Chandigarh

StateCommission

CC/455/2016

Sukhdev Kumar - Complainant(s)

Versus

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

Tajeshwar Singh,Adv.

22 Mar 2017

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	455 of 2016
Date of Institution	:	12.08.2016
Date of Decision	:	22.03.2017

 

1. Sukhdev Kumar son of Sh.Satpal Gupta, resident of House No.1451-A, Sector 39-B, Chandigarh.
2. Geeta Garg wife of Sh.Sukhdev Kumar, resident of House No. 1451-A, Sector 39-B, Chandigarh.

……Complainants

V e r s u s

1. Omaxe Chandigarh Extension Developers Private Limited, through its Director, having its Registered Office at Omaxe House, 10, L.S.C. Kalkaji, New Delhi-110019.
2. Omaxe Chandigarh Extension Developers Private Limited,  through its Director/Chairman, having its Regional Office at SCO No.139-140/143-144, First Floor, Sector 8-C, Madhya Marg, Chandigarh-160018.
3. Rajendar Kumar, Proprietor of Shiv Shakti Properties, SCO 77, 1^st Floor, Sector 40-C, Chandigarh.

              .... 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.Tajeshwar Singh, Advocate for the       complainants.

      Sh.Ashim Aggarwal, Advocate for opposite        parties no.1 and 2.

      Opposite party no.3 exparte.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                Complainants no.1 and 2 are husband and wife respectively. They were Govt. employees and were living in an accommodation provided by the Government. It is stated by them that they had always dreamed of owning a house in or around Chandigarh. Attracted by rosy promises given by opposite party no.3, they were directed to invest in a project, launched by opposite parties no.1 and 2, namely Ambrosia, Omaxe New Chandigarh, Mullanpur, Punjab. They were taken to opposite parties no.1 and 2, through opposite party no.3 (Agent). They were shown a very rosy picture of the project, making very tall promises, as narrated in para no.2 of the complaint.  Allured by the said promises, they decided to purchase a ground floor built-up unit in the said project. For the ground floor unit, extra amount of Rs.2 lacs was paid by the complainants. In all, they paid an amount of Rs.8 lacs, vide receipt dated 14.12.2011 Annexure C-6. The payment was made through three cheques. Vide letter dated 29.12.2011 Annexure C-7, they were intimated that they were allotted a flat bearing no.AIFC/P/GF/11, in  the said project. It is on record that on 09.05.2012, they received an allotment letter Annexure C-8, asking them to deposit an amount of Rs.5,72,236.25ps., which they deposited on 01.06.2012, vide receipts Annexure C-10 to C-12. It is their positive case that when they purchased the flat in the year 2011, promise was made with them to deliver possession of the constructed unit, after development, within a period of three years from the date of booking. They received provisional allotment letter dated 23.11.2012, Annexure C-3 in respect of unit having 1425 square feet of area. Thereafter, nothing happened. The opposite parties remained dormant. No update on progress of construction work was given. When request was made by the complainants, the opposite parties lingered on the matter, on one pretext or the other. On 07.08.2014, Allotment Letter/Agreement was sent to them for signatures, wherein, new terms and conditions were mentioned and as per Clause 7 (a), it was promised that the possession of the unit will be handed over within a period of 15 months, from the date of signing of that Agreement, with grace period of six months i.e. total 21 months, failing which, the opposite parties were to pay compensation for the period of delay. The possession was subject to force majeure conditions. The complainants were hesitant to sign the Agreement, however, they were asked to sign the same, under threat of forfeit of amount paid by them. Vide letter dated 13.10.2014 Annexure C-17, they received letter intimating that construction in the project had started. It is their case that from time to time, they had paid an amount of Rs.28,85,225.84Ps.

