Chandigarh

StateCommission

CC/52/2020

Gaurav Singh Khurana - Complainant(s)

Versus

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

Devinder Singh, Ullas Kapoor Adv.

29 Oct 2021

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.

:

52 of 2020

Date of Institution

:

26.02.2020

Date of Decision

:

29.10.2021

 

 

  1. Gaurav Singh Khurana S/o Kanwal Preet Singh, R/o H.No.3005, Sector 28-D, Chandigarh – 160002.
  2. Nimrat Kaur Khurana D/o Joginder Singh W/o Gaurav Singh Khurana, R/o H.No.3007, Sector 19-D, Chandigarh – 160019.

…… Complainants

V e r s u s

  1. M/s Emaar MGF Land Pvt. Ltd., through its Managing Director/ Principal Officer, having its Registered Office at MGF House, 17-B, Asaf Ali Road, New Delhi – 110002.
  2. M/s Emaar MGF Land Ltd., SCO No. 120-121, 1st Floor, Sector 17-C, Chandigarh.

…..Opposite Parties

BEFORE:              JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS.PADMA PANDEY, MEMBER.

                             MR. RAJESH K. ARYA, MEMBER.

 

Present through Video Conferencing:-

                         Sh.Ullas Kapoor, Advocate for the complainants.

                         Sh.Sanjeev Sharma, Advocate for the Opposite Parties.

 

PER PADMA PANDEY, MEMBER

         

                   The above captioned complaint has been filed by the complainants seeking refund of amount of Rs.37,75,900/-, paid to the opposite parties, towards purchase of apartment bearing Flat No.H2-902, Tower-H, measuring 1350 square feet, in a project launched by  them under the name and style ‘The Views”, Sector 105, SAS Nagar, Mohali, Punjab (in short the unit), total sale price whereof was fixed at Rs.41,36,550/-, on the ground that they failed to deliver possession thereof by 30.01.2011 i.e. within a period of 36 months from the date of allotment (30.01.2008), as envisaged under Clause 21.1 of the Agreement dated 30.01.2008 (Annexure C-2) for dearth of construction and development works at the project site. It is the case of the complainants that number of requests made in the matter, in writing as well as oral, to the opposite parties, to complete the development and construction work and deliver possession of the unit in question ended with bald assurances only. At one point of time, the opposite parties vide email committed to deliver possession of the unit, but to no avail. Under those circumstances, the complainants sought refund of the amount paid alongwith interest, but to no avail. By stating that the aforesaid act and conduct of the opposite parties  amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainants seeking directions to the opposite parties to refund the entire amount paid alongwith interest, compensation; litigation expenses etc. 

  1.           The complaint has been contested by the opposite parties on numerous grounds, inter alia, that in the face of arbitration clause contained in the agreement, this consumer complaint is not maintainable;  that this Commission did not vest with pecuniary and territorial jurisdiction; that the complainants being speculator did not fall within the definition of consumer; that the clause with regard period of possession contained in the agreement clearly says that it was only proposed that possession will be delivered within a period of 36 months from the date of allotment, as such, time was not the essence of contract; that for any delay in offering possession, interests of the complainants were safeguarded by way of penalty clause contained in the agreement; that because the project in question has been got registered under RERA under which, possession of the units has to be delivered by June 2020, as such, jurisdiction of this Commission is barred from entertaining this complaint;  that this complaint filed is time barred; that the complainants did not rescind the contract as such now they cannot file this complaint seeking refund of amount paid; and that still if they want refund of the amount  paid forfeiture of earnest money shall be applicable as per terms and conditions of the agreement
  2.           On merits, purchase of the unit in question by the complainants, in the manner narrated in the complaint; amount received towards the unit in question, as mentioned in the complaint; and that there is a delay in delivering possession of the said unit and that the same has not been delivered even till the date of filing this complaint has not been disputed by the opposite parties. Prayer has been made to dismiss the complaint with costs.
  3.           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, the parties have adduced evidence by way of affidavits and also produced numerous documents including written arguments by the parties, wherein they have reiterated their contentions.                  
  4.           Accordingly, we have heard counsel for the complainant and have gone through the entire record of the case, including the written arguments, very carefully.
  5.           From the pleadings of parties and other material available on the record, following points have emerged for consideration in this case: -
    1. Whether in the face of existence of Arbitration clause in the agreement and that the project has been got registered under the provisions of RERA in 2017, jurisdiction of this Commission in entertaining and deciding this complaint is barred?
    2. Whether the complainant falls under the definition of consumer?
    3. Whether this Commission is vested with pecuniary and territorial jurisdiction to entertain this complaint or not?
    4. Whether time was essence of the contract?
    5. Whether the complaint filed is within limitation?
    6. Whether there was any deficiency in rendering service on the part of the opposite parties?
    7. Whether the opposite parties are entitled to forfeit earnest money out of the amount  deposited towards price of the said unit or not?
    8. Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?

