants are not applicable at all to the facts of the present case.”

35.       It was clearly stated by the National Commission, in Emaar MGF Land Limited and another's case (supra), that when the promoter has violated material condition, in not handing over possession of the unit, in time, it is not obligatory for a purchaser to accept possession after that date.  In the above case, it was laid down as a matter of fact that non-acceptance of possession after the agreed date, would not amount to rescinding of contract.
36.       In the present case also, Opposite Parties No.1 and 2 committed breach of their obligation, in not offering possession of the plot, in question, within 12 months, whereof 15.01.2012 (Buyer's Agreement was signed on this date). As a matter of fact, possession of the plot was offered only on 15.10.2014. It is also on record that Buyer's Agreement was offered for signing, after about one year and two months of allotment of the plot. In the allotment letter, there was no stipulation to impose penal interest on delayed payment towards price of the plot, however, penal interest was imposed without any justification. When the Buyer's Agreement was signed, the schedule of payment annexed with the allotment letter was virtually over. Above facts clearly goes to show that Opposite Parties No.1 and 2 were deficient, in rendering service, to the complainant.  
37.       An attempt was made to defeat claim raised by the complainant, by stating that he did not fall within the definition of a ‘consumer’ as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986 (in short the 1986 Act). It is stated that as the complainant already owned a property in Chandigarh, address whereof has been mentioned in the head-note of this complaint, meaning thereby that he has purchased the plot for resale, as and when there is escalation in prices of the real estate, in future, to earn huge profit.

We are of the considered opinion that the plea taken by Opposite Parties No.1 and 2 that the complainant is a speculator, is devoid of merit. It may be stated here that the complainant, in paragraph No.1 of the complaint, in clear-cut terms stated that he intended to purchase the said plot, to construct a house thereon and reside therein, in order to have shelter for him and his family. On the other hand, no material data has been placed, on record, by Opposite Parties No.1 and 2, to prove that the house, in question, address whereof, has been mentioned in head-note of the complaint, is owned by the complainant. Not only this, no cogent and convincing evidence has been placed, on record, to prove that in the past, before booking the plot, in question, the complainant was indulged in sale and purchase of the property, on regular basis, to earn huge profits. For proving so, the party alleging the same, is required to produce some evidence, in support thereto. Recently, 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. The principle of law, laid down, in Kavita Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the plot, 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 ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by Opposite Parties No.1 and 2, being devoid of merit, stands rejected.

38.       It was next vehemently argued by Counsel for Opposite Parties No.1 and 2 that the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer’s Agreement. To say so, reference was made to Clause 42 of the Buyer’s Agreement, which reads thus:-

“42. In the event of any dispute arising out of or touching upon or in relation to the terms of this Agreement or its termination, including the interpretation and validity thereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussion, failing which the same shall be settled through arbitration of an Arbitrator to be appointed (by?) the Company. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996, or any statutory amendments, modifications or re-enactment thereof for the time being in force and shall be held at New Delhi. The Courts at Mohali alone shall have the territorial jurisdictions in all matters arising out of/touching and/or concerning this Agreement”

39.       It is stated that in case of dispute, an attempt will be made to settle the same, in an amicable manner, failing which, the same shall be referred to an Arbitrator in terms of Arbitration and Conciliation Act, 1996 (in short the 1996 Act). Heavy reliance has been placed on judgment of Calcutta High Court titled as Sudarshan Vyapar Pvt. Ltd. and another's case (supra). Further reliance was placed on a judgment rendered by the State Consumer Disputes Redressal Commission, Punjab, at Chandigarh, titled as Raj Kumar Singal Vs. M/s Puma Realtors Private Limited and another, Miscellaneous Application Nos.1226 and 1227 of 2014, in Consumer Complaint No.60 of 2014 and also upon a case titled as M/s S.B.P. and Co. Vs. M/s Patel Engineering Limited and another, AIR 2006 SC 450.
40.       On the other hand, it is stated by Counsel for the complainant that in terms of Section 3 of the 1986 Act, above plea supported by the said judgments, needs to be rejected.

