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2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No.710 of 2017
Date of Institution : 21.08.2017
Date of Reserve : 27.03.2018
Date of Decision : 05.04.2018
1. Krishan Kumar Aggarwal R/o House No. 655, Phase-4,
Mohali (Punjab)
2. Rohit Kumar R/o House No. 552, Phase - 4, Mohali (Punjab)
3. Raj Kumar Gupta R/o House No. 27, Type-IV, Thapar
University Campus, Patiala.
....Complainants
Versus
1. M/s Puma Realtors Pvt. Ltd., An IREO Group Company
through its Managing Director/Director/Chairman, Corporate Office
at SCO No. 6-8, First and Second Floors, Sector 9-D, Madhya
Marg, Chandigarh-160009
2nd Address for service
M/s Puma Realtors Pvt. Ltd., An IREO Group Company through its
Managing Director/Director/Chairman, Registered Office at No. 5,
Dhanraj Chambers, 1st Floor, Satbati, New Delhi - 110074
2. Mr. Anupam Nagalia, Director/Chairman of M/s Puma
Realtors Pvt. Ltd., An IREO Group Company, Corporate Office at
SCO No. 6-8, First and Second Floors, Sector 9-D, Madhya Marg,
Chandigarh-160009
Consumer Complaint No. 710 of 2017 2
3. Mr. Amrick Singh, Director/Chairman, of M/s Puma Realtors
Pvt. Ltd., An IREO Group Company, Registered Office at No. 5,
Dhanraj Chambers, 1st Floor, Satbati, New Delhi - 110074
....Opposite parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the complainants : Sh. Neeraj Sobti, Advocate
For the opposite parties: None.
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
Complainants have filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that Op No. 1 is a body corporate incorporated under the Companies Act, 1956 and are doing the business of developing Mega Housing Project i.e. 'IREO Hamlet', Sector 98, SAS Nagar, Mohali and Op Nos. 2 & 3 are its Directors, who are responsible for day to day business of Op No. 1. Originally Mrs. Bhavneet Mavi w/o Harvinder Singh Mavi R/o House No. 1132, Sector 70, Mohali purchased a residential plot No. 106, measuring 250.59 sq. yards from Ops situated at IREO Hamlet vide provisional allotment letter dated 29.4.2011 and had paid a sum of Rs. 6,50,000/- vide receipt Consumer Complaint No. 710 of 2017 3 dated 26.4.2011 and a sum of Rs. 2,14,536/- was paid vide receipt dated 28.6.2011. On 8.7.2011, plot buyer's agreement was executed by the Ops in favour of said allottee. After that the original allottee had paid a sum of Rs. 2 Lacs vide receipt dated 5.8.2011, on a sum of Rs. 2,60,000/- vide receipt dated 5.8.2011, Rs. 2,25,000/- vide receipt dated 5.8.2011, Rs. 2,90,741/- vide receipt dated 5.8.2011 and Rs. 2,90,741/- vide receipt dated 5.8.2011. In this way, a total sum of Rs. 18,40,277/- was paid to the Ops by the original allottee. The complainants were in need of residential house exclusively for themselves and for their family members and purchased the said plot from the original allottee with the understanding that all the allottees have their independent floor over the said plot. Accordingly, the provisional allotment letter/receipts of the plot buyer's agreement was endorsed in favour of the complainants by the Ops vide letter dated 30.8.2011. As per Clause No. 3 of the plot buyer's agreement, the basic sale price of the plot was settled to the tune of Rs. 57,63,570/- and they were also required to pay EDC @ Rs. 1275.10p per sq. yard and PLC @ Rs. 500/- per sq. yard. Vide letter dated 26.9.2011, Ops changed the payment plan of the complainants from time linked to development linked plan. As per the demands raised by the Ops, the complainants kept on making the payments to the Ops and made the payments as under:-
1. 6,82,671/- 28.5.2013
2. 1,46,942/- 28.5.2013
3. 1,50,000/- 12.6.2013
4. 1,47,000/- 14.3.2014
