Chandigarh

StateCommission

CC/13/2018

Jagdish Chander Singal - Complainant(s)

Versus

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

In Person

26 Sep 2019

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	13 of 2018
Date of Institution	:	10.01.2018
Date of Decision	:	26.09.2019

 

Jagdish Chander Singal S/o Late Sh.Hant Ram Singal, residing at: 502, GH-34, Sector 5, MDC, Panchkula-134114.

……Complainant

V e r s u s

1. M/s Emaar MGF Land Limited, having its Registered Office at ECE House, 28, Kasturba Gandhi Marg, New Delhi-110001 and Local City Office at SCO 120-122, 1^st Floor, Sector 17-C, Chandigarh-160017. Now shifted to: Office No.40, Central Plaza, Sector -105, Mohali-160062 (Punjab), through its Managing Director/Director/Officer-in-Charge/Authorized Signatory.
2. M/s Emaar MGF Land Limited, ECE House, 28, Kasturba Gandhi Marg, New Delhi-110001, through its Managing Director/Director/Officer-in-Charge/Authorized Signatory.

Site Address:- 40, Central Plaza, The Views at Mohali Hills, Sector 105, Mohali-160062.

….Opposite Parties

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

 

BEFORE:         JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                        MRS. PADMA PANDEY, MEMBER.

 

Argued by:       Sh.Jagdish Chander Singal, complainant in      person.

      Sh.Ashim Aggarwal, Advocate for the opposite parties.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                The complainant has filed this complaint, seeking refund of amount of Rs.50,21,500/- paid by him, to the opposite parties, towards purchase of plot bearing No.104-EP-3-250, measuring 250 square yards, in their project named ‘Mohali Plots’. Mohali Hills, Sector 104, Mohali, Punjab (in short, the project). Total price of the said plot was fixed at Rs.52,34,000/-. It is specific case of the complainant that despite making payment of substantial amount equal to about 95% of the total sale consideration, the opposite parties failed to offer possession of the said plot on or before 12.12.2012 as committed vide Clause 8 of the ‘Plot-Buyer`s Agreement’ dated 13.12.2011 i.e. within a period of 12 months from the date of execution thereof. A number of visits were made by the complainant to the project site and also the office of the opposite parties, to know the reason of delay in offering and delivering possession of the plot in question but of no avail. Later on, it transpired that there was some issue with regard to road in front of the plot in question. Number of emails were written by the complainant to the opposite parties, requesting them to complete development work; deliver possession of the plot to him; and also, to pay compensation for the period of delay but of no avail. On the other hand, vide letter dated 05.08.2016 (Annexure C-21) it was informed to him that the area of the plot stands revised to 250.05 square yards as a result whereof, the price thereof stood increased to Rs.56,71,205/-. In the said letter, it was also informed that process to hand over possession of the plot will commence within 60 days.  He was asked to make payment of Rs.13,99,711/- on or before 05.09.2016. It has been pleaded that the opposite parties charged various illegally charges. Upon receipt of letter dated 05.08.2016, the complainant visited the project site and found that basic amenities such as club, hospitals, schools, connectivity to the roads, electricity, water etc. were not in existence. As such, he challenged the demand raised by the opposite parties, by way of writing number of letters/emails and also requested them to complete the development work and provide basic amenities but of no avail. He also met various Officials/Officers of the opposite parties, to whom photographs showing incomplete development at the project site were also handed over but his grievance was not redressed. It has been stated that during visits of the complainant, in the years 2016 and 2017, it was found that entry/main access to the project site has been sealed by the Forest Department. Left under no choice, the complainant sought refund of the amount paid alongwith interest but of no avail.

                It has been averred that the aforesaid act of the opposite parties caused lot of harassment, mental agony and financial loss to the complainant, as he has been paying heavy installments to the HDFC Limited, from which he had raised loan for making payment towards price of the said plot. Hence, the present complaint has been filed by the complainant, seeking refund of amount paid alongwith interest, compensation etc.

