Chandigarh

StateCommission

CC/315/2015

Gurpreet Singh - Complainant(s)

Versus

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

Sushil Saini, Adv.

18 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	315 of 2015
Date of Institution	:	22.12.2015
Date of Decision	:	18.04.2016

 

Gurpreet Singh son of Shri Kunda Singh, resident of #1604, Phase 10, SAS Mohali, Cust ID No.52936, Sales Order No. (707706).

……Complainant

V e r s u s

1. M/s Emaar MGF Land Limited, Emaar MGF Land Limited, SCO 120-122, First Floor, Sector 17-C, Chandigarh-160017, through its.
2. M/s Emaar MGF Land Limited, Emaar MGF Land Limited, ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001.

               ....   opposite parties

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

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

                 SH.DEV RAJ, MEMBER

                 MRS. PADMA PANDEY, MEMBER

                 

Argued by:  Sh. Rakesh Verma, Advocate for the complainant.

                  Sh. Ashim Aggarwal, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

           

            The facts, in brief, are that allured by the advertisements, given by the opposite parties, in respect of their project, launched under the name and style of  “The Bungalows”, Mohali Hills, Sector 108, SAS Nagar, Mohali, Punjab, the complainant, applied to them, for allotment of a residential unit, and paid a sum of Rs.5 lacs, as booking amount. The complainant was allotted unit No.TBM-300-AG-579, measuring 300 square yards, in the said project. Basic sale price of the said unit was fixed at Rs.66 lacs. Apart from that, the complainant was also required to pay External Development Charges of Rs.5,43,300/- plus (+) Preferential Location Charges of Rs.3,96,000/- and Rs.30,000/- towards IFMS.  It is stated that after giving down payment rebate of 12% on the basic sale price, the complainant, in all, was required to pay Rs.68,16,900/- towards total sale consideration of the said unit. The complainant opted down payment plan.

