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TechTiers IT Solutions Private Limited v/s Emaar MGF Land Limited through its Managing Director & Others

    Complaint Case No. 329 of 2018

    Decided On, 28 September 2021

    At, Union Territory Consumer Disputes Redressal Commission UT Chandigarh

    By, THE HONOURABLE MR. JUSTICE RAJ SHEKHAR ATTRI
    By, PRESIDENT
    By, THE HONOURABLE MRS. PADMA PANDEY
    By, MEMBER & THE HONOURABLE MR. RAJESH K. ARYA
    By, MEMBER

    For the Complainant: Navjot Singh, Proxy for Sandeep Bishnoi, Advocates. For the Opposite Parties: Sanjeev Sharma, Advocate.



Judgment Text

Raj Shekhar Attri, President

It is the case of the complainant-company that its Director namely Mr.Harpreet Singh Chatha, used to visit India from USA, from time to time and was constrained to book various hotels for his stay in India. Since, he was eligible for a flat for his residential purposes, as such, the complainant desired to purchase a residential unit for him. In order to cater the above need, on 28.01.2008, the complainant booked unit bearing no. no.L1-F05-503, measuring 1750 square feet, in a project launched by the opposite parties under the name and style ‘The Views”, Sector 105, SAS Nagar, Mohali, Punjab (in short the unit), total sale price whereof was fixed at Rs.56.30 lacs. Allotment in respect of the said unit was made vide letter dated 03.03.2008, Annexure OP-5. As per demands raised by the opposite parties, total amount of Rs.48,09,305/-, stood paid by the complainant, from 28.01.2008 to 28.01.2014, yet, possession of the said unit was not delivered by 02.03.2011 i.e. within a period of 36 months from the date of allotment (03.03.2008), as envisaged under Clause 21.1 of the Agreement dated 09.04.2008 (Annexure C-3). It has been stated that the opposite parties failed to give the reasons for non-delivery of possession of the unit by the committed date. It has been averred that there has been a gross violation of the provisions of Punjab Apartment and Property Regulation Act, 1995 (PAPR Act) on the part of the opposite parties.

By stating that the aforesaid act and conduct of the opposite parties amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainant seeking directions to the opposite parties to refund the entire amount paid alongwith interest, compensation, litigation expenses etc.

The claim of the complainant has been contested by the opposite parties on numerous grounds, inter alia, that the complainant did not fall within the definition of consumer, as the unit in question was purchased for commercial purpose; that the resolution dated 02.01.2008 placed on record by the complainant wherein it has been stated that the unit in question has been purchased for the Director of the company-Mr.Harpreet Singh Chatha, has been forged and fabricated; that at the time of purchase of the unit in question a resolution dated 01.12.2007 had been submitted by the complainant wherein it has been stated that the unit in question is being purchased for the residential flat/guest house of the company; that even if the unit in question was purchased for Director of the company then also it amounts to commercial transaction; that in the face of arbitration clause contained in the agreement, this consumer complaint is not maintainable; that this Commission did not vest with pecuniary and territorial jurisdiction; that the clause with regard to period of possession contained in the agreement clearly says that it was only proposed that possession will be delivered within a period of 36 months from the date of allotment, subject to force majeure circumstances, as such, time was not the essence of contract; that for any delay in offering possession, interests of the complainant were safeguarded by way of penalty clause contained in the agreement; that possession of the unit in question was offered to the complainant vide letter dated 30.08.2018, Annexure OP-7, after obtaining partial completion certificate dated 27.07.2018, which fact stood concealed by the complainant; that the parties are bound by the terms and conditions of the agreement and since there is no provision of refund and on the other hand only delayed penalty is payable for the period of delay, as such, the complainant is not at liberty to seek refund of the amount paid; and that the price of the unit in question is Rs.64,26,958/- and not Rs.56.30 lacs as claimed by the complainant.

On merits, purchase of the unit in question by the complainant, in the manner narrated in the complaint; amount received towards the unit in question, as mentioned in the complaint; and that possession of the unit was not delivered by the committed date i.e. 02.03.2011 has not been disputed by the opposite parties. Prayer has been made to dismiss the complaint.

This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, the parties have adduced evidence by way of affidavits and also produced numerous documents including written arguments by the parties, wherein they have reiterated their contentions.