2.         His claim has been contested by the opposite parties, on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that this Commission has no territorial jurisdiction to deal with the matter; that the complainant did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as he alongwith his family members have also purchased properties in their names; and that the complaint is bad for non-joinder of HDFC Limited as necessary party to this complaint, from which the complainant has availed housing loan.
3.         On merits, it has been stated in the reply that exemption was granted by the State Government, to the Company, from applicability of the provisions of Punjab Apartment and Property Regulation Act, 1995 (in short, the PAPRA). It has been pleaded that possession of the plot in question was offered to the complainant vide letter dated 05.08.2016, on completion of development works and basic amenities but he failed to take over the same. Delay in offering possession took place on account of force majeure circumstances, having been faced by the Company.  However, compensation for the period of delay to the tune of Rs.4,72,603/- was credited in the account of the complainant, maintained by the Company and still, if the complainant wants refund of the deposited amount, forfeiture clause contained in the agreement will be applicable. It has been contended that all the issues raised by the complainant by way of sending emails/letters, were addressed by the opposite parties. Even delayed payment interest to the tune of Rs.7,17,236/- was waived off, by the company, on request having been made by the complainant.
4.         It has also been added in the reply that time was not to be considered as essence of the contract, as the Company had committed only to make its endeavor to complete development works within the time period mentioned in Clause 8 of the agreement. However, in the same breath, it was pleaded that the complaint filed is time barred. It has been denied that entry points to the project were sealed by the Forest Department. Prayer was made to dismiss the complaint with cost.
5.         In the replication filed, the complainant reiterated all the averments contained in the complaint and controverted those, contained in written version of the opposite parties. It has been specifically clarified by the complainant in the replication that he has a son and two daughters, who are adults and besides  this, he has six grandchildren and that if his wife and their children have purchased any property in their individual names, he (complainant) is not bound to disclose the same to the opposite parties and as such, in no manner, he can be precluded from the definition of ‘consumer’.
6.         The parties have been afforded adequate opportunities to adduce evidence in support of their respective contentions, by way of affidavit and they also produced numerous documents.
7.         We have heard the contesting parties and have gone through record of the case, very carefully.
8.         In this case, following points have been emerged for consideration:-
   1. Whether the arbitration clause in the agreement bars the jurisdiction of this Commission?
   2. Whether this Commission has territorial jurisdiction to entertain this complaint?
   3. Whether the complainant falls under the definition of consumer?
   4. Whether time was essence of the contract or not?
   5. Whether the complainant was bound to accept the offer of possession of the plot in question, made after an inordinate delay of more than three and a half years?
   6. Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?
   7. Whether the complaint could be dismissed only on the ground that HDFC Limited from which the complainant has availed loan for making payment towards price of the said plot has not been impleaded as necessary party?

 

9.         First, we would like to deal with the objection raised by the opposite parties, to the effect that in the face of existence of provision in the agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this issue has already been dealt with by the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, wherein it has been held that an Arbitration Clause in the agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018.

                As such, objection raised by the opposite parties, in this regard, stands rejected.

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

                According to Section 17 (2) 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. We have gone through the record and it is evident that the Plot Buyer’s Agreement dated 13.12.2011 (Annexure C-4) has been executed between the parties at Chandigarh. Apart from this, there are number of documents placed on record, including the payment receipts, which reveal that the correspondence took place between the complainant and the Company, at its Chandigarh Office. Under these circumstances, since part of cause of action accrued to the complainant at Chandigarh, as such, this Commission has got territorial jurisdiction to entertain the present complaint, in view of the provisions of Section 17 (2) of the Act. Objection taken by the opposite parties, in this regard, therefore, being devoid of merit stands rejected. 

11.         The next question under our consideration is as to whether the complainant falls within the definition of a consumer, as defined by Section 2 (1) (d) of the Act? It has been vehemently contended by Counsel for the opposite parties that because there are other properties, which stand in the name of the complainant and also his relatives, as such, the plot in question has been purchased by him for the purpose of investment. We do not agree with the contention raised. As stated above, the complainant by way of filing replication has clarified that he has a son and two daughters, who are adults and besides  this, he has six grandchildren and that if his wife and their children have purchased any property in their individual names, he (complainant) is not bound to disclose the same to the opposite parties. It is settled law that replication is a part of proceedings, if it is allowed to be placed on record by the Court. It was so said by the Hon’ble Supreme Court of India in K. Laxmanan Vs. Thekkayil Padmini , 2009 (1) R.C.R. 388.

