DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.269 of 2016

                                                     Date of institution:  12.05.2016

                                                     Date of decision   :  10.05.2018

Mrs. Simmi wife of Dheeraj Kumar and Jatinder Bhalla son of Mr. D.S. Bhalla, residents of House No.233, Phase 3-A, Mohali.

…….Complainants

Versus

1.     M/s. Bajwa Developers Ltd. Registered office Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar (Mohali), through its Managing Director.

2.     Jarnail Singh Bajwa, Managing Director M/s. Bajwa Developers Ltd. Registered Office Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar (Mohali).

……..Opposite Parties

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member.

                Mrs. Natasha Chopra, Member.

Present:     Shri Rabinder Dutta, counsel for complainants.

                Ms. Kulwinder Kaur, counsel for the OPs.

Order by :-  Shri G.K. Dhir, President.

Order

               OP No.1 floated scheme of 1 BHK flats in Sector 74-A, 117, District Mohali and advertised the same through newspapers. Complainants after discussions with OP No.1 purchased one BHK BR No. 720 having area of 450 sq. ft. approximately on payment of total price of Rs.12,00,150/-, vide agreement of sale dated 20.05.2011. Following amounts were paid to OP No.1 on different dates:

                In this way total sum of Rs.4.00 lakhs was paid. OP No.1 promised to handover possession of the flat at the end of year 2012. Complainants got knowledge through some newspapers as if OP No.1 has not handed over possession of flats to the prospective buyers and that is why they approached OP No.1 for knowing that no project work is going on at the spot. Even after visit to spot, complainants found that the work on the project has not been started. Thereafter, complainants sent legal notice dated 18.04.2016 to OPs for requesting for refund of the amount of Rs.4.00 lakhs with interest @ 18% per annum from the due date till realisation. By pleading adoption of unfair trade practice by OPs and also claiming that OPs provided deficient services, this complaint filed for seeking direction to OPs to refund the received amount of Rs.4.00 lakhs with interest @ 18% per annum. Compensation for mental harassment and agony of Rs.2.00 lakhs, but for adoption of unfair trade practice Rs.1.00 lakh and litigation expenses of Rs.22,000/- more claimed.

2.             In reply submitted by OPs, it is claimed that complaint is time barred because the agreement was arrived at on 20.05.2011 and the last payment of Rs.1.00 lakh was made on 03.07.2012, but present complaint filed on 12.05.2016 i.e. after more than four years of prescribed period of limitation. Moreover, it is claimed that complainants are not consumers within meaning of Section 2 (1) (d) of Consumer Protection Act because the flat was meant for economically weaker sections of the society. Complainants despite being affluent members of society concealed their identity and kept OPs in dark, while entering into agreement dated 20.05.2011. Possession of the flat was to be delivered in case payments made as per payment plan annexed with the agreement. Earnest amount of Rs.3.00 lakhs alone was paid in two installments and as such complaint for the claimed reliefs is not maintainable. Reference to provisions of Section 27 of Indian Limitation Act, 1963 read with Article 54 thereof made alongwith Section 24-A of the Consumer Protection Act for claiming that complaint is barred by limitation. As per Clause-3 of agreement, in case any installment not paid within period of 15 days from the stipulated date, then earnest amount to stand forfeited. Moreover, as per Clause-7 of the agreement, the purchaser to abide by economically weaker section norms allotment criteria. Complainants have not furnished any document of their claim of belonging to economically weaker sections as prescribed by Punjab Govt. Agreement is scribed on under stamped papers and the same has not been signed by complainants. Consent of OPs was obtained by fraud by concealing the status of complainants. It was for complainants to establish that they were eligible for allotment of flat meant for economically weaker sections of the society, but they failed to do so and as such they are not consumers. Admittedly OPs floated the scheme and complainants booked one BHK flat by paying amount of Rs.4.00 lakhs, but other averments of the complaint denied by claiming that in view of Clause-3 of the agreement, earnest amount liable to be forfeited because of non adhering to the payment plan by complainants.

3.             Complainants to prove their case tendered in evidence affidavit Ex.CW-1/1 alongwith documents Ex.C-1 to C-3 and thereafter closed evidence.  On the other hand, counsel for OPs tendered in evidence affidavit Ex.OP-1/1 of Shri J.S. Bajwa, Managing Director of OPs and thereafter closed evidence.

4.             Written arguments submitted by complainants but not by OPs. Oral arguments heard and records gone through.

5.             From the pleadings of parties and perusal of endorsements on agreement Ex.C-1, it is made out that complainants actually paid amount of Rs.4.00 lakhs on three different dates. Rs.1.00 lakh was paid on 21.04.2011, but Rs.2.00 lakhs were paid on 20.05.2011 and further an amount of Rs.1.00 lakh was paid on 03.07.2012. Endorsement Ex.C-3 reflects that position and the same even is not denied by OPs in their written reply or in the affidavit Ex.OP-1/1 of representative of OPs. However, after going through Clause-2 of agreement Ex.C-1, it is made out that out of the total payable sale consideration of Rs.12.00 lakhs for the booked flat in question, complainants were required to deposit Rs.3.00 lakhs by 20.05.2011, but Rs.1,80,000/- each more in 5 installments due on 20.09.2011; 20.01.2012; 20.05.2012; 20.09.2012 and 20.11.2012. So certainly it is made out that complainants have not made the payments as per schedule of plan enumerated in Clause-2 of agreement Ex.C-1. So certainly fault lays with complainants in not adhering to payment plan schedule.

6.             As per law laid down in Randhir Singh and Anr. Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. 2015(1) CPJ 514 (NC), if the purchaser remained defaulter by not adhering to the installment payment plan, then he is not entitled for any interest, even though the builder had not developed the site, due to which he is not in a position to deliver possession. It is so because he who seeks equity must do equity. In case the equity seeker himself is defaulter, then he is not entitled for any interest, is the crux of ratio of above said case. Ratio of this case is fully applicable to the facts of the present case and as such complainants are not entitled to interest until they sought refund of the paid amount. That refund sought by complainants for the first time by issuing legal notice Ex.C-2 through postal receipt on 16.04.2016 and as such complainants entitled to interest @ 12% per annum on the deposited amount with effect from 16.04.2016 till payment.

7.             Counsel for OPs vehemently contends that as complainants failed to stick to the schedule of payment referred above and as such earnest amount paid by them liable to be forfeited in view of Clause-3 of agreement Ex.C-1. However, present is a case in which OPs also remained at fault by not abiding by terms and conditions of agreement Ex.C-1 because they did not raise construction of the flat and nor called upon complainants to treat the agreement as cancelled just due to non deposit of installments by them. As the agreement in question Ex.C-1 was arrived at exclusively for the purpose of sale of flat, but possession of the same never delivered and nor execution of sale deed took place and nor OPs ever called upon complainants to fix date for execution and registration of sale deed either by way of sending notice or otherwise and as such OPs cannot get benefit of their own fault by way of forfeiture of amount deposited by complainants.

8.             OPs claim through written reply as well as affidavit that agreement in question be treated as void and as such virtually the agreement in question sought to be rescinded by OPs. In view of that, virtually OPs are seeking declaration of agreement as voidable. Besides after taking us through Clause-7 of agreement Ex.C-1, it is sought to be contended that as purchasers (complainants) failed to fulfill the terms and conditions of agreement or bye laws providing for allotment of EWS category flat and as such agreement in question is void. Certainly after going through Ex.C-1 it is made out that flat in question allotted to complainants was subject to fulfillment of terms and conditions requisite for allotment of flat of EWS category. Even if complainants failed to submit the requisite declaration for showing their entitlement to the EWS category flat in question, despite that the agreement at the most can be declared as voidable at the option of OPs, if they want to treat it as voidable.

9.             Even if complainants may not have fulfilled the requirement to avail benefit of EWS housing scheme, despite that OPs themselves remained at fault in not getting the formalities complied with in that respect by issue of notice or otherwise and as such in case OPs to get the agreement declared void, on account of non fulfillment of conditions by complainants requisite for getting benefit of EWS housing scheme, even then they cannot retain the received amount because in doing so they virtually are seeking their unjust enrichment. OPs themselves are also at fault in not starting the construction.

10.            Section 65 of Indian Contract Act, 1872 specifically provides that when an agreement is discovered to be void, or the contract becomes void, then any person, who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person, from whom he received it. Likewise, Section 64 of Indian Contract Act provides that when a person at whose option, a contract is voidable, rescinds it, the other party there to need not perform any promise therein contained, in which he is the promisor Further as per second part of this Section 64, the party rescinding a voidable contract shall, if he had received any benefit thereunder from other party to such contract, will restore such benefit, so far as may be, to the person from whom it was received.  In view of these provisions contained in Sections 64 and 65 of Indian Contract Act, it is obvious that if the contract is sought to be declared as void due to non compliance of the formalities requisite by rules and regulations for entitlement of complainants to EWS category flat, then OPs cannot retain the benefit received by them under contract Ex.C-1. However, OPs bound to return the received amount of Rs.4,00,000/- with compensation of interest w.e.f. 16.04.2016 (the date of issue of legal notice Ex.C-2 by complainants for seeking refund of the amount) onwards till payment because OPs themselves made complainants to believe as if agreement Ex.C-1 is valid and that is why they put signatures on it in token of correctness by acknowledging its terms. However, in case OPs want to get this agreement declared as voidable at their option, even then they are bound to return back received amount of Rs.4,00,000/-.

11.           Complainants certainly are consumers of OPs within meaning of Section 2 (1) (d) of CPA because they availed services of OPs for purchase of flat on payment of part of sale consideration with promise of paying balance amount on execution of sale deed or on getting of possession of flat in question. It is the case of complainants that OPs have not developed the project and as such fault lays with OPs in not fulfilling their promise of delivering the possession to complainants. For that fault of OPs, the complainants cannot be made to suffer and as such on equitable considerations also, complainants entitled for refund of paid amount of Rs.4,00,000/- with interest from 16.04.2016 (the date of issue of legal notice Ex.C-2 by complainants for seeking refund of the amount) and not before that, as discussed above.

12.            In cases titled as  Dream Land Promoters & Consultants Vs. Pramod Kumar, 2013 (1) CPC 357 (SC); Emaar MGF Land Ltd. and another Vs. Karnail Singh, 2014 (3) CPC 49 (NC) as well as in case of  Rajubhai Tank, Director of Odhav Hari Developers Pvt. Ltd. & Ors. Vs. Bindraben Bharatkumar Mavani (Minor) through her Natual Guardian, 2014(1) CPC 624(NC) and in case of  Pushpak Infrastructure Pvt. Ltd. Vs. Santanu Mukherjee 2014(3) CPC 336(NC) and  Ram Niwas Garg Vs. Nagar Nigam, Kanpur & Anr. 2015(2) CLT 96 (NC), it has been held that if possession cannot be handed over to the allottee for any reason, then the allottee entitled to refund of paid amount with interest. However, in case he has paid the full sale consideration amount, then direction to seller to execute the sale deed even can be issued. In the case before us, the full sale consideration amount has not been paid, but part of sale consideration alone paid and as OPs have taken plea that complainants not complied with requisite formalities of getting them declared as entitled to flat of EWS category and as such virtually OPs are seeking declaration as if the contract is voidable. Even in case of voidable contract, OPs bound to refund back the received amount.  That refund in the facts and circumstances of the case must be ordered with interest @ 12% per annum from 16.04.2016 (the date of issue of legal notice Ex.C-2 by complainants for seeking refund of the amount) as discussed in detail above.  OPs cannot be permitted to retain the money paid by complainants and even the flat agreed to be sold by them because in case it is so ordered, then it will amount to unjust enrichment of OPs at the cost of complainants, despite the fact that fault lays with OPs also in not getting the formalities of EWS category allotment complied with from complainants at earliest. The entitlement of complainants to interest @ 12% per annum w.e.f. 16.04.2016 will be there. Complainants suffered mental agony and harassment at the hands of OPs due to refuting of their claim of refund resulting in their dragging in this litigation and as such certainly complainants entitled to compensation for mental agony and harassment as well as to litigation expenses.

13.            As OPs failed to deliver possession of the flat or refund the received amount despite issue of legal notice Ex.C-2 dated 16.04.2016 and as such certainly complaint is within limitation, more so when recurring cause of action has accrued in favour of complainants. Fault of OPs to construct the flat for long gave recurring cause of action to complainants and as such benefit of Section 27 of Indian Limitation Act or Article 54 thereof and Section 24-A of Consumer Protection Act, 1986 not available to OPs. In view of existence of recurring cause of action in favour of complainants, the complaint certainly is within limitation. Complaint, therefore, cannot be termed as groundless at all.

14.            As a sequel of above discussion, complaint allowed with direction to OPs to refund the received amount of Rs.4,00,000/- with interest @ 12% per annum with effect from the date of issue of legal notice namely 16.04.2016 till payment. Compensation for mental harassment and agony of Rs.20,000/- and litigation expenses of Rs.5,000/-  more allowed in favour of complainant and against the OPs. Payment of these amounts of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of order.  File be indexed and consigned to record room.

Announced

May 10, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                                    (Amrinder Singh Sidhu)                                                                Member

(Mrs. Natasha Chopra)

Member