Samaresh Prasad Chowdhury, Presiding Member
The instant complaint under Section 17 (inadvertently mentioned under Section 12) of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is at the instance of an intending purchaser against the Developer (Opposite Party No.1) and the marketing agent (Opposite Party No.2) on the allegation of deficiency in services primarily on the part of Opposite Party No.1in respect of a flat and one car parking space as per terms of the Agreement in a consumer dispute of housing construction.
In a nutshell, complainant’s case is that he booked a flat being flat No.603 on the 6th floor in Tower No.E7 having saleable area of 1524 sq. ft. (approx) corresponding to built up area of 1158 sq. ft. along with one open car parking space at Eden City Housing Project located at Holding No.B1-90/A/1, New Budge Budge Trunk Road, P.S.- Maheshtala, Kolkata – 700141, Dist- South 24 Parganas within the local limits of Ward No.31 of Maheshtala Municipality at a total consideration of Rs.22,55,520/-. On 18.02.2008, OP No.1 did provide allotment letter along with General Terms and Conditions (GTC) to the Complainant. As per terms and conditions, the OP was under obligation to handover the flat/apartment within 36 months from the date of commencement of construction of each tower and it was specifically mentioned that in case of failure to deliver the possession of the flat within the said period, the OP No.1 shall be liable to pay Rs.5,000/- per month for 3BHK Apartment subject to the provision of Force Majeure Circumstances contained in Clause-10 of the Agreement. The complainant has stated that as per terms and conditions of the Agreement, he has made all payments from time to time upto 7th instalment and 8th instalment was payable to OP No.1 at the time of delivery of possession. The complainant has stated that by a letter dated 17.11.2012 OP No.1 made a demand of Rs.4,66,759/- including Rs.4,09,546/- towards the said flat, club membership, club subscription for the first year, caution deposit, maintenance charges for common areas for the first year, reimbursement of diesel generator power backup generator, electricity, cable line charges and documentation charges and also a sum of Rs.57,213/- for overdue interest over delayed payment. Upon receiving the said letter, the complainant by a letter dated 30.11.2012 requested the OP No.1 to send a detailed statement of interest as there were some discrepancies in the account of the complainant. However, the complainant intimated through e-mail to OP No.1 that he wanted to visit the flat, roof terrace, club house on 08.12.2012. After visiting the flat, OP No.1 handed over a pre-handover snag checking form to the complainant and the complainant noted down several deficiencies/shortcomings with regard to bed room, bath room, kitchen etc. However, those shortcomings were not redressed for which the complainant through his Advocate severed a legal notice dated 29.03.2013 agitating his grievances but it turned a deaf ear. Hence, the complainant has come up in this Commission with the instant complaint with prayer for several reliefs, viz. – (a) to direct the OP Nos. 1 & 2 to deliver vacant possession of the subject flat and car parking space; (b) to direct the OP Nos. 1 & 2 to execute and register the Deed of Conveyance in respect of the flat and car parking space; (c) to direct the OP Nos. 1 & 2 to finish the unfinished works as mentioned in Paragraph-19 of the petition of complaint; (d) to direct the OP Nos. 1 & 2 to pay Rs.5,00,000/- as compensation on account of harassment and mental agony; (e) to direct the OP Nos. 1 & 2 to pay litigation cost of Rs.20,000/- etc.
The Opposite Party No.1by filing a written version has stated that in view of the provision of Section 12A of West Bengal Building (Regulation and Promotion of Construction and Transfer by Promoters) Act, 1993 (in short, ‘Promoters Act, 1993’) this Commission has no jurisdiction to entertain the complaint. It has also been stated that as there was an Arbitration Clause in the Agreement, in accordance with Section 8 of the Arbitration and Reconciliation Act, 1996 this Commission has also no jurisdiction to adjudicate the complaint. It has further been stated that the complainant could not make payment of instalment in time as per terms of the agreement and as such as there was no deficiency on the part of them, the complaint should be dismissed.
On behalf of complainant, complainant himself has tendered evidence on affidavit. He has also given reply against the questionnaire set forth by OP No.1.
The Opposite Party has filed evidence on affidavit through one Sri Indranil Bhowmik, Senior Legal Manager for the Eden Real Estate Pvt. Ltd. (OP No.1). The said person has also given reply on behalf of OP against the questions put forward by the complainant.
Both the parties have relied upon several documents in support of their respective cases including the terms and conditions of GTC. At the time of hearing, the parties have also filed brief notes of arguments.
