Chandigarh

StateCommission

CC/484/2016

Surjit Singh Thadwal - Complainant(s)

Versus

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

Atul Goyal,Adv.

15 Dec 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	484 of 2016
Date of Institution	:	19.08.2016
Date of Decision	:	15.12.2016

 

Surjit Singh Thadwal son of Late Sh./Mr.Bachan Singh, resident of South Crest, Cryfield Grange Road, Coventry, Warks, U.K.-CV47AQ, through his Special Power of Attorney holder Sh.Kulbir Singh son of Sh.Piara Singh, resident of V.P.O. Randhawa Masanda, District Jalandhar, Punjab.

……Complainant

V e r s u s

1. M/s Emaar MGF Land Pvt. Ltd., SCO 120-122, First Floor, Sector 17-C, Chandigarh, through its Authorized Signatory or Branch Manager.
2. M/s Emaar MGF Land Ltd., Corporate Office, ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001, through its Managing Director

              .... Opposite Parties

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

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by: Sh.Atul Goyal, Advocate for the complainant.

                Sh.Ashim Aggarwal, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT’

                The complainant is an NRI and presently residing in U.K. This complaint has been filed through his Special Power of Attorney holder namely Sh.Kulbir Singh. It is stated that the  said Attorney holder is fully conversant with the facts of the present dispute. Copy of Special Power of Attorney has been placed on record as Annexure C-1.

                       

2.         It is stated by the complainant that, for his own residential purpose, he booked one flat, in a project, launched by the opposite parties namely “The Views”, Mohali Hills, Sector 105, SAS Nagar, Mohali. It was assured to the complainant by representative of the opposite parties that Emaar MGF Land Limited, is a leading Real Estate Company and, in case, he invests in the said project, he would get possession of the flat, as promised, in a time bound manner. Upon this, the complainant paid an amount of Rs.7 lacs, towards registration of his expression of interest, for a flat, consisting 3BHK, vide cheque dated 04.04.2008. Vide allotment letter dated 29.04.2008, he was allotted flat no.L1-F06-602, in the said project. Besides constructed unit, he was to be provided with one car parking space, for an amount of Rs.1.50 lacs. Preferential Location Charges were fixed @ Rs.100/- per square feet. Total price of the said unit was fixed at Rs.55,98,293/-, which included External Development Charges also. The complainant was directed to deposit further amount of Rs.3,51,159/- within 45 days from the date of booking i.e. latest by 25.05.2008. Copy of allotment letter has been placed on record as Annexure C-3. The complainant opted to make down payment in one go. His request was accepted. Discount was offered to him and he was directed to pay only balance amount of Rs.41,95,264/- which was paid by him, through cheque on 15.05.2008. Copy of receipt has been placed on record as Annexure C-4. It is his grievance that when allotment letter was handed over to him, no terms and conditions were introduced.  Later on, Apartment Buyer’s Agreement was got signed on 28.07.2008 and as per Clause 21.1 of the said Agreement, possession was agreed to be delivered within 36 months from the date of allotment. The said provision reads thus:-

“Subject to Force Majeure conditions and reasons beyond the control of the Company and subject to the Allottee not being in default of any of the provisions of this Agreement and having complied with all provisions, formalities, documentation etc. and the terms and conditions of this Agreement, the Company proposes to hand over the possession of the Apartment within a period of 36 months from the date of allotment. The Allottee agrees and understands that the Company shall be entitled to a grace period of ninety (90) days, after the expiry of 3 months for applying and obtaining the occupation certificate in respect of the Group Housing Complex”.