5. 6,77,670/- 14.3.2014
6. 8,330/- 1.4.2014
Consumer Complaint No. 710 of 2017 4
7. 1,46,700/- 9.6.2014
8. 1,466/- 30.6.2014
9. 6,77,000/- 3.9.2014
10. 1,48,000/- 3.9.2014
11. 8,250/- 26.9.2014
12. 1,43,360/- 29.10.2014
13. 1,448/- 6.11.2014
14. 86,500/- 25.11.2014
15. 50,393/- 25.11.2014
16. 3,47,000/- 25.11.2014
17. 86,700/- 25.11.2014
18. 5,764/- 5.12.2014
19. 4,64,665/- 11.2.2015
20. 99,600/- 11.2.2015
21. 69,035/- 11.2.2015
22. 25,000/- 11.2.2015
23. 5,764/- 26.3.2015
In this way, they have made a sum of Rs. 60,19,535/-. As per Clause 21.2 of the plot buyer's agreement, the Ops were to develop such project by laying roads, water lines, sewer lines, electrical lines etc. and as per Clause 11.1, Ops were liable to hand over the physical possession of the plot within a period of 24 months with a grace period of 6 months i.e. latest by 8.1.2014. As per Clause 11.2 of the agreement, if the Ops failed to offer the possession of the plot by the end of the grace period then Ops shall be liable to pay to the allottee a compensation to be calculated @ Rs. 50/- per sq. yard for every month of delay. As per Clause 11.3, if the Ops failed to give the possession beyond the period of 12 months from the end of grace period i.e. upto 7.1.2015 then complainants are entitled to terminate the agreement and sought the refund of the amount already paid and option for termination may be extended by the allottee only upto dispatch of the notice of possession and such a refund shall be made by the Company within 90 days of the receipt of intimation to this effect Consumer Complaint No. 710 of 2017 5 from the allottee. On 12.5.2015, Ops issued notice of possession to the complainants. The complainants on 23.5.2015 visited the site and shockingly came to know that the development was not complete and Ops without completing the project issued the offer of possession letter. The complainant wrote a letter dated 22.6.2015 to the Ops, however, no reply was sent to the said letter. In fact the basic amenities like roads and sewerage were not completed / developed at the site as promised by them and M/s Beam Facilities Management Pvt. Ltd. was appointed temporarily to undertake the maintenance and upkeep of the project and services, therefore, notice of possession is mere camouflage and just a paper possession. When the complainant inquired about the non- completion / incomplete development of the project and how they can issue the notice of possession without completion of the project, therefore, the notice of possession issued by the Ops is bad in law and complainants are entitled to refund under Clause 11.3 and Clause 20.1 of the buyers agreement but Ops lingered on the matter on one pretext or the other by mis-representing to the complainant that now the project is complete. Alleging deficiency in services on the part of Ops, this complaint has been filed by the complainants seeking following directions against the Ops:-
A) That the opposite parties No. 1 and 2 may kindly be ordered to refund to the complainants a sum of Rs. 60,19,535/- received from the complainants from time to time towards the said plot alongwith interest @ 12% from Consumer Complaint No. 710 of 2017 6 the date of actual payment till the date of actual realization.
B) To pay compensation to the tune of Rs. 3,00,000/- to complainants towards mental torture and harassment caused to the complainants because of the act and conduct of the Op's No. 1 and 2.
C) To pay a sum of Rs. 1 Lac towards Counsel Fee. D) To pay a sum of Rs. 75,000/- towards litigation charges/cost.
E) That the complainants be granted such other relief / reliefs to which they are found entitled to under law and equity.
