w w w . L a w y e r S e r v i c e s . i n



Prerna Dewan v/s IREO Fiveriver Private Limited

    Complaint Case No. 134 of 2017

    Decided On, 25 May 2017

    At, Union Territory Consumer Disputes Redressal Commission UT Chandigarh

    By, THE HONOURABLE MR. JUSTICE JASBIR SINGH (RETD.)
    By, PRESIDENT
    By, THE HONOURABLE MR. DEV RAJ
    By, MEMBER & THE HONOURABLE MRS. PADMA PANDEY
    By, MEMBER

    For the Complainant: Sukaam Gupta, Advocate. For the Opposite Party: Ramnik Gupta, Advocate.



Judgment Text

Dev Raj, Member

1. The facts, in brief, are that on being assured about the layout plan of Mega Township comprising plots, villas, built-up-floors, commercial shopping area etc. in the upcoming project namely “Ireo Fiveriver”, the complainant booked a plot in the said project by paying Rs.6,00,000/- on 15.08.2010. An Independent Plot Buyer’s Agreement (Annexure C-1) was executed between the complainant and the Opposite Party on 26.09.2011 vide which, Plot Type-E bearing Unit No.U-21 was allotted to the complainant at a basic sale price of Rs.34,10,000/- apart from EDC, IDC and PLC, if any.

2. As per Clause 11.1 of the Agreement, possession of the unit was to be delivered to the complainant within 24 months from the date of execution of the agreement plus extended grace period of six months, which expired on 26.03.2014 (in fact 25.03.2014). Subsequently, the complainant paid an amount of Rs.2,52,500/- to the Opposite Party, besides already paid up amount of Rs.6,00,000/-, thus, making a total sum of Rs.8,52,500/-. The complainant approached the Opposite Party but no satisfactory reply was given. The complainant also raised question of clearances of the project but nothing was informed by the Opposite Party. When noting was heard, the complainant sent letter dated 01.05.2015 (Annexure C-3), seeking refund of the deposited amount alongwith compensation as per Clause 11.2 of the Agreement, in response to which, the Opposite Party vide letter dated 22.05.2015 (Annexure C-5) asked the complainant to deposit Rs.7,24,625/- towards further installment. The complainant again reiterated his request for refund vide letter dated 25.05.2015 (Annexure C-6), in response to which, the Opposite Party again sent demand letters (Annexures C-8 & C-9). Left with no option, the complainant sent letter dated 04.01.2016 to the Opposite Party, through registered post, for refunding the deposited amount and compensation as already requested (Annexure C-10).

3. It was further stated that the complainant is entitled to interest @15% p.a. as the Opposite Party also charged interest @15% p.a. in case of default in making payment on the part of allottee as per clause 7.2 of the Agreement. It was further stated that the Opposite Party failed to develop the site and offer possession of the unit, in question, to the complainant and still there is no likelihood of site being developed for possession in the near future. It was further stated that the aforesaid acts of the Opposite Party amounted to deficiency, in rendering service and indulgence into unfair trade practice.

4. Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Party, the complainant filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Party to refund the amount of Rs.8,52,500/- alongwith interest @18% p.a.; pay Rs.5,00,000/- as compensation for deficiency in service, unfair trade practice and mental harassment suffered by the complainant besides Rs.1,00,000/- as litigation expenses.

5. The Opposite Party, in its written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration Clause No.34 in the Plot Buyer’s Agreement dated 26.09.2011; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the complainant did not hire any services of the Opposite Party, as the parties did not enter into any contract for hiring the services; that the complainant is not a consumer, as she purchased the unit, in question, not for her personal use but for investment/commercial purpose; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the 1986 Act.

6. On merits, it was stated that the Opposite Party on 08.09.2011 issued provisional allotment letter (Annexure OP-48), dispatched on 09.09.2011 having details of the plot and payment schedule as Annexure A to the complainant. It was further stated that besides basic sale price, the complainant agreed to pay EDC, IDC and charges towards IFMS and that being so, the total consideration price of the plot, in question, was Rs.41,81,125/-. It was denied that possession period was agreed to be 24 months from the date of agreement with extended grace period of six months. It was agreed between the parties that possession period was to travel beyond said 30 months and the complainant duly agreed and consented to receive the liquidated damages from the Opposite Party. It was further stated that Clause 11 of the agreement has to be read in its entirety and not in piecemeal manner in order to ascertain the real intentions of the parties regarding period of offer of possession. It was denied that period to offer possession expired on 26.03.2014. It was further stated that had the complainant been serious to take possession, then she would have certainly made the payment of due installments, which were demanded from her on commencement of development at the site, by sending her demand notices, reminders and final notices. It was further stated that the complainant was not entitled to refund in accordance with the terms and conditions of the Agreement.

