STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH.

                                                          Complaint Case No.   42 of 2012     

                                                    Date of institution:       07.08.2012

                                                    Date of decision  :       13.12.2012

Sushil Siwach son of Sh. Raghuvir Siwach, 2189, Sector 35-C, Chandigarh

                                                                                          …Complainant

                                       Versus

Shalimar Estates(P) Ltd. Corp. Office: SCO 110-111, Sector-8-C, Chandigarh through its Managing director/Branch head. 

                                                                                    … Opposite Party.   

                        Complaint U/s 17 of Consumer Protection Act,1986.

Present:      Sh.J.P.S.Ahluwalia,  Advocate for the complainant.

                     Sh.Arun  Kumar, Advocate for the Opposite Party.

CORAM:           Justice Sham Sunder(Retd), President

                           Mrs.Neena Sandhu, Member

Per Justice Sham Sunder(Retd) , President

                        The facts, in brief, are that the Opposite Party is a builder and developer of residential and commercial buildings. It had invited applications for its project in the name of ‘Shalimar Plaza’ Site No.1, IFP, Phase VIII B, IT City, Mohali,  for  registration and allotment of commercial showrooms.  The complainant  being  unemployed, wanted to start some business, to earn his livelihood, by way of self employment, in the said showroom, and, thus, he visited the office of the Opposite Party, at Chandigarh, and booked one showroom, of ‘C’ category, having  super area of 400 sq. feet, in the project aforesaid. The complainant, at the time of sending the application form, also paid to the Opposite Party, the initial deposit of Rs.3,60,000/-, vide cheque no.040302, for which receipt Annexure C-2 was issued by it (Opposite Party). At the time of registration of the showroom, by the complainant, the Opposite Party, had assured him that the possession of the same  shall be handed over within the scheduled time of 2 years, from the date of issuance of acceptance- cum- demand letter dated 28.2.2006 Annexure C-4. It was intimated by the Opposite Party, to the complainant, that his application was accepted, for registration for  the allotment of  commercial showroom, in the aforesaid project. The complainant paid registration money of Rs.7,20,000/-, to the Opposite Party, on 14.3.2006, vide receipt No.1050, copy whereof is annexure C5. The complainant, paid first quarterly and second quarterly installments of Rs.2,50,000/- each, to the Opposite Party, within the prescribed time, for which receipts no.1085 and 1139 Annexures C-6 and C-7, respectively, were issued in his favour. Subsequently the complainant made payments of the  remaining  instalments, as mentioned in the acceptance- cum- demand letter, for which the Opposite Party, issued receipts, copies  whereof   are  annexures C-8 to  C-10. The complainant, in all, deposited a sum of Rs.23,30,000/- with the Opposite Party, on various dates, towards the price of the aforesaid showroom. The complainant visited the office of the Opposite Party, at Chandigarh, as he was not delivered the possession of the showroom, by the stipulated date, and  requested that physical possession of the showroom be given to him, but to no avail. It was  stated that, a lot of mental agony and physical  harassment was caused to the complainant, as the Opposite Party failed to deliver  the physical possession  of the showroom, booked by him by the stipulated date.  The complainant, thus, asked the Opposite Parties   for the refund of  amount, with interest and compensation but to no avail. It was further stated that neither possession was delivered to the complainant nor the refund of amount was made.  It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice.  When the grievance of the complainant, 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, directing the Opposite Party to refund the amount of Rs.23,30,000/- with interest @24% P.A.; pay compensation,  in the sum of Rs.2 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.25,000/-.

