Chandigarh

StateCommission

CC/591/2016

Dr. Divya Khosla - Complainant(s)

Versus

Omaxe Chandigarh Extension Developers - Opp.Party(s)

R.S.Pandher, Adv.

18 Apr 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	591 of 2016
Date of Institution	:	15.09.2016
Date of Decision	:	18.04.2017

 

1. Dr. Divya Khosla w/o Dr. Rahul Gupta,
2. Dr. Rahul Gupta s/o Kuldip Raj Gupta,

Both residents of H.No.1220-B, Doctors Flat, Sector 32-B, Chandigarh.

 ……Complainants.

Versus

1. M/s Omaxe Chandigarh Extension Developers Private Limited, SCO 143-144, First Floor, Sector 8-C, Chandigarh through its Managing Director.
2. Managing Director, M/s Omaxe Chandigarh Extension Developers Private Limited, SCO 143-144, First Floor, Sector 8-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. R. S. Pandher, Advocate for the complainants.

                     Sh. Munish Gupta, Advocate for the Opposite     Parties.

 

PER DEV RAJ, MEMBER

             The facts, in brief, are that the complainants who were in the need of a residential house, deposited Rs.4 Lacs with the Opposite Parties as booking amount vide receipt dated 23.09.2010. Thereafter, they paid Rs.4,32,630/- vide receipts dated 15.11.2010, being 20% of basic sale price, to become eligible for allotment. The Opposite Parties sent letter dated 21.12.2010 regarding draw for allotment on 29.12.2010. Flat No.567, 2^nd Floor measuring 388 sq. yards having built up area of 1920 sq. ft. was allotted to the complainants vide provisional allotment letter dated 07.07.2011 (Annexure C-2). Allotment letter dated 18.11.2011 (Annexure C-3) was also signed between the complainants and the Opposite Parties, as per which, the total cost of the unit was Rs.43,34,500/-, which included basic sale price of Rs.41,89,500/- plus additional cost of Rs.1,25,000/- (Rs.40,000/- for club and Rs.85,000/- for power back-up installation cost) & Rs.20,000/- towards maintenance security.

 

2.          It was further stated that as per clause 31(a) of the Allotment/Agreement, possession of the unit was to be given within 24 months plus extendable period of 6 months i.e. 30 months from the date of execution of the same i.e. by 19.01.2014. It was further stated that the construction commenced on 20.07.2011, as is evident from letters dated 03.10.2011, 07.11.2011 and 24.12.2011 (Annexure C-4 colly.). It was further stated that the complainants paid an amount of Rs.51,40,188.20, by 18.08.2015, which included service tax of Rs.1,48,658.98, as per statement of accounts dated 06.02.2016 (Annexure C-5). It was further stated that the Opposite Parties sent letter dated 14.12.2013 to the complainants stating that the development  work  in   residential  independent  floors

was going on and that the area of the unit had been increased by approximately 220 sq. ft. and the revised area of the unit became 2140 sq. ft., for which the complainants requested the Opposite Parties that only an amount of Rs.2,182/- per sq. ft. was chargeable for the increased area whereas the Opposite Parties charged the complainants at the increased rate of Rs.2,343/- and, thus, charged Rs.35,420/- in excess. Further vide letter dated 04.07.2015 (Annexure C-8), the Opposite Parties intimated that the unit, in question, was on the verge of completion and a demand of Rs.4,08,133.53 was raised. Thereafter, the complainants deposited Rs.1,69,000/- on 09.07.2015 and Rs.2,39,867.40 on 18.08.2015, as demanded by the Opposite Parties. It was further stated that the amount paid also included Rs.69,554/- towards interest for delay in payment of installments. It was further stated that as per Clause 21 of the allotment letter, the Opposite Parties are charging penal interest @18% p.a. for any delay in payment of installments up-to one month and thereafter @24% p.a.

