Chandigarh

StateCommission

CC/454/2016

Sukhdev Singh Sidhu - Complainant(s)

Versus

M/s Emerging India Housing Corporation - Opp.Party(s)

Gaurav Chopra, Adv.

25 Jan 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	454 of 2016
Date of Institution	:	12.08.2016
Date of Decision	:	25.01.2017

 

Sukdhev Singh Sidhu son of Sh.Jora Singh, resident of VPO Charik, District Moga, now at H.No.1183, Gali No.3, Jujhar Nagar, near Nimbuan Wala Bagh, Moga.

……Complainant

V e r s u s

1. M/s Emerging India Housing Corporation, having its Registered Office at B-57, Lower Ground Floor, South Extension-II, New Delhi, through its Authorized Representative.
2. M/s Emerging India Housing Corporation, having its Head Office at SCO 46-47, Sector 9-D, near Matka Chowk, Madhya Marg, Chandigarh-160009, through its Authorized Representative.

              .... 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:Ms.Kashika Kaur, Advocate for the complainant.

                Opposite Parties exparte.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                 The complainant has filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short the Act), with a prayer that directions be issued to the opposite parties to refund an amount of Rs.30,67,200/-, with interest, paid by him, to them (opposite parties). He is also seeking grant of compensation to the tune of Rs.5 lacs, for mental agony and physical harassment, besides payment of Rs.1 lac towards litigation expenses.

