STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1.     Emaar MGF Land Limited, SCO 120-122, 1st Floor, Sector 17-C, Chandigarh, through its Branch Head.

2.     Emaar MGF Land Limited, ECE House, 28 Kasturba Gandhi Marg, New Delhi-110001, through its Director.

……Appellants/Opposite Parties

V e r s u s

1.     Ms. Mona Makin, wife of Late Maj. JBS Makin, resident of 136, Uday Park, New Delhi-110049

2.     Ms.  Mamta Sekhon, daughter of Mr. Jung Bahadur Singh, resident of 136, Uday Park, New Delhi-110049.

              ....Respondents/complainants

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:   JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

                MRS. NEENA SANDHU, MEMBER.

Argued by: Sh. Sanjeev Sharma, Advocate for the appellants.

                   Sh. Deepak Aggarwal, Advocate for the respondents.

PER JUSTICE SHAM SUNDER (RETD.), PRESIDENT

              This appeal is directed against the order dated 08.05.2012, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it accepted the complaint, filed by the complainants (now respondents) and directed the Opposite Parties (now appellants), as under:-

“In view of the foregoings, we are of the firm opinion that the present complaint has lot of merit, weight and substance. The same is accordingly allowed. The OPs are directed to pay a compensation of Rs.One Lakh to the complainants, for causing them immense mental & physical harassment.  They are also directed to pay penalty to the complainants @ Rs.50/ per sq.yard, per month, with effect from 12.7.2010 (the stipulated date of delivery of possession being 11.7.2010) till the date of delivery of actual physical possession of the plot in question to the complainants, apart from paying litigation cost of Rs.15000/-.

This order be complied with by the OPs within a period of 30 days from the date of receipt of a copy of the order, failing which, they shall be liable to pay penal interest @12% p.a. on the above awarded amount of compensation of Rs.One Lakh from the date of filing this complaint i.e. 16.8.2011 till its actual payment, besides paying litigations costs as well as paying penalty to the complainants @ Rs.50/ per sq.yard, per month, with effect from 12.7.2010 (the stipulated date of delivery of possession being 11.7.2010) till the date of delivery of actual physical possession of the plot in question to the complainants”

2.             The facts, in brief, are that the complainants, jointly applied for a plot, vide Application No. 917, in the project, floated by the Opposite Parties, on the basis of the brochure, Annexure C-1. They were allotted plot no.284, having approximate area of 300 sq. yds, in Pinewood Park, Sector 108, Mohali Hills, by issuing Provisional Allotment Letter (Annexure C-2). The Plot Buyer’s Agreement (Annexure C-3), was entered into between the parties, on 11.7.2007. It was stated that the complainants, made payment of Rs.34,50,000/-, being the total price of plot, vide receipts Annexures C-5 to C-14. Thus the complainants were qualified for “Pay on Time Reward Scheme” of the Opposite Parties. It was further stated that the Opposite Parties, vide letter dated 30.01.2010 (Annexure C-16), demanded additional External Development Charges (EDC) to the tune of Rs.3,96,051/-, on the ground, that the same had been levied by the Government of Punjab, vide Notification dated 19.09.2007. It was further stated that this fact was never disclosed, by the Opposite Parties, during the period of three years. However, the complainants paid the additional External Development Charges, amounting to Rs.3,80,000/-, to the Opposite Parties. It was further stated that neither the building plans were got approved, by the Opposite Parties, from the Competent Authorities, nor the conveyance deed was executed, in favour of the complainants. It was further stated that according to the Plot Buyer`s Agreement–Annexure C-3, if the complainants failed to raise construction within a period of 3 years, from the date of offer of possession, then penalty was to be imposed on them.  It was further stated that according to Clause 8 of the Plot Buyer`s Agreement, the Opposite Parties were required to deliver physical possession of the plot, within a period of 2 years, from the date of execution of the same, but not later than three years, failing which they (Opposite Parties) were liable to pay a penalty @Rs.50/- per sq. yd., per month, for such period of delay, beyond three years, from the date of execution of the Agreement, aforesaid. It was further stated that physical possession of the plot was not handed over to the complainants, by the stipulated date. It was further stated that only paper possession of the plot, was offered to the complainants. It was further stated that the internal services like roads, water lines, sewer lines and electric lines, as well as external services like storm water drains, roads, electricity, horticulture etc., were to be got provided by the Opposite Parties, through the Government or the concerned Local Authorities, but till date, they were unable to provide the same. It was further stated that since the internal development work was not completed by the Opposite Parties, and the entire external development was not got completed from the Local Authorities and the Government, by them, though the charges, referred to above, were paid for the same, the question of handing over physical possession of the plot, in question, and consequent construction thereon, did not at all arise. It was further stated that the complainants, visited the site, but no sign of development was seen there. Even the plinth level was not proper. It was further stated that the Opposite Parties, admitted their deficiency, by writing the letter dated 30.01.2010, to the complainants. It was further stated that the Punjab Government, reduced the applicable External Development Charges, but the Opposite Parties, neither reduced the same nor intimated, with regard to the same, to the complainants. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to hand over physical possession of the plot, in question, to them, after properly demarcating the same, and get issued all the licences, No Objection Certificate, Occupation Certificate etc. etc, from the concerned Competent Authorities, by strictly  observing the terms and conditions of the Plot Buyer`s Agreement; pay penalty, in the sum of Rs.50/- per square yard, per month, according to Clause 8 of the Plot Buyer`s Agreement, for such period of delay, beyond three years, starting from 11.07.2010; pay compensation for mental agony and physical harassment, to the tune of Rs.5 lacs, to the complainants; and pay cost of litigation to the tune of Rs.21,000/-.