3.          It was further stated that till date, the Opposite Parties have failed to offer the legal possession of the unit to the complainants and have only offered provisional possession. It was further stated that to mislead the complainants, the Opposite Parties sent letter dated 21.11.2015 (Annexure C-9) mentioning that they were under process of getting conveyance deed registered with the concerned authorities. Vide letters dated 05.12.2015 & 18.12.2015 (Annexure C-10 colly.), the Opposite Parties asked the complainants to pay stamp duty/purchase stamp certificate of Rs.4,04,100/- on consideration amount of Rs.50,50,634/- and further asked to pay Rs.50,506/- as IDC fee, Rs.50,506/- as registration fee and Rs.5,400/- as PLRS. It was further stated that the Opposite Parties unlawfully demanded legal expenses of Rs.15,801/- although these are not mentioned in the allotment letter. Thereafter, the complainants sent email dated 10.04.2016 to the Opposite Parties stating that the unit, in question, is incomplete and photographs of the incomplete unit were also sent. A notice dated 13.08.2016 (Annexure C-13) was also sent by the complainants. It was further stated that as per Clause 31(e) of the allotment letter, the Opposite Parties were liable to pay an amount of Rs.10/- per sq. ft. per month for the period of delay in handing over the possession of the unit.

4.          It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also, indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Parties to hand over actual and legal physical possession of the unit, complete in all respects alongwith amenities promised in the approved layout plan of the project; execute sale/conveyance deed of the unit in the name of the complainants; pay compensation @Rs.10/- per sq. ft. till date of actual handing over of possession; pay interest @24% p.a. on the deposited amount from the respective dates of deposit till actual possession; refund Rs.35,420/- charged in excess for increase in area of the unit; charge stamp duty on basic sale price only; not to charge IDC of Rs.50,506/- & legal charges of Rs.15,801/- and pay Rs.5,00,000/-  as compensation for mental agony and harassment and Rs.55,000/- as costs of litigation.

5.          The Opposite Parties, in their written statement, took up certain preliminary objections to the effect that the alleged dispute ought to be referred to Arbitration under Section 8 of the Arbitration & Conciliation Act, 1996 and also in terms of Clause 50(c) of the allotment letter/agreement dated 18.11.2011 as the present case involved complex questions of fact and detailed evidence was required; that this Commission did not have the territorial jurisdiction to entertain the instant matter as the property is situated within the territorial jurisdiction of District SAS Nagar, Mohali, Punjab; that this Commission does not have the pecuniary jurisdiction as the amount of claim together with interest exceeds Rs.One Crore; that the complainants do not fall within the ambit of definition of ‘consumer’ as defined under Section 2(1)(d) of the Act as they have invested in the project and that the complainants are guilty of suppression veri and suggestion falsi as they concealed vital facts and documents from this Commission. 

6.          On merits, it was admitted that since the agreement was entered into between the parties on 18.11.2011, therefore, the date of commencement for the purpose of development period was to be taken as 18.11.2011 and not 20.07.2011, as alleged. It was further stated that after excluding Sundays etc. as per Clause 31(a) from 18.11.2011, from 30 months, the possession was to be offered by 18.10.2014. It was further stated that the possession was offered on 04.07.2015 vide letter (Annexure C-8) and the Opposite Parties are still ready and willing to offer delay penalty. It was further stated that paid amount of Rs.49,91,529/- included Rs.1,66,691/- on account of credit notes (delay penalty) given to the complainants from time to time and, therefore, the complainants in-fact made payment of Rs.47,55,283/- as on date.

7.          It was further stated that qua increased area, charges were levied as per the original booking rate and not otherwise. While denying that any provisional offer was made, the Opposite Parties stated that possession, complete in all respects, was offered to the complainants vide letter dated 04.07.2015 but for the reasons best known to them, the complainants did not come forward to take physical possession and are making excuses. It was further stated that Rs.70,752/- was payable by the complainants on account of delayed payment and another amount of Rs.1,70,313/- was payable on account of various charges and part payment. It was further stated that instead of asking the complainants to deposit the same, the Opposite Parties adjusted the aforesaid amounts to the tune of Rs.2,39,867/- towards delay penalty payable by the Opposite Parties to the complainants and, accordingly, issued credit notes qua the same towards full and final payable amount by the complainants (Annexures R-1 & R-2). It was further stated that the fact of aforesaid adjustment was concealed by the complainants to reap gains and nothing else.

