Chandigarh

StateCommission

CC/726/2016

Harpreet Singh Dhot - Complainant(s)

Versus

M/s Omaxe Chandigarh Extension Developers Private Limited - Opp.Party(s)

In Person

27 Feb 2017

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	726 of 2016
Date of Institution	:	24.10.2016
Date of Decision	:	27.02.2017

 

Harpreet Singh Dhot son of Late Sh.Niranjan Singh Dhot, #174, Mohindra Complex, Kheri Gujran Road, Patiala, Punjab.

……Complainant

V e r s u s

1. M/s Omaxe Chandigarh Extension Developers Private Limited, Regional Office at SCO 139-140, Sector 8-C, Madhya Marg, Chandigarh-160008, through its Managing Director/Director/ Manager/Authorized Signatory.
2. M/s Omaxe Chandigarh Extension Developers Private Limited, 10, L.S.C. Kalkaji, New Delhi-110019 its Chairman/Managing Director/Director/Authorized Signatory.

              .... 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:       Complainant in person

      Sh.Munish Gupta, Advocate for the opposite    parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The complainant alongwith his family wanted to settle near to Chandigarh and for the said purpose, he purchased flat bearing no.718, Ground Floor, measuring 1725 square feet,  in a project namely “Omaxe Cassia”  New Mullanpur, Punjab, floated by the opposite parties. The said flat was purchased by the complainant in resale from one Prem Kumar Garg, the previous owner, who had paid only an amount of Rs.50,000/- to the opposite parties. The said amount was paid to him, by the complainant and on request having been made to the opposite parties,  the unit, in question was transferred in the name of the complainant, on 28.07.2012. Copy of request form has been placed on record as Annexure C-1. Allotment letter dated 31.10.2012 Annexure C-2, was issued in favour of the complainant. Total sale price of the flat was fixed at Rs.32,80,007/- which included Interest Free Maintenance Security, Power backup Equipment cost, etc.  The complainant opted for construction linked payment plan.