2. Upon notice, Ops appeared and filed their written reply through their authorized signatory Mr. Rajiv Bhatia s/o Sh. J.L. Bhatia by taking preliminary objections that are of jurisdictional nature, therefore, these be decided before deciding the complaint on merits; the complaint is not maintainable as according to plot buyer's agreement dated 8.7.2011, the Ops have already issued a letter of possession dated 12.5.2015 and complainants are under obligation to get the possession, therefore, no relief can be granted to the complainants; the complaint is not maintainable in view of the existence of the Arbitration Clause No. 33 that in case of any dispute between the parties, the matter is required to be referred to the Arbitrator to be appointed by the Ops and once there is clear ouster of the jurisdiction of the Commission then application under Section 3 of the CP Act is not maintainable; the complainants are not covered under the definition of the consumer as they have not Consumer Complaint No. 710 of 2017 7 bought the goods or availed/hired the services of the Ops and buyer's agreement was contingent contract and in case there is any violation of contingent contract then the Civil Suit could be filed by the complainants; the complainants had not booked the plot for their personal use and booked it for investment/commercial purpose; there is no deficiency in service on the part of Ops and direction under the CP Act can be given only as per conditions specified in the contract, therefore, no cause of action for the complainants to file this complaint and that the claim of the complainants is too exorbitant. On merits, it has been stated that Op Nos. 2 & 3 are not personally liable as they are not involved in the project in their personal capacity. It was denied that the complainants were in need of residential house exclusively for themselves or for their family members and they joined together only to earn the profit. Other facts with regard to booking of the flat by Bhavneet Mavi and purchasing the rights of the plot by the complainants from her is admitted. With regard to the various payments as referred in the complaint, it has been stated that it is a matter of record. However, the payments were not made in time. These payments were made with delay after issuance of various reminders. The allegations of the complainants are misleading and they are mis-construed the terms of the agreement. In case possession of the plot for any reason has not been delivered to the complainants they have a right to get compensation as incorporated in the agreement itself. Moreover, now the project is Consumer Complaint No. 710 of 2017 8 totally complete. There is no deficiency in service on the part of Ops. Complaint is without merit, it be dismissed.
3. The parties were allowed to lead their respective evidence in support of their complaint. Complainant in his evidence has tendered affidavit dated 11.12.2017 Ex. C/A and documents Exs. C-1 to C-10. On the other hand, Op have tendered affidavit of Rohit Tanwar, Auth. Representative as Ex. OP-A and documents Exs. Op-1 to Op-41.
4. We have heard the counsel for the parties and have carefully gone through the pleadings of the parties, evidence and documents on the record.
5. Before coming to the merits of the complaint, some preliminary objections have been taken by the Ops, which are required to be dealt with.
6. It has been stated that under Clause 33 of the agreement, there is a provision to refer the matter to the Arbitration and under Section 8 of the Arbitration and Conciliation Act, the State Commission being the judicial authority can refer the matter to the Arbitrator. For ready reference Section 33 of the agreement is referred as under:-
"33. Dispute Resolution by Arbitration All or any disputes arising out of or touching upon or in relation to the terms of this Agreement or its termination including the interpretation and validity of the terms hereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussions failing which the same shall be settled through reference to a sole Arbitrator to be appointed by a resolution of the Consumer Complaint No. 710 of 2017 9 Board of Directors of the Company, whose decision shall be final and binding upon the Parties. The Allottees hereby confirms that it shall have no objection to the appointment of such sole Arbitrator even if the person so appointed, is an employee or advocate of the Company or is otherwise connected to the Company and the Allottee hereby accepts and agrees that this alone shall not constitute a ground for challenge to the independence or impartiality of the said sole Arbitrator to conduct the arbitration. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereto and shall be held at the Company's offices or at a location designated by the said sole Arbitrator in Chandigarh. The language of the arbitration proceedings and the Award shall be in English. Both the Parties will share the fees of the Arbitrator in equal proportion."
