Landmark judgements

HIERARCHY OF CONSUMER FORAS NOT FOLLOWED BY FILING THE CONSUMER COMPLAINTS WITH INFLATED CLAIMS

National Consumer Disputes Redressal Commission

 

Padmini Malhotra vs M/S. Era Land Marks (India) Ltd. on 15 December, 2015

          NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION  NEW DELHI          CONSUMER CASE NO. 1269 OF 2015         

 

  PADMINI MALHOTRA  N-212, GREATER KAILASH, PART-1,   NEW DELHI-110048

 

Versus      

  M/S. ERA LAND MARKS (INDIA) LTD.  B-24, SECTOR-3,   NOIDA-201301

 

   BEFORE:      HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER

Dated : 15 Dec 2015               

 

                                                              ORDER                    

 

 JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER

     [  Recently, we have experienced a trend where the complainants with a view to short circuit the system and defeat the hierarchy of the system, file the consumer complaints with inflated claims with a view to bring the cases within the jurisdiction of National Commission. This practice needs to be curbed out because it encourages forum shopping and also tend to short circuit the procedure for disposal of complaint. The instant complaint is also an example where the complainant has filed the complaint with an inflated claim with a view to directly file the consumer complaint in the National Commission against the spirit and object of the Act.]

 

1  The scheme of Consumer Protection Act provides for the hierarchy of Consumer Foras, namely, District Consumer Disputes Redressal Forum, State Consumer Disputes Redressal Commission and the National Consumer Disputes Redressal Commission. The Act has specifically demarcated the jurisdiction of the Consumer Foras at aforesaid three levels to entertain the original consumer complaint. Section 11 (1) of the Consumer Protection Act, 1986 provides that District Forum shall have jurisdiction to entertain the complaint wherein the value of the goods or service and compensation, if any, claimed does not exceed rupees twenty lacs. Section 17 (1) (a) (i) of the Act provides that the State Commission shall have jurisdiction to entertain complaints where the value of the goods or service and compensation, if any, claimed exceeds rupees twenty lacs but does not exceed rupees one crore. Section 21 (a) (i) of the Act provides that National Commission shall have jurisdiction to entertain the complaint where the value of the goods or service and compensation, if any, exceeds rupees one crore.

2.         Recently, we have experienced a trend where the complainants with a view to short circuit the system and defeat the hierarchy of the system, file the consumer complaints with inflated claims with a view to bring the cases within the jurisdiction of National Commission. This practice needs to be curbed out because it encourages forum shopping and also tend to short circuit the procedure for disposal of complaint. The instant complaint is also an example where the complainant has filed the complaint with an inflated claim with a view to directly file the consumer complaint in the National Commission against the spirit and object of the Act.

3.         Padmini Malhotra, the complainant has filed the instant consumer complaint against the opposite party M/s Era Land Marks ( India ) Ltd. alleging deficiency in service on the part of the opposite party in respect of a flat booked by the complainant in the project undertaken by the opposite party.  The complainant has sought following reliefs:

"(a)      Direct the opposite to hand over the possession of Unit No. C-072, Block C, 7th Floor Era Redwood Regency Sector 78 Faridabad Haryana'

(b)       In the alternative direct the opposite party to pay the current market value of unit no.C-072 Block C, 7th Floor Era Redwood Regency Sector 78 Faridabad Haryana i.e. Rs.8000/- per sq. ft. i.e. Rs.1,17,60,000/-.

(c )       pass an order in favour of the complainant directing the opposite party to pay a sum of Rs.4,41,000/- as compensation @ 5 per sq. ft. as mentioned in clause 11.4 till the handing over of the possession of unit C-072, block C, 7th floor Era Redwood Regency Sector 78, Faridabad Haryana;

(d)       direct opposite party to pay interest @ 18% p.a. on Rs.20,61,990/- from 14.09.2010 to 14.09.2015 i.e. Rs.18,55,791;

( e)      direct the opposite party to pay the loss of rent @ Rs.25000/- per month from 14.09.2010 to 14.09.2015 i.e. Rs.15,00,000/-;

(f)         the complainant also seeking compensation on account of their mental agony and harassment amounting to Rs.25,00,000/-

(g)       further pay a sum of Rs.25 lacs as cost for the present litigation;

(h)       any other order (s) as this Court may deem fit and necessary"

 

4.         I have heard arguments on the issue of pecuniary jurisdiction.

5.         Before adverting to the submissions of learned counsel for the complainants, it would be  useful to have a look on Section 21 (a) (i) of the Consumer Protection Act, 1986 ( in short, the Act), which deals with the original jurisdiction of the National Commission to entertain the complaints.   Section 21 (a) (i) of the Act, reads as under:

"21.    Jurisdiction of the National Commission. -- Subject to the other provisions of this Act, the National Commission shall have jurisdiction--

(a) to entertain--

(i)  complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore. " 

6.         On reading of the above it is clear that National Commission has jurisdiction to entertain the complaints where the value of goods or services and the compensation, if any, claimed taken together  exceeds rupees one  crore.