2.         It is specific case of the complainant that as per Clause 23 (b) of the said Allotment Letter/Agreement, the opposite parties undertook to complete the construction work within 30 months (24 months (+) 06 months grace period)  from the date of signing of allotment letter dated 31.10.2012 i.e. upto 30.04.2015. As per demands raised by the opposite parties, by the end of October 2015, the complainant had paid an amount of Rs.31,53,896.47ps. towards price of the unit i.e. more than 95%, however, possession was not in sight.
3.         In the year 2016, when the complainant visited the site, he was surprised to see that construction work was going on at a very slow speed. Basic amenities were yet to be provided. He made many visits to the office of the opposite parties, to know, as to when, possession will be delivered to him, however he failed to  get any satisfactory reply. By writing email on 08.08.2016 Annexure C-3, he brought to the notice of the opposite parties that on account of non delivery of possession of the unit, his planning to shift near to Chandigarh is suffering. He made a request for early delivery of possession of the unit. When he failed to get any reply, he sent another email dated 25.08.2016 Annexure C-4, reiterating his grievance, however, even then, nothing happened. It was further stated that for any delay payment, as per terms and conditions of the allotment letter, the opposite parties were imposing penal interest @18% p.a., for a delay of first 30 days and thereafter @24% p.a., however, for their default, they are offering a very meager compensation @Rs.10/- per square feet of the super area, as per Clause 23 (h) of the Allotment Letter/Agreement. Under above circumstances, the present complaint was filed seeking directions to the opposite parties for delivery of possession of the unit; payment of compensation for the period of delay; mental agony and physical harassment; and also litigation expenses.
4.         Notice in this complaint was ordered to be issued on 26.10.2016, for 22.11.2016, upon which, reply was filed by the opposite party on 11.01.2017, raising many preliminary objections like as per Clause 41 of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide dispute between the parties, because as per above said provision, the matter needs to be referred to an arbitrator for adjudication. It was further averred that the complainant did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as he being investor 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. It was averred that the complainant had purchased another residential unit i.e. a plot, in the project of the opposite parties, for which he had earlier filed consumer complaint bearing no.300 of 2015 and has been refunded the amount deposited and that complaint was disposed off, vide order dated 09.02.2016, passed by this Commission. Pecuniary jurisdiction of this Commission was challenged. Territorial jurisdiction of this Commission was also challenged, by stating that no cause of action, whatsoever, has accrued within the territorial jurisdiction of this Commission. It was pleaded that the complainant being a subsequent allottee, as he has purchased the unit, in question, from open market, he is not a consumer. It was averred that the complaint filed is beyond limitation.
5.         Factual matrix of the case was not controverted. Price of the flat mentioned in the complaint and payments made by the complainant is not disputed. Purchase of flat by the complainant, in resale, in the manner, referred to above, was admitted. There is no dispute qua total sale consideration of the unit. It was also not disputed that as per Clause 23 (b) of the said Allotment Letter/Agreement, the opposite parties undertook to complete the construction work within 30 months (24 months (+) 06 months grace period)  from the date of signing of allotment letter dated 31.10.2012 i.e. upto 30.04.2015. However Counsel for the opposite parties, at the time of arguments vehemently contended that the said period was to be computed, after excluding Saturdays, Sundays etc. It was stated that the opposite parties are making every efforts to complete construction work of the flats, in the said project. It was further stated that the opposite parties have obtained all necessary sanctions/approvals, from the Competent Authorities. It was averred that the complainant never approached the opposite parties, for redressal of his grievance. Prayer was made to dismiss the complaint.
6.         On 14.12.2016, an application under Section 8 of the Arbitration and Conciliation Act, 1996, was also filed by the opposite parties, stating that 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 16.12.2016, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case.     
7.         In the rejoinder filed, the complainant reiterated all the averments, contained in the complaint and controverted those, contained in written version of the opposite parties. Alongwith rejoinder, photographs clicked on 26.01.2017, depicting incomplete construction of the unit, in question, were also placed on record, by the complainant. 
8.         The parties led evidence in support of their case.
9.         The contesting parties raised arguments, in tune of the facts narrated above.
10.         We have heard the contesting parties, and have gone through the evidence and record of the case, very carefully.
11.         It was specifically stated by Counsel for the opposite parties, that during pendency of this complaint, possession of the unit was offered to the complainant, vide letter dated 19.01.2017. However, as stated above, when filing rejoinder, many photographs of the construction at the spot, have been placed on record, by the complainant. While placing reliance on those photographs, which are not disputed by Counsel for the opposite parties, it has been specifically stated by the complainant that construction was incomplete and paper possession was offered by the opposite parties, only to save their skin. It was further alleged that to complete construction of flats, in the said project, including the flat of the complainant, it will take at-least four to six months. At the time of arguments, we specifically asked Counsel for the opposite parties, that whether he will give an undertaking that let the complainant go and take possession of the flat, on making necessary dues, within a week from today. He very hesitantly said on the date of arguments that construction is not complete and it will take some more time. In view of above, it appears that by sending offer of possession of the unit, vide letter dated 19.01.2017, only an attempt has been made by the opposite parties, to mislead this Commission. Construction at the spot is not yet complete.  

                It is well settled law that the onus to prove that the project has been completed and the area/site, in question, is fully developed, is on the builder/opposite parties. It was so said by the National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present case, it is very strange that not even a single document has been placed on record, by the opposite parties, in respect of the flat, in question, to prove that the construction is complete and they are actually ready for offer and delivery of possession. 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 and construction 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 Authorities, which could be said to be best evidence, to prove their case, but they miserably failed to do so. It is therefore held that even till date, the construction of flats is not complete. This act and conduct of the opposite parties, amounted to unfair trade practice.

12.         It was further stated by Counsel for the opposite parties that the complainant being investor, has purchased the unit in dispute, for selling the same, to earn profits and not for personal use, as such, he would not fall within the definition of consumer, as defined under the Act. It was averred that besides, the unit in dispute, the complainant had also purchased a plot in the project of the opposite parties, meaning thereby that he is an investor. Be that as it may, it is on record that the complaint bearing no.300 of 2015, was filed qua the said plot purchased by the complainant. However, before this Commission, the matter was compromised by the opposite parties and amount paid towards price of the said plot, was returned to the complainant, after deduction of 20% therefrom.

