Paramjeet Singh Dhaliwal, President
The complainant has filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short, “the Act”), against the opposite parties, seeking following directions to them:
(i) to deliver possession of the plot, complete in all respects, with all the amenities, as were promised at the time of booking;
(ii) to pay compensation at the rate of 12% per annum (though opposite parties charge interest at the rate of 18% on account of delay in payments on the part of the complainant) from the date of intended possession till the date of actual payment;
Or in the Alternative:
(iii) to refund the principal amount of Rs. 46,39,000;
(iv) to pay compensation at the rate of 12% per annum (though opposite parties charge interest at the rate of 18% on account of Consumer Complaint No. 123 of 2020 delay in payments on the part of the complainant) from the date of respective deposits till date of actual refund;
(v) to pay Rs. 3,50,000 as compen-sation for the mental harassment and agony suffered by the complainant; and
(vi) to pay Rs. 55,000 towards costs of litigation.
Facts of the Complaint
2. Brief facts, as set out in the complaint, are that the opposite parties are carrying on the business of real estate, construction and development of townships/colonies all over India. They are having their office at the project in S.A.S. Nagar, Mohali, Punjab. The complainant, who was looking out for a residential unit in or around Chandigarh for himself and his family, came across the wide publicity done by the opposite parties regarding their residential project known as “Pearl City”, in Sector 100, Greater Mohali, through brochures and their representatives. Being induced by their tall claims, the complainant moved application for allotment of a plot bearing No. 512, measuring 200sq. yds. on 16.1.2011 under “Time Linked Payment Plan”. Allotment letter was issued in this regard and subsequently an agreement was entered into between the parties on 4.6.2011. The complainant made initial payment of Rs. 4,60,000. Basic sale price of the said plot was Rs. 46,00,000, plus other charges like Preferential Location Charges (PLC) of Rs. 2,30,000, club membership Rs. 35,000, power back up Rs. 60,000 and Interest Free Maintenance Security (IFMS) of Rs. 20,000. Thus, the total cost of the plot was Rs. 49,45,000. The complainant was informed that the project was sanctioned and approved in the year 2009 by the State Government and all the timelines would be met. Hence, the complainant started paying the balance sale consideration to them. The agreement has contradictory clauses, stating that the possession would be delivered after the grant of sanctions. It is against the provisions of the Punjab Apartment and Property Regulation Act, 1995 (in short, “PAPRA”). Reference to various provisions of PAPRA has been made in the complaint. As per terms of the agreement, application form and allotment letter, the plot, in question was intended to be situated in the project of the opposite parties situated in Sector 100, Mohali. The complainant paid a total sum of Rs. 46,39,000 to the opposite parties towards the price of the plot, in question, as tabulated in Para-7 of the complaint. The opposite parties had represented that they had started the construction in the year 2009 and the possession would be delivered in June 2014. However, they failed to offer the possession of the plot within the stipulated period, despite repeated requests and visits of the complainant. Even the opposite parties failed to show him the necessary approvals and sanctions for setting up the project, in question. The complainant tried to raise his issues through mediation by sending e-mails, Ex.C-5 (colly.), to the opposite parties, but to no effect. The aforesaid act and conduct of the opposite parties amount to deficiency in service and unfair trade practice. Hence, the present complaint.
3. Upon notice, opposite parties No. 1 & 2 did not appear despite their service and were proceeded against ex parte, vide order dated 4.9.2020. Initially, opposite party No. 3 also did not appear despite his service through publication of notice in the newspaper and was proceeded against ex parte, vide order dated 1.4.2021. However, today Mr. Raghav Gulati, Advocate has appeared and filed memo of appearance on behalf of opposite party No. 3. Thus, opposite party No. 3 is allowed to join the proceedings at this stage only i.e. arguments.
Evidence of the Complainant
4. To prove his claim, the complainant filed his own self attested affidavit, along with copies of documents, i.e. application form Ex.C-1, allotment letter dated 17.1.2011 Ex.C-1A, Plot Buyer’s Agreement dated 4.6.2011 Ex.C-2, call notice/demand notice/ payment receipts Ex.C-3a to Ex.C-3d and Ex.C-4a to Ex.C-4c and emails Ex.C-5 (colly.).
Contentions of the Parties
5. We have heard learned Counsel for the complainant and opposite party No. 3 and perused the record carefully.
6. Learned Counsel for the complainant has argued on the similar lines of the averments, as mentioned in the complaint. It has been further contended that the opposite parties failed to complete/develop their project and deliver possession of the plot within the stipulated period, despite receiving substantial amount towards the price of the plot from the complainant. They also failed to obtain the requisite permissions/ approvals/sanctions before launching their project. Even there are no basic amenities provided at the site. The opposite parties kept on utilizing the amount deposited by the buyers, including the complainant, for their own cause without bothering to develop the project. Due to deficiency in service and unfair trade practice on the part of the opposite parties, the complainant is entitled to all the reliefs, as prayed for in the complaint.
7. Learned Counsel for opposite party No. 3 has vehemently contended that there is no deficiency in service on the part of opposite party No. 3 and the complaint against him is liable to be dismissed.
Consideration of Contentions
8. We have given our thoughtful consideration to the respective contentions raised by the learned Counsel for the parties.
