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National Consumer Disputes Redressal Commission (NCDRC): Prem Narain, Presiding Member, has directed the developers of “Greenopolis” to refund homebuyers their amount deposited at the interest rate of 9% p.a. and in a few complaints the bench has asked for the possession to be handed over by 30-09-2020 with the occupancy certificate and with a delayed penalty of 6% p.a. on the deposited amount.

Consumer Complaints

Allottees of the project “Greenopolis” situated in Gurgaon alleged deficiency in service on the part of Opposite parties — Three C Shelters (P) Ltd.

Original allottee booked an apartment in OP’s project for a consideration of Rs 87,16, 800/-, apartment was allotted and later the same was endorsed in favour of complainant.

OP’s failed to deliver the possession in 42 months inclusive of 6 months grace period. Till date, complainant has paid Rs 75,96,776/- to OP’s.

Several complaints have been filed by homebuyers with regard to no delivery and possession of the apartments for which they have paid installments of a very huge amount.

Analysis and Decision

No breach of agreement by complainants | Entitled to relief under Sections 54 and 55 of the Indian Contract Act, 1872

Argument with regard to Sections 54 and 55 of the Indian Contract Act, 1872, OPs relied on the Commission’s decision in DLF Southern Town (P) Ltd. v. Dipu C. Seminal, wherein the complainant had deposited only the booking amount and no instalments were paid whereas in the present complaints instalment have been paid upto reasonable limit and on no progress in construction, the payment was stopped later.

Force Majeure

Defence of force majeure by OPs cannot be taken as there was no ban on construction and OPs should have put their resources and managerial skills to bring water from outside to complete the construction in time.

Joint Project

Three C Shelters (P) Ltd. pleaded for force majeure conditions for delay and on the other hand Orris Infrastructure (P) Ltd. pleaded that Three C Shelters was responsible for delay in construction. Both of them had signed on the “Apartment buyer Agreement” and hence Commission stated that both of them were responsible for delay.

Apartment Buyer Agreement

Bench observed that the OP’s clearly have failed to complete the project and give the possession in time to the homebuyers as per the Apartment Buyer Agreement.

Hence allottees have right to ask for refund due to the inordinate delay which has been beyond 1 year, the possession was to be given in the year 2016.

No Forfeiture of earnest money

So far as the question of forfeiture of earnest money is concerned, it is seen that the complainants are seeking refund as the project has been inordinately delayed. Even though the RERA, Haryana has taken a meeting to expedite the project and Three C Shelters (P) Ltd. has agreed to complete the project in phases.

Commission noted that OPs have not paid EDC and IDC to the Government and it seems that the OPs were not serious in timely completing the project. Thus, in these circumstances, there can be no question of forfeiture of earnest money.

Supreme Court in Haryana Urban Development Authority v. Diwan Singh, (2010) 14 SCC 770 , observed that subsequent buyers are entitled to receive interest only after the date of endorsement in their favour.

In view of the above, Commission directed Three C Shelters to refund the amount at 9% interest per annum.

In one of the cases, Orris Infrastructure (P) Ltd. is directed to complete the construction work and handover the possession till 30-09-2020 after obtaining occupancy certificate, and it shall pay interest of 6% p.a. on the deposited amount.

If the possession is not delivered till 30-09-2020, the complainant shall be at liberty to take refund of the total deposited amount Rs 77,58,581/- along with interest @ 9% p.a. from the date of respective deposits till actual payment. [Sanjay Gupta v. Three C Shelter (P) Ltd., Consumer Case no. 3814 of 2017, decided on 20-07-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Redressal Commission (NCDRC): The Bench of R.K. Agarwal (President and V.K. Jain and M. Shreesha, Members, while taking into consideration a batch of petitions and further referring to several decisions of the Supreme Court, reached to the conclusions that,

“Coaching Classes cannot fall within the definition of ‘Education Institutions’.”

“Any defect or deficiency or unfair trade practice pertaining to a service provider like ‘Coaching Centres’ does not fall within the jurisdiction of the Consumer Fora.”

Facts in the present case are in respect to deficiency of services by an educational institution that is a Dental College for admitting students when it was neither affiliated with the university nor recognized by the Dental Council of India.

Counsel appearing for the complainants stated that the facts in Buddhist Mission Dental College and Hospital v. Bhupesh Khurana, (2009) 4 SCC 473 relate to deficiency of service on account of non-affiliation and that it does not fall within any deficiency rendered during the ‘Course of Education’ being imparted ‘Post Admission’.

OP University has indulged in deficiency of service and unfair trade practice.

Contentions

OPs Counsel placed reliance on Supreme Court’s decision in P.T. Koshy v. Ellen Charitable Trust, 2012 (3) CPC 615 (SC), and stated that students are not ‘Consumers’ and ‘Education’ is not a commodity and the Educational Institutions are not rendering ‘Service’.