7. It was further stated that development and construction work at site could not be commenced till 13.04.2015 on account of unforeseen events and circumstances/imposition of fresh conditions by Government authorities after execution of the

Please Login To View The Full Judgment!

greement. It was further stated that had the State Government not imposed fresh conditions while granting the routine necessary approvals and permission, the Opposite Party would have developed the project in time and offered possession to the allottees as per terms and conditions of the Agreement. It was further stated that the delay in commencement of development and offering possession was on account of fresh new conditions imposed. Further, the Hon’ble Supreme Court of India, in the case ofRavinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012 granted stay and issued directions to the State of Haryana and its functionaries, not to undertake any further construction on the land, in question. The said stay order was vacated on 12.12.2012. It was further stated that as per Clause 11.4 of the Agreement, in case development was delayed due to force majeure circumstances, then the period for handing over of the possession shall stand automatically extended to the extent of delay caused due to the aforesaid force majeure circumstances. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.8. The complainant, in support of her case, submitted her affidavit, by way of evidence, alongwith which, a number of documents were attached.9. The Opposite Party, in support of its case, submitted the affidavit of Sh. Rajneesh, its Authorised Representative, by way of evidence, alongwith which, a number of documents were attached.10. The complainant filed rejoinder, wherein, she reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Party.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 complainant was allotted Plot No.U-21, Type E, admeasuring 155 sq. yards in the Township known as ‘IREO Fiveriver’, situated at Sector 3, 4 & 4A, Pinjore-Kalka, Urban Complex, Distt. Panchkula, Haryana. Plot Buyer’s Agreement was executed between the complainant and the Opposite Party on 26.09.2011 (Annexure C-1) alongwith which, Payment Plan (Annexure–I) was also annexed. The basic sale price was Rs.22,000/- per sq. yard besides External Development Charges (EDC) @Rs.4,100/- per sq. yard, Infrastructure Development Charges (IDC) @Rs.525/- per sq. yard and IFMS charges @Rs.350/- per sq. yard. The payment against the aforesaid plot was to be regulated as per Development Linked Payment Plan for Plots (at page 49 of the file). Against the total basic sale price of Rs.41,81,125/- excluding EDC and IDC; the complainant made payment in the sum of Rs.8,52,500/- to the Opposite Party. According to Clause 11.1 of the Agreement,subject to force majeure conditions and reasons, beyond the control of the opposite party, it was to deliver physical possession of the unit, within a period of 30 months i.e. 24 months plus (+) 6 months, from the date of execution of the same (Agreement), with complete basic amenities, as provided in Clause 22.4. As admitted by the Opposite Party, development and construction work at site could not be commenced till 13.04.2015. It is stated that it was on account of unforeseen events and circumstances/imposition of fresh conditions by Government authorities after execution of the Agreement. On getting no response, the complainant sought refund of the amount vide letter dated 01.05.2015 (Annexure C-3). When the complainant sought refund on 01.05.2015, 42 months period including 12 months extended delay period after execution of Plot Buyer’s Agreement already stood lapsed on 25.03.2015.13. It was argued by counsel for the Opposite Party that in the face of existence of arbitration Clause No.34 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. 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 ofFair 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 partyto the arbitration agreement or any person claiming through or under him,so applies not later thanthe date of submitting hisfirst 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 arbitrationunless 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 ofSecretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha(2004) 1 SCC 305andUnited 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 asLt. 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 longerres-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 the Opposite Party, being devoid of merit, is rejected.14. Another objection raised by the Opposite Party was that since the complainant did not buy goods and did not hire any services, and was seeking enforcement of the Agreement in respect of immovable property, therefore, only a Civil Court can decide the complaint, and consumer complaint was not maintainable. It may be stated here, that the complainant hired the services of the Opposite Party, for purchasing theunit, in question, in the manner, referred to above. According to Clause 11.1 of theAgreement,subject to force majeure conditions and reasons, beyond the control of the Opposite Party, it was to hand over possession of the apartment, in question, within a period of thirty months i.e. (24 months + 6 months grace period), from the date of execution of the same (Agreement). Section 2 (1) (o) of the Act, defines service as under:-“service” means service of any description which is made available to potentialusers