It is significant to mention here that during pendency of this complaint, the complainant moved application bearing no.495 of 2018, whereby request was made to amend its prayer as under, which was allowed by this Commission:-

“a. To direct the opposite parties to refund the amount of Rs.48.09 lakhs inclusive of service tax alongwith interest @6% per annum from the date of making the payments till realization;

b. To pay Rs.3,50,000/- (Rupees Three Lakhs Fifty Thousand Only) on account of compensation for causing mental tension, harassment and mental agony to the complainant;

c. To pay Rs.16,84,295/- (Rupees Sixteen Lakhs Eighty Four Thousand Two Hundred Ninety Five Only) towards expenses incurred by stay of Mr Harpreet Singh Chatha, Director of the Company a various hotels at Chandigarh

d. To pay cost of litigation Rs.50,000/- (Rupees Fifty Thousand Only)

e. To pay punitive cost as assessed by Hon'ble Commission.

Any other relief which this Hon'ble Commission may deem fit in the peculiar facts & circumstances of the case and to which the complainant is found entitled to may also be granted, in favour of the complainant.”

We have heard the contesting parties and have gone through the entire record of the case, including the written arguments, very carefully.

The first question, which needs to be decided by this Commission is, as to whether the case of the complainant falls under the purview of Consumer Protection Act or not. The complainant has placed on record Original Special Resolution passed by its Board of Directors on 02.01.2008, Annexure C-1, wherefrom it is evident that the company had resolved to book a residential unit, especially for the residence of one of its Directors namely Mr.Harpreet Singh Chatha. Thus, at this stage, now the question, which arises for consideration is, as to whether, the unit so booked by the complainant for the residence of its Director(s) could be said to be booked for commercial purposes, as is claimed by the opposite parties. It may be stated here that the term 'consumer' as defined in Section 2(1)(d) of the Consumer Protection Act, 1986, under which this complaint has been filed, excludes from its ambit, the person who purchases goods for resale or for any commercial purpose. Therefore, only in case, the unit in question had been purchased for re-sale or for commercial purpose, the complainant will not be a consumer and, therefore a consumer complaint will not be maintainable. On the other hand, in our considered opinion, if a residential flat/plot is purchased by a company for the personal residential use of its Director/employees, the same cannot be linked to the regular profit generating business activities of the company. The said house/flat is in no way an aid to assist or promote the business and does not generate any business revenue or profit for the company. Our this view is supported by the observations made by the Hon’ble National Commission in M/s. Atul Aggarwal & Sons Vs. M/s. Mercedes Benz India Pvt. Ltd., First Appeal No. 133 of 2014, decided on 24.06.2020. Relevant part of the said order reads as under:-

“For the reasons stated hereinabove, and in view of the decision of the Hon'ble Supreme Court in Lilavati Kirtilal Mehta Medical Trust (supra), the reference is answered as follows:

1. It is the purpose for which the residential plot / house is booked / purchased, which is material for determining whether the purchaser is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. The legal status of the purchaser, be it an individual, a partnership, an Association of Persons, a Trust, a Society or a Company is immaterial for such determination.

2. If a house / residential plot is booked / purchased by a company for the residential use of its Directors / employees the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking / purchase is concerned.

3. If a house / residential plot is bought / booked by a company as a part of its business activities and such purchase / booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act as far as such a purchase / booking is concerned.

The view taken by this Commission in Springdale Core (Supra) would equally apply to the purchase of a vehicle by a company or a partnership firm. ”

Similar observations were made by the Larger Bench of the Hon’ble National Commission in Crompton Greaves Limited & Anr. Vs. Daimler Chrysler India Private Limited & Ors. Consumer Complaint No.51 of 2006, decided on 08.07.2016, and the following view was taken:-

“4. The term ‘commercial purpose’ has not been defined in the Consumer Protection Act and as held in Laxmi Engineering Works v. P.S.G. Industrial Institute [(1995) 3 SCC 583], in the absence of a statutory definition, we have to go by its ordinary meaning. ‘Commercial’ denotes ‘pertaining to commerce’ (Chamber’s Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile, having profit as the main aim” (Collin’s English Dictionary) and the word ‘commerce’ means “financial transactions, especially buying and selling of merchandise on a large scale” (Concise Oxford Dictionary)”.

5. …. The acquisition of the goods or the hiring or availing of services, in order to bring the transaction within the purview of section 2 (1) (d) of the Consumer Protection Act, therefore, should be aimed at generating profits for the company or should otherwise be connected or interwoven with the business activities of the company. The purpose behind such acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or services”.

xxxx………………..

For the reasons stated hereinabove, the issue referred to the larger Bench is answered as follows:-

(a) If a car or any other goods are obtained or any services are hired or availed by a company for the use/personal use of its directors or employees, such a transaction does not amount to purchase of goods or hiring or availing of services for a commercial purpose, irrespective of whether the goods or services are used solely for the personal purposes of the directors or employees of the company or they are used primarily for the use of the directors or employees of the company and incidentally for the purposes of the company.

