Chandigarh

StateCommission

CC/91/2019

Mr. Davinder Singh Khangura - Complainant(s)

Versus

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

Satinder Singh Randhawa Adv.

22 Jan 2020

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	91 of 2019
Date of Institution	:	26.04.2019
Date of Decision	:	22.01.2020

 

1. Mr.Davinder Singh Khangura s/o Mr.Gurdial Singh Khangura, r/o C-9/9079, Vasant Kunj, New Delhi 110070 India.
2. Mrs.Harinder Khangura w/o Mr.Davinder Singh Khangura, r/o C-9/9079, Vasant Kunj, New Delhi 110070 India.

 

……Complainants

V e r s u s

M/s Emaar MGF Land Limited, through its Managing Director/Principal Officer, having its Registered Office at ECE House #28, Kasturba Gandhi Marg, New Delhi-110001.

Also at:-

M/s Emaar MGF Land Limited, SCO No.120-121, 1^st Floor, Sector 17-C, Chandigarh through its Director Mr.Shravan Gupta.

….Opposite Party

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

 

BEFORE:       JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                      MRS. PADMA PANDEY, MEMBER.

                      MR. RAJESH K. ARYA, MEMBER.

 

Argued by:    Sh.Satinder Singh Randhawa, Advocate for the complainants.

Sh.Sanjeev Sharma, Advocate for the opposite party.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   The above captioned complaint has been instituted seeking directions to the opposite party, to refund the amount of Rs.45,83,555/- paid by the complainants towards purchase of flat bearing no.TVM-K2-F01-103, measuring 1550 square feet, in the project named “The View”, Sector 105, SAS Nagar, Mohali. Total sale consideration of the unit was fixed at Rs.46,50,006.66ps. It is the case of the complainants that despite the fact that they  have paid substantial amount of Rs.45,83,555/- i.e. more than 95% of the total sale consideration, for the period from 21.06.2011 to 30.07.2011, yet, possession of the said unit was not delivered within a period of 36 months from the date of allotment i.e. from 12.07.2011 as envisaged under Clause 21.1 of the agreement. However, when possession was offered after an inordinate delay on 28.03.2018, even then it was found that neither construction of the unit was complete nor basic amenities were provided at the project site.   

                   By stating that the aforesaid act and conduct of the opposite party in not handing over possession of the unit in question, by the committed date and on the other hand offering possession of an incomplete unit and that too after an inordinate delay, amount to deficiency in providing service, negligence and adoption of unfair trade practice, the complainants have filed the present case seeking refund of amount paid alongwith interest, compensation etc.

2.           Their claim has been contested by the opposite party, 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 the complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act; that this Commission did not vest with territorial jurisdiction; that the complaint filed is beyond limitation; that time was not the essence of contract as it was mentioned in the agreement that the Company only proposes to complete construction and development work within 36 months from the date of allotment of the unit; that for any delays, stipulated penalty has been provided in the agreement, which safeguarded the interest of the complainants; and that because the project in question has been got registered under RERA as such jurisdiction of this Commission to adjudicate this complaint is barred.
3.           On merits, purchase of the unit by the complainants; payments made as mentioned in the complaint; execution of agreement; and that there was inordinate delay in offering possession of the unit has not been disputed by the opposite party. It has been averred that delay in offering possession of the unit took place on account of force majeure circumstances having been faced by the opposite party; that for the delay caused, the complainants were suitably compensated as per terms and conditions of the agreement. It has been contended that after completing the construction and basic amenities, possession of the unit in question was offered to the complainants vide letter dated 28.03.2018 (Annexure C-10) and that too after obtaining partial completion certificate but instead of taking over the same, they have filed this complaint seeking refund of the amount paid, as such, under these circumstances, forfeiture clause contained in the agreement will be applicable. Prayer was made to dismiss the complaint.
4.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence by way of affidavits and also produced numerous documents.
5.           We have heard the contesting parties and have carefully gone through record of the case, very carefully.
6.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
   1. Whether the arbitration clause contained in the agreement bars the jurisdiction of this Commission?
   2. Whether this Commission has territorial jurisdiction to entertain this complaint?
   3. Whether the complainants fall under the definition of consumer?
   4. Whether time was essence of the contract?
   5. Whether the complainants are bound to take over possession offered to them after an inordinate delay of more than 3 ½ years?
   6. Whether the complaint filed is within limitation?
   7. Whether the complainants are entitled to get refund of the amount deposited and if yes, at what rate of interest?
   8. Whether forfeiture clause will be applicable to the present case?