7.         In the instant case main plea of the complainant is to seek delivery of possession of flat allotted to her.  Besides there is an alternative plea seeking current market value of the subject flat calculated @ Rs.8000/- per sq. ft.  amounting to Rs.1,17,60,000/-.

8.         Cause of action of the complainant is that the opposite party despite of having received more than agreed consideration amount has failed to deliver the possession of the allotted flat within the period stipulated in the Apartment Buyer's Agreement dated 14.09.2007.  On perusal of the agreement as also as per allegation in the complaint, consideration amount for the flat was Rs.19,84,500/-, against which Rs.20,61,990/- has been received.  Thus, the value of service availed is Rs.20,61,990/-.

9.         The complainant in the alternative has claimed a sum of Rs.1,17,16,000/- claiming the same to be market value of the flat, the aforesaid plea on the face of it appears to be figment of imagination of the complainant.  On perusal of the complaint, I find that on one hand it is claimed that flat is not yet complete, on the other hand the complainant has put a preposterous figure of Rs.1,17,60,000/- as market rate of the flat for which he has paid Rs.20,61,990/- without quoting even a single instance of sale of similarly located flat at such a high rate of Rs.8000/- per sq. ft.  It appears that aforesaid claim has been made just to inflate the amount of relief with a view to defeat the hierarchy of the consumer forum based upon the pecuniary jurisdiction.

10.       Further as regards the compensation in prayer clause ( c ), the complainant is seeking compensation to the sum of Rs.4,41,000/- as compensation @ Rs.5 per sq. ft. as mentioned in clause 11.4 of the allotment agreement.  Besides said compensation, the complainant has also prayed under clause ( d) for interest @ 18% p.a. w.e.f. 14.09.2010 to 14.09.2015 on the amount paid on sum of Rs.20,61,990/- amounting to Rs.18,55,791/- and also under clause ( e )  claimed compensation on account of loss of rental income for the said period @ Rs.25000/- per month. From the above it is clear that the complainant view a view to inflate the jurisdiction value has claimed the compensation on the basis of three yardsticks, namely, in terms of Clause 11.4 of the allotment agreement; 18% interest on the deposited amount for the period w.e.f. 14.9.2010 to 14.9.2015 as also the loss of rental income. By no standard the complainant can claim compensation by applying different yard sticks simultaneously. At best if at all the complainant succeeds, she would be entitled to compensation as per any one of the aforesaid three prayers clauses (c) (d) & (e). Thus, an attempt on the part of the complainant to inflate the value of the relief in order to bring the case within the jurisdiction of National Commission is obvious.  Further in clause (f), the complainant is seeking compensation on account of mental agony and harassment to the tune of Rs.25,00,000/- and also a sum of Rs.25,00,000/- as cost for litigation.  This clearly highlights the intention on the part of the complainant to inflate the value of the relief to bring this case within the jurisdiction of the National Commission.

11.       Allegedly, the complainant has paid a total sum of Rs.20,61, 990/- against the consideration price.  Therefore, in view of latest trend of judgments, at best, for the delay in delivery of possession, she can be paid compensation to the extent of 18% p.a. on the deposited amount but the complainant has deliberately tried to increase the quantum of compensation by putting it under different heads to inflate the jurisdictional value.  Under these circumstances, it is clear that if we ignore the alternative relief of Rs.1,17,60,000/- based on the alleged market value, without an iota of evidence to support the allegation,  the total jurisdictional value of relief claimed is much less than Rs.1.00 crore from which the original jurisdiction of National Commission starts.

12.       Complainant has contended that issue whether the market value of the flat can be taken as a factor for deciding the issue of pecuniary jurisdiction came up before Bench No.6 of this Commission in Consumer Case No. 427 of 2014 titled Satish Kumar Pandey & Anr. Vs. M/s Unitech Ltd. and various other complaints wherein the said bench took the current market value of the flat as a factor for deciding the pecuniary jurisdiction and observed as under:

16.    It was next contended by the learned counsel for the opposite party that since the sale consideration paid by the complainants was less than Rs.1,00,00,000/- the complaint is maintainable before the concerned State Commission and not before this Commission. Again, I find no merit in the contention. The case of the complainants is that current market value of such apartments is not less than Rs.10,000/- per sq. ft. calculated accordingly the current market value of the individual flats booked by the complainants comes to more than Rs.1,00,00,000/- in every complaint. One of the prayers made in the complaint is to direct the opposite party to handover possession of the flat to the complainants. For the purpose of this relief, the current market value of the flat would be the pecuniary value of the service and since the said value is more than Rs.1,00,00,000/- in each case, it cannot be disputed that only this Commission has the jurisdiction to entertain this complaint. 

13.       It is argued that aforesaid judgment has precedential value and this Bench is under obligation to follow the same or in the alternative if the bench does not agree with the said finding, the matter should be referred to the President for being decided by a larger bench.  The complainant has contended that Supreme Court has time and again held that judges are bound by the precedents and procedures and they are under obligation to honour the precedential value of the earlier judgments.  In support of this contention, complainant  has referred to the judgments of the Supreme Court in the matter of AIR 2005 SC 752, AIR 1990 SC 261 and AIR 1989 SC 1933.

14.       I have carefully gone through the judgment of Hon'ble Supreme Court relied upon by the complainant. There can be no doubt that the proposition of law laid down by the Hon'ble Supreme Court that the Judges are bound by the precedents and procedure and the judicial decorum and legal propriety demands that ordinarily a co-ordinate Bench of the same strength should follow the judgment of the earlier Bench and if the Co-ordinate Bench finds it difficult to agree with the view taken by the earlier Bench, the matter should be referred for decision by a Larger Bench. Facts in this case, however, are different. The judgment of Bench No.6 in the matter of Satish Kumar Pandey (supra) is passed by a Single Bench. As against this judgment, the Division Bench of this Commission in Consumer Complaint No.579/2015 titled Gurdeep Singh H. Puruswani vs. Runuwal Constructions pronounced on 11th September, 2015 has taken a different view wherein it is held that as per Section 21 (a) (i) of the Consumer Protection Act, 1986, the value of the service in case of a development project would be the agreed value of the flat.  In the said judgment, the Division Bench considered the judgment of Bench No. 6 in the matter of Satish Kumar Pandey ( supra) and distinguished it with the following observations:

15.       I do not find merit in the contention of the learned counsel for the complainant.  The present market value of the subject flat in view of the clear provision of Section 21 (a) (i) of the Act has no relevance in this case.  As per the above noted provision, the value of the complaint for the purpose of pecuniary jurisdiction comprises of value of goods or services and the compensation.  The judgment of the Coordinate Bench relied upon by the complainants is of no avail to them.  The Coordinate Bench in para 16 of the judgment has dealt with the issue pertaining to pecuniary jurisdiction of the National Commission. Relevant observations of Coordinate Bench are reproduced as under:

"16.    It was next contended by the learned counsel for the opposite party that since the sale consideration paid by the complainants was less than Rs.1,00,00,000/- the complaint is maintainable before the concerned State Commission and not before this Commission. Again, I find no merit in the contention. The case of the complainants is that current market value of such apartments is not less than Rs.10,000/- per sq. ft. calculated accordingly the current market value of the individual flats booked by the complainants comes to more than Rs.1,00,00,000/- in every complaint. One of the prayers made in the complaint is to direct the opposite party to handover possession of the flat to the complainants. For the purpose of this relief, the current market value of the flat would be the pecuniary value of the service and since the said value is more than Rs.1,00,00,000/- in each case, it cannot be disputed that only this Commission has the jurisdiction to entertain this complaint."

16.       On reading of the aforesaid paragraph, it is clear that the above said observation of the coordinate bench have been passed without taking into consideration Section 21 (a) (i) of the Act which provides for the formula for computing the value of the pecuniary jurisdiction.   It appears that the above noted provisions of  the Act was not brought to the notice of the learned Bench.  Therefore, in our considered view, the findings of the coordinate Bench being dehors Section 21 (a) (i) is of no help to the complainant.

17.       I find no reason to differ with the view taken by the Division Bench.    In view of the discussion above, the value of service allegedly availed by the compensation and compensation which can be reasonably claimed would be Rs.20,61,990/- plus 18% interest on the said amount for five years, which would be somewhere around Rs.19.00 lacs approximately.  If we add the aforesaid two amounts and compensation of Rs.25,00,000/- for mental agony, the total value would be much less than Rs.1.00 crore.  Therefore, in view of section 21 (a) (i) of the Consumer Protection Act, 1986, the instant complaint does not fall within the pecuniary jurisdiction of the National Commission. Instant complaint has been filed with a clear attempt to inflate the value of the relief which amounts to abuse of process of law being an attempt to short circuit the hierarchy of the consumer foras.  Complaint is accordingly dismissed with liberty to the complainant to file fresh complaint on the same cause of action before the appropriate fora.

 

  ......................J AJIT BHARIHOKE PRESIDING MEMBER

 

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