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Consumer Complaint No.180 of 2016 1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
Consumer Complaint No.180 of 2016
Date of Institution : 13.06.2016
Date of Reserve : 17.07.2017
Date of Decision : 27.07.2017
Avtar Singh Smadh Bhai S/o Sh.Swaran Singh R/o 3378, Sector 71,
S.A.S. Nagar, Mohali.
....Complainant
Versus
1. The Sherwood Officers Society, through its Chairman/Vice
Chairman/General Secretary/Founder Members, Sherwood
Estate, Landran Chunni Road, Sector 113, Mohali.
2nd Address
The Sherwood Officers Society, Sherwood Estate, Through its
Chairman/Vice Chairman/ General Secretary/Founder
Members, Opp. New Cantt. Wagha By-Pass, Amritsar.
2. Sh.Praneet Bhardwaj, S/o Late Sh.Devinder Sahai, Chairman/
Founder Member, The Sherwood Officers Society, Sherwood
Estate, Landran Chunni Road, Sector 113, Mohali.
3. Sh.Parampal Singh Sidhu, S/o S. Harpal Singh Sidhu, Vice
Chairman/ Founder Member, The Sherwood Officers Society,
Sherwood Estate, Landran Chunni Road, Sector 113, Mohali.
4. M/s RKM Housing Ltd., SCO 1-2-3-4, Behind Chandigarh
Engineering College, Sector 112, Landran, S.A.S. Nagar,
Mohali through its Managing Director Sh.Kanwaljeet Singh
Walia.
..........Opposite parties
Complaint under Section 17(1)(a)(i) of
Consumer Protection Act, 1986
Consumer Complaint No.180 of 2016 2
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Gurcharan Singh Saran, Judicial Member
Present:-
For the complainant : Sh.Neeraj Sobti, Advocate
For opposite parties No.1to3 : Sh.A.K.Verma, Advocate
For opposite party No.4 : None
GURCHARAN SINGH SARAN, JUDICIAL MEMBER
ORDER
The complainant has filed this complaint on the averments that opposite party No.1 who is a Registered Cooperative Society registered under the Societies Registration Act XXI of 1860 whereas opposite parties No.2 & 3 are its Chairman and Vice Chairman. Apart from other objectives, they are providing housing facilities and had advertised for their project in the name and style of 'Sherwood Estate', in Sector 113, Mohali. The complainant being interested to purchase the residential plot for his own personal living, booked the same on the basis of advertisement given by the opposite parties. He visited their office situated at Mohali. The complainant alongwith the application paid a sum of Rs.12,00,000/- and Rs.20,00,000/- vide receipt dated 06.06.2011 and Rs.21,000/- towards Membership fee. He also paid a sum of Rs.2,50,000/- to the opposite party. Receipt of the same was misplaced but opposite party No.4 confirmed the receipt of payment of Rs.34,50,000/-. Opposite parties allotted a residential plot measuring 250 sq. yards at the rate of Rs.13,800/- per sq.yards in favour of the complainant. As per clause 9 of the allotment letter, opposite parties assured him to hand over the possession of the plot within a period of one and half year from the date of booking i.e. 26.04.2011. However, they failed to develop the Consumer Complaint No.180 of 2016 3 said land as per the terms and conditions mentioned in the allotment letter and to hand over the possession of the plot within the stipulated period. Rather, they decided to hand over the project to Opposite party No.4 i.e. RKM Housing Ltd., Mohali and pleaded that the said project will be started immediately and the possession shall be handed over to the buyers within a short period. The complainant signed the consent letter for the MoU dated 15.07.2014 executed between opposite parties No.1 to 3 and opposite party No.4 with the understanding that the possession of the plot shall be handed over to the complainant shortly. However, the revised allotment letter No.RKM/016 dated NIL was issued to the complainant by opposite party No.4 in the month of November, 2014, wherein they stated that the possession shall be handed over within a period of 20 months. In the month of December, 2015, the complainant came to know that GMADA had issued a letter to the Punjab Govt. stating that opposite parties No.1 to 3 in connivance with opposite party No.4 are grabbing the money from the general public and have failed to complete the project. Alleging deficiency in service, the present complaint has been filed by the complainant seeking refund of Rs.34,71,000/- alongwith interest at the rate of 18% per annum; Rs.5,00,000/- as compensation towards mental harassment; and Rs.50,000/- towards litigation expenses; Rs.1,00,000/- towards counsel fee;
