NAWAB
SINGH J, Suman Devi-complainant, has filed the instant complaint under section 17 of the
consumer protection act, 1986 (for short the act, 1986) with the averments that
she booked a residential plot No.R-70 Type-A, in a forthcoming project of M/s
IREO Fiveriver Private Limited-Opposite Party (for short the builder) known as
IREO Fiveriver. The complainant initially deposited Rs.6,25,000/- vide receipt
Exhibit C-1. In all, she paid Rs.28,50,461/- to the builder. A Plot Buyers
Agreement (Exhibit C-2) was executed between the parties on June 23 , 2011. The
totalth sale consideration of the plot was Rs.62,64,750/-. The possession of
the plot was to be handed over to the complainant within 24 months from the
execution of the agreement, that is, by June 22 ,nd 2013. The builder neither
handed over the possession of the plot nor responded to the complainant with
regard to the progress of the project. The complainant requested for refund of
the amount deposited, alongwith interest but the builder did not pay any heed
to her request.
2. The
builder, in its written version, resisted the complaint on various grounds
including its maintainability. The builder in preliminary objections averred
that the complainant is not Consumer within the meaning of section 2(1)(d) of the
consumer act; vide Clause-34 of the Buyers Agreement, dated June 23 , 2011,
it was resolved between the parties that all theirrd disputes, differences or
disagreements arising out of, in connection with or in relation to the
Agreement, shall be decided by Arbitration in accordance with the provisions of
the Arbitration & Conciliation Act, 1996 (for short, Arbitration Act, 1996)
and in view thereof, no Court or Commission or Tribunal, except the Arbitral
Tribunal, has jurisdiction to entertain any dispute arising out of the
transaction in question; the complainant has not hired any services from the builder. On merits, the builder
admitted the payment of Rs.28,50,461/- made by the complainant. The builder
also admitted the execution of Plot Buyers Agreement (Exhibit C-2). It is
pleaded that the possession has got delayed due to force majeure circumstances
because the builder was granted Forest Clearance on December 17 , 2009, which
was later revalidated and Wild Lifeth Clearance was granted on October 30 ,
2009, Airport Clearance on February 26 , 2010,th th Ground Water Board
permission on August 19 , 2011, License No.28, 55 and 74 were issued onth March
23 , 2010, August 1 , 2013 and August 1 , 2013 respectively. It was submitted
thatrd st st environment clearance was given on April 15 , 2014, No Objection
Certificate (NOC) fromth Pollution Control Board on May 2 , 2014 but still NOC
from National Wild Life Board wasnd awaited.
3. The
complainant-Suman Devi in evidence examined herself as CW1 and produced
documents. The builder examined Rajneesh-OPW1, authorized representative
alongwith documents Exhibit OP-1 to OP-44.
4. The
following questions arise for consideration:-
(i)
Whether the complainant is consumer or not?
(ii)
Whether the present complaint is to be referred to Arbitration in view of
Clause-34 of the Buyers Agreement, dated June 23 , 2011?rd
(iii)
Whether the builder defaulted in delivering the possession of the plot to the
complainant or not?
5. The
first question, that falls for consideration is whether the complainant is
consumer or not? Unless there is evidence on record to show that the
complainant had booked more than one property/flat for the purpose of trading,
a bald assertion by the builder that property/flat had been bought for the
purpose of making profits is not sufficient to hold that the transaction was
for Commercial purpose. Except for a bald plea in the reply that the plot had
been purchased by the complainant with a view to sell it on premium and make
profits, Builder has not said even an additional word in this behalf, leave
alone leading evidence to prove the assertion. So, this plea of the builder is
hereby rejected.
6. The
next question is as to whether the matter is to be referred to the Arbitration
per clause 34 of the Buyers Agreement, dated June 23 , 2011 or not? rd
7.
Learned counsel for the builder has contended that after enactment of the arbitration and
conciliation (amendment) act, 2015 in section 8 of the arbitration act, it is mandatory for this
Commission to refer the parties to arbitration.
8. section 8 of the
arbitration act, 1996 is reproduced as under:-
8. Power to refer parties
to arbitration where there is an arbitration agreement. A judicial authority before which an action is
brought in a matter which is the(1) subject of an arbitration agreement shall,
if a party so applies not later than when submitting his first statement on the
substance of the dispute, refer the parties to arbitration. The application
referred to in sub-section (1) shall not be entertained unless it is(2)
accompanied by the original arbitration agreement or a duly certified copy
thereof. Notwithstanding that an application has been made under(3) 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.
