Chandigarh

StateCommission

CC/296/2017

Sohan Singh - Complainant(s)

Versus

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

Rajmat Singh, Adv.

18 Sep 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

 

Complaint case No.	:	296 of 2017
Date of Institution	:	06.04.2017
Date of Decision	:	18.09.2017

 

1. Sohan Singh Mankoo aged about 48 years S/o Amar Singh resident of Village Dhunda, Tehsil Bassi Pathana, District Fatehgarh Sahib.
2. Vivek Singh alias Vivek Shahi aged about 33 years S/o Ranbir Kumar Singh C/o Kamal Goods Carrier, G.T. Road, Barra, Tehsil and District Fatehgarh Sahib.
3. Sharanjeet Singh aged about 37 years S/o Hardam Singh C/o Dhiman Hardwere Store G.T. Road, Sirhind, Tehsil and District Fatehgarh Sahib.

……Complainants.

V e r s u s

1. M/s. Emaar MGF Land Ltd., E.C.E., House No.28, Kasturba Gandhi Marg, New Delhi – 10001, through its Managing Director.
2. M/s. Emaar MGF Land Ltd., SCO No. 120-122, First Floor, Sector 17-C, Chandigarh, through its Branch Manager/authorized signatory.

                                                          .... Opposite Parties

 

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                       MR. DEV RAJ, MEMBER.

                       MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Rajmat Singh, Advocate for the complainants.

Sh. Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER DEV RAJ, MEMBER

               The facts, in brief, are that the Opposite Parties floated a scheme to develop a commercial complex known as “Central Plaza” at Mohali Hills, Sector 105, S.A.S. Nagar, District Mohali, Punjab. Being allured, the complainants booked a shop/unit measuring 1477sq. ft. in the above project by paying Rs.6,91,001/- as registration & booking amount. The complainants further paid Rs.2,30,334/- each vide cheques (Annexures C-1 to C-3 respectively). They were allotted Shop/unit No.23 T.F. measuring 1477 sq. ft. in the aforesaid project and Buyers Agreement dated 24.03.2008 for a total sale price of Rs.49,21,459/- was executed between the parties at Chandigarh (Annexure C-4). It was further stated that as the complainants did not have any space to run their business, they booked the unit, in question, exclusively to setup an office for booking of readymade furniture outlet for the purpose of earning their livelihood by way of self employment.    

2.            It was further stated that as per Clause 22.1 of the Agreement, possession of the unit was to be delivered within a period of 36 months from the date of execution of the Agreement with grace period of 90 days, failing which, as per Clause 24.1 of the said Agreement, penalty of Rs.50/- per sq. ft. per month of the super area of the unit, was to be paid for the period of delay beyond three years till the date of notice offering possession. It was further stated that the Opposite Parties did not hand over possession of the unit, in question on the stipulated date despite receipt of Rs.42,73,007/-.

3.            It was further stated that the Opposite Parties vide statement of account dated 16.05.2016 (Annexure C-7 colly.) raised demand of Rs.37,97,719/- on account of increase in super area from 1477 sq. ft. to 1581 s. ft. and changed the number from 23 to 323 without seeking any consent from the complainants, which was totally arbitrary, unjustified and illegal. 

4.            It was further stated that the Opposite Parties intimated to the complainants to offer possession vide their letter dated 24.04.2015 but the complainants were not obliged to accept the said offer of possession at such belated stage, when such offer was not accompanied by any compensation as per Clause 24.1 of the Agreement. It was further stated that request of complainants during numerous personal visits to the Opposite Parties, to make payment of compensation for delayed period was of no avail. It was further stated that the Opposite Parties are illegally withholding the hard earned amount of Rs.42,73,007/- paid by the complainants, which they are liable to refund alongwith interest.

5.            It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), seeking directions to the Opposite Parties to refund Rs.42,73,007/- to the complainants alongwith interest @18% p.a. from the respective dates of payment till realization; pay Rs.3 Lacs as compensation on account of unfair trade practice, deficiency in service, mental agony and financial loss etc. and Rs.50,000/- on account of dragging the complainants into unnecessary litigation.