2.       Buyer's Agreement dated 11.02.2010, Annexure C-1 (in short the Agreement), in respect of the unit, in question, was executed between the parties. As per Clause 8 of the said Agreement, subject to force majeure conditions, and reasons beyond control of the Company,  physical possession of the fully constructed residential unit, was to be handed over to the complainant, within a period of 24 months, from the date of execution thereof (Agreement), i.e. latest by 10.02.2012, failing which, they were liable to pay compensation/penalty @Rs.100/- per square yard, per month, for such period of delay.
3.       It is stated that by 02.03.2010, the complainant had deposited an amount of Rs.64,29,735/- against Rs.68,16,900/- towards price of the said unit. However, possession of the unit was not delivered by the stipulated date.
4.       It is stated that when possession of the unit, in question, was not offered, by the stipulated date, the complainant made various requests to the opposite parties, vide letters/emails, to apprise him about the status of the project, but to no avail. Ultimately, vide email dated 09.09.2013, the   opposite parties informed the complainant that possession of the unit is expected to be delivered in next three to four months and that delayed compensation for the period of delay, will be paid at the time of delivery of possession only. However, despite above, when possession of the unit was not delivered to the complainant, he sought refund of the amount deposited alongwith interest, but to no avail.
5.       It is averred that the huge amount of Rs.64,29,735/-, deposited by the  complainant, towards the price of unit, in question, was utilized by the   opposite parties, without providing him any services, as a result whereof, he had suffered financial loss. The complainant underwent a lot of mental agony and physical harassment, on account of non-delivery of physical possession of the fully constructed unit, to him.
6.       It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency, in rendering service, as also 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 (hereinafter to be called as the Act only), was filed, seeking directions to the opposite parties, to deliver possession of the unit, in question, forthwith; and also to pay compensation; litigation expenses; or any other relief, order or direction, which this Commission, deems fit.
7.       The complaint was admitted on 28.12.2015 and notice thereof was ordered to be issued to the  opposite parties, for 20.01.2016. On 20.01.2016, Sh.Ashim Aggarwal, Advocate, put in appearance on behalf of the  opposite parties, and sought time for filing written reply and evidence. As such, the complaint was adjourned to 12.02.2016, for the purpose. However, on 10.02.2016, an application was moved by the  opposite parties, under Section 8 (amended) of the Arbitration and Conciliation Act, 1996, for referring the matter to the Arbitration. The said application was disposed of, by this Commission, vide order dated 12.02.2016, holding that the question qua arbitration will be considered at the time of final arguments, in the main complaint. 
8.       Ultimately, reply and evidence, on behalf of the  opposite parties was filed on 26.02.2016. It was stated that in view of Section 8 of the Arbitration and Conciliation Act, 1996 [as amended vide the Arbitration and Conciliation (Amendment) Act, 2015], to settle disputes between the parties, the matter is required to be referred to an Arbitration, as such, this Commission has no jurisdiction to entertain the same (complaint). To say so, reliance was placed on Article 42 of the Agreement. It is further pleaded that this Commission has got no territorial and pecuniary Jurisdiction, to entertain and decide the complaint. Booking of the unit, in question; provisional allotment thereof in favour of the complainant; and payment of the amount mentioned in the   complaint,   by   him,   was  admitted. It is admitted that, as per Clause 8 of the Agreement,  possession of the unit, in question, was proposed to be delivered to  the  complainant, within a period of 24 months, from the date of execution thereof (Agreement). It is further stated that it was well within the knowledge of the complainant that time was not the essence of contract and for any delays, stipulated penalty had been provided in the Agreement, which safeguarded his rights. It is averred that the amount of compensation/penalty, for the period of delay, will be paid to the complainant, at the time of delivery of possession of the unit, in question. It is further stated that occupation certificate in respect of the said unit, has already been obtained from the Competent Authorities. It is stated that possession of the unit, is likely to be delivered to the complainant shortly. The remaining averments, were denied, being wrong.
9.       The complainant submitted his affidavit, in support of the averments, contained in the complaint, by way of evidence, alongwith which, a number of documents were attached.
10.       The   opposite parties, in support of their case, submitted the affidavit of Mr.Gurdeep Singh, their Senior Manager (Legal), by way of evidence, alongwith which, a number of documents were attached. 
11.       We have heard Counsel for the parties, and, have gone through the evidence and record of the case, carefully.   
12.       Counsel for the complainant has addressed his arguments, in terms of the facts stated in earlier part of this order. It is further stated that despite making payment of Rs.64,29,735/-, i.e. more than about 94% of the sale consideration, possession of the unit was not even offered to the complainant within the stipulated period, or even as on today, for want of construction of the same; development and basic amenities and further that amended provisions of Section 8 of 1996 Act, are not applicable in the face of existence of Section 3 of 1986 Act. It is averred that this Commission has got territorial and pecuniary jurisdiction to entertain the complaint.
13.       Counsel for the opposite parties, has vehemently contended that in view 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 no jurisdiction to entertain the consumer complaint. It was further argued that, may be, taking note of un-amended provisions of Section 8 of 1996 Act vis-à-vis Section 3 of 1986 Act, it had earlier been said that the Consumer Foras have jurisdiction to entertain a complaint, as Section 3 provides additional remedy to the consumers and existence of arbitration clause in the agreement would not bar jurisdiction of the Consumer Foras, however, with amendment in Section 8 of the 1996 Act, position has changed. In a way, he made an attempt to say that amendment in Section 8 of 1996 Act, leaves no power, with the Consumer Foras to entertain any consumer complaint, in cases, wherein provisions for settlement of disputes is provided through arbitration. To buttress his arguments, he has referred to Clause 42 of the Agreement, which reads thus:-

“This or 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. The arbitration proceedings shall be governed by the Arbitration & 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 High Court of Punjab and Haryana at Chandigarh and the Courts subordinate thereto having territorial jurisdictions over the unit shall be to the specific exclusion of all other courts, alone have the exclusive jurisdiction in all matters arising out of/touching and/or concerning this Agreement”.