                In the present case, it is specifically stated by the complainant that he has purchased the flat, in question, to settle his family near to Chandigarh and also taking note of future of separate residence of his children. At the same time, 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, in the open market 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. 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. 

13.         Now we will like to deal with an objection raised by the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. 

                It may be stated here, that the complainant has sought possession of the unit, in question, price whereof is Rs.32,80,007/-. (as is evident from the document Annexure-A at page 50 of the file); interest @15% p.a. on the deposited amount and @Rs.10/- per square feet of the super area, for the period of delay in delivery of possession; compensation to the tune of Rs.5 lacs, for mental agony, physical harassment, financial loss, deficiency in providing service and unfair trade practice; and cost of litigation to the tune of Rs.50,000/-, aggregate value whereof fell above Rs.20 lacs but below Rs.1 crore. In no way, the aggregate value of the relief claimed, exceeds Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. The objection taken by the opposite parties, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

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

                According to Section 17 of the Act, a consumer complaint can be filed, by the 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, a request for transfer of the flat, in question, in favour of the complainant, was accepted by the opposite parties, at Chandigarh, vide request form dated 28.07.2012 Annexure C-1. Copies of Allotment Letter/Agreement was also sent by the opposite parties from their Chandigarh office, through letter dated 18.09.2012 Annexure C-2, for signatures of the complainant. Besides as above, it is also evident from the documents placed on record that demands letters were sent by the opposite parties from their Chandigarh Office and also the receipts with regard to payments made, were also issued by the said office. All the documents, referred to above, bear the stamp of Chandigarh office of the opposite parties.  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. 

15.         The next question, that falls for consideration, is, as to whether, the complainant is entitled to delivery of possession of the unit purchased by him. It is an admitted fact that the unit, in question, was not offered to the complainant, by the stipulated date or even by the date, this complaint was filed, despite the fact that Rs.31,53,896.47ps. out of total sale consideration of Rs.32,80,007/- has been paid by the complainant, for want of construction work; development and basic amenities at the site. At the same time, it has been clearly held above, by placing reliance, on the candid admission of Counsel for the opposite parties that despite the fact that offer of possession of the unit, has been made to the complainant vide letter dated 19.01.2017 i.e. during the pendency of this complaint, yet, construction of the unit is not complete and it will take some more time. However, he failed to make any firm commitment, on behalf of the opposite parties. The complainant has also proved this fact, by placing on record, photographs clicked by him, on 26.01.2017 (after offer of possession), which were placed on record, by way of rejoinder, which clearly prove that still a lot of work is pending to the done in the flat and also the area surrounding thereto, is still a part of cultivation land. By making a misleading statement that possession of the constructed unit, with all basic amenities required, will be delivered within the maximum period of 30  months from the date of Allotment Letter/Agreement i.e. latest by 30.04.2015, and not abiding by the commitment made by the opposite parties, and at the same time issuing paper possession during pendency of the complaint, just to mislead this Commission, they (opposite parties) were not only deficient, in rendering service, but also indulged into unfair trade practice. The complainant is certainly entitled to delivery of physical possession of the unit, in question.

                In view of above, the opposite parties are also liable to pay compensation to the complainant, for causing mental agony, physical harassment, deficiency in providing service and adoption of unfair trade practice.

16.         Further contention raised by Counsel for the opposite parties that as per Clause 23 (b) of the Agreement, beyond the period of 24 months, the opposite parties can get further six months to deliver possession of the unit and while computing the above said period, Sundays, Saturdays, Bank Holidays, etc. are to be ignored, came up for consideration before this Commission in Ankur Gupta Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.309 of 2016 decided on 22.11.2016,  and when dealing this issue, it was observed by this Commission, as under:-

“We feel that the contention raised is liable to be rejected. In Clause 23(b) of the Agreement, it is stated that possession will be delivered within 24 months, from the date of allotment letter, with six months extension. It is further stated that when computing the said period all Saturdays, Sundays and Bank Holidays will be excluded. A similar issue came up for consideration before this Commission qua another project of the opposite parties, in the case of Dr.Divya Dahiya Vs. M/s Omaxe Chandigarh Extension Developers Private Limited and another, Consumer Complaint No.57 of 2016, decided on 15.07.2016, wherein, it was observed as under:-