In this regard, it is necessary to mention Section 8 of the Arbitration and Conciliation Act, 1996, which reads as under:-
"8. Power to refer parties to arbitration where there is an arbitration agreement.-- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.(Emphasis supplied). Consumer Complaint No. 710 of 2017 10 (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said Agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
According to this Section, in case a party to the Arbitration agreement and any other person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, the Court can refer the parties to the Arbitration but no such application was filed. Then additional remedy has been provided under Section 3 of the Act under which Consumer Fora has the right to entertain the complaint even if Consumer Complaint No. 710 of 2017 11 there is arbitration Clause. For ready reference, Section 3 of the Act is referred as under:-
"3. Act not in derogation of any other law.--The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
Recently, the larger Bench of the Hon'ble National Commission in Consumer Case No. 701 of 2015 "Aftab Singh versus EMAAR MGF Land Limited & Anr." and in other similarly situated cases, decided on 13.07.2017, after discussing various judgments of the Hon'ble Supreme Court and the amendment made by the Parliament in Section 8(1) of the Arbitration and Conciliation Act, 1996 observed that the amendment does not affect in any manner the powers of the Consumer Fora to entertain the complaints under Section 3 of the Act. It was held that even if there is provision of Arbitration Clause in the agreement, it does not debar the Consumer Fora to take cognizance of the complaint despite provision of Arbitration Clause in the agreement. The counsel for the Ops was unable to rebut this legal preposition and the judgment pronounced by the Hon'ble National Commission, therefore, we do not agree with the plea raised by the counsel for the Ops that the State Commission does not have the power to entertain the complaint in view of the Arbitration Clause in the agreement.
7. It has been argued by the counsel for the Ops that the complainants are not consumer as they have not bought the goods Consumer Complaint No. 710 of 2017 12 and have not hired any service from Op No. 1 and that the Ops are developing the project on its own land. The agreement is in the nature of an agreement to sell and does not create any right and interest in the property in favour of the buyer. In this regard, it is pertinent to refer the definition of the consumer as defined under Section 2(1)(d) of the CP Act:-
"2. Definitions. - (1) In this Act, unless the context otherwise requires,--
(d) "consumer" means any person who--
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed Consumer Complaint No. 710 of 2017 13 of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;
Explanation.-- For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment;"
No doubt that the complainants have not purchased the goods but their case is covered as they have availed the services from the Ops and that too for consideration because under the agreement Ex. C-2 dated 8.7.2011 executed between the Ops and Bhavneet Mavi and lateron vide letter dated 30.8.2011, the rights were assigned in favour of the complainants in Plot No. 106 in terms of Clause 14 of the Buyer's Agreement and after that various payments were received by the Ops and as per the statement of account issued by the Ops, a sum of Rs. 60,19,535/- has been received by the Ops and balance has been shown to be Rs. 2,88,178.66p. Under agreement Ex. C-2, Ops have agreed to deliver the possession of Plot No. 106 after developing it within a period of 24 months with grace period of 6 months. The definition of the services has been defined under Section 2(1)(o) of the Act, which reads as under:-
"2. Definitions. - (1) In this Act, unless the context otherwise requires,--Consumer Complaint No. 710 of 2017 14
(o) "service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
It includes the housing construction services, therefore, in case the Ops have agreed to develop a plot in his property for the complainants for consideration, it comes under the definition of housing construction duly covered under the definition of the service and in case a service has been obtained for consideration as defined under Clause 2(1)(d) of the Act then the complainants come under the definition of the consumer. We do not agree with the plea raised by the counsel for the Ops that it is just an agreement to sell creating contractual liability. It is just not an agreement to sell because in that event, the plot would have been sold as it is but it is mega project under which all the development works are to be carried out by the Ops enabling its allottees to raise the construction. Therefore, it is more than agreement to sell and it is duly covered under the definition of services as referred above.