2.         It is apparent on record that the  complainants were offered time bound plus construction linked payment plan. It is their positive case that after the last payment made, no demand was ever raised by the opposite parties and at the time of arguments, it was so admitted by Counsel for opposite parties no.1 and 2 that thereafter no demand was raised. In the year 2016, visit to the site made by the complainants, showed that construction of the project was not yet complete. To prove that fact, they have placed on record photographs Annexure C-28 colly. It is their further case that promise to give possession within three years came to an end in the year 2014. Thereafter, second promise was made in the year 2014, to deliver possession within 15-21 months. That period also came to an end on 05.06.2016 and even as on today, delivery of possession is not in sight. Further they have submitted that despite allotment of ground floor unit to them, without intimation, they have been shifted to a unit constructed on stilts. Ground floor has been used for parking. By stating as above, the present complaint was filed seeking directions to the opposite parties to refund the amount deposited alongwith interest, compensation and litigation expenses.
3.         Notice was issued to the opposite parties.
4.         Despite deemed service, none put in appearance, on behalf of opposite party no.3, as a result whereof, he was proceeded against exparte vide order dated 23.09.2016. Otherwise also, against him, it was only alleged that he has introduced the complainants to opposite parties no.1 and 2 and also allured the complainants to purchase the unit, in question. No inaction on his part has been agitated. In view of above, we are of the considered opinion that it will not be justified to grant any relief to the complainants against opposite party no.3. Accordingly, the complaint qua opposite party no.3 is dropped.
5.         Opposite parties no.1 and 2,  in their joint written reply raised many preliminary objections like as per Clause 62 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 complainants did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act, as they being investors 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. Pecuniary and territorial jurisdiction of this Commission was challenged. It was averred that the complaint filed is beyond limitation.
6.         Factual matrix of the case was not controverted. Price of the unit mentioned in the complaint and payments made by the complainants is not disputed. Purchase of the unit, in question, by the complainants, in the manner, referred to above, was admitted. There is no dispute qua total sale consideration of the unit. It was also not seriously disputed that as per Clause 7 (a) of the said Allotment Letter/Agreement, opposite parties no.1 and 2 undertook to complete the construction work within 21 months (15 months (+) 06 months grace period)  from the date of signing of allotment letter dated 06.09.2014 i.e. upto 05.06.2016. 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 opposite parties no.1 and 2 will try to deliver possession in the said period. It was further stated that even otherwise, since the disputed flat falls under the category of immoveable property, as such, in that event also, time was not the essence of contract. It was further stated that the promise made vide brochure was indicative. Allotment of unit was subject to approvals, having been obtained from the Competent Authorities. Change in the floor of the unit was due to statutory requirement, however, the unit remained ground floor, as defined under the provisions of Punjab Urban Planning and Development Authority Building Rules, 2013. It was further stated that it was well within the knowledge of the complainants that for any delays, stipulated penalty has been provided in the Allotment Letter/ Agreement, which safeguarded their interest. It was stated that construction work of the unit is going on in full swing and possession thereof, would be offered to the complainants, very soon. Prayer was made to dismiss the complaint.
7.         On 27.10.2016, an application under Section 8 of the Arbitration and Conciliation Act, 1996, was also filed by the opposite parties no.1 and 2, 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 02.11.2016, with the direction that question qua arbitration will be considered, at the time of final arguments in the main case.   
8.         In the rejoinder filed, the complainants reiterated all the averments, contained in the complaint and controverted those, contained in written version of opposite parties no.1 and 2.
9.         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.
10.         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 complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, perusal of almost all the documents placed on record (except few) reveals that the same have been issued by opposite parties no.1 and 2, from their Chandigarh Office. Even the Allotment Letter/Agreement, containing detailed terms and conditions in respect of the sale of the unit, in question, was executed at Chandigarh, as the same bears the stamp of Chandigarh Office of opposite parties no.1 and 2. Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by opposite parties no.1 and 2, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

