Chandigarh

StateCommission

CC/208/2015

Karnail Singh - Complainant(s)

Versus

Chandigarh Housing Board - Opp.Party(s)

Rajinder Singh Raj & Kirandeep Kaur, Adv.

07 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH
 

Consumer Complaint	:	208 of 2015
Date of Institution	:	04.09.2015
Date of Decision	:	07.04.2016

 

Sh. Karnail Singh son of Sh. Basta Singh resident of H.No.1307, 1^st Floor, Sector 34-C, Chandigarh.

……Complainant.

Versus

Chandigarh Housing Board, Sector 9, Chandigarh through its Chief Executive Officer.

              ....  Opposite Party.

 

Consumer Complaint under Section 17 of the Consumer Protection Act 1986.

 

BEFORE:   JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                 SH. DEV RAJ, MEMBER.

                 MRS. PADMA PANDEY, MEMBER.

               

 

Argued by:

Sh. Rajinder Singh Raj, Advocate for the complainant.

Sh. Vishal Sodhi, Advocate for the Opposite Party.

 

PER DEV RAJ, MEMBER

            The facts, in brief, are that the complainant applied for allotment of a three bedrooms flat vide application form No.14103, under General Self Financing Housing Scheme – 2008, Sector 63, Chandigarh. It was stated that as per Acceptance-cum-Demand Letter dated 25.11.2011 (Annexure C-1), the total consideration amount of the flat was Rs.70,28,135/-, out of which, the complainant paid Rs.13,04,255/- within 30 days of the issuance of the said letter and the balance amount was to be paid in three installments of Rs.19,07,000/- each payable within 6 months, 12, months and 18 months. It was further stated that the complainant paid the first two installments and also paid Rs.10,00,000/- against the third installment, totaling Rs.44,40,547/- and only Rs.25,87,588/- remained to be paid. It was further stated that the Opposite Party did not issue any allotment letter of the flat to the complainant and there was no time prescribed in the acceptance-cum-demand letter for delivery of possession to the complainant. It was further stated that the Opposite Party could claim the last installment only on completion of construction, after lapse of 18 months of issue of letter dated 25.11.2011 i.e. 25.05.2013 but it failed to complete the construction and deliver actual physical possession of the flat to the complainant.

2.         It was further stated that instead of completing the construction in time, the Opposite Party issued a show cause notice dated 12.05.2015 to the complainant regarding cancellation of the allotment and gave an opportunity to appear before it on 28.05.2015 at 11 AM. It was further stated that the complainant reached the office of the Opposite Party on the date and time given but there was no competent person to attend him. It was further stated that the complainant submitted a letter on the same day to the Opposite Party, which was received by it vide Diary No.163,072 dated 28.05.2015 (Ann.C-2). It was further stated that the complainant received another notice dated 3.6.2015 (Ann. C-3), whereby he was directed to appear before the Opposite Party on 8.6.2015. It was further stated that on reaching the office of the Opposite Party on the said date, the CEO of the Opposite Party was not present in the office and the complainant again submitted letter to the Opposite Party, [which was diarized vide No.163,571 dated 08.06.2015 (Annexure C-4)],to the effect that he be intimated the correct amount due against him. It was further stated that the Opposite Party issued another notice dated 15.06.2015 (Annexure C-5) asking the complainant to appear before it on 19.06.2015 but the complainant could not appear on the said date, as the letter dated 15.06.2016 was actually delivered to him on 22.06.2015.

3.         It was further stated that vide letter dated 25.08.2015 (Annexure C-6), the Opposite Parties asked the complainant to pay the balance amount of Rs.76,05,645/-, which included Rs.51,18,057/- on account of interest/penalty and Rs.25,87,588/- was the remaining payment against consideration amount. It was further stated that since the Opposite Party is yet to complete the construction and deliver possession of the flat to the complainant, it could not charge interest/penal interest. It was further stated that the complainant served a legal notice dated 01.07.2015 (Annexure C-7) upon the Opposite Party but to no avail. 

