Raj Shekhar Attri, President
This compliant has been filed by the complainants, seeking refund of the balance amount of Rs.4,28,059/- out of the total amount of Rs.19,28,059/- paid by them to the opposite party, towards purchase of flat bearing no.695 (UGF), measuring 1675 square feet, in the project launched by it, under the name and style ‘Palm Residency’, New Chandigarh, Mohali, Punjab. Allotment letter was issued in respect of the said unit on 23.06.2016, Annexure C-3. It has been stated that since at the time of booking of the said unit on 26.03.2015, it was assured by the opposite party that possession thereof will be delivered within a period of 30 months, as such, under bonafide belief, they paid total amount of Rs.19,28,059/- for the period from 26.03.2015 to 27.07.2016, yet, thereafter, when they visited the project site in April 2018, it was found that it was nowhere near completion even, what to speak of delivery of possession of the said unit. It has been stated that it was also found that though it was assured by the opposite party that the building will comprise only three storied flats, yet, the same was extended to four storied flats. When after waiting for sufficient time, the complainants did not get possession of their unit, they approached the opposite party with a request to refund the amount paid. It has been stated that in the first instance, the opposite party did not accede their request, yet, when notice was served upon it, an oral settlement was arrived at between the parties to the effect that the entire amount paid, will be refunded to the complainants. It has been averred that thereafter, the opposite party refunded only an amount of Rs.15,00,000/- out of Rs.19,28,059/-. Thereafter, the complainants made number of requests to the opposite party to pay the balance principal amount of Rs.4,28,059/- and also interest accrued thereon alongwith interest on the amount refunded to them, but to no avail. Hence, this complaint.
The claim of the complainants has been contested by the opposite party, on numerous grounds, inter alia, that the complainants have concealed material facts from this Commission; that this Commission did not vest with territorial and pecuniary jurisdiction to entertain and decide this complaint; that since joint permission has not been sought to file this complaint as such it needs to be dismissed on this ground alone; that because they have purchased the unit for commercial purposes, as such, they did not fall within the definition of “consumer”; that the complainants were defaulter in making payment towards price of the said unit, as per construction linked payment plan, as a result whereof, letters/reminders dated 20.12.2017, Annexure O-1, 16.02.2018, Annexure O-2 and 07.05.2018, Annexure O-3 were sent to them; that the plan was approved for construction of four storied building; that possession of the unit in question was to be delivered to the complainants within a period of 36 months and not 30 months as alleged by the complainants; that possession of the unit in question, complete in all respects, was offered to them vide letter dated 12.06.2018, Annexure O-4 followed by reminder dated 18.06.2018, Annexure O-5 to execute buyer’s agreement but instead of doing that, they sought cancellation of allotment of the said unit and refund of the amount paid; that since the complainants themselves sought cancellation of the unit in question, as such, forfeiture of earnest money to the extent of 10% of the basic sale price thereof was applicable to their case; that after forfeiture with some discount on 10% amount aforesaid, the remaining amount was paid to the complainants; that since the said amount stood received by the complainants, as such, now no relationship exists between the parties; and that the entire original documents pertaining to the unit in question have also not been returned by the complainants.
On merits, booking of the unit by the complainants and payments made by them as mentioned in the complaint has not been disputed. It has been stated that the project of the opposite party has been got registered under the Real Estate (Regulation and Development) Act, 2016 (in short, the RERA) on 15.09.2017; that later on exemption from the applicability of provisions of the Punjab Apartment and Property Regulation Act, 1995, (PAPR Act) stood granted by the Government on 25.01.2017 and as such, exemption granted will have retrospective effect; that the claim of the complainants seeking higher rate of interest is totally unjustified. Rather, it should be as specified under Section 19 of the RERA i.e. MCLR + 2% interest; that infact the complainants are entitled to interest @6% p.a. only, as no agreement has been executed in this case and that too after forfeiture aforesaid and no interest can be granted to the complainants under PAPR Act. Prayer has been made to dismiss the complaint with costs.
In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and controverted those contained in written reply filed by the opposite party.
The parties led evidence in support of their case. The parties have also filed written arguments.
Accordingly, we have heard the contesting parties and have gone through record of the case, including the rejoinder and written arguments filed by the parties, very carefully.