14.       It is submitted that occupation certificate in respect of the unit, in question, has already been obtained from the Competent Authority, and possession of the unit, will be delivered to the complainant , shortly.
15.       Above arguments were controverted by Counsel for the complainant, in rebuttal.
16.       The principal 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 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that under similar circumstances, in a case titled as Abha Arora Vs. Puma Realtors Pvt. Ltd. and another, consumer complaint No.170 of 2015, decided on 01.04.2016, this Commission, brushed aside similar argument, raised by Senior Counsel for the builder, while holding as under:-

“24 Before dealing with the legal issues, it is necessary to note down amended and unamended provisions of Section 8 of 1996 Act and other provisions, which were added in the 1996 Act (principal Act), by the Arbitration and Conciliation Amendment Act, 2015, which was signed by the Hon'ble President of India on 31.12.2015.

            Unamended provisions of Section 8 of 1996 Act,       reads thus:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

25.  After amendment, Section 8 of 1996 Act, reads as under:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

26. The provisions which needs interpretation/ explanation, as added in the principal Act, have been underlined, in the above extracted paragraph. Vide the 2015 Act, in principal Act, Fourth Schedule was added with it, scale of fee, to be charged by an Arbitrator has been prescribed. Besides as above, by making amendment in Section 11 of 1996 Act, it is provided that any application of the contesting parties to appoint an Arbitrator is to be decided by the High Court/its nominee expeditiously as possible and an effort be made to dispose of the same, within 60 days, from the date of service of notice upon the opposite party. Further, by making an amendment in the principal Act, Section 29 A has been added providing that an Arbitrator is supposed to make an award within 6 months from the date the Arbitral Tribunal enters upon the reference. There is a provision for extending the time period for 6 months more, with consent of the parties. Thereafter, the Court has been given power to extend it, in case of need. As per Section 34 of 1996 Act, the award so passed, can be challenged before the Court. As per amended provisions added in the principal Act, the Court is supposed to dispose of the said dispute within a period of one year, from the date, on which the notice is served upon the opposite party. As per law, the matter can further be challenged in the High Court and may be, thereafter, it will go to the Hon'ble Supreme Court of India.

27.  Now, we would like to deal with applicability of Section 8 (amended) of the principal Act, to the proceedings before this Commission. It is to be decided, as to whether, in the face of existence of an arbitration clause in the Agreement, it is open to this Commission, to entertain a consumer complaint, in terms of provisions of Section 3 of 1986 Act or not.

            Here, it is necessary to reproduce the provisions      of Section 3 of 1986 Act, for consideration:-

“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.”

28   Such issue was also raised, when unamended provisions of Section 8 of 1996 Act, was in existence. Similar argument was raised that when settlement of disputes is provided through arbitration in the Agreement, the consumer complaint is not maintainable. In umpteen number of cases, it is held by the Hon'ble Supreme Court of India, National Commission and various State Commissions, that Section 3 of 1986 Act provides additional remedy and existence of arbitration clause, in the Agreement, to settle disputes between the parties, is not a bar to entertain a complaint filed by the consumer, alleging deficiency in providing service etc.

            A similar issue came up before this Commission in Sh.Dharam Pal Gupta Vs. M/s Emaar MGF Land Limited and another, Consumer Complaint No.147 of 2015, decided on 13.10.2015. After noting the ratio of judgments of the Hon'ble Supreme Court of India, in various cases, and also of the National Commission, it was observed as under:-

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”

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.

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.”

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.

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 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”.

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.

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.”

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).

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.

29.     Not only this, in the latest judgment titled as Mahindra Holidays & Resorts India Ltd. Vs. Adnan Samoon Rassiawala & 6 Ors., First Appeal No. 127 of 2016, decided on 18.03.2016, the National Commission observed as under:-

“The short question for consideration in this Appeal is as to whether the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (for short “the State Commission”) was justified in dismissing the application filed by the Appellant, the Opposite Party in the Complaint, under Section-8 of the Arbitration and Conciliation Act, 1996, seeking stay of the proceedings in the Complaint and for referring the matter to arbitration, in view of the fact that there was an Arbitration Agreement between the parties.