3.         It is specifically mentioned that subject to force majeure circumstances, the opposite parties proposes to deliver physical possession of fully constructed flat, within a period of 36 months from the date of allotment i.e. on or before 28.04.2011, with grace period of 90 days after the expiry of 3 months, for obtaining occupation certificate etc., failing which they were liable to pay compensation by way of penalty, for the period of delay in handing over possession of the unit.
4.         It is further case of the complainant that as per the said Agreement, balance amount of Rs.2,62,789.63ps., was to be paid, at the time of getting intimation of offer of possession. When possession of the unit was not offered to the complainant, as promised, he approached the opposite parties, through telephone, in the years 2011, 2012 and 2013. Every time, he was assured that he will get possession in near future. In October 2014, he had a talk with Branch Manager of the opposite parties and he was intimated that he is likely to get possession of the unit, in next six months. His query qua handing over possession of the unit made to the opposite parties, in the month of November 2015 also met the same fate. The complainant got information from website of the opposite parties, showing status of construction as “incomplete”. Faced with the situation, he asked for refund of the amount paid with interest. However, he failed to get any positive result.

                Stating that he has lost faith in the opposite parties, this complaint was filed seeking refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-.

5.         Upon notice, joint written reply was filed by the opposite parties on 25.10.2016.
6.         Thereafter, on 26.10.2016, an application under Section 8 of the Arbitration and Conciliation Act, 1996, was filed by the opposite parties, wherein, it was pleaded that in the face of existence of an 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 and let the matter be referred to an arbitration for adjudication. The said application was disposed of vide order dated 27.10.2016, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case.

                It was averred in the joint written reply that the complainant did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as he being an NRI had purchased the unit, in question, for commercial purpose i.e. for selling the same, as and when there was escalation in the prices of real estate, to gain huge profits. Not only this, he had purchased another unit, in the project of the opposite parties and have transferred it. By placing reliance on the ratio of judgment of Larger Bench, passed by the National Consumer Disputes Redressal Commission, New Delhi (National Commission), titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016, pecuniary jurisdiction of this Commission was challenged stating that if interest claimed is added in other relief claimed, it fell beyond Rs.1 crore.  Territorial jurisdiction of this Commission was also challenged. It was pleaded that that the complaint was time barred. It was averred that relationship of the complainant with the Attorney aforesaid, has not been explained.

7.         Purchase of unit by the complainant, in the manner, referred to above, is not disputed. It was admitted that the complainant had purchased the unit, in question, against down payment plan. Payment of amount of Rs.48,95,264/- was also not disputed. The contents of allotment letter dated 29.04.2008 and terms and conditions mentioned in the Buyer’s Agreement are also admitted. It was also admitted that on account of making down payment in one go, discount to the extent of Rs.4,32,565.88ps.,  besides free car parking space was given to the complainant. It was also stated that, as per Clause 21.1 of the Agreement,  it was agreed between the parties, that the Company only proposes to deliver possession of the unit, in question, within a period of 36 months, from the date of allotment, as such, time was not the essence of contract. It was further stated that it was well within the knowledge of the complainant that for any delays, stipulated penalty has been provided in the Agreement, which safeguarded his interest. It was averred that construction work is under progress and possession of the flat, in question, will be offered to the complainant, at the earliest. It was also said that the opposite parties are ready to relocate the complainant to some other unit, in the same project, where possession could be offered to him immediately. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite parties, nor they had indulged into any unfair trade practice as alleged. The remaining averments, were denied, being wrong. It was prayed that let the complaint be dismissed.
8.         During pendency of the complaint, on 05.12.2016, an application was moved by the complainant, to place on record  an affidavit dated 02.12.2016, wherein it was sworn by him (complainant) that Sh.Kulbir Singh, his Special Power of Attorney holder, is his cousin brother. It was also stated in the said affidavit that the complainant has not transferred any plot to anybody, as alleged by the opposite parties and rather he intends to use the same for his personal use, as and when, he visit his motherland. The said application was disposed of, by this Commission, vide order dated 07.12.2016.
9.         The parties led evidence in support of their case.
10.         We have heard Counsel for the parties and have gone through the evidence and record of the case, very carefully. Except raising frivolous objections, not even a single word has been stated, as to why and under what circumstances, the opposite parties failed to complete construction of the unit. To convince this Commission, even this much has not been stated that construction was delayed on account of global meltdown and/or on account of shortage of construction material, by placing on record any evidence in that regard. No explanation worth the name has been given, in causing delay on construction. In view of above, benefit of delay on account of force majeure conditions, as contained in terms and conditions of the Agreement cannot be extended in favour of the opposite parties.
11.         It is on record that it is a case of failed promise made by the opposite parties with the complainant. It is not in dispute that the complainant purchased a flat from the opposite parties in their project namely ‘The Views’, for total sale price of Rs.55,98,293/-. Allotment letter was issued in his favour on 29.04.2008. There is no dispute that the complainant opted for one time down payment plan and further it is also not denied that immediately, thereafter, i.e. within less than two months, he paid an amount totaling Rs.48,95,264/-. Rest of the amount was to be paid on getting offer of possession of the unit. As per the provisions of Clause 21.1 of the Agreement, possession of the unit was to be delivered within 36 months from the date of allotment i.e. on or before 28.04.2011, with grace period of 90 days after the expiry of 3 months, for obtaining occupation certificate etc. For delay in delivery of possession, provision of penalty was made. In view of above, there is no substance in the arguments raised by Counsel for the opposite parties that time was not the essence of contract

