L.K. Vashisht & Anr vs M/S. Landmark Apartment Pvt. Ltd

M. Shreesha, J

Aggrieved by the orders dated 25.04.2019 in Consumer Complaint Nos. 226 and 227 of 2015, passed by the Haryana State Consumer Disputes Redressal Commission, Chandigarh (in short "the State Commission"), the Complainants preferred these First Appeals, under Section 19 of the Consumer Protection Act, 1986 (in short "the Act"). By the impugned order, the State Commission has dismissed the Complaint.

For reason cited in the Affidavit and also the Medical Certificate given for Parkinson's Disease we find it a fit case to condone the delay.

Since both these Appeals deal with an identical issue, they are being disposed of by this common order. For the sake of convenience, First Appeal No. 815 of 2016 is being treated as a lead case.

The brief facts as set out in the Complaint are that the Developer (hereinafter referred to as "the Developer") after obtaining license No. 97 of 2018 from the State of Haryana, launched a project by the name of "Landmark Cyber Space" at Sector 67, Gurgaon, Haryana. It is stated that the project was widely advertised and lured by the promises made in the advertisements, the Complainants decided to purchase a super area space of 1000 sq. ft. and invested their life savings of Rs. 25,00,000/- ( i.e. 100% cost) vide two cheques dated 23.07.2008 and 08.08.2008 and entered into an Agreement with the Developer on 10.08.2008. It was stated that at the time of booking, according to condition D of the Application Form, the Developer had agreed that if the possession was not given within 36 months, the Developer would refund the amount paid within 30 days from the date of the receipt of the request for refund with 12% simple interest p.a. It was averred that as per condition No. 4 of the Agreement, the Developer agreed to pay Rs. 55,000/- per month as assured return but stopped making this payment after the year 2013. It was averred that after a lapse of three years, the Complainants visited the site and had several meetings with the Developer and each time they were assured that the project would be completed very soon.

It was averred that the Developer had not complied with the terms and conditions of the Agreement dated 10.08.2008 and failed to give possession even after 7 years. On 31.07.2014, the Complainants got issued a legal notice to the Developer asking for refund of the amount according to condition no. 11 of the Agreement i.e. 2.2 times of the Principal Amount (Rs. 25,00,000/-) along with 18% interest annually from the date of Agreement, but there was no response. The Complainant vexed with the attitude of the Developer approached the State Commission seeking the following reliefs:

"It is therefore, respectfully prayed that the complaint be accepted and opposite party be directed to refund 2.2 times amount of principal amount i.e. Rs.25 lacs with 18% interest the total claimed amount is Rs.8,434,471/- including the interest upto Nov. 2015 according to condition no.11 of the agreement in the interest of justice.

It is further prayed that the opposite party be directed to pay Rs. two lac for the expenditure on account of litigation charges and Rs. 1 lac for mental harassment as the opposite party has cheated the complainants as mentioned above."

The Developer filed its Written Statement stating that the space booked by the Complainants was a 'Commercial' one and not 'Residential', hence, the Complainants do not fall within the definition of 'Consumers' as defined under the Act. It was averred that the Complainant relied upon the Memorandum of Understanding and the genesis of the MOU can be proved before the Civil Court; that the Developer has already applied for the Completion Certificate and if any time is taken for completion of the legal formalities the same cannot be treated as an intentional delay; that as per clause 4 of the Agreement the Developer has already paid the assured return three years as per Agreement; that despite their best efforts, the Developer could not complete the project on time and hence had paid the amount of assured return for three years and now the project is complete; that the Complainants have only paid Rs. 50,00,000/- against 2000 sq. ft. vide two Agreements and thereafter stopped paying money despite demands; that the Complainants never came forward to sign the Builder Buyer Agreement; that the Complainants had already received Rs. 57,70,050/- as assured return against 2000 sq. ft. for two MOUs which is amounting to more than the principal amount paid and there are outstanding dues on the Complainants. It is stated that there is no deficiency of service on behalf of the Developer.

The State Commission based on the evidence adduced and pleadings placed before it, dismissed the Complaints observing as hereunder:

"4. The main controversy swirls around the question that whether the complainants are covered by definition of consumer or not, particularly when they booked space in commercial project.

Learned counsel for complainant vehemently argued that when complainant- Mr. L.K. Vashisht entered witness box it was specifically stated by him that they booked this space to establish their children and having consultancy and it amounts to purchase for earning livelihood and they are covered by the definition of consumer. He placed reliance upon the opinion of this commission in complaint no. 92 of 2015 expressed in Ms. Parnita Garewal Vs. M/s Landmark Apartment Pvt. Ltd. decided on 26.07.2016.

