Chandigarh

StateCommission

CC/789/2017

Sh. Sudarshan Bhandari - Complainant(s)

Versus

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

Kabir Sarin, Adv.

09 Apr 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	789 of 2017
Date of Institution	:	10.11.2017
Date of Decision	:	09.04.2018

 

1. Sh.Sudarshan Bhandari s/o Sh. Ram Dev Bhandari, r/o #531, Phase 3B1, SAS Nagar, Punjab-160059.
2. Sh. Hreetesh Bhandari s/o Sh. Sudarshan Bhandari, r/o #531, Phase 3B1, SAS Nagar, Punjab-160059.

Through : his father and GPA dated 14.10.2017 Sh.Sudarshan Bhandari s/o Sh.Ram Dev Bhandari r/o #531, Phase 3B1, SAS Nagar, Punjab 160059.

……Complainants

V e r s u s

M/s Emaar MGF Land Private Ltd., having its registered office at ECE House, # 28, Kasturba Gandhi Marg, New Delhi – 110001.

Also at :

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

                                           .... Opposite Party

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

Argued by:      

Sh. Kabir Sarin, Advocate for the complainants.

Sh. Ashim Aggarwal, Advocate for the Opposite Party.

 

PER PADMA PANDEY, MEMBER

              The facts, in brief, are that the complainants being convinced by the tall claims and marketing strategy of the Opposite Party, booked unit in its project under the name and style of “The Views” at Mohali Hills in Sector 105, Mohali, vide application form dated 14.08.2006 deposited an amount of Rs.7 lacs. In pursuance of the application of the complainants, the Opposite Party allotted apartment No.E-1/702 on 7^th floor in the said project vide provisional allotment letter dated 30.11.2006 (Annexure C-1). It was stated that the complainants again received letter dated 20.04.2007 (Annexure C-2), whereby, the Opposite Party had on similar terms yet again unilaterally changed the earlier provisional allotment to apartment No.C-1/702 on 7^th Floor and again called the complainants to clear an amount of Rs.4,40,665/- on or before 15.05.2007. The total amount of the unit, in question, was Rs.45,72,150/-. Thereafter, the Opposite Party allotted apartment bearing No.C1-F07-702 in the project of the Opposite Party and executed Apartment Buyers Agreement on 01.09.2009 (Annexure C-3).  It was further stated that the complainants visited the site and found that the tower/area, where the original unit was located, was far from completion, as such, they made correspondence with the Opposite Party (Annexure C-4 colly.). It was further stated that the Opposite Party admitted not being in a position to provide timely possession of the originally allotted unit and compelled the complainants to shift to another tower, which was estimated to be completed in near future. The complainants having left with no other option but to accept the same, as such, the Opposite Party shifted the unit of the complainants to unit No.L1-F10-1004 measuring approximately 1800 sq. ft. in lieu of earlier unit C1-F07-702 vide letter dated 20.01.2010 (Annexure C-5). It was further stated that the complainants duly paid the entire sale consideration, in respect of the unit, in question, to the tune of Rs.48,04,771/-, as is evident from statement of accounts (Annexure C-7). As per Clause 21.1 of the Agreement, possession of the said unit was to be delivered within a period of 36 months from the date of allotment i.e. latest by 01.09.2012. The complainants were faced with utmost shock and dismay, as they would be facing huge financial loss and were constrained to approach the office of the Opposite Party to seek clarifications on the expected delay but the same remained futile. Complainant No.1 sent numerous representations/correspondence, whereby, he called upon the Opposite Party to immediately redress his grievances and provide assurances/undertakings qua the residential unit and its future projects (Annexure C-8 colly.). It was further stated that the Opposite Party failed to offer/deliver possession of the unit to the complainants. It was further stated that the aforesaid acts, on the part of the Opposite Party, 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), was filed.

2.           The Opposite Party, in its written version, has taken objection regarding arbitration clause in the Agreement, and also, it separately, moved an application 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. It was stated that this Commission has no territorial jurisdiction to entertain and decide the complaint, as the property is situated at Mohali, registered office of the Opposite Party is at New Delhi and as per settled law, a Company can be sued only at the place its registered office is located. It was further stated that this Commission has no pecuniary jurisdiction to try the complaint, as the value of claim together with interest and compensation exceeds Rs.1 crore. It was further stated that the complainants did not fall within the definition of “Consumer” as envisaged under the Consumer Protection Act, 1986, as they are residents of #531, Phase 3B1, SAS Nagar, Punjab, which apparently shows that the complainants are already having house in their names and, as such, they purchased the said unit for commercial purposes/speculation. It was further stated that the complaint was time barred, as the cause of action accrued in 2009. It was further stated that as per Clause 21.1 of the Agreement, the company “proposed” to hand over possession and further as per Clause 23.1, in the event possession is not handed over within stipulated time, the Company would be liable to pay penalty. It was further stated that there was no definitive agreement stating that possession would definitely be delivered within a period of 36 months from the date of allotment. The word used is “proposes”, which means to try/make effort. It was further stated that Company has already offered possession in two of the towers in the project and work is being expedited to hand over the balance towers at the earliest. The works upto wall paint on Tower L1 have already been completed and installation of lifts is under progress and possession would be offered shortly upon obtaining of occupation certificate. It is well settled principle of law that in cases of sale of immovable property and construction, time is never regarded as the essence of the contract, more so when there is penalty clause under the Agreement for any alleged delay. It was admitted regarding booking of the unit and execution of the Agreement. It was further stated that the total amount of the apartment No.TVM L1-F10-1004 was Rs.51,52,158/-, out of which, the complainants paid an amount of Rs.48,04,771/-. It was further stated that the complainants are eligible for OTPR and benefit of the same would be given at the time of intimation of possession. It was denied that possession of the apartment was to be handed over on 01.09.2012. It was further stated that the complainants having accepted alleged delay, cannot at this stage when possession is likely to be offered shortly, seek refund and same would amount to cancellation of contract and attract forfeiture charges. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice.

