FIRST ADDITIONAL BENCH

     STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
      PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

               Consumer Complaint No.303 of 2017

                                      Date of Institution: 03.05.2017
                                      Order reserved on: 12.04.2018
                                      Date of Decision : 13.04.2018

Mr. Sangram Sandhu son of Sh. Gurlal Singh Sandhu, resident of
House No.61, Sector-28-A, Chandigarh.
2nd Address H.No.1554, Sector-69, Mohali.
                                                      .....Complainant
                        Versus
1.

Puma Realtors Pvt. Ltd., a company incorporated under the companies Act 1956 (An IREO Group Company) having its registered office at no.5, Dhanraj Chambers, 1st floor, Sarbari, New Delhi-110074 and Corporate Office at SCO No.6-8, First and Second Floor, Sector-9D, Chandigarh 160009 (India) through its Managing Director.

2. The Directors, Puma Realtors Pvt. Ltd., a company incorporated under the companies Act 1956 (An IREO Group Company) Corporate Office at SCO No.6-8, First and Second Floor, Sector-9D, Chandigarh 160009 (India).

.....Opposite Parties Complaint U/s 17(1)(a) of the Consumer Protection Act, 1986 (as amended up to date).

Quorum:-

Shri J. S. Klar, Presiding Judicial Member.

Smt. Surinder Pal Kaur, Member.

Present:-

For the complainant : Ms. Narendra Kaur, Advocate For the opposite parties : Sh. Mukesh Pandit, Authorized representative ..................................................................................

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

The complainant has filed this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act"), against opposite parties (OPs) on the averments, OPs floated a scheme for the allotment of residential plots in their upcoming Project i.e. 'IREO Consumer Complaint No.303 of 2017 2 Hamlet', SAS Nagar, Mohali. The complainant was desirous of purchasing a plot within the vicinity of Tricity. The complainant approached OPs for this purpose. He was allotted plot no.80 of 250 square yard, vide provisional allotment letter dated 26.05.2011, in Sector 98, Mohali for basic sale price of Rs.62,64,750/- (@Rs.25,000/- per square yard). External development charges @Rs.1275.10 per square yard of plot area were also charged over and above the basic sale price by OPs from him. He also paid IFMS charges of 350 square yard. Plot buyer's agreement was executed between the parties on 27.06.2011. Till February 23 2015, he deposited total payment of Rs.63,58,756/- under applicable payment plan and few receipts are Annexured as C-3 and C-12. Balance payment was to be paid by complainant to OPs at the time of delivery of possession and registration of sale deed. It is further averred that OPs failed to deliver the possession of the said plot within the stipulated period to him. The complainant has alleged deficiency in service on the part of OPs. As per clause no.11.1 of the plot buyer's agreement, OPs were bound to handover the physical possession of residential plot no.80 within a period of 24 months from the date of execution of the agreement. OPs were entitled to an additional period of six months (grace period) after expiry of 24 months, as per clause 11.1 of the agreement i.e. 27.12.2014, but OPs failed to deliver the possession within scheduled time. The complainant received notice of possession, vide letter dated 04.05.2015 from OPs to the effect that plot was ready for possession Consumer Complaint No.303 of 2017 3 subject to fulfillment of certain conditions i.e. payment of all amounts due, payment of stamp duty, registration charges and incidental expenses, submission of duly filled in and signed registration form, execution of indemnity bond-cum-undertaking and signing of tripartite maintenance agreement. It is further averred that as per payment plan, 5% of BSP and 50% of IFMS amounting to Rs.3,57,091/- was to be paid at the time of possession. Vide letter dated 26.09.2011, OP changed the payment plan from Time linked payment plan to Development linked payment plan and also annexed schedule-I for payments. As per the new schedule, 5% of BSP and 100% stamp duty and registration fee amounting to Rs.3,13,238/- was to be paid at the time of possession. The complainant deposited Rs.2,90,873/- on 06.07.2015 through cheques. In December 2015, OP called complainant for signing of some documents and for completion of formalities for execution of conveyance deed and assured for execution of conveyance deed shortly, but to no effect. In February 2016, complainant visited the site and found that there was no development and even the roads dividing Sectors 97-98 and approach road for reaching the site were not there. The complainant approached OPs immediately and asked about the progress of the project, but OPs intimated verbally that process of mobilization would take some time. It is further averred that OPs have no necessary permission/approval with regard to development of the project, as the documents sent by them to GMADA were having various deficiencies. He asked OPs to provide Consumer Complaint No.303 of 2017 4 the necessary approvals/permissions, but they did not bother to give reply. The service layout plan has got sanctioned on 18.05.2015 by OPs, after issuance of possession letter to him. Even the completion certificate/partial completion certificate in respect of above project has not been issued by competent authority to OPs for this project, hence notice of possession issued by OPs to complainant on 04.05.2015 was baseless. The complainant has alleged deficiency in service and unfair trade practice on the part of OPs and prayed that OPs be directed to refund the amount of Rs.66,49,619/- alongwith interest @10.5% per annum from the actual date of deposit; further to pay compensation of Rs.1,50,000/- for mental harassment and Rs.50,000/- as litigation expenses.