“The first question, which falls for consideration, is, as to whether there was delay in offering possession of the plot, in question, and if so, to what extent. The allotment letter for independent floor in Row-Housing Project “Silver Birch” in the project of the Opposite Parties (Annexure C-4) was issued to the complainant on 30.08.2011. As per Clause 31(a) of the allotment letter, the Opposite Parties were to complete the development of the unit within 24 months or within an extended period of six months from the date of start of construction, subject to force majeure conditions. Since allotment letter is dated 30.08.2011, by computing 24 months plus 6 months period, the Opposite Parties were bound to deliver possession of the plot, in question, by 01.03.2014. The Opposite Parties have stated that period was to be computed by excluding Sundays, Bank Holidays, enforced Govt. holidays and the days of cessation of work at site in compliance of order of any Judicial/concerned State Legislative Body. Apparently, for seeking six months extension beyond 24 months or beyond six months extended period, the Opposite Parties owe an explanation, if the delay was on account of force majure conditions but nothing by way of cogent evidence to this effect has been placed on record. Thus, when no explanation for extension of six months period has been furnished, the Opposite Parties at the most could be allowed one out of the two benefits i.e. either six months extension beyond 24 months or period on account of Sundays/Holidays etc. This Commission in Consumer Complaint No.153 of 2015 titled ‘Mr. Madan Lal Taneja and another Vs. M/s Omaxe Chandigarh Extension Developers P. Ltd.’ decided on 03.11.2015, facts of which were almost identical, held that Opposite Parties were to hand over possession within 30 months from the date of start of construction. Thus, the possession of the unit, in question, was to be delivered by 01.03.2014.”

 

                Similar view has also been reiterated by this Commission, in number of cases, thereafter, in respect of the same project. It was specifically held that when there is no explanation of getting extension of 6 months’ period to deliver possession beyond the stipulated date, the benefit of exclusion of Saturdays, Sundays, Bank Holidays etc. cannot be given. Out of the two benefits, only one can be made available to the opposite parties. In this view of the matter, the contention raised by Counsel for the opposite parties, being devoid of merit, must fail and the same stands rejected.

17.         What relief can be granted to a consumer, in case of delay, in offering possession of a residential unit purchased, came up for consideration before this Commission in Ankur Gupta`s case (supra), wherein dealing with similar issue, it was observed as under:-

“What relief can be granted to a consumer, in case of delay, in offering possession, came up for consideration before the Hon’ble National Commission, in a case titled as Parsvnath Exotica Ghaziabad Resident's Association Vs. Parsvnath Buildwell Pvt. Ltd. & Anr., consumer complaint no.45/2015, decided by the Hon’ble National Commission, on 06.05.2016, wherein, it was argued by the project proponent that at the maximum, as provided in the Agreement, the consumer will be entitled to claim penalty for delayed compensation @Rs.5/- per square feet, per month. Noting that in case of delay in making payment, the project proponent was charging heavy penal interest, instead of penal amount, the interest on the deposited amount, for the period of delay was granted, by holding as under:-

“Though, the Agreement between the developer and the flat buyers provides for payment of compensation in case of delay @ Rs.5/- per square feet of the super area per month, such clauses have been found to be unfair trade practice and have been consistently rejected by this Commission in several decision, including  Consumer Complaint No. 427 of 2014 Satish Kumar Pandey & Ors. Vs. Unitech Ltd. and connected matters decided on 08.6.2015.  Therefore, the aforesaid clauses cannot be taken into consideration, while determining the compensation payable to the members of the complainant association for the aforesaid delay in completion of construction.”

Not only this, in another case, titled as Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)     xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.”

Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the cases, referred to above, if interest @12% on the deposited amount for the period of delay, till delivery of possession of the unit, is awarded, that would meet the ends of justice.”

                Not only this, in H.P. Housing Board Vs. Janak Gupta [2009] INSC 627 (26 March 2009) (Civil Appeal No. 6346 of 2002), it was clearly held by the Hon’ble Supreme Court of India that in the cases of delay, in delivery of possession, award of interest @ 12% per annum, on the deposited amount, for the period of delay, would meet the ends of justice. Taking note of above said proposition of law, in the present case also, ends of justice would meet, if interest is granted for delayed period, to the complainant whereof 30.04.2015.

