The National Consumer Dispute Redressal Commission (NCDRC) has reiterated that an Arbitration Clause in the Agreement doesn't bar the jurisdiction of the Consumer Court to entertain the Complaint.

The single-judge bench of Justice R.K. Agarwal cited M/s. Emaar MGF Land Ltd. Vs. Aftab Singh, 2018 Latest Caselaw 921 SC to affirm the above and accordingly dismissed the IA filed by the Opposite Party Developer seeking permission to refer the case to Arbitrator. 

Brief Facts of the Case

The Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 against Opposite Party, M/s. Emaar MGF Land Limited seeking a refund of the amount paid towards the purchase of the Villa along with interest, compensation, and costs as the Opposite Party Developer failed to hand over the possession of the Villa booked by them in the Project launched by the Developer in the name and style of “The Villa”.

It was advertised with facilities such as car parking spaces, recreational facilities, and landscaped gardens, based on which the complainant made a booking and deposited ₹11,00,000/- and signed an agreement in 2008. The possession was supposed to be given in 2010 but the developer kept on delaying the same. When in 2015, the complainant inspected the site, no construction work was progressed and therefore he asked for a refund. The Opposite didn't provide the same and resultantly, the complainant filed the present complaint with the NCDRC alleging deficiency of service and unfair trade practice on the part of the developer, praying for a refund of the money they paid with interest, compensation for harassment, mental agony, and litigation expenses.

NCDRC's Observation

The Commission at the outset, in view of M/s. Emaar MGF Land Ltd. Vs. Aftab Singh, 2018 Latest Caselaw 921 SC rejected the contention of the Opposite Party Developer that the clause of Arbitration bars this Commission from entertaining the Complaint as unsustainable.

So far as the next objection raised that the Complainants are not ‘Consumers’ and that the subject Villa was booked for investment purpose was concerned, the Commission referred to Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainant No.1 was dealing in real estate i.e. in the purchase and sale of plots/ flats in his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case the Opposite Party Developer had failed to discharge by filing any documentary evidence to establish their case. 

"I am of the considered view that the Complainants do fall within the definition of ‘Consumer’ as defined under Section 2 (1)(d) of the Act and the Complaint does fall under the jurisdiction of this Commission", the commission said.

With regard to the submission made by the learned Counsel for the Opposite Party Developer that the Complainants has defaulted in timely making payment of the installments, the Commission opined that if there was default in making the timely payments by the Complainant, the Opposite Party Developer was empowered in terms of Agreement either to charge interest on the delayed payment to or cancel the allotment and refund the deposited amount, however, the Opposite Party Developer has neither cancelled the allotment nor refunded the amount. 

"A bare perusal of above Clauses makes it clear that as per Clause 26 in case of delay, the Allottees/Complainants are liable to pay interest @18%, whereas as per Clause 8, in case of delay in possession, the Opposite Party Developer is liable to pay meager compensation in the form of ₹50/- per sq. yd. This shows that the terms of the Agreement are wholly one-sided and unfair. "

Therefore, the Complainants cannot be made bound to the terms of the Agreement, which are one-sided and unfair in the light of the recent Judgment of the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan 2019 Latest Caselaw 330 SC.

Noting that as per terms of the Agreement, the Opposite Party Developer was obliged to give possession by 06.08.2010 but the possession was offered only on 15.03.2018, i.e., after a delay of more than 7½ years from the expected date of delivery, the Court cited Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 Latest Caselaw 299 SC wherein it has been held that in a case of an unreasonable delay in offering possession of the allotted flat, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid by him to the builder with compensation.

The Court went on to rule that the Complainantsare entitled for refund of the entire deposited amount along with damages/compensation.

"In the instant case, it is not in dispute that the Complainants were allotted the Villa on 24.12.2007.  As per terms of the Agreement executed between the Parties, the proposed date for delivery of the possession of the Villa was 06.08.2010.  Despite having received a huge sum of ₹1,07,90,736/- (Rupees One CroreSevenLacs Ninety Thousand Seven Hundred Thirty Six only) on different dates upto07.09.2010, the Opposite Party Developer had failed to deliver the possession of the Villa even after more than 11 years of the booking of the Villa.  Admittedly, the possession of the Villa was offered only on 15.03.2018, i.e., after more than 11 years from the date of booking of the Villa.  The Complainants cannot be made to wait indefinitely.  The Complainantshad not made a prayer for delivery of possession in the Consumer Complaint but sought refund of the amount paid by them to the Opposite Party Developer on account of the delay in offering possession of the allotted Villa to them."

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