Though Mr. Pattjoshi, learned Senior Counsel, has made valiant attempt to convince us that in the light of the decision of the Hon’ble Delhi High Court in HDFC Bank Ltd. v. Satpal Singh Bakshi, 2013 (134) DRJ 566 (FB), the parties were bound by the Arbitration Agreement and in view of the clear provision of Section-8 of the said Act, the dispute, subject matter of the Complaint, ought to have been referred to arbitration, yet we are unable to persuade ourselves to agree with the learned Senior Counsel.  The issue sought to be raised is no more res integra as stands concluded by a number of authoritative pronouncements by the Hon’ble Supreme Court (see Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (dead) through LRs & Ors., (2004) 1 SCC 305; Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294; and National Seeds Corporation Ltd. v. Madusudan Reddy, (2012) 2 SCC 506).

In light of the said decisions of the Hon’ble Supreme Court, directly on the point, decision of the High Court cannot be relied upon, particularly when none of the afore-noted decisions have been noticed in the High Court’s decision, on which reliance has been placed by the learned Senior Counsel.

We do not find any illegality in the impugned order, warranting our interference.

Consequently, the Appeal fails and is dismissed in limine”.

30. Now it is to be seen, whether, after making amendment in Section 8 of the principal Act, any additional rights have accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling disputes through an Arbitrator, this Commission is not empowered to entertain a consumer complaint.

            As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act.

31.  Now, we will have to see what difference has been made by effecting amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to Consumer Foras  to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist for arbitrator, notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said. Otherwise also, as has been stated in the earlier part of this order, where there is any ambiguity in understanding meaning of provision of law, or where two interpretations are possible, one beneficial to the consumer would be accepted.

32.    We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/ multinational companies/traders. As in the present cases, the consumers/ complainants have spent their entire life savings to get a plot, so that they can construct a house thereon. Their hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  the complaint is supposed to be decided within three months, from the date of service of the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act,  the consumer will be forced to (as in the present case) pay huge expenses. As in the present case, the complainant is claiming refund of Rs.65,56,513/- alongwith interest, compensation and litigation costs, aggregate value whereof, if added may be near about Rs.1 crore. In that event, the complainant will be forced to pay an amount of Rs.1,68,750/-  towards her share of Arbitrator fees. Not only as above, it is admissible to an Arbitrator, to decide the dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of General Assembly Resolution No.39/248 and the provisions of 1986 Act. In view of above, the ground raised by Counsel for opposite party no.1, stands rejected.”

 

17. Similar view was reiterated by this Commission, in Praveen Kumar Arora and another Vs. Emaar MGF Land Limited, consumer complaint No.198 of 2015, decided on 04.04.2016, by further holding as under:-

“20. The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. In the present case, the complainants have spent their entire life earnings to purchase a unit, in a housing project, launched by the opposite party. It was their hope that they will live therein. However, their hopes were shattered, when despite making payment of entire amount towards price, they failed to get possession of a unit, in a developed project. As per established ratio of the judgment in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and also in the judgment of 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), it was said that the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

21. In view of the above, the argument raised by Counsel for the opposite party that 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 no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected”.