2. Upon notice, Sh.A.S.Verma, Advocate, had filed his power of attorney on behalf of opposite parties No.1 to 3 but he has filed the written statement only on behalf of opposite parties No.1 and
3. In their written reply they raised the objections that the complaint is not maintainable in the present form against the opposite parties as Consumer Complaint No.180 of 2016 4 he did not come to the Forum with clean hands and suppressed the material facts and that the complainant failed to make the payment as per the schedule given along with the allotment letter. On merits, it was admitted that the complainant deposited a sum of Rs.21,000/- as Membership fee with the opposite parties which is not refundable. The complainant also paid Rs.12,00,000/- on 26.04.2011 and Rs.20,00,000/- on 06.06.2011 and in total he has paid Rs.32,00,000/- . It was denied that he paid an amount of Rs.34,50,000/-. It was admitted that the complainant was allotted a residential plot measuring 250 square yards at the rate of Rs.13,800/- per square yard in their project Sherwood Estates in Mohali and had assured him to hand over the possession within one and half year but it was subject to the payment of all the dues. Opposite party is a society and not a colonizer and the work of the society is being run with smooth payment of the members and in case members make default, the future of the society will spoil on account of non-payment by the complainant and other members. Thus, the opposite party could not get the CLU from GMADA and fee was increased from Rs.1,29,00,000/- to Rs.2,40,00,000/-. When the opposite parties were not in a position to take further steps then the management decided to hand over the project to opposite party No.4 i.e. RKM Housing. The agreement dated 15.07.2014 was signed between opposite parties No.1 to 3 and opposite party No.4 and then project was transferred to opposite party No.4 who issued a revised allotment letter to the complainant. The complainant consented for transfer of the project to opposite party No.4. As per clause 7 of the revised allotment letter the amount so paid by the complainant to these Consumer Complaint No.180 of 2016 5 opposite parties was transferred to opposite party No.4. It was denied that there was any deficiency in service on part of the opposite parties. Complaint is without any merit and it be dismissed.
3. Notice was issued to opposite party No.4. After receipt of the notice opposite party No.4 did not file the written reply within the stipulated period of 45 days as provided under Section 13(1)(a) of the Act. Therefore, vide order dated 30.09.2016, it was ordered that the written reply of opposite party No.4 cannot be taken on the record.
4. The parties were allowed to lead their respective evidence.
5. In support of his allegation, the complainant tendered into evidence her own affidavit as Ex. C-A, Certificate of Registration dated 23.08.2005 as Ex.C-1, Copy of Memorandum of Association as Ex.C-2, copy of receipts (colly) as Ex.C-3 to Ex.C-6, copy of allotment letter dated 06.06.2011 as Ex.C-7, copy of revised allotment letter as Ex.C-8, copy of letter dated 04.03.2015 as Ex.C-9, copy of English translation dated 02.06.2016 as Ex.C-10. On the other hand, OP No.2 & 3 tendered in evidence the affidavit of Varinder Singh, as Ex.OP1&3/A, memorandum of association dated 23.08.2005 as Ex.OP1&3/1, copy of resolution No.35/2014 dated 29.06.2014 as Ex.OP1&3/2, copy of meeting notice dated 10.09.2014 as Ex.OP1&3/3, copy of MoU dated 15.07.2014 as Ex.OP1&3/4, copy of revised allotment letter with reference No.RKM/016 as Ex.OP1&3/5, copy of payment plan as Ex.OP1&3/6, original authority letter dated 26.09.2016 as Ex.OP1&3/7, copy of allotment letter dated 05.06.2011 as Ex.OP1&3/8, copy of membership letter dated 05.06.2011 as Ex.OP1&3/9, copy of payment schedule as Ex.OP1&3/10, whereas opposite party No.4 tendered in evidence the affidavit of Kanwaljit Consumer Complaint No.180 of 2016 6 Singh Ahluwalia, MD of RKM as Ex.OP4/A, copy of list of members as Ex.OP4/1, copy of list of property as Ex.OP4/2, copy of detail of liabilities for loan as Ex.OP4/3, copy of urgent refund cases as Ex.OP4/4, copy of letter dated 27.01.2017 as Ex.OP4/5, copy of CLU dated 02.12.2016 as Ex.OP4/6, copy of letter dated 15.05.2016 as Ex.OP4/7, copy of intimation letter regarding CLU as ex.OP4/8, copy of letter dated 28.06.2016 as Ex.OP4/9.