                Under above circumstances, we are fully satisfied with the clarification given by the complainant, in the replication filed. Furthermore, there is nothing, on the record, that the complainant is a property dealer and deals in the sale and purchase of property, on regular basis. Mere fact that the family members of complainant have also purchased properties in their names, is not sufficient to debar him from the purview of a ‘consumer’. A person cannot be said to have purchased a house for a commercial purpose only by proving that he/she has purchased more than one houses or plots.  Separate plots may be purchased by a person for the individual use of his/her family members.  A person may buy more than one house as per his requirements. Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. Apart from it, the opposite parties failed to adduce an iota of evidence to recluse the complainant from the definition of ‘consumer’ under the Act. Otherwise also, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316 and Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016.  The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. In the opinion of this Commission, the complainant falls within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite parties, therefore, being devoid of merit and stands rejected. 

12.         The next question under our consideration is as to whether, time for handing over possession of the plot to the complainant, was essence of the contract or not? It may be stated here that a specific period of 12 months for delivering possession of the plot to the complainant with every endeavor, has been mentioned in Clause 8 of the Agreement.  Other than this Clause contained in the agreement, there is no Clause, which speaks about the period/date for delivery of possession of the plot to him. A clear-cut promise was made to deliver possession of the plot, within a maximum period of 12 months i.e. on or before 12.12.2012. It is not the case of the opposite parties that they encountered any force majeure circumstances, as a result whereof, they were legally entitled for extension of time for delivering possession of the plots to the allottees, including the complainant. Mere taking a bald plea in the absence of any cogent and convincing documents, has no value in the eyes of law. The opposite parties cannot wriggle out of the commitments made vide Clause 8 of the agreement with regard to time period for delivery of possession. It is therefore held that time was unequivocally made the essence of contract. In view of above, plea of the opposite parties in this regard stands rejected.
13.         It is not in dispute, that the complainant agreed to purchase the plot in question in the aforesaid project of the opposite parties, on making payment of Rs.5 lacs, as booking amount, as a result whereof, ‘Plot-Buyer’s Agreement’ dated 13.12.2011 was executed between the parties. It is also not disputed that out of the total sale consideration of Rs.52,34,000/, an amount of Rs.50,21,500/- stood paid by the complainant by the year 2012 itself. It is also an admitted fact that the opposite parties were liable to handover the physical possession of residential plot latest by 12.12.2012. Whereas, on the other hand, perusal of the record reveals that possession was offered vide letter dated 05.08.2016 (Annexure C-21) i.e. after an inordinate of about more than three and a half years.

                As such, under these circumstances, the question under our consideration is as to whether if the Developer fails to deliver possession of the allotted plot within the stipulated time, the allottee is under obligation to accept the same, or he/she can seek refund of the amount paid. It may be stated here that it is well settled law that non-delivery of possession of plot(s)/unit(s) in a developed project by the stipulated date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. It was so said by the National Commission, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, wherein, it was held  as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

The above view taken by the National Commission, has been reiterated by it, in the case titled as Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. Relevant part of the said order reads thus:-

“This Commission in Emaar MGF Land Ltd. & Anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, has held that if the Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to accept an alternative plot. At the cost of repetition, we may reiterate that in the event of Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/plot and he would be within his rights to seek refund of the amount deposited with the Developer against allotment”.

The above view taken is further supported by the principle of law laid down by the Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019. In that case, possession of the unit had been offered during pendency of the complaint after obtaining occupation certificate, though after a delay of 2 years of the stipulated date. The Supreme Court upheld the order of refund of amount paid alongwith interest, passed by the National Commission, while holding as under:-

      “In the present case, admittedly the Appellant – Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent – Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.