8.          It was further stated that the complainants themselves are not coming forward to take possession, despite all their dues having been cleared and delay penalty having been paid by the Opposite Parties by virtue of aforesaid credit notes issued in favor of the complainants. It was further stated that the Opposite Parties were neither deficient, in rendering service nor did they indulge into unfair trade practice. The remaining averments, made in the complaint, were denied.

9.          The complainants, in support of their case, submitted their separate affidavits, by way of evidence alongwith a number of documents.

10.        The Opposite Parties, in support of their case, submitted affidavit of Sh. Atul Arya, their Authorised Representative, alongwith a number of documents, by way of evidence. 

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

12.        It is evident on record that the complainants booked an independent floor in the project of the Opposite parties by paying Rs.3,89,958.57 as booking amount apart from Rs.10,041.43 as service tax on the aforesaid booking amount. Subsequently, the complainants paid Rs.3,24,279.80 and Rs.97,489.64 vide receipts dated 15.11.2010 and 15.11.2010 respectively. They also paid service tax of Rs.8,350.20 and Rs.2,510.36 respectively on the aforesaid amounts vide aforesaid receipts. Vide letter dated 21.12.2010 (Annexure C-1/B), the Opposite Parties intimated the complainants that they had finalized the date of draw, which was scheduled to be held on 29 Dec. 2010 at Hotel Hometel Park Plaza, Plot No.147 & 148, Industrial Area, Phase-I, Chandigarh at 11.00 A.M. On becoming successful in the draw, the complainants, vide provisional allotment letter dated 07.07.2011 (Annexure C-2) were allotted an independent floor on plot bearing No.567 measuring 388 sq. yards having built up area of 1920 sq. ft. as per tentative layout plan. The allotment letter/terms and conditions were executed between the complainants and the Opposite Parties on 18.11.2011 (Annexure C-3). In this case, there is no significant difference between the date of allotment (18.11.2011) and start of construction (20.07.2011). It is also evident from Annexure-B (Part – III) (Page 54 of the file) that the complainants opted Plan B: Interest Free Construction Linked Installment Plan and payment was to be made as per stages of construction. Vide letter dated 14.12.2013 (Annexure C-7 colly), the Opposite Parties informed the complainants that there was increase of area of approx. 220 sq. ft. of the unit and, thus, revised area was 2140 sq. ft. The complainants, in all, paid an amount of Rs.49,21,975.37 + Rs.69,554.00 = Rs.49,91,529.37 + Rs.1,48,658.98 as service tax to the Opposite Parties (which included credit by Opposite Parties towards delay penalty), as is apparent from statement as on 06.02.2016 (Annexure C-5). It is also evident from Annexure C-5 that the Opposite Parties have credited following amounts in the account of the complainants:-

Sr. No.	Credit Note dated	Amount (Rs.)	Service Tax (Rs.)
1.	18.08.2015	69554.00	0.00
2.	18.08.2015	4000.00	168.00
3.	18.08.2015	13300.00	558.60
4.	18.08.2015	28000.00	1176.00
5.	18.08.2015	91598.76	3847.15
6.	18.08.2015	26550.00	1115,10
7.	18.08.2015	0.37	0.02
	Total:	233003.13	6864.87

 

As per Clause 31(a) of the Allotment Letter aforesaid, possession of the apartment was to be given within 24 months or within an extended period of 6 months i.e. 30 months from the date of start of construction (20.07.2011) i.e. on or before 19.01.2014.

13.        Vide order dated 14.03.2017, this Commission directed the Counsel for the Opposite Parties to place, on record, Occupation Certificate issued by the competent authority qua the unit, in question, which he duly placed on record on 24.03.2017 (marked as Exhibit ‘X’), on which date, arguments were heard and the case was reserved for orders.

14.        It was argued by Counsel for the Opposite Parties that in the face of existence of arbitration clause 50(c) 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. A specific miscellaneous application bearing No.508 of 2016 was also filed by the Opposite Parties under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to Arbitration. The said application was disposed of vide order dated 18.11.2016 holding that the question qua arbitration would be considered at the time of final arguments in the main case. 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 objection raised by Counsel for the Opposite Parties, being devoid of merit, is rejected.