 

7.           First of all, coming to the objection raised with regard to jurisdiction of this Commission in the face of existence of Arbitration clause contained in the agreement, it may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, 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 party in this regard stands rejected.
8.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that in the instant case, perusal of almost all the documents placed on record reveal that the same have been issued by the opposite party from its Chandigarh Office i.e. SCO No.120-122, ^1st Floor, Sector 17-C, Chandigarh. Even the Agreement in respect of unit in dispute, containing detailed terms and conditions has been executed at Chandigarh Office of the Company, meaning thereby that the opposite party was actually and voluntarily residing and carrying on business from its branch office at Chandigarh and personally works for gain hereat. As such, objection taken in this regard is rejected. 
9.           As far as objection taken to the effect that the complainants did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite party to establish that the complainants have purchased the unit/flat in question to indulge in ‘purchase and sale of flats’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since it failed to discharge that onus, hence we hold that the complainants are consumers as defined under Section 2(1)(d) of the Act. Mere fact that the complainants are residing in a house at Delhi or anywhere else, cannot be made a ground to shove them out of the definition of a consumer. Objection taken in this regard is rejected.
10.           There is no dispute with regard to the fact that against total sale consideration of Rs.46,50,006.66ps., the complainants paid an amount of Rs.45,83,555/- i.e. more than 95% of the total sale consideration, for the period between 21.06.2011 to 30.07.2011, to the opposite party towards purchase of the said unit. It is also an admitted fact that despite the fact that it was in a clear-cut manner, committed by the opposite party vide Clause 21.1 of the agreement that possession of the unit will be delivered within a period of 36 months from the date of allotment i.e. on or before 11.07.2014 (date of allotment being 12.07.2011), yet, the opposite party miserably failed to do so and on the other hand, possession was offered to the complainants on 28.03.2018 i.e. after an inordinate delay of more than three and a half years. The opposite party has not disputed the said inordinate delay, and, rather, in a very candid manner, admitted in para no.c of the written reply that since amenities were not completed at the project site, possession was not offered to the complainants. Relevant part of the said para reads as under:-

“.The possession had not been offered since the amenities were not been completed for the unit allotted….”

Under above circumstances, at the time of arguments, Counsel for the complainants contended that since there has been an inordinate delay in the matter, the complainants are not bound to take over possession of the unit at such a belated stage and are entitled to seek refund of the amount paid. Whereas, on the other hand, Counsel for the opposite party contended with vehemence, that because the possession so offered was a genuine one, though belatedly, the complainants are bound to take over the same. Under these circumstances, the moot question which needs consideration is, as to whether, the complainants were bound to take over possession of the unit in question, offered after an inordinate delay of more than three and a half years. It may be stated here that a similar question fell for determination before the Hon’ble National Commission in Govindan Raghavan Vs. Pioneer Urban Land And Infrastructure Ltd., Consumer Case No. 239 of 2017, decided on 23 Oct 2018, wherein while negating the plea taken by the builder, refund of the amount paid was ordered, by holding as under:-

“16.    The learned counsel for the OP submits that in CC No.239 of 2017, not only the construction of the apartment has already been completed, even the requisite Occupancy Certificate has been obtained on 23.07.2018 and therefore, the complainant should now take possession of the allotted flat instead of insisting upon the refund of the amount paid by him towards the cost of the flat.  The learned counsel for the said complainant states on instructions that the complainant is no more interested in taking possession of the allotted flat and wants refund of the amount paid by him alongwith appropriate compensation.  Considering that the last date for completion of the construction expired about three years before the Occupancy Certificate was obtained, and in fact, it had expired more than one year before this complaint was instituted, the complainant, in my opinion, cannot be compelled to accept possession of the flat at this belated stage.”

 

11.           Feeling aggrieved, against the order dated 23.10.2018, the builder went in  Civil Appeal No.12238 of 2018,  before the Hon’ble Supreme Court, which was dismissed by it vide order dated 02.04.2019, while holding as under:-

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired…….”