2. Upon notice, OPs appeared and filed their joint written reply and contested the complaint of the complainant vehemently by raising preliminary objections that complaint is false and frivolous. The complainant is under an obligation to receive the final possession of the plot in terms of notice of possession issued by OPs. The complainant admitted the development on the spot, vide letter dated 27.10.2015 and asked OP no.1 to bear the cost of stamp duty, registration charges and incidental expenses. The allegations of complainant are after-thought only. There is an arbitration clause no.33 in the agreement and hence consumer complaint is not maintainable. The relationship of consumer and service provider between the parties has been denied by OPs. The complainant booked the plot for commercial purposes and for investment and is Consumer Complaint No.303 of 2017 5 not consumer of OPs. The complaint is alleged to be barred by time. Any deficiency in service on the part of OPs has been vehemently denied. The compensation can be awarded under Act only, as described in Section 14(1)(d) of the Act. The complaint is without any cause of action available to the complainant. This Commission has no pecuniary jurisdiction to try the complaint. The complaint is also contested even on merits by OPs. The report of Local Commission dated 24.10.2015 has been sidetracked by the OPs showing development and existence of basic amenities in the project. It has been denied that OP no.1 has not been granted the requisite sanctions and approvals by the competent authorities for development of this project. OP no.1 has been exempted from certain conditions including the completion certificate, as per notification issued by Punjab Government in the year 2008. The OPs have controverted the other averments of the complainant by denying any deficiency in service and unfair trade practice on their part. OPs have prayed for dismissal for the complaint.

3. The complainant tendered in evidence his affidavit Ex.C-A alongwith copies of documents Ex.C-1 to Ex.C-24 and closed the evidence. As against it, OPs tendered in evidence affidavit of Sumit Kumar authorized representative of OPs Ex.OP-A alongwith copies of documents Ex.OP-1 to Ex.OP-37 and closed the evidence.

4. We have heard the learned counsel for the parties and also examined the record of the case. The complainant seeks Consumer Complaint No.303 of 2017 6 amendment by filing an application seeking reduction of his claim in this complaint. The complainant seeks to reduce his claim of interest from 18% to 10.5% and litigation expenses from Rs.80,000/- to Rs.50,000/- and compensation from Rs.10,00,000/- to Rs.1,50,000/-. The counsel for OP contested it by contending that there is no such provision to allow it. In view of law laid down by the National Commission in "S.D. Enterprices Vs. National Insurance Co. Ltd. & others" 2017(I)CPJ-527 (NC), this type of amendment in reducing the claim by complainant can be allowed. On the basis of law laid down by the National Commission, this application is allowed and amended complaint is taken on the record. The further point raised by OPs is that there is an arbitration clause in the buyer's agreement between the parties and hence consumer complaint is not maintainable. We find no force in this submission of OPs. The matter has been settled by larger bench of Hon'ble National Commission in consumer complaint no.701 of 2015, decided on 13.07.2017 titled as "Aftab Singh Vs. EMAAR MGF Land Limited and another". The National Commission has held in this authority that an arbitration clause in the afore-stated kind of Agreements between the complainants and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the Arbitration Act, 1996. Against this order of the National Commission, Civil Appeal nos.23512-23513 of 2017 titled as EMAAR MGF Land Limited and another Vs. Aftab Singh" was filed by OP before the Top Court, which has since been dismissed Consumer Complaint No.303 of 2017 7 by the Apex Court, vide order dated 13.02.2018. Consequently, the existence of an arbitration clause is not a bar to resolution of this dispute by the Consumer Forum. Even otherwise, the Apex Court has also so held in "National Seeds Corporation Limited Vs. M. Madhusudhan Reddy and another" 2012(2)CLT-382/383 and in Fair Air Engineers (P) Ltd. vs. N. K. Modi (1996) 6 SCC 385 that Section 3 of C.P. Act gives additional remedy to consumers to avail of his remedy as per his choice. In view of Section 3 of C.P. Act conferring the additional remedy on the consumers, we find no force in this submission of OPs and repel the submission of OPs on this point.