Undisputedly, the OP Eden Real Estate Ltd. issued an advertisement towards selling flats and apartment at Maheshtala, Dist- South 24 Parganas called ‘Eden City’. The complainant being allured with such advertisement agreed to purchase one flat/apartment and booked a flat being flat No. 603 on the 6th floor in Tower No.E7 having saleable area of 1524 sq. ft. (approx) corresponding to built up area of 1158 sq. ft. along with one open car parking space at Eden City Housing Project located at Holding No.B1-90/A/1, New Budge Budge Trunk Road, P.S.- Maheshtala, Kolkata – 700141, Dist- South 24 Parganas within the local limits of Ward No.31 of Maheshtala Municipality at a total consideration of Rs. 22,55,520/-. As per Clause 9 of the GTC, the OP Company was under obligation to deliver possession of the apartments to the allotees within estimated 36 months from the date of commencement of construction of each tower. It is not in dispute that complainant has paid the instalments time to time and excepting 8th and final instalment of Rs.2,25,552/- which is required to be paid on possession the entire amount has been paid by the complainant to OP No.1. It is not the case of the OP No.1 Company that due to Force Majeure Circumstances, they could not hand over the flat/apartment to the complainant within the time frame. As per terms of the Agreement, the OP No.1 should have handed over the subject flat and car parking space to the complainant within 36 months i.e. within 17.02.2011. However, the OP No.1 could obtain Occupancy Certificate from Maheshtala Municipality on 03.10.2012 in accordance with Section 34(2) of the West Bengal Municipal Rules and intimated the same to the complainant on 17.11.2012 meaning thereby the OP No.1 has failed to keep their promise and in this regard, there has been a total delay of 21 months in issuing the letter of possession from the committed date of delivery of possession.
Be that as it may, in the written version, the OP has taken a stand that this Commission has no authority to entertain the complaint in view of the provisions of Section 12A of the Promoters Act, 1993. For proper understanding of the situation, it would be worthwhile to reproduce the provisions of Section 12A of Promoters Act, 1993 which provides –
“12A(1). No Civil Court shall have any jurisdiction to entertain or decide any question relating to matters arising under any provisions of this Act or the rules made thereunder .....”.
Therefore, the question comes up whether a Forum constituted under the Act be termed as ‘Court’. The statement of objects and reasons and the scheme of the Act make it quite clear that the main objective is to provide for better protection of the interests of the consumer. To achieve that purpose, a cheaper, easier, expeditious and effective redressal mechanism is provided in the Act, by establishing quasi-judicial Forums at the District, State and National level with wide range of powers vested in them. The rigors of the Indian Evidence Act, 1872 and the Civil Procedure Code are not applicable to the proceedings before these quasi-judicial bodies. Therefore, having due regard to the scheme and purpose sought to be achieved, viz. better protection of interest of the consumers, the provisions of the Act have to be given purposive, broad and positive construction, more so, when Section 3 of the Act provides that remedy under the Act is in addition to and not in derogation of any other provisions of law.
In a decision reported in 2016 (3) CHN (Cal) 464 [Md. Akbar Kamal – Vs. – Tabraiz Alam Siddiqui] the Hon’ble Calcutta High Court after considering the several decisions passed by it earlier in the case of Bithi Das – Vs. – Debabrata Majumdar reported in 2014 (2) ICC 853, the decision in the case of Rita Das – Vs. – Jayashri Ghosh reported in 2012 (3) CLJ 291 and several other decisions of Hon’ble Supreme Court has observed that this Commission do have jurisdiction to entertain the complaint.
In a landmark decision reported in AIR 2003 SC 1043 [State of Karnataka – Vs. – Vishwabarathi House Building Co-op Society & Ors.] the Hon’ble Supreme Court speaking on the jurisdiction of the Consumer Fora held that the provisions of the Act are required to be interpreted as broadly as possible and the Fora under the Act have jurisdiction to entertain a complaint despite the fact that other Fora/Courts would also have jurisdiction to adjudicate upon the lis. The Hon’ble Supreme Court proceeded to observe that the jurisdiction of the Consumer Forum should not and would not be curtailed unless there is an express provision prohibiting the Consumer Forum to take up the matter which falls within the jurisdiction of Civil Court or any other Forum established under some enactment. The Hon’ble Court had gone to the extent of saying that if two different Fora have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the Consumer Forum would not be barred and the power of the Consumer Forum to adjudicate upon the dispute could not be negated.
The OP No.1 Company has also taken a stand in their written version that in view of Arbitration Clause in the Agreement, this Commission has no jurisdiction to entertain the complaint in view of provision of Section 8 of Arbitration and Conciliation Act, 1996. The relevant portion of Clause – 19 of GTC is set out below –
“ ........ All disputes and differences relating to or arising out of or in connection with the allotment read with terms and conditions contained herein, shall be mutually discussed and settled between the parties, failing which the matter shall be referred to the sole Arbitration of the Managing Director of the Company, in accordance with the provisions of the Arbitration and Conciliation Act, 1996, whose decision shall be final and binding upon both the parties”.
