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Judgment
Dinesh Singh, Member
The instant Appeal has been filed under Section 19 of The Consumer Protection Act, 1986, hereinafter referred to as the 'Act', challenging the Order dated 27.09.2018 passed in Consumer Complaint No. 227 of 2018 by the State Consumer Disputes Redressal Commission, Punjab, hereinafter referred to as the 'State Commission'.
The Appellants, Chandigarh Overseas Private Limited, were the Opposite Parties before the State Commission, and are hereinafter being referred to as the 'Builder Co.'.
The Respondents, Mr. Amninder Deep Singh and Mr. Rajpreet Singh, were the Complainants before the State Commission, and are hereinafter being referred to as the 'Complainants'.
Brief salient facts of the case, shorn of unnecessary details, are that the Complainants deposited Rs. 20,00,000/- with the Builder Co. with an application dated 10.05.2010 for allotment of a "Design Studio", hereinafter being referred to as the 'Unit', in their "Industrial Knowledge (Fashion Technology) Park", hereinafter being referred to as the 'Project'.
A Buyer Developer Agreement, hereinafter being referred to as the 'Agreement', was executed between the Complainants and the Builder Co. on 10.05.2010.
Thereafter the Complainants deposited Rs. 13,00,000/- with the Builder Co. on 15.06.2010, bringing the total deposited amount to Rs. 33,00,000/-.
The agreed and assured date of completion of the Project, as written in the Agreement, was 31.03.2011.
The Builder Co. issued a "Provisional Allotment Letter" on 17.06.2011, in which it inter alia stated that "The Final Allotment and Possession will be subject to the Terms & Conditions, Rules and Regulations and directions issued by the department of Industries in its approvals and subsequent correspondence until now and to be issued in future.".
The Builder Co. failed to make a "Final Allotment" or to deliver "Possession" of the Unit to the Complainants.
The Complainants filed Consumer Complaint No. 227 of 2018 before the State Commission on 27.03.2018.
We heard arguments from the learned Counsel for both sides, and perused the entire material on record, including inter alia specifically the impugned Order dated 27.09.2018 of the State Commission and the Memorandum of Appeal.
The State Commission vide its impugned Order dated 27.09.2018 had allowed the Complaint.
The Award made by the State Commission is reproduced below:
In view of our above discussion, this complaint is allowed and following directions are issued to the opposite parties:-
i) to refund `33,00,000/- to the complainants along with interest at the rate of 12% per annum from the different dates of payment of different amounts till the date of payment;
ii) to pay `50,000/- to the complainants as punitive damages; and
ii) to pay `50,000/-, as compensation for the harassment and mental agony suffered by them including cost of litigation.
However, the opposite parties shall be at liberty to deduct the amount of damages paid by them to the complainants as per clause 15 of the Buyer Developer Agreement, Ex.C-7, if any, after showing proof to the complainants about the payment of the same.
The opposite parties shall comply with the order within 30 days of the receipt of certified copy thereof, failing which the amount of `50,000/- as punitive damages and another amount of `50,000/- as compensation shall also carry interest at the rate of 12% per annum from the date of this order till realization.
The State Commission has, in essence, directed the Builder Co. to refund the amount deposited by the Complainants (Rs. 33,00,000/-) with interest (@12% p.a.) along with punitive damages (Rs. 50,000/-) and compensation for harassment and mental agony including cost of litigation (Rs. 50,000/-).
The salient material chronology is as below:
i.
Date of Application by the Complainants with the Builder Co. for allotment of a Unit in their Project:
10.05.2010
(ii)
Date of making first deposit and amount of the deposit:
10.05.2010
Rs. 20,00,000
(iii)
Date of execution of the Agreement:
10.05.2010
(iv)
Date of making subsequent deposit with the Builder Co. and amount of the deposit:
15.06.2010
Rs. 13,00,000/-
(v)
Total amount deposited by the Complainants with the Builder Co.:
Rs. 33,00,000/-
(vi)
Total cost of the Unit:
Rs. 33,00,000/-
(vii)
Agreed and assured date of completion of the Project:
31.03.2011
(viii)
Date of the Provisional Allotment Letter:
17.06.2011
(ix)
Date of filing of the Complaint before the State Commission (C.C. No. 227 of 2018):
27.03.2018
(x)
Date of the State Commission's impugned Order:
27.09.2018
(xi)
Date of filing of the Appeal by the Builder Co. before this Commission (F.A. No. 349 of 2019):
25.02.2019
(xii)
Date of arguments before this Commission:
26.09.2019
One contention made by the Builder Co. was that, since the agreed and assured date of completion was 31.03.2011, and the Complaint was filed before the State Commission on 27.03.2018, the Complaint is barred by limitation.