                At the same time, it is also submitted that the opposite parties cannot evade their liability, merely by saying that since the word proposed/tentative 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 parties in this regard also stands rejected.

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

                According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him. In the instant case, it is evident from the record, that the Agreement was executed between the parties at Chandigarh. Not only this, even the payment receipt dated 15.05.2008 Annexure C-4, clearly reveals that substantial amount of Rs.41,95,264/- was received by Chandigarh Office of the opposite parties, as the same (receipt) bore the address of the Company as “Emaar MGF Land Limited, Chandigarh”. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, 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. 

13.         Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.
14.         In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer :

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.”

 

15.         It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

                As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

                In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

 

“12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

 

(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

 

(2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

 

(3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and

 

(ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.”

 

16.         In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.`s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.
17.         The next question, that falls for consideration, is, as to whether, the complainant fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here that the mere objection of the opposite parties that since the complainant is a Non-Resident Indian (NRI), as such he has purchased the unit, by way of investment, to gain huge profits, by selling the same, as and when there was escalation in prices, does not carry any weight and is liable to be rejected. It has been mentioned by the complainant, in para no.2 of his complaint that the said unit has been purchased by him, for his own use. On the other hand, nothing contrary to this, has been proved by the opposite parties, by placing on record, any document. Even otherwise, the mere fact that it was a residential unit, which was allotted, in favour of the complainant, was sufficient to prove that it was to be used for the purpose of residence, by the complainant, might be on or off while he visits to India (his motherland) or his family. There is nothing, on the record, that the complainant is a property dealer. Thus, in the absence of any cogent evidence, in support of the objection raised by the  opposite parties, mere bald assertion i.e. simply saying that the  complainant being investor because he is an NRI, or he had purchased another property in the project of the opposite parties, which was transferred later on, as such, he did not fall within the definition of a consumer, cannot be taken into consideration. At the same time, no law debars an NRI, who basically belonged to India, to purchase a residential property in India. Under similar circumstances, the Hon`ble National Commission, in a case titled as Smt. Reshma Bhagat & Anr. Vs. M/s Supertech Ltd. Consumer Complaint No. 118 of 2012, decided on 04.01.2016, held as under:-

“We are unable to clap any significance with these faint arguments.  It must  be borne in mind that after selling the property at Bangalore, and  in order  to save  the money from riggers  of capital gain tax, under  Section 54 of the Income Tax Act, 1961, there lies no rub in getting the property, anywhere, in whole of India.  There is not even an iota of evidence that they are going to earn anything from the flat in dispute.  From the evidence, it is apparent that the same had been  purchased  for  the residence of  the complainants.  Moreover, Sh. Tarun S. Bhagat, who is an independent person. It cannot be made a ‘rule of thumb’ that every NRI cannot own a property in India.  NRIs do come to India, every now and then.  Most of the NRIs have to return to their native land. Each NRI wants a house in India.  He is an independent  person  and  can  purchase any  house in India,  in his own name.”