Basing upon that clause, the Ld. Advocate for OP No.1 has submitted that the dispute cannot be entertained by this Commission and it should be referred to the Arbitrator in accordance with terms and conditions of the Agreement. Ld. Advocate for the OP has drawn my attention in this regard to a decision of Hon’ble Calcutta High Court in the case reported in (2013) 1 CAL L T 546 [Sudarshan Vyapar vt. Ltd. & Anr. - vs. - Madhusudan Guha].
The argument advanced by the Ld. Advocate for OP No.1 in this regard does not appear to be acceptable in view of the provisions of Section 3 of the Act. In the case of DLF Ltd. - vs. - Mridul Estate Pvt. Ltd. reported in III (2013) CPJ 439 the Larger Bench of Hon’ble National Consumer Commission considering several decisions of Hon’ble Supreme Court reported in – (1) the case of SBP & Co - vs.- M/s. Patel Engineering Company Ltd. & Anr., AIR 2006 SC 450; (2) National Seeds Corporation Ltd. - vs. - M. Madhusudan Reddy & Anr., I (2012) CPJ 1 (SC); (3) Lucknow Development Authority - vs. - M.K. Gupta, III (1993) CPJ 7 (SC) and several other judgements has observed that the Consumer Fora constituted under the C.P. Act are not bound to refer the dispute raised in the complaint on an application filed under Section 8 of the 1996 Act seeking reference of the dispute to an Arbitral Tribunal in terms of valid arbitration clause in the agreement entered into between the parties. The OP in CC/188 of 2010 preferred an appeal in the Hon’ble Supreme Court and the Hon’ble Supreme Court in the case of Rosedale Developers Pvt. Ltd. - vs. - Aghore Bhattacharya reported in (2015) 1 WBLR (SC) 385 has held that the National Commission did not commit any error by holding that the remedy of arbitration available to the complainant does not bar the jurisdiction of the Consumer Fora and the Consumer Fora are not under an obligation to refer the matter to the Arbitral Tribunal.
After amendment to Section 8 of Arbitration Act, 2015 a bunch of applications filed by the developers/builders and in disposing of the same by the Larger Bench of the Hon’ble National Commission reported in III (2017) CPJ 270 (Aftab Singh - vs. - EMAAR MGF Land Ltd. & Anr.) has observed that in the context of consumer jurisprudence, the Hon’ble Supreme Court has not disturbed the earlier opinion regarding the arbitrarily of consumer disputes rendered in the pre-amendment era rather it has affirmed the protection granted to the consumers from private resolution. After a detailed discussion with reference to several judgement of the Hon’ble Supreme Court including the decision reported in (2016) 10 SCC 386 (A. Ayyasamy - vs. - A. Paramasivam & Ors.) the Hon’ble National Commission has arrived at the conclusion that in light of overall architecture of the Consumer Act and Court - evolved jurisprudence, amended Sub Section (1) of Section 8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to arbitration in terms of the arbitration agreement. Consequently, the Hon’ble National Commission reject the arguments on behalf of the builder and hold up that an arbitration clause between the complainant and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the 1996 Act.
The whole dispute centres around relating to delay in delivery of possession. In Clause 8 of the Agreement, it stipulates – “The allottee(s) agrees/agree to make payment of the price and/or the instalments on the due date in the manner mentioned in the provisional allotment letter. Any delay beyond the due date will attract interest @ 15% p.a. for the period of delay upto a maximum 2(two) months of the due date. Part payments will not be accepted after the due dates. The company reserves the right to cancel the allotment, immediately on expiry of the 2(two), months without any reference to the allottee .........”.
Clause-10 of the Agreement deals with compensation for delay in possession which read as follows – “If the company fails to deliver possession of the apartments to the allotees within the stipulated time (subject to the provisions of Force Majeure contained in Clause 9 above except in cases where delivery of possession has been withheld by the company on any of the grounds or reasons stated in these General Terms and Conditions), then it shall pay compensation to such allottees of the apartment effective from the scheduled date of possession till actual date of the delivery of possession of the apartments at the following rates:
i. 2 BHK Apartment Rs.3,500/- per month
ii. 3 BHK Apartment Rs.5,000/- per month”.
The fact remains that the opposite party could not keep their promise to deliver the 3BHK Apartment to the complainant within 36 months as agreed upon. It signifies that there has been a delay in delivery of the apartment as promised and it implies denial of service and the delay in delivery of possession resulted in deficiency in service.
