SHRI SWAPAN KUMAR MAHANTY, PRESIDENT
This is an application u/s.12 of the C.P. Act, 1986.
The brief facts relevant for the disposal of the present consumer complaint are that the complainant booked a flat being Unit No. C3 on 3rd floor in the Block IG-05, measuring about 990 Sq. ft. (super built up area) together with an open car parking space in the project namely “IVY GREENS” which OP-1 is the developer. The total consideration of the subject flat is 33,20,000/- (plus service tax). An Agreement for Sale dated 03.03.2014 was executed incorporating their respective obligations with respect of the aforesaid transactions. In terms of the Agreement for Sale complainant has paid Rs.6,54,344/- to the OP-1 as part consideration. For requirement of residential accommodation complainant made payment in good faith towards his obligation to the OP- 1 as and when demanded. As per Sale Agreement the possession of the Unit is to be delivered within 36 months from the effective date. For the purpose of purchasing the subject Unit, Complainant also availed home loan of Rs.24,17,000/- from Central Bank of India, Prince Anwar Shah Road Branch, Official banker of the project “ IVY GREENS “. In spite of several telephonic conversation and e-mails the OPs 1 to 5 did not inform regarding status of construction of the subject Unit. Finding no other alternative, complainant had been to the project site twice and shocked that except ‘piling ‘no other progress of construction noticed. Ultimately, the complainant made cancellation request to the OP 1 & 5 vide letter dated 12.06.2017 and thereafter continued to enquire regarding the status of cancellation of subject Unit being No. C3 on 3rd floor in Block IG-5 vide several e-mails but such emails were unattended. The OPs failed and neglected to refund the booking money. Ultimately, complainant issued demand notices dated 02.11.2017 and 10.04.2018 to the OPs, but no refund was made. There is unfair trade practice and deficiency in service on the part of the OPs. The complainant is therefore, before this Forum seeking refund of Rs.10,71,000/- along with compensation, interest and litigation costs.
The complainant is resisted by the OPs 1 to 4 who took pecuniary objection that the complainant is barred by limitation and this Forum has no pecuniary jurisdiction to entertain the consumer complaint as the value of the flat is more than Rs.20,00,000/-. The complainant is not a consumer within the meaning of C.P. Act, 1986 as he booked the flat for resale purpose. The progress of the project work is affected due to continuous rain, flood and non availability of labour. In their written version, the answering OPs have disputed regarding cancellation of Agreement for Sale dated 03.03.2014. The Consumer Forum could not adjudicate the dispute in summary manner and the Civil Court decide such dispute. Hence, the answering OPs have prayed for dismissal of the complaint.
OPs 5 to 7 have also contested the case by filing Written Version alleging inter alia that answering OPs are not party to the Agreement for Sale dated 03.03.2014 executed between the complainant and OPs 1 to 4 in respect of the subject flat. There is no legal relationship or privity of contract between the complainant and the answering OPs in so for as development, construction and possession of the subject flat. Complainant is not a consumer within the meaning of section 2 (1) (d) of the Consumer Protection Act, 1986. No consideration has been paid to the answering OPs for availing any services and the dispute is to refund of amount against cancellation of Agreement for Sale which was paid to the account of the OP-1/Developer. Thus, there is no question of deficiency in service and unfair trade practice on the part of the answering OPs. Accordingly, the answering OPs have prayed for dismissal of the complaint.
Decision with Reasons
Both parties have tendered evidence through affidavit. They have also given reply against the questionnaires set forth by the adversaries. Both parties have also filed their BNAs. We have heard the Ld. Advocates for the parties and have also gone through the evidence as well as documents on record.
Fact remains that the complainant entered into an Agreement for Sale dated 03.03.2014 with the O.P.-1 Vedic Realty Pvt. Ltd. for purchasing a flat (Unit No. C3, Block No.-IG-5) on the 3rd Floor measuring about 990 sq. ft. (Super built up area) together with a open car parking space in the project namely “Ivy Greens”, Rajarhat at a total consideration of Rs.33,20,000/- (plus service tax) and in terms of the Sale Agreement the complainant has already paid Rs.6,54,344/- to the OP-1 vide cheque Nos. 088132, 39600 and 000001 dated 19.11.2013 and 08.12.2013 drawn on ICICI Bank and HDFC Bank. Complainant had been to the project site twice and shocked that except “piling” no other progress of construction noticed. In spite of several e-mails the OPs 1 to 5 did not inform regarding status of the construction of the subject flat and ultimately, complainant vide letter dated 12.06.2017 requested the OPs 1 to 5 for cancellation of allotment of subject flat with a request to refund booking amount but such letter was unattended.