4.            It was further stated that the aforesaid acts, on the part of the Opposite Party, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Party to withdraw the show cause notice and not to cancel the flat; not to charge the remaining consideration amount of Rs.25,87,588/- and Rs.51,18,057/- as interest/penalty on the delayed payment; deliver possession of the flat, in question, complete in all respects; pay Rs.2,00,000/- as compensation for harassment, mental agony and pain caused to the complainant and Rs.50,000/- as cost of litigation costs, and any other relief to which the complainant is found entitled to under the facts and circumstances of the case.    

5.         The Opposite Party was served, and put in appearance on 28.09.2015. It filed its written statement on 26.10.2015. In the written statement, the Opposite Party while admitting the factual matrix of the case, stated that the Opposite Party launched a housing scheme in the year 2008 for allotment of flats under various categories in Sector 63, Chandigarh under General Self Financing Housing Scheme, 2008. It was further stated that the flats were offered on self finance basis where the allottee was to make an investment or contribute entire price of flat before getting possession of flat. It was further stated that the complainant opted for category ‘A’ Sub Scheme ‘B’ seeking allotment of 3 Bedroom Flat under assured allotment plan/scheme vide application form No.14103. It was further stated that the price of the flat - Rs.70,28,135/- was tentative and not final and subject to variation, which was to be worked out at the time of actual allotment. It was further stated that the consideration price of the flat was to be paid in 3 instalments of Rs.19,07,960/- each after a period of 6 months, 12 months and 18 months respectively from the date of issuance of acceptance-cum-demand letter dated 25.11.2011. It was further stated that under Clause 3 of acceptance-cum-demand letter, the complainant was required to pay all the instalments (100%) and other dues before getting the possession. It was further stated that the payment of entire consideration is sine-qua-non for getting possession of the flat. It was denied that the complainant made instalments in time. It was further stated that the complainant made defaults in making the instalments in time and invited payment of penal interest for delay in paying instalments. It was further stated that the complainant made total payment of Rs.40,34,408/-. It was further stated that about Rs.78 Lacs is still pending as on date against the complainant. It was further stated that there was no agreement or promise for handing over possession within some time period. It was further stated that time for completion of construction and handing over possession of the flat was not the essence of contract. It was denied that completion of construction, in any case, was to be completed after the lapse of 18 months from the date of issuance of acceptance-cum-demand letter.

6.         It was denied that letter dated 12.05.2015 was a show cause notice and it was the reminder to the complainant to appear on 28.05.2015 for clearing dues. It was further stated that the complainant appeared on 28.05.2015 and submitted a letter requesting two months time for clearing the dues. It was further stated that the complainant was issued a show cause notice dated 03.06.2015 to appear on 28.05.2015 (In fact 08.06.2015), on which date, some Advocate on behalf of the complainant appeared and submitted a letter at the reception counter. It was further stated that the complainant in that letter wanted some clarification regarding calculation of interest, which was duly provided by the Opposite Party to him (Annexure OP-3). It was further stated that the Opposite Party issued a show cause notice dated 15.06.2015 calling the complainant to appear for personal hearing on 19.06.2015 and to submit his defence against the cancellation of the flat. It was further stated that another show cause notice for non-deposit of remaining outstanding amount of Rs.76,05,645/- was issued to the complainant followed by various notices to clear the due amount. It was further stated that the proceedings for cancellation of flat are pending with the Opposite Party. It was further stated that the legal notice dated 01.07.2015 issued by the complainant was unsustainable, in as much as, the allotment price was clearly prescribed in the scheme of allotment and further in the acceptance cum demand letter. It was further stated that the entire action of the Opposite Party was in consonance with the scheme of allotment rather the complainant himself invited trouble by making default in payment of instalments. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

7.         The complainant, in support of his case, submitted his affidavit by way of evidence, alongwith which, a number of documents were attached.