3.             The Opposite Parties, in their joint written version, pleaded that the complaint was not maintainable. It was further pleaded that the District Forum, at Chandigarh, had no territorial Jurisdiction, to entertain and decide the complaint. It was admitted that the complainants, applied for the allotment of a plot, in the scheme, mentioned in the complaint. It was also admitted that, vide Provisional Allotment Letter dated 5.7.2007 (infact 5.5.2007), the complainants were allotted plot No. 284, having approximate area of 300 Sq. yards, in Pinewood Park, Sector 108, Mohali, @ Rs.11,500/- per sq. yard, plus Preferential Location Charges. The total price of the plot was Rs.34,50,000/-., which was paid by the complainants. It was stated that, in addition, the complainants were required to pay External Development Charges of Rs.1,47,259/- (infact Rs.1,47,249/-). It was further stated that the payment plan was appended with the Provisional Allotment Letter. It was further stated that the parties executed and signed the Plot Buyer's Agreement dated 11.7.2007, Annexure R-2. It was further stated that according to Clause 2(d) of the Plot Buyer’s Agreement dated 11.7.2007, the External Development Charges, were applicable and liable to be paid by the allottees/complainants. The External Development Charges, being statutory levy, were to be levied by the Government, for the purpose of external development, and it was liable to increase or decrease. It was further stated that, thus, such increase was to be borne by the complainants. It was further stated that the notification dated 19.09.2007, issued by the Government of Punjab, was applicable to the project of the Opposite Parties, and other projects, falling in the State of Punjab. It was further stated that the demand, with regard to the External Development Charges, was raised in mid 2008. It was further stated that, vide notification dated 22.6.2010, the Govt. of Punjab, again increased the External Development Charges and demand, in respect thereof, was raised.  It was further stated that the offer of physical possession made by the Opposite Parties, was still valid. It was further stated that only after the complainants, took possession of the demarcated plot, the Opposite Parties would facilitate and render all necessary assistance to them. It was further stated that the External Development Charges, if any, due against the complainants, could be paid, after taking the physical possession, and sanctioning of building plan. It was denied that the physical possession was delayed, as the letter of offer of possession was issued on 30.01.2010, which was well within the period of 3 years, of signing the agreement.  It was further stated that the External Development Charges had also been paid to the Government. It was further stated that approximately, possession of 800 plots, in Sectors 105, 108 & 109, in Emaar MGF Mohali Hills, had already been offered. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

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

5.             After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

6.             Feeling aggrieved, the instant appeal, has been filed by the appellants/ Opposite Parties.

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

8.             The Counsel for the appellants/Opposite Parties, submitted that the District Forum, had no territorial Jurisdiction to entertain and decide the complaint, as no cause of action arose to the complainants, within the territorial limits of Chandigarh. He further submitted that, even the District Forum had no pecuniary Jurisdiction, to entertain and decide the complaint, as the price of the plot, in question, was Rs.34,50,000/-, excluding the External Development Charges, and they sought one of the reliefs, as that of physical possession of the same. He further submitted that since the District Forum, had neither the territorial Jurisdiction nor the pecuniary Jurisdiction, to entertain and decide the complaint, the order impugned, being a nullity, is liable to be set aside.