In course of hearing of argument the Ld. Advocates for the O.Ps. have submitted that this Forum has no pecuniary jurisdiction to entertain the consumer complaint as the value of the flat is Rs.33,20,000/- and the compensation claimed by the complainant is Rs.8,00,000/-. On the contrary, the Ld. Advocate for the complainant has submitted that the total consideration of the flat is Rs.33,20,000/- including service tax and various installments were paid to a total amount of Rs.10,71,000/-. Complainant had been to the project site twice and shocked that except piling no other progress of the construction noticed for which he requested the OPs 1 to 5 vide letter dated 12.06.2017 for cancellation of the booking of the subject flat. In these circumstances, complainant requested for refund of booking amount in terms of Article-4, Clause-V of the Agreement for Sale dated 03.03.2014.
We have considered the arguments advanced by the Ld. Advocates for the parties and have also examined the record. The following prayers have been made in complaint.
- Direct the O.Ps. to make payment of Rs.18,71,000/- including compensation along with interest at the rate of 18 percent p.a. w.e.f. 12.06.2017 till the date of adjudication of the consumer complaint.
- Litigation costs and other incidental expenses,
- Any other order, relief as may be deemed fit and proper as the Hon’ble Forum may deem fit and proper.
It is clear that the main request is for refund of Rs.10,71,000/- with 18 percent interest per annum. Apart from this, the complainant has also requested for compensation of Rs.8,00,000/- and litigation cost . The Section 11 (1) of the Consumer protection Act, 1986 reads as under :-
“ 11. Jurisdiction of the District Forum : -
- Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complainants where the value of the goods or services and compensation, if any, claimed does not exceed Rupees Twenty lakhs.’’
Needless to say, the jurisdiction means the authority of a Court/Forum to administer justice subject to the limitations imposed by law, which are three-fold, viz. – (a) as to subject matter; (b) as to territorial jurisdiction and (c) as to pecuniary jurisdiction. If any Court or Forum passes any order without any competence, the said order would be a nullity. It is well settled that the question of territorial and pecuniary jurisdiction has to be ascertained at the initial stage or in the nascent phase of the proceeding. However, in a decision reported in (2005) 7 SCC 791 (Harshad Chiman Lal Modi – vs. – D.L.F. Universal Ltd. & Anr.) the Hon’ble Apex Court has observed that the question of pecuniary jurisdiction or territorial jurisdiction has to be dealt with before the Court/Forum where the suit/complaint has been instituted and not in an appellate stage. Therefore, it is incumbent upon a Forum constituted under the Act to see at the time of admission of complaint that the provisions contained in Section 11or Section 17or Section 21 of the Act are strictly followed so that a real consumer may not suffer on technical fault at the end of the day.
The Act does not specifically lay down as to how a complaint is to be valued for the purpose of jurisdiction. However, the Hon’ble National Commission is consistent with the view that it is the total value of the goods and / or services as well as that of compensation would determine the pecuniary limit of jurisdiction of Consumer Forum. In a decision reported in 1996 (2) CPR 26 (M/S Quality Foils India Pvt. Ltd Vs Bank of Madura Ltd and Anr.) a larger Bench of Hon’ble National Commission presided by Justice V. Balakrishna Eradi has observed –
‘in our view, where a claim of compensation is pleaded in a Consumer Complaint, then the total value of the goods and / or services as well as that of compensation would determine the pecuniary limit of jurisdiction’.
In a decision dated 12.03.2012 in RP/2679/2011 (P.S. Srijan Enclave and Ors Vs Sanjeev Bhargav) the National Commission has observed thus:
“it is settled Law that determination of pecuniary jurisdiction in respect of a dispute regarding service relating to housing would include the value of the property as a whole as well as the compensation demanded in the complaint.”
The Hon’ble National Commission has decided the issue of pecuniary jurisdiction in the matter of Ambrish Kumar Shukla & 21 Ors – Vs – Ferrous Infrastructure Pvt. Ltd. reported in I (2017) CPJ 1. The said judgment in para 15 while giving the gist of the answers to various questions, mentions the following ;
“15. Issue No. (iii)
The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint to determine the pecuniary jurisdiction of the Consumer Forum.“
From the above it is clear that the consideration paid at the time of hiring of the service of the OPs may also decide the pecuniary jurisdiction in certain cases, particularly in cases of refund where no further amount is to be paid. In the present case complainant has claimed that he has paid Rs. Rs.10,71,000/-. On perusal of the Agreement for Sale and email dated 18.09.2017 it appears to us that the complainant has paid Rs.9,99,201/- to the OP-1 on various dates . The value of consideration as per definition of “ Consumer “ is given under Section 2 (1) (d) of the Consumer Protection Act, 1986 includes “ partly paid and partly promised “. Thus, in case of refund of the amounts paid to the OPs / Developer, there would only be the element of “partly paid” and the element of “promised to be paid” would be missing. Thus, the consideration in a case of refund would only mean the amount paid and therefore, consideration paid in the above quoted observation in the decision in ‘ Ambrish kumar Shukla & Ors (Supra)’ could be only the amount paid by the complainant to the OPs and this shall decide the pecuniary jurisdiction of the Consumer Forum. Obviously, there is difference in the cases where parties one to go ahead and conclude the sale of goods or availment of services and where one party is only seeking refund and thereby clearly deciding for non-execution of the agreement. Thus, the value of service in a complaint case seeking refund of the paid amount would be limited to the amount paid whose refund has been sought for.
