Chandigarh

StateCommission

CC/966/2016

Megh Raj - Complainant(s)

Versus

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

Somesh Gupta, Adv.

17 May 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	966 of 2016
Date of Institution	:	28.12.2016
Date of Decision	:	17.05.2017

 

Megh Raj aged about 67 years, son of Late Sh.Mohan Dass, resident of House No.1184, Phase-9, Mohali (SAS Nagar).

……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, through its Managing Director/Director/ General Manager/Authorized Signatory.
2. M/s Omaxe Chandigarh Extension Developers Private Limited, Corporate Office 10, L.S.C. Kalkaji, New Delhi-110019, through its Chairman/Managing Director/Director/ General Manager/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: Sh.Somesh Gupta, Advocate for the complainant.

Sh.Sanjeev Sharma, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The facts in brief are that the opposite parties floated a project known as ‘Omaxe Cassia’, Mullanpur, SAS Nagar, Mohali, Punjab. Allured by rosy pictures given regarding salient features of the said project, the complainant purchased one flat bearing No.749, 1^st Floor, measuring super area of 1725 square feet, in resale from Sh.Sandeep Sharma and Smt. Shobhana Sharma, original allottees. At the time of purchase of the said unit, the original allottees had already paid an amount of Rs.8 lacs, towards booking amount on 21.03.2011 and thereafter, Rs.5,87,224/- vide receipt dated 24.08.2011.

2.         It is case of the complainant that despite receiving huge amount of Rs.13,87,224/-, the opposite parties did not execute Allotment Letter/Buyer’s Agreement, which act amounted to deficiency in providing service and adoption of unfair trade practice. It was further stated that, ultimately, Allotment Letter/Buyer’s Agreement had been got executed between the original allottees and the opposite parties, on 25.01.2013.
3.         It was averred that on completion of all formalities, the unit, in question, was transferred in favour of the complainant. All the necessary documents including the Agreement, were endorsed, in his favour. In this manner, the complainant stepped into the shoes of the original allottees, in respect of the unit, in question.
4.         It was stated that, thereafter, an amount of Rs.5,47,205/- vide receipt dated 18.02.2013, was paid by the complainant to the opposite parties, towards price of the said unit. As per the Agreement, price of the said unit was fixed at Rs.46,68,011.50Ps., which included IFMS, Power Backup equipment cost, club cost etc. Construction linked payment plan was opted by the complainant, according to which 95% of the sale consideration was to be paid before offer of possession and the remaining amount equal to 5% was to be paid at the time of offer of the said unit.
5.         As per Clause 23 (b) of the allotment letter/agreement dated 25.01.2013, possession of the constructed unit was to be delivered within 24 months from the date of signing of the said agreement with extended period of six months i.e. total 30 months, subject to force majeure circumstances. End date to deliver possession was fixed on or before 24.07.2015. Relevant Clause reads thus:-

“The Company shall put its best efforts to complete the development/construction of the Unit within 24 (Twenty Four) months from the date of signing of this Allotment Letter by the Allottee(s) or within an extended period of 6 (six) months, however construction within aforesaid 30 months is subject to force majeure conditions (as mentioned in Clause (c) & (d) hereunder) and subject to all Unit Allottee(s) making timely payment or subject to any other reasons beyond the control of the Company. No claim by way of damages/compensation shall lie against the Company in case of delay in handing over the possession on account of any of the aforesaid reasons and the Company shall be entitled to a reasonable extension of time for the delivery of possession of the said Unit to the Allottee(s). The aforesaid period of development shall 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.”