 

  1.           First coming to the  objection taken by the opposite parties to the effect that in the face of existence of Arbitration clause in the agreement, jurisdiction of this Commission is barred; 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 buyer 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 taken in this regard stands rejected.
  2.           Now we will deal with the objection taken by the opposite parties to the effect that in the face of provisions of RERA under which the project has been got registered vide letter dated 26.09.2017, Annexure OP-2, jurisdiction of this Commission is barred to entertain this complaint.

                   In the first instance, it may be stated here that if some part of the land of the project (14.084 acres) had been got registered under the provision of RERA in September 2017, it has not relation whatsoever, with the project in question, wherein the unit in question was sold in the year 2006 and possession thereof was to be delivered latest by 30.01.2011 as per clause 21.1 of the agreement dated 30.01.2008, Annexure C-2.  In the said letter dated 26.09.2017, Annexure OP-2, it has nowhere been written by the issuing Authority that after issuance of this letter, blanket immunity has been provided to the opposite parties for all the faults committed by them flowing out of deficiency in providing services, negligence and adoption of unfair trade practice on their part especially cheating the gullible customers.

                   As far as plea taken regarding jurisdiction of this Commission, in the face of registration of the project under the provisions of RERA is concerned, it may be stated here that the same does not merit acceptance, in view of the ratio of law laid down by the Hon’ble Supreme Court of India in Civil Appeal No. 3581-3590 of 2020, M/s Imperia Structures Ltd. Vs. Anil Patni and another, decided on 02.11.2020, wherein it was held that the provisions of RERA Act does not in any way bar the consumer foras under the provisions of the CP Act to entertain any consumer complaint. Relevant part of the said order reads as under:-

 

24. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.

 

25. Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force. 26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called “consumers” within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.

 

*27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee , it was held by this Court:- “The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. *(See Bharat Bank Ltd. V. Employees and Nahar Industrial Enterprises Ltd. vs. Hong Kong & Shanghai Banking *Corpn . On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint…”

 

                   This view has been reiterated by the Hon’ble Supreme Court of India in Civil Appeal No. 5785 of 2019, Ireo Grace Realtech Pvt. Ltd. Versus Abhishek Khanna & Others, decided on 11.01.2021. As such, objection taken in this regard stands rejected.

  1.           An objection was also taken by the opposite parties to the effect that the complainant 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 parties to establish that the complainants have purchased the unit in question to indulge in ‘purchase and sale of units’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their onus, hence we hold that the complainant is a consumer as defined under the Act. The mere fact that the Complainants had any other property in their names at Chandigarh is not a ground to shove the complainants out of the definition of consumer. In our considered opinion, a person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the Hon’ble National Commission negated the plea taken by the builder, while holding as under:-

“….In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house. 

 

Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose…..”

 

                   In this view of the matter, objection taken by the opposite parties, stands rejected. 