5. The next submission of counsel for OPs is that complainant is not consumer and complainant has purchased the unit for investment purposes. On hearing the submission of counsel for parties and on perusal of record, we find no force in it as OPs developed the residential project wherein complainant purchased the plot. The complainant has pleaded and stated in his affidavit on oath that he was desirous of residential plot within the vicinity in the tricity and opted for it. There is nothing on the record that complainant owned any other properties somewhere else. The OPs failed to discharge the onus on this point that complainant is property dealer and deals in sale and purchase of the property. Consequently, the complainant is held to be consumer by repelling the contention of OPs in this regard. The next point urged by counsel for OPs is that consumer complaint is not maintainable as there is no relationship of Consumer Complaint No.303 of 2017 8 consumer and service provider between the parties. We are not impressed with this submission. Housing construction is a service under the Act and complaint is maintainable in this regard. There is relationship of consumer and service provider between the parties and it is so held by us in this complaint.

6. We have perused the documents on the record. Ex.C-1 is provisional allotment of plot in above project allotted to complainant by OPs on 26.05.2011. Agreement was executed between the parties on 27.06.2011, vide Ex.C-2 on the record recording the terms and conditions of this allotment. Clause 11 of this agreement deals with possession and holding charges and is re- produced as under :

"11. POSSESSION AND HOLDING CHARGES 11.1 Subject to Force Majeure as defined herein, and further subject to the Allottee having complied with all its obligations under the terms and conditions of this Agreement; and not being in default of any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges, and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Plot to the Allottee within a period of 24 (Twenty Four) months from the date of execution of this Agreement ("Commitment Period"). The Allottee further Consumer Complaint No.303 of 2017 9 agrees and understands that the Company shall additionally be entitled to a period of 6 (six) months ("Grace Period"), after the expiry of the said Commitment Period.

11.2 Subject to Clause 11.1, if the Company fails to offer possession of the said Plot to the Allottee by the end of the Grace Period, it shall be liable to pay to the Allottee compensation calculated at the rate of Rs. 50/- (Rupees Fifty only) per sq. yd. of the area of the said Plot ("Delay Compensation") for every month of delay until the actual date fixed by the Company for handing over of possession of the said Plot to the Allottee. The Allottee shall be entitled to payment against such 'Delay Compensation' only after completion of all documentation including registration of the Conveyance Deed.