Based on the above consideration, it is clear that in the present case even if total refund of Rs.9,99,201/- is taken in to consideration along with interest at the rate of 18 percent per annum from 12.06.2017 till the adjudication of the case and compensation of Rs. 8,00,000/- , the total figure does not cross the limit of Rs.20,00,000/-. Hence, this Forum has pecuniary jurisdiction to entertain the instant consumer complaint. In a case reported in II (2018) CPJ 567 (NC) Deepak Sharma – Vs – BPTP Ltd. (Consumer Case No. 3179 of 2014) supported the case of the complainant. Therefore, the OPs 1 to 3 being the Builder & Directors are liable to refund (Rs.9,99,201/- minus Rs.2,50,000) = Rs 7,49,201/- to the complainant out of earnest / booking money and payment of EMIs. The OPs 1 to 3 have also right to deduct Rs.2,50,000/- from the earnest money for the flat deposited by the complainant including payment of EMIs in terms of Article-4 of Clause-V of the Agreement for Sale dated 03.03.2014.
The next point involved in this case relates to whether the complainant is a consumer as per provision of Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986. Admittedly, complainant hired services from OPs 1 to 3 upon payment of consideration and thereby he is a consumer under Section 2 (1) (d) (ii) of the CP. Act., 1986.
It is true that OP-4 is the Manager of OP-1 and OPs 5 to 7 are not the party to the Agreement for Sale dated 03.03.2014 executed between the complainant and the OP-1 Vedic Realty Pvt. Ltd. in respect of Unit No. C3, 3rd Floor, Block No. IG-5 measuring about 990 Sq. ft. (Super buildup area) together with a open car parking space in the project “ Ivy Greens “. There is also no legal relationship of privity of contract between the complainant and the OPs 4 to 7 in so far as development and construction of the subject flat. Agreement for Sale and e-mail dated 18.09.2017 go to show that all payments were made to the OP-1. The role of OP 4 being the Manager of OP-1 to look after the day to day business affairs and the role of the OPs 5 to 7 were limited to indentify the customers who were interested to buying / booking of flats in the Real Estate Market, introducing them to the OP-1 / Developer for facilitating the negotiation. The OPs 4 to 7 did not provide any services to the complainant. As such, there is no deficiency in service and unfair trade practice on the part of the OPs 4 to 7. In our opinion, they are unnecessary parties to the instant Consumer Case.
The last point as to whether the complaint is barred by limitation. Fact remains that vide letter dated 12.06.2017 complainant cancelled the Agreement for Sale dated 03.03.2014 with a request to refund the booking amount including payment of EMIs. The OPs 1 to 3 did not accept the cancellation request. The instant consumer complaint is filed on 17.04.2018 within two years from the date of request of cancellation of Sale Agreement. Therefore, the Consumer Case is not barred U/section 24A of the Consumer Protection Act, 1986,.
Based on the above discussion, we are of the view that there is deficiency in service and unfair trade practice on the part of the OPs1 to 3 being the Developer and Directors of Vedic Reality Pvt. Ltd. and in fact they withhold the booking amount including the EMIs amount without any cogent reason. The Consumer Protection Act came into being the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The act and conduct of the OPs 1 to 3 are a clear case of deception, which resulted in the injury and loss of opportunity to the complainant. The complainant cannot wait indefinitely to get the booking money. The complainant has suffered mental agony and harassment. It is settled principle of law that the compensation should be commensurate with loss of suffered and it should be just fair and reasonable and not arbitrary. To get the relief the complainant has to wage a long drawn and tedious legal battle. In the circumstances, the complainant is entitled to refund Rs.7,49,201/- from the OPs 1 to 3 along with interest at the rate of 08 percent per annum from the date of cancellation of Sale Agreement till realisation.
In the result, the case succeeds in part.
Hence,
ORDERED
That the complaint case be and the same is allowed on contest in part against the OPs 1 to 3 with litigation cost of Rs.5,000/- (Rupees five thousand) only and is also dismissed on contest against the OPs 4 to 7 without any costs.
OPs 1 to 3 are jointly and severally directed to refund Rs.7,49,201/- (Rupees Seven lacs Fourty Nine thousand Two hundred One) only along with interest at the rate of 8 percent per annum from 12.06.2017 i.e. the date of cancellation of the Sale Agreement till realisation including litigation cost to the complainant within one month from the date of this order.
OPs 1 to 3 are further directed to deposit Rs.5,000/- (Rupees five thousand) only as punitive damage to this Forum for unfair trade practice within the stipulated period.
Liberty be given to the complainant to put the order in execution, if OPs 1 to 3 transgress to comply the order.