8. It has been further contended by the counsel for the Ops that the plot was booked for speculative purposes and that the complainants are not the consumer, therefore, they are not covered under the definition of consumer according to definition attached to Consumer Complaint No. 710 of 2017 15 Section 2(1)(d) of the Act. In case we go through the contents of the complaint, the complainants had booked/purchased only one plot and in para No. 8 of the complaint, it has been stated that the complainants had gone to the site but they were surprised to see that it is not feasible to construct a house or reside in their colony as a lot of development work was to be done there, which makes it clear that the intention of the complainants is to raise the construction and to reside there. The Ops have not been able to place on the record that the complainants are trading in the real estate. They have not referred that they have any other property in the vicinity of Mohali or that they were earlier used to sell or purchase the plots/flats. In case the Ops have not been able to prove these things on the record then it cannot be said that the complainants had purchased the property for speculative purposes. We are fortified by the judgment of 2017(3) CLT 459 (NC) "Pranab Basak versus Suhas Chatterjee". In that case, two flats were booked by the complainant and a plea was taken that the complainant had booked these flats for investment purposes. It was observed by the Hon'ble National Commission that unless it is established that the complainant is dealing in sale and purchase or his real intention in booking the flat was to sell the same on profit, on appreciation of the value of the real estate. Therefore, we do not agree with the plea raised by the counsel for the Ops that the complainant is not a consumer as she had booked the plot for commercial purposes.
Consumer Complaint No. 710 of 2017 16
9. It has been further alleged that the allegations in the complaint are contractual in nature and as such only triable in a Civil Court. No doubt that there is a contract between the parties and under that contract the Ops have agreed to develop the colony in which Plot No. 106 has been allotted and the possession has been agreed to be given after development work at the site. We have dealt in detail this point in para No. 10 that complainants are a consumer as defined under the CP Act and under Section 3 of the Act, the Consumer Foras have a right to entertain the complaint, therefore, in consumer disputes this Commission has a right to entertain the consumer complaint and the plea raised by the counsel for the Ops that it is triable only before the Civil Court is not a correct preposition.
10. An objection has been taken by the Ops that Op Nos. 2 & 3 are not involved personally, therefore, wrongly impleaded as a party to the compliant. No doubt they may not be involved personally but as an Director/Chairman, they are responsible for completion of the project. Therefore, they have been rightly made a party to the complaint.
11. Now we will take the complaint on merits to see whether there is deficiency in service, amount of compensation in reference to Section 14(1)(d) of the CP Act, extent of the claim and concealment of material fact, if any, is there on the part of the complainants. As per averments in the complaint, plot No. 106 measuring 250.59 sq. yards situated at IREO Hamlet, Sector 98, SAS Nagar, Mohali was allotted by the Ops in favour of Mrs. Consumer Complaint No. 710 of 2017 17 Bhavneet Mavi w/o Harvinder Singh Mavi and she had paid a sum of Rs. 18,40,277/-. The complainants were in need of the residential house and they purchased the said plot from the said allottee and accordingly, provisional allotment letter, receipts of the plot and plot buyer's agreement was endorsed by the Ops in favour of the complainants. In this regard a letter dated 30.8.2011 Ex. C-3 was issued by the Ops in favour of the complainants vide which complainants were informed that the onwards rights/obligations with respect of plot No. 106 are hereby assigned to him as nominee of Bhavneet Mavi and the documents i.e. allotment letter, buyer's agreement and receipts were endorsed in favour of the complainants. According to the letter dated 26.9.2011 Ex. C-4 instead of time linked plan, it was changed to development linked payment plan, which is as under:-
On Booking Rs. 576357/- (10% of BSP)
On Allotment Rs. 288179/- (5% of BSP)
Within 3 months of Allotment Rs. 975741/- (15% of BSP + 25%
EDC + 25% PLC)
On start of site development Rs. 975741/- (15% of BSP + 25%
EDC + 25% PLC)
Within 3 months of Rs. 975741/- (15% of BSP + 25%
commencement of EDC + 25% PLC)
development work at site
On partial (50%) completion of Rs. 975741/- (15% of BSP + 25% laying of services i.e. EDC + 25% PLC) excavation, laying of pipes etc. On completion of PHE services Rs. 576357- (10% of BSP) to the property On completion of 2 courses of Rs. 664064/- (10% of BSP + 100% WBM IFMS & Additional Facility Charge) On offer of possession Rs. 288179/- (5% of BSP + 100% Stamp Duty and Registration) Ex. C-5 to Ex. C-5AA are the receipts issued by the Ops in favour of the complainants. Ex. C-6 is the statement of account issued by the Ops vide which a sum of Rs. 60,19,535/- has been paid which Consumer Complaint No. 710 of 2017 18 coincide with the pleadings taken by the complainants in this complaint, therefore, the payment has been paid by the complainants to the Ops.