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

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

5.           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. This question has already been elaborately dealt with by this Commission in case titled Mrs.Anjani Dass Vs. DLF Universal Limited, Complaint Case No.295 of 2017, decided on 19.07.2017. Para No.12 of the said order, inter-alia, being relevant, is extracted hereunder:-

“12.  At the time of arguments, it was also argued by Counsel for the opposite parties that in view of Section 8 of the Arbitration and Conciliation Act, 1996, this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitrator for adjudication.

                We are not going to agree with the argument raised. This Commission, in a case titled as ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126 has already elaborately dealt with this question, while relying upon ratio of judgments of the Hon’ble Supreme Court, titled as Fair Air Engg. Pvt. Ltd. & another Vs. N. K. Modi (1996) 6  SCC 385, C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC 233, Rosedale Developers Private Limited Vs. Aghore Bhattacharya and others, (Civil Appeal No.20923 of 2013), 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), and held that even in the face of existence of arbitration clause in an Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has jurisdiction to entertain the consumer complaint. Furthermore, under similar circumstances, 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, held as under:-

“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.”

Furthermore, the National Commission in a case titled Omaxe Limited Vs. Dinesh Lal Tarachandani, First Appeal No.1433 of 2016, decided on 24.11.2016, while dismissing the appeal filed by the builder (Omaxe), held as under:-

“We are unable to persuade ourselves to agree with the Learned Counsel.  In our opinion, the decision of the State Commission being based on the authoritative pronouncements by the Hon’ble Supreme Court and also on the decision dated 02.05.2016, rendered by this Bench in the case of Lt. Col. Anil Raj & Ors. Vs. M/s Unitech Limited & Ors. in CC No. 346/2013, in which we have held that notwithstanding the amendments in the Arbitration Act, the reasoning and ratio of the decision of the Hon’ble Supreme Court, in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) Through LRs. & Ors.  (Supra) still holds good, no fault can be found with the view taken by the State Commission. 

Consequently, the Appeal fails and is dismissed accordingly.”

                Recently, the larger Bench of the National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, vide order dated 13.07.2017, has held that an Arbitration Clause in the Agreements between the complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.

                In view of the above, argument raised by Counsel for the opposite parties, in this regard, being devoid of merit is rejected.”

             

            Against the order passed by the larger Bench of the Hon'ble National Consumer Disputes Redressal Commission, New Delhi, M/s Emaar MGF Land Limited filed Civil Appeal No.(s) 23512-23513 of 2017 in Hon’ble Supreme Court of India, which was also dismissed.

              In view of the above, the objection raised by Counsel for the Opposite Party, being devoid of merit, is rejected.

6.           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 Apartment Buyer’s Agreement was executed between the parties on 01.09.2009 at Chandigarh (Annexure C-3). Not only this, letters (Annexures C-1, C-2, letter dated 20.01.2010 (at page No.98 of the file) &  Annexure C-6 were sent by the Opposite Party 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 Party, in its written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

7.           Another objection taken by the Opposite Party, with regard to pecuniary jurisdiction, also deserves rejection.  In the present case, even if the interest component is added to the amount claimed/price of the unit, the case is well within the pecuniary jurisdiction of this Commission. In view of above, this objection taken by the Opposite Party that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.

8.           The next question, that falls for consideration, is, as to whether, the complainants fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. Counsel for the Opposite Party stated that as per record of the Opposite Party, the complainants are residents of #531, Phase 3B1, SAS Nagar, Punjab, which apparently shows that the complainants are already having house in their names, as such, they purchased the said unit for commercial purposes/speculation. After going through the record, we are of the view that the objection taken by the Opposite Party does not carry any weight and is liable to be rejected. It has been mentioned by the complainants, in their complaint that complainant No.1 at the time of such expression of interest was a retired Senior Government Officer and was residing in unsuitable accommodation thought it fit to secure the future residential requirements of his family and to ensure that the residential transition of the family is convenient and well taken care of. It was further stated that the complainants being native to the state of Punjab, wish and desire to have his dream residence for subsequent to retirement and settling his children in their home state. Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainants, was sufficient to prove that it was to be used for the purpose of residence, by the complainants. There is nothing, on the record, that the complainants are property dealers. Thus, in the absence of any cogent evidence, in support of the objection raised by the  Opposite Party, mere bald assertion i.e. simply saying that the  complainants purchased the property for speculation purposes, as such, they did not fall within the definition of a consumer, cannot be taken into consideration. Further, in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, decided by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only this, recently in a case titled as  Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the 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.”