       In Lucknow Development Authority v. M.K. Gupta,  this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.

      In Fortune Infrastructure & Anr. v. Trevor D’Lima & Ors.,  this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

      The Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant –

Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent – Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.”

 

In the present case also, there has been an inordinate delay in offering possession of the plot in question. Had the opposite parties placed on record some convincing evidence to prove their case that delay in offering possession occurred on account of force majeure circumstances, the matter would have been different. Since, nothing has been placed on record to substantiate the stand taken by the opposite parties, in that regard, as such, we are of the considered opinion that the complainant is well within his right to terminate the agreement and seek refund of the entire amount paid, by way of filing this complaint. In these circumstances, forfeiture clause contained in the agreement will not be made applicable, as the fault, if any, lays on the part of the opposite parties and not the complainant. The opposite parties cannot be benefited out of the deficiency flown out from their part.

14.         It is to be further seen, as to whether interest on the amount refunded can be granted in favour of the complainant. It may be stated here that, it is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335. The complainant is, thus, entitled to get refund of the amount paid, alongwith interest, from the respective dates of deposits, till realization.
15.         The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units, by the stipulated date, fell for determination before the Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Relevant part of the said order is reproduced hereunder:-

 “We have in our Judgment in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65 held that in case the amounts have to be refunded, the Interest Act would apply.  In our view, in these matters as it is not possible for us to ascertain what was the prevailing rate of interest,  we have been directing payment of interest @ 12% from the date the amounts were deposited till repayment.”

Furthermore, the Supreme Court of India in H.P. Housing Board Vs. Janak Gupta, (2009) INSC 627, granted interest @12% p.a. on the amount to be refunded by the builder, while holding as under:-

 “We may note that in Haryana Urban Development Authority vs. Darsh Kumar (2005) 9 SCC 449, this Court has said that in future the Forum/Commission will follow the principles laid down by it in the case of Balbir Singh-I(supra).In the light of the aforenoted decisions, the order of the Commission, awarding interest at the rate of 18% per annum cannot be sustained. We are of the view that having regard to the facts and the circumstances of the instant  case, award of interest @ 12% per annum would meet the ends of justice. …………………….”.

In view of principle of law laid down by the Supreme Court of India, in the cases referred to in this paragraph, if interest @12% p.a. is awarded to the complainant, from the respective dates of deposits, till realization, that will meet the ends of justice. At the same time, the complainant is also held entitled for compensation towards mental agony and physical harassment, caused to him, at the hands of the opposite parties. 

16.         Now coming to the objection raised by the  opposite parties, to the effect that this complaint is time barred, it may be stated here that the same stands rejected, in view of the reason that if two years are counted from 05.08.2016, when possession of the plot in question was offered to the complainant, which has been held to a paper one, this complaint  having been filed on 10.01.2018, is well within limitation. Objection taken in this regard, as such, stands rejected.
17.          As far as objection taken to the effect that the complaint is bad for non-joinder  of necessary party i.e. HDFC Limited, from which the complainant had raised loan for making payment towards price of the said plot, it may be stated here that, under similar circumstances, in the cases, where this Commission orders refund of the amount deposited, it is always ordered that banking or financial institution, if any, from which the allottee/purchaser has availed loan facility for making payment of installments towards the plot(s)/unit(s), it will have the first charge of the amount payable, to the extent, the same is due to be paid. In this case also, this Commission is going to pass such directions. As such, no prejudice will cause to the opposite parties, in the matter. Objection taken in this regard, stands rejected.  
18.         No other point was urged by the contesting parties.
19.         For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-

1. To refund the amount of Rs.50,21,500/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.50,21,500/- shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for causing mental agony and physical harassment and also deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @12% p.a. from the date of passing of this order, till realization.

 

20.         However, it is made clear that HDFC Limited from which the complainant has availed loan facility for making payment towards part price of the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
21.         Certified Copies of this order be sent to the parties, free of charge.
22.         The file be consigned to Record Room, after completion.

Pronounced.

26.09.2019

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

 

Rg