12. Vide letter dated 12.5.2015 Ex. C-7 notice of possession letter was issued by the Ops in favour of the complainants. After that the complainants visited the site and vide letter dated 22.6.2015 Ex. C-8, the complainants mentioned that they were shocked to see that the site is not developed and found the following discrepancies:-
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 penelity 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. Consumer Complaint No. 710 of 2017 19
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."
The Ops wrote a letter dated 29.6.2015 to Mr. Upjeet Singh Sahota in which it was referred that they are in process of completing the blacktopping work, which shows that till 29.6.2015, the development work was not complete, therefore, they could not issue the letter dated 12.5.2015 that the work is complete and direction was given to the complainants to take the possession of the plot. No doubt that some sale deeds have been executed by the Ops in favour of some of the allottees but this does not prove that the development work at the site is complete. There is report of the Local Commissioner dated 24.10.2015 Ex. OP-10 wherein it was mentioned that there does not exist any boundary wall except the adjoining of the entrance gate. Counsel for the Ops has also referred to the notification dated 14.8.2016 Ex. Op-16 vide which the exemption under Section 44 has been issued to the Ops but the development work was ordered to be carried out in accordance with the 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 Mega Project of Ops was exempted from certain conditions including the completion certificate but lateron there is letter No. Consumer Complaint No. 710 of 2017 20 4966-CTP(Pb)/SP-458 dated 2.9.2014(Ex.Op-30) 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 to such projects, which causes hardships to promoters and residents of such projects for the maintenance and upkeep of public utilities and services. To stream line the issue of completion/ partial completion certificate of PAPRA project, falling outside Municipal Limits, its procedure and time frame has been worked out. Therefore, the completion/partial completion certificate is required to be obtained by the Ops under the scheme issued by the Government of Punjab vide its letter dated 2.9.2014 and under that letter, all the Companies were asked to get the completion certificate and that is why the completion certificate has been obtained by the Ops, however, the partial completion certificate was obtained in favour of the Ops by GMADA on 30.6.2017 Ex. Op-4. Without getting the partial completion certificate, Ops were not competent to issue any notice/offer of possession letter, therefore, the certificate was just a formality to save from the penal clauses. As per the agreement, the relevant clauses for the possession and holding charges are under Clause 11, which reads 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 Consumer Complaint No. 710 of 2017 21 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 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 Consumer Complaint No. 710 of 2017 22 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 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 Consumer Complaint No. 710 of 2017 23 against the Company nor be raised otherwise or in any other manner by the Allottee."
According to these clauses, the possession was to be delivered within a period of 24 months with a grace period of 6 months from the date of agreement whereas the date of agreement is 8.7.2011 and after adding the grace period, it will come to an end on 1.1.2014. According to Clause 11.3, in case the possession is delayed by the Company beyond the period of 12 months from the end of the grace period then the allottee shall become entitled to opt for termination of the allotment/agreement and refund of the actual paid up installments after adjusting the interest / penalty on delayed payments. In that way, the possession was to be given at the most by January, 2015 but as per the letter issued by the Ops when the development work was not complete, than issued possession letter in May, 2015, therefore, even on that day, the complainants had become entitled to invoke Clause No. 11.3 of the agreement. When the complainants visited the site after receiving the offer of possession letter, he pointed out the discrepancies at the site referred above in his letter dated 22.6.2015 Ex. C-8. Even the Ops in their letter dated 29.6.2015 Ex. C-9 had referred that the development work is still going on. Even approvals from the GMADA were also asked for.