6.         It was averred that, thereafter, as per demands raised by the opposite parties, from time to time, the complainant kept on making the payment. The complainant after paying substantial amount, visited the site and saw that construction work was being carried out at a snail`s speed.
7.         As such, he requested the opposite parties to raise further demands, only as per actual stage of construction, but they did not bother and raised another demand of Rs.4,64,730/-. Under threat of cancellation of the unit, in question, he paid the said amount. It was stated that thereafter, a lot of correspondence took place between the parties, but the opposite parties did not change their style of making demands, even in the absence of construction work. The complainant has paid an amount of Rs.43,39,934/- towards price of the said unit.
8.         The opposite parties kept on giving false dates for delivery of possession of the unit, in question. Various reminders sent in the matter, did not yield any result. Visits to the site reveal that still it will take a long time, to complete construction of the unit. Basic amenities were still not in existence at the project site.
9.         It was further stated that instead of completing the project, in dispute, the opposite parties floated new projects, in the same area, meaning thereby that the amount paid by the complainant was diverted for launching the said new projects, as a result whereof, the project, in dispute, got delayed. It was averred that recently, the complainant came to know that now the date of offer of possession has been dragged to June 2017.
10.         It was pleaded that neither possession of the unit, in question was offered/delivered, nor the amount of compensation, towards delay in delivery of possession was given to the complainant. It was stated that even the service tax was illegally received by the opposite parties, from the complainant. It was further stated that the aforesaid acts of the opposite parties, amounted to deficiency in providing service and adoption of unfair trade practice.

                By stating as above, the instant complaint has been filed by the complainant, seeking refund of amount paid alongwith interest thereupon; compensation, for mental agony and physical harassment etc., as also for the period of delay @Rs.10/- per square feet per month; and litigation expenses.

11.         Upon notice, joint reply was filed by the opposite parties wherein it was pleaded that as per Clause 41 of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide disputes between the parties, because as per above said provision, the matter needs to be referred to an arbitrator for adjudication. In this regard, a separate application was also moved by the opposite parties, which was disposed of vide order dated 29.03.2017, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case. 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. As per Clause 41 of the Allotment Letter, the Courts at Punjab and Delhi, shall have territorial Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. However, it was admitted that some part of cause of action, accrue to the complainant, at Chandigarh. Pecuniary jurisdiction of this Commission was challenged by stating that the relief claimed falls above Rs.1 crore. It was averred in the written reply that the complainant did not fall within the definition of “consumer” as defined under Section 2 (1) (d) of the Act, as he has not purchased the unit, in question, for his residential purpose. He has his own house at Mohali, Punjab. It was averred that the complainant being a subsequent allottee, as he has purchased the unit, in question, from open market, is not a consumer.
12.         Factual matrix of the case was not controverted. Price of the unit mentioned in the complaint and payments made by the complainant are not disputed. It was admitted that the complainant purchased the unit, in question, in resale, in the manner, referred to above. It was averred that as per Clause 23 (b) of the Allotment Letter/Agreement, it was agreed that the opposite parties shall only make best efforts to complete construction and development within a period of 24 months from the date of signing thereof (allotment letter), within extended period of six months and deliver possession thereafter. It was further stated that the said period was to be computed excluding Saturdays, Sundays and Bank Holidays, and only thereafter, possession of the unit was to be delivered, as such, no definite period was fixed for the same. It was further stated that since the disputed unit falls under the category of immovable property, as such, time was not the essence of contract. It was further stated that it was well within the knowledge of the complainant that for any delays, stipulated penalty has been provided in the Allotment Letter/ Agreement, which safeguarded his interest and the opposite parties are ready to pay the same. It was pleaded that possession  of the unit has been offered to the complainant on 19.01.2017, for carrying out fit outs thereof, on making payment due, but the complainant failed to make the said payment and also did not come forward to take possession. It was stated that the opposite parties are making best efforts to complete development works at the project site. It was further stated that the complainant was defaulter in making payment, as a result whereof, various reminders were sent to him, but to no avail. It was further stated that, in case, the complainant still wanted refund of the amount deposited; the same would amount to surrender of the unit, and would attract forfeiture charges. It was averred that the complaint is barred by limitation. Prayer was made to dismiss the complaint.
13.         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.
14.         The parties led evidence in support of their case.
15.         We have heard Counsel for the parties and have gone through the evidence and record of the case, very carefully.
16.         Before going into the merits of the case, first of all, we will deal with the argument raised by Counsel for the opposite parties that in view of Section 8 of the Arbitration and Conciliation Act, 1996, this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitrator for adjudication. We are not going to agree with the argument raised. This 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.