6.             The Opposite Parties, in their written version, took up certain preliminary objections regarding arbitration clause in the Agreement, and they also separately, moved miscellaneous application bearing No.668 of 2017 U/s 8 of Arbitration and Conciliation Act, 1996 taking a specific objection in this regard for referring the matter to the Arbitrator in terms of the agreed terms and conditions of the Agreement. The said application was disposed by this Commission vide order dated 07.07.2017 by holding that the applicability of the arbitration process would be seen at the time of final arguments in the main consumer complaint. It was further stated that the complainants are not consumers as they purchased a commercial unit jointly, solely for purpose of speculation and, thus, the complainants do not fall within the definition of “Consumer” as defined under Section 2(d) of the Consumer Protection Act, 1986. It was further stated that no cause of action has arisen in favour of the complainants as the possession of the unit, in question, has already been offered in April 2015. It was further stated that this Commission has no territorial jurisdiction to entertain the complaint, as the impugned property is located at Mohali and the Buyer Agreement was also executed at Mohali. It was further stated that this Commission has no pecuniary jurisdiction to entertain the complaint.

7.            On merits, the factum regarding booking of the unit; execution of the Agreement; allotment of the unit and receipt of the amount of Rs.42,73,007/- as per Statement of Account as on 24.04.2015 (at Page 86 of the written statement) against the unit has been admitted by the Opposite Parties. It was stated that after completion of the shop and receipt of occupation certificate, possession of the unit, in question, was offered to the complainants vide letter dated 24.04.2015 (Annexure R-5) and in case of immovable property, for handing over of possession, time was never the essence. It was further stated that no definite time line was given to hand over the possession of the unit, in question and only an endeavour was to hand over the same within the period stipulated in the Agreement . It was further stated that the demands were raised in accordance with the payment schedule shared with the initial allottee at the time of booking and with the complainants at the signing of the Agreement.  Increase in area of the unit, in question, and consequently, increase in the price of the unit was admitted. It was further stated that till date of intimation of possession, an amount of Rs.9,25,365/- was payable as delayed payment charges and now after issuance of IOP, a sum of Rs.3,59,408/- had accrued till 08.06.2017. It was further stated that the complainants themselves were habitual defaulters. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor did they indulge into unfair trade practice.

8.            The complainants filed rejoinder, wherein, they reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties. 

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

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

11.          The first 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 this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, it is admissible to an Arbitrator to decide a 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 was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“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.”

33.        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. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to 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.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

 

               Same is the ratio of recent judgment passed by three Judges Bench of Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh & Ors. Vs. Emaar MGF Land Ltd. & Anr.’, III (2017) CPJ 270 (NC).

               In view of the above, the plea taken by the Opposite Parties, 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.

12.          The next objection raised by the Opposite Parties was that the complainants are not consumers as they do not fall within the definition of “Consumer” as defined under Section 2(1)(d) of the Consumer Protection  Act, 1986 as they have invested their money

 

jointly only for commercial purpose or some speculation business and they are not end users. It was stated that the complainants are running their independent businesses and have not placed on record any documents to prove their business details or sales tax number etc. We are not going to agree with the contention raised. There is nothing on record to show that the space was purchased by the complainants to earn profits, in future, by selling it at a higher premium. The complainants are not the property dealers and deal in the sale and purchase of property, on regular basis, and as such, there is no evidence to show that the space/unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Furthermore, the complainants have specifically stated in their complaint that as they did not have any space to run their business, the unit, in question, was booked by them, exclusively to setup an office for booking of readymade furniture outlet for the purpose of earning their livelihood by way of self employment. In the rejoinder, in Para 3, the complainants have clearly mentioned that since complainant No.1 is dealing with manufacturing work and complainant No.3, who is proprietor of M/s Dhiman Hardware Store G.T. road, Sirhind, has to supply hardware material to Sohan Furniture house through transport of complainant No.2, namely, Vivek Shai alias Vivek Singh, therefore, all the complainants applied for the unit, in question, jointly for earning their livelihood by way of self-employment as complainant No.2 has to book order at the retail outlet and also has to supply the readymade furniture to the buyers through his transport. Similar controversy, as to whether the complainant(s) on purchase of a shop/unit would fall within the definition of consumer complaint, came up for consideration, before this Commission, in a case titled as M/s Chandigarh Overseas Private Limited Vs. Easow Mathew, First Appeal No.284 of 2015, decided on 25.01.2016. Taking note of similar contentions, this Commission, gave findings as under:-