2.         It is his case that on assurances, commitments and projections given by representatives of the opposite parties, he booked a flat, measuring 1605 square feet, in a project launched by the opposite parties, under the name and style of ‘Emerging Heights-III, situated on Landran-Banur Road, Sector 115, Greater Mohali, Punjab, for which, he paid an amount of Rs.1,25,000/- as booking amount, vide receipt dated 16.07.2011. Vide letter dated 16.07.2011, it was confirmed by the opposite parties that he has been allotted flat, in the said project. He was asked to pay first installment of Rs.4,12,600/- which constituted 15% of the sale consideration of flat. The said amount was deposited by the complainant, vide receipt dated 09.08.2011. Subsequently, as per demands raised by the opposite parties, the complainant kept on making payment of installments. By 03.04.2012, the complainant had paid an amount of Rs.14,33,600/-.
3.         Vide provisional allotment letter dated 18.04.2012, the complainant was allotted flat bearing no.B-302, measuring 1605 square feet, for a total sale consideration of Rs.35,84,000/-. The complainant opted for interest free installment plan. Thereafter, the complainant was asked to make remaining amount towards the said flat. As such, as per demands raised, the complainant had paid the total amount of Rs.30,67,200/- towards price of the said flat i.e. 85% of the total sale consideration.
4.         It is necessary to note here that it is positive case of the complainant that despite the fact that 85% of the total sale consideration towards the said flat had been paid by him, Buyer’s Agreement was never presented for signing. It is further said that construction of the block/tower, in which the unit is located, has not yet commenced, as such, the question of offer and delivery of possession thereof, did not at all arise. Despite requests made, no concrete date to start construction and hand over possession of the flat was given by the opposite parties to the complainant.
5.         At the time of arguments, it was stated by Counsel for the complainant that when the project, in question, was sold in the year 2011, necessary Change of Land Use (CLU) certificate and other permissions were not available with the opposite parties. It was further stated that when grievance of the complainant was not redressed by the opposite parties, notice dated 08.07.2016 was served upon them (opposite parties) seeking refund of the amount deposited alongwith interest but the same was not even replied.  Hence this complaint.
6.         Upon notice, joint written reply was filed by the opposite parties, pleading that in the face of existence of an arbitration Clause in the allotment letter to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It was averred that the complainant did not fall within the definition of a “consumer” as defined under Section 2(1)(d) of the Act, as he 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. Territorial jurisdiction of this Commission was disputed, by saying that mere making payment in Bank account of the opposite parties, at Chandigarh, did not confer any jurisdiction on this Commission to adjudicate the complaint. It was averred that the dispute being not covered under the Consumer Protection Act, 1986 (in short the Act), the instant complaint was not maintainable. It was stated that the complaint is bad for misjoinder and non-joinder of parties. It was also pleaded that the present complaint is barred by limitation. It was further stated that even the affidavit filed by the complainant, in support of his complaint is defective.
7.         Purchase of unit by the complainant, in the manner, referred to above, is not disputed. Issuance of allotment letter and price of the unit is also not in dispute. Payments made vide receipts dated 15.12.2012 (Rs.3,58,400/-), 06.08.2013 (Rs.3,58,400/-) and 31.10.2013 (Rs.2 lacs) are disputed, saying that the same had not been received by the opposite parties. It was pleaded that since the complainant defaulted in making payment towards the said unit, as such, the same was cancelled by the opposite parties vide letter dated 09.01.2014. It was further stated that, consequently, the complaint having been filed after a period of two years from the date of cancellation of the unit, was palpably barred by time. However, at the same time, it was pleaded that since two copies of Agreement for signatures of the complainant was sent to him, vide letter dated 24.01.2013, wherein it was mentioned that possession of the unit will be delivered by 30.05.2017, as such, the complaint having been filed in the year 2016, is pre-mature. It was averred that the complainant failed to return the said Agreement after signatures.  It was stated that construction of the unit is almost complete. Delay in offer of possession occurred, because of several reasons. It was stated that delay in offer of possession also occurred, as some similar situated allottees alongwith the complainant defaulted in making payment of installments, as per the schedule given. It was averred that the opposite parties had obtained all the necessary approvals/sanctions for constructing the units and developing the project, in question. 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 unfair trade practice. The remaining averments, were denied, being wrong.
8.         The parties led evidence, in support of their case.
9.         On the date of arguments i.e. 13.01.2017, none put in appearance on behalf of the opposite parties, as a result whereof, they were proceeded against exparte. Accordingly, we have heard Counsel for the complainant and, have gone through the evidence and record of the case, carefully. 
10.         The first question that falls for consideration, is, as to whether, this Commission has got territorial jurisdiction to entertain and decide this complaint or not. It may be stated here that according to Section 17 (2) (b) of the Consumer Protection Act, 1986 (in short the Act) a complaint can be filed in the State Commission, within the limits of whose jurisdiction, any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution. Further, as per Section 17 (2) (c) of the Act, a complaint can also be filed in the State Commission, where the cause of action, wholly or in part, arises to the party, filing the complaint. It is significant to mention here that perusal of page 34 of the file, forming part of the provisional allotment letter dated 18.04.2012, clearly reveals that it has been admitted in writing by the opposite parties that they have its Corporate Office at Chandigarh. At the same time perusal of almost all the documents on record also reveals that even the Head Office of the opposite parties is located at Chandigarh i.e. SCO 46-47, Sector 9-D, Near Matka Chowk, Madhya Marg, Chandigarh-160009. In these circumstances, it could easily be said that the opposite parties are having their Head Office and Corporate Office at Chandigarh, from where, they are carrying on business and personally works for gain. At the same time, it has also been proved on record and has been admitted by the opposite parties that payments, in respect of the unit, in question, were received by them, from the complainant, at Chandigarh. Therefore, in our considered view, the complaint can be entertained and adjudicated upon by this Commission, at Chandigarh, in view of the provisions of Sections 17(2)(b) and 17 (2) (c) of the Act. 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. 
11.         The next question that falls for consideration is as to whether, the complainant is an investor and did not fall within the definition of a consumer, under Section 2 (1) (d) (ii) of the Act, as alleged by the opposite parties or not. It may be stated here that there is nothing on record, that the complainant is a property dealer, and deals in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by him, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. On the other hand, the complainant has specifically clarified in the rejoinder filed, that he had purchased the unit in question for personal use. Since, the opposite parties have leveled allegations against the complainant, as such, the onus lays upon them, to prove it, which they failed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by the  opposite parties, mere bald assertion i.e. simply saying that the complainant being investor, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, 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. 