First, we will deal with the objection taken by the opposite party, to the effect that the complainants 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 party to establish that the complainants had purchased the unit in question to indulge in ‘purchase and sale of plots’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but it failed to discharge its onus. On the other hand, the complainants, in their complaint have clearly stated that the unit in question was purchased by them for their residential purposes. Hence we hold that the complainants are consumers as defined under the Act. In this view of the matter, objection taken by the opposite party stands rejected.
As far as objection taken with regard to territorial jurisdiction of this Commission is concerned, it may be stated here that perusal of application dated 07.04.2015, Annexure C-1, in respect of booking of the unit in question , reveals that the same has been received by the opposite party at Chandigarh, as it bears round stamp of its Chandigarh Office. Furthermore, it is also evident from letters dated 16.02.2018, Annexure A-1 and demand letter dated 07.05.2018, Annexure A-4 have been issued by the opposite party from its Chandigarh Office i.e. SCO No.139-141, Sector 17-C, Chandigarh, meaning thereby that the opposite party was actually and voluntarily residing and carrying on its business, at the said Chandigarh Office for gain. Not only as above, the said fact is further fortified when we perused the information dated 04.01.2021 (at page 38 of the paper book) placed on record by the opposite party itself, wherein the address of the Company has been mentioned as SCO No.139-141, Sector 17-C, Chandigarh-160017 only. Thus, this Commission at Chandigarh has territorial jurisdiction to entertain this complaint. Objection taken by the opposite party in this regard stands rejected.
Now, we will like to deal with the objection raised by the opposite party 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, 1986, under which this complaint has been filed, 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 lakhs but does not exceed rupees one crore. As such, in the present case, if total value of the unit, in question, i.e. Rs.69,64,175/- plus other reliefs claimed, are clubbed together, it exceeds Rs.20 lacs and fell below Rs.1 crore. Thus, this Commission has pecuniary Jurisdiction to entertain and decide this complaint. Objection taken by the opposite party in this regard stands rejected.
There is no dispute with regard to purchase of unit by the complainants in the aforesaid project of the opposite party. It has also not been disputed that despite the fact that substantial amount of Rs.19,28,059/- against the basic sale price of Rs.63,50,000/- i.e. equal to 30%, stood received by the opposite party from the complainants, for the period from 26.03.2015 to 27.07.2016, yet, it failed to execute buyers’ agreement. It is coming out from the record that it was for the first time, vide letter dated 16.02.2018 only (Annexure O-2) i.e. after about 3 years from the date of booking of the unit that the complainants were asked to come for execution of the agreement. For all these years, the opposite party utilized the amount paid by the complainants, without providing them anything. In our considered opinion, the complainants were not obliged to execute the agreement after such a long delay because had they signed the same, they would have tied with another 30 months starting from execution of the said agreement, for delivery of possession of their unit. Thus, the aforesaid act of the opposite party by not executing the agreement, after receipt of amount equal to 25% of the basic sale price of the unit in question, was not only unfair but illegal, which act also contravenes Section 6 (1) of the PAPR Act, which lays a duty on the opposite party to execute the agreements for sale as per law, after obtaining the maximum sale consideration of 25%. It is apposite here to reproduce the said provision: -
“6. Contents of agreement of sale:- (1) Notwithstanding anything contained in any other law for the time being in force, a promoter who intends to construct or constructs a building of apartments, all or some of which are to be taken or are taken on ownership basis, or who intends to offer for sale plots in a colony, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty five per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such apartments, or plots, as the case may be, and the agreement shall be in the prescribed form together with prescribed documents and shall be registered under the Registration Act, 1908 (Central Act No. 16 of 1906) ……….
The opposite party was legally bound under law to execute the agreement and to get the same registered under the Registration Act 1908, after obtaining 25% of the sale consideration, but the said provision has been violated by the opposite party. The opposite party cannot wriggle out of the situation, by taking shelter under the exemption certificate from the provisions of PAPR Act, which was issued in its favour only on 25.01.2017 i.e. much after booking of the unit in question. It has no where been proved that the said exemption will have retrospective effect but in our considered opinion, it will have prospective effect only. The opposite party was deficient in providing service and adopted unfair trade practice on this count.