This argument is devoid of any force. This statement seems to be an after thought version. It is nowhere pleaded in the complaint that this space was booked for settlement of their kids or running consultancy. Even in his statement it was nowhere stated by complainant that what their children are doing at this stage. It was stated that he was suffering from Parkinson disease and was willing to leave the job, but, he has not produced any evidence to prove this fact. It is opined by Hon'ble National Commission in Revision Petition No. 4044 of 2009 titled as M/s. JCB India Ltd. Vs. M/s. Chandan Traders & Ors. decided on 19.02.2015 that complainant has to plead and prove that commercial article was purchased for earning livelihood by way of self-employment. In that case complainant alleged that he purchased machine for earning livelihood, but there was no evidence to prove this fact, whereas in the present case complainants have not even alleged to this effect. Even otherwise for running consultancy services they have to employ other persons and it cannot be considered that property was booked for earning livelihood.

Not to talk of this fact from the perusal of copy of complaint Ex.R-1 it is clear that complainants have purchased another shop measuring 1000 sq. yards in this very project. When they purchased two spaces in commercial project, it cannot be presumed that same was for earning livelihood. Since they purchased office space for commercial purpose, he cannot be considered as consumer keeping in view the opinion of Hon'ble National Commission in Madhu Sehgal's case (supra). These views are fortified by opinion of Hon'ble National Commission in Nilesh Goyal Vs. Symphony Infrastructure Pvt. Ltd. IV CPJ (2016) 678 (NC) wherein it is opined that if consumer has purchased more than one office/ shop then he cannot be considered as consumer. These views are fortified by the opinion of the Hon'ble National Commission expressed in Pradeep Singh Pahal Vs. TDI Infrastructure Pvt. Ltd. CPJ 1 (2016) 219. Complainant cannot derive any benefit from the cited case law because in that case complainants succeeded to prove that the property was purchased for earning livelihood, whereas it is no so in the present case. Looking from any angle it is clear that complainant is not consumer and complaint is not maintainable. He cannot be considered as consumers as provided under section 2 (i)(d) of the Consumer Protection Act, 1986 (in short "Act")

when this commission is not having jurisdiction to adjudicate upon this mater it is not supposed to go into the merits of the case because judgement without jurisdiction amounts to nullity as opined by Hon'ble National Commission expressed in Revision Petition No. 317 of 1994 titled as Haryana Urban Development Authority Vs. Vipin Kumar Kohli decided on 19.01.1995. Resultantly complaint fails and the same is hereby dismissed."

(Emphasis supplied)

The point that arises for consideration is whether the State Commission was justified in holding that the Complainants were not 'Consumers' as they had purchased 'Commercial Space'. It is an admitted fact that the Complainants purchased super area space of thousand square feet in 'Landmark Cyber IT Park' and paid the total cost i.e. Rs. 25,00,000/- vide cheques dated 23.07.2008 and 08.08.2008 through ICICI Bank and an MOU was entered into between the parties on 10.08.2008.

It is clearly specified that the purchase of space in the proposed IT Park is for consideration of Rs. 25,00,000/-; that parking EDC maintenance charges would be paid at the time of possession; that the Developer will pay Rs. 55,000/- as assured return per month quarterly to the Complainants till the delivery of possession or for a period of 3 years; that quarterly cheque of the sum assured would be paid in individual names to all co-owners equally and that the Developer would reimburse 2.2 times of the entire principal amount in case of non-completion of the project along with bank interest @ 18% p.a. annually. A perusal of the Application Form shows that the Developer has further promised to complete the project within 36 months and in case the Developer fails to do so for reasons beyond their control they would refund the money within 30 days from the date of receipt of request for refund with simple interest @ 12% p.a.

At the outset, we address to the issue as to whether the Complainants fall within the Ambit of the definition of 'Consumer' as defined under Section 2(i)(d) of the Act.

Learned Counsel appearing for the Developer vehemently contended that the Complainants were not 'Consumers' as they have booked 'Commercial Space' in the IT Park and that there was no plea in the Complaint that it is for their livelihood. He further submitted that the Complainants already received an amount of Rs. 57,70,050/- towards assured return in both the Complaints and that the plea that this Commercial Space was purchased for their own livelihood was raised by the Complainants for the very first time in their Evidence Affidavit without filing any documentary proof thereof and that the IT Park today is complete and the competent authority has also issued part Occupation Certificate and hence seeking refund with interest at this juncture, is not justified. He drew our attention to Clause 11 in the said MOU, which is reproduced as here under:

"11. That the First Party will reimburse 2.2 times of the entire principal amount in case of non completion of project along with bank interest of 18% annually."

