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

                                     Consumer Complaint No. 686 of 2015

                                                Date of institution:  22.12.2015                                         Date of decision   :  30.01.2017

Harit Sharma son of Dharam Vir Sharma, resident of Kothi No.2220, Sector 15-C, Chandigarh.

 ……..Complainant

                                        Versus

1.     The Greater Mohali Area Development Authority, PUDA Bhawan, Sector 62, SAS Nagar, District Mohali through the Chief Administrator.

2.     The Estate Officer, Greater Mohali Area Development Authority, PUDA Bhawan, Sector 62, SAS Nagar, District Mohali.

                                                           ………. Opposite Parties

Complaint under Section 12 of

 the Consumer Protection Act.

Quorum

Shri Ajit Pal Singh Rajput, President 

Shri Amrinder Singh Sidhu, Member.

Mrs. R.K. Aulakh, Member.      

Present:    Complainant in person.

                Shri G.S. Arshi, counsel for the OPs.

ORDER

By Ajit Pal Singh Rajput, President

                Complainant Harit Sharma has filed this complaint against the Opposite Parties (hereinafter referred to as the OPs) under Sections 11 and 12 of the Consumer Protection Act. The brief facts of the complaint are as under:

              The complainant had applied with the OPs for allotment of type-II category flat in the scheme of Purab Premium Apartments vide application No.6102. The complainant was successful in the draw of lots held on 19.03.2012 and was issued letter of intent dated 21.05.2012 for.  The complainant had paid Rs.59,75,800/- towards all the installments on the due dates as per conditions of letter of intent dated 21.05.2012. As per condition No.3 under heading ‘Ownership and Possession’ sub condition No.(ii) the possession of the apartment was to be handed over after completion of development work at site within a period of 36 months from the date of issuance of letter of intent.  As per this condition, the offer of possession was to be given by 17.05.2015 but the possession was not delivered by this date. Therefore, the complainant vide letter dated 22.05.2015 requested the OPs to refund the entire amount alongwith interest as per conditions of letter of intent dated 21.05.2012. On demand by the Estate Officer, the complainant surrendered the original letter of intent and also submitted copy of his PAN Card.  However, when nothing was heard from the OPs, the complainant sent reminder dated 08.07.2015. Alongwith this letter the complainant attached NOC from the bank who financed an amount of Rs.5,50,000/-.  However, the OPs vide order dated 05.08.2015 ordered refund of the deposited amount to the complainant. Accordingly cheque dated 12.08.2015 for Rs.60,54,236/- was issued in the name of the complainant.  The perusal of order dated 05.08.2015 shows that the OPs have paid 8% interest only for the period from 22.05.2015 to 27.07.2015 and the cheque had been prepared on 12.08.2015 whereas as per Clause No.3 (ii) of the LOI dated 21.05.2015 the complainant was entitled to 8% interest compounded annually.  Further the OPs have also wrongly deducted Rs.16,995/- towards service tax. The complainant sent demand notice dated 09.11.2015 to the OPs calling upon them to make the payment of Rs.7,60,337/- towards remaining interest amount due within 15 days, however, till date no payment has been made by the OPs. Hence the complaint for giving directions to the make payment of remaining interest of Rs.7,60,337/- alongwith interest @ 18% per annum till realisation; to pay him Rs.16,995/- of service tax alongwith interest @ 18% interest which was wrongly deducted; to pay him Rs.5,00,000/- as compensation for mental agony and Rs.33,000/- as litigation expenses.

2.             In response to notice, Shri G.S. Arshi, advocate has appeared and filed memo of appearance on 17.02.2016 and the complaint was adjourned to 03.03.2016 for filing POA and reply by the OPs.   On 03.03.2016 neither the counsel for the OPs appeared nor was any POA/reply filed.  As the OPs failed to submit written reply within the stipulated period of 45 days, therefore, in view of the law laid down by the Hon’ble Supreme Court of India on 04.12.2015 in case titled as New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., the complaint was proceeded against the OPs and the matter was posted for 27.04.2016 for evidence of the complainant.