2.                              In its written version, the Opposite Party pleaded that the complaint was not maintainable.  It was further pleaded that the complainant did not fall within the definition of a consumer, as he purchased the showroom for commercial purpose, for carrying on commercial activities, to earn huge profits. It was further pleaded that the complaint was not maintainable, as an arbitration clause, existed, in the application form, and in case of any dispute, the matter was to be referred to the arbitration. It was, however, admitted that the complainant booked a showroom, with the Opposite Party, vide application No.1761. It was also admitted that the possession of the showroom was to be delivered, within a period of two years, as mentioned in the complaint.  It was also admitted that an amount of Rs.23,30,000/-, in all, was deposited by the complainant, towards the price of  showroom, which was booked by him.  It was stated that the completion of  project, was delayed, as the other buyers, had not paid the due instalments, due to which, the Opposite Party suffered a huge loss. It was further stated that the construction and development work of the shopping mall, at the site, was in full swing, but even then, as a goodwill gesture to fulfill their part of the obligation, the Opposite Party was paying the  damages @ Rs.10/- per sq.feet, per month,  in terms of Condition No.12 of the Application Form. It was further stated that delay, in the project, was never in the interest of the Opposite Party. It was further stated that, in the complaints, filed by the other complainants, who had booked the showrooms, before this Commission earlier, regarding the same project, order regarding the refund of  amount, was passed, alongwith compensation, interest and costs. It was further stated that in the appeals, filed by the Opposite Party, in those cases,  on the basis of agreement/settlement,  between the  parties, it (Opposite Party) was directed to handover  possession to the allottees therein, within a period of 12 months from 13.5.2011, failing which the same (appeals) were deemed to be dismissed.  It was further stated that the Opposite Party filed Special Leave Petition before the Hon`ble Supreme Court and after hearing its Counsel, the Hon`ble Supreme Court, granted interim stay against the order dated 28.09.2012 passed by the National Consumer Disputes Redressal Commission, New Delhi, in FA No.11/2011, FA No.12/2011,  FA No.13/2011,  FA No.14/2011,  and FA No.91/2011.  It was denied that the Opposite Party was deficient, in rendering service, or indulged into unfair trade practice.  The remaining allegations, were denied, being wrong.  

3.                              The complainant, in support of his case, submitted his own affidavit, by way of evidence, alongwith which, a number of documents were attached.

4.                              The Opposite Party, in support of its case, submitted an affidavit of R.K. Aggarwal, their Managing Director, by way of evidence, alongwith which, a number of documents were attached. 

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

6.                              The Counsel for the complainant, submitted that, despite deposit of a sum of Rs.23,30,000/- from time to time, towards the price of  showroom, booked by the complainant, with the Opposite Party, it failed to deliver  possession of the same upto 28.2.2008, the date stipulated, in the Application form and acceptance-cum-demand letter .  He further submitted that even, by the time, the complaint was filed in the year 2012, there was no progress of construction at the site.  He further submitted that even though there was no progress, in construction of the showroom, at the site, and the Opposite Party had not fulfilled  its obligation, according to the terms and conditions, contained in the Application  form, still the complainant deposited the price of the showroom, alongwith interest demanded by the Opposite Party.  He further submitted that the Opposite Party could not furnish any sufficient cause, as to why, the completion of project was delayed, and, why the possession was not given within the time committed.  He further submitted that the other cases, referred to, by the Counsel for the Opposite Party, were decided by the National Commission, on the basis of an agreement arrived at  between the parties.  He further submitted that the Opposite Party was   not only deficient, in rendering service, but also indulged into unfair trade practice. He further submitted that the complainant has not received a single penny, on account of damages @ Rs.10 per sq. ft,  for delay, in possession of the showroom aforesaid. He further submitted that the complainant is, thus, entitled to the refund of amount with interest, from the respective dates of deposits, till realization, compensation for loss of income and for mental agony and physical harassment.

7.                              On the other hand, the Counsel for the Opposite Party, submitted that the project, no doubt, was not completed within the time frame. He further submitted that the construction was in full swing and possession could be delivered within 6 to 8 months.  He further submitted that delay, in the project was due to the factum, that the other allottees, who had booked the showrooms, had not made payment of instalments.  It was further submitted that the Opposite Party was  ready to pay compensation @ Rs.10/- per square feet, per month, on the super area for delay, in handing over the possession of  showroom, beyond the  period committed. He further submitted that the complainant did not fall within the definition of a consumer. He further submitted that the Opposite Party was neither deficient, in rendering service, nor indulged into unfair trade practice.