       

                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  complainant, 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.  

18.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainant, was within limitation or not.  It may be stated here that since it has been frankly admitted by the opposite parties, in number of paragraphs of their joint written statement that offer of possession of the flat, in question, could not be made till date, as the construction work thereof is still going on and on the other hand, amount deposited was also not refunded to the complainant alongwith interest, when request for the same was made by him in November 2015, as such, there is continuing cause of action, in his 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 parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
19.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.48,95,264/- deposited by him. It is an admitted fact that the opposite parties are unable to offer and deliver possession of the unit, in question and still firm date of delivery of possession of the unit, could not be given to him (complainant). The complainant cannot be made to wait for an indefinite period, for delivery of actual physical possession of the unit purchased by him. The opposite parties, therefore, had no right, to retain the hard-earned money of the complainant, deposited towards price of the unit, in question. The complainant is thus, entitled to get refund of amount deposited by him. In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.
20.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the  complainant. It is not in dispute that an amount of Rs.48,95,264/- was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the  opposite parties, for their own benefit. There is no dispute that for making delayed payments, the opposite parties were charging heavy rate of interest (compounded quarterly @15%) as per Clause 4.1 of the Agreement, for the period of delay in making payment of instalments.  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. In view of above, the complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.48,95,264/- alongwith interest from the respective dates of deposits onwards.  
21.          Since, it has already been held that the complainant is entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by the opposite parties to the effect that they are ready to pay penalty amount for the period of delay, in delivery of possession cannot be considered, at this stage. If the opposite parties are allowed to invoke the relevant Clause of the Agreement, in the instant case, regarding payment of penalty, that would amount to enriching them, at the cost of the complainant. The defence taken is accordingly rejected.
22.         The next 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.

                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.”

                It is also desirable to reproduce unamended provisions of Section 8 of 1996 Act, which reads thus:- 

“8. Power to refer parties to arbitration where there is an  arbitration agreement.—

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

23.         Many a times, by making reference to the provisions of Section 8 of 1996 Act, in the past also, such objections were raised and the Hon'ble Supreme Court of India, when interpreting the provisions of Section 3 of 1986 Act, in the cases of 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) etc., came to a conclusion that the remedy provided under Section 3 of 1986 Act, is an independent and additional remedy and existence of an arbitration clause in the agreement, to settle disputes, will not debar the Consumer Foras, to entertain the complaints, filed by the consumers.

                In the year 2015, many amendments were effected in the provisions of 1996 Act. After amendment, Section 8 of 1996 Act, reads as under:-

“8. Power to refer parties to arbitration where there is an arbitration agreement.—