18.         Another objection was raised by Counsel for opposite parties, that since the complainant is a subsequent allottee, and he has purchased the unit, in question, from the open market, he is not a consumer. It is not in dispute, that the complainant has purchased the unit, in resale, from the original owner, referred to above. At that time, even Allotment Letter/Agreement was not got executed between the original allottee and the opposite parties. Admittedly, the unit, in question, was transferred by the opposite parties, in favour of the complainant, on making request vide document Annexure C-1. It is an admitted fact that the Allotment Letter/Agreement containing detailed terms and conditions, in respect of the sale of unit, in question, was executed between the complainant and the opposite parties only. It is well settled law that once the property is transferred/endorsed, in the name of the buyers from the original owner, he/she/they (buyer(s), is/are vested with all the rights and interests, accrued in favour of his/her predecessor(s), as he/she/they stepped into her/his/their shoes. It was also so said by the National Consumer Commission, New Delhi in case Vatika Limited   Vs Mr. Rajneesh Aggarwal, Revision Petition No. 525 of 2013, decided on 22.07.2014, wherein the complainant was the fourth subsequent allottee. In that case, the National Commission, held as under:-  

“So far as the case of Raje Ram is concerned, the facts of the present case are totally different. In the present case, the respondent/complainant had purchased the apartment in question from the first transferee on 29.4.2006 when the construction had not been completed and   purchase/transfer of the apartment was duly approved by the petitioner company after charging Rs.65,840/- as transfer charges. In the circumstances, the petitioner company could not deny its role as a service provider to the respondent/complainant and has to be held liable for any deficiency in service with reference to the terms and conditions of the agreement which was made equally applicable to the complainant also consequent upon the approval of the assignment by the petitioner company……………...”

                The principle of law laid down in the aforesaid case, decided by the National Commission, is fully applicable to the present case. In view of the above, the argument raised by Counsel for the opposite parties, being devoid of merit, is rejected.

19.         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 is an admitted case that offer of possession of the unit, in question, could not be made, by the date of filing this complaint and on the other hand, offer so made during pendency of the complaint, has been clearly proved to be paper one, as such, there is continuing cause of action, in favour of the complainant, 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 limitation. The submission of Counsel for  opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
20.         An objection was also raised, by making reference to Clause No.41 of the Allotment Letter, that in the face of existence of provision 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. We feel that the argument raised is liable to be rejected.

                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.”

                As such, the plea taken by the opposite parties, in this regard, being devoid of merit, is rejected.

21.         No other point, was urged, by the contesting parties.
22.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under:-
    1. To hand over actual physical possession of the unit, in question, to the complainant, within a period of 04 months, from the date of receipt of certified copy of this order, complete in all respects, after obtaining necessary occupation/partial/completion certificates, from the competent authorities, on receipt of legally due amount from him (complainant), if any.
    2. To execute and get registered the sale deed, in respect of the unit, in question, in favour of the complainant, within two months, from the date of handing over possession, as indicated in Clause (i) above, on payment of registration and stamp duty charges, by him to the Registering Authorities.
    3. To pay compensation, by way of interest @12% p.a., on the entire deposited amount, to the complainant, from 30.04.2015 (promised date) to 28.02.2017, within two months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a., till realization.
    4. To pay compensation by way of interest @12% p.a. on the entire deposited amount, w.e.f. 01.03.2017, onwards (per month), till actual delivery of actual physical  possession of the unit, by the 10^th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a., from the date of default, till payment is made.
    5. To pay compensation, in the sum of Rs.02 (Two) lacs, on account of mental agony, physical harassment, caused to the complainant, deficiency in providing service and adopting unfair trade practice, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing this complaint till realization.
    6. To pay cost of litigation, to the tune of Rs.50,000/-  to the complainant, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing this complaint till realization.
23.         Certified Copies of this order be sent to the parties, free of charge.
24.         The file be consigned to Record Room, after completion.

Pronounced.

27.02.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.