6. We have heard the learned counsel for the parties and have carefully gone through the allegations as alleged in the complaint, written version filed by the opposite parties, evidences and documents placed on the record as well as written arguments filed by the opposite party No.1 & 3.
Misc. Application No.1542 of 2017
7. During the pendency of the complaint opposite parties No.1 & 3 moved an application for dismissal of the present complaint qua opposite parties No.1 & 3 because opposite party No.1 is the Society and opposite party No.3 is Vice Chairman, according to Section 13 of the Societies Registration Act 1860, provided as under:-
"In the event of any dispute arising among the said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal court of original civil jurisdiction of the district in which the chief building of the society is situate and the court shall make such order in the matter as it shall deem requisite."
8. Therefore, this Commission has no jurisdiction to decide the matter between the society and members. To support this proposition he has referred the judgment reported in 2009(5) BCR 201 titled as Consumer Complaint No.180 of 2016 7 General Manager, Telecom Vs. M.Krishnan & Anr., wherein it has been held that Consumer Forum does not have the jurisdiction as there is a special remedy in Section 7B of Telegraph Act regarding disputes in respect of telephone bills. Later on, the Hon'ble National Commission had circulated the instructions that under Section 3 of the Act an additional remedy has been provided. Therefore, the Consumer Fora, have the jurisdiction as held in II (2014) CPJ 38 titled as "GMTD, BSNL, Shillong Vs. KUM.D.Phawa, Mangpoh". Moreover, the provisions under the Telegraph Act are entirely different than the provisions under the Cooperative Societies Act, therefore, this judgment will not apply to the facts of the present case. He has further referred to the judgment reported in 2013(4) C.P.J. 333 titled as Anjana Abraham Vs. Managing Director of Koothattukulam Farmers Service Co-operative Bank Ltd., in which, there was a dispute between a member and Cooperative society regarding the settlement of account. In that event, it was observed that if there is alternative remedy under Section 69 of the Act, the complaint was rightly dismissed by the Consumer Fora. He further referred to a judgment reported in 2015(2) C.P.J. 207, titled as K.D.Kothiyal Vs. Phool Kaul & Ors. in that case, there was a dispute between two members of the society. In that context, it was held that consumer complaint is not maintainable. He has also referred to a judgment reported in 2016(4) C.P.J. 711 titled as Rajendra Singh Verma Vs. Committee of Management, Indraprastha Sahakari Awas Samiti Limited & Anr. It was a dispute regarding the outstanding amount. The matter was settled by the arbitrator. In that context, it was held by the Hon'ble Bench that Consumer Complaint No.180 of 2016 8 once the matter is settled by the Arbitrator then the complaint before the National Commission is barred by principles of res judicata. He has referred to another judgment reported in 2016(2) C.P.J. 42 titled as "Hanuman Sahakari Pani Pruvatha Sanstha Maryadit & Ors. Vs. Ramchandra Bapuso Khade & Ors.". In that case, there was a dispute between the opposite party and society regarding loss caused on account of non-supply of water for irrigation of land. In that context, it was held by the Hon'ble National Commission that Consumer Fora has no jurisdiction to entertain the complaint. Whereas, learned counsel for the complainant referred to the judgment of Hon'ble National Commission reported in 2017(1) CLT 73 titled as "Raj Kumar Goyal Vs. Malwinder Singh Battu & Ors." In this case, opposite purchased a land and assured to its members to allot flats but failed to give possession. In that context, it was held that even if the issue is to be handled by the Cooperative Department under cooperative law, jurisdiction of Consumer Fora to deal with these matters is not barred. In that case, personal liability of the office bearers of Cooperative Society will also be there. In that case, a Judgment of Hon'ble Supreme Court reported in III (1996) CPJ 1 (SC) titled as "Fair Air Engineers Pvt. Ltd. Vs. N.K.Modi" was also relied upon. In another judgment reported in IV(2015) C.P.J., Pg.16 titled as H.R. Singh & Ors. Vs. Vandana Sanjay Pandya & Ors, it was observed that Cooperative Societies Act does not oust the jurisdiction of Consumer Protection Act, 1986. A specific provision under Section 3 of the Act has been provided. The same is reproduced as under:-
Consumer Complaint No.180 of 2016 9
"3. Act not in derogation of any other law: The provisions of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
9. This Section is in addition to and not in derogation of provisions under any other Act. Where the Cooperative Society has assured for the services after taking the amount from its members then it falls within the ambit of services and where the society is in default of services then the matter is covered under the Consumer Protection Act, 1986 and Consumer Foras have the jurisdiction to entertain the complaints. Therefore, we do not agree with the plea raised by the counsel for opposite parties No. 1 & 3 that the complaint against opposite parties No.1 & 3 be dismissed. The application is without merit and it is hereby dismissed.