9.             On the other hand, the Counsel for the respondents/complainants, submitted that the Opposite Parties, are having their Branch Office at Chandigarh.  He further submitted that, on the receipts Annexure C-5 to C-14, one of the addresses of the Opposite Parties, is written as of SCO 120-122, First Floor, Sector 17-C, Chandigarh-160017. He further submitted that even the payments, towards the price of the flat, were made at Chandigarh. He further submitted, that, as such, the District Forum, at Chandigarh had territorial Jurisdiction, to entertain and decide the complaint. He further submitted that even the District Forum, had the pecuniary Jurisdiction, to entertain and decide the complaint. He further submitted that the District Forum was right, in coming to the conclusion, that since physical possession of the plot, was not delivered to the complainants, within the stipulated time, they were entitled to the reliefs, granted by it (District Forum). He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.

10.           The first question, that falls for consideration, is, as to whether, the District Forum, at Chandigarh, had territorial Jurisdiction, to entertain and decide the complaint or not. The complainants are the residents of New Delhi. The plot, which was allotted to them, is situated at Mohali. The Plot Buyer`s Agreement Annexure C-3, dated 11.07.2007, was executed at New Delhi, as is evident therefrom. The Corporate Office of the Opposite Parties, is situated at New Delhi. The copies of receipts Annexures C-5 to C-14, do not reveal that the payment of price of the plot was made, by the complainants, to the Opposite Parties, at Chandigarh.  Even, none of the other documents, placed, on record, reveals that any transaction took place, within the territorial Jurisdiction of Chandigarh. The mere fact that the Branch Office of the Opposite Parties, is at Chandigarh, without any further cause of action, having arisen there, did not vest the District Forum, at Chandigarh, with the territorial Jurisdiction, to entertain and decide the complaint. While interpreting the provisions of Section 17(2)(b) of the Act, which are para-materia to the provisions of Section11(2)(b) of the Act, in Sonic Surgical Vs National Insurance Company Ltd. IV(2009) CPJ 40(SC), the Apex Court held as under ;

“4.      In our opinion, no part of the cause of action arose at Chandigarh. It is well settled that the expression cause of action means that bundle of facts which gives rise to a right or liability. In the present case admittedly the fire broke out in the godown of the appellant at Ambala. The insurance policy was also taken at Ambala and the claim for compensation was also made at Ambala. Thus no part of the cause of action arose in Chandigarh.

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8. Moreover, even if it had application, in our opinion, that will not help the case of the appellant. Learned Counsel for the appellant submitted that the respondent-Insurance Company has a branch office at Chandigarh and hence under the amended Section 17(2) the complaint could have been filed in Chandigarh. We regret, we cannot agree with the learned Counsel for the appellant. In our opinion, an interpretation has to be given to the amended Section 17(2)(b) of the Act, which does not lead to an absurd consequence. If the contention of the learned Counsel for the appellant is accepted, it will mean that even if a cause of action has arisen in Ambala, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where a branch office of the Insurance Company is situated. We cannot agree with this contention. It will lead to absurd consequences and lead to bench-hunting. In our opinion, the expression branch office’ in the amended Section 17(2) would mean the branch office where the cause of action has arisen. No doubt this would be departing from the plain and literal words of Section 17(2)(b) of the Act but such departure is sometimes necessary (as it is in this case) to avoid absurdity [vide G.P Singh’s Principles of Statutory Interpretation, Ninth Edition, 2004 P. 79].”