8.         The Opposite Party, in support of its case, submitted the affidavit of Sh. Ashok Jasrotia, its Chief Accounts Officer, by way of evidence, alongwith which, a number of documents were attached. 

9.         We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

10.       It is evident that the Opposite Party – Chandigarh Housing Board floated Housing Flat Scheme 2008 under Categories A, B, C & D. Each category comprised two sub schemes. In Category-A, under Sub Scheme ‘A’, 228 units were for the general category and under Sub Scheme ‘B’, 16 units were under Assured Allotment Scheme (8 units each on the Ground and First Floor). The complainant applied for Category-A flat under Sub Scheme ‘B’ and he was issued acceptance-cum-demand letter in respect of First Floor of 3 Bedroom flat on freehold basis under Assured Allotment Scheme under Registration No.GHS63-3BR-BID-1 (Annexure C-1). The price and mode, as indicated in Para 3 of the aforesaid letter dated 25.11.2011 was as under:-

“3. According to Para-VIII of the brochure of the scheme under the heading “Price & Mode of payment”, you are required to deposit the amount as per schedule of payment given below:-

 

Price in lacs	Amount
Due/payable within 30 days of the issue of Acceptance-cum-demand letter	Rs.1304255
1st Instalment within 6 months from the date of ACD letter	Rs.1907960
IInd Instalment within 12 months from the date of ACD letter	Rs.1907960
IIIrd instalment within 18 months from the date of ACD letter	Rs.1907960
At the time of handing over the possession	100% of chargeable price minus price already paid

 

Note:

i)    In case full payment of the Dwelling Unit is made within 30 (Thirty) days from the date of issue of Acceptance-cum-demand letter, no interest will be charged.

 

ii)   The rate of interest of the Housing Scheme is 12% p.a.”

 

11.       From the above table, it transpires that the total price of the flat under Assured Allotment, under which the complainant was registered, was Rs.70,28,135/- against the reserved price of Rs.39,57,451/- (Page 43 of the file). The complainant, as submitted by him, deposited a sum of Rs.44,40,547/- whereas the Opposite Party in its written statement in Para 6 has admitted receipt of Rs.40,34,408/- only.  

12.       Para 5 of acceptance-cum-demand letter dated 25.11.2011 (Annexure C-1) being relevant is extracted hereunder:-

‘5. In case payment of registration money or the subsequent installments is not made by the due date of the payment mentioned above, the applicant shall pay interest @18% p.a. for the first month, @21% for the second month and 24% p.a. for the third month. No extension will be allowed beyond 3 months and the registration shall be liable to be cancelled. However, the Chairman CHB may allow extension beyond 3 months, or the revival of registration if the same has been cancelled, as the case may be, in case(s) of exceptional circumstances, on written request subject to payment of interest @30% p.a. beyond the period of 3 months.”

The rate of interest @12% per annum, as indicated in note (ii) below Para 3 and Para 5 above @18%, 21%, 24% and 30% per annum varies to a great extent. Neither allotment letter was issued nor period for delivering possession on receipt of payment was indicated except the acceptance-cum-demand letter dated 25.11.2011.

13.       It is case of the Opposite Party that the complainant, after making payment in the sum of Rs.40,34,408/-, did not make the balance payment, on account of which, he is liable to pay the balance amount of about Rs.78 Lacs including interest. The complainant contended that the balance amount was not paid on account of non-completion of construction. Thus, payment which was to be made as per schedule indicated in the acceptance-cum-demand letter, was not made.

14.       During arguments, Counsel for the complainant submitted that no allotment letter explaining the terms and conditions of allotment was ever issued, till date, and no time limit was laid down for completing construction and to deliver possession, which amounted to clear deficiency on the part of the Opposite Party. It was further submitted that the Opposite Party was charging hefty interest, which was not justified and, therefore, stated that amount deposited by the complainant be refunded. It was further submitted that in acceptance-cum-demand letter, there was also stipulation that “Rate of Housing Scheme is 12% p.a.”.  The rate of interest i.e. 18%, 21%, 24% and for delay beyond 3 months @30% is certainly higher. It was also submitted by the Counsel that the interest charged is extensively on the higher side, which amounts to unfair trade practice. Rate of interest @30% is four times the rate of interest, which the State Bank of India allows on term deposits. Even private Builders, in case of default, do not charge such high rate of interests.