3.             The complainant tendered in evidence  his affidavit Ex.CW-1/1; copies of letter of intent dated Ex.C-1; letter for refund Ex.C-2; reminder Ex.C-3; sanction order Ex.C-4; cheque Ex.C-5 and letter claiming payment of compound interest Ex.C-6.  In rebuttal, the OPs tendered in evidence affidavit of Mahesh Bansal, their Estate Officer (Housing) Ex.OP-1/1

4.             The ld. counsel for the complainant has submitted that the main controversy involved in the present case is, that as per Condition No.3(II) of the letter of Intent i.e Ex.C-1 the complainant is entitled to interest @ 8% compounded annually on the deposited amounts. The condition No.3 (II)  is reproduced below:

                “3. Ownership and Possession:

                   (II)Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent. In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually.”

 5.            The complainant was entitled to withdraw from the scheme and claim the refund of the payments deposited by the complainant alongwith interest @ 8% compounded annually. The ld. counsel stated that the complainant had deposited a sum of Rs.59,75,800/- and the OPs had only paid interest amounting to Rs.1,06,090/-. The OPs had also illegally deducted service tax @ 3.09% to the tune of Rs.16,995/- on the earnest money of Rs.6,90,000/-. He argued that the complainant was entitled to receive 8% interest compounded annually of the deposits made by the complainant, as due to the deficiency of service on the part of the OPs the complainant was forced to withdraw from the said scheme. He also argued that the complainant cannot be left to suffer due to the negligence of the OPs, in delivery of possession. The ld. counsel also referred to case laws, titled as Puneet Malhotra and others Vs. Parsvnath Developers Ltd.,  2015(1) CLT 552 (NC) wherein in Para 14 of the judgment the Hon’ble National  Commission has directed the OPs to refund the amount which the complainants had deposited with it, alongwith interest on the said amount @ 18% per annum from the date of the deposit was made till the date of refund is made.  Further learned counsel for the complainant has referred to the case titled as Ghaziabad Development Authority Vs. Union of India & Anr, 2000 (II) CPJ 1 wherein the Hon’ble Supreme Court in Para No.11 has upheld the decision of MRTP Commission for grant of interest from the date of deposited. Para No.11 of the judgment is reproduced as under:

“This case relates to allotment of a flat. The MRTP Commission has led that the claimant entitled to allotment of a flat. An option has been given to the claimant. If the claimant may refuse to take the flat in terms of the direction made by the commission, he will be entitled to the refund of the amounts deposited by him with interest at the rate of 18% p.a. from the date of deposit of the various amounts by the claimant.”

6.             On the other hand learned counsel for the OPs has argued that as per Clause 3 (ii) of the letter of intent, the OPs have rightly paid 8% interest to the complainant from the date he withdrew from the scheme. The service tax which was deducted from the amount due to the complainant has been paid to the Govt.  Learned counsel has thus argued that there is no deficiency in service on the part of the OPs.

7.             After hearing the Ld. Counsel for the parties and going through the pleadings, evidence and the oral argument as well as written submissions, we find force in the submissions made by the ld. counsel for the complainant. In our view, it is established from the material placed on record i.e. statement by way of affidavit i.e. Ex. CW-1/1 that the OPs had only paid Rs.1,06,090/- towards interest.  We hold that as per condition No.3 (ii) Ex.C-1 the complainant is entitled to @ 8% interest compounded annually on the deposited amounts in the event of failure of the OPs to deliver the possession within stipulated period.  However, the complainant is not entitled to refund of service tax of Rs.16,995/- as the same has been paid by the OPs  to the Govt.

8.             Accordingly, in view of our aforesaid discussion and the case law citied by the ld. counsel for the complainant we are of the opinion, that the OPs had committed deficiency of service by not paying 8% interest from the dates of deposit.       

9.             Hence we direct the OPs to pay to the complainant interest on the deposited amounts @ 8% compounded annually from the dates of deposit till actual payment minus the amount of Rs.1,06,090/- which the complainant has already received from the OPs . We also find that the complainant is also entitled for compensation on account of mental agony amounting to Rs.15,000/- (Rs. Fifteen thousand only) alongwith litigation cost amounting to Rs.10,000/- (Rs. Ten thousand only).

               The OPs are directed to comply with the order of this Forum within 45 days from the date of receipt of this order. The present complaint stands allowed accordingly.            

                The arguments on the complaint were heard on 23.01.2017 and the order was reserved. Now the order be communicated to the parties. Copy of the order be sent to the parties free of cost and thereafter the file be consigned to the record room.

Pronounced

Dated: 30.01.2017    

                                          (A.P.S.Rajput)                  

President

        (Amrinder Singh Sidhu)

Member

(Mrs. R.K. Aulakh)

Member