15.        The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. It is the case of the Opposite Parties that since the property, in dispute, is situated within the territorial jurisdiction of District SAS Nagar, Mohali, Punjab, therefore, this Commission cannot adjudicate upon the present complaint. 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, letter dated 03.11.2010 (Annexure C-1/A); letter dated 14.12.2013 (Annexure C-7) were issued by the Opposite Parties to the complainants from their Chandigarh Office. Since, as per 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 submission of the Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

16.        An objection was raised by the Opposite Parties that since the sum total of reliefs claimed by the complainants, in their complaint, exceed Rs.1 Crore, hence, this Commission has no pecuniary jurisdiction to entertain this complaint. It may be stated here, to clarify the position, that a similar question fell for determination before this Commission in Surjit Singh Thadwal Vs. M/s Emaar MGF Land Pvt. Ltd. & Anr., Complaint Case No.484 of 2016, decided by this Commission on 15.12.2016, wherein while negating the said plea, it was held as under:-

“13.        Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.

14.        In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.”

15.       It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

                As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

                In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

 “12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :-

 (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength.

 (2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted.

 (3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and

 (ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.”

16.         In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.’s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.”

             In view of above, the objection taken by the Opposite Parties that this Commission lacks pecuniary jurisdiction, being devoid of merit, fails and the same stands rejected.

17.         To defeat claim of the complainants, the next objection raised by the Opposite Parties was that since the complainants had purchased the unit, in question, for investment/commercial purpose i.e. for resale, as and when there was escalation in the prices of real estate, as such, they would not fall within the definition of consumer, as defined by Section 2(1)(d)(ii) of 1986 Act. It may be stated here that there is nothing, on record to show, that the complainants are property dealer(s), and are indulged in sale and purchase of property, on regular basis. In the absence of any cogent evidence, in support of the objection raised by the Opposite Parties, mere bald assertion to that effect, cannot be taken into consideration. It may be stated here that in a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., Consumer Complaint No.137 of 2010, decided on 12.02.2015, 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. The principle of law, laid down, in Kavita Ahuja’s case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the unit, in question, was purchased by the complainants, by way of investment, with a view to earn profits, in future. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs  Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

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

 

The complainants, thus, fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in the written reply, therefore, being devoid of merit, is rejected.  

18.        The next question, which falls for consideration, is, as to whether there was delay in offering possession of the unit, 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-3) was issued to the complainants on 18.11.2011. 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. Clause 31(a) of allotment letter reads thus:-

“31(a). 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 the Allotee(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.”

 

By computing 24 months plus 6 months period from 20.07.2011 (the date of start of construction as per Annexure C-4 colly),, the Opposite Parties were bound to deliver possession of the unit, in question, by 19.01.2014. 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 and cessation of work 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 19.01.2014. The Opposite Parties were granted permission for occupation/use of Ground Floor, First Floor and Second Floor vide Memo No.GMADA-S-D.O(B)2015/37559 dated 02.09.2015 (Exhibit ‘X’). The Opposite Parties vide letter dated 04.07.2015 (Annexure C-8), offered the complainants provisional possession of the unit, in question, Para 4 whereof reads as under:-

“We hereby offer your provisional possession of the said unit upon compliance of necessary formalities by you including payment of balance sale consideration as stated in the Statement of Account annexed hereto as Annexure-A to this Letter within 15 days to the date of this letter. Upon realization of said amount, the final finishing touches to your Residential Unit will be taken up and; on completion of codal formalities and registration of Conveyance Deed for said unit in your favour, the possession of the above said unit will be handed over to your goodself as per the terms of the Allotment Letter.”