15.       As per Annexure OP-2, the Opposite Party issued show cause notice dated 6.8.2012 informing him (complainant) that he was required to make payment of registration money of Rs.13,04,255/- within 30 days from the date of issue of acceptance-cum-demand letter dated 25.11.2011. Vide the aforesaid show cause notice, the complainant was asked to appear on 18.08.2012 failing which exparte decision was to be taken. Nothing was mentioned in the show cause notice ibid regarding interest. Again show cause notices dated 23.8.2012 and 28.9.2012 were issued. As is evident from Para 6 of written statement of Opposite Party, on merits, a sum of Rs.15,00,000/- was deposited by the complainant on 15.11.2012, which meant that the Opposite Party accepted the registration amount after one year of issuance of acceptance-cum-demand letter dated 25.11.2011 whereas as per Para 5 of acceptance-cum-demand letter dated 25.11.2011, no extension beyond three months could be allowed and the registration was liable to be cancelled. Only Chairman Chandigarh Housing Board could allow extension beyond three months or the revival of registration, if the same was cancelled, as the case may be, in exceptional circumstances on written request, subject to payment of interest @30% per annum beyond the period of three months. Apparently, there was no request from the complainant to this effect and still in violation of the provision, the Opposite Party at its sweet will, accepted the amount, apparently with a view to extract huge amount by way of 30% interest from the complainant.

16.       The Opposite Party also issued show cause notices dated 17.12.2012, 27.02.2013, 09.05.2013, 03.07.2013, 05.08.2013, 17.11.2013 and 15.01.2014, asking him (complainant) to deposit the outstanding amount by the date(s) indicated therein and in the event of non-payment, cancellation was to follow. The notices did not reveal the details/break-up of amount/interest payable. As per last show cause notice dated 15.01.2014, outstanding amount was Rs.65,73,325/-. These show cause notices reveal that the complainant was seriously in default but action in terms of Para 5 of acceptance-cum-demand letter and Regulation 7 (4) of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations, 1979, was not taken. Again reminder/show cause notices were issued on 19.03.2014, 09.05.2014, 11.08.2014, 10.10.2014, 18.12.2014, 10.02.2015 and 31.03.2015, asking the complainant to appear before the Chief Executive Officer, Chandigarh Housing Board alongwith relevant documents of having deposited the outstanding dues in respect of dwelling unit, in question. In these notices also, the amount due against the complainant was not mentioned. Clearly notices were being issued in routine without taking any effective action and no attempt was made to bring the issue to a logical conclusion. The complainant has also enclosed show cause notice dated 12.05.2015 in response to which he put in appearance in the Chandigarh Housing Board office on 28.05.2015 and also submitted an application (Annexure C-2, at page 11 of the file), seeking time to make payment.

17.       Again on receipt of Show Cause Notice dated 03.06.2015, the complainant submitted another application dated 08.06.2015 to the Chandigarh Housing Board, which reads as under:-

 

 

“To

The Accounts Officer,

CHB, Chd.

 

Subject: Show Cause Notice regarding Form No.14103 Regn No.GHS63 3 BR-BID-1.

Sir,

In this regard, it is submitted that I have attended your office on 28.5.15 in pursuant to notice and today i.e. 8-6-15, I have come present. The notice is regarding outstanding dues. It is submitted that none of the officer is providing us with the details of outstanding amount. The officials are rather harassing us. The notice is also silent about the amount to be paid. Till the amount is not clear, I am unable to deposit any amount. Moreover there is no clarity over the amount of interest, if any to be paid. The CHB has also delayed the possession of the flat. It is CHB who should pay interest to the allottees.