We find this contention to be totally untenable.
When the amount of Rs.33,00,000/- was deposited on 10.05.2010 / 15.06.2010, being the total cost of the Unit, and when neither any refund was made and nor any Unit offered for possession, it was a continuing wrong, the Complainants had a continuing cause of action, and as such it can in no way be said that their Complaint was barred by limitation.
We also note that the State Commission has correctly appraised this issue in its impugned Order (para 18 of the State Commission's Order).
Another contention made by the Builder Co. was that the Complainants had booked the Unit for "commercial gains" and were accordingly not 'Consumer' within the meaning of Section 2(1)(d) of the Act.
We find this contention also to be totally untenable.
We note that the Complainants, who are real brothers, have specifically and categorically averred in their Complaint that "the complainants, with an intention to establish a ready-made garment shop/boutique in the Fashion Technology Park for Complainant No. 1 to enable him to earn his livelihood by way of self employment, agreed to purchase the said unit in the Fashion Technology Park." (para 5 of the Complaint).
We also note that the State Commission has correctly appraised this issue in its impugned Order and arrived at a reasoned finding that the Complainants were 'Consumer' under the Act (para 17 of the State Commission's Order).
We further note that the Builder Co. has but raised only a bald objection, it has not adduced any cogent evidence to rebut the Complainants' specific and categorical averment that the Unit was to establish a ready-made garment shop / boutique for Complainant No. 1 to enable him to earn his livelihood by way of self-employment.
In the clear absence of any cogent evidence to substantiate its anyhow made objection, that the Complainants had booked the Unit for "commercial gains", we agree with the State Commission that the Complainants are covered by the Explanation given in Section 2(1)(d) of the Act (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).
The Builder Co. has inter alia stated that it entered into and later terminated a Joint Development Agreement with one M/s Ionic Realty Limited, that it was involved in litigation, that as a consequence of "stay" on the "construction" of the Project there was no activity on the Project site from 26.04.2011 to 23.08.2014.
It has also stated that the Project was "stalled" by the Regulatory Authorities.
It has accordingly contended that the Project was delayed due to reasons beyond its control, and has sought protection under the Force Majeure clause in the Agreement.
We may however state that prior to, or, at the least, simultaneous to, getting a Consumer to enter into its Agreement and accepting the first payment towards the total cost of the subject Unit, the Builder Co. was required and expected to have the due pragmatic and realistic assessment and preparation of the Project Planning, Execution and Completion.
It was the prime responsibility of the Builder Co. to ensure that it was in a position to deliver the possession of the subject Unit(s) to the Buyer(s) Consumer(s) within the agreed and assured period and in all contingencies within a reasonable period thence (reasonable period here would connote such period as a reasonable man would not normally agitate).
Planning, Execution and Completion were its responsibility, and not of the Consumer(s).
(Normal) impediments or problems that arise in Planning, Execution and Completion were its responsibility, and not of the Consumer(s).
Specifically, availability of land (/ acquisition of land), as well as all approvals from the concerned Government / Development / Municipal authorities, as and when due, being fundamental basic requirements of a construction Project, were decidedly the Builder Co.'s primary responsibilities, and not of the Consumer(s).
Its arrangements of Joint Development Agreement(s) etc. with any third party or its arrangements with its contractors or sub-contractors etc. or its litigation etc. were its own concern / problem, and not of the Consumer(s).
Cost and Time overruns were its responsibility, not of the Consumer(s).
Non-fulfilment of its overall responsibilities of Project Planning, Execution and Completion can not be and are not grounds for condoning or overlooking delay in completion and failure to hand over possession within the agreed and assured period.