11.           The perusal of the facts of Sonic Surgical’s case (supra), clearly goes to reveal that the policy was taken by the complainant at  Ambala; the godown, in respect of which, the Policy was taken, was situated at Ambala, whereas the complaint was filed before this Commission, at Chandigarh. Under these circumstances, it was held that since no cause of action arose, within the territorial Jurisdiction of this Commission, at Chandigarh, except that the Opposite Party had the Branch Office there, it had no territorial jurisdiction to entertain and decide the complaint. In Sonic Surgical’s case (supra), before the Hon’ble Supreme Court, an argument was advanced, by the Counsel for the appellant/complainant that since the Branch Office of the Insurance Company, was situated at Chandigarh, even if, no other cause of action, arose to the complainant, within the territorial jurisdiction of Chandigarh, the State Commission, at Chandigarh, had jurisdiction to entertain and decide the complaint. That argument of the Counsel for the appellant/complainant therein, was rejected by the Hon’ble Supreme Court, in the manner, referred to above.  In the written version, it was, in clear-cut terms, stated by the Opposite Parties, that the District Forum, had no territorial Jurisdiction to entertain and decide the complaint, yet, it (District Forum), failed to touch the same, what to speak of discussing and deciding this question. In our considered opinion, the District Forum, had no territorial Jurisdiction, to entertain and decide the complaint, as no cause of action, arose to the complainants, at Chandigarh. The order impugned, having been passed by the District Forum, being without Jurisdiction, is illegal and liable to  be set aside.

12.           Now, coming to the pecuniary Jurisdiction. It may be stated here, that, admittedly, the total price of the plot is Rs.34,50,000/-, excluding the  External Development Charges. The entire sale consideration of Rs.34,50,000/-, has already been paid, as stated by the complainants, in their complaint, to the Opposite Parties. The complainants sought the relief of physical possession of the plot, in question, after properly demarcating the same, alongwith compensation for mental agony and physical harassment, to the tune of Rs.5 lacs, and penalty in the sum of Rs.50/- per square yard, per month (as per clause 8 of the Plot Buyer`s Agreement), starting from 11.07.2010, till realization. Section 11(1) of the Act reads as under:-

“11. Jurisdiction of the District Forum.

 (1) Subject to other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the Compensation if any, claimed ¹[does not exceed rupees twenty lakhs].

 (2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction, -

 (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or ²[carries on business or has a branch office or] personally works for gain; or

(b) 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 ³[carries on business or has a branch office], or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or ⁴[carry on business or have a branch office], or personally works for gain, as the case may be, acquiesce in such institution; or

              (c) the cause of action, wholly or in part                 arises”.

13.           Since, physical possession of the plot, in question, had been sought, as one of the reliefs, alongwith compensation of Rs.5 lacs, for mental agony and physical harassment, the aggregate value of the goods or services as well as of the compensation, was required to be taken into consideration, for determining the pecuniary Jurisdiction of the Consumer Fora. Similar principle of law, was laid down, in Quality Foils India Pvt. Ltd. Vs. Bank of Madura Ltd., & Anr., II (1996) CPJ 103 (NC), a case decided by a four Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, which reads as under :-

“In our view, where a claim of compensation is pleaded in a consumer complaint, then the total value of the goods and/ or services as well as that of compensation would determine the pecuniary limit of jurisdiction. It is the aggregate value of the goods and compensation or the aggregate value of the services as well as that of compensation that determines the pecuniary jurisdiction. As we read the provisions of Section 17(1)(a) [and for that matter the provisions of Section 11(1) and Section 21(a)(i) which are in pari-materia the criteria of the value of goods or services if claimed without any compensation would govern the jurisdiction of the Consumer FORA. Where the complainant gives the value of the goods and compensation or the value of the services and compensation, then the question arises whether each one of them should exceed or cross the hurdle of the pecuniary jurisdiction. In some cases, the value of the goods or the compensation claimed and for that matter the value of the services and the compensation claimed may be such that if considered separately it will fall in the jurisdiction of the District Forum or State Commission whereas if considered on the basis of the aggregate, it may fall within the jurisdiction of National Commission or State Commission. The intention of the Legislature is to give the jurisdiction to the Consumer FORA based on the total “value” of the goods and compensation, if any, or in other case the value of the services and compensation if any. Any other interpretation would lead to conflict of jurisdiction. Even though the Legislature has not mentioned the word aggregate before the word value of the goods or services, in the context of provisions of the Act, the intention is clear to give jurisdiction based on the quantum of reliefs put together, in other words, aggregate of the value of the goods and compensation or aggregate of the value of services and compensation, or on the aggregate value of the goods and services and compensation”