“6.     On interpreting provisions of application form for allotment/agreements, and other documents on record, the Forum came to the conclusion that construction at the project, was to be completed by 18.01.2010, however, it was not done and possession of the unit, was not delivered, as per promise made by the opposite parties. Defence taken by the appellant that the respondent was not a consumer was righty rejected, by observing as under:-

“As we have already observed, the complainant has specifically pleaded in his complaint that he wanted to settle a business for himself for earning his livelihood and to become an independent business owner, he agreed to purchase the said unit of 100 sq. ft. in Design Studio No.12.  The complainant has also pleaded that he is a consumer as per the provisions of the Consumer Protection Act as the said unit was purchased by him for earning his livelihood.  The allegations of the complainant are supported by his own affidavit.  The OPs have not produced any such evidence that the complainant is a property dealer dealing in the sale and purchase of real estate. The total area of the unit purchased by the complainant from the OPs is only 100 sq. ft. which is for small investors.  Since the complainant wanted to settle a business for himself for earning his livelihood, it cannot be inferred that the said unit was purchased by him with the sole motive of earning profits.  As far as the contention of the learned counsel for the OPs that the complainant is not qualified to run his unit in the project is concerned, it was the duty of the OPs to verify the same before accepting the application for allotment of the unit whether he was eligible under “Small Investor Scheme” or not.  At this stage, such an objection is not tenable.  In Arun Mandhana Vs. Chandigarh Overseas Pvt. Ltd. & Anr., Consumer Complaint No.19 of 2012 decided on 12.10.2012 and Ruchira V. Arora Vs. M/s Chandigarh Overseas Private Limited, First Appeal No.8 of 2013 decided on 1.3.2013, our own Hon’ble State Commission in somewhat similar circumstances in the complaints against the same very OPs held that the size of the studio was small and the sale price of the said studio was also not too high, therefore, it was established that the complainant never intended to run commercial activity in the studio on a large scale with a view to earn huge profits and he fell within the definition of consumer.”

7.        Contention of Counsel for the appellant that the respondent was not a consumer also needs to be rejected, taking note of ratio of the judgement of the National Commission, titled as Kavit Ahuja Vs. Shipra Estate Limited and Jai Krishna Estate Developers Private Limited, Consumer Complaint No.137 of 2010, decided on 12.02.2015. Similar objection was raised, in that case. The National Commission while interpreting the provisions of Section 2 (1) (d) of the Act, held as under:-

“Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

8.        By noting ratio of the judgment of the Hon'ble Supreme Court of India, titled as Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, it was stated by the National Commission in that case that the word commercial purpose is a question of fact to be decided in the facts of each case. It is not value of the goods, which matters, but the purpose, for which the goods bought are put to, needs to be noted. Same would be clearly applicable to, for hiring or availing services. In the present case,  application to purchase a unit, was moved in the year 2006. Out of Rs.5 lacs, an amount of Rs.4,75,000/- stood paid, for purchase of the built-up unit. Rest of the amount was to be paid, at the time of possession of the unit. In the year 2009, when completion of the project was not visible, under above circumstances, when buyback offer was made by the appellant on 22.06.2009, may be on account of frustration in not getting possession of the unit, in time, it was accepted by the respondent, on 04.08.2009 vide letter Annexure C-7. On account of that act, the respondent cannot be excluded from the definition of a consumer. Even otherwise, as has been observed by the National Commission, in the case of Kavit Ahuja's case (supra), that surplus funds can be invested, in such a manner, in purchasing property/unit(s), to earn better returns, in future and unless there is evidence on record that the purchaser thereof, was indulging into sale and purchase of unit(s), on regular basis, he would fall within the definition of a consumer.”

There is nothing, on record, that the complainants owned any other space, in the tricity, in their name. On the other hand, the Opposite Parties failed to produce on record any evidence that the complainants were property dealers or they intended to purchase the commercial space, by way of investment, with a view to sell the same, in the event of escalation in prices.  The complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

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

               According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident from the record, that receipts/acknowledgment-cum-receipt (at Pages 68 to 81) and intimation of possession letter dated 24.04.2015  (Annexure R-5) were issued/sent by Opposite Party No.2 from its Chandigarh Office, as the same bore the address of the Company as “SCO 120-122, First Floor, Sector 17-C, Chandigarh 160017”. Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the Opposite Parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

14.          Another objection taken by the Opposite Parties, with regard to pecuniary jurisdiction, also deserves rejection.  Nothing is mentioned as to how the complainants do not fall within the pecuniary jurisdiction of this Commission. As per admitted facts, the complainants have sought refund of amount of Rs.42,73,007/- alongwith interest @18% p.a. from the date of deposit till actual payment to the complainants; compensation to the tune of Rs.3 lacs and cost of litigation to the tune of Rs.50,000/-. It is apparent from relief clause that the complaint filed is well within the pecuniary jurisdiction of this Commission.