(b) The purchase of a car or any other goods or hiring or availing of services by a company for the purposes of the company amount to purchase for a commercial purpose, even if such a car or other goods or such services are incidentally used by the directors or employees of the company for their personal purposes.”

In the present case also, it is evident from the Original Special Resolution passed by the Board of Directors on 02.01.2008, Annexure C-1, placed on record by the complainant that the company has purchased the unit in question, especially for the residence of one of its Directors namely Mr.Harpreet Singh Chatha. Thus, it leaves no doubt with this Commission to hold that the unit in question was purchased by the complainant for the residential use of its Director aforesaid and, as such, it is a consumer within the meaning of Section 2(1)(d) of the Act, especially, when there is no contrary evidence to prove that the said purchase has any close and direct nexus with the regular profit generating activities of the company.

To buttress the case of the opposite parties, their counsel contended that the aforesaid special resolution placed on record by the complainant is forged and fabricated and that at the time of purchase of the unit in question, it had provided copy of resolution dated 01.12.2007, Annexure OP-1, wherein, it was stated that an application be made with some well known and established builders/developers of real estate in India for purchase of a residential flat/guest house for the company. In this regard, it is submitted that the opposite parties failed to apprise this Commission as to what prejudice has been caused to them, in case, in the first board resolution name of the Director, for whom the said unit was purchased by the complainant was not disclosed to them. Secondly, irrespective of the fact that the name of the Director was not mentioned in the said board resolution, yet, the contents thereof (board resolution submitted with the opposite parties) still are sufficient to prove the intentions of the complainant that the motive behind purchase of the said unit was for residential purposes only and it may be for their Director or any other employee. Not only as above, vide Clause 24 of the agreement aforesaid, it has been agreed to between the parties that the said unit will be used for residential purposes only. Relevant part of the said clause is reproduced hereunder:-

“PERMITTED USE

24.1 The Allottee agrees undertakes and commits that the Apartment allotted to the Allottee can be used only for residential purposes and the Allottee hereby undertakes to use the Apartment for residential purpose only and not for any other purpose whatsoever. However, pursuant to allotment, if the Allottee uses or is found to be using the Apartment for any purpose, other than residential purpose, which is not in consonance with allotment, or is detrimental to the public interest, then such violation of such specified use shall be treated as breach of the terms of this Agreement. In such an event the Company shall, at its sole discretion, be fully entitled to cancel the allotment and forfeit the entire amount paid by the Allottee till the date of such cancellation. Pursuant to such cancellation, the Allottee shall have no right, title or interest whatsoever in the Plot”.

Thus, when after receipt of the board of resolution aforesaid by the opposite parties in the year 2007 from the complainant, the parties vide clause 24.1 of the agreement had agreed that the unit in question was to be used for residential purpose only, as such, now the opposite parties cannot take a contrary stand, to defeat the claim of the complainant. In this view of the matter, contention raised by counsel for the opposite parties being devoid of merit, stands rejected.

The next question that falls for consideration is, as to whether, in the face of existence of Arbitration clause in the agreement, jurisdiction of this Commission is barred, as has been contended by the opposite parties? 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 Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements between the buyer 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 13.02.2018. 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 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection taken in this regard stands rejected.

Now we will deal with the objection taken by the opposite parties with regard to pecuniary jurisdiction. It may be stated here that this complaint has been filed under the Consumer Protection Act, 1986, under which, for determining pecuniary jurisdiction, this Commission is required to take into consideration the value of the goods and compensation claimed if any, by the complainant. In the present case, as stated above, the complainant moved application-bearing no.495 of 2018, whereby request was made to decrease the rate of interest sought for, from 18% p.a. to 6% p.a. in order to bring its case within the pecuniary jurisdiction of this Commission. The said application was allowed by this Commission vide order dated 11.09.2018, which remained unchallenged by the opposite parties and as such has attained finality. Under these circumstances, if the value of the unit purchased by the complainant and compensation claimed are clubbed together, the same exceeds Rs.20 lacs and fell below Rs.1 crore. In this view of the matter, this Commission has pecuniary Jurisdiction to entertain and decide this complaint. Objection taken by the opposite parties, as such, stands rejected.

Now coming to the objection raised with regard to territorial jurisdiction, it may be stated here that it is settled law that even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court/Tribunal/Fora within the territorial limits of which that occurs. In the instant case, it is evident that application form dated 19.02.2008, Annexure OP-3, was received by the opposite parties at SCO 120-122, 1st Floor, Sector 17-C, Chandigarh. Furthermore, even the agreement dated 09.04.2008, Annexure C-3, in respect of the unit in question was also executed at Chandigarh, meaning thereby that the Company was actually and voluntarily residing and carrying on business from its Office at Chandigarh and personally work for gain thereat. Thus, it is held that this Commission at Chandigarh has got territorial jurisdiction to entertain and decide this complaint. Objection taken by the opposite parties, thus, stands rejected.