 

 

                The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainant, thus, falls 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. 

12.         Another objection was also taken by the opposite parties, in their written version, that consumer complaint was not maintainable, as there was no promise to provide any service to the complainant.

                It may be stated here that the complainant hired the services of the opposite parties, for purchasing the unit, in question, and  he was ultimately allotted the same for consideration, in the manner explained above. It was not that the complainant purchased the unit, in an open auction, on “as is where is basis”.  In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2 (1) (o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C.1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act, provides an alternative remedy. Even if, it is assumed that the complainant had a remedy to file a suit, in the Civil Court, the alternative remedy provided under Section 3 of the Act, could be availed of by him, as he falls within the definition of a consumer. In this view of the matter, the objection  taken by  the opposite parties, in their written version, being devoid of merit, must fail, and the same stands rejected.

13.         As far as the objection taken by the opposite parties, to the effect that the complaint is bad for non-joinder and misjoinder of party(s), is concerned, it may be stated here that the opposite parties failed to clarify, as to which party(s) was/were required to be added or deleted, in the head-note of the instant complaint, which could have effect the facts of the case. Such an objection taken by the opposite parties, in this regard, therefore, being without any justification, is rejected.
14.         Admittedly, the complainant booked the unit, in question, in the project launched by the opposite parties. He was allotted a flat, vide allotment letter dated 18.04.2012. Price of the unit was fixed at Rs.37,81,100/-. No clear cut date/time has been specified in the said allotment letter, as to when, possession of the unit, was to be delivered to the complainant. It was only  mentioned therein that possession of the unit is expected to be handed over on the date, as mentioned in the sale brochure or on the date of payment of entire cost towards the unit. However, in the written version, it has been stated that possession was to be delivered on or before 30.05.2017. We will discuss on this, in later part of this order. 

                As per receipts placed on record, the complainant had already paid an amount of Rs.30,67,200/- to the opposite parties. No doubt, out of the deposited amount, the opposite parties have disputed an amount of Rs.3,58,400/-, Rs.3,58,400/- and Rs.2 lacs, paid on 15.12.2012, 06.08.2013 and 31.10.2013, respectively. We are not going to accept this plea taken by the opposite parties, in this regard, for the reasons given hereinafter.

                In the first instance, it is submitted that the complainant has produced on record, documentary evidence, in the shape of receipts (at pages 46 to 49) having been issued by the opposite parties, to prove that the payment, in dispute, has been made by them to the opposite parties. The said receipts are signed by an authorized signatory of the opposite parties. To challenge the said receipts, the opposite parties should have placed on record cogent and convincing evidence, to prove that the said amount was not paid to them. They could have very well produced the ledger account of the complainant and also the bank statements, pertaining to the unit and project, in question, for the relevant period, but they failed to do so. By not placing the said record before this Commission, an adverse inference could very well be drawn against the opposite parties that had the said record been placed on record, the same would have gone against their interest. Not only this, in the notice dated 08.07.2016 sent by the complainant through registered post (legal mode), on the correct address of the opposite parties, he had sought refund of amount of Rs.30,67,200/- alongwith interest. In the said notice, the complainant has showed the date-wise details by way of chart, in respect of the amount so paid to the opposite parties. Had the disputed amount been not received by the opposite parties, they would have definitely replied to the said notice, saying that the same (amount in dispute) had not been paid by the complainant to them, but they did not do so. Besides as above, the opposite parties in para no.3 of preliminary objections, have themselves admitted, by showing date-wise chart, that the complainant had made the payment of Rs.30,67,200/- though with minor delay. Under these circumstances, it is held that the complainant has proved his case, that he had paid total  amount of Rs.30,67,200/-, towards price of the said unit. The stand taken by the opposite parties, in this regard, being devoid of merit, is rejected. 