11.3 Subject to Clause 11.1, in the event of delay by the Company in handing over the possession of the said Plot beyond a period of 12 months from the end of the Grace Period (such 12 months period hereinafter referred to as the "Extended Delay Period"), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) made against the said Plot after adjusting the interest / penalty on delayed payments along with Delay Compensation for 12 months. Such refund shall be made by the Company within 90 days of receipt of intimation to this effect from the Allottee, without any interest Consumer Complaint No.303 of 2017 10 thereon. For removal of doubt, it is clarified that Delay Compensation payable to the Allottee who is validly opting for termination, shall be limited to and calculated for the fixed period of 12 months only irrespective of the date on which the Allottee actually exercised the option for termination. This option of termination may be exercised by the Allottee only up till dispatch of the Notice of Possession by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever, monetary or otherwise shall lie against the Company nor be raised otherwise or in any other manner by the Allottee." The OP was to complete the development within 24 months with further grace period of six months at the most within 2½ years period from the date of execution of agreement dated 27.06.2011. The complainant paid the amounts to OPs and this fact is reflected on the record vide Ex.C-3 to C-12 and the statement of account coupled with it. Ex.C-13 is copy of notice of possession dated 04.05.2015 sent by OPs to complainant. The plan was changed vide Ex.C-14 on 26.09.2011 from time linked payment plan to Development linked payment plan in this case. The complainant paid cheques to OPs vide Ex.C-15 and C-16 for Rs.2,87,964/- and Rs.2909/-. The grievance of the complainant is that OP have not completed the project and there is no completion certificate with OPs as well, despite the receipt of most of the substantial amounts of sale consideration. The complainant relied upon Ex.C-18 addressed to Consumer Complaint No.303 of 2017 11 Executive Engineer PSPCL under RTI Act for obtaining information. Ex.C-23 is copy of letter bearing memo no.2614/CTP dated 13.05.2013 issued by Chief Town Planner Punjab to M/s Puma Realtors for approval of revised layout plan. Affidavit of complainant is Ex.C-A on the record to this effect. The OPs also led evidence by tendering affidavit of Sumit Kumar Authorized person of OPs Ex.OP-A on the record. He proved the copy of resolution Ex.OP-1 to pursue the case. He relied upon notice of possession dated 04.05.2015. He stated that OP tendered the possession to complainant on 04.05.2015, but he has not received the possession allotted property. This witness further stated that complainant wrote letter dated 27.10.2015 expressing his willingness for execution of conveyance deed of the plot in question in his favour. This witness further stated that amenities have been provided in the project by OPs. He testified that complainant has not received the possession despite provision of amenities by OPs therein.

7. From careful appraisal of entire evidence on the record, we have come to this conclusion that plot no.80 was allotted to the complainant in the above project by OPs. The complainant had paid the total amount of Rs.63,58,746/- out of total sale consideration of Rs.66,71,984/- to them. The OPs mainly relied upon notice of possession dated 04.05.2015 to the effect that they have provided amenities in the project, but complainant has not received the possession of the allotted plot. The complainant testified in his Consumer Complaint No.303 of 2017 12 affidavit Ex.C-A that he visited the spot and found that the site was not developed and found the below noted deficiencies therein:

"1. There is no road connectivity.

2. Even the internal roads are still not complete.

3. The boundary wall which was promised has not been completed.

4. There is no water or sewage or Electricity facility available in the colony.

5. The construction of Club house for which payments has been taken by the company is not even started at the site.

6. It seems that the company is in the hurry to offer the possession in order to avoid the penalty clause in the agreement.

7. We have purchased this plot with great hope that your company will offer us a fully developed colony. But it seems that we have been cheated.

8. You are requested to complete all the above said facilities at the site before offering the possession.

9. Please send a copy of approval from GMADA whether you have been allowed to offer possessions of IREO Sector 98 plots or not.

10. Please provide copies of all approvals given by GMADA to the company."

OPs relied upon the sale deeds, which have been executed by the OPs in favour of some other allottees, but this fact ipso facto has not proved this fact that development work has been carried out thereat and the above allottees might have waived the objection of lack of development on the spot and proceeded to seek execution of the conveyance deed in their favour. From perusal of documents and evidence on the record, we find that there is no boundary wall except the adjoining of the entrance gate. The submission of counsel for OPs is that the project has been exempted under Section 44 of PAPRA Act, 1995 by the Punjab Government, but the development work was to be carried out in accordance with layout plan sanctioned by the Chief Town Planner Punjab and the guidelines issued by the Department of Housing and Urban Development and the promoter shall be responsible for obtaining the final NOC from the Punjab Pollution Control Board. No doubt that the Project of OPs was exempted from certain conditions including the completion certificate, but later on there is letter No.4966-CTP(Pb)/SP-458 dated 02.09.2014 issued by Govt. of Punjab, Department of Housing and Urban Development (Housing II Branch) under which it has been stated that Mega Housing Project has been approved under PAPRA, 1995, however, the present frame work does not provide the clear procedure to issue completion or partial completion certificate to such projects, which causes hardships to promoters and residents of such projects for the maintenance and upkeep of public utilities and services. Despite exemption of the project, the Consumer Complaint No.303 of 2017 14 developer cannot deliver the possession without completing the basic amenities. The OPs were not competent to issue offer of possession without completion or partial completion certificate. Here no such completion certificate or partial completion certificate has been placed on record by OPs to prove the entire development in the project. The possession was to be delivered within a period of 24 months with further grace period of six months from the date of execution of agreement dated 27.06.2011, which came to an end on December 2013. As per clause 11.3 of agreement, if possession is delayed by the company beyond 12 months from the end of grace period, then allottee shall become entitled to seek termination of allotment and seek refund of the actual paid up installments after adjusting the interest/penalty on delayed payment. The possession was to be given to complainant by OPs in December 2013 but the development work was not completed by and as such possession letter issued by OPs in 2015 is inconsequential. Clause 11.3 of the buyers agreement entitles the complainant to seek refund beyond 12 months from the end of the grace period in case of non development of project and non delivery of possession. The permanent electricity connection was not granted to the project of OPs vide Ex.OP-24. Vide Ex.OP-26 Punjab Pollution Control Board Zonal Office-I, Patiala dated 05.01.2016 granted the consent to operate an outlet under Section 25/26 of Water (Prevention and Control of Pollution Act, 1974 for discharge of effluent. The partial completion certificate Ex.OP-29 is dated 20.06.2017, whereas scheduled date of delivery Consumer Complaint No.303 of 2017 15 of possession was December 2013 in this case, and OPs obtained the partial completion certificate after lapse of 3½ years from the scheduled date of delivery of possession. Even the partial completion certificate has not fully established that project has been clearly completed by OPs. Report of Local Commissioner is Ex.OP-33 on the record pointing out certain discrepancies left by OPs.