Now the next question that falls for consideration is, as to by which date, the opposite party was liable to deliver possession of the unit in question to the complainants. Admittedly, the unit in question was booked by the complainants on 26.03.2015, vide application Annexure C-1 and allotment thereof was made vide letter dated 23.06.2016, Annexure C-3. It is also not in dispute that agreement in this case was not executed between the parties and it was for the first time, vide letter dated 16.02.2018 only (Annexure O-2) i.e. after about 3 years from the date of booking that the complainants were asked to come for execution of the agreement, which was never executed. It may be stated here that it has been discussed in preceding part of this order that the opposite party was deficient in providing service and adopted unfair trade practice in not executing the agreement, the moment it had received substantial amount equal to 25% of the basic sale price, and the said agreement has not been executed till date. Thus, in the absence of a specific date of delivery of possession in any of the documents, placed on record, we are of the considered opinion that if we take a reasonable period of three years from the date of booking of the unit i.e. from 26.03.2015, as period of completion of construction and development works at the project site and delivery of possession of the unit in question to the complainants, it comes to 25.03.2018, in view of principle of law laid down by the Hon’ble Supreme Court of India in M/s Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442, relevant part whereof is reproduced hereunder, that will meet the ends of justice:-
‘…… Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract…’
Now the next question that falls for consideration is, as to whether, the opposite party was ready to deliver possession of the unit in question by 25.03.2018 i.e. within a reasonable period of three years from the date of booking thereof or not?. It may be stated here no cogent and convincing evidence has been placed on record, to prove that the construction and development activities including the basic amenities such as roads, electricity, sewerage etc. were completed at the project site by 25.03.2018. It may be stated here that burden to prove that the project has been completed and the area/site, in question, is fully developed or is about to complete, is on the builder/opposite party. It was so said by the Hon’ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. Mere placing on record some latest photographs of the project site, which too reveal that still a lot of work is pending to be done, are of no use to the opposite party.
When confronted with the situation, in order to wriggle out of the situation, Counsel for the opposite party placed reliance on letter dated 12.06.2018, Annexure O-4 and contended with vehemence that though possession of the unit in question, complete in all respects, was offered to the complainants, but they failed to take over the same and on the other hand, sought cancellation thereof, as they needed refund of the amount paid, which was paid to them, after applying forfeiture clause.
On the other hand, Counsel for the complainants vehemently denied receipt of the said offer of possession letter dated 12.06.2018, Annexure O-4 and contended with vehemence that since despite the fact that substantial amount, referred to above, stood received by the opposite party, and on the other hand, neither agreement was executed for a long time i.e. about 3 years of booking nor construction and development activities were completed at the project site till the year 2018 and the visits to the project site revealed that possession could not be delivered in the near future also, as such, they vide email dated 03.07.2018, Annexure A-2, sought refund of the amount paid alongwith interest. It was further contended that despite the fact it was orally committed by the opposite party that the amount paid will be refunded with interest, yet, it has paid part amount of Rs.15 lacs only and the remaining amount alongwith interest is still pending to be paid by it to the complainants.
Thus, at this stage, the question which falls for consideration is, as to whether, possession of the unit in question was ever offered by the opposite party to the complainants or not? It is significant to mention here that, no doubt, in order to prove that possession of the unit was offered to the complainants, the opposite party has placed reliance on letter dated 12.06.2018, Annexure O-4, yet, in our considered opinion, not even a single evidence has been placed on record, to prove that the said letter was actually dispatched and delivered to the complainants. In order to prove the delivery of the said alleged offer letter, upon the complainants, the opposite party was required to place on record the postal receipt and the mode vide which it was dispatched, especially, when there is objection/denial of receipt thereof. Furthermore, the authenticity of letter dated 12.06.2018, Annexure O-4 is doubtful, because it did not bear any letter head of the company. Thus, since, the opposite party has failed to prove on record that the said letter dated 12.06.2018 was ever sent and delivered to the complainants, it is therefore held that the same has no significant value in the eyes of law and cannot be taken into consideration.
Be that as it may, even this much has not been proved that construction and development activities were completed at the project site, before 12.06.2018. It is very strange that in the present case, as stated above, not even an iota of evidence has been placed on record by the opposite party to prove that construction/development works and basic amenities were completed at the project site, before 12.06.2018, when it allegedly offered possession of the unit in question to the complainants. In case, the development/construction activities were undertaken and completed at the project site before 12.06.2018, then it was for the opposite party, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, are completed at the site or not but it failed to do so.