17.         Another objection taken by the opposite parties, with regard to pecuniary jurisdiction of the Commission, also deserves rejection. It may be stated here, that the complainant has sought refund of amount of Rs.43,39,934/-/- alongwith interest @15% p.a. compounded quarterly; compensation @Rs.10/- per square feet per month, for the period of delay; Rs.5 lacs, as compensation for mental agony, physical harassment, deficiency in providing service and adoption of unfair trade practice; and cost of litigation to the tune of Rs.55,000/-, aggregate value whereof fell above Rs.20 lacs and below Rs.1 crore. Though, interest is not to be taken into consideration, while determining pecuniary jurisdiction of this Commission, yet, in the present case, even for the sake of arguments only, even if the interest claimed is taken into consideration, then also the aggregate value of the relief claimed, does not 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.
18.         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, it is evident that letter dated 28.02.2013 i.e. request form for transfer of ownership of flat, in question, was received by Chandigarh office of the opposite parties; Allotment Letter/Agreement was also signed at Chandigarh, as all its pages, bear stamp of Chandigarh Office of the opposite parties. Besides as above, perusal of almost all the documents (except few) placed on record reveals that the same were issued by Chandigarh Office of the opposite parties, as the same bear the first address thereon as SCO 139-140/143-144, Sector 8-C, Madhya Marg, Chandigarh. At the same time, in para no.7 of the preliminary objections, it has also been admitted by the opposite parties that a part of cause of action accrued to the complainant at Chandigarh.  Since, as per the documents, referred to above, and also as per own admission of the opposite parties, 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. 

                At the same time, a wrong plea has been taken by opposite parties, that as per Clause 41 of the Allotment Letter/Agreement, it was agreed to between the parties that the Courts at Delhi and Punjab, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. We have gone through the said clause and found that it was agreed that “The Courts at Chandigarh and Delhi alone shall have jurisdiction in all matters arising out of/touching and/or in connection with this allotment”. There is no mention that Courts at Delhi and Punjab only have jurisdiction. Rather it was mentioned that that Courts at Chandigarh and Delhi alone shall have jurisdiction. As such, plea taken by the opposite parties, contrary to the record, has no legs to stand and is accordingly rejected.

19.         The next question, that falls for consideration, is, as to whether, the complainant fell within the definition of a consumer, as defined by Section 2 (1) (d) (ii) of the Act, or not. It may be stated here that the mere bald objection of the opposite parties that the complainant had not purchased the unit, for residential purpose, does not carry any weight and is liable to be rejected. It has been clearly mentioned by the complainant, in para no.1 of his complaint that the said unit was purchased by him, to meet the growing family needs of his big family i.e. for residential purpose. On the other hand, nothing contrary to this has been proved by the opposite parties, by placing on record, any document. There is nothing on the record, that the complainant is a property dealer, and deals in the sale and purchase of property. Furthermore, 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 as above, recently under similar circumstances, in  a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“ In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In a given case, separate houses may be purchased by a person for the individual use of his family members.  A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house.  Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose.  In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. Vs. Acron Developers Pvt. Ltd. & Ors. First Appeal No. 1287 of 2014 decided on 05.11.2015.”

 

                Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion to that effect, cannot be taken into consideration. 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, therefore, being devoid of merit, is rejected.  

20.         Another objection was raised by Counsel for the 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, in the manner, referred to above. Admittedly, the unit, in question, was transferred by the opposite parties, in favour of the complainant, on completing all the formalities and receipt of the required amount. It is well settled law that once the property is transferred/endorsed, in the name of the buyer from the original owner, he  is vested with all the rights and interests, accrued in favour of his/her predecessor(s), as he stepped into 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 above, the argument raised by Counsel for the opposite parties, being devoid of merit, is rejected.

21.         Now it is to be seen, as to whether, the complainant is entitled to refund of the amount paid or not. It is not in dispute that the unit, in question, was purchased by the complainant, in resale, in the project of the opposite parties, vide request letter dated 28.02.2013. By the time, this complaint was filed, admittedly, the complainant had already paid an amount of Rs.43,39,934/- against Rs.46,68,011.50ps. towards price of the said unit. At the time of purchase of the said unit, admittedly terms and conditions of the Agreement, were kept intact. As per Clause 23 (b) of the Agreement, possession of the constructed unit, was to be delivered by the opposite parties to the complainant, within 30 months i.e. (24 months plus 6 months) from the date of signing of that Agreement. End date to deliver possession of the unit expired on 24.07.2015. It is on record that construction by that time was not complete. Possession of the unit, in question, was offered only on 19.01.2017 and that too, during pendency of this complaint. Even the contents of offer of possession clearly reveals that the development work is still not complete, as it was clearly intimated therein that the same is on the verge of completion. The said letter was issued, only for carrying out necessary interior/fit out works in the said unit, meaning thereby that still the unit, in question, and also the development at the site, was not complete in all respects. As such, the possession so offered to the complainant cannot be said to be genuine one.

                It is well settled law that before handing over possession of a residential unit, it is required of the builder to complete the development/construction work and obtain occupation and partial/completion certificates from the competent Authorities. An allottee is not obliged to take possession of a flat, unless it is complete in every respect, including the completion certificate. It was also so said by the Hon’ble National Commission, in Inderjit Singh Bakshi Versus S.M.V. Agencies Private Limited, FA No. 729 of 2013, decided on 30.11.2015. In the present case, such certificates are not on record, meaning thereby the same have not been obtained by the opposite parties, from the Competent Authorities.

                At the same time, burden 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 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. It is very strange that not even an iota of evidence has been placed, on record, by the opposite parties, to prove that when offer was made to the complainant, in respect of the unit, in question, construction and development work was complete and that all the basic amenities were in existence. In case, all the development/ construction activities, had been undertaken, and completed at the site, by the said date, 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/construction activities, had been undertaken and completed at the site or not, but they failed to do so. As such, it is held that the possession offered during pendency of the complaint, is nothing, but a paper possession and is not sustainable in the eyes of law.

                Be that as it may, since it is an admitted case that the possession was offered on 19.01.2017 i.e. after a long delay of about more than one and a half years, as such, there is a material breach of terms and conditions, on the part of the opposite parties. Under above circumstances, material violation of terms and conditions of the Agreement, by the opposite parties, cannot be ignored. It is well settled law that non-delivery of possession of constructed unit in a developed project, by the stipulated date, is a material violation of the terms and conditions of the Allotment Letter/Agreement, on the part of a builder. Under similar circumstances, in a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015, decided on 14 Sep 2016, 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.”

Not only as above, in a case titled as Brig Ajay Raina (Retd.) and another Vs. M/s Unitech Limited, Consumer Complaint No.59 of 2016, decided on 24.05.2016, wherein possession was offered after a long delay, this Commission, while relying upon the judgments rendered by the Hon`ble National Commission, ordered refund to the complainants, while holding as under:-

“Further, even if, it is assumed for the sake of arguments, that offer of possession, was made to the complainants, in July 2015 i.e. after a delay of about three years, from the stipulated date, even then, it is not obligatory upon the complainants to accept the same. It was so held by the National Commission in Emaar   MGF   Land   Limited   and   another   Vs. Dilshad Gill, III (2015) CPJ 329 (NC). Recently also, under similar circumstances, in the case of M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, the National Commission, held as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

                As such, under above circumstances, the complainant cannot be forced to accept possession of the unit, offered at a belated stage, in the absence of any force majeure circumstances.

                In view of above, it is held that since there was a material violation on the part of the opposite parties, as explained above, the complainant is at liberty to seek refund of the amount deposited, alongwith interest and compensation.

22.         Another objection raised by Counsel for the opposite parties that it was mentioned in the Allotment Letter/ Agreement that the Company shall make its best efforts to deliver possession of the unit, within a period of 24 months, with further grace period of six months, as such, time was not the essence of contract, is also devoid of merit. It may be stated here that it was clearly mentioned in Clause 23 (b) of the Allotment Letter/Agreement that possession of the unit will be delivered by the opposite parties, within a period of 24 months, with extended period of 6 months, by making best efforts, to the complete the development and construction of the unit, subject to force majeure circumstances or reason beyond the control of the opposite parties. It is not the case of the opposite parties that they encountered any force majeure circumstances, as a result whereof, they were legally entitled for extension of time for delivering possession of the units to the allottees, including the complainant.
23.         It was also argued that, as per terms and conditions of the said Allotment Letter/Agreement, when computing the above said period, Sundays, Saturdays, Bank Holidays, etc. are to be ignored.

                We feel that the contention raised is liable to be rejected. As stated above, 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 was reiterated by this Commission, in a case titled as Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016. 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. Thus, under these circumstances, since as per Clause 23 (b) of the Allotment Letter/Agreement, the opposite parties were bound to deliver possession of the unit, within a maximum period of 30 months from the date of execution of the same i.e. on or before 24.07.2015, as such, time was unequivocally made the essence of contract.

                At the same time, the opposite parties also cannot evade their liability, merely by saying that since it was mentioned in the Allotment Letter/Agreement, that they shall put their best efforts for delivery of possession of the unit, as such, time is not to be considered as essence of the contract. Non-mentioning of exact date of delivery of possession of the unit(s) in the Allotment Letter/Agreement, is an unfair trade practice, on the part of the Builder. The builder is bound to mention the exact/specific date of delivery of possession of the unit(s) to the allottees/purchasers thereof.  It was so said by the Hon`ble National Commission, in Rajeev Nohwar & Anr. V/S Sahajanand Hi Tech Construction Pvt Ltd, 2016 (2) CPR 769. Relevant portion of the said case reads thus:-

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

 

                In view of above, the plea of the opposite parties in this regard also stands rejected.

24.         Another objection was raised by the opposite parties that the complainant was defaulter in making payment of installments towards the said unit. It may be stated here that it is an admitted fact that the opposite parties failed to offer possession of the unit, in question, by the stipulated date, as they could not complete the construction. It has also been proved on record, that even as on today, the opposite parties are not able to deliver possession of the unit, in question, complete in all respects, in a developed project aforesaid. Even in the alleged offer of possession letter dated 19.01.2017, still they are saying that “development of the said project is on the verge of completion”. Thus, if it is so, the complainant was well within his right, to withhold the amount (in the present case, for very few days, as is evident from the record), in view of principle of law laid down in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. Even otherwise, the opposite parties have levied heavy rate of interest i.e. @24% p.a., on the delayed payment, as is evident from statement of account Annexure –A, at page 50 of the file.  They have not left the complainant and have penalized him heavily for that. As such, once they, instead of exercising their right of cancelling the allotment, proceeded further by waiving the delay, by charging of delayed payment interest, now it is not open to them, to raise such an objection. 

                Secondly, such a plea has no legs to stand, also in view of decision rendered by the National Commission, in a case titled as Puneet Malhotra Vs Parsvnath Developers Ltd., II (2015) CPJ 18 (NC), wherein under similar circumstances it was observed and held as under:-

“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”.

 

                No help, therefore, can be drawn by the opposite parties out of the objection, raised by them, in this regard.

25.         Another objection taken by the opposite parties that since the unit, in question, falls under the category of immovable property, as such, in that event also, time is not to be considered as essence of the contract, is also bereft of merit, in view of ratio of judgment titled as Saradamani Kandappan vs S. Rajalakshmi & Ors., Civil Appeal Nos. 7254-7256  of 2002 &                                      and  Contempt Petition (C) No. 28-29 of 2009, decided on 4^th  July, 2011, wherein the Hon`ble Supreme Court held as under:-

“A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S. Vidyanadam and Others vs. Vairavan - (1997) 3 SCC 1 (by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed:

"It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.

In the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .........We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation.

Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."

(emphasis supplied) Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.”

 

26.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the  complainant. It is not in dispute that an amount of Rs.43,39,934/- was paid by the complainant. Incomplete possession offered during pendency of the complaint, is of no use to the complainant. The said amount has been used by the opposite parties, for their own benefit. There is no dispute that the opposite parties were charging heavy rate of interest 18% p.a. for the first month and thereafter @24% p.a., as per Clause 16 (d) of the Allotment Letter/Agreement, for the period of delay in making payment of instalments.  It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon`ble Supreme Court of India, in UOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (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.43,39,934/- alongwith interest, from the dates when the payments were actually made by him i.e. at the time of purchase of the unit, in resale onwards.  
27.         As far as the plea taken by the opposite parties, regarding forfeiture of earnest money is concerned, it may be stated here that the same stands rejected, because it is not the case of the opposite parties, that they were ready with possession of the unit, to be delivered to the complainant, by the stipulated date but it was he (complainant) who wanted to rescind the contract, on account of some unavoidable circumstances/financial constraints or for any personal reason, and is seeking refund of the amount deposited. Had this been the case of the opposite parties, only in those circumstances, it would have been held that since the complainant himself is rescinding the contract, as such, he is entitled to the amount deposited, after deduction of the earnest money, as per law. Incomplete possession offered during pendency of the complaint, is of no help to the opposite parties, as the same has been offered only to evade their liability. In this view of the matter, the plea taken by the opposite parties, in this regard, has no legs to stand and is accordingly rejected.
28.          Since, it has already been held that the complainant is entitled to refund of the amount deposited, alongwith interest and compensation, as such, the plea taken by the opposite parties to the effect that they are ready to pay penalty amount for the period of delay, in delivery of possession of the unit, cannot be considered, at this stage. If the opposite parties are allowed to invoke the penalty Clause, in the instant case, regarding payment of penalty, that would amount to enriching them, at the cost of the complainant. The defence taken is accordingly rejected. 

                Similarly, once this Commission is ordering refund of the amount paid, alongwith interest and compensation, as such, the complainant is also not entitled to get compensation for the period of delay, in delivery of possession, as prayed for by him. Had he sought possession of the unit, in question, the matter would have been different.

29.         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 it is an admitted case that offer of possession of the unit, in question, was not made to the complainant, by the date, when this complaint was filed. Possession of the unit was offered during pendency of complaint only i.e. on 19.01.2017,  which has also been held to be a paper possession, by this Commission, after giving detailed findings, as per law. As such, if limitation is to be counted, that has to be from 19.01.2017. Thus, if the period of 2 years, is counted from that date, the complaint filed is well within its limitation. Under these circumstances, it is held that the complaint is not at all barred by limitation. The submission of Counsel for the opposite parties, in this regard, being devoid of merit, must fail, and the same stands rejected.
30.         No other point, was urged, by Counsel for the parties.
31.         For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties are jointly and severally directed as under:-

1. To refund the entire amount Rs.43,39,934/-  to the complainant, alongwith interest @12% p.a.,  from the dates, when the same was actually paid by him, at the time of purchase of the said unit, in resale, and thereafter  onwards.
2. To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the  complainant.
4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 02 (two) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a., instead of @12%, from the dates, when the same was  actually paid by the complainant, at the time of purchase of the said unit,  in resale and thereafter  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.

32.         However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of installments towards the said unit, it will have the first charge of the amount payable, to the extent, the same is due to be paid by him (complainant).
33.         Certified Copies of this order be sent to the parties, free of charge.
34.         The file be consigned to Record Room, after completion.

Pronounced.

17.05.2017

Sd/-

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

 (DEV RAJ)

MEMBER

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.