9.
After amendment of the section in the year 2015, section 8 reads as under:-
8. Power to refer parties
to arbitration where there is an arbitration agreement. A judicial authority,
before which an action is brought in a matter which is the(1) 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.
10. section 3 of the consumer
act is
relevant to adjudicate the point at issue. So, it is necessary to reproduce the
provisions of section 3 of the consumer act:-
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.
11.
Upon reading of the section 3 of the consumer act, it is clear that it
provides additional remedy and existence of arbitration clause, in the
agreement, to settle disputes between the parties, is not a bar to entertain a
complaint filed by the consumer, alleging deficiency in service in providing
services etc. It is a remedy in addition to and not in derogation to any other
remedy available to an individual. Honble Supreme Court in Skypak Couriers Ltd. v. Tata Chemicals Ltd. held as under:-Ltd.,
(2000) 5 SCC 294 Even if there exists an arbitration clause in an agreement and
a complaint is made by the consumer, in relation to a certain deficiency of
service, then the existence of an arbitration clause will not be a bar to the
entertainment of the complaint by the Redressal Agency, constituted under the
Consumer Protection Act, since the remedy provided under the Act is in addition
to the provisions of any other law for the time being in force.
12. In another case Trans Mediterranean Airways v. Universal
Exports 2011(4) R.C.R.(Civil) , Honble Supreme Court held as
under:472 (SC) In our view,
the protection provided under the CP Act to consumers is in addition to the
remedies available under any other statute. It does not extinguish the remedies
under another statute but provides an additional or alternative remedy
13. No
doubt these authorities were rendered prior to the amendment of section 8 of the
arbitration act, 1996 but even then the spirit of section 8 of arbitration (amendment) act, 2015
and section 3 of the consumer act is the same, that is, the remedy is in
addition to and not in derogation to any other remedy available. In a recent
judgment Lt. Col. Anil Raj and Another decided on May 02 , 2016 byVersus M/s
Unitech Limited and another, C.C. No.346 of 2013, nd Honble Mr. Justice D.K.
Jain, President, National Consumer Disputes Redressal Commission, New Delhi
after considering the amendment in section 8 of the arbitration (amendment) act,
2015 held
that in spite of the recent amendments in the Arbitration Act that the
protection provided to the consumers under this Act is in addition to the
remedies available under any other statute, including the consentient
arbitration under the Arbitration Act. It was held that the complaint filed by
a consumer before the Consumer Fora would be maintainable despite there being
an arbitration clause in the agreement to refer the dispute to the Arbitrator.
Hence, the aforesaid contention advanced by learned counsel for the builder is
rejected.
14.
Clause 11.1 of the agreement is relevant, which is reproduced as hereunder:-
11.
POSSESSION AND HOLDING CHARGES 11.1 Subject to Force Majeure as defined herein,
and further subject to the Allottee having complied with all its obligations
under the terms and conditions of the 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.
15. It
is not disputed that the builder floated the project and they were bound to
obtain all the permissions before they invite applications from public. The
builder cannot raise plea that for want of certain clearances, the possession
of the plot could not be delivered. When the builder invited the applications
and collected huge amount from the public, they cannot delay the
allotment/possession of the plot for awaiting clearances. Thus, delay/breach,
if any, was on the part of the builder. The builder has not even remotely
alleged any default on the part of complainant. It is clearly made out that the
builder was at fault in non-performance of the services agreed. The builder
could not deny the refund of the deposited amount sought by the complainant.
The complainant has paid Rs.28,50,461/- to the builder. The builder is a
commercial organization and used the amount for promotion of its business.
16. In view of above, the
complaint is allowed. M/s IREO Fiveriver Private Limited-builder is directed to
pay Rs.28,50,461/- (Rupees Twenty Eight Lac Fifty Thousand Four Hundred Sixty
One Only) to the complainant, alongwith interest at the rate of 12% per annum
from the date of its respective deposits till the date of realization;
Rs.25,000/- as compensation for rendering deficient services and Rs.10,000/-
towards litigation expenses. The entire amount be paid by the builder within a
period of 45 days, from the date of receipt of the order, otherwise, it will
carry interest at the rate of 18% per annum, till realization and it calls for
pointed notice that under Section 27 of the Act, if the builder fails or omits to
comply with this order, it shall be punishable with imprisonment for a term
which shall not be less than one month but which may extend to three years or
with fine or with both. Announced 26.07.2016 (Diwan Singh Chauhan) Member (B.M.
Bedi) Judicial Member (Nawab Singh) President
very useful
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