15.          The next question, that falls for consideration, is, as to whether, the complaint filed by the complainant, was within limitation or not.  In the present case, the cause of action arose only on 24.04.2015 when intimation of possession was sent to the complainants (Annexure C-7/R-5) i.e. after a      huge delay of more than four years and Opposite Parties failed to refund the amount to the complainants, when so requested by them. Since the complainants filed the present complaint on 06.04.2017, it is well within the limitation. There is continuing cause of action, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by time. The submission of Counsel for the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

16.        As regards cancellation letter dated 30.06.2011 (Annexure R-6), in the rejoinder the complainants have stated that neither any such letter was issued to them nor the Agreement was ever cancelled by the Opposite Parties. It was further stated that as per statement of account, the Opposite Parties got deposited Rs.2 Lacs and Rs.4 Lacs from the complainants on 25.07.2011 and Rs.2 Lacs on 31.12.2011 (in fact 09.01.2012) and Rs.10 lacs on 20.04.2012. It was further stated no show cause notice was served by the Opposite Parties upon the complainants. It is apparent on record that after issuance of this letter, as per statement of account as on 24.04.2015 (at page 86 of the written statement), demands against the unit, in question, were raised on 25.07.2011 & 09.01.2012 and the complainants duly paid the same. Therefore, the said cancellation stood revoked.

17.          The next question which falls for consideration is whether the Opposite Parties were required to intimate the complainants about increase in area. The area of the unit vide intimation of possession letter dated 24.04.2015 was revised to 1581.04 sq. ft (146.88 sq. mtrs.) from the earlier area of 1477 sq. ft. (137.22 sq. mtrs.). It may be stated here that in terms of Clause 18.1 of the Agreement, intimation was required to be given to the complainants in the event of any alteration/ modification resulting in more than 10% (ten percent) increase or decrease. The increase, in the instant case, being less than 10%, the Opposite Parties were not required to inform the complainants about increase in area.

18.          The next question, that falls for consideration, is, as to within which period the delivery of possession was to be given to the complainants. It is clearly proved from Clause 22.1 of the Agreement that possession of the unit was to be delivered to the complainants maximum within a period of 36 months (+ grace period of 90 days) from the date of agreement. In the present case, agreement was executed on 24.03.2008, as such, possession was to be delivered to the complainants latest by 23.06.2011 but they (Opposite Parties) failed to deliver the same within the stipulated period, as per the Agreement.

19.          The next question, that falls for consideration, is, as to whether the Opposite Parties offered possession of the unit, in question, to the complainants, within the period stipulated in the Agreement, complete in all respects or not. As stated above, as per Clause 22.1 of the Agreement, possession of the unit was to be delivered to the complainants within a maximum period of 36 months + 90 days grace period, from the date of agreement i.e. latest by 23.06.2011 but the Opposite Parties failed to deliver possession of the unit, to the complainants within the stipulated time frame, as mentioned in the Agreement. It was almost after four years from the due date for delivering possession that the Opposite Parties sent intimation of possession letter dated 24.04.2015 (Annexure R-5) to the complainants. It is pertinent to note that there was, thus, huge delay of about 4 years.

20.          The next question that falls for consideration, is, as to whether, the complainants were bound to accept offer of possession, in respect of the unit, in question, when the same was offered to them vide intimation of possession letter dated 24.04.2015 (Annexure R-5), i.e. after a long delay of 4 years from the stipulated period and that too, in the absence of any cogent evidence regarding force majeure circumstances. It is pertinent to note that possession of the unit was to be delivered to the complainants within a maximum period of 36 months + 90 days grace period from the date of agreement i.e. latest by 23.06.2011. However, the Opposite Parties sent letter of intimation of possession only vide letter dated 24.04.2015 to the complainants. It may be stated here that non-delivery of possession of the unit, in question, by the stipulated date, is a material violation of the terms and conditions of the Agreement. There is no cogent evidence on record that the said delay occurred, on account of force majeure circumstances, met by them (Opposite Parties), on account of some valid reason(s). Under similar circumstances, when there was inordinate delay in offering possession, this Commission, in the case of Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, while relying upon the judgments rendered by the Hon`ble National Commission, held as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the Complainant was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

The principle of law laid down in the aforesaid cases is fully applicable to the present case. It is therefore held that the complainants could not be held guilty, of filing the present complaint, seeking refund of the deposited amount, alongwith interest and compensation, as possession of the unit was not offered to them by the stipulated date.