15.         Perusal of payment schedule and the chart indicated by the opposite parties, make it very clear that there was slight delay in making payment on the part of the complainant, which in no manner, can be said to be so huge, which could cause delay in construction and offer of possession of the unit.

                At the same time, it is also pertinent to mention here that even, as on today, nothing concrete has been produced on record to show that construction of the tower, in which the unit, in question, is located is complete and ready for offer of possession.  Already a period of more than four years has lapsed from the date of booking of the unit, but possession has not been offered to the complainant, despite the fact that out of total sale consideration of Rs.37,81,100/-, an amount of Rs.30,67,200/- i.e. about 85% has been paid to the opposite parties. The stand taken by the opposite parties, in their written version, that the construction work is almost complete and that they were in possession of all the necessary approvals/sanctions to construct the flats and develop the project, cannot be accepted as correct. It is well settled law that the onus to prove that the project had been completed and the area/site, in question, is fully developed, is on the builder/opposite parties. It was so observed 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. Thus, in case, all the development activities, had been undertaken, and construction of the flats is complete at the site, 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 activities, had been undertaken and completed at the site or not, but they failed to do so. At the same time, they were also required to produce on record, a copy of the occupation and partial/final Completion Certificates (if obtained), having been issued by the Competent Authority, which could be said to be best evidence, to prove their case, but they miserably failed to do so. As such, an adverse inference can very well be drawn against the opposite parties, that they have not obtained the occupation and partial/final completion certificates, in respect of the unit and project, in question, for want of construction and basic amenities. It is therefore held that even till date, the construction of Tower, in which the flat, in question, is located is not complete.

16.         Besides as above, it has also come out from the record that the opposite parties had not obtained necessary approvals and sanctions from the Competent Authorities, before launching and selling the project, in question. Admittedly, the unit, in question was booked by the complainant in the year 2011 and the same was provisionally allotted to him, vide letter dated 18.04.2012. However, perusal of the record placed by the opposite parties themselves reveals that environment clearance for construction of flats, in the said project was issued by the Competent Authority, only on 05.06.2015; clearance from Fire Department was given on 10.02.2015; No Objection Certificate (NOC) from Punjab Pollution Control Board, was issued on 23.04.2015; Certificate regarding technical approval of the project by the Govt. was issued on 05.12.2012; NOC for discharge of sewerage treated water was issued on 10.04.2015; NOC from the Government of India, Ministry of Defence/Raksha Mantralaya was issued only on 03.07.2014; and NOC from Air Headquarters, New Delhi, was issued on 08.07.2014. Thus, it is clearly proved by way of documents, referred to above, that the project was marketed, launched and sold before getting approvals/sanctions from the Competent Authorities, which is an unfair trade practice, on the part of the opposite parties. Similar view was expressed by the National Commission in Emerging India Real Assets Pvt. Ltd. and another vs. Kamer Chand and another, Revision-Petition No.765 of 2016, decided on 30.03.2016.

                Under these circumstances, it is held that delay in construction and offer of possession of the unit, in question, was not on account of delay in making payments by the complainant (in the present case minor delay), but it was on account of non-obtaining of necessary permissions/sanctions by the opposite parties, in respect of the project, in question, from the Competent Authorities. Even otherwise, the plea taken up by the opposite parties to the effect that delay in offer of possession of flats occurred on account of delay in making payment by some of the allottees including the complainant, has no legs to stand, in view of decision rendered by the National Commission, in a case titled as Puneet Malhotra Vs Parsvnath Developers Ltd., Consumer Complaint No.  232 of 2014, Decided on 29.01.2015, wherein under similar circumstances it was observed that “If some of the allottees had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating Inventory at a lower price”. In the present case, the opposite parties are trying to shift their deficiencies, on the shoulders of the complainant, by taking bald pleas, which is not sustainable in the eyes of law. As such, it is held that the opposite parties, in not offering possession of the unit, in question, even as on today, despite receiving substantial amount from the complainant, and that too, in the absence of any force majeure circumstances, amounted to deficiency in providing service and also adoption of unfair trade practice.