           

18.       Not only as above, execution of judgment/decree passed by the Consumer Foras is very easy and less time consuming. Invariably, in all the judgments passed, between one to three months’ time, is granted to the judgment debtors(s) to discharge liability. If it is not so done, and the order is not stayed in the meantime by the Higher Fora, two options are available with the complainant/decree holder. Section 25 of 1986 Act provides the procedure to enforce orders by the Consumer Foras. In Sector 25 (3), it is provided that where any amount is due from any person, under an order passed by any Consumer Fora, the concerned Consumer Fora, on an application moved by the decree holder, may issue a certificate to the Collector of the District, to recover the said amount, by way of land revenue, in  terms of Section 72 of the Punjab Land Revenue Act, 1887. The said provision is also very stringent. The Collector is supposed to attach the holding of the judgment debtors to take the said property under his own management and control. The Collector is further supposed to manage the said property and raise all rents and profits accruing therefrom to the exclusion of the defaulter, until the decree is satisfied. The above procedure will consume at the maximum four to six months, for realization of the amount awarded. Further option is also available to a complainant/decree holder, to move an application under Section 27 of 1986 Act, which provides that where a trader or a person against whom, a complaint was made, fails or omits to comply with the order passed by the Consumer Fora, such party would entail award of punishment of imprisonment for a term, which shall not be less than one month, but may extend to three years, or with fine, which shall not be less than Rs.2,000/-, and may be extended upto Rs.10,000/-, or both. This provision is very effective, as and when application is moved under Section 27 of 1986 Act, for fear of imprisonment, it is seen that immediately the judgment debtor(s) make an attempt to comply with the order passed by the Consumer Foras. Whereas, to the contrary Section 36 of 1996 Act, provides that award shall be enforced, in accordance with the provisions of the Code of Civil Procedure 1908, in the same manner, as if it was a decree of a Court. Such a procedure is very costly and time consuming. Executing a decree would virtually mean fighting one more litigation, in a Court, to get enforcement of an award. If such a procedure is adopted, it will defeat the very purpose and spirit of 1986 Act.     
19.       In view of the above, and also in the face of ratio of judgments, referred to above, the arguments raised by Counsel for the opposite parties, stand rejected.
20.       The next question, that falls for consideration, is, as to whether, this Commission has got pecuniary Jurisdiction, to entertain the complaint or not. It may be stated here, that the complainant has sought possession of the unit, value whereof is Rs.68,16,900/-, plus compensation to the tune of Rs.1.5 lacs, for mental agony and  physical harassment; and cost of litigation, to the tune of Rs.50,000/-, aggregate value whereof [excluding the interest claimed] came to be around Rs.70,16,900/- and, as such, fell below Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint.

            The next question, that arises for consideration, is, as to whether, interest @10% p.a., claimed by the complainant, on the amount of compensation, was required to be added, to the value of the reliefs claimed, or not, for determining the pecuniary Jurisdiction of this Commission.  In Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. & Ors. II (2003) CPJ 81 (NC), a case decided by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, the facts were that the complainant filed a Consumer Complaint, before the State Consumer Disputes Redressal Commission, Haryana, claiming an amount of Rs.18,33,000/-, with interest @18% per annum, on this amount, from the date of claim, till realization. It also claimed suitable damages, on account of loss caused to it. The State Consumer Disputes Redressal Commission, vide order dated 08.08.2002, disposed of the complaint, with liberty reserved to the complainant, to approach the National Consumer Disputes Redressal Commission, holding that if interest @18% P.A. was allowed, on the amount of Rs.18,33,000/- it (amount) will exceed Rs.20 lacs (at that time the pecuniary Jurisdiction of the State Consumer Disputes Redressal Commission was upto Rs.20 lacs), for which it had no pecuniary Jurisdiction. Feeling aggrieved, the complainant/appellant filed the aforesaid appeal. The National Consumer Disputes Redressal Commission, in the aforesaid appeal, held as under:-

“Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs.18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

Accordingly, while accepting appeal, the order dated 8.8.2002 is set aside. On complaint being returned by the State Commission, the appellant is permitted to file it before the appropriate District Forum for being decided on merits in accordance with law. No order as to costs”.