13. What is the value of the notice of possession letter? As per averments in the complaint, it has been stated that number of development works have not been completed specifically with regard to the electricity, sewerage treatment plant, proper access Consumer Complaint No. 710 of 2017 24 road etc. and no completion certificate has been obtained by the complainants from the Competent Authority. With regard to completion certificate, the counsel for the Ops has referred that they have initiated to make the project under the Punjab State Industrial Policy, 2003 in furtherance of that LOI dated 30.9.2005 was issued. Vide its notification dated 14.8.2008 State had exempted the project of Ops from the provisions of the PAPRA except Section 32 of the Act, which deals with Constitution of Punjab Urban Development Fund. However, there is letter No. 4966-CTP(Pb)/SP-458 dated 2.9.2014(Ex.Op-30) 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 to such projects, which causes hardships to promoters and residents of such projects for the maintenance and upkeep of public utilities and services. To stream line the issue of completion / partial completion certificate of PAPRA project, falling outside Municipal Limits, its procedure and time frame has been worked out. Therefore, the completion/partial completion certificate is required to be obtained by the Ops under the scheme issued by the Government of Punjab vide its letter dated 2.9.2014 and under that letter, the Ops have applied for the partial completion certificate and the same was issued to them by GMADA in their memo/ letter No. GMADA/STP/2017/2026 dated 30.6.2017 Ex. Op-4. The Hon'ble National Commission in the Consumer Complaint No. 710 of 2017 25 judgment 2017(1) CPR 292 "Harinder Singh versus Unitech", was held that in the absence of completion certificate, complainant cannot be compelled to take possession of the plot. In another judgment reported in 2017(1) CPR 168 (NC) "Sanjay Kumar versus Sahara Prime City Limited & others" it was held that allottee is entitled to withdraw from the scheme in the event of delay in completion of the project. These judgments have not been rebutted by the counsel for the Ops. Therefore, even if there is a notice of possession letter issued by Ops that too before completion as referred in Clause 11.3 of the agreement, there is a completion certificate, which was issued in the year 2017 much after issuance of possession letter. Therefore, without completion certificate, the complainant cannot be compelled to take the possession.
14. Whether the possession letter is in real sense or only to avoid the penalty because the development work at the site is not complete and that is the reason that competent authority demanded various documents from the Ops vide its letter No. 3800 dated 7.10.2016 but those documents have not been submitted by the Ops, perhaps the work at the site is not complete, therefore, completion certificate has not been granted. In fact the Ops want to deliver the half baked things to the complainants without completion of the development work at the site and in the absence of fulfillment of conditions, it will be very difficult for the complainant to make the construction and reside there.
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15. Even in this partial completion certificate, condition have been laid down to get NOC from Government of India, Ministry of Environment and Forests, NOC from PPCB with the provisions under the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention & Control of Pollution) Act, 1981 and conditions laid down by office of Engineer-in-Chief (Commercial), PSPCL, Patiala, disposal of rain/storm water of the project, maintaining the rain water harvesting within the project, internal services, roads, parks etc., disposal of rain/ storm water, provision for drinking water etc., although, the Ops had placed on the record NOC from ground water withdrawal issued by Government of India, Central Ground Water Authority, Ministry of Water Resources. Application was moved for obtaining environmental clearance certificate, however, vide letter dated 30.11.2012 Ex. Op-19, it was returned with certain objections and after that no fresh application for obtaining environment clearance certificate has been moved by the Ops with the concerned Authority. In case, it has been moved, it has not been placed on the record by the Ops. Similarly, NOC from Punjab Pollution Control Board was issued by PPCB vide its letter dated 14.5.2013 and explanation was given vide letter dated 9.12.2014 Ex. Op-21 and vide letter dated 29.6.2015 Ex. Op-22 certain conditions were laid down by PPCB to give the final certificate but no final certificate has been issued by PPCB. Perhaps the conditions contained in the NOC letter dated 14.5.2013 may not be completed. Then no LD system has been approved by the PSPCL for which they were to Consumer Complaint No. 710 of 2017 27 issue the bank guarantee, which was not given and it was deposited only on 22.3.2016, therefore, on the date of issuance of the notice/offer of possession letter dated 12.5.2015, even LD system by the PSPCL was not approved.