In the case of M/s S.B.P. and Co.'s case (supra), the Hon'ble Supreme Court dealt with altogether a different issue i.e. what is the nature of function of the Chief Justice or his designate, under Section 11 of the 1996 Act. Whether it is purely an administrative function or the Chief Justice or his designate, has the power to adjudicate upon the issues like existence of Arbitration clause in the Agreement/its validity. None of the provisions of 1986 Act were under consideration. The Hon'ble Supreme Court in M/s S.B.P. and Co.'s case (supra) discussed in detail, the provisions of the 1996 Act, and then gave a finding that powers of the Chief Justice of India or the High Court, under Section 11 (6) is not an administrative power but it is a judicial power. When discussing the question, as to who would fall within the definition of Judicial Authority, in terms of Section (8) of the 1996 Act, by making reference to ratio of judgment in the case Fair Air Engineers Pvt. Ltd. & Anr. Vs. N.K. Modi, III (1996) CPJ 1 (SC) = (1996 (6) SCC 385, it was only said that judicial authority will include the Courts, and also specific Tribunals like Consumer  Fora. Whether the Consumer Fora is bound to refer the matter to the Arbitrator, was not under consideration, in the above case.

The part of ratio of judgment in case Fair Air Engineers Pvt. Ltd. & Anr.'s case (supra) dealing with above aspect, was not discussed in M/s S.B.P. and Co.s case (supra). In the former judgment besides opining that Consumer  Fora have all the trappings of the judicial authority, further, by making reference to the provisions of Section 34 of the Arbitration Act, 1940 viz a viz Section 3 of 1986 Act, in Fair Air Engineers Pvt. Ltd. & Anr.'s case (supra), it was observed as under:-

“It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the CPC. Thereby, as seen, Section 34 of the Act does not confer and automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on their own and on the peculiar facts and circumstances of the particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.”

41.       It was specifically opined that the remedy under Section 3 of the 1986 Act, is in addition to and not in derogation to any other remedy available to an individual. Section 3 of the 1986 Act, read thus:-

“3. Act not in derogation of any other law.—The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

42.       The above question was again dealt with, by the Hon'ble Supreme Court of India, in National Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy & Anr., I (2012) CPJ 1 (SC).  Taking note of the above provisions of 1996 Act and Section 3 of the 1986 Act, it was observed as under:-

“29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2-Judge Bench interpreted that section and held as under:

“the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Mr. Suri, that the words ‘in derogation of the provisions of any other law for the time being in force’ would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.

30. In Skypak Couriers Limited v. Tata Chemicals Limited (supra), this Court observed:

“Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.”

31. In Trans Mediterranean Airways v. Universal Exports (supra), it was observed:

“In our view, the protection provided under the CP Act to consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy”.

43.       Ratio of the judgments have left nothing to chance. It was mandated that even in the case of special legislation, it is permissible for an individual to avail remedy, under the 1986 Act. The National Commission, in a case titled as DLF Limited Vs Mridul Estate (Pvt.) Ltd., Revision Petition No.412 of 2011 (alongwith other 11 connected cases), decided on 13.05.2013 after taking ratio of judgment in the case of M/s S.B.P. and Co.'s case (supra), came to a specific conclusion that remedy provided under Section 3 of the 1986 Act is in addition to and not in derogation of the provisions of any other law, for the time being in force. It was specifically stated that ratio of judgment passed in M/s S.B.P. and Co.'s case (supra), will not debar a Consumer Fora from entertaining the complaint, even in cases where an alternative remedy of Arbitration is provided. Vide that judgment many Revision-Petitions were decided.       