            Not only this, a similar question regarding pecuniary Jurisdiction, fell before this Commission, in a case titled as Karnail Singh  and another Vs. M/s Emaar MGF Land Limited, Consumer Complaint No.05 of 2014 decided on 09.04.2014. In that case also, an objection was raised by the  opposite parties (Emaar MGF Land Limited) that since the complainants,  had sought refund of amount of Rs.62,60,750/- alongwith interest @24% P.A., from the respective dates of deposits, alongwith compensation and litigation costs, as such, if the reliefs are clubbed together alongwith interest claimed, the aggregate value therefore fell above Rs.1 crore, and as such, this Commission had no pecuniary Jurisdiction to entertain the complaint. In that case, while rejecting the said objection of the  opposite parties, this Commission, while placing reliance on Shahbad Cooperative Sugar Mills Ltd.' case (supra),  came to the conclusion that it had pecuniary Jurisdiction to entertain the complaint, and ordered refund of the amount alongwith interest, compensation and litigation costs, vide order dated 09.04.2014. Appeal filed by the opposite parties (Emaar MGF Land Limited) against the order dated 09.04.2014, before the National Commission, was dismissed with punitive damages of Rs.5 lacs. Still feeling aggrieved, the  opposite parties, filed Special Leave to Appeal (C) No.29392 of 2014, which was also dismissed by the Hon'ble Supreme Court of India, in limine, vide order dated 14.11.2014. In this manner, the findings given by this Commission in Karnail Singh and another's case (supra), while placing reliance on Shahbad Cooperative Sugar Mills Ltd.'s case (supra), to the effect that it has pecuniary Jurisdiction to entertain and decide the complaint, in the manner, referred to above, were upheld by the National Commission, and also the Hon'ble Supreme Court of India. Recently, in the case of Denis  Exports Pvt. Ltd Vs. United India Insurance Co. Ltd, Consumer Case No. 196 of 2016, decided On 08 Mar 2016, it was clearly held by the National Commission that interest component being imaginary, will not be added in the reliefs sought by the consumers, for determining pecuniary jurisdiction of the Consumer Foras. The principles of law, laid down, in the cases referred to above, are fully applicable, to the facts of the instant case. In view of the above, the submission of Counsel for the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

21.       The next question, that falls for consideration, is, as to whether, this Commission has got territorial Jurisdiction, to entertain the complaint or not.

            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 them. In the instant case, the Agreement, in respect of the unit, in question, was executed, at Chandigarh. Not only this, perusal of the payment receipts placed on record, clearly goes to show that the same were issued by Chandigarh office of the opposite parties, as the same bore the first address (at bottom) as “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 the opposite parties, also stands rejected.