11.         It was stated by Counsel for opposite parties no.1 and 2 that the complainants being investors, have purchased the unit in dispute, for selling the same, to earn profits and not for personal use, as such, they would not fall within the definition of consumer, as defined under the Act. It may be stated here that in the present case, it is specifically stated by the complainants that they have purchased the flat, in question, for their own residential purpose. At the same time, there is nothing on record, that the complainants are property dealers, and deal in the sale and purchase of property, on regular basis, in the open market and, as such, the unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof. Since, opposite parties no.1 and 2 have leveled allegations against the complainants, as such, the onus lays upon them (opposite parties no.1 and 2), 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 no.1 and 2, mere bald assertion i.e. simply saying that the complainants being investors, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only this, recently in a case titled as  Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, under similar circumstances, the National Commission negated the plea taken by the builder, while holding as under:-

“In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots.  A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots.  In a given case, separate houses may be purchased by a person for the individual use of his family members.  A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city.  A person may buy two or three houses if the requirement of his family cannot be met in one house. 

 

 

                The principle of law, laid down, in the aforesaid cases, is fully applicable to the present case. The  complainants, thus, fall within the definition of a ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by opposite parties no.1 and 2 in their written reply, therefore, being devoid of merit, is rejected. 

12.         Now we will like to deal with an objection raised by opposite parties no.1 and 2 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 complainants have sought refund of amount paid i.e. Rs.28,85,225.84ps., alongwith interest @24% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony; physical harassment; deficiency in providing serviced 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 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 opposite parties no.1 and 2, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected.

13.         It is admitted on record that in the first instance, booking amount of Rs.8 lacs was paid by the complainants to opposite parties no.1 and 2. After issuance of allotment letter, they paid another amount of Rs.5,72,236/-, against demand raised on 09.05.2012. Thereafter, opposite parties no.1 and 2 remained dormant. Allotment Letter/Buyer’s Agreement was sent for signing, only on 07.08.2014, which was finally executed on 06.09.2014. There was an inordinate delay in getting the Agreement signed. Such like Allotment Letter/Agreement is supposed to be presented within, say two to three months, from the date of booking, but it was not so done. As such, it can safely be said that Allotment Letter/Agreement was got signed belatedly. The said act would amount to unfair trade practice on the part of opposite parties no.1 and 2. It was also so said by this Commission in Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016.
14.         As per averments made by the complainants, when booking amount was paid in the year 2011, there was a promise to handover possession of the constructed unit, within a period of three years, however, in the Agreement dated 06.09.2014, new terms and conditions were incorporated therein and possession was agreed to be delivered within 21 months i.e. (15 months plus 6 months) from the date of signing of that Agreement, as per Clause 7 (a), which read thus:-

“The Company shall try to complete the development/construction of the Unit/Project within 15 (Fifteen) months from the date of signing of this Allotment Letter by the Allottee(s) or approval of the building plans, whichever is later and within such further extended grace period of 6 (six) months. Completion of development of the Unit within such 21 (Twenty One) months is subject to force majeure conditions (as mentioned in Clause (b) hereunder) and subject to timely payment by the Unit Allottee(s) 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.”

15.         Even if we presume that possession of the unit was to be delivered within 21 months, from the date of signing of the Agreement, it was to be delivered by 05.06.2016. However, it was not so done. Photographs placed on record, make it very clear that when the complaint was filed in month of August 2016, construction work was still going on.

                At the time of arguments, we specifically asked Counsel for opposite parties no.1 and 2, to give a committed date within which, possession of the unit, in question, can be delivered to the complainants. He said that no such date can be given at this juncture. Above facts clearly indicate that opposite parties no.1 and 2 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. It is also case of the complainants, that after making the last payment, no further demand was raised by opposite parties no.1 and 2.  At that stage, it was a construction linked plan. Promised date to deliver possession of the unit was 05.06.2016 and  now it is March 2017.  It was only said that opposite parties no.1 and 2 are making best efforts, to complete the construction and development work and possession will be delivered soon. The complainants cannot be made to wait for an indefinite period, for delivery of possession of the unit, purchased by them. 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 opposite parties no.1 and 2. 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.”