 

 

               

                The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. 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 Party, in its written reply, therefore, being devoid of merit, is rejected.  

9.           The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not.  It may be stated here that since it has been frankly admitted by the Opposite Party, in number of paragraphs of its written statement that offer of possession of the unit, in question, could not be made till date, and on the other hand, amount deposited was also not refunded to the complainants, as such, there is continuing cause of action, in their favour, 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 Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

10.          Another objection raised by Counsel for the Opposite Party that since it was mentioned in the Agreement that the Company shall “proposes” to deliver possession of the unit within maximum period of 36 months from the date of allotment, 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 21.1 of the Agreement that possession of the unit will be delivered by the Opposite Party, within a maximum period of 36 months from the date of allotment, subject to force majeure circumstances or reason beyond the control of the Opposite Party. In the instant case, the Opposite Party did not raise any force majeure circumstances, if any, encountered by it. In the absence of any force majeure circumstances having been faced by the Opposite Party or any other valid and legal reason beyond its control, the stand taken by it, 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 21.1 of the Agreement, the Opposite Party was bound to deliver possession of the unit, within a maximum period of 36 months from the date of allotment, as such, time was,  unequivocally made the essence of contract.

              Even otherwise, the Opposite Party cannot evade their liability, merely by saying that since the word endeavour/tentative/ proposed was mentioned in the Agreement, for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Buyer’s Agreement, is an unfair trade practice, on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof.  It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

“Merely making possession by a particular date will also not meet the requirement of law and the promotor is under a legal mandate to stipulate a specific date for delivery of possession of the flat in the agreement which he executes with the flat buyer”.

In view of above, the plea of the Opposite Party in this regard also stands rejected.

11.         The next question, that falls for consideration, is, as to whether, the complainants are entitled for the refund of the amount of Rs.48,04,771/- as claimed by them. It is evident from statement of account (Annexure C-7) that an amount of Rs.48,04,771/- was deposited in respect of the unit, in question. However, the Opposite Party failed to deliver  actual physical possession of the unit, complete in all respects, to the complainants, within the stipulated period, as mentioned in the Agreement or even by the time when the complaint was filed, as the Opposite Party in its written statement clearly stated that the Company has already offered possession in two of the towers in the project and work is being expedited to handover the balance towers at the earliest. The works upto wall paint on Tower L1 have already been completed and installation of lifts is under progress and possession would be offered shortly upon obtaining of occupation certificate. Thus, it is clearly proved that possession has not been delivered to the complainants, as per the stipulated time frame as mentioned in the Agreement or even by the time when the complaint was filed.  The complainants cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit. The Opposite Party, therefore, had 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 facts of the case, the Opposite Party is also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them.

12.         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.48,04,771/-, was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by the Opposite Party, for its own benefit. There is no dispute that for making delayed payments, the  Opposite Party was charging heavy rate of interest (compounded @15% p.a.) as per Clause 20.1 of the Agreement, for the period of delay in making payment of installments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was 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 (2014) 6 SCC 335). In view of above, the  complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.48,04,771/- alongwith interest @10% p.a., from the respective dates of deposit, till realization. 

13.         As far as the plea taken by the Counsel for the Opposite Party, at the time of arguments, regarding forfeiture of earnest money is concerned, it may be stated here that the same stands rejected, because it is not its (Opposite Party) case, that it was ready with possession of the unit, complete in all respects, to be delivered to the complainants, by the stipulated date or even by the time when the complaint was filed but it was they (complainants) who wanted to rescind the contract, on account of some unavoidable circumstances/ financial constraints, due to deficiency in the services of the Opposite Party or for any personal reason, and are seeking refund of the amount deposited. Had this been the case of the Opposite Party, that it was willing to offer possession complete in all respects by the stipulated time, only in those circumstances, it would have been held that since the complainants themselves are rescinding the contract, as such, they are entitled to the amount deposited, after deduction of the earnest money, as per the terms and conditions of the Agreement. In this view of the matter, the plea taken by the Opposite Party, in this regard, has no legs to stand and is accordingly rejected.

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

15.         For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Party is directed, as under:-

1. To refund the amount of Rs.48,04,771/- to  the  complainants, alongwith interest @10% p.a.,  from the respective  dates  of  deposits onwards.
2. To  pay  compensation,  in the sum   of       Rs.1.00 lacs, for causing mental agony and physical harassment, to the complainants.

 

3. To pay cost of litigation, to the tune of Rs.33,000/- to the  complainants.

 

4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @12% p.a.,  instead of @10% p.a. from the date of default, and interest @10% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

 

16.         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 of the amount payable, to the extent, the same is due to be paid by the complainants.

17.         Certified Copies of this order be sent to the parties, free of charge.

18.         The file be consigned to Record Room, after completion.

Pronounced.

April 9^th, 2018.                                       Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

Sd/-

 [DEV RAJ]

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

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