Force Majeure , unforeseeable circumstances, irrespective of its various 'liberal' or 'strict' interpretations, and irrespective of its various interpretations in different sets of facts, can, but, not be nebulously and irrationally articulated in the agreement, or contended and argued for anything and everything related to the Builder Co.'s responsibilities for completion of the Project without Cost or Time overruns.
It is a matter of record that:
[a] The Agreement was executed between the Complainants and the Builder Co. on 10.05.2010.
[b] The Complainants deposited Rs. 20,00,000/- and Rs. 13,00,000/- (total Rs. 33,00,000-) with the Builder Co. on 10.05.2010 and 15.06.2010 respectively for the subject Unit in its Project.
[c] The agreed and assured date of completion of the Project, as written in the Agreement, was 31.03.2011.
[d] Subsequent to the said agreed and assured date of completion of the Project, i.e. subsequent to 31.03.2011, the Builder Co. issued a "Provisional Allotment Letter", on 17.06.2011, in which it inter alia stated that "The Final Allotment and Possession will be subject to the Terms & Conditions, Rules and Regulations and directions issued by the department of Industries in its approvals and subsequent correspondence until now and to be issued in future.".
[e] Despite obtaining the total cost of the subject Unit (Rs.33,00,000/-), the Builder Co. failed to complete the Project and deliver physical possession of the subject Unit by the agreed and assured date (31.03.2011), or even till the date of filing of the Complaint before the State Commission (27.03.2018), or even still till the date of decision of the State Commission (27.09.2018), or even still further till the date of arguments in the instant Appeal in the Circuit Bench at Chandigarh (26.09.2019).
[f] No refund of the amount deposited (in 2010), with or without deduction, with or without interest, was made by the Builder Co. after the expiry of the agreed and assured date of completion (31.03.2011), or even within a reasonable period thence (reasonable period here would again connote such period as a reasonable man would not normally agitate).
No refund was made even till the date of arguments before this Commission (in 2019).
[g] The Builder Co.'s Project did not have all (repeat all) necessary approvals from the competent Government / Development / Municipal authorities at the time of its Agreement i.e. on 10.05.2010, or even on the agreed and assured date of completion i.e. on 31.03.2011, or even still within a reasonable period thereafter.
A Consumer cannot be made to wait indefinitely or unreasonably. Indefinite or unreasonable delay cannot continue ad nauseam, ad infinitum (such situation would be absurd). In the facts of the present case, unreasonable delay is writ large. A natural corollary thereof is that two rights accrue to the Consumer:
one : the option to wait for the subject Unit to be handed over, if and when the construction is completed and the offer of possession of the subject Unit is made by the Builder Co., at his (the Consumer's) considered wisdom and discretion, and in addition to seek just and equitable compensation under the Act for unreasonable delay and consequential loss and injury.
two : to claim refund of the deposited amount with just and equitable interest / compensation / cost of litigation.
That is, the Consumer has both options available, one , to obtain possession of the subject Unit if and when offered by the Builder Co. and in addition seek just and equitable compensation under the Act for unreasonable delay in possession, and, two, to opt for a fair amount from the Builder Co. comprising of refund of the deposited amount with just and equitable interest / compensation / cost of litigation.
It is seen that of the two options available to the Complainants herein, they opted for obtaining a fair amount comprising of refund of the amount paid to the Builder Co. with interest / compensation / cost of litigation.
In a nutshell, the Builder Co. invited Application(s) for "Allotment of Industrial Unit(s)" and collected deposits from Consumer(s) without the Project being duly approved by the competent Government / Development / Municipal authorities, it did not get the Project duly approved within the agreed and assured period of completion i.e. till 31.03.2011, it did not get the Project duly approved even within a reasonable period thence.
The deposit of Rs. 33,00,000/-, being the total cost of the subject Unit, was made by the Complainants with the Builder Co. in 2010. The Builder Co. failed to complete the Project and deliver physical possession of the subject Unit till the agreed and assured date of completion (31.03.2011), or within a reasonable period thence.