16.         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 complainants, what to speak of delay in delivery thereof. At the same time, opposite parties no.1 and 2 also failed to prove on record that once ground floor was allotted to the complainants, then why they shifted them to a floor on stilt and provided covered parking thereon (ground floor). Opposite parties no.1 and 2 failed to place on record any document, having been issued by the Competent Authorities, on the basis of which, they could convince this Commission that they could legally do so. In view of above, it is held that since there was a material violation on the part of opposite parties no.1 and 2, in not offering and handing over possession of the unit by the stipulated date or even till date, the complainants were 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 no.1 and 2 are also under an obligation to compensate the complainants, for inflicting mental agony and causing physical harassment to them, as also escalation in prices.

17.         At the time of arguments, it was also argued by Counsel for opposite parties no.1 and 2 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 no.1 and 2, 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.”

 

18.         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 7 (a) of the Allotment Letter/Agreement, opposite parties no.1 and 2 were bound to deliver possession of the unit, in question, within a maximum period of 21  months from the date of execution of the same i.e. on or before 05.06.2016, as such, time was unequivocally made the essence of contract.

                At the same time, opposite parties no.1 and 2 also cannot evade their liability, merely by saying that since it was mentioned in the Allotment Letter/Agreement, that opposite parties no.1 and 2 shall try to deliver 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 opposite parties no.1 and 2 in this regard also stands rejected.

19.         Another objection taken by opposite parties no.1 and 2 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  complainants. It is not in dispute that an amount of Rs.28,85,225.84Ps. was paid by the complainants, without getting anything, in lieu thereof. The said amount has been used by opposite parties no.1 and 2 for their own benefit. There is no dispute that for making delayed payments, opposite parties no.1 and 2 were charging heavy rate of interest 18% p.a. for the first month and thereafter @24% p.a.,  as per Clause 36 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  complainants are certainly entitled to get refund of the amount deposited by them, to the tune of Rs.28,85,225.84Ps. alongwith interest, from the respective dates of deposits till realization.  
21.         Counsel for opposite parties no.1 and 2 also argued 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 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 opposite parties no.1 and 2 in this regard, being devoid of merit, is rejected.

22.         The next question, that falls for consideration, is, as to whether, the complaint filed by the complainants, was within limitation or not.  It may be stated here that since it is an admitted case that offer of possession of the unit, in question, could not be made, by the date of filing this complaint or even till date, for want of construction and basic amenities at the site, as such, there is continuing cause of action, in favour of the complainants, in view of principle of law laid down, in  Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal  Shah and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC). Under these circumstances, it is held that the complaint is not at all barred by limitation. The submission of Counsel for  opposite parties no.1 and 2 in this regard, being devoid of merit, must fail, and the same stands rejected.
23.         Since it has already been held above that the complainants are entitled to refund of the amount deposited, alongwith interest and compensation, as such, plea taken by Counsel for opposite parties no.1 and 2, that opposite parties no.1 and 2 are ready to pay compensation for the period of delay in delivering possession, as per the Agreement, has no legs to stand and is accordingly rejected.
24.         No other point, was urged, by the contesting parties.
25.         For the reasons recorded above, the complaint is partly accepted, with costs. The opposite parties no.1 and 2, jointly and severally, are directed as under:-
    1. To refund the amount Rs.28,85,225.84Ps., to the complainants, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.
    2. To pay compensation, in the sum of Rs.2.50 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices.
    3. To pay cost of litigation, to the tune of Rs.50,000/- to the complainants.
    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.
26.         However, it is made clear that, if the complainants have 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 them (complainants).
27.         Complaint against opposite party no.3 stands dismissed, with no order as to cost, in view of the findings given above.
28.         Certified Copies of this order be sent to the parties, free of charge.
29.         The file be consigned to Record Room, after completion.

Pronounced.

22.03.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

 (PADMA PANDEY)

        MEMBER

 Rg.