       The officials are also not allowing us to meet CEO in person to explain our grievances.

       Kindly address the matter at the earliest.

       Regards.

Chd.                                         sd/-

8/6/2015.            For (Karnail Singh)

                           H.No.1307,1^st Floor,

Through counsel”

 

18.       The complainant issued legal notice dated 01.07.2015 through registered post (Annexures C-7 & C-8), pointing out that the Opposite Party did not intentionally and willfully issue the allotment letter indicating the terms and conditions of the sale. It was also submitted that when the complainant visited the office of the Opposite Party, in response to notices dated 28.5.2015 and 3.6.2015 (in support of which, he has submitted evidence), nobody was there to meet him. The Opposite Party did not respond, either to letter dated 8.6.2015 (Annexure C-4) and to the legal notice.

19.       Annexures C-5 and C-6 are also Show Cause Notices regarding cancellation of registration of the unit, in question. As per show cause notice dated 25.8.2015 (Annexure C-6), a sum of Rs.76,05,645/- was shown due against the complainant. On perusal of these Show Cause Notices, it is evident that the matter was kept pending by the Opposite Party and no decision in accordance with the regulations was taken, thereby interest continued to accrue and multiply, making it almost impossible for the complainant to pay the same. In all fairness, when the complainant defaulted, a decision was required to be taken by the Opposite Party for cancellation of the unit. The Opposite Party was well aware that the complainant was defaulter by not making the payment due but it despite issuing show cause notices did not decide the matter. Sequence of events clearly depict that there was complete lack of initiative on the part of the Opposite Party to take action as per rules and regulations. Default by the complainant was clear, warranting cancellation. Inaction on the part of the Opposite Party amounted to clear deficiency. Further, had the decision to cancel the registration of the complainant been taken by the Opposite Party within reasonable time, when he (complainant) defaulted, the complainant could avail remedies available to him under the provisions of relevant rules. Since the Opposite Party kept the matter pending and              allowed to linger on, without taking any decision, levying interest @30% per annum made                         it virtually impossible for the complainant to clear the dues.

20.       During arguments, Counsel for the      Opposite Party submitted that there was no     provision for refund and relied upon Rule 7(4) of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations 1979, which reads as under:-

“7(4)       In case any instalment is not paid by the allottee by the due date, a notice shall be served on him calling upon him to pay the instalment within a month together with penalty which may extend upto [25] percent of the amount due. If the payment is not made within the said period of such extended period or such extended period, as may be allowed by the Board but not exceeding three months in all, from the date on which the instalment was originally due, the Board may cancel the allotment and forfeit the whole or part of the consideration money and ground rent already paid in respect of the property and thenceforth the property shall vest in the Board.”

Clause XI relating to Surrender/Cancellation, contained in the Brochure, read as under:-

“XI. SURRENDER/CANCELLATION.

(i)     If the refund of the initial deposit is sought before the acceptance of        application/registration, either by       draw of lots or otherwise, 5% of the   amount of initial deposit shall be   forfeited to the Board.

(ii)   In case the refund of the initial deposit is sought after acceptance of      application/registration, either by       draw of lots or otherwise, but within one month of issue of acceptance-    cum demand letter, the amount       shall       be refunded after forfeiting 10% of    the initial deposit.

(iii)  In case payment of registration money or the subsequent   installments are not made by the       due date of prescribed in the    acceptance-cum-demand letter, te       applicant shall have to pay interest   @18% per annum for the first       month, @21% for the 2^nd month and    @24% p.a. for the 3^rd month. No       extension will be allowed beyond       three      months and the registration    shall       be cancelled. However, the Chairperson, Chandigarh Housing     Board may allow an extension        beyond three months, or revive       registration if the same has been       cancelled, as the case may be, in    case(s) of exceptional   circumstances,       on written request       subject to payment      of interest @30%      p.a. beyond the     period of 3 months.