We note ingredients of both, 'deficiency in service' within the meaning of Section 2(1)(g) & (o), and 'unfair trade practice' within the meaning of Section 2(1)(r) of the Act, to be well and truly evident on the part of the Builder Co.
In respect of 'unfair trade practice', we may note here that it is a specific provision unique to The Consumer Protection Act, 1986.
Section 2(1)(r) says of "a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-".
The list provided in Section 2(1)(r) is illustrative and not comprehensive.
That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on facts and reasons, on fair and objective appraisal of the evidence and material on record, would qualify as 'unfair trade practice' within the meaning of Section 2(1)(r).
In the instant case,
[a] Inviting and accepting "Application(s)" and obtaining concomitant deposit of Rs.20,00,000/-and entering into an Agreement on 10.05.2010 without having all (repeat all) approvals in place,
[b] Accepting further deposit of Rs. 13,00,000/- on 15.06.2010 without having all approvals in place,
[c] Not having all approvals in place even by the agreed and assured date of completion of the Project i.e. even by 31.03.2011,
[d] Not having all approvals in place even still within a reasonable period thereafter,
[e] Issuing a "Provisional Allotment Letter" on 17.06.2011, after the agreed and assured date of completion (31.03.2011), and inter alia stating therein that "The Final Allotment and Possession will be subject to the Terms & Conditions, Rules and Regulations and directions issued by the department of Industries in its approvals and subsequent correspondence until now and to be issued in future.",
[f] Arbitrarily and highhandedly retaining the deposited amount of Rs. 33,00,000/-, being the total cost of the subject Unit, for an unreasonably protracted period beyond the agreed and assured date of completion of the Project (31.03.2011), are decidedly unfair and deceptive within the meaning of Section 2(1)(r).
We may add that the Act is for "better protection of the interests of consumers", in recognizedly a fight amongst unequals.
Its Statement of Objects and Reasons speaks of "speedy and simple redressal to consumer disputes".
The Complainants deposited the total cost of the subject Unit (Rs. 33,00,000/-) with the Builder Co. in 2010. The agreed and assured date of completion of the Project was 31.03.2011. We are now in 2019.
This is a plain and simple case of a Builder Co., with wherewithal, on the one side, and an ordinary common Consumer, without wherewithal, on the other side, with the Builder Co. first indulging in deficiency in service and unfair trade practice, causing loss and injury to the Consumer, and then indulging in litigation in one, and then, two, Consumer Protection Fora. We also find that, before the second Forum, i.e. this Commission, also, its case fails.
All this is not viewed favourably.
We note that the State Commission has passed a well-appraised and well-reasoned Order.
We find the Award made by the State Commission, as quoted in para 5 above, to be just and equitable.
We have no hesitation in dismissing the Appeal and confirming the Award made by the State Commission in its impugned Order dated 27.09.2018.
In addition, we deem it just and appropriate that Rs. 50,000/- shall be paid by the Builder Co. to the Complainants towards cost of litigation in the appellate proceedings before this Commission.
Further, for 'unfair trade practice' per se , the Builder Co. through its Chief Executive is put to stern advice of caution with imposition of cost of Rs. 1,00,000/- to be deposited in the Consumer Legal Aid Account of the State Commission.
The Builder Co. shall ensure compliance within four weeks of the pronouncement of this Order (paras 20, 21 and 22 above).
The State Commission shall undertake execution as per the law for failure or omission in compliance within the stipulated time-period.
Towards this end, the Registry is directed to send a copy of this Order to the State Commission within seven days of its pronouncement.
We may add that the liability qua the Consumer-Complainants initiated the day they made their first deposit with the Builder Co., and it continues.
The duties / responsibilities of Director are laid-down in The Companies Act, 2013.
We also refer to the substantive principles of law as contained in Section 47 ('Questions to be determined by the Court executing decree') under Part II, Execution , of the CPC.
The Director(s) of the Builder Co. shall have to discharge the onus to show that they are not liable, along with the Builder Co., jointly and severally, on the question being raised in the executing Forum in execution proceedings.
We are making this observation in reference to ' Enforcement ' under Section 25(3) and ' Penalties ' under Section 27 of the Act.
So disposed.