 

Further in ‘Emaar MGF Land Ltd. & Anr. Vs. Dyal Singh’, First Appeal No.462 of 2014, decided on 03.07.2015, Hon'ble National Consumer Disputes Redressal Commission, New Delhi, in Para 16, held as under:-

“16.    Admittedly, appellants did not offer possession of the apartment within  the prescribed period, in terms of Clause 21 of the “Apartment Buyer’s Agreement”,  Moreover, no explanation has been given by the appellants as to why they did not offer the possession of the apartment by the stipulated period, though respondents had paid substantial amount. As per copy of the Statement of Account filed by the appellants, as on 04-Sep-2012 (Page No.133 of Paper Book of F.A. No.462 of 2014), the respondent has paid a sum of Rs.41,45,068/- out of the total sale price of the apartment, which was Rs.48,65,580.50. Thus, deficiency on the part of the appellants started right from that very moment. It is an admitted fact, that as per the agreement possession of the apartment was to be handed over latest by 23.8.2011. But the appellants admittedly offered the possession of the apartment for the first time only  in the year 2013. When the appellants did not offer the possession of the apartment in question within the specified period, under these circumstances, the respondents were fully justified to refuse the offer of possession, as late as in the year 2013. Thus, appellants themselves have violated the relevant terms and conditions with regard to handing over of the possession. Now it does not lie in their mouth to blame  the respondents for their own negligence (i.e. of the appellants). Therefore, appellants by not delivering the legal physical possession of the apartment within the prescribed period, are not only deficient in rendering  service but are also guilty of indulging into unfair trade practice. The appellants in  the present  case are enjoying the hard earned money  of the respondents since 2008. Now on one pretext or the other, appellants do not want to refund the same, though negligence on the part of the appellants, is writ large in this case.”

 

The aforesaid appeal was dismissed by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi with punitive damages. Aggrieved against the aforesaid order, Emaar MGF Land Limited filed Special Leave to Appeal (C) No(s). 32492/2015 before the Hon’ble Supreme Court of India and the same was also dismissed.

21.          In view of the above, it is held that since there was a material violation on the part of the Opposite Parties, in not handing over physical possession of the unit, complete in all respects, within the stipulated date, as mentioned in the Agreement, the complainants were at liberty, not to accept the offer made after a long delay, and on the other hand, were right by seeking refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.

22.          Another objection raised by Counsel for the Opposite Parties that since it was mentioned in the Agreement that the Company shall endeavour to deliver possession of the unit within maximum period of 36 months, as such, time was not the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 22.1 of the Agreement that possession of the unit will be delivered by the Opposite Parties, within a maximum period of 36 months from the date of agreement. The Opposite Parties were entitled to a grace period of 90 days after the expiry of 36 months for applying and obtaining occupation certificate. Further Clause 22.3 stipulated that “In the event that the possession of the premises is likely to be delayed for reason of any force majeure event or any other reason beyond the control of the Developer, then in any of the aforesaid events, the Developer shall upon notice claiming force majeure to the Allottee be entitled to such extension of time till the force majeure event persists or the reason beyond the control of the Developer exists….” In the instant case, the Opposite Parties neither specifically informed the complainants of force majeure circumstances, if any, encountered by them nor did they produce any cogent evidence. In the absence of any valid and legal reason, the stand taken by the Opposite Parties, in this regard, for condonation of delay in delivery of possession of the unit, to the complainants, cannot be taken into consideration. Thus, under these circumstances, since as per Clause 22.1 of the Agreement, the Opposite Parties were bound to deliver possession of the unit, within a maximum period of 36 months + 90 days (total 39 months), from the date of agreement, as such, time was,  unequivocally the essence of contract.