Not only as above, earlier also this Commission has decided number of cases, in respect of the project in question and it has been observed that money had been collected from the prospective buyers, with animus of cheating and fraud, by launching the project and selling units/plots therein by violating the provision of relevant Rules and Regulations, applicable in the State of Punjab. Recently, in Puja Garg Vs M/s Manohar Infrastructure & Constructions Pvt. Ltd., CC No. 278 of 2019, decided by this Commission on 31.03.2021, it has come to our knowledge (when we went through the documentary evidence therein), that despite the fact that as per condition no.v) of the Letter of Intent (LOI) dated 03.05.2013 granted in favour of the company in respect of the project in question, it was directed not to advertise/launch it and not to collect money from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. yet, it violated the same and launched the project and starting selling the plots therein, starting from February 2011, when it was not even the owner of the land underneath the said project. Under those circumstances, the opposite party was held liable for adopting unfair trade practice on this count. Relevant contents of Puja Garg’s case (supra) are reproduced hereunder:
“……..The another valid reason with this Commission to hold that the money has been collected from the complainant and other prospective buyers, with animus of cheating and fraud, which act cannot be cured by obtaining the exemption dated 25.01.2017 from the provisions of PAPR Act, at the subsequent stage, is the contents of Letter of Intent (LOI) dated 03.05.2013 which was granted in favour of the opposite parties in respect of the project in question. In condition no.v) of the said LOI it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans and also exemption under section 44 of PAPR Act is issued by the State Govt. Relevant part of the said condition of LOI is reproduced hereunder:
“v. ….The project shall not be Advertised/launched and no money will be collected from general Public for allotment of land/plot/flat/any space till such time the layout plans/Zoning plans are approved by the Competent Authority and exemption u/s 44 of PAPR Act 1995 is issued by the State Govt….” .
It is further evident from the contents of said LOI that application for setting up the residential project was moved by the opposite parties before the competent Authority, for the first time on 16.09.2011 and project was approved only on 22.03.2013. It is also evident from information dated 23.05.2016 supplied by Chief Town Planner, Punjab, that Change of Land Use was approved for the first time on 31.03.2014 and layout plan was approved only on 06.10.2015. It is also evident from the contents of notification dated 25.01.2017 aforesaid that thereafter also, the opposite parties got the layout plans revised on 21.10.2015. Thus, in the present case, despite the fact that vide condition no.v) of LOI aforesaid, it has been in a very candid manner stated that the project shall not be advertised/launched and money could not be collected from general public for allotment of land, plot etc. without the approval of layout and zoning plans, (which in the present case has been approved only on 21.10.2015) and also exemption under section 44 of PAPR Act is issued by the State Govt. (which in the present case has been issued only on 25.01.2017), yet, the opposite parties violated the same and launched the project and starting selling the plots therein, starting from February 2011, when they were not even the owners of the land underneath the said project. It is therefore held that by launching and selling the project before 25.01.2017, i.e. the date when the said exemption was granted to the opposite parties from the provisions of PAPR Act, they indulged into unfair trade practice and the said practice needs to be deprecated….”
In the present case also, the opposite party has repeated the said violations. However, surprisingly, the Government of Punjab, Department of Housing and Urban Development (Housing II Branch) i.e. the competent Authority was well aware of the fact that the project has been launched and plots/units have been sold to the general public starting from the year 2015 itself (as far as the present case is concerned), without necessary approvals/permissions and huge money has been collected and usurped by the opposite party from the innocent buyers, yet, it did not hear the aggrieved consumers before granting exemption to the project on 25.01.2017 from the provisions of PAPR Act. As such, the said act of the competent authority is against the principles of natural justice; fair play and not binding on the complainants and other prospective buyers. If the competent Authorities failed to take any action under relevant Rules and Regulations against the company, no benefit can be taken out there-from by the opposite party, in this complaint filed by the complainants under Consumer Protection Act, filed for deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite party.