  1.           Now we will deal with the objection taken by the opposite parties with regard to pecuniary jurisdiction. It may be stated here that this complaint has been filed under the Consumer Protection Act, 1986, under which, for determining pecuniary jurisdiction, this Commission is required to take into consideration the value of the goods and compensation claimed if any, by the complainant. In the present case, as stated above, keeping in view the value of the unit purchased by the complainant and compensation claimed, the same exceeds Rs.20 lacs and fell below Rs.1 crore.  In this view of the matter, this Commission has pecuniary Jurisdiction to entertain and decide this complaint.
  2.           Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant case, it is evident that Payment Receipt dated 12.08.2006 was issued by the company in favour of the allottee, from its Office at SCO 120-122, 1st Floor, Sector 17-C, Chandigarh. Furthermore, even the agreement dated 30.01.2008, Annexure C-2, in respect of the unit in question was executed at Chandigarh,  meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Office at Chandigarh and personally work for gain thereat. Thus, it is held that this Commission at Chandigarh has got territorial jurisdiction to entertain and decide this complaint. Objection taken, thus, stands rejected.
  3.           There is no dispute with regard to the fact that the unit in question was purchased by the Complainants, in the aforesaid project, for which an amount of Rs.37,75,900/- against total sale consideration of Rs.41,36,550/-stood received by the opposite parties. It is also an admitted fact that the opposite parties failed to deliver possession of the unit in question by the promised date i.e. 30.01.2011 (within a period of 36 months from the date of allotment thereof as per Clause 21.1 of the Agreement dated 30.01.2008), for dearth of construction and development works. In the joint written reply filed, no firm commitment to hand over possession of the unit in the near future has been made by the opposite parties. The opposite parties failed to apprise this Commission, as to by which date, construction will be completed and possession of the unit, can be handed over to the complainant. Not even a single reason has been given for delay in offering possession of the unit in question to the complainant. It is settled law that onus to prove the stage and status of construction and development work at the project, and that all the permissions/approvals have been obtained in respect of the project in question, is on the builder/developer. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. It is very strange that in the present case, not even an iota of evidence has been placed on record by the opposite parties to prove as to at what stage, construction and development work has reached at the project site. In case, the development/construction activities are being undertaken and are about to complete, then it was for the opposite parties, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, had been undertaken and completed at the site or not or about to complete, but they failed to do so.
  4.           However, to wriggle out of the situation, it has been stated by the opposite parties, that since the complainants were offered possession but they did not step forward, as such, now they cannot seek refund of the entire amount paid and on the other hand, forfeiture clause will be made applicable whereby earnest money out of the deposited amount will be forfeited. We do not agree with the same, for the reasons to be recorded hereinafter.

                   In the first instance, it is submitted that once the opposite parties were not in a position to deliver possession of the unit purchased by the complainant, in the manner stated above, by the committed date, for dearth of construction and development activities, they could not impose the same forcibly and at the same time, the Complainants were not obliged to accept the same. Our this view is supported by the observations made by the Hon’ble National Commission in Emaar MGF Land Ltd. & anr. V. Amit Puri (First Appeal No.250 of 2014), decided on 30.03.2015, holding that if the Developer fails to deliver possession of the allotted unit within the stipulated time, the allottee is under no obligation to accept an alternative unit. Similar observations were made by the Hon’ble National Commission in Syed Nizam Ali Vs. Guruprasad, Revision Petition No. 463 of 2016, decided on 29th Feb 2016. Relevant part of the said order is reproduced hereunder:-

“The contention of the Counsel for the Revision Petitioner that awarding 15% interest is excessive also cannot be sustained as the District Forum had awarded this interest only by way of damages and did not award any amount towards compensation.  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 admission of the opposite parties to the effect that they offered the possession to the Complainants and also ready to compensate her for the period of delay, in itself is sufficient to hold that they made false representations in respect of the unit in question, which were materially incorrect and were made in such a way that the complainants, to whom it was made, was entitled to rely upon it and they may act in reliance on it. The complainants are thereby involved in a disadvantageous contract with the opposite parties and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true. All the facts established that from the very inception there was intent to induce the complainants to enter into the contract by way of signing agreement, referred to above, and also intent to deceive her, which act amounts to grave deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties.