Main Complaint
10. It is an admitted fact that opposite parties No.1 & 3 through its office bearers had launched a project 'Sherwood Estates' at Sector 113, Mohali. On the basis of advertisements, the complainant booked one plot measuring 250 square yards with the opposite parties at the rate of Rs.13,800/- per sq. yards and the same was allotted to the complainant. It's total cost comes to Rs.34,50,000/- and the entire payments has been made by the complainant as pleaded in the complaint, receipts of the amount Rs.32,21,000/- inclusive of Rs.21,000/- as Membership fee, Ex.C-3 to Ex.C-6 have been tendered. He has also referred to the revised allotment letter issued by RKM Housing Limited, in which it is admitted that total payment of Rs.34,50,000/- has been received by the opposite parties. The IDC charges of Rs.3,75,000/- has been shown which is to be Consumer Complaint No.180 of 2016 10 paid by the complainant. Through this revised allotment letter, it makes it clear that the complainant was bound to pay Rs.3,75,000/- to opposite parties No.1 & 3. As per the allotment letter issued by opposite parties No.1 & 3, Ex.C-7 and according to clause 9 of the same, they were to hand over the possession of the plot to the allottee within the period of one and half year. Accordingly, the possession was to be given by December, 2013 but it was not made. Then, there was a memorandum of understanding signed between opposite parties No.1 to 3 and opposite party No.4, Ex.OP1&3/4. Opposite parties No.1 to 3 decided to handover the entire project to opposite party No.4. Apart from this, he took over all the assets and liabilities to develop it for the Members/Allottees vide agreement dated 15.07.2014. On the basis of that, opposite party No.4 issued a revised allotment letter No.RKM/016 dated NIL, Ex.OP1&3/5 to the complainant, wherein it was mentioned that the possession of the flat would be delivered within a period of 20 months, but the project was not completed. In reply to the letter written by Mr.Vishal Gupta, to GMADA in open Sangat Darshan; Ex.C-9, it has been stated that as per report M/s Sherwood Estates through its Chairman Sh.Parampal Singh Sidhu and Vice Chairman Sh.Parneet Bhardwaj and Managing Director Sh.Kanwaljeet Singh Walia of M/s R.K.M. Housing has connived with each other and without seeking any permission started enrolling and collecting money from the members of the said society and, as such, have violated the provisions of Section 4 of the PAPRA Act, 1995. Section 4 of the PAPRA is provides as under:-
"4. Issuing of Advertisement or Prospectus:-
(1) No promoter shall issue an advertisement or Consumer Complaint No.180 of 2016 11 prospectus, offering for sale any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless,-
(a) the promoter holds a certificate of registration under sub-section (2) of section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus; and
(b) a copy of the advertisement or prospectus is filed in the office of the competent authority before its issue or publication.
(2) The advertisement or prospectus issued under sub- section (1) shall disclose the area of the apartments or plots offered for sale, title to the land, extent and situation of land, the price payable and in the case of colonies, also layout of the colony, the plan regarding the development works to be executed in a colony and the number and the validity of the licence issued by the competent authority under sub-section (3) of section 5, and such other matters as may be prescribed. (3) The advertisement or prospectus shall be available for inspection at the office of the promoter and at the site where the building is being constructed or on the land being developed into a colony, alongwith the documents specified in this section and in section 3.