 

Thereafter, the complainants on 09.07.2015 made payment in the sum of Rs.1,59,695.19 + Rs.6,709.28 service tax. The Opposite Parties on 18.08.2015 credited the amounts on account of delay penalty in the account of complainants. Thus, the due amount stood cleared by the complainants in August, 2015, as admitted by the Opposite Parties in their written statement. It is apparent from letter dated 21.11.2015 (Annexure C-9) that the Opposite Parties informed the complainants that they were under the process of getting the conveyance deed registered with the concerned authorities. Vide this letter the complainants were requested to contact Mr. Puneet Jolly or their Chandigarh Office regarding the same and also requested the complainants to coordinate with their officials viz. Mr. Rajendra Gupta & Mr. Palwinder Singh Virk regarding handing over of possession of the unit, in question. Subsequently, vide letters dated 5.12.2015 & 18.12.2015 (Annexure C-10 colly.), the Opposite Parties informed the complainants that they have started the process of registration of plots and invited the complainants to get the sale deed registered by paying the requisite stamp duty and registration fee etc. Thereafter, the complainants vide email dated 10.04.2016, wrote to the Opposite Parties that on visiting the unit, they found that the same was grossly incomplete and it was not humanly possible for any sensible person or organization to offer possession of defunct unit. The complainants also requested the Opposite Parties to supply completion certificate and occupancy certificate before offering possession and to intimate the actual date of possession as the stipulated period for offering possession had already expired. Vide this mail, the complainants also sought compensation @Rs.10/- per sq. ft. per month for the delayed period. Subsequently, the complainants served legal notice dated 13.08.2016 upon the Opposite Parties.

19.        It may be stated here that vide order 09.12.2016, this Commission directed the complainants to go and occupy the unit purchased by them and it was agreed by the Opposite parties that the keys of the unit would be handed over to the complainants at the site on 18.12.2016 at 11:00 A.M. However, on 12.12.2016, an application bearing M.A. No.581 of 2016 was moved by the complainants for postponing the date of handing over of possession of the unit, in question, as the complainants were out of country from 10.12.2016 to 20.12.2016. The said application was taken up on 16.12.2016 and was disposed of on the same very date directing the Opposite Parties to hand over the possession of the unit, in question, to the complainants on 22.12.2016, in terms of aforesaid order dated 09.12.2016 passed by this Commission in the present complaint.

20.        On the next date of hearing i.e. 23.12.2016, at the time of arguments, it was stated by counsel for the Opposite Parties that the deficiencies in construction of the unit indicated by the complainants shall be removed within two weeks and the matter was adjourned to 23.01.2017. The complainants were also directed to visit the unit and take its possession, in case the deficiencies stood removed. On 23.01.2017, Counsel for the Opposite Parties stated that some defects in the construction were indicated by the complainants and they needed 15 days time to correct those defects. The matter was adjourned to 17.02.2017. On 17.02.2017, Counsel for the parties stated that the possession of the unit, in question, was handed over by the Opposite Parties to the complainants on 12.02.2017.

21.        Admittedly, possession of the unit, in question, complete in all respects, after removing deficiencies, was delivered to the complainants on 12.02.2017, meaning thereby, that up-till 12.02.2017, the possession of the unit, in question, was not ready and complete. Therefore, delay in handing over possession is solely attributable to the Opposite Parties.

22.        The question, which now falls for consideration, is, as to what quantum of compensation the complainants are entitled to and whether the Opposite Parties have afforded compensation to the complainants for delayed possession, in terms of provision in the allotment letter. The Opposite Parties, in Para 8 of their written statement on merits have stated that against payable amounts by the complainants, they (Opposite Parties) adjusted amount in the sum of Rs.2,39,867/- towards delay penalty payable by the Opposite Parties to the complainants. To this extent, averment of the complainants in Para 8 of the complaint, that on 18.08.2015, they deposited a sum of Rs.2,39,867/- is wrong. This amount was in fact amount credited by the Opposite Parties against the account of the complainants towards delay penalty.

23.        The delay in delivering possession to the complainants was 36 months 24 days and compensation for delay penalty shall work out as under:-

1.	Due date for possession	=	19.01.2014
2.	Possession delivered on	=	12.02.2017
3.	Delay	=	36 months 24 days
4.	Amount of compensation @Rs.10/- per sq. ft. per month.	=	Rs.7,87,520.00
5.	Less compensation already credited	=	Rs.2,39,867.00
		=	Rs.5,47,653.00

 

The complainants are, therefore, held entitled to Rs.5,47,653/- on account of delay penalty compensation.