In view of peculiar facts and circumstances of this case, we are of the considered opinion that when the complainants saw that neither agreement has been executed within a reasonable time and had they signed the same in the year 2018, they would have to wait for another three years for possession; nor the opposite party was serious in completing the construction and development activities at the project; and on the other hand, they (complainants) were empty handed till 2018, despite the fact that they started pouring money from the year 2015 itself, they were right in not making further payment and seeking refund of the amount paid with interest. The opposite party cannot expect the complainants to go on making payments, in the absence of development and construction work at the project site. Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date, it cannot expect the allottee(s) to go on paying installments to it. Similar view had also been taken by the Hon’ble National Commission, in Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. Thus, the opposite party by forfeiting substantial amount of Rs.4,28,059/- out of the amount paid by the complainants, indulged into unfair trade practice. Even this much has not been proved by the opposite party, as to under which clause/condition of any document, it was entitled to forfeit the amount of Rs.4,28,059/- out of the deposited amount, especially, when no agreement has been executed between the parties. It is not the proven case of the opposite party that it was ready with possession of the unit in question within a period of 30 months from the date of booking thereof, but the complainants wanted to quit on account of some personal reasons or financial constraints. Whereas, on the other hand, as stated above, it was only when the complainants saw that the opposite party will not be able to deliver possession of the unit for want of construction and development activities, that they sought refund of the amount paid alongwith interest vide email dated 03.07.2018, Annexure A-2, which was never responded by the company.
It is therefore held that since the part principal amount is still lying with the opposite party and at the same time, interest on the entire amount has also not been paid to the complainants, as such, cause of action was still surviving with them, to seek refund thereof, by way of filing this consumer complaint. In this view of the matter, plea taken by the opposite party that its relationship with the complainants ceased, the moment it has refunded the part amount, referred to above, being devoid of merit, stands rejected.
Thus, the fact of the matter is that amount of the complainants remained deposited with the opposite party for quite long time and nothing has been provided to them till 02.07.2018, as a result whereof, they sought refund of the amount paid with interest. Therefore, the complainants are also entitled to interest on the entire deposited amount as held by Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) as follows:-
“9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.”
In our considered opinion, in the peculiar facts and circumstances of this case, if interest @12% p.a. is awarded in favour of the complainants, for the period the amount stood deposited by them with the opposite party, that will meet the ends of justice.
Now coming to the objection taken to the effect that application seeking permission to file joint complai
Please Login To View The Full Judgment!
nt has not been filed by the complainants, as such, it is liable to be dismissed on this ground alone, it may be stated here that because the unit in question stood purchased jointly by the complainants, who are husband and wife respectively, they were not required to file any application seeking permission to file a joint complaint. The view taken by this Commission is supported by the judgment of the Hon’ble National Commission titled as Karnail Singh & 2 Ors. Vs. M/s. Emerald Lands (India) Private Limited & 5 ors., Consumer Case No. 2809 of 2018, decided on 02 Jan 2019, wherein the three complainants who had jointly been allotted plot in a project, moved an application under Section 12(1)(c) of the Act, which was rejected by it saying that it is wholly misconceived and the complaint was treated to have been filed under Section 12(1)(a) of the Act. Relevant part of the said order is reproduced hereunder:- “..The present Complaint appears to have wrongly been filed along with an Application under Section 12(1)(c) of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) on behalf of three Complainants. As all the three Complainants have jointly been allotted Plot No. D-110, admeasuring 1290.98 sq. yards in Imperial Golf Estate at Village Mullanpur and Talwandi Khurd, District Ludhiana (Punjab) by Opposite Party No.1, the Application filed under Section 12(1)(c) of the Act is wholly misconceived and is hereby rejected. The Complaint is treated to have been filed under Section 12(1)(a) of the Act…” For the reasons recorded above, this complaint is partly accepted with costs and the opposite party, is directed as under:- Refund the balance amount of Rs.4,28,059/- to the complainants, alongwith compensation by way of interest @12% p.a., without deducting any TDS, 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.4,28,059/- 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. Pay interest @12% p.a. on the amount of Rs.15 lacs, from the respective dates of deposits thereof, till the date(s) when the same stood refunded to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, it shall be liable to pay interest @ 15% p.a. on the said amount, from the date of passing of this order, till realization. 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.1,50,000/- to the complainants 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.1,50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to Record Room, after completion.