(iv)    If the registration is cancelled either on the applicant’s own request or for non payment of registration money or any of the subsequent installments with interest, if any, or due to any other reason, the amount deposited with the Board shall be refunded after forfeiting 10% of the initial deposit. However, whether the surrender or cancellation is made after the expiry of 1, 2 & 3 months from the due date, in addition, interest calculated @18%, 21% and 24% p.a. respectively, shall be charged on the due amount remaining unpaid, from the due date till the date of surrender or cancellation. Where the surrender/cancellation is made after 3 months, interest @30% p.a. shall be charged further for the period beyond 3 months.

(v)     The registration/allocation of floor so cancelled with be offered to the next period in the waiting list during the period of its validity provided he/she pays, within 30 days of the issue of  Acceptance-cum-Demand letter, the total amount due so far, alongwith interest as per scheme for the entire period concerned had he/she been required to pay the amount from time to time as in the case of other allottees under the scheme. Extension in the period of payment of the amount will, however, be allowed on the terms as contained in clause (iii) above.”

 

21.        Provision of Regulation 7 (4) of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations, 1979 stipulated that allotment could be cancelled by forfeiting the whole or part of the consideration money. When the Opposite Party was deficient in rendering service by allowing extension of time of about one year in deposit of registration money, contrary to the provision, at its sweet will and did not decide the issue promptly in accordance with provision in Regulations, by no stretch of imagination, it could forfeit the whole of the amount deposited by the complainant. This is not a case, where any incorrect or false information was furnished or any material fact was suppressed by the complainant, warranting forfeiture of whole of the amount. In fact, it was a profiteering scheme for the Opposite Party as against the reserved price of Rs.39,57,451/-, the complainant was registered for a flat at a total sale consideration of Rs.70,27,135/-.  As per provision of Regulation 7 (4) of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations 1979, when the complainant defaulted beyond three months, the Opposite Party – CHB ought to have taken a decision to cancel the allotment. This regulation also says that Board could forfeit the whole or part of the consideration money. Under no parameter, forfeiture of whole of the amount could be said to be justified. In Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha, (2004) 1 SCC 305 and also in the judgment of United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC), and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), it was said that the consumers are always in weak position and where two interpretations are possible, the one beneficial to the consumer should be accepted. When the Opposite Party was well aware about consistent default of the complainant, it ought to have decided the issue within laid down time limit, to mitigate the misery of complainant from unreasonable liability of interest. The complainant has already paid a sum of Rs.44,40,547/- and as per averment in Para 3 of the written statement of the Opposite Party, a sum of Rs.78 lacs was still due against the complainant as on 21.10.2015. This would mean that against reserved price of Rs.39,57,451/- and assured allotment price of Rs.70 Lacs, the complainant would be paying Rs.44 lacs + Rs.78 lacs = Rs.122 lacs. Inaction of the Opposite Party has added to the miseries of the complainant besides litigation for both the parties. Non-payment of due  amount by the complainant warranted cancellation but the Opposite Party failed to take action in accordance with the provision in regulation and without valid reasons prolonged the issue. During arguments, Counsel for the Opposite Party stated that price of such a unit, in the market, is well above Rs.One Crore. Timely action would, thus, have been helpful to the Opposite Party, to get handsome price for the unit, in question, after cancellation.

22.       Now the question, which falls for consideration, is, as to what amount should be forfeited while refunding the deposited amount to the complainant. A similar question arose in DLF Ltd. Vs. Bhagwanti Narula, Revision Petition No.3860 of 2014, decided on 06.01.2015, by the National Consumer Disputes Redressal Commission, New Delhi, wherein as per the Agreement, 20% of the sale price of the premises was to collectively constitute the earnest money, which was to be forfeited, in case, the allottee made a default in payment of instalments(s) and asked for refund of the amount deposited. Such Clause came up for interpretation, before the National Commission, in the aforesaid case. The National Commission, ultimately, held that an Agreement having forfeiture Clause of more than 10% of the sale consideration, would be invalid, as it would be contrary to the established legal principle that only a reasonable amount could be forfeited, in the event of default on the part of the buyer. In the aforesaid case, the National Commission placed reliance on Bharathi Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd., (1996) 4 SCC 704, wherein the Hon’ble Supreme Court of India accepted the contention that in appropriate case, the Consumer Forum, without trenching upon acute disputed questions of fact, may decide the validity of the terms of the contract based upon the fact situation and may grant relief, though, each case depends upon its own facts. Ultimately, the National Commission, in the aforesaid case, held that the amount exceeding 10% of the total sale price, could not be forfeited, by the seller. Relying upon, what has been held above, in DLF Ltd.’s case (supra), in our considered opinion, Regulation 7(4) of Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations 1979 providing for forfeiture of whole or part of the consideration money cannot be construed to mean that whole of consideration money can be forfeited, as it would be highly unreasonable and would amount to unfair trade practice. In Chandigarh Housing Board Vs. Surinder Pall Soni, 2004 (1) CPC 413 (NC), the Hon’ble National Commission partly allowed Revision Petition bearing No.1202 of 2003, directing the Chandigarh Housing Board to refund the deposited amount after deducting 10% of the deposits, as required by provisions of said regulation. The respondent/complainant, in that case, apart from owning a shop-cum-flat in motor market, Chandigarh, also applied for allotment of dwelling unit under Category I & IV. Paras No.7 to 11 of the aforesaid order, being relevant, are extracted hereunder:-

7. Despite the aforesaid facts, the State Commission arrived at the conclusion that complainant did not own any dwelling unit at the Motor Shop site at the time when he applied for allotment of dwelling unit under Categories I and IV. It appears that attention of the State Commission was not drawn to the fact that the respondent had filed an affidavit dated 15.9.1988 before the competent authority that he was absolute owner and in possession of a shop-cum-flat No. 385 in Motor Market, Chandigarh with full proprietary rights. He had also executed the Indemnity Bond for having construction plan sanctioned. Because of this clinching evidence, the order passed by the State Commission cannot be justified.

8. Further, the State Commission also held that at the time of allotment of dwelling unit under Category IV on 9.5.1994, the complainant had applied for cancellation of his registration in Category I vide application dated 11.4.1994. Therefore, there was no ground for cancellation of registration relating to allotment of Category IV House. This reason is also contrary to what is held by the Apex Court in Chandigarh Housing Board v. Narinder Kaur Makol, V (2000) SLT 507=(2000) 6 SCC 415. A bare reading of the aforesaid judgment makes it crystal clear that Regulation 6 is required to be complied with. The Court in this case held thus :

“It must be realised that these plots are allotted on concessional basis to the allottees by the public authority and the relevant regulations must, therefore, be interpreted in such a manner as to save their real purpose so that the plots are available, as far as possible, to the largest numbers of persons, and for preventing the same family members, husband or wife or dependents, as the case may be, from getting more than one plot or house, for the same purpose. We are of the view that the words “residential house” in Regulation 6(1) must be treated as including a flat constructed above the commercial flat on the ground floor. This will be so even if originally the plot was allotted for commercial purposes, if incidentally construction of residential flat above the ground floor commercial plot is allotted as a commercial plot, if it is permissible to build a residential flat above the commercial plot, and is so constructed, then such a residential flat will come within the prohibition in Regulation 6(1).”

9. In the present case also, facts stated above clearly reveal that respondent has suppressed the fact that he had acquired a plot for construction of shop and the flat. Therefore, the cancellation of the allotment in favour of the respondent by the authorities was justified. For the aforesaid reason, the orders passed by the Consumer Disputes Redressal Commission, Union Territory, Chandigarh, and by the Consumer Disputes Redressal Commission Forum-I, Union Territory, Chandigarh, directing the petitioner to refund the amount of Rs. 3,55,000/- which was deposited for dwelling unit under Category I and the sum of Rs. 95,912/- deposited for dwelling unit under the hire-purchase scheme with 12% interest cannot be justified. It is, therefore, set aside.