Feeling aggrieved against the order dated 13.05.2013, passed by the National Commission, Rosedale Developers Private Limited/Opposite Party challenged above order in the Hon'ble Supreme Court. In the case of Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), the  Hon'ble Supreme Court of India, by making reference to the ratio of  judgment in the case M/s S.B.P. and Co.'s case (supra),  observed that the judgment has no bearing on the issue, as to whether in the face of an Arbitration Clause, Jurisdiction  can be exercised by the Consumer  Fora or not. In that judgment, the Supreme Court had not interpreted the provisions of 1996 Act in the light of the provisions contained in 1986 Act. It was further observed that the observation made in that judgment that Section 8 of the 1996 Act is mandatory, cannot lead to an inference that the Consumer  Fora is bound to make a reference to the Arbitral Tribunal. As such, the facts of Sudarshan Vyapar Pvt. Ltd. and another's and Raj Kumar Singal's cases (supra) relied upon by Counsel for Opposite Parties No.1 and 2, cannot be applied to the facts of the present case.

44.       The position has further been clarified by the National Commission, in the latest Judgment titled as Shri Satish Kumar Pandey and another Vs. M/s Unitech Limited, Consumer Complaint No.427 of 2014 (alongwith other 23 connected cases), decided on 08.06.2015. It was observed as under:-

“It was also contended by the learned counsel for the opposite party that since the agreements between the parties contains arbitration clause, arbitration and not a complaint before this Commission is the appropriate remedy. I, however, find no merit in this contention. As provided in Section 3 of the Consumer Protection Act, the provision of this Act are in addition to the other remedies available to a consumer. Therefore, the availability of arbitration as a remedy does not debar the complainant from approaching a consumer forum in a case of deficiency in the services rendered to him by the service provider or adoption of unfair trade practices by him. This issue came up for consideration of the Hon’ble Supreme Court in National Seeds Corporation Vs. M. Madhusudhan Reddy & Anr. (2012)2 SCC 506 and after taking into consideration the provisions of the Section 8 of the Arbitration Act of 1996 and the Section 3 of the C.P. Act it was held that the plain language of Section 3 of the C.P. Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.  The Hon’ble Supreme Court has also held that the complaint filed by a consumer before the consumer fora would be maintainable despite their being an arbitration clause in the agreement to refer the dispute to the Arbitrator. In view of the above referred authoritative pronouncement of the Hon’ble Supreme Court which was later followed by a Three Members Bench of this Commission in DLF Ltd. Vs. Mridul Estate Pvt. Ltd., R.P. No.412 of 2011 decided on 13-05-2013, the aforesaid contention advanced by the learned counsel for the opposite party is liable to be rejected.”