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

24.         Now it is to be seen, whether, after amendment in Section 8 of the principal Act, any additional right has accrued to the service provider(s), to say that on account of existence of arbitration agreement, for settling the disputes through an Arbitrator, the Consumer Foras have no jurisdiction to entertain a consumer complaint. As has been held by Hon'ble Supreme Court of India, in various cases, and also of the National Commission, in large number of judgments, Section 3 of the 1986 Act, provides additional remedy, notwithstanding any other remedy available to a consumer. The said remedy is also not in derogation to any other Act/Law.
25.         Now, we will have to see what difference has been made by the amendment, in the provisions of Section 8 of 1996 Act. After amendment, it reads that a Judicial Authority is supposed to refer the matter to an Arbitrator, if there exists an arbitration clause in the agreement, notwithstanding any judgment, decree, order of the Hon'ble Supreme Court of India, or any other Court, unless it finds that prima facie, no valid arbitration agreement exists. The legislation was alive to the ratio of the judgments, as referred to above, in earlier part of this order. Vide those judgments, it is specifically mandated that under Section 3 of 1986 Act, an additional remedy is available to the consumer(s), which is not in derogation to any other Act. As and when any argument was raised, the Hon'ble Supreme Court of India and the National Commission in the judgments, referred to above, have made it very clear that in the face of Section 8 of 1996 Act and existence of arbitration agreement, it is still opened to the Consumer Foras to entertain the consumer complaints. None of the judgments ever conferred any jurisdiction upon the Consumer Foras to entertain such like complaints. Only the legal issues, as existed in the Statute Book, were explained vide different judgments. If we look into amended provisions of Section 8 of the principal Act, it explains  that judicial Authority needs to refer dispute, in which arbitration agreement exist to settle the disputes notwithstanding any judgment/decree or order of any Court. That may be true where in a case,  some order has been passed by any Court, making arbitration Agreement non-applicable to a dispute/parties. However, in the present case, the above said argument is not available. The jurisdiction of Consumer Foras to entertain consumer complaints, in the face of arbitration clause in the Agreement, is in-built in 1986 Act. It was not given to these Foras, by any judgment ever. The provisions of Section 3 of 1986 Act interpreted vide judgments vis a vis Section 8 of un-amended 1996 Act, were known to the legislature, when the amended Act 2015 was passed. If there was any intention on the part of the legislature, then it would have been very conveniently provided that notwithstanding any remedy available in 1986 Act, it would be binding upon the judicial Authority to refer the matter to an Arbitrator, in case of existence of arbitration agreement, however, it was not so said.
26.         We can deal with this issue, from another angle also. If this contention raised is accepted, it will go against the basic spirit of 1986 Act. The said Act (1986) was enacted to protect poor consumers against might of the service providers/multinational companies/traders. As in the present case, the complainant has spent his life savings to get a unit, for the residential purpose, referred to above. His hopes were shattered. Litigation in the Consumer Fora is cost effective. It does not involve huge expenses and further it is very quick. A complaint in the State Commission can be filed, by making payment between Rs.2000/- to Rs.4000/- (in the present case Rs.4000/-). As per the mandate of 1986 Act,  a complaint is supposed to be decided within three months, from the date of service to the opposite party. In cases involving ticklish issues (like the present one, maximum not more than six months to seven months time can be consumed), whereas, to the contrary, as per the principal Act (1996 Act),  the consumer will be forced to incur huge expenses towards his/her share of Arbitrator’s fees. Not only as above, 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 can safely be said that if the matter is referred to an Arbitrator, as prayed, in the present case, it will defeat the very purpose of the provisions of 1986 Act.
27.         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 unit, in question, in the said project, launched by the opposite parties. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the constructed unit, in question, in a developed project, on account on non-completion of construction. 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.

                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.”

                In view of the above, objection raised by Counsel for 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.

28.         The objection raised by the opposite parties to the effect that the complainant failed to disclose relationship with his Attorney holder is not sustainable, in view of affidavit referred to above, submitted by him (complainant), wherein he has sworn that Sh.Kulbir  Singh, his power of attorney holder, is his cousin brother.
29.         No other point, was urged, by Counsel for the parties.
30.         For the reasons recorded above, the complaint is partly accepted, with costs. The  opposite parties are jointly and severally directed as under:-

1. To refund the amount Rs.48,95,264/- to  the  complainant, alongwith interest @12% p.a. (as prayed),  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the  complainant.
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 @15% p.a.,  instead of @12% p.a. from the respective dates of deposits onwards, and interest @12% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

31.         However, it is made clear that, if the complainant has 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 him (complainant).
32.         Certified Copies of this order be sent to the parties, free of charge.
33.         The file be consigned to Record Room, after completion.

Pronounced.

15.12.2016

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

 (DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg