Chandigarh

StateCommission

CC/873/2016

Kirpal Singh Mooner - Complainant(s)

Versus

Omaxe Chandigarh Extension Developers Pvt. Ltd. - Opp.Party(s)

Rajesh Verma & Devinder Kumar, Adv.

01 May 2017

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	873 of 2016
Date of Institution	:	01.12.2016
Date of Decision	:	01.05.2017

 

Kirpal Singh Kooner son of Sh.Ajmer Singh, resident of House No.2702-B, Sector 42-C, Chandigarh.

……Complainant

V e r s u s

1. Omaxe Chandigarh Extension Developers Private Limited (wholly owned subsidiary of M/s Omaxe Ltd.), 10, Local Shopping Complex, Kalkaji, New Delhi-110019, through its Managing Director/Principal Officer/Authorized Signatory.
2. Managing Director, Omaxe Chandigarh Extension Developers Private Limited (wholly owned subsidiary of M/s Omaxe Ltd.), 10, Local Shopping Complex, Kalkaji, New Delhi-110019.
3. Omaxe Chandigarh Extension Developers Private Limited, (wholly owned subsidiary of M/s Omaxe Ltd.), SCO No.143-144, (First Floor), Sector 8-C, Chandigarh-160008, through its Authorized Person/Principal Officer.

              .... 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.Rajesh Verma, Advocate for the complainant.

      Sh.Ashim Aggarwal, Advocate for the opposite parties.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                The present is the case in which, not only deficiency in providing service but also adoption of unfair trade practice is amply proved on record, so far as the opposite parties are concerned. It is proved on record that despite having received almost the entire sale consideration, towards sale price of the flat purchased, possession thereof, has not been offered, as per promise made. Even then, the opposite parties have audacity to contest this complaint, by raising frivolous objections. 

2.         The facts, in brief are that allured by tall claims made through various publications qua qualities of the project, launched by the opposite parties, known as ‘Silver Birch’, in Omaxe Chandigarh Extension, situated at Mullanpur, LPA, GMADA, SAS Nagar Mohali, Punjab, the complainant moved an application in the month of March 2010, for allotment of exclusive floor, on ground floor, to be constructed on a plot measuring 300 square yards, in the said project. To get the allotment done, he paid an amount of Rs.3 lacs, through cheques on 08.03.2010. Copy of the application form and payment receipts are placed on record as Annexures C-1 to C-4, respectively. Vide letter dated 17.06.2010, he was informed regarding acceptance of his expression of interest  to purchase a unit and promise was made that the allotment will be made in near future. Vide letter dated 07.07.2010 Annexure C-6, he was provisionally allotted independent floor (ground floor) on plot bearing no.248, measuring 252.30 square meters/301.75 square yards, having builtup area of 1500 square feet. The area was subsequently increased to 1685 square feet, against additional cost. Allotment letter/Agreement Annexure C-7 was issued on 07.09.2010. As per Clause 31 (a) of the allotment letter/agreement, possession of the constructed unit was to be delivered within 24 months from the date of start of construction with extended period of six months, subject to force majeure circumstances. Relevant Clause reads thus:-

“The Company shall put its best efforts to complete the development of the Unit within 24 (Twenty Four) months or within an extended period of six months from the date of start of construction, subject to force majeure conditions (as mentioned in Clause (b) hereunder) or subject to Allottee(s) as well as other Unit Allottees 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.”

 