14.              In Kishori Lal Bablani Vs. M/s Aditya Enterprise  & Others, Consumer Complaint No.93 of 2012, decided by the National Consumer Disputes Redressal Commission, New Delhi, the complainant alleged deficiency, in rendering service, and adoption of unfair trade practice, by the Opposite Party-builder, in not handing over possession of the agreed flat No.705-B, VIIth Floor, measuring 1393 sq.ft., at Pranik Chambers, Saki Naka, Saki Vihar Road, Mumbai, by the stipulated date i.e. 13.12.2006, despite payment of full consideration of the same, amounting to Rs.40,75,000/-. Thus, the complainant sought the following reliefs:-

“i.              Deliver the possession of premises at 705-B, 7th Floor, ‘Pranik Chambers’, Saki Vihar Road,  Saki Naka, Andheri    (E), Mumbai to the complainant, forthwith.

ii.        to charge outgoings for the premises only from the date of delivery of the possession of the said premises.

iii.      to pay interest @ 24% to the complainant on the instalments paid by the complainant on 25.08.2006 from 31.12.2006 (promised date of delivery of possession as per clause 10 of the agreement for sale) till the date of actual delivery of possession of the premises and to pay interest @ 24% to the complainant on the instalments paid by the complainant on 04.08.2007 and 24.10.2011 from the date of payment till the date of delivery of possession of the premises for the opportunity loss.

iv.       To pay Rs.15,00,000/- ( Rupees Fifteen Lakhs only) to the complainant for causing mental stress, torture and towards advocate’s fee etc.

v. Pass an order directing the opposite parties to complete the construction work of the building immediately and form a Co-operative Society of the purchasers so as to hand over possession of the building to the Society and forthwith transfer the conveyance of the property in the name of the said Co-operative Society.

vi.       Any other or further relief(s) which this Hon’ble Forum may be pleased to grant in favour of the complainant in view of the facts of the above case”. 

15.           The National Consumer Disputes Redressal Commission, New Delhi, came to the conclusion, that the complainant, mainly sought possession of the flat, in question, which he purchased at a price of Rs.40,70,000/-, besides some interest and compensation.  The National Consumer Disputes Redressal Commission, New Delhi, thus, was of the opinion that the valuation of the claim, made by the complainant, being below Rupees One crore, the complainant was required to file the complaint, before the State Consumer Disputes Redressal Commission, having pecuniary Jurisdiction, in the matter.  In the instant case also, as stated above, the entire sale consideration of the plot, had already been paid by the complainants, to the Opposite Parties, alongwith External Development Charges, at the time of filing the complaint. Under these circumstances, the pecuniary Jurisdiction, was required to be determined, on the basis of the aggregate value of the plot plus (+) compensation, claimed, as per Section 11(1) of the Act. It is settled principle of law, that, it is for the Consumer Fora, to determine, as to whether, it had territorial Jurisdiction and pecuniary Jurisdiction to entertain and decide the complaint; whether the complainants, qualified as Consumers under the Act; whether the allegations, contained in the complaint, constituted the Consumer Dispute; and, as such, the Consumer Complaint was maintainable. However, the District Forum, failed to take into consideration, all these parameters, and, thus, fell into a grave error, in deciding the complaint, on merits, with regard whereto, it had neither the territorial Jurisdiction, nor the pecuniary Jurisdiction. The order impugned, thus, passed by the District Forum, having no pecuniary Jurisdiction, to entertain and decide the complaint, is a nullity, and is liable to be set aside.

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

17.           For the reasons recorded above, the appeal is accepted, with no order as to costs. The order of the District Forum is set aside.

18.           The complaint, in original, is ordered to be returned to the complainants, alongwith the documents attached therewith, after retaining the attested to be true photocopies of the same, for filing the same, before the appropriate State Consumer Disputes Redressal Commission, having territorial and pecuniary Jurisdiction, to entertain and decide the same.

19.           Certified copies of this order, be sent to the parties, free of charge.

20.           The appeal file alongwith attested to be true  photocopies of the complaint case, and the documents attached therewith,  be consigned to Record Room, after completion.

Pronounced

October 8, 2012

Sd/-

[JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Rg