17.         Not only as above, unfair trade practice, on the part of the opposite parties, is writ large. It has come on record that the Buyer’s Agreement was not got signed by the opposite parties, from the complainant, till the date of filing of the complaint or even till date. This act of the opposite parties also amounted to gross unfair trade practice on their part.
18.         However, to defeat the genuine claim of the complainant, the opposite parties, firstly by placing on record letter dated 09.01.2014, vide which they allegedly cancelled allotment of the unit, in question, on account of default in making payments, took a stand that the complaint is time barred because the complainant was required to approach this Commission, within a period of two years from 09.01.2014. Secondly, they have also placed on record, a letter dated 24.01.2013, vide which they alleged to have sent two copies of Agreement for signatures of the complainant. Both the documents, alleged to have been sent through courier.

                First coming to the cancellation letter dated 09.01.2014, it may be stated here that the opposite parties have failed to convince this Commission, as to why, the alleged cancellation letter was sent to the complainant in January 2014, by which time, they had already received Rs.30,67,200/- against Rs.37,81,100/-, i.e. about 85% of the sale consideration and that too, by that time, even offer of possession of the unit was not made to the complainant. Had offer of possession been made to the complainant prior to 09.01.2014 and had the complainant failed to deposit the amount due and demanded if any, only in those circumstances, the stand of the opposite parties, in cancelling the allotment of unit, in question, on account of non-payment by the complainant, would have been justified, which is not so in the present case. This plea of the opposite parties is also defeated by their own statement, made in para no.16 of the reply on merits, to the effect that they allegedly sent copies of the Agreement for signatures, and as per terms and conditions mentioned therein, the tentative date of handing over possession of the unit was mentioned as 30.05.2017.

                At this stage, if it is assumed only for the sake of arguments, though not admitted, that as per the alleged  agreement, referred to above, date of possession of the unit, was tentatively fixed as 30.05.2017 (i.e. after six years of allotment), then it is not clarified by the opposite parties that why they were in hurry, to cancel the allotment of booking on 09.01.2014, when they had already received 85% of the sale consideration till 2013 i.e. Rs.30,67,200/- against Rs.37,81,100/-. It has also not been clarified that under which condition of the allotment letter, they were legally authorized to directly cancel the allotment of unit. On the other hand, perusal of condition no.9.1.1 of the allotment letter, reveals that in the event of breach or default by the allottees, the opposite parties were under an obligation to issue a notice calling the complainant to rectify the defect within a period of 30 days, failing which, the unit was liable to be cancelled after such period. In the instant case, not even a single document has been placed on record, to show that any such notice of 30 days, which was obligatory upon the opposite parties, or any reminder for making payment, if any, was ever sent to the complainant. As such, it is held that letter dated 09.01.2014, is nothing but has been manufactured by the opposite parties, later on, just to defeat the genuine claim of the complainant, and as such, no reliance can be placed thereon, to hold that the complaint filed by the complainant is barred by limitation. Since, in the present case, neither possession has been offered till date, nor refund of the amount deposited has been paid, alongwith interest, there is a continuing cause of action in favour of the complainant, to file the instant complaint, in view of principle of law laid down in Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC).   

                Now coming to the letter dated 24.01.2013, vide which the opposite parties alleged to have sent two copies of Agreement for signatures of the complainant. It may be stated here that this stand has been taken by the opposite parties, only with a view to strengthen their plea that since in the said Agreement tentative date of handing over possession of the unit was mentioned as 30.05.2017, the complaint filed is premature. In the first instance, it may be stated here that contrary stands have been taken by the opposite parties in their written statement. On the one hand, they are taking a plea that the complaint is time barred and at the same time, a plea has also been taken that the complaint filed is premature. Had the opposite parties sent copies of the said Agreement for signatures, to the complainant, they would have definitely placed a copy thereof, to convince this Commission, that since the tentative date of handing over possession of the unit was fixed on or before 30.05.2017, as such, the complaint filed is premature. They could have place on record, a copy of an Agreement of a similar located allottee(s), who were allotted units alongwith the complainant, in the same year, or a specimen thereof, to prove their stand but they miserably failed to do so. As such, an inference can very well be drawn that no such Agreement was ever sent to the complainant, by the opposite parties, for signatures thereof.