8.                              There is, no dispute, about the factum that the complainant booked a showroom, referred to above, with the Opposite Party.  As admitted by the Opposite Party,  the complainant had deposited  the amount of Rs.23,30,000/-  on various dates,  towards the price of showroom. It was also admitted that as per Clause 12 of the application form,  possession of  the  showroom was to be delivered within two years, from the date of issuance of acceptance-cum-demand letter, subject to force majeure circumstances.   It was also admitted by the Opposite Party, that the possession was to be delivered, on or before 28.2.2008.  Admittedly, possession of the showroom has not so far been delivered to the complainant. By not delivering the possession, within the period of two years i.e. upto 28.2.2008, the Opposite Party, could certainly be said to be deficient, in rendering service, as also indulging into unfair trade practice by making a false promise. 

9.                              No doubt, a period of two years could be extended due to force majeure circumstances.  It was for the Opposite Party, to clearly explain, in the written reply, as to what were those circumstances, which were beyond its control, as a result whereof, the construction could not be completed, in time, and the possession could not be delivered by 28.2.2008. In  the written reply, the only plea taken up by the Opposite Party, was to the effect, that  the other buyers,  did not make the payment of  instalments, in time, as a result whereof, there was delay in the completion of  project.  No evidence, in this regard was, however, produced by the Opposite Party.  It may be stated here, that the complainant, in this case, has already deposited a huge amount of Rs.23,30,000/-,  towards the price of  showroom.  As stated above, till date, the project has not been completed, nor possession of the showroom has been delivered to the complainant. The Opposite Party, therefore, failed to prove, any circumstance, beyond its control, due to which the construction was delayed. The plea, referred to above, taken up by the Opposite Party, in the written reply, therefore, appears to be false.  The said plea was taken by it, just with a view to cover up its lapse, and to deny the refund of amount, claimed by the complainant. The submission of the Counsel for the Opposite Party, being devoid of merit, must fail, and the same is rejected.

10.                         The Counsel for the Opposite Party, submitted that the Opposite Party had already paid compensation @ Rs. 10/- per sq. feet, per month for some period after 28.2.2008, by adjusting that amount, against the amount still due against the complainant and was ready to pay the same till the delivery of possession and, as  such, the complainant was not entitled to the  refund of  amount alongwith interest and compensation.  The submission of the Counsel for the Opposite Party, does not appear to be correct.  No evidence regarding the payment of compensation to the complainant  was produced.  The Counsel for the complainant, however, denied the payment of compensation, as stated above, or adjustment of the same.  Even otherwise, payment of   compensation of Rs.10/- per square feet only, per month, would not satisfy  the claim of the complainant. If no further relief is given, that would give unnecessary advantage to the Opposite Party, because it may still neglect to raise construction for a number of years,  as has been done by it till date, by simply paying Rs.10/- per sq. ft. i.e. Rs.4000/- per month.  The Opposite Party must be earning handsome returns on the amount of Rs.23,30,000/-  which was deposited with it, from time to time, by the complainant.  By investing this amount, in the real estate, by the Opposite Party, as it being a builder, it must have earned handsome returns, in the shape of interest at the minimum to the tune of 15% p.a., which comes to Rs.29125/- per month. In these circumstances, payment of Rs.10/- per sq.ft per month, as compensation, would be nothing, but an undue enrichment of the Opposite Party, at the cost of the complainant. The amount of compensation @Rs.10/- per square feet, per month,  would have been said to be sufficient,   in case, the complainant had prayed for delivery of  possession of the showroom, as, in that event, he would have got benefit of escalation in prices. No specific prayer was made for delivery of possession. Even, at the time of arguments, the Counsel for the complainant, in clear- cut terms, submitted that the complainant, only claims   refund of amount, with interest and compensation. The submission of the Counsel for the Opposite Party, in this regard, being devoid of merit, is rejected

11.                         Although, a period of more than four years from 28.2.2008, the date committed for handing over the possession, has lapsed, yet  the construction is not complete. No doubt, the Counsel for the Opposite Party, submitted that, the construction at the site, was in full swing. However, such a submission of the Counsel for the Opposite Party, cannot be taken into consideration. Such a plea may be another excuse, on the part of the Opposite Party, to delay the refund of hard earned money, already deposited with it, by the complainant.