It is the case of the Developer that there was no definite time frame given to construct the project and as it was an assured return project the benefits of which were already availed by the Complainants together with the fact that the project today is complete, question of refund of the principal amount with interest does not arise.

A brief perusal of the Affidavit of Evidence filed by the Complainants before the State Commission establishes that the Complainants wanted to use the said space for opening an office for their livelihood by employing themselves. This Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, has held that when a plea is raised by the Developer/ Developer that the Complainant is not a Consumer as defined under Section 2 (i)(d) of the Act as the space was purchased for commercial purpose or that more than two shops / flats have been purchased, it has been held by this Commission that the onus shifts to the Developers / Developer to establish that the Complainant was dealing in real estate i.e. in purchase and sale of shops / flats. In the instant case the Developer did not discharge its onus.

Be that as it may, this Commission in its order dated 23.01.2018 in First Appeals No. 1260 to 1262 of 2016 (M/s. Landmark Apartment Pvt. Ltd. Vs. Ms. Parnita Garewal), while dealing with the same point of law, as to whether the Complainants were Consumers when they have purchased commercial space in the same project floated by the same developer, has held that the Complainants were Consumers as defined under Section 2 (i)(d) of the Act and that the Agreement does not anywhere specify that the space is meant for only IT Park enabled services. Even in the instant case, neither the Application Form nor the MOU states that the space had to be used only for an IT related purposes.

It is pertinent to mention that the Hon'ble Supreme Court in its order dated 16.04.2018 in SLP No. 9147 of 2018 ((M/s. Landmark Apartment Pvt. Ltd. Vs. Krishna Prakash), has dismissed the SLP preferred by the Developer against the orders passed in the aforenoted First Appeals and therefore the finding that the Complainants who have purchased Commercial Space in the said IT Park fall within the definition and Ambit of Section 2 (i)(d) of the Act, has attained finality.

As four years have already lapsed and the Consumer Complaint is of the year 2015, we do not find it a fit case to remand the matter back to the State Commission. Moreover, when the same issue has already attained finality in similar matters. As per Clause 4 of the MOU, the developer has to pay Rs. 55,000/- as an assured return per month payable quarterly to the Complainants till the date of possession or for a period of 3 years. It is stated by the learned Counsel appearing for the Developer that this amount has already been paid for a period of 3 years. It is also an admitted fact by the Complainants that an amount of Rs. 57,50,050/- has been paid up to the year 2013 and an MOU is dated 10.08.2008 and therefore it may be seen that 3 years has lapsed and the Complainants have received an amount upto the year 2013.

Now we address ourselves to whether the Complainants are entitled to the amount sought for under Clause 11 of the MOU. It is an admitted fact that the Developer did not deliver legal possession along with the Occupation Certificate, though more than 10 years have lapsed. The Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 (SC), has laid down that the flat purchaser could not be made to wait inordinately for possession. In that case the Hon'ble Supreme Court has observed that a period of 7 years is an inordinate period of delay. In the instant case, it is pertinent to mention that the MOU was entered into way back on 10.08.2008 and more than 10 years has lapsed, which can be construed as an inordinate delay. Though Clause 11 of the MOU stipulates that the Developer should refund 2.2 times the principal amount with interest @ 18% p.a, to balance equities, we find it a fit case to rely on the terms and conditions specified in the Application Form with respect to refund of the principal amount with interest @ 12% p.a. from the respective dates of deposit till the date of realisation. We also find it a fit case to award reasonable compensation of Rs. 25000/- and cost of Rs. 10,000/- for the mental agony suffered by the Complainants.

At this juncture, it is also significant to mention that the direction for refund with interest @ 12% p.a has attained finality as the Hon'ble Supreme Court has dismissed SLP in First Appeals No. 1260 to 1262 of 2016 (M/s. Landmark Apartment Pvt. Ltd. Vs. Ms. Parnita Garewal), dealing with the identical facts against the same Developer and the same project.

In the result, both these Appeals are allowed and the order of the State Commission is set aside and we direct the Developer to refund the amount paid by the Complainants in each Complaint with interest at 12% p.a. from the respective dates of deposit till the date of realization together with reasonable compensation of Rs. 25,000/- and cost of Rs. 10,000/-. This amount is directed to be paid within four weeks from the date of receipt of a copy of this order, failing which, the amount shall attract interest @ 14% p.a. for the same period.