Counsel appearing for the Complainant’s while referred to P. Sreenivasulu v. P.J. Alexander, wherein it was held that Educational Institutions would come within the purview of the Consumer Protection Act, 1986 and that Education is a ‘service’.

Analysis and Decision

Commission addressed the ratio laid down by the Supreme Court in a catena of Judgments with respect to ‘Education’ and ‘Educational Services’ vis-a-vis Consumer Protection Act, 1986.

Bihar School Examination Board v. Suresh Prasad Sinha, (2009) 8 SCC 483,

“…Any dispute relating to fault in holding of examination and non-declaration of result by an examinee does not fall within the purview of the Consumer Protection Act, 1986.”

Maharshi Dayanand University v. Surjeet Kaur, (2010) 11 SCC 159,

“…Supreme Court in the above-stated case examined in detail the jurisdiction of the Consumer Fora to entertain a Complaint with respect to deficiency of service by Educational Institutions.”

While noting the contention that Supreme Court clearly culls down the principles and has emphatically laid down that student is not a consumer and educational institutions are not providing any ‘Service’, Supreme Court’s decision in P.T. Koshy v. Ellen Charitable Trust, 2012 (3) CPC 615 (SC) was referred to wherein it was held that,

“…Educational Institutions are not providing any kind of service, therefore, in matter of admission, fees, etc., there cannot be a kind of service, therefore, in matter of admission, fee, etc., there cannot be a question of deficiency of service. Such matters cannot be entertained by the Consumer Forum under the Consumer Protection Act, 1986.”

Counsel for the Complainants contended that the ratio of the order has to be interpreted in the sense that it was applicable only to cases which involve ‘Core Education’ services and not all activities which relate to Educational Institutions and that both  Bihar School Examination Board v. Suresh Prasad Sinha, (2009) 8 SCC 483 and Maharshi Dayanand University v. Surjeet Kaur (2010) 11 SCC 159, refer to conference of a degree and conduction of an examination, which do not sum up the entire gamut of “Education”.

Unni Krishnan, J.P. v. State of A.P., (1993) 1 SCC 645,

“…Education has never been a commerce in this country and that establishing an Educational Institution can neither be a trade or business nor can it be a profession within the meaning of Article 19 (1)(g), it was held that “Education” in its truest aspect is more a mean and a vocation rather than a profession or trade or business.”

Commission relying on the in Amar Singh Yadav v. Shanta Devi, AIR 1987 Patna 191, wherein it was held that,

“…while deciding the Law of Precedence has observed that when there is a direct conflict between two decisions of the Supreme Court of co-equal Bench, the subordinate Court must follow the judgments which states the law more elaborately and accurately and that the question whether the decision is earlier or later is not material. In the instant case in Maharishi Dayanand University Case (Supra) the Hon’ble Supreme Court had discussed the law elaborately.”

Thus, the Commission stated that ratio laid down in the last judgment that is Amar Singh Yadav v. Shanta Devi, AIR 1987 Patna 191 has to be followed. It is significant to note here that the ratio in Maharshi Dayanand University v. Surjeet Kaur (2010) 11 SCC 159, P.T. Koshy v. Ellen Charitable Trust, 2012 (3) CPC 615 (SC), Prof. K. K. Ramachandran (Supra) and Anupama College of Engineering (Supra) does not address to the aspect of what comprises ‘Core Education’ and whether all activities related to Education/ Educational institutions would be excluded from the purview of the Act.

In view of the above discussion, consumer complaints were dismissed. [Manu Solanki v. Vinayak Mission University, 2020 SCC OnLine NCDRC 7, decided on 20-01-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Dispute Redressal Commission:  The Commission held that if a complaint is filed beyond a period of two years from when the cause of action has happened the same will not be entertained, unless there are sufficient reasons for condoning the delay in filing the appeal.

The Consumer Forum through a Division Bench, comprising of, B.C. Gupta, Presiding Member and S.M. Kantikar, Member dismissed an appeal filed by M/S. Kiran Gems Pvt. Ltd. The brief facts, being that the appellant company had purchased an insurance policy from the respondent, to cover all the damages that may arise in the normal course of business ,but upon the actual event of an abnormal activity, the Insurance Company did not entertain the full claim of the appellant and the same being under dispute between the two parties, in the present case. The appellant also contested that the Insurance company owed a total sum of Rs 35,15,014 to them, and further argued that the dismissal of their previous complaint regarding the same matter (Miscellaneous Application, MA/90/2011) is not valid.