12.                         Reference, no doubt, was made by the Counsel for the Opposite Party, that in the appeals, filed by the Opposite Party, in the National Commission, against the decision, rendered in other complaints, relating to this project, by this Commission, an agreement was arrived at, between the parties,  and, on the basis of the same, the time for delivery of possession was extended for a period of 12 months from 13.5.2011, failing which, it was ordered that  the same (appeals) would be deemed to   be dismissed.  It may be stated here, that, in the instant case, there is no agreement between the parties.  The Counsel for the complainant, at the time of arguments, did not agree to the submission of the Counsel for the Opposite Party, for giving the Opposite Party more time, for delivery of possession. On the other hand, he insisted that the complainant was entitled to the refund of the amount, deposited by him, with the Opposite Party, from time to time, with interest and compensation.   Even, as per the orders, in those appeals, possession was not delivered to the allottees by the time stipulated. Had both the parties, in the instant case, agreed to the passing of such an order, the matter would have been different.  Under these circumstances, no help can be drawn, by the Counsel for the Opposite Party, from the orders aforesaid  of the National Commission, in   similar type of cases. The submission of the Counsel for the Opposite Party, therefore, being devoid of merit, must fail, and the same is rejected.

13.                         The complainant, was not only deprived of the use of his hard earned money, for a long time, which was deposited with the Opposite Party, but he also suffered a lot of mental agony and physical harassment, as till date not even a single penny, has  been refunded by it, nor possession of the showroom has been delivered. For such harassment, the complainant is also entitled to compensation.

14.                         Coming to the submission of the Counsel for the Opposite Party, that the complainant did not fall within the definition of ‘consumer’, it may be stated here, that the same being devoid of merit, deserves to be rejected.   In the complaint itself, the complainant, in clear-cut terms, stated that he being  unemployed, had booked the showroom, for using the same, to earn his livelihood, by doing some business therein.  No evidence was produced by the Opposite Party, to the contrary, that the showroom was booked by the complainant, with a view to give the same, on rent or for sale for generating profits,  and not  for the purpose of self employment for earning  livelihood by him (complainant).  Under these circumstances, it cannot be said the complainant does not fall within the purview of  a ‘consumer’. The submission of the Counsel for the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.

15.                         The next question, that arises for consideration, is, as to whether, the complaint under Section 17 of the Consumer Protection Act, is not maintainable, on account of the reason, that an arbitration clause exists in the application form. With a view to appreciate the controversy, in   its proper perspective, reference to Section 3 of the  Act is required to be made, 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.”

16.             Section 3 of the Act, is worded in widest terms, and leaves no manner of   doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force.  The mere  existence of an  arbitration clause, in the document  aforesaid,  would not oust the jurisdiction of the Consumer Fora, in view of the provisions of Section 3 of the Act.  Similar principle of law, was laid down, in Fair Engg. Pvt. Ltd. & another Vs N.K.Modi (1996)6  SCC385  and  C.C.I Chambers Coop. Housing Society Ltd. Vs Development Credit Bank Ltd. (2003) 7 SCC233.   In this view of the matter, the submission of the Counsel for the  Opposite Party, being devoid of merit, must fail, and  the same stands rejected.

17.             For the reasons, recorded above, the complaint must succeed, and the same is, accordingly, partly accepted with costs of Rs.10,000/-,  in the following terms:-

                                  (i) The Opposite Party is directed to refund Rs.23,30,000/-,                                              (Rs. twenty three lacs thirty thousand) deposited by the                                      complainant, with interest @ 15% p.a. from the respective                                          dates of deposits till realization ;

(ii)The Opposite Party is also directed to pay compensation, in the sum of Rs.one lac, for causing mental agony and physical harassment, to the complainant, by neither handing over possession of the showroom, by the committed date, nor refunding the amount ; 

(iii)The aforesaid directions shall be complied with by the Opposite Party within  a period of 40 days, from the date of  receipt of a copy of the order, failing which, it shall be liable to pay the   amount mentioned in clause(i) above with interest @ 18% P.A., from the dates, indicated therein and interest @ 15% P.A. on the amount, mentioned in clause(ii) above, from the date of filing the complaint, besides  payment of costs of   Rs.10,000/-

18.             Certified Copies of this order be sent to the parties, free of charge.

19.                         The file be consigned to record room.

                                                                                                            Sd/-    

Announced                                                   (JUSTICE SHAM SUNDER)(Retd)

13.12.2012                                                                President

                                                                                                                        Sd/-                                                                                                           ( NEENA SANDHU)

Rg                                                                                                       Member