9. Undisputedly, the complainant applied for allotment of a residential plot in the above noted project of the opposite parties, vide Application Form dated 16.1.2011, Ex.C-1. He was allotted plot No. 512, measuring 200 sq.yds. for basic sale price of Rs. 46,00,000 plus other applicable charges, vide allotment letter dated 17.1.2011, Ex.C-1a. ‘Plot Buyer’s Agreement”, Ex.C-2, was executed between the parties on 4.6.2011. As per Clause-10 of the said agreement, possession of the plot, in question, was to be delivered within three years from the date of official launch of Sector-100 of the said Township or from the date of signing the agreement, whichever was later, subject to force majeure circumstances. There is no date of official launch of the project on record. Thus, the possession of the plot, complete in all respects, along with agreed facilities, was to be delivered within three years from the date of execution of the agreement, i.e., up to 4.6.2014. The complainant deposited a total sum of Rs. 46,39,000 towards the price of the plot with the opposite parties, as is evident from Statement of Account Ex.C-4c, according to terms and conditions of the allotment letter/agreement and there is no default on his part. However, the opposite parties failed to deliver possession of the plot within the aforesaid period. As per Clause-9 of the agreement, the allottee was to start and complete the construction of the house with due sanction of the competent authority within a period of 36 months from the date of offer of possession, failing which the promoter was entitled to resume the plot without paying any compensation to the allottee and to allot the same to somebody else. It needs to be emphasized that the stipulated period for completing the construction over the plot, in question, would expire only after 36 months from the date of offer of possession, which has not yet been made. At the sake of repetition, the stipulated period for delivery of possession of the plot expired on 4.6.2014 and the possession has not been delivered up that date and even after expiry of further three years therefrom.
10. The whole purpose of pleadings is to give fair notice to each party of what the opponent’s case is and to ascertain with precision the point(s) on which the parties agree and those on which they differ. The purpose is to eradicate irrelevancy. The complaint is a concise statement of facts and if no reply is filed to the complaint, the averments made therein are deemed to have been admitted. For the sake of repetition, it is relevant to mention that the opposite parties did not appear despite service and were proceeded against ex parte. Thus, all the averments made in the complaint are deemed to have been admitted and the evidence led by the complainant stands unrebutted; for which an adverse inference is to be drawn against the opposite parties. Thus, no evidence has come on record, whether the opposite parties had obtained the requisite approvals and permissions from the competent authorities, before launching the said project. Keeping in view the above circumstances, we hold that the opposite parties have failed to comply with the provisions of PAPRA.
11. As per Section 3 (General Liabilities of Promoter) of the PAPRA, the opposite parties were required to make full and true disclosure of the nature of their title to the land, on which such colony is developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days’ notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with Section 3 of the PAPRA.
12. As per Section 5 (Development of land into Colony) of PAPRA, the opposite parties were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they violated Section 5 of PAPRA.
13. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/flats, but no evidence has been led on the record by the opposite parties to prove that any account has been maintained by them in this respect. As such, they also violated Section 9 of the PAPRA.
14. As per Rule 17 of the “Punjab Apartment and Property Regulation Rules, 1995” framed under Section 45 of the PAPRA, it has been provided as under:
17. Rate of interest on refund of advance money upon cancellation of agreement. The promoter shall refund full amount collected from the prospective buyers under Sub-section (1) of Section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment.”
15. The Act came into being in the year 1986. It is one of the benevolent pieces 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 complainant made payment of substantial amount to the opposite parties, with the hope to get the possession of the plot within a reasonable period. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services, i.e. allotment of land and development thereof within a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in injury and loss of opportunity to the complainant. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the plot within a reasonable period. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties, i.e. builders, knew from the very beginning that they had not complied with various provisions of the PAPRA and the Rules framed thereunder and could not deliver the possession within the stipulated period and, thus, by misrepresentation induced the complainant to book the plot, due to which the complainant has suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon’ble Supreme Court and the Hon’ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities.
16. In view of our above discussion, the deficiency in service and unfair trade practice on the part of the opposite parties have been clearly established. The opposite parties are liable to be deliver possession of the plot, in question, with complete development and infrastructure and all the basic and agreed amenities/facilities and execute the Sale/Conveyance Deed in favour of the complainant, subject to payment of balance sale consideration without any interest or penalty. Since there is no penalty clause in the agreement, Ex.C-2, to compensate the complainant for delay in delivery of possession, so we are of the view that the opposite parties are liable to pay compensation for delay in delivery of possession of the plot calculated at the rate of 12% per annum on the entire amount deposited by the complainant after the stipulated period i.e. from 4.6.2014 till delivery of possession of the plot, in the manner as observed above. The complainant is also entitled to suitable litigation costs and other expenses.
17. Accordingly, the complaint is partly allowed and following directions are issued to the opposite parties:
(i) to deliver legal, actual and physical possession of the plot, in question, with complete development and infrastructure and
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all the basic and agreed amenities/facilities and execute the Sale/Conveyance Deed in favour of the complainant, subject to payment of balance sale consideration without any interest or penalty; (ii) to pay compensation for delay in delivery of possession of the plot calculated at the rate of 12% per annum on the entire amount deposited by the complainant i.e. Rs. 46,39,000 (Rupees Forty Six Lac Thirty Nine Thousand only) after the stipulated period i.e. from 4.6.2014 till delivery of possession of the plot, in the manner as observed above; and iii) to pay Rs. 46,000 (Rupees Forty Six Thousand only), as litigation costs and other expenses. 18. The compliance of this part of the order shall be made by the opposite parties within a period of 60 days from the receipt of certified copy of the order; failing which the complainant shall be entitled to the alternative relief as under: (i) refund of the amount deposited by the complainant, i.e. Rs. 46,39,000 (Rupees Forty Six Lac Thirty Nine Thousand only), along with compensation for causing financial loss and depriving the complainant of the use of the said amount during the period the same remained with the opposite parties at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA; and (ii) to pay Rs. 46,000 (Rupees Forty Six Thousand only), as litigation costs and other expenses. 19. The compliance of this part of the order shall be made by the opposite parties within a period of 30 days after the expiry of above said period of 60 days. Complaint partly allowed.