  1.           The unit in question was booked as far as back in 2006 and now it is 2021 and still the complainants are empty handed. There has been an inordinate delay in the matter. Under above circumstances, we are of the considered opinion that we cannot make the complainants to wait for an indefinite period for delivery of possession of the unit in question, at the whims and fancies of the opposite parties. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date or if no period is mentioned in the agreement, within a reasonable period say two to three years from the date of booking, 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. Our this view is supported by the observations made by the Hon’ble National Commission in Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018. This view taken is further supported by the principle of law laid down by the Hon’ble 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 and also  in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. In the present case also, since there has been an inordinate delay in the matter as such, we are of the considered opinion that, in the facts and circumstances of this case, if we order refund of the amount paid alongwith interest @11% p.a. as explained above, that will meet the ends of justice. 

                   At the same time, it is also held that since fault if any is on the part of the opposite parties only, as they miserably failed to offer and deliver possession of the unit to the complainants by the committed date referred to above or even by the date when arguments were heard in this  case, thereby causing lot of mental agony and harassment to them, as such, they cannot take any benefit out of the deficiency in providing service and adoption of unfair trade practice on their part, by forfeiting the earnest money. Plea taken by the opposite parties in this regard stands rejected.

  1.           As far as objection taken by the opposite parties to the effect that time was not the essence of contract, it may be stated here that, in the absence of any force majeure circumstances, having been faced by the opposite parties, they were legally bound to deliver possession of the unit in question, by the committed date i.e. by 30.01.2011 (within a period of 36 months from the date of allotment thereof as per Clause 21.1 of the Agreement dated 30.01.2008), but they miserably failed to do so. Other than the Clause referred to above, there is no Clause, which speaks about the period/date for delivery of possession of the unit to the complainants. Thus, the opposite parties cannot wriggle out of the commitments made vide the Clause aforesaid, with regard to time period for delivery of possession of the unit. It is therefore held that time was unequivocally made the essence of contract. In view of above, plea taken by the opposite parties to the effect that time was not essence of the contract or that no definite period was given to offer possession of the unit, being devoid of merit stands rejected.
  2.           Furthermore, the opposite parties also cannot wriggle out of their liability by saying that delay took place on account of the reason that the purchaser delayed/defaulted in making payment, in view of principle of law laid down by the Hon’ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date or within a reasonable period where no agreement is executed, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon’ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development and construction work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser.  In the instant case also, if the purchaser after making payment of substantial amount or stopped the same for some time, when he came to know that the project has been launched without obtaining necessary approvals/sanctions from the competent Authorities; and there was delay in raising construction on the part of the opposite parties, he was right in doing so, in view of principle, referred to above, laid down by the Hon’ble Supreme Court in Haryana Urban Development Authority (supra).  Objection taken in this regard stands rejected.
  3.           Since, it is an admitted fact that possession of unit in question, has not been offered either by the promised date or by the date this complaint has been filed or even thereafter, as explained above, as such, there is a continuing cause of action in favour of the complainants to file this complaint in view 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),  wherein it was held that when possession of the residential units is not offered, there is a continuing cause of action in favour of the allottee/buyer. Objection raised in this regard, as such, stands rejected.
  4.           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.37,75,900/- to the complainants, alongwith interest @11% p.a. from the respective dates of deposit onwards, without deducting any TDS, within a period of 30 days from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 14% p.a. (11% 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 harassment 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 @9% p.a. from the date of passing of this order, till realization.
  1.           However, it is further made clear that in case the complainants had availed loan facility from any Bank/Financial Institution, for making payment towards price of the unit in question, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainant.
  2.           Certified copies of this order be sent to the parties, free of charge.
  3.           The file be consigned to Record Room, after completion.

 

Pronounced.

29.10.2021

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

[PADMA PANDEY]

MEMBER

 

Sd/-

 [RAJESH K. ARYA]

MEMBER

“Dutt”  

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