and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”15. From the afore-extractedSection2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service.InNarne Construction P. Ltd., etc. etc. Vs. Union Of India and Ors. Etc., II (2012) CPJ 4 (SC), it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor,the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law,was laid down, inHaryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section3 of the Act provides an alternative remedy. Even if, it is assumed that the complainant has remedy to file a suit in the Civil Court, the alternative remedy provided underSection 3 of the Act, can be availed of by her, as she falls within the definition of ‘consumer’, as stated above. In this view of the matter, the objection of the Opposite Party, in this regard, being devoid of merit, must fail, and the same stands rejected.16. To defeat claim of the complainant, the next objection raised by the Opposite Party was that since the complainant 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, she would not fall within the definition ofconsumer, 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 complainant is a property dealer, and is 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 Party, mere bald assertion to that effect, cannot be taken into consideration. In Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31, it was held by the National Commission 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, inKavita 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 complainant, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the National Commission, inDLF 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 inRajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”Therefore, in view of law settled by the National Commission in the aforesaid cases, the complainant falls within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Party, in its written reply, therefore, being devoid of merit, is rejected.17. The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainant, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to him/her. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”,meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only this, provisional allotment letter dated 08.09.2011 (Annexure OP-48) annexed by the Opposite Party with its written statement, was issued by the Opposite Party from its Chandigarh Office i.e. SCO 6-7-8, 1st & 2nd Floor, Sector 9-D, Chandigarh. Since, as per Clause 33 of the Agreement and the document, referred to above, a part of cause of action arose to the complainant, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.18. No doubt, in the written version, an objection was also taken by the Opposite Party, that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned inSection 13 (4)of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions ofSection 17of the Act.InAssociated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC),the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference betweenSections 11/17of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh.InEthiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.19. InCosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC)andRadiant Infosystem Pvt. Ltd. & Others Vs D. Adhilakshmi & Anr I (2013) CPJ 169 (NC)the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according toSections 11/17of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to her, to file the complaint. The submission of Counsel for the Opposite Party, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.20. Now coming to the merits of the case, as is evident from the aforesaid position, after payment of sum of Rs.8,52,500/- by the complainant on 15.08.2010 and 07.10.2011 and execution of Buyer’s Agreement on 26.09.2011, the Opposite Party neither developed the site nor raised any further demand towards price of the plot, in question uptill April 2015. As per Clause 11 of the Agreement, possession of the unit, in question, was to be delivered within 24 months plus 6 months grace period i.e. 30 months. As per Clause 11.3 of the Agreement, the Opposite Party was also entitled to extended period of 12 months from the end of the grace period from the date of execution of the Agreement i.e. upto 25.03.2015. It was only after long period of 4 years, after making of payment of Rs.6 Lacs on 15.08.2010 and 42 months from the execution of the Agreement, that the Opposite Party vide letter dated 16.03.2015 (Annexure OP-46) wrote to the complainant as under:-“Wishing you and your family a truly delightful 2015!Firstly we would like to thank you for your continued support and faith in us and we look forward to the same trust and support in future.Due to certain unforeseen circumstances and reasons which despite our best efforts were purely beyond our control, there has been a delay in commencement of development works at site. However, all pre-requisites for commencement of construction/development works are now in place including the approval from Environment and National Board of Wild Life and we are forthwith commencing the development works for our project “Ireo Fiveriver”.In keeping with Ireo’s tradition of working with the best in the industry, Ireo Fiveriver township has been conceived and planned by internationally renowned architects and town planners and with Ireo’s commitment towards delivering world class quality one can be assured that Ireo Fiveriver will emerge as one of the most well conceived and executed township