Ernakulam District Commission holds Asten Properties Liable For Delay In Handing Over The Booked Flat

Brief Facts of the Case

The complainant had booked a flat in an apartment project from Asten Properties/developer/opposite party. They signed an agreement stating that the apartment would be ready within 30 months. However, the complainant later discovered no construction at the project site. Despite asking multiple times, the developer didn't restart construction or provide a new schedule. The complainant's lawyer sent a notice asking for a refund of the paid amount with interest and compensation. The developer admitted the delay but didn't provide a new schedule. With no progress and no intention to complete the project, the complainant faced mental stress and difficulties. The complaint is an original petition seeking a refund of the amount paid with interest, compensation of Rs. 65,45,313 for damages, and additional compensation of Rs. 1,30,90,735 for losses due to negligence, deficient service, and unfair trade practices.

Contentions of the Opposite Party

The developer contended that an arbitration clause exists in the agreement, which they argue should dismiss the consumer complaint. However, the complainant argues that the jurisdiction of the Consumer Commission is not barred by the arbitration clause, as settled by the decisions of the Hon'ble Supreme Court of India and the National Commission.

Observations by the Commission

The commission observed that the complainant is indeed a consumer, supported by evidence of payments made to the developer. However, the developer failed to meet their responsibilities and deliver the apartment within the agreed timeframe. Furthermore, the Commission observed that even though the developer argued for an arbitration clause, the commission clarified that this clause doesn't take away the Consumer Commission's authority. This stance aligns with previous decisions by the Supreme Court of India and the National Consumer Commission. The commission referred to a specific case, National Seeds Corporation Limited v. M. Madhusudhan Reddy and Anr. (2012), wherein the Supreme Court clarified that arbitration is not the only available remedy for a party. It is an optional choice, and individuals can opt for arbitration or file a complaint under the Consumer Protection Act. If someone decides to pursue arbitration initially, it may prevent them from later filing a complaint under the Consumer Protection Act. However, if they first choose to file a complaint with the appropriate Consumer Forum, they cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996.

The commission directed the developer to refund Rs. 65,45,313/- to the complainant, along with Rs 50,00,000 as compensation to the complainant for the loss and damages sustained by him due to the negligence, deficiency in service, and unfair trade practice. The developer shall also pay the complainant Rs.50,000/- towards the cost of the proceedings.