Raj Shekhar Attri, President

The above captioned complaint has been instituted seeking directions to the opposite parties to refund the amount of Rs. 18,92,388 paid by the complainant towards purchase of flat bearing No. 65, Tower No. D-2, 5th floor, measuring 1325 square feet, in their project named “Sandwoods Opulencia”, Mohali, Punjab (in short the unit). Total sale consideration of the said unit was fixed at Rs. 41,73,750. It is the case of the complainant that despite making payment of substantial amount, referred to above, the opposite parties failed to start construction of the unit at the project site and deliver possession thereof by 24.5.2018, which was committed by them vide Clause 6 of the agreement dated 25.5.2015 (Annexure C-4). It has been averred that it also came to the knowledge of the complainant that the opposite parties launched the project without obtaining necessary approvals/sanctions from the competent Authorities. Emails dated 12.6.2019 and also 17.6.2019 (Annexure C-8 colly.) were also sent to the opposite parties with a request to refund the amount paid as they have failed to complete construction and development work at the project site but to no avail. Visits were also made to the office of the opposite parties in the matter, but that also did not make any difference.

2. By stating that the aforesaid act and conduct of the opposite parties amount to deficiency in providing service and adoption of unfair trade practice, thereby causing mental agony, harassment and also financial loss to the complainant, as he is paying equal monthly installments to the bank from which housing loan was obtained to make payment towards the price of the said unit, whereas on the other hand possession thereof, has not been offered to him for dearth of construction and development works, the complainant has filed the present complaint seeking refund of amount paid along with interest, compensation etc.

3. His claim has been contested by the opposite parties, on numerous grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that he did not fall within the definition of “consumer” as defined under Section 2(1)(d) of the Act; that this Commission did not vest with pecuniary and territorial jurisdiction; and that the complaint is bad for non-joinder of financial institution as necessary party, from which he had taken housing loan for making payment of installments towards the said unit.

4. On merits, it has been admitted by the opposite parties that they received the amount as asserted by the complainant for the sale of unit aforesaid in the said project. It has been pleaded that since the project which is being developed by the opposite parties is very big, some delay is to be ignored; that construction work is going on in full flow, which is near completion; that the opposite parties are entitled to get extension of time for delivery of possession in view of Clause 6(b) of the agreement; that possession of the unit in question will be delivered to the complainant in near future; and that for any delays, the complainant will be compensated as per terms and conditions of the agreement. Remaining averments of the complaint have been denied. Prayer has been made to dismiss the complaint with cost.

5. This Commission has afforded adequate opportunities to both the parties to adduce evidence in support of their respective contentions, by way of filing affidavit, which was adduced by them.

6. We have heard the contesting parties and have gone through the record of the case, very carefully.

7. In this case, following points have emerged for consideration:

(i) Whether the arbitration clause contained in the agreement bars the jurisdiction of this Commission?

(ii) Whether this Commission has territorial and pecuniary jurisdiction to entertain this complaint?

(iii) Whether the complainant falls under the definition of consumer?

(iv) Whether there was any deficiency in rendering service, negligence and unfair trade practice on the part of the opposite parties?

(v) Whether the complainant is entitled to get refund of the amount paid along with interest and if yes, at what rate?

8. First, we would like to deal with the objection raised by the opposite parties to the effect that in the face of existence of provision in the agreement, to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as Aftab Singh v. Emaar MGF Land Limited & Anr., III (2017) CPJ 270 (NC)=Consumer Case No. 701 of 2015, decided on 13.7.2017, wherein it was held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No. 23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.2.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos. 23512-23513 of 2017 against order dated 13.2.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by the opposite parties in this regard stands rejected.

9. Now coming to the objection regarding territorial jurisdiction, it may be stated here that perusal of payment receipts dated 13.3.2015 (Annexure C-1), 24.4.2015 (Annexure C-2) and allotment letter dated 9.5.2015 (Annexure C-3), reveal that the same have been issued by Chandigarh Office of the Company, as the same bear the Corporate Address thereof as SCO 222-223, Sector 34-A, Chandgiarh-160022. Not only as above, even the buyer’s agreement dated 25.5.2015 (Annexure C-4) was also executed between the parties at Chandigarh Office of the Company, as is evident from page 1 thereof, wherein it has been written—“This Apartment Buyer’s Agreement is made at Chandigarh on this 25th day of May 2015”, meaning thereby that the opposite parties are actually and voluntarily residing and carrying on their business, at the said Chandigarh Office for gain. This Commission, therefore, has territorial jurisdiction to entertain this complaint. As such, objection taken in this regard is rejected.

10. Now, we will like to deal with the objection raised by the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint. It may be stated here that as per Section 17(1)(a)(i) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakh but does not exceed rupees one crore. It was also so elucidated elaborately by a Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 Ors. v. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC)=Consumer Case No. 97 of 2016, decided on 7.10.2016. As such, in the present case, if total value of the unit, in question, i.e. Rs. 41,73,750, plus compensation claimed by way of interest @ 18% p.a. on the deposited amount of Rs. 18,92,388 and other reliefs claimed, are clubbed together, it exceeds Rs. 20 lacs and fell below Rs. 1 crore. This fact is also fortified from the calculation sheet dated 21.7.2019 (Annexure C-10) attached along with the complaint by the complainant. Thus, this Commission has got pecuniary Jurisdiction to entertain and decide this complaint. Objection taken by the opposite parties in this regard stands rejected.