in the Tri City area. The mobilization of manpower as well as machinery has already taken place at site. for the convenience of the customers, we have set up a Sales Gallery at the project site and you are most welcome to pay a visit as and when desired by you.Now that the construction activity is to start, we are in the process of sending out demand letters for the installment payable at this milestone. We request your co-operation for making prompt payments enabling us to ensure speedy progress of the construction activity.We once again assure you a superior living experience in Ireo Fiveriver that you shall be calling your ‘Home’.”21. The complainant vide letter dated 01.05.2015 (Annexure C-3) requested the Opposite Party to refund the entire amount deposited alongwith penalty as per Clause 11.2 of the Agreement. The complainant has stated that she received Reminder-1 dated 22.05.2015 wherein she was asked to make payment of installment in the sum of Rs.7,24,625/-. Perusal of Annexure C-5 reveals that it was a reminder, which was written to the complainant by the Opposite Party in continuation of demand raised by it regarding payment of installment of Rs.7,24,625/-, which was due on 18.05.2015. Neither date of letter in reminder dated 22.05.2015 nor the date, on which, the demand was raised, was mentioned in Annexure C-5. The counsel for the Opposite Party, during arguments, however, stated that since the Opposite Party gives 21 days’ time to make payment of an installment, a letter in all probability was issued in the last week of April 2015. It may be stated here that letter, if any, sent by the Opposite Party in the last week of April 2015 and reminder dated 22.05.2015 were sent, when 42 months period from the date of execution of the Agreement stood lapsed on 25.03.2015. The complainant, pointing out delay and deficiency of Opposite Party, requested to refund the amount vide letter dated 22.05.2015 (Annexure C-6) sent by registered post, receipt whereof is Annexure C-7). She reiterated her request for refund and delay compensation vide letter dated 04.01.2016 (Annexures C-13 & C-14).22. It is, thus, clear that there was inordinate delay on the part of the Opposite Party in offering possession. Her (complainant’s) request for termination of the agreement and refund of the deposited amount was clearly in accordance with Clause 11.3 of the agreement, which reads thus:-“11.3 Subject to Clause 11.1, in the event of delay by the Company in handing over the possession of the said Plot beyond a period of 12 months from the end of the Grace Period (such 12 months period hereinafter referred to as the “Extended Delay Period”), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installments made against the said Plot after adjusting the interest/penalty on delayed payments alongwith Delay Compensation for 12 months. Such refund shall be made by the Company within 90 days of receipt of intimation to this effect from the Allottee, without any interest thereon. For removal of doubt, it is clarified that Delay Compensation payable to the Allottee who is validly opting for termination, shall be limited to and calculated for the fixed period of 12 months only irrespective of the date on which the Allottee actually exercise the option for termination. This option of termination may be exercised by the Allottee only up till dispatch of the Notice of Possession by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever, monetary or otherwise shall lie against the Company nor be raised otherwise or in any other manner by the Allottee.”23. The request of the complainant was, thus, in accordance with the terms of the Agreement. There is nothing on record that the Opposite Party informed the complainant about force majeure conditions, on account of which, development of project was delayed. In any case, the complainant was well within her rights to terminate the Agreement and seek refund. The complainant did so vide letters dated 01.05.2015, 22.05.2015 and 04.01.2016 (Annexures C-3, C-4, C-6 & C-7, C-13 & C-14) but the Opposite Party continued to retain the amount deposited by the complainant.24. The Opposite Party has stated that possession of the plot, in question, could not be offered to the complainant, within the period stipulated in the Agreement for want of development work at the site, on account of the reasons beyond its control i.e. on account of force majeure circumstances. It may be stated here that this issue qua force majeure was elaborately dealt with by this Commission in case titled “Gp. Cpt. Arun Bali (Retd.) Vs. M/s IREO Fiveriver Pvt. Ltd., Consumer Complaint No.215 of 2015 decided on 27.05.2016, wherein this Commission, in Paras 21 to 31, held as under:-“21. Admittedly, possession of the unit, in question, has not been delivered by the Opposite Party to the complainant till the date, the instant complaint was filed or even till date. In the written version, the opposite party, frankly admitted, that possession of the plot, in question, could not be offered to the complainant, for want of construction and development work at the site, on account of the reasons beyond its control i.e. on account of force majeure circumstances. Clause 1 of the Agreement, reads thus:-“Force Majeure”shall mean any event beyond the reasonable control of the Company or Confirming Parties by itself or in combination with other events or circumstances which cannot (i) by the exercise of reasonable diligence, or (ii) despite the adoption of reasonable