The Commission held that the appeal was filed beyond the mentioned time period of 2 years and because of this delay the appellant cannot be heard. The Bench also referred to the judgment of Anshul Aggarwal v. New Okhla Industrial Development Authority, (2011) 14 SCC 578 in which the Hon’ble Apex Court held that:

“It is also apposite to observe that while deciding an application filed in such cases for condonation of delay, the Court has to keep in mind that the special period of limitation has been prescribed under the Consumer Protection Act, 1986 for filing appeals and revisions in consumer matters and the object of expeditious adjudication of the consumer disputes will get defeated if this Court was to entertain highly belated petitions filed against the orders of the Consumer Foras.”

The Bench ordered the dismissal of the appeal because there was a delay of 2178 days in filing the complaint and no remarkable justification was given by the appellant while explaining this delay.  [M/s Kiran Gems Pvt. Ltd. v. Oriental Insurance Co. Ltd., Appeal Number 1718 of 2016, decided on 12-12-2017]

Case BriefsSupreme Court

Supreme Court: After a 3-member committee headed by former Supreme Court judge, Justice Arijit Pasayat, filed it’s report on the facilitating infrastructural improvements in National/State Consumer Fora, the 3-judge bench of Dipak Misra, CJ and AM Khanwilkar and Dr. DY Chandrachud, JJ asked the Central Government to file a comprehensive status report indicating compliance with the directions issued by the Court on 21 November 2016 within six weeks. The committee had submitted the report on March 4, 2017.

On 21.11.2016, the Court had issued the following directions:

  • The Union Government shall for the purpose of ensuring uniformity in the exercise of the rule making power under Section 10(3) and Section 16(2) of the Consumer Protection Act, 1986 frame model rules for adoption by the state governments. The model rules shall be framed within four months and shall be submitted to this Court for its approval;
  • The Union Government shall also frame within four months model rules prescribing objective norms for implementing the provisions 24 of Section 10(1)(b), Section 16(1)(b) and Section 20(1)(b) in regard to the appointment of members respectively of the District fora, State Commissions and National Commission;
  • The Union Government shall while framing the model rules have due regard to the formulation of objective norms for the assessment of the ability, knowledge and experience required to be possessed by the members of the respective fora in the domain areas referred to in the statutory provisions mentioned above. The model rules shall provide for the payment of salary, allowances and for the conditions of service of the members of the consumer for a commensurate with the nature of adjudicatory duties and the need to attract suitable talent to the adjudicating bodies. These rules shall be finalized upon due consultation with the President of the National Consumer Disputes Redressal Commission, within the period stipulated above;
  • Upon the approval of the model rules by this Court, the state governments shall proceed to adopt the model rules by framing appropriate rules in the exercise of the rule making powers under Section 30 of the Consumer Protection Act, 1986;
  • The National Consumer Disputes Redressal Commission is requested to formulate regulations under Section 30A with the previous approval of the Central Government within a period of three months from today in order to effectuate the power of administrative control vested in the National Commission over the State Commissions under Section 24(B)(1)(iii) and in respect of the administrative control of the State Commissions over the District fora in terms of Section 24(B)(2) as explained in this Judgment to effectively implement the objects and purposes of the Consumer Protection Act, 1986.

Requesting Additional Solicitor General Maninder Singh to assist the Court in the matter, the Court fixed 30.01.2018 as the next date of hearing. [State of Uttar Pradesh v. All U.P. Consumer Protection Bar Association, 2017 SCC OnLine SC 1488, order dated 15.12.2017]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission: The grievance of the petitioner in a recent case before the Commission was that appellants/complainants had entered into agreements with the respondents for purchase of residential flats, which the respondents were to construct and despite paying the substantial amount to the respondents, the construction of the flats had not been completed. The State Commission dismissed the complaints and ruled in favor of respondents against which the appellants approached the National Commission.

To decide on the issue, the Commission examined and explained the relevance of Section 3 of the Consumer Protection Act which provides that the provisions of the Act shall be in addition and not in derogation of the provisions of any other law for the time being in force. Therefore, the remedy under the Act is an additional remedy available to the consumer. The Commission presided by V.K. Jain, J. observed that in the instant case, respondents had entered into agreements with the complainants/appellants, agreeing to construct flats for them and give possession of the said flats and therefore they have a relationship of consumer and service provider and this relationship would not come to an end with just one party canceling the agreement.

The Commission further said that if there is deficiency on the part of the respondents in rendering services to consumers and the same is proved, the complainants/appellants would be entitled to appropriate relief in terms of the provisions of the Consumer Protection Act. In this case, remedy was initiated before the civil court by respondents and not the complainants and therefore, the jurisdiction of civil court is not at all ousted.  [Yashwant Rama Jadhav v. Shaukat Hussain Shaikh, First Appeal No. 1229 of 2017, decided on 18.11.2017]