11. As far as objection taken to the effect that the complainant did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to the opposite parties to establish that the complainant has purchased the unit in question to indulge in ‘purchase and sale of flats’ as was held by the Hon’ble National Commission in Kavit Ahuja v. Shipra Estates, I (2016) CPJ 31 (NC), but since they failed to discharge their onus, hence we hold that the complainant is a consumer as defined under Section 2(1)(d) of the Act.

12. There is no dispute that the complainant had booked a unit in the said project of the opposite parties and had paid total amount of Rs. 18,92,388 towards the same. It is also not in dispute, that as per clause 6 of the agreement dated 25.5.2015 (Annexure C-4) the opposite parties committed to hand over possession of the said unit, latest by 24.5.2018, but the same has not been done by the said date or even by the date when arguments were heard in this complaint. In the written reply filed by the opposite parties, not even a single reason has been given, as to why possession has been delayed. However, on the other hand, it has been stated that since the project is a big one, as such, some delay needs to be ignored; and that the construction work is going on in full swing and possession will be delivered in the near future.

13. At the time of argument also, we specifically asked Counsel for the opposite parties as to how much time, will the Company take to complete construction and development work and deliver possession of the unit in question; he was having no satisfactory reply and gave stereotype answer that work is going on at the project site and possession will be delivered in the near future. It may be stated here that every proposed buyer or the allottee has a right to know the nature of title of the land; requisite license, certificates etc. in respect of the project wherein he has purchased a unit; and as to whether the builder/developer is authorized to raise construction and sell the units therein or not. However, in the instant case, even this much has also not been proved that necessary approvals/sanctions had been obtained before launching the project in question and that license and other permissions have been granted to the opposite parties authorizing them to start construction and sell the units therein. Even the list of Directors of the Company has not been submitted along with the reply filed by the opposite parties.

14. Burden to prove that the project has been launched and that development work has started therein and that the same is about to complete, is on the builder/opposite parties. It was so said by the Hon’ble National Commission, in Emaar MGF Land Limited and Another v. Krishan Chander Chandna, IV (2014) CPJ 589 (NC)=First Appeal No. 873 of 2013, decided on 29.9.2014. However, in the present case, not even a single document has been placed on record by the opposite parties to show as to whether CLU has been granted in respect of the project in question; licence has been obtained to launch the same; and that all approvals/sanctions have been obtained from the competent Authorities. At the same time, nothing has been placed on record to convince this Commission that the opposite parties can be granted extension of time as envisaged under Clause 6 (b) of the agreement. To seek such immunity under force majeure circumstances the opposite parties were required to convince this Commission by placing on record cogent material but they failed to do so. Under these circumstances, it is held that by neither completing the construction and development work; nor delivering possession of the unit by the committed date or even thereafter, the opposite parties indulged into unfair trade practice and are also negligent and deficient in providing service.

15. We are of the considered opinion that the complainant cannot be made to wait for an indefinite period, at the whims and fancies of the opposite parties i.e. on the ground that they are ready to compensate the complainant for the period of delay in delivering possession of the unit in question. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. Our view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, II (2019) CPJ 34 (SC)=III (2019) SLT 435=Civil Appeal No. 12238 of 2018, decided on 2.4.2019 and also in Fortune Infrastructure v. Trevor D’ Lima & Ors., II (2018) CPJ 1 (SC)=III (2018) SLT 556=(2018) 5 SCC 442. In the present case also, since there has been a delay of more than one and a half years and the same is still continuing, as the opposite parties are not sure as to by which period possession of the unit could be delivered to the complainant, as such, we are of the considered opinion that if we order refund of the amount paid by the complainant along with suitable interest, that will meet the ends of justice.

16. The complainant is therefore held entitled to get refund of the amount actually paid by him along with interest @12% p.a. from the respective dates of deposit in view of principle of law laid down by the Hon‘ble Supreme Court of India in H.U.D.A. v. Neelam Sharma, Civil Appeal No. 3417 of 2003, decided on 18.8.2004, wherein it was held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Recently also, under similar circumstances, the Hon’ble National Commission in Anil Kumar Jain & Anr. v. M/s. Nexgen Infracon Private Limited (A Mahagun Group Company), I (2020) CPJ 368 (NC)=Consumer Case No. 1605 of 2018, decided on 23rd December, 2019, ordered refund of the amount paid, along with interest @ 12% p.a.

17. At the same time, the opposite parties are also held liable to compensate the complainant for deficiency in providing service, negligence, adoption of unfair trade practice and also causing him mental agony and harassment.

18. As far as objection taken to the effect that the complaint is bad for non-joinder of financial institution from which the complainant has obtained housing loan, as necessary party, it may be stated here that the opposite parties have failed to clarify, as to what prejudice has been caused to them in such a situation. However, irrespective of the fact that the bank/financial institution has been made party to the complaint or not, this Commission in each and every complaint filed before it, wherein refund is ordered, gives direction to the effect that the bank/financial institution, if any, from which the complainant has raised housing loan for payment of installment, shall have the first c

harge of the amount payable. In this complaint also, this Commission is going to pass such directions. As such, objection taken in this regard stands rejected. 19. For the reasons recorded above, this complaint is partly accepted, with costs. The opposite parties, jointly and severally, are directed as under: (i) To refund the amount of Rs. 18,92,388 to the complainant, along with interest @ 12% p.a., from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs. 18,92,388 shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization. (ii) To pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs. 50,000 to the complainant within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount of Rs. 50,000, shall carry interest @ 9% p.a. from the date of passing of this order, till realization. 20. However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment towards the said unit, it shall have the first charge of the amount payable, to the extent, the same is due to be paid by the complainant. 21. Certified copies of this order be sent to the parties, free of charge. The file be consigned to Record Room, after completion. Complaint allowed.