precautions and/or alternative measures, have been prevented, or caused to have been prevented, and which impairs or adversely affects the Company`s/Confirming Parties’ ability to perform its obligation under this Agreement, and which events and circumstances shall include but not be limited to a) acts of God, i.e. fire, drought, flood, earthquake, epidemics, natural disasters or deaths or disabilities; b) explosions or accidents, air crashes and shipwrecks; c) strikes of lock outs, industrial dispute; d)non-availability of cement, steel or other construction material due to strikes of manufactures, suppliers, transporters or other intermediaries or otherwise; e)war and hostilities of war, riots or civil commotion; f) non-grant, refusal, delay, withholding, cancellation of any approval from any governmental authority or imposition of any adverse condition or obligation in any approvals from any governmental authority, including any delay beyond the control of the Company/ Confirming Parties in issuance of the Completion Certificate and/or any other approvals/certificate as may be required; g) any matter, issues relating to grant of approvals/permissions, notices, notifications by the Competent Authority becoming subject matter of any suit/writ before a Court of law; h) the promulgation of or amendment in any law, rule or regulation or the issue of any injunction, court order or direction from any governmental authority that prevents or restricts the Company/Confirming Parties from complying with any or all the terms and conditions as agreed in this Agreement; i) economic recession; j) any event or circumstances analogous to the foregoing.However, the force majeure circumstances, which have been claimed by the opposite party, for not starting development and construction work, at the site are, delay in sanction of layout plans by the Competent Authorities; delay in grant of NOC from the Irrigation Department; delay in clearance and delayed grant of licence for additional land measuring 10.594 acres plus 18.343 acres, by the Competent Authorities, as the area was situated in a squatted small pockets; delay in approvals for environment clearance by the Competent Authorities; and also stay on construction on the land, in question, granted by the Hon’ble Supreme Court of India, in the case ofRavinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010, vide order dated 19.04.2012, which was finally vacated on 12.12.2012.22. Now here, the question arises, as to whether, the aforesaid circumstances, encountered by the opposite party, can be termed as force majeure circumstances, for non-development & construction work at the site and non-delivery of possession of the units, by the stipulated date or not.23. First coming to the plea taken by the opposite party regarding delay in sanction of final lay-out plans by the Competent Authorities, it may be stated here that the said plea does not merit acceptance. It was the bounden duty of the opposite party, to get approved the final layout plans, in respect of the project, in question before launching the project, and only, thereafter, accept booking amount from the customers. The complainant including other allottees cannot be penalized for the delay in the aforesaid sanction of layout plans. If the opposite party chose to accept booking, on the basis of provisional sanction of the layout plan, by the Competent Authorities, it is to blame to only itself, for the delay, and not the purchasers of units.The purchaser of a plot, who had nothing to do with the sanction of the layout plan, by the Competent Authorities, cannot be penalized, by postponing the possession or registration of the plot. Similar view was taken by the National Commission in a case titled asM/s. Narne Constructions Pvt. Ltd. Vs. Dr. Devendra Sharma & 4 Ors., Revision Petition No. 4620 of 2013, decided on 17thDec 2015.As such, the plea raised by the opposite parties, in this regard, stands rejected.24. Now coming to the second plea taken by the opposite party, to the effect that there was delay in grant/issuance of NOC and various permissions/ licence/clearances from various Departments like environment, irrigation, wildlife etc., it may be stated here that the same also does not merit acceptance. In our considered opinion, it is the duty of the builder, to obtain the requisite permissions or sanctions, referred to above, in the first instance, and, thereafter, recover/ accept the consideration money from the purchaser of the flats/plots. It is a known fact that delay occurs in obtaining various permissions from different Governmental Authorities, and this fact is well-known to the builder(s). The time normally taken, in getting such permissions, could have been contemplated by the builder, before issuing the brochure/executing agreement. It is an unfair trade practice, if the builder, without any planning and without obtaining any effective permissions/sanctions/licence to allot plot or to construct building/apartments, invites offers and collects money from the buyers.25. During arguments, Counsel for the Opposite Party, by placing on record copies of letters dated 30.1.2012 (Annexure OP/A-1), 23.2.2012 (Annexure OP/A-2), 9.3.2012 (Annexure OP/A-3), 7.5.2012 (Annexure OP/A-4), 12.6.2012 (Annexure OP/A-5), 30.7.2012 (Annexure OP/A-6), 8.11.2012 (Annexure OP/A-7), 14.3.2013 (Annexure OP/A-8), 14.3.2013 (Annexure OP/A-9), 21.3.2013 (Annexure OP/A-10), contended that the matter was pursued with the State Government for getting NOCs/grant