22.       Counsel for the  opposite parties, placed reliance on Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., AIR 1993 SC 1742, a case decided by the Hon’ble Supreme Court, to contend that time was not the essence of contract. It may be stated here that the facts of Smt. Chand Rani's case (supra), are distinguishable, from the facts of the instant case. Smt. Chand Rani's case (supra), related to the specific performance of contract. It was held that intention to make time as the essence of contract, must be expressed in unequivocal terms in the Agreement. It was, under these circumstances, held in the said case that time was not the essence of contract. Whereas, in the instant case, as per Clause 8 of the Agreement, subject to force majeure conditions, and reasons beyond the control of the Company,  physical possession of the constructed unit, was to be handed over to the complainant, within a period of 24 months, from the date of execution thereof (Agreement). The time was, thus, unequivocally made the essence of contract. Therefore, no help, from the aforesaid case, can be drawn, by Counsel for the opposite parties. The submission of Counsel for the opposite parties, thus, being devoid of merit, must fail, and the same stands rejected.
23.       The next question, arises, as to within which period, delivery of possession of the unit, was to be given to the complainant. The Buyer's Agreement Annexure C-1, was executed between the parties, on 11.02.2010. According to Clause 8 of this Agreement, subject to force majeure conditions, and reasons, beyond the control of the opposite parties, they were to deliver physical possession of the unit, within a period of 24 months, from the date of execution of the same (Agreement). Admittedly, possession of the unit, in question, was not delivered to the complainant, by the stipulated date, or even by the date, the complaint was filed and that the same will be delivered shortly. Counsel for the opposite parties, frankly admitted this fact, during arguments also. As stated above, substantial amount of Rs.64,29,735/-, i.e. more than 94% of the sale consideration, towards the said unit, has been paid by the complainant, but  possession of the unit, was not delivered to him. By making a misleading statements, to the complainant, that possession of the unit, would be delivered within 24 months, from the date of execution of Agreement, and by not abiding by the commitments, made by them, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant is certainly entitled to physical possession of the unit, in question.
24.       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 fully constructed unit, in question, alongwith basic amenities, by the opposite parties, by the promised date. According to Clause 8 of the Agreement, the  opposite parties were liable to pay to the complainant, penalty/compensation, in the sum of Rs.100/-, per square yard, per month, for the period of delay, beyond 24 months, from the date of execution of the same. The opposite parties in their written version, in most of the paragraphs admitted that the complainant is entitled to the said penalty/compensation and they are ready and willing to pay the same. As such, the complainant is entitled to compensation/penalty @Rs.100/-, per square yard, per month (i.e. Rs.30,000/- per month, Rs.100/- x 300 square yards), from 10.02.2012 (promised date) onwards, on account of delay, in the delivery of possession of the fully constructed unit, as per Clause 8 of the Agreement, alongwith all basic amenities.
25.       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, for a long number of years, by not delivering physical possession of the unit, in question, to him, by the  opposite parties, by the promised date i.e. 10.02.2012. The complainant booked the unit, with the hope to have a roof over his head, but his hopes were dashed to the ground. Till date, i.e. even after the expiry of a period of more than about four years, from the promised date  i.e. 10.02.2012, delivery of physical possession of the constructed unit, has not yet been given, to the complainant, by the  opposite parties. 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, 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, to the tune of Rs.1.5 lacs (as prayed), shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.1.5 lacs.
26.       No other point, was urged, by Counsel for the parties.
27.       For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-
    1. To hand over physical possession of unit No.TBM-300-AG-579, to the complainant, complete in all respects, as per terms and conditions of the Agreement, within a period of three months,  from the date of receipt of a certified copy of this order, on payment of  the amount, if any, legally due against him (complainant).
    2. To execute and get registered the sale deed, in respect of the unit, in question, in favour of the complainant within 30 days from the date of handing over possession, as indicated in Clause (i) above, on payment of registration and stamp duty charges, by him to the Registering Authorities.
    3. To pay penalty/compensation @Rs.100/-, per square yard, per month,  from  10.02.2012 (the promised date), till 30.04.2016, alongwith interest @12% p.a.
    4. To pay compensation accruing due @Rs.100/-per square yard, per month,   w.e.f.  01.05.2016, onwards, by the 10^th of the following month, failing which, the same shall carry interest @12 % P.A., from the date of default, till realization. The payment of compensation @Rs.100/- per square yard, per month, in the manner, explained above, shall continue till physical possession of the unit is actually delivered to the complainant.
    5. To pay compensation, in the sum of Rs.1.5 lacs (as prayed), to the complainant on account of deficiency in rendering service, adoption of unfair trade practice, mental agony and physical harassment, caused to him (complainant), at their hands.
    6. The  opposite parties, are further directed to pay cost of litigation, to the tune of Rs.50,000/-, to the complainant.
    7. Amounts mentioned and granted to the complainant, in Clauses (iii), (v) and (vi), shall be paid by the  opposite parties, within 45 days, from the date of receipt of a certified copy of this order, failing which, the amount accrued (10.02.2012 to 30.04.2016) as per Clause (iii) shall carry penal interest @15% p.a. instead of 12% p.a. and the amounts mentioned at Clause nos.(v) and (vi) shall carry interest @12% p.a. from the date of filing the complaint, till realization.
28.       Certified Copies of this order be sent to the parties, free of charge.
29.       The file be consigned to Record Room, after completion

Pronounced.

18.04.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 [PADMA PANDEY]

MEMBER

 

 

Rg.