Now, the question comes up whether the amount of compensation of Rs.5,000/- per month for 3BHK flat is adequate in comparison with claim of OP Company of 15% p.a. for default in payment. It is quite evident that the term of this nature is wholly one sided, unfair and not conscionable. The developer charges interest @15% p.a. in the event of delay on the part of purchaser in making payment but seeks to pay Rs.5,000/-p.m. which is less than 3% p.a. of the capital investment. Needless to say, such a term in the GTC encourages the developer to divert the funds collected by them for one project to another project being undertaken by them. Therefore, the interest being charged by the bank and financial institution for financing projects of the builders is many times more than nominal compensation which the builder would pay to the flat buyers in the form of compensation. In fact, the OP No.1 has not even claimed that the entire amount recovered by it from the purchasers was spent on this very project. This gives credence to the allegation of the complainant and his money has been used elsewhere. Therefore, such a practice constitutes unfair trade practice.
Ld. Advocate for the complainant has placed before us a decision of Hon’ble National Consumer Commission in CC/427/2014 [Sri Satish Kumar Pandey & Anr. – Vs. – M/s. Unitech Ltd.]. We find force in such submission. Therefore, relying upon the decision referred above and the facts and circumstances of the case, we think that a compensation in the form of interest @ 15% p.a. should be paid over the amount already paid by the complainant from the committed date of delivery of possession i.e. from 17.02.2011 till the date of notice of possession i.e. till 17.11.2012 (i.e. delay for 21 months in total after obtaining the Occupancy Certificate on 03.10.2012).
The evidence on record also speaks that complainant has failed to pay the instalments in time. It reveals that there is 237 days delay in making first instalment along with overdue amount totalling Rs.3,36,136/-, there is 22 days delay in making 2nd instalment, there is 105 days delay in making 3rd instalment and there is 36 days delay in making 6th instalment along with the overdue amount. Accordingly, the demand for payment of possession of Rs.4,09,546/- along with Rs.57,213/- towards the overdue interest against the payment received beyond the due dates interest calculating till 15.11.2012 as per the agreement does not appear to be unjustified.
The Complainant took a plea that OP No.1 did not complete the flat in habitable condition. In this regard, the complainant has spell out his grievances in Paragraph-19 of the petition of complaint. However, the complainant did not take any pain to prove the alleged shortcomings on the part of developer by appointing any technical person like Engineer Commissioner. The record reveals that during the pendency of the case, the complainant filed an application being IA/195/2019 whereby he has made a prayer for appointment of an Advocate to ascertain whether the flat in question is in habitable condition or not. The said application was rejected simply on the ground that an Advocate cannot be treated as expertise within the purview of Section 13(4) of the Act. Therefore, the allegation made by the complainant in Paragraph-19 of the petition of complaint could not succeed.
On evaluation of materials on record, it transpires that the complainant being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP No.1 on consideration and OP No.1 has failed to fulfil their part of obligations as per GTC and thereby deficient in rendering services towards the complainant within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. Therefore, the complainant is entitled to some reliefs. In
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our view, direction upon the OP No.1 to deliver possession and to execute the Sale Deed within 60 days on receipt of balance amount as per notice of possession (final demand for payment of possession dues and demand for payment of dues on account of overdue interest and bank charges amounting to Rs.4,09,546/- and Rs.57,213/- respectively (Annexure-A and Annexure A/1) to the notice of possession dated 17.11.2012 will meet the ends of justice. Despite payment of almost entire consideration amount, when the complainant was deprived from having a roof of his own over his head within the time frame, certainly it caused tremendous mentally agony and harassment for which the complainant is entitled to compensation and considering the loss suffered by him, we assess the compensation in the form of simple interest @ 15% p.a. from committed date of possession i.e. from 18.02.2011 till the date of notice of possession i.e. 17.11.2012 (for 21 months). Under compelling circumstances, the complainant has to knock the door of a Forum constituted under the Act and therefore, complainant is entitled to litigation cost which we quantify at Rs.10,000/-. With the above discussion, we dispose of the complaint with the following directions – i. The Opposite Party No.1 is directed to deliver Letter of Possession and to execute the Deed of Conveyance in respect of the flat and car parking space as per Agreement (GTC) in favour of complainant within 90 days from date subject to payment of the amount as mentioned in Annexure-A & A/1 to the notice of possession dated 17.11.2012; ii. The Opposite Party No.1 is directed to pay compensation in the form of simple interest @ 15% p.a. over the amount already paid from the committed date of possession i.e. from18.02.2011 to 17.11.2012; iii. The Opposite Party No.1 is directed to pay Rs.10,000/- as cost of litigation to the complainant; iv. The balance amount payable by the complainant, if any, shall be adjusted by OP No.1 out of the compensation payable to them in terms of this order. The balance compensation, if any, shall be paid at the time of offering possession of the flat to the complainant, in terms of this order.