45.       Reading of ratio of the judgments referred to above, make it clear that in case of  M/s S.B.P. and Co.'s case (supra), the issue before the Supreme Court of India was altogether different. The provisions of 1986 Act were not under consideration viz. a viz. the provisions of 1996 Act.  As such, the ratio of judgments referred to above, makes it very clear that the judgments in Sudarshan Vyapar Pvt. Ltd. and another's and Raj Kumar Singal's cases (supra), were given by wrongly interpreting the ratio of M/s S.B.P. and Co.'s case (supra).
46.       In view of the above, it is held that the submission of Counsel for Opposite Parties No.1 and 2, that  the complaint filed under Section 17 of the Act, was not maintainable, before this Commission, on account of existence of an arbitration Clause in the Buyer’s Agreement, being devoid of merit, stands rejected.
47.       Another objection raised by Counsel for Opposite Parties No.1 and 2, that time was not essence of the contract is also devoid of merit, in view of Clause 8 of the Buyer’s Agreement, according to which, possession of the plot, in question, was to be delivered within a maximum period of 18 months, from the date of execution of the same, failing which they were liable to pay compensation/penalty @ Rs.50/- per square yard per month, for the period of delay. The time was, thus, unequivocally made the essence of contract. The plea of Counsel for Opposite Parties No.1 and 2 in this regard also stands rejected.
48.       Another frivolous objection was taken by Counsel for Opposite Parties No.1 and 2, by stating that the plot, in question, is situated at Mohali, as such, only the State Consumer Disputes Redressal Commission, Punjab, has territorial Jurisdiction to entertain and decide the complaint.
49.       According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction, whereof a part of cause of action arose to him/her. In the instant case, the Agreement, in respect of the plot, in question, was executed, at Chandigarh, as is evident from page 53 of the file. Not only this, even the payment acknowledgment receipts at pages 106-111 reveal that the same were issued by Opposite Party No.2 at Chandigarh, as the same bore the address “Emaar MGF Land Limited, SCO 120-122, First Floor, Sector 17-C, Chandigarh 160017”. It means that a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission. This Commission has, therefore, got territorial Jurisdiction to entertain and decide the complaint. The objection taken by Counsel for Opposite Parties No.1 and 2, also stands rejected.
50.        So far as the objection taken by Counsel for Opposite Parties No.1 and 2 regarding pecuniary Jurisdiction of this Commission is concerned, it may be stated here, that the complainant has sought  refund of an amount of Rs.45 lacs paid by him, alongwith interest @18% P.A., from the respective dates of deposits; compensation to the tune of Rs.5 lacs, for mental agony, physical harassment and financial loss; and cost of litigation, to the tune of Rs.50,000/-, the aggregate value whereof, if clubbed together, fell above Rs.20 lacs and below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection, taken by Counsel for Opposite Parties No.1 and 2, in this regard also, deserves rejection.
51.       Counsel for the complainant has vehemently contended that even when an offer of possession of plot was made, the Competent Authority had not issued a Completion Certificate for the project in question. To the contrary, it is stated by Counsel for Opposite Parties No.1 and 2 that on account of exemption granted to them by the State Government, under the Punjab Apartment and Property Regulation Act 1995, it was not necessary for them to get Completion Certificate, in respect of the project, in question. In view of findings given in the preceding paragraphs of this order, we are not giving any opinion on this issue, in this case and it is kept open.
52.       No other point, was urged, by Counsel for the parties.
53.       For the reasons recorded above, the complaint is partly accepted, with costs, qua Opposite Parties No.1 and 2. As such, Opposite Parties No.1 and 2 are jointly and severally directed, as under:-
    1.   To refund an amount Rs.45 lacs to the complainant.
    2.   To pay compound interest quarterly @ 18%, to the complainant, from respective dates, on the amount aforesaid (total Rs.45 lacs), when deposited with them. (Above rate of interest is less than the rate of interest charged by Opposite Parties No.1 and 2 for delayed payment i.e. 24% compounded quarterly, as per Clause 3 of the Buyer’s Agreement)
    3.   To pay compensation, in the sum of Rs.3 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices of the real estate.
    4.   To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant.
    5.           To pay the entire ordered amount, in Clauses (i), (iii) and (iv), including compound interest quarterly @ 18% as mentioned in Clause (ii) above, within a period of three months, from the date of receipt of a certified copy of this order, failing which they shall be liable to pay to the complainant, compound interest quarterly @ 24%, qua the entire amount assessed, from the date of default till realization, i.e. on Clauses (i), (iii) and (iv).
54.           The complaint qua Proforma Opposite Party No.3 is dismissed with no order as to costs, as no deficiency, in rendering service, or adoption of unfair trade practice, has been proved by the complainant, on its part.
55.       However, it is made clear that Housing Development Finance Corporation Ltd./Proforma Opposite Party No.3, from which the loan was taken by the complainant, for payment of installments, towards the said plot, shall have first charge on the amount, referred to in Clause (i) above, to the extent of unpaid loan amount, by him (complainant).
56.       Certified copies of this order be sent to the parties, free of charge.
57.       The file be consigned to Record Room, after completion.

Pronounced.

13.10.2015

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

[DEV RAJ]

MEMBER

 

Sd/-

[PADMA PANDEY]

 MEMBER

Rg.