                As far as the courier receipts, vide which the said documents were allegedly sent by the opposite parties, are concerned, it is very pertinent to add here that the columns against date, time, sender’s signature, courier charges, stamp etc. are blank, doubting the authenticity of the said documents (courier receipts), and as such, have no significant value in the eyes of law. No reliance therefore can be placed upon by this Commission, on the said courier receipts.

19.         The next question, that falls for consideration, is, as to whether, in the face of existence of arbitration Clause in the allotment letter, 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 ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126. Paras 25 to 35 of the said order, inter-alia, being relevant, are extracted hereunder:-

25.        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.

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

 

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

27.                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.”

28.      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.

29.       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.”

30.   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.

31.        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.

32.        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 his residential purpose. 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.

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

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

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

35.   In  view of the above, the plea taken by the opposite party, 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.”

                In view of the above, the plea taken by the opposite parties in this regard, being devoid of merit, is rejected.

20.         A plea was also taken by the opposite parties that the affidavit filed by the complainant, is defective. In the first instance, it is submitted that a detailed affidavit has been filed by the complainant, in support of his complaint. Even otherwise, the proceedings before the Consumer Fora, are summary, in nature. The Consumer Protection Act, 1986, is a beneficial legislation, to provide speedy, inexpensive and hassle free redressal to the grievance of the consumers. The provisions of the Code of Civil Procedure, except the one, provided under Section 13(4) of the Act, and the Evidence Act are not applicable to the consumer disputes. The Consumer Foras are to evolve their own procedure, for adjudicating the consumer disputes, by resorting to the principles of natural justice, but are not required to enter into technicalities, with a view to deny the substantial justice. In view of above, the plea taken by the opposite parties stands rejected.
21.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to refund of the amount of Rs.30,67,200/-, deposited by him. It has been held above that the opposite parties failed to deliver possession of the unit, in question, for want of construction; basic amenities etc. even as on today. The complainant cannot be made to wait for an indefinite period, for delivery of possession of the unit purchased by him. Under above circumstances, prayer of the complainant to claim refund of the amount, actually paid, cannot be negated. Non-delivery of possession of the unit, in question, by the stipulated date (not clarified by the opposite parties in the present case) or within a reasonable period, say two to three years from the date of allotment i.e. from 18.04.2012, is a material violation on the part of the opposite parties and amounts to deficiency in providing service and adoption of unfair trade practice. 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:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

                However, in the present case, the situation is worst, as possession has not been even offered to the complainant, what to speak of delay in offer thereof. Even Flat Buyer’s Agreement was not executed by the opposite parties. In view of above, it is held that since there was a material violation on the part of the opposite parties, in not offering and handing over possession of the unit within a reasonable period, referred to above, or even till date of filing this complaint, the complainant was at liberty to seek refund of the amount actually deposited, alongwith interest and compensation, by way of filing the instant complaint.

                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.

22.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted in favour of the complainant. It has been proved on record that an amount of Rs.30,67,200/- 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 @24% p.a.,  as per Clause 5.5 of the Allotment Letter, 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 (2014) 6 SCC 335). In view of above, the  complainant is certainly entitled to get refund of the amount deposited by him, to the tune of Rs.30,67,200/- alongwith interest, from the respective dates of deposits till realization. 
23.         No other point, was urged, by Counsel for the complainant.
24.         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.30,67,200/- to the complainant, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.
2. To pay compensation, in the sum of Rs.2 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.30,000/- 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%, from the respective dates of deposits onwards, and interest @15 % p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.

25.         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 shall have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
26.         Certified Copies of this order be sent to the parties, free of charge.
27.         The file be consigned to Record Room, after completion.

Pronounced.

25.01.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

 

Rg.