(4) When any person makes an advance or deposits on the faith of the advertisement or prospectus, and sustains any loss or damage by reason of any untrue statement included therein, he shall be compensated by,-
(a) the promoter, if an individual;
(b) every partner of the firm, if the promoter is a firm;
(c) every person who is a director at the time of issue of
the advertisement or prospectus, if the promoter is a company: Provided, however, that such person shall not be liable if he proves that,-
(a) he withdrew his consent to become a director before the issue of the advertisement or prospectus; or
(b) the advertisement or prospectus was issued without Consumer Complaint No.180 of 2016 12 his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c) after the issue of the advertisement or prospectus and before any agreement was entered into with buyers of plots or apartments, he, on becoming aware of any untrue statement therein, withdrew his consent and gave reasonable public notice of the withdrawal and of the reasons therefor. (5) When any advertisement or prospectus includes any untrue statement, every person who authorised its issue, shall be punished with imprisonment for a term which may extend upto one year or with fine which may extend upto five thousand rupees, or, with both, unless he proves that the statement was immaterial or that he had reason to believe and did upto the time of issue of the advertisement or prospectus believe that the statement was true."
11. During the course of arguments, counsel for opposite parties No.1 & 3 failed to convince us how they have complied with the provisions of Section 4 of PAPRA, 1995. In case any person launched any project without complying with Section 4 of the Act is unfair trade practice. Therefore, without complying with Section 4, even applications cannot be called for from the members for the project. Even when the project was transferred to opposite party No.4 they were not having the requisite permissions from the concerned departments. Opposite party No.4 has now taken the CLU from Senior Town Planner vide their letter dated 02.12.2016, Ex.OP-4/6. Clause 9 of the letter issued by Senior Town Planner is as under:-
"(ix) Applicant shall obtain NOC from P.P.C.B. under the Water Prevention and control of Pollution Act, 1970, Municipal Consumer Complaint No.180 of 2016 13 Solid Waste Management and Handling Rules, 2000 or any other relevant Act before undertaking any development at site."
However, opposite party No.4 has also not placed on the record the requisite Certificate obtained by them from the concerned department. Therefore, we are of the view that if opposite party No.4 did not obtain the requisite certificates from all concerned departments referred in Ex.OP-4/6 then how they can start developing of project.
12. Therefore, we are of the opinion that there is unfair trade practice as well as deficiency in service on the part of the opposite parties. The project was transferred to opposite party No.4 to complete the same and they had undertaken to complete within a period of 20 months but nothing was done on their part and opposite party No.4 failed to complete the project within the stipulated period.
13. If this is the situation when the opposite party failed to obtain the necessary permissions from the concerned authorities and to complete the project within the stipulated time the consumer cannot be allowed to suffer for an indefinite period and he is entitled to refund of his amount. It has been so held in 2007(2) CLT 440 titled as 'Kamal Sood Vs. DLF Universal Ltd.' and 2014(2) CLT 401 titled as 'Brigadier B.S.Taunque (Retd.) & Others Vs. M/s Sangeethashree Builders & Developers International Private Limited & Others'. Similar orders have been passed by this Commission in F.A. No.231 of 2016 decided on 12.10.2016 titled as M/s R.K.M. Housing Ltd. Vs. Smt. Geeta Bhatia & Anr. and F.A. No.230 of 2016 decided on 12.10.2016 titled as M/s R.K.M. Housing Ltd. Vs. Smt. Rakhi & Anr.
Consumer Complaint No.180 of 2016 14
14. No other point was argued by the counsel for the parties. Accordingly, we accept the complaint and ordered:
(i) to refund the sum of Rs.34,50,000/- alongwith interest at the rate of 12% per annum from the various dates of payment till realization;
(ii) to pay Rs.1,00,000/- as compensation on account of unfair trade practice on the part of the opposite parties by giving false assurances to develop the area within the stipulated period of two years which causes mental tension and harassment to the complainant;
(iii) to pay Rs.21,000/- as litigation costs.
15. The above directions be complied with within 45 days from the date of receipt of certified copy of the order.
16. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (GURCHARAN SINGH SARAN) JUDICIAL MEMBER July 27, 2017 parmod