of licence for additional areas measuring 10.914 Acres, 18.343 Acres and 7.32 Acres. Letters dated 10.6.2013 (Annexure OP/A-11), 16.9.2013 (Annexure OP/A-12), related to seeking extension for environmental clearance. Since the copies of letters seeking clearance/NOC etc. pertained to the year 2012 and 2013, his submission that delay in approvals/clearances was a force majeure condition, which contributed to delay in completing the development/basic amenities within the time stipulated in the Agreement, does not merit acceptance, when no further communication sent to the Governmental Authorities after 2013 has been brought on record.26. In our considered opinion, as already discussed above, it was the bounden duty of the Opposite Party to contemplate the period, which was likely to be taken in development of the project. It is also clear even from the documents, now placed on record, that the matter was not pursued with the Governmental Authorities after 2013. The Opposite Party was clearly deficient in rendering service and indulged into unfair trade practice and these documents do not, in any way, dilute their deficiency.If the possession of plot, as also the construction of the building/apartment is delayed, because of such reasons, and the possession thereof is not delivered within the stipulated time, the builder itself is responsible for that, and it cannot take shelter under force majeure circumstances.It was also so said by the National Commission, in a case titled asKamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC). In that case also, a similar plea regarding non-grant of various sanctions, approvals and certificates in respect of the DLF project, by the Government concerned, resulting into delay in delivery of possession of the unit, was raised by the Builder. However, the National Commission in that case, while brushing aside the said plea of the builder, observed and held as under:-“The main questions which require consideration in the appeal are—(i) Can a builder give alluring advertisement promising delivery of possession of the constructed building/flat to the purchaser/ consumer within the stipulated time, and, subsequently, on his failure, turn around and contend that as governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan, were not given, the delay in construction should not be the ground for grant of compensation to the consumer? And,(ii) Secondly, whether the consumer should suffer by paying escalation cost due to such delay?2. In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.3. Secondly, in such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so, escalation cost is required to be borne by the builder.”27. The principle of law, laid down in the aforesaid case, is fully applicable to be present case. In this view of the matter, the plea of the opposite party, to this effect, also stands rejected.28. So far as the plea regarding grant of stay by the Hon’ble Supreme Court of India, in a case ofRavinder Singh and Ors. Vs. State of Haryana and Others, SLP 21786-21788 of 2010,is concerned, it may be stated here that as is evident from letters dated 30.4.2012 (Annexure OP/A-13) and 30.4.2012 (Annexure OP/A-14),the said stay was granted on 19.04.2012 and was vacated on 12.12.2012. Otherwise also, the said stay was not specific to the opposite party. Directions were issued to the Government only, not to undertake construction on the land in question. At the maximum taking a stay order, as an order to the opposite party/builder also, benefit of only about 08 months period (stay granted on 19.04.2012 and vacated on 12.12.2012) can be given and not beyond that. It was not clarified by the opposite party, as to what stopped it to start construction and development work before 19.04.2012 and, thereafter, from 12.12.2012, the date when stay aforesaid was vacated. At the same time, as has been held above, if the opposite party did not take requisite approvals/sanctions, from the Competent Authorities, before launching the project, in question, it cannot take shelter under the force majeure clause, to defeat the claim of the complainant.29. The pleas taken by the opposite party, claiming force majeure circumstances, referred to above, also deserve rejection, in the face of case titled as Ramesh Chander and another Vs. M/s IREO Fiveriver Private Limited, CC No.99 of 2014, decided on 29.04.2015, qua this very project, decided by the State Commission, Haryana, Panchkula. In that case also, exactly similar excuses were given by the opposite party, for not starting development at the site and non-delivery of possession of the unit, to the purchasers, which were rejected by the State Commission, Haryana, Panchkula, by observing as under:-“It is not disputed that the builder floated the project and they were bound to obtain all the permissions before they invite applications from public. The builder cannot raise plea that for want of certain clearances, the possession of the plot could not be delivered. When the builder invited the applications and collected huge amount from the public, they cannot delay the allotment/possession of the plot for awaiting clearances. Thus, delay/breach, if any, was on the part of the builder. The builder has not even remotely alleged any default on the part of the complainants”30.First Appeal No.473 of 2015 filed against that order by the opposite party before the National Commission, New Delhi, was got dismissed as withdrawn, vide order dated 22.07.2015.31. Even otherwise, there