10. The next question would be whether the respondent is entitled to have refund of the amount deposited by him. Firstly, it should be made clear that respondent has tried to suppress the material fact in applying for flats in Category I and Category IV and he has filed false affidavit. It is apparent that he wanted to take undue advantage of getting more and more flats contrary to the regulation.

11. Further, Regulation 6 empowers the authority to forfeit the deposited amount, but that forfeiture clause gives discretion to the authority either to forfeit entire amount or a portion thereof after taking into consideration all relevant facts. In the facts and circumstances of the case, we direct that after deducting 10% of the said amount, petitioner shall refund the remaining amount without interest.

Revision petition is allowed accordingly.”

In view of aforesaid, it is  held that the Opposite Party is only entitled to forfeit 10% of the sale consideration of the flat, in question, and not beyond that. Therefore, the amount of forfeiture shall come to Rs.7,02,813/-. The Opposite Parties could forfeit Rs.7,02,813/- out of Rs.40,34,408/-, (amount admitted by the Opposite Party in its written statement) deposited by the complainant. It is relevant to mention here that as per complainant, he has deposited Rs.44,40,547/- whereas the Opposite Party in its written statement has admitted receipt of Rs.40,34,408/- only. The Opposite Party shall recheck and if the amount paid by the complainant is more, benefit of same shall be given to the complainant. In short, the amount paid by the complainant less (-) Rs.7,02,813/- shall be refunded alongwith interest @12% per annum, from the date(s) of deposit.

23.       The next question, which falls for consideration, is, as to whether, the complainant is entitled to interest or not. Though the Opposite Party, claimed that as per acceptance-cum-demand letter, it could charge interest @18%, 21%, 24% and for delay beyond 3 months @30%, but the fact is that below Para 3 of the acceptance-cum-demand letter, it was mentioned that the rate of interest of the Housing Scheme is 12% per annum. The complainant paid huge amount in the sum of Rs.44,40,547/- (as per Opposite Party Rs.40,34,408/-), which was undoubtedly his hard earned money. Despite his paying huge amount, no allotment letter was issued by the Opposite Party qua terms and conditions of allotment. Even to the acceptance-cum-demand letter dated 25.11.2011, the complainant was not asked to give his consent. In view of above, action of the Opposite Party, when it itself did not cancel the registration and continued to charge interest @18%, 21%, 24% and 30%, was clearly contrary to the stipulation in the acceptance-cum-demand letter and also amounted to unfair trade practice. Since, as already stated earlier, the complainant neither concealed any material fact nor was he registered for allotment on the basis of any false or incorrect information, coupled with the fact that the amount deposited by him remained with the Opposite Party for substantial period, in our considered opinion, interest on the amount deposited by the complainant, @12% per annum, would be justified and fair. For default attributable to him, he has been penalized in the sum of Rs.7,02,813/-.

24.         No other point, was urged, by the Counsel for the parties.

25.          For the reasons, recorded above, the complaint is partly accepted, with costs, and the Opposite Party is directed in the following manner:-

(i)    To refund the deposited amount, after deducting 10% of Rs.70,28,130/- (i.e. Rs.7,02,813/-) alongwith interest @12% per annum, to the complainant, from the respective dates of deposits, till realization, within two months, from the date of receipt of a certified copy of this order, failing which, the Opposite Party shall pay the aforesaid amount alongwith interest @15% per annum, instead of 12% per annum, from the date of default till actual payment;

 (ii)  To pay cost of litigation, to the tune of Rs.50,000/-, to the complainant within a period of two months from the date of receipt of a certified copy of the order, failing which, the Opposite Party shall pay the aforesaid amount alongwith interest @12% per annum from the date of default till actual payment;

26.         Certified Copies of this order be sent to the parties, free of charge.

27.         The file be consigned to Record Room, after completion.

Pronounced

April  07, 2016.

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER