Source: http://consumerawakening.com/land-details.php?land_id=70
Timestamp: 2019-04-21 06:20:27+00:00

Document:
Consumer Protection Act, 1986 — Sections 2(1)(g), 2(1)(r), 21(a)(ii) — Housing — Booking of flat — Non-delivery of possession — Deficiency in service — Unfair trade practice — State Commission partly allowed complaint — Hence appeal — There was no construction activity by OP-builder — Approval had not been obtained from Government authorities — It was their duty to ensure that before accepting amount of booking, they should have laid down clear-cut time schedule within which property was to be delivered to persons making booking of property — There is no evidence of any force majeure conditions — Refund of deposited amount along with 18% p.a. interest, directed.
For the Appellants : Mr. Rajat Bhardwaj, Advocate.
For the Respondent : Mr. Abhinit Taneja, Advocate.
Dr. B.C. Gupta, Member—These two first appeals filed under Section 19 read with Section 21(a)(ii) of the Consumer Protection Act, 1986, arise out of the impugned order dated 7.5.2012, passed by the U.T. Chandigarh State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in Consumer Complaint No. CC-66/2011, filed by the complainant Dr. Ambuj Chaudhary against the Opposite Party (OP), M/s. Omaxe Limited, Builder/Developer, vide which, the said complaint was allowed and the OPs were directed to refund the sum deposited with them by the complainant along with interest and compensation. The complainant has challenged the impugned order, seeking enhancement of compensation awarded by the State Commission, whereas the OP have sought dismissal of the consumer complaint upon various grounds.
to refund the deposited amount, i.e., Rs. 16,57,322 along with interest @18% from the date of deposit till realisation.
to pay Rs. 24,315 as insurance paid by the complainant for the insurance of his home loan.
to pay Rs. 8,65,000 as rent paid by the complainant.
to pay Rs. 5,00,000 as damages suffered by the complainant on account of escalation of costs.
to pay punitive damages to the extent of Rs. 2,00,000.
to pay compensation to the tune of Rs. 2,00,000 for mental agony and harassment suffered by the complainant.
3. It was explained that the complainant had hired a rented accommodation where he stayed with effect from 1.4.2005 to 31.3.2008 and a payment of Rs. 8,65,000 had been made as rent by the Fortis Hospital, where he was working.
4. The complaint was resisted by the OPs Builders by filing a written statement before the State Commission, saying that the complainant failed to make payment of the instalments as per the payment plan after making the initial deposit with them. Despite issuing reminders from time to time, the said instalments were not paid. Even then, the OPs refrained themselves from cancelling the allotment and forfeiting the earnest money deposited by him. The OPs stated that the development work on the project was in full swing and the possession will be offered as per the agreed terms and conditions. In so far as raising of loan etc. for making payment was concerned, the OPs were not liable in any manner on that account. The OPs maintained that all allegations levelled against them were baseless and there was no deficiency in service on their part and the complaint deserved to be dismissed. The OPs also took the preliminary objections that the State Commission had no territorial jurisdiction to deal with the matter. Moreover, the complainant was claiming refund of a sum of 16 lakh and hence, the State Commission did not have the pecuniary jurisdiction to deal with the matter.
The Opposite Parties are directed to refund Rs. 16,57,322, deposited by the complainant, along with simple interest @ 6% p.a. from 1.4.2011, till realisation.
The Opposite Parties are directed to pay to the complainant, compensation for delay @ 5 per sq. ft. of the super area per month, as per Clause 28(e) of the agreement Annexure C-6 from 1.4.2011 till realisation.
The Opposite Parties are further directed to pay compensation, to the complainant, in the sum of 1 lac, for mental agony and physical harassment, caused to him, as indicated in paragraph number 16 above.
The Opposite Parties are further directed to pay to the complainant costs of litigation to the tune of 20,000.
6. Being aggrieved against the above orders of the State Commission, both the parties have filed the present first appeals. The complainant/appellant has demanded that interest @18% p.a. should be granted on the amount deposited by him from the date of deposit till realisation. In addition a sum of Rs. 3,95,241 paid by the complainant on account of interest and insurance to the Bank should be ordered to be paid to them. A sum of Rs. 8,65,000 paid on account of rent should also be allowed to be paid to him and litigation cost of Rs. 20,000 should be allowed too. On the other hand, the OP Builder stated in their appeal that since the complainant failed to pay his dues within time, the consumer complaint should be dismissed and the order passed by the State Commission set aside.
7. During arguments, the learned Counsel for the OP, Omaxe Limited, stated that as per the impugned order, compensation for delay @ 5 per sq. ft. of super area per month had been allowed to the complainant, although he had not made any prayer to that effect. The relief allowed by the State Commission was, therefore, much more than that requested by the complainant. The grant of compensation @1 lakh for mental agony etc. was also on the higher side. The learned Counsel has drawn attention to the schedule of payment as contained in the agreement dated 19.3.2009, saying that the complainant had failed to make payment as per the payment plan, despite sending many letters to him. The order passed by the State Commission was, therefore, not in accordance with law and should be set aside.
8. The learned Counsel for the complainant, however, stated that the OP Builder had failed to honour the terms and conditions of the agreement, as they could not provide the flat in question, within a period of 18 months, or within an extended period of 6 months from the date of the agreement, as laid down in Clause 28(a) of the agreement. Taken from 19.3.2009, the period of 18 months had expired on 19.9.2010. The State Commission had taken an erroneous view in allowing interest with effect from 1.4.2011 to them. The said interest should have been allowed from the date of deposit. Moreover, keeping in view the principles laid down by the Hon’ble Supreme Court in the case, Ghaziabad Development Authority v. Balbir Singh, II (2004) CPJ 12 (SC)=III (2004) SLT 161, the complainant was entitled to interest @ 18% p.a., based on the facts and circumstances of the case. Moreover, since the complainant had made payments of huge amounts as interest to the Bank, he was entitled to be reimbursed the entire amount of interest. As per the documents produced along with the written arguments, the complainant had paid a sum of 6.5 lakh as interest already.
9. In his written arguments, it has been stated on behalf of the complainant that the State Commission relied upon Clause 28(f) of the agreement and had allowed interest @6% p.a. only, whereas the said clause was to be applied in those cases, where the project had been delayed due to force majeure conditions or the reasons beyond the control of the company. In the present case, there were no such conditions and hence, the OP builder was liable to pay much more interest to the complainant than that allowed by the State Commission. In the written arguments as well, the complainants stated that in accordance with the view taken by the Hon’ble Supreme Court in Ghaziabad Development Authority v. Balbir Singh (supra), interest should be allowed from the date of deposit of the amount in question. Moreover, the complainant was entitled to be reimbursed the payments already made as payment of interest and payment of rent to the landlord, as they had produced documentary evidence in lieu of having made such payments.
10. I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.
11. The first issue that merits consideration in the present case is with regard to the territorial and pecuniary jurisdiction of the State Commission to deal with the matter.
12. While discussing the issue of territorial jurisdiction, the State Commission stated that the complainant had obtained loan from the IDBI Bank Limited for making payment for the flat and a tripartite agreement had been executed between the parties at Chandigarh, which was duly signed by the complainant, the OP Builder and also the representative of the Bank. In this way, a part of the cause of action had arisen at Chandigarh and hence, the State Commission had territorial jurisdiction to entertain and decide the complaint. There are no grounds to disagree with this view taken by the State Commission. It is further observed that the regional office of the OP builder is also situated at Chandigarh. In accordance with Section 17(2) of the Consumer Protection Act, 1986, the consumer complaint could be instituted where the OP builder carried on business or had a branch office. Since the OP Builder had a regional office in Chandigarh, which in all probability would be the nearest branch office from the site of the project, the complaint could have very well been instituted at Chandigarh. It is held, therefore, that the State Commission of UT Chandigarh had the territorial jurisdiction to deal with the consumer complaint.
13. The State Commission have also discussed the issue of pecuniary jurisdiction in their order and observed that the complainant had prayed for refund of the deposited amount of Rs. 16,57,322 along with interest @18% p.a. from the date of deposit along with Rs. 8,65,000 as rent paid by his employer and compensation under various heads. In this way, the total claim made by the complainant was well above 20 lakh and hence, the State Commission had pecuniary jurisdiction to deal with the matter.
14. The contention of the OP builder does not have any legal force on this issue as well, because the pecuniary jurisdiction has to be determined in accordance with the value of the goods or services and compensation, if any, claimed in accordance with Section 17(1)(a)(i) of the Act. It is held, therefore, that the State Commission took a correct view that they had pecuniary jurisdiction to deal with the matter.
15. The main issue that merits consideration in the case is whether there has been any deficiency in service on the part of the OP towards the complainant, in not delivering the possession of the property in accordance with the terms and conditions of the agreement, although they had received almost the entire consideration for the said property. The facts on record make it clear that the initial deposit of 2.5 lakh was accepted by the OP Builder on 24.5.2006. Another sum of Rs. 50,000 was also given to them on 6.6.2006. As stated by the complainant, the possession of the flat was to be given to the complainant within 18 months of the date of the booking, which comes to 24.11.2007. The OP Builder have not been able to explain anywhere, as to how they accepted the initial deposit from the complainant, if they were not in a position to deliver possession of the property within a time bound frame. From the facts and circumstances on record, it is abundantly clear that there was no construction activity by the OP builder at that time. The OP builder cannot take advantage of the situation by simply saying that the statutory approvals had not been obtained from the Government Authorities by that time. It was their duty to ensure that before accepting the amount of booking, they should have laid down a clear-cut time schedule, within which the property was to be delivered to the persons making booking of the said property. The State Commission did consider this aspect of the case, but concluded that since the document relating to the payment plan had not been signed by the parties, the same could not have been given effect to. The State Commission based their judgment, relying upon the provisions of the agreement dated 19.3.2009. Even if the contention of the State Commission on this account is correct that there was no signed agreement between the parties for delivery of possession within 18 months of the date of booking, it is clear that the OPs had no right to accept payment from the interested parties, if they were not in a position to ensure delivery of the property as per a time-bound schedule. The plea taken by the OP Builder that the complainant failed to make payment of instalments to them after the initial booking, does not cut any ice, because the OP builder has not been able to establish that they could have offered possession of the property, had the instalments been paid in time by the complainant. The OP Builder are, therefore, debarred from taking advantage of the situation if the complainant failed to make payments as per the original payment plan dated 13.7.2006.
16. Now, coming to the agreement dated 19.3.2009, it has been clearly laid down in Clause 28(a) of the said agreement that the possession was to be delivered within 18 months from the date of the signing the agreement between the parties, or within the extended period of 6 months, subject to force majeure conditions. It is a fact established on record that the OP builders also failed to honour the commitment made with the buyer as per the terms and conditions of the said agreement. The OP builder have not been able to explain, if there were any force majeureconditions, which prevented them from giving delivery of the possession in time. They have simply stated in the written statement to the complaint filed by them that the physical possession will be offered to the complainant expeditiously. The said reply dated 9.1.2012 is clearly beyond a period of 24 months from the date of the agreement. The only contention raised in the reply is that the complainant failed to make payment of the instalments in time. As already stated, the original payment plan had been given on 13.7.2006, whereas the agreement was got signed on 19.3.2009. It is clear, therefore, that even if the payments were not made as per the original payment plan, the complainant cannot be held to be at fault, because the possession of the property could not be offered, even in accordance with the terms and conditions of the agreement, made almost after a period of 3 years, i.e., on 19.3.2009. A copy of the payment plan has been reproduced in para 5 of the agreement which says that 15% of the basic sale price was to be paid at the time of booking, another 15% was to be paid within 30 days of the booking, and the rest of the instalments were payable at further intervals of 60 days from the date of booking. Since the date of booking is 24.5.2006, whereas the agreement was entered on 19.3.2009, such payment plan does not have any relevance, because there is no correlation between the payment schedule and the pace of construction. It shall be against all cannons of justice, if payment is received as per some time-linked plan, but the construction of the project is inordinately delayed.
18. It is clear from the above clause that simple interest @6% p.a. is to be paid by the OP Builder to the complainant for the period of delay, only when the project was delayed for force majeure reasons, or for reasons beyond the control of the company. In the present case, there is no evidence of any force majeure conditions etc. and hence, the State Commission have taken an erroneous view that the complainant was entitled to the grant of interest @6% p.a. only.
19. Similar issues have been discussed in a number of landmark judgments made by the Hon’ble Supreme Court and this Commission as well. As stated already, in the case, “Ghaziabad Development Authority v. Balbir Singh” (supra), it has been made clear that rate of interest @18% p.a. cannot be granted in each and every case and the same has to be determined according to the facts and circumstances of each case. It is to be seen, therefore, whether in the facts and circumstances of the present case, the complainant is entitled for the grant of higher rate of interest.
20. A perusal of the orders recently passed by this Commission reveals that in Unitech Ltd. v. Vivek Prakash, FA/125/2015, decided on 13.2.2015, it was held that the grounds to support the plea of Force Majeure were fake. This Commission upheld the order passed by the State Commission, granting interest at the rate of 18% per annum from the date of deposit till realization. In“Subhash Chander Mahajan & Anr. v. Parsvnath Developers Ltd., II (2014) CPJ 719 (NC)=CC/144/2011, decided on 5.5.2014, another Bench of this Commission ordered payment of interest at the rate of 18% per annum from the date of deposit till realization. In Swarn Talwar & Ors. v. United Ltd., CC No. 347/2014, decided on 14.8.2015 and allied matters, this Commission ordered payment of simple interest @18% p.a. as a comprehensive, all inclusive compensation. In “Ravi Kumar Rajoria & Anr. v. Unitech Ltd. & Ors., CC No. 362/2014, decided on 25.5.2016 and allied matters, the total consideration amount deposited by the complainants was ordered to be paid back with interest @18% p.a. from the date of receipt till realisation. In addition, compensation for harassment was also awarded. In Puneet Malhtora v. Parsvnath Developers, II (2015) CPJ 18 (NC)=CC/232/2014 decided on 29.1.2015, this Commission also ordered to refund the amount deposited by the complainant along with interest on the amount @ 18% p.a. from the date of deposit till realisation.
21. The overall facts and circumstances of the present case bring out that the builder is insisting that the money should have been deposited with them, based on the payment plan given in the year 2006, although they themselves entered into an agreement with the complainant after a gap of almost 3 years, i.e., on 19.3.2009. Even after signing the said agreement they were not able to deliver the property as per the terms and conditions of the said agreement, not to talk of understanding reached by them with the complainant as early as in the year 2006. It shall, therefore, be in the interest of justice that the money deposited by the complainant is returned to him along with interest @18% p.a. from the date of deposit till realisation in accordance with the view taken in the orders cited above. It is made clear that the award of such interest shall amount to providing all-inclusive comprehensive compensation to the complainant. The first appeal, FA No. 496/2012 is, therefore, allowed and the order passed by the State Commission is modified as stated above. The other appeal, FA No. 300/2012 filed by the OP Builder is ordered to be dismissed. There shall be no order as to costs.

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