16. With regard to the amenities at the site, Ops themselves have referred to the report of one Local Commissioner appointed by the U.T. State Commission in CC No. 170 of 2015 "Abha Arora Vs. Puma Realtors Private Limited and another" and its report dated 24.10.2015 is on the record as Ex. Op-10. It is referred in the report 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 at the site are not complete. Even if the letter of possession was not referred in the complaint, it does not have any bearing upon the case of the complainant because it was not accompanied with completion certificate and as discussed above, the amenities at the site are not complete. Therefore, in case we take the totality of the circumstances, the amenities were not complete on the date of issuance of notice/offer of possession letter dated 12.5.2015. As per Clause No. 11.3 of the agreement, in case the project was not Consumer Complaint No. 710 of 2017 28 completed by January, 2015 as agreed in the plot buyer's agreement then the complainants have the authority to withdraw from the scheme.
17. It has been argued by the counsel for the Ops that according to Clause 11.2 of the agreement, in case there is some delay then the compensation can be calculated @ Rs. 50/- per sq. yards but it has been stated by the counsel for the complainants that the agreement is one sided because in case of delayed payment the complainants are required to pay interest @ 15% p.a. from the date of due till the date of payment. However, it was further observed by the Hon'ble National Commission in the judgment 2017(3) CLT 520 (NC) "Ankur Goswami versus Supertech and another" 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, therefore, the penalty @ Rs. 50/- per sq. yards will not be applicable. Further under Rule 17 i.e. Rate of Interest on refund of advance money upon cancellation of agreement under Punjab Apartment and Property Regulation Rules, 1995, it has been provided as under:-
"17. Rate of Interest on refund of advance money upon cancellation of agreement. - The promoter shall refund full amount collected from the prospective buyers under sub- section (1) of section 6 together with interest thereon at the Consumer Complaint No. 710 of 2017 29 rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
In the above rule it has been observed to refund the amount alongwith interest @ 12% p.a. Therefore, to be just and reasonable, the complainants will be entitled to interest @ 12% on the deposited amount.
18. With regard to applicability of Section 14 of the CP Act, it is a services agreed by the Ops to be provided to the complainants under the agreement and the Ops have defaulted to provide the services as agreed in the agreement and in view of the detailed discussion referred above, the complainants have a right to withdraw from the scheme and to seek for the refund and further under Clause 14(d) the Fora has a right to award such amount as compensation to the complainants for any loss or the injury suffered by the complainants due to the negligence of the Ops for which provision is there under the PAPRA under which Housing Project of Ops was sanctioned under which there is a provision that in case of refund, the amount be refunded alongwith interest @ 12% p.a. and further some compensation can also be allowed with regard to mental and physical harassment to the complainants for awaiting a long period and to visit the site to check the development at the site.
19. What is the amount deposited by the complainants with Ops? In the complaint, the complainants have referred a sum of Rs. 60,19,535/- whereas in their statement of account of Ops Consumer Complaint No. 710 of 2017 30 referred in the record by the complainants as Ex. C-6 proves the deposit of this amount, therefore, there is no dispute with regard to the deposit of the above mentioned amount.
20. In nutshell, we are of the opinion that there is a deficiency in service on the part of Ops, accordingly, we allow the complaint and direct Ops as under:-
(i) To refund a sum of Rs. 60,19,535/- alongwith interest @ 12% p.a. from the various dates of deposit of the amount till payment;
(ii) Rs. 1 Lac as compensation for physical and mental harassment; and
(iii) Rs. 21,000/- as litigation expenses.
The above directions be complied by the Ops within a period of 45 days from the date of receiving of the copy of the order, failing which the complainants shall be at liberty to execute the order by filing application under Sections 25 & 27 of the CP Act against the Ops.
21. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
22. Order be communicated to the parties as per rules.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER April 05, 2018.
as Consumer Complaint No. 710 of 2017 31