3.         It is pertinent to mention here that since, it is evident from the statement of account dated 26.10.2016, that after receiving booking amount, the opposite parties started making demands in respect of the unit, in question, and had started receiving amount from 23.04.2011 on regular basis, as such, it could very well be said that the date of start of construction, if assumed to be 23.04.2011, possession was to be handed over within a maximum period of 30 months, from that date i.e. on or before 22.10.2013.
4.         Total cost of the unit was fixed at Rs.41,23,061/- plus additional cost of Rs.2,06,050/- towards increased area i.e. Rs.43,29,111/-. To make payment, the complainant got sanctioned housing loan, for a sum of Rs.20 lacs, from the State Bank of India, by moving an application on 19.08.2010. Loan account was closed on 12.05.2015. No Due Certificate Annexure C-9 was issued by the said Bank, confirming the said fact. Vide letter dated 13.05.2015, lien on the property no.248 was also cancelled by the said Bank.
5.         The complainant continued to make payment, as per demands raised and by the time this complaint was filed, he had paid an amount of Rs.40,95,457.16Ps., with a credit note of Rs.2,33,654/-, which included the total price. Copy of statement of account is at Annexure C-11.  The complainant received letter dated 14.01.2016, stating that the opposite parties had withdrawn letter issued to him on 24.08.2015 offering possession of the unit, in question. It was specifically stated by the complainant that letter dated 24.08.2015 was never received by him.
6.         It was further stated that despite the fact that substantial amount, referred to above, was paid by the complainant, he was not offered possession of the unit, in question. Visits made to the office of the opposite parties, with a request to complete the construction and deliver possession of the unit, did not yield any result. It was stated that even as on today, the construction is not complete and basic amenities are not in existence at the site. It was further stated that neither possession of the unit, in question was delivered to the complainant, nor the amount deposited was refunded to him. It was also stated that the aforesaid acts of the opposite parties amounted to deficiency in rendering service and adoption of unfair trade practice on the part of the opposite parties.
7.         The opposite parties, in their joint written reply raised many preliminary objections like as per Clause 50 (c) of the Allotment Letter/Agreement, this Commission has no jurisdiction, to entertain and decide dispute between the parties, because as per above said provision, for settlement of dispute, 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. He is already residing in his own house in Sector 42C, Chandigarh. Territorial and pecuniary  jurisdiction of this Commission was challenged.
8.         Factual matrix of the case was not controverted. Price of the unit mentioned in the complaint and payments made by the complainant is not disputed. Purchase of the unit, in question, by the complainant in the manner, referred to above, was admitted. Execution of Allotment Letter and Tripartite Agreement was also not disputed. There is no dispute qua total sale consideration of the unit. It was also not seriously disputed that as per Clause 31 (a) 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 start of construction. However, the said period was to be computed, after excluding Saturdays, Sundays etc. It was stated that the said period was tentative, as it was said in the Agreement that the opposite parties will put their best efforts to complete construction in the said period, as such, time was not the essence of contract. It was further stated that even otherwise, since the disputed unit falls under the category of immovable property, as such, in that event also, time was not the essence of contract. It was further stated that in case of delay in delivery of possession of the unit, stipulated penalty has been provided in the Allotment Letter/Agreement, which safeguarded the interest of the complainant. It was averred that the opposite parties are ready to relocate the complainant to some other unit, in the said project, where possession is readily available. It was pleaded that due to clerical error, letter dated 24.08.2015 was sent to the complainant. Vide letter dated 14.01.2016, the complainant was asked to ignore the said letter.  It was averred that neither there was any deficiency in providing service on the part of the opposite parties, nor they indulged into unfair trade practice. Prayer was made to dismiss the complaint.
9.         On 15.02.2017, 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 17.02.2017, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case.     
10.         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.
11.         The contesting parties led evidence in support of their case and raised arguments, in tune of the facts narrated above, which were heard in detail.
12.         The first 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, perusal of almost all the documents placed on record (except one or two) reveals that the same have been issued by the opposite parties, from their Chandigarh Office, i.e. SCO No.139-140/143-144, First Floor, Sector 8C, Madhya Marg, Chandigarh. The fact that the said office at Chandigarh was actively involved in the transaction, in question, is further fortified from the letter dated 14.01.2016, Annexure C-12, wherein, the opposite parties clearly intimated the complainant that “in case of any queries feel free to visit our office at SCO 139-140, Sector 8-C, Madhya Marg, Chandigarh”.  It means that the opposite parties were actively working from their Branch Office at Chandigarh, address whereof has been mentioned above, as far as the present project and the unit, in question, is concerned. Since, as per the documents, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

13.         It was stated by Counsel for the opposite parties that because the complainant is already residing in his own house no.42C, Chandigarh, meaning thereby that he owns an independent house in his name, as such, it can safely be said that he being investor, had purchased the unit, in dispute, for selling the same, to earn profits and not for personal use, and therefore, he would not fall within the definition of consumer, as defined under the Act. In the first instance, it may be stated here that the complainant by way of filing rejoinder, has clarified that the house in Sector 42C is a govt. accommodation, allotted to him. At the same time, the complainant has specifically stated in his complaint that he has purchased the unit, in question, in the project of the opposite parties, for his residential purpose. 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 (opposite parties), to prove it, which they failed to do so. Thus, in the absence of any cogent evidence, in support of the objections raised by 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 as above, 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 a similar 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. 

14.         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 refund of amount paid i.e. Rs.43,29,111/- alongwith interest @12% p.a. from the respective date of deposits; interest has been calculated to the tune of Rs.29,08,748/- till 30.11.2016 (complaint filed on 01.12.2016); compensation to the tune of Rs.3 lacs, for harassment; 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.

15.         It is admitted on record that in the first instance, the complainant moved an application in the month of March 2010, for purchase of the said unit, on making payment of Rs.3 lacs, through cheques on 08.03.2010, in response whereto, vide letter dated 07.07.2010 Annexure C-6, he was provisionally allotted the said unit. It is also not disputed that area of the said unit was increased from 1500 square feet, to 1685 square feet, against additional cost.  Allotment letter/agreement Annexure C-7 was issued on 07.09.2010, as per Clause 31 (a) whereof, possession of the constructed unit was to be delivered within a maximum period of 30 months from the date of start of construction, subject to force majeure circumstances i.e. on or before 22.10.2013, as has been clarified above. However, it was not so done. This fact is not disputed by the opposite parties. However, to confirm the fact that the unit was not ready for possession, reliance has also been placed by the complainant on the contents of letter dated 14.01.2016 Annexure C-12. Relevant contents of the said letter reads thus:-

“This is with reference to our letter dated 24-AUG-2015 with respect to your allotted Flat No.OSBC/TYPE-A/GF/248 in project “Omaxe Silver Birch” situated at Omaxe New Chandigarh, Mullanpur, District SAS Nagar, Punjab (hereinafter referred to as “said Project”). We express our sincere apology with reference to the above mentioned letter as the same cited offer of possession of your Unit. However, the Construction work of your above mentioned unit is under progress and you shall be duly intimated about the completion of work of said unit vide new offer of Possession Letter.”

 

16.         Reading of contents of the above said letter, makes it very clear that by the end date, construction of the unit was not complete and even on 14.01.2016, the opposite parties have admitted that construction of the unit is not complete and the complainant will be intimated in due course of time. Even till the time, arguments were heard in this case, admittedly possession of the unit was not offered to the complainant. Further, at the time of arguments, no committed date to give possession was offered. At the time of arguments, we specifically asked Counsel for the opposite parties, to give a committed date within which, possession of the unit, in question, can be delivered to the complainant. He said that no such date can be given at this juncture. Above facts clearly indicate that the opposite parties are guilty of providing deficient service. As per promise made, after receipt of huge amount, no attempt was made to complete construction of the unit. Now it is May 2017.  It was only said that the opposite parties are making best efforts, to complete the construction and development work and that the complainant can be relocated to some other unit, where possession is readily available. Since, it is a well settled law that a purchaser cannot be forced for relocation, unless he agrees to the same, as such, we cannot pass any directions, in that regard, especially when the complainant is not ready for it and is seeking refund of the amount deposited, by way of filing this complaint. Under above circumstances, the complainant cannot be made to wait for an indefinite period, for delivery of possession of the unit, purchased by him. 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 the opposite parties. In a case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No.70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-

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

 

17.         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”.

 

                However, in the present case, the situation is worst, as possession has not been even offered to the complainant, what to speak of delay in delivery thereof. In view of above, it is held that since there was a material violation on the part of opposite parties, in not offering and handing over possession of the unit by the stipulated date or even till date, the complainant was at liberty to seek refund of the amount deposited, alongwith interest and compensation, by way of filing the instant complaint.

                In view of above facts of the case, the opposite parties are also under an obligation to compensate the complainant, for inflicting mental agony and causing physical harassment to him, as also escalation in prices.

18.         The opposite parties also tried to evade their liability, by saying that since it was mentioned in the Allotment Letter/Agreement, that the opposite parties shall make best efforts to complete the development of the unit, within a maximum period of 30 months, referred to above, 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.

19.         At the time of arguments, it was also argued by Counsel for opposite parties that, as per terms and conditions of the said Allotment Letter/Agreement, when computing the above said period of delivery of possession, Sundays, Saturdays, Bank Holidays, etc. are to be ignored.

                We feel that the contention raised is liable to be rejected. A similar issue came up for consideration before this Commission qua another project of 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 and, thereafter also, in number of cases. 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 31 (a) of the Allotment Letter/Agreement, the opposite parties were bound to deliver possession of the unit, in question, within a maximum period of 30  months, from the date of start of construction of the same i.e. on or before 22.10.2013, as such, time was unequivocally made the essence of contract.

                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.”

 

20.         It is to be further seen, as to whether, interest, on the amount refunded, can be granted, in favour of the  complainant. It is not in dispute that an amount of Rs.43,29,111/- was paid by the complainant, without getting anything, in lieu thereof. The said amount has been used by the opposite parties for their own benefit. There is no dispute that for making delayed payments, opposite parties were charging heavy rate of interest 18% p.a. for the first month and thereafter @24% p.a.,  as per Clause 21 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 being original allottee is certainly entitled to get refund of the amount deposited by him, alongwith interest, from the respective dates of deposits till realization.  
21.         Counsel for the opposite parties also argued that in the face of existence of arbitration Clause in the Allotment Letter/Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of  1996 Act, this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to an arbitration for adjudication.

                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.

22.         Since it has already been held above that the complainant is entitled to refund of the amount deposited, alongwith interest and compensation, as such, plea taken by Counsel for the opposite parties, that in case of delay in delivery of possession of the unit, stipulated penalty has been provided in the Allotment Letter/Agreement, which safeguarded the interest of the complainant or that the opposite parties are ready to pay compensation for the period of delay in delivering possession of the unit, has no legs to stand and is accordingly rejected.
23.         No other point, was urged, by Counsel for the parties.
24.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under:-
    1. To refund the amount Rs.43,29,111/- to the complainant, alongwith interest @12% p.a., from the respective dates of deposits onwards.
    2. To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.
    3. To pay cost of litigation, to the tune of Rs.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 respective dates of deposits onwards, and interest @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization.
25.         However, it is made clear that, in case, the complainant is under debt of loan amount, availed 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).
26.         Certified Copies of this order be sent to the parties, free of charge.
27.         The file be consigned to Record Room, after completion.

Pronounced.

01.05.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.