As far as objection taken by the opposite parties to the effect that time was not the essence of contract, it may be stated here that, in the absence of any force majeure circumstances having been faced by the opposite parties, they were legally bound to deliver possession of the unit in question, by the committed date i.e. by 02.03.2011 (within a period of 36 months from the date of allotment (03.03.2008) as per Clause 21.1 of the Agreement dated 09.04.2008), but they miserably failed to do so. Other than the Clause referred to above, there is no Clause, which speaks about the period/date for delivery of possession of the unit to the complainant. Under these circumstances, the possession period has to be reckoned from the period specified in the agreement. Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in M/s. Imperia Structures Ltd. Versus Anil Patni and Another, CIVIL APPEAL NO. 3581-3590 of 2020, decided on November 02, 2020, wherein it was held that the period of possession has to be reckoned in terms of the contract/agreement only. Thus, the opposite parties cannot wriggle out of the commitments made vide the Clause aforesaid, with regard to time for delivery of possession of the unit. It is therefore held that time was unequivocally made the essence of contract. In view of above, plea taken by the opposite parties to the effect that time was not essence of the contract, being devoid of merit stands rejected.

There is no dispute with regard to the fact that the unit in question was purchased by the complainant, as far as back in the year 2008; possession whereof was to be delivered by 02.03.2011 i.e. within a period of 36 months from the date of allotment, as per Clause 21.1 of the Agreement dated 09.04.2008. It is also an admitted fact that possession of the unit was not offered by the committed date and on the other hand, it was offered after a huge delay of more than 7 years i.e. only on 30.08.2018, Annexure OP-7. Not even a single reason has been given by the opposite parties, for such a huge delay in offering possession of the unit in question to the complainant.

Be that as it may, as stated above, the fact that there has been an inordinate delay of more than 7 years, in offering possession of the unit in question is not disputed. Under these circumstances, the moot question which falls for consideration is, as to whether, the complainant was obliged to take over possession so offered vide letter dated 30.08.2018 i.e. after delay of more than 7 years of the committed date or not. In our considered opinion that the complainant was not obliged to take over the said possession, offered to it after such a huge delay, even if it is assumed that the same was genuine/complete in all respects. Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in Civil Appeal No.12238 of 2018 (Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan), decided on 02.04.2019, wherein it was held as under:-

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired…….”

Similar view had been taken by the Hon’ble National Commission in M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

Furthermore, in another case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, similar view was taken by the Hon’ble National Commission, as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

In Sujay Bharatiya & Anr. Vs. Unitech Reliable Projects Pvt. Ltd., Consumer Case No.1814 of 2017 decided on 05.07.2018 also, similar view was taken by the Hon’ble National Commission. It is therefore held that in the peculiar facts and circumstances of this case, the complainant is entitled to get refund of t

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he entire amount paid alongwith interest @6% p.a. (as prayed for, though in similar cases, we are granting 12% interest), which will meet the ends of justice. In this view of the matter, plea taken by the opposite parties that they are ready to compensate the complainant for the period of delay in offering possession of the unit stands rejected, having been rendered infructuous. Had the complainant sought possession of the unit in question, then the plea taken by the opposite parties in that regard could have been taken into consideration and compensation for the period of delay would have been granted by this Commission, as per the existing law. It is therefore held that considering the default on the part of the opposite parties in performing their contractual obligation, the complainant cannot be compelled to accept the offer of possession at the belated stage and therefore, is entitled to get refund the entire amount paid by it alongwith reasonable compensation, in the form of interest, as prayed for. Besides this, the opposite parties are also liable to pay compensation for negligence and providing deficient service to the complainant. For the reasons recorded above, this complaint is partly accepted, with costs and the opposite parties, jointly and severally, are directed as under:- To refund the amount of Rs.48,09,305/- to the complainant, alongwith compensation by way interest @6% p.a. (as prayed) from the respective dates of deposit onwards, without deducting any TDS, within a period of 30 days from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 9% p.a. (6% p.a. plus (+) 3% p.a.), from the date of default, till realization. To pay compensation for deficiency in providing service to the complainant and negligence, as also cost of litigation, in lumpsum, to the tune of Rs.1,35,000/- 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.1,35,000/- shall carry interest @9% p.a. from the date of passing of this order, till realization. However, it is further made clear that in case the complainant has availed loan facility from any Bank/Financial Institution, for making payment towards price of the unit in question, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainant. Certified copies of this order be sent to the parties, free of charge. The file be consigned to Record Room, after completion.
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