8. We have come to this conclusion that offer of possession by OP in 2015 without completion certificate, which has been obtained subsequently in the year 2017, is paper possession only. Even in partial completion certificate certain conditions have been incorporated to get NOC from Govt. of India, Ministry of Finance of Environment and Forest and so on. The report of Local Commissioner on the record has established that main gate of the project is situated in front of Sector 97 and in front of the main gate, there is no metalled road. The sewerage pipe lines have been laid and connected to Sewerage Treatment Plant, but have not been connected with the main service lines of the GMADA. Storm water pipelines inside the project have been laid and connected with rain water harvesting wells, but have not been connected with the main service lines of GMADA. There is no boundary wall to the project, therefore, even on the basis of report of the Local Commission, the amenities in the project are not complete.

9. The submission of counsel for OPs is that even if there is some delay in delivery of possession, the complainant is entitled Consumer Complaint No.303 of 2017 16 penalty of Rs.50/- per square yard, under clause 11 of the agreement. It has been held by the Hon'ble National Commission in "Ankur Goswami versus Supertech and another" 2017(3) CLT 520 (NC) that this clause in the allotment letter would be applied to the case where allottee is seeking possession of the flat and where allottee is not seeking refund of the amount. However, in the present case, the allottee is seeking the refund of the deposited amount, therefore, the penalty @ Rs. 50/- per sq. yards will not be applicable, where allottee seeks refund of the amount.

10. As per clause 11.3 of agreement Ex.C-2 executed between the parties, in case possession is not delivered by the promoter to the allottee, beyond a period of 12 months from the end of grace period, then allottee shall become entitled to seek the termination of allotment and further seek refund of the deposited amounts with interest on delayed payment. The complainant is entitled to seek refund of the deposited amount, because OPs failed to deliver the possession to complainant even beyond a period of 12 months after the end of the grace period i.e. 27.12.2013 and the right of the complainant accrues to seek refund of the deposited amount by seeking cancellation of the allotment, as per this contractual relationship as well.

11. As a result of our above discussion, we accept the complaint of the complainant with following directions to OPs: Consumer Complaint No.303 of 2017 17

(i) To refund the entire deposited amounts of complainant with interest @10.5% per annum from the date of their respective deposits till actual payment, as prayed for by complainant.

(ii) To further pay Rs.50,000/- as compensation for mental harassment.

(iii) To further pay Rs.20,000/- as litigation expenses. The above amounts shall be payable by OPs to complainant within two months from date of receipt of certified copy of this order.

12. Arguments in this complaint were heard on 12.04.2018 and the order was reserved. The certified copies of the order be communicated to the parties, as per rules.

13. The complaint could not be decided within the statutory period due to heavy pendency of court cases.

(J. S. KLAR) PRESIDING JUDICIAL MEMBER (SURINDER PAL KAUR) MEMBER April 13, 2018.

(MM)