12.           Because in the present case there is an inordinate delay of more than three and a half years in offering possession of the unit in question, as such, in view of settled law that non-delivery of possession of plots/units in a developed project by the promised 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, if we order refund of the amount paid alongwith suitable interest that will meet the ends of justice.  The complainants are therefore held entitled to get refund of the amount paid alongwith interest, from the respective dates of deposits till realization.
13.           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/plots, by the stipulated date, fell for determination before the Hon`ble 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, the Hon`ble 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. Recently also, under similar circumstances, the Hon’ble National Commission in Anil Kumar Jain & Anr. Vs. M/S. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23^rd Dec 2019, ordered refund of the amount paid, alongwith interest @12% p.a.
14.           As such, in view of principle of law laid down by the Hon`ble Supreme Court of India and also the National Commission, this Commission is of the consideration opinion that if the complainants are granted interest @12% p.a. from the respective dates of deposits that will meet the ends of justice. In no way the opposite party can forfeit any amount out of the deposited one, as it is not its case that the complainants have sought refund of amount paid on account of some personal reasons and are quitting before expiry of the period committed for possession, as contained in the agreement. At the same time, the opposite party is also held liable to compensate the complainants for deficiency in providing service, negligence and adoption of unfair trade practice and also causing them mental agony; harassment and financial loss.
15.           As far as objection raised by the opposite party, to the effect that this complaint is time barred, it may be stated here that the same is devoid of merit, in view of observations made by the Hon’ble National Commission in a case titled as Ansal Housing And Construction Ltd. Vs.  Tulika Gupta & Anr., First Appeal No. 545 of 2017, decided on 24 Aug 2017, to the effect that till the time either the possession is given to the allottees or the amount paid by them was refunded; there will be a continuing cause of action to file a consumer complaint. Relevant part of the said order is reproduced hereunder:-

“As regards the plea of limitation, ordinarily if the  possession is not given to the allottees, they would have a recurrent cause of action to file the complaint till the time either the possession was given to them or the amount paid by them was refunded.  Of course, the complainants would also have an earlier cause of action in case allotment is cancelled.”

 

                   Even otherwise, in the present case, if period of two years are counted from 28.03.2018 i.e. the date when possession was offered to the complainants, even then this complaint having been filed on 26.04.2019, is within limitation.

16.           The next question under our consideration is as to whether, time for handing over possession of the unit to the complainants, was essence of the contract or not? It may be stated here that a specific period of 36 months from the date of allotment, for delivering possession of the unit to the complainants, has been mentioned in Clause 21.1 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 unit to complainants. The opposite party has not placed on record an iota of evidence to convince this Commission that it actually encountered any force majeure circumstances, as a result whereof, it was legally entitled for extension of time for delivering possession of the unit to the allottees, including the complainants. The opposite party cannot wriggle out of the commitments made vide Clause 21.1 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 party in this regard stands rejected.
17.           As far as objection taken to the effect that in the face of registration of the project under RERA, jurisdiction of this Commission is barred, it may be stated here that the same does not hold field, in view of findings/observations made by the Hon’ble National Commission in Mohit Sharma & Anr. Vs. M/S. Ramprastha Promoters and Developers Pvt. Ltd. & Anr., Consumer Case No. 2384 of 2017, decided on 01 May 2019, wherein it was held that RERA does not bar the jurisdiction of Consumer Fora. Similar view was reiterated by the Hon’ble National Commission in Sandeep Mittal Vs. Ireo Grace Realtech Pvt. Ltd., Consumer Case No. 1916 of 2016, decided on 30 Jul 2019.  
18.           For the reasons recorded above, this complaint is partly accepted with costs and the opposite party is directed as under:-

1. To refund the amount of Rs.45,83,555/- to the complainants, 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.45,83,555/- 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.

          However, the opposite party is at liberty to deduct the amount of compensation, if any, paid to the complainants, for the period of delay in offering possession of the unit in question, out of the aforesaid awarded amount.

2. To pay compensation for causing mental agony and physical harassment; 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 complainants, 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.

19.           However, it is made clear that if the complainants have availed loan facility from any Bank/Financial Institution, for making payment towards price of the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainants.
20.           Certified Copies of this order be sent to the parties, free of charge.
21.           The file be consigned to Record Room, after completion.

Pronounced

22.01.2020

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

Sd/-

(RAJESH K. ARYA)

MEMBER

 Rg.