23.          The next question, that falls for consideration, is, as to whether, the complainants are entitled to refund of the amount of Rs.42,73,007/-, deposited by them. It is, no doubt, true that the complainants deposited the total amount of Rs.42,73,007/- in respect of the unit, in question, as is evident from statement of account (at Page 86 of the written statement). It is an admitted fact that the Opposite Parties were not in a position to hand over possession of the unit to the complainants, complete in all respects, within the stipulated time frame, as mentioned in the Agreement. The possession of the unit offered by the Opposite Parties to the complainants vide letter dated 24.04.2015 i.e. after a huge delay of more than 4 years, was not acceptable to the complainants, and they were not bound to accept the same. The Opposite Parties, therefore, have no right, to retain the hard-earned money of the complainants, deposited towards price of the unit, in question. The complainants are thus, entitled to get refund of amount deposited by them. In view of above, the Opposite Parties are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them.

24.          It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the complainants. It is not in dispute that an amount of Rs.42,73,007/-, was paid by the complainants, during the period December, 2007 uptil November, 2013, without getting anything, in lieu thereof. The said amount has been used by the Opposite Parties, for their own benefit. 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 them, the said right. It was also so said by the Hon’ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014. It may be stated here that it is the case of the Opposite Parties that till date of intimation of possession, an amount of Rs.9,25,365/- was payable as delayed payment charges and now after issuance of intimation of possession, a sum of Rs.3,59,408/- had accrued till 08.06.2017. It was further stated that the complainants themselves were habitual defaulters. It may be stated here that as per Clause 24.1 of the said Agreement, penalty of Rs.50/- per sq. ft. per month of the super area of the unit, was to be paid for the period of delay beyond three years in handing over of possession, till the date of notice offering possession. The Opposite Parties have stated that the complainants defaulted continuously, when demands were raised. On the other hand, the complainants have stated that they did not pay the demands raised as compensation in terms of clause 24.1 was never paid by the Opposite Parties. The complainants defaulted repeatedly by not paying the amounts towards demands raised, which, also partly contributed to non-completion of the unit, in question, in time. The complainants should have paid rest of the amount but they failed. As per Clause 24.2, compensation was payable if the complainants did not default in payments as per schedule of payments or breached the terms of agreement. Had there been little default on the part of the complainants, such a clause might not be applicable but in the instant case, default was repeated a number of times, as is proved from the detail of bounced cheques, given at Page 87 of the written statement i.e. Final Statement of Account as on 24.04.2015. Due to defaults in making timely payments, on the part of the complainants, delayed interest accumulated in the sum of Rs.9,25,365/- and now after issuance of intimation of possession, a sum of Rs.3,59,408/- had accrued till 08.06.2017. When the complainants on receipt of intimation of possession did not wish to take possession, they could file the consumer complaint immediately but they waited almost for two years and filed the complaint just a month before the expiry of 2 years limitation period. Therefore, in the facts and circumstances of the instant case, the complainants are not entitled to same rate of interest as this Commission is awarding in the cases relating to this project. In our opinion, award  of interest @10% p.a. would meet the ends of justice. Therefore, the complainants are held entitled to get refund of the amount deposited by them, to the tune of Rs.42,73,007/- alongwith interest @10% p.a. (simple) from the respective dates of deposits till realization. 

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

26.          For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are jointly and severally held liable and directed, as under:-

1. To  refund   the  amount of Rs.42,73,007/-, to  the complainants, alongwith simple interest @10% p.a. (simple), from the respective  dates of deposits onwards, within 45 days, from   the  date of receipt of a certified copy of  this   order.
2. To pay compensation in the sum of Rs.1,50,000/- for causing mental agony and harassment and cost of litigation to the tune of Rs.33,000/-, to the complainants, within 45 days, from the date of receipt of a certified copy of this order.
3. In case, the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then the Opposite Parties  shall be liable to pay the amount mentioned in Clause (i) with simple interest @13% p.a., instead @10% p.a. (simple), from the date of filing the complaint, till realization, and interest @10% p.a. (simple), on the  amount of compensation and litigation cost, mentioned in Clause (ii), from the date of filing the complaint, till realization.

27.          However, it is made clear that, if the  complainants have availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it will have the first charge on the amount payable, to the extent, the same is due to be paid by the complainants.

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.

18.09.2017

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

 

 [DEV RAJ]

MEMBER

 

 

 (PADMA PANDEY)

         MEMBER

Ad