24.        The next question, which falls for consideration, is, whether the complainants were charged Rs.35,420/- in excess for increased area of 220 sq. ft. by the Opposite Parties at the increased rate of Rs.2,343/- per sq. ft. as against the chargeable rate of Rs.2,182/- per sq. ft., which was applied at the time of allotment. It may be stated here that the Opposite Parties, in Para 6, on merits, in their written statement have stated as under:-

“6. That the contents of Para No.6 are wrong and denied. Qua the increased area, charges have been levied as per the original booking rate and not otherwise. The averment with regard to Rs.35,420/-, having been charged extra, is wrong and denied, as the increase in area leads to increase in basic sale price and other charges also.”

 

It is clearly evident from Annexure-B (Part-II) (Page  53 of the file) that basic sale price in the sum of Rs.41,89,500/- for 1920 sq. ft. area was @Rs.2182.03. With increase in area by 220 sq. ft., for 2140 sq. ft., the basic sale price, as per statement (Annexures C-5 & C-6), is Rs.47,05,125.00. Since the Opposite Parties have charged a sum of Rs.5,15,625/- for increased area of 220 sq. ft. (Rs.47,05,125.00 minus Rs.41,89,500.00 = Rs.5,15,625.00), the Opposite Parties have applied the rate of Rs.2,343/- per sq. ft. (Rs.5,15,625.00 ÷ 220 sq. ft. = Rs.2,343/- per sq. ft.). Therefore, a sum of Rs.35,420/- having been wrongly charged, by applying higher rate for the increased area, the complainants are held entitled to refund of the same.

25.        The next question, which falls for consideration, is, whether stamp duty and registration charges etc. vide letter dated 05.12.2015 (Annexure C-10 colly.) has been correctly demanded by the Opposite Parties. It is clearly mentioned in letter dated 05.12.2015 that stamp duty has been calculated on the basis of applicable rates. Since, the stamp duty and registration charges are payable to the Govt., the Opposite Parties are not benefitted in any manner. Therefore, in our considered opinion, the complainants are liable to pay the same.

26.        As regards alleged unlawful demand of legal expenses of Rs.15,801/-, it may be stated here that the complainants are liable to bear the incidental expenses for registration and execution of sale deed. IDC Fee in the sum of Rs.50,506/-  is distinct and separate from IDC (Internal Development Charges) and is, therefore, payable.

27.        The complainants are also held entitled to Rs.1,00,000/- on account of mental agony, physical harassment and deficiency in rendering service.

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

29.        For the reasons recorded above, the complaint is partly accepted with costs against the Opposite Parties.

               Since possession of the unit, in question, stands delivered to the complainants on 12.02.2017, therefore, to get the sale deed executed in their favour, the complainants shall pay stamp duty in the sum of Rs.4,04,100/-; Registration Fee of Rs.50,506/-; IDC Fee of Rs.50,506/-; PLRs: Rs.5,400/- and legal expenses of Rs.15,801/-, totaling Rs.5,26,313/-, and they shall also complete all documents as required vide letter dated 05.12.2015 (Annexure C-10 colly.) within a period of 60 days from the date of receipt of certified copy of this order.

             The Opposite Parties are, jointly and severally, held liable and directed as under:-

1.    To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of receipt of certified copy of this order, on payment of stamp duty & registration charges etc., as indicated above, by the complainants.
2.    To pay Rs.5,47,653/- to the complainants towards compensation for delayed delivery of possession, within two months from the receipt of certified copy of the order, failing which, the said amount shall carry interest @12% per annum from the date of filing the complaint till actual payment.
3.    To pay compensation, in the sum of Rs.1,00,000/- on account of mental agony and physical harassment, caused to the complainants, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.
4.    To pay cost of litigation, to the tune of Rs.35,000/-, to the complainants, within two months from the date of receipt of a certified copy of this order, failing which, the same shall also carry interest @12% p.a., from the date of filing the complaint till realization.

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

31.        The file be consigned to Record Room, after completion.

Pronounced.

18.04.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

[DEV RAJ]

MEMBER

 

 

[PADMA PANDEY]

 MEMBER

Ad