is nothing on record, to show that at any stage, when the project was going to be delayed, difficulties now propagated were brought to the notice of the purchasers. Clearly, the matter was not effectively taken up by the opposite party, with the Government Authorities, to expedite the sanctions etc., so that construction/ development at the project could be started. It is therefore held that by not starting the development and construction work at the site and also by not handing over possession of the unit, to the complainant by the stipulated date, mentioned in the Agreement, and even as on today, there was a material violation, on the part of the opposite party, which act amounted to deficiency in providing service and adoption of unfair trade practice.”Thus, the plea of force majeure is of no help to the Opposite Party and the same stands rejected.25. Deficiency in service and indulgence into unfair trade practice on the part of the Opposite Party is, thus, clearly evident. The complainant is entitled to refund of the deposited amount with interest.26. It is to be further seen, as to whether, interest, on the amount refunded can be granted, in favour of the complainant. It is an admitted fact that an amount of Rs.8,52,500/- was paid by the complainant, to the Opposite Party. The said amount has been used by the Opposite Party, for its own benefit. There is no dispute that for making delayed payments, the Opposite Party could charge heavy rate of interest @15% p.a. as per Clause 7.2 of the Agreement, for the period of delay in making payment of instalments. It is well settled law that whenever money has been received by a party and when its refund is ordered, the right to get interest follows, as a matter of course. The obligation to refund money received and retained without right implies and carries with it, the said right. It was also so said by the Hon’ble Supreme Court of India, inUOI vs. Tata Chemicals Ltd (Supreme Court), (2014) 6 SCC 335 decided on March 20th, 2014 (2014) 6 SCC 335).The complainant has made a prayer for refund of the amount deposited, alongwith interest @18% p.a., till realization. The request of the complainant made in May 2015 for refund of the deposited amount was not considered by the Opposite Party, which is also an act of indulgence into unfair trade practice. What to talk of refunding the amount, the Opposite Party even did not bother to inform the complainant as to what action was taken by the Opposite Party on the request so made. By not getting refund of hard earned money for years, the complainant has certainly suffered financial loss. In the circumstances, in our considered view, in view of deficiency of the Opposite Party, grant of interest @10% p.a., on an amount of Rs.8,52,500/-, from the respective dates of deposits, till realization, if granted, shall serve the ends of justice.27. The next question, that falls for consideration, is, as to whether, the complainant is entitled to compensation, under Section 14(1)(d) of the Act, on account of mental agony and physical harassment, and injury caused to her, by not refunding the deposited amount by the Opposite Party despite requests made by her on 01.05.2015 and 22.05.2015. As already discussed above, the complainant was well within her rights to terminate the Agreement and seek refund, in the absence of any development at the site. The complainant purchased the unit, with the hope to have a roof over her head alongwith family members but her hopes were dashed to the ground. She has, thus, undergone a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Party. However, compensation in the sum of Rs.5 Lacs claimed by the complainant is clearly on the higher side. The complainant, has been adequately compensated by granting interest @10% per annum on the deposited amount for the delay period. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainant, if granted, to the tune of Rs.50,000/-, shall be reasonable, adequate and fair. The complainant, is, thus, held entitled to compensation, in the sum of Rs.50,000/-.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. The Opposite Party is held liable and directed as under:-(i) To refund the amount ofRs.8,52,500/-to the complainant, alongwith interest @10% p.a. (simple), from the respective dates of deposits, within a period of 45 days, from the date of receipt of a certified copy of this order.(ii) To pay an amount of Rs.50,000/-, as compensation for mental agony, physical harassment, deficiency in rendering service and unfair trade practices and Rs.20,000/- as cost of litigation, to the complainant, within a period of 45 days from the date of receipt of a certified copy of the order.(iii) In case, the payment of amount, mentioned in Clause (i), is not made, within the stipulated period, then the Opposite Party, shall be liable topay the amount mentioned in Clause (i) above, with interest @13% p.a. (simple), from the date of filing the complaint, till realization and amount mentioned in Clause (ii) above, with interest @10% p.a. (simple) from the date of filing the complaint till realization.30.However, it is made clear that in case, the complainant has availed loan facility from any financial institution(s), such an institution shall have the first charge on the amount payable, to the extent, the same is due against the complainant.31. Certified Copies of this order be sent to the parties, free of charge.32. The file be consigned to Record Room, after completion.Pronounced.
OR

Already A Member?

Also