1.         The present First Appeal (FA) has been filed by the Appellant against Respondents as detailed above, under section 19 of Consumer Protection Act 1986, against the order dated 20.02.2019 of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) No. 227/2014 inter alia praying for setting aside the final order dated 20.02.2019 passed by the State Commission.

2.         While the Appellant was Respondent before the State Commission, the Respondents were Complainants in the said Complaint No. 227/2014 before the State Commission. Notice was issued to the Respondents on 10.05.2019.  Parties filed Written Arguments/Synopsis on 21.02.2024 (Appellant) and 25.01.2022 (Respondents) respectively.

3.         Brief facts of the case, as emerged from the FA, Order of the State Commission and other case records are that: -

 Vide application dated 07.01.2008, the complainants applied for allotment of Residential Apartment in Group Housing Complex, The Pranayam, Sector -82-85, Faridabad, Haryana for a consideration of Rs.50,98,756/- plus additional charges.Allotment letter was sent to the complainants on 27.03.2008.Agreement was executed between the parties on 16.12.2008. It was agreed between the parties that the Appellant will hand over the Apartment to the Complainants/Respondents within three years from the date of payment of earnest money positively and the complainants will make the payment according to the demand of the Appellant as and when raised. The complainants paid Rs.6,36,930/- as earnest money.The complainants paid Rs.30,12,144/- till 16.09.2011 on different dates including the earnest money. The complainants find that the construction work of the apartments is not as per the schedule and contacted the Appellant about the delay.The complainants were assured by the employee ofAppellant that the interest charged will be waived off.Upon this, the complainant made a request by letter dated 18.05.2011 to Managing Director and an offer of further plan of payment was explained by the said communication on waiver of interest.The complainants received the letter on 18.07.2011 for final reminder of payments in which net cost of the flat was shown as Rs.49,97,656/- and in the column of receipt of paymentRs.29,48,337/- was acknowledged instead of Rs.32,12,144/-.No satisfactory clarification about this amount was given by the Appellant. The OP issued letter dated 04.10.2011 demanding Rs.3,84,210/- as enhanced EDC and further informed that the said payment be made by 05.11.2011. No clarification was given by the Appellant.Vide letter dated 14.03.2012 the Appellant informed the complainants to pay Rs.24,73,441.06 plus interest of Rs.11,89,476.00 and vide this letter the Respondent increased the Net cost of the flat to Rs.56,55,037.93, but no clarification was given by the Appellant. The complainants made several requests for waiver of interest as the construction work of the apartment by the Appellant was late and not as perschedule.On 14.05.2013, the complainants made an offer to the Appellant in which complainants agreed to make payment of Rs.15,00,000/-on acceptance of the offer and balance within two months of acceptance and a further payment of Rs.5,00,000/- towards the interest.In January 2013, the Appellant finished the construction work and started allotting the apartments far behind the scheduled date as per Agreement. The complainants received letter on 24.07.2013, issued by the Appellant dated 19.07.2012 stating that after 10 days the Appellant shall be free to transfer it in favour of the third party. The complainants vide letter dated 24.07.2013 communicated that they are willing to pay the full consideration amount plus Rs.5,00,000/- extra towards interest as communicated vide letter dated14.05.2013 and that the Appellant has not taken into consideration the said offer.The complainants visited several times the office of the Appellant for settlement of the matter but the Appellant vide latest demand dated February 2014, demanded Rs.50,00,000/- towardsthe interest amount.Hence, the complainants filed complaint before the State Commission.

4.         Vide Order dated  20.02.2019, the  State  Commission  has  allowed  the

Complaint and passed the following order:-

“21. On the facts and circumstances of the case I feel that grant of interest @12% per annum from the respective dates when the complainants made the payment, till the date of refund would meet the ends of justice. Accordingly the OPs are directed to refund Rs.32,62,144.30 alongwith interest @12% per annum from the date of payment to the date of refund. That would take care of cost of litigation also. The OPs are directed to comply with the orders within 45 days from the receipt of copy of this order.”

5.         Appellant has challenged the Order dated 20.02.2019 of the State Commission mainly on following grounds:

(i)        The State Commission failed to consider the clauses of Buyers’ Agreement which clearly stipulate that the allotment of Allottee is liable to be cancelled in case of Allottee fails to make timely payment of installments as agreed by them in Buyers’ Agreement.  The State Commission failed to consider the admission of Respondents that they failed to make timely payment of installments and only penalized the Appellant.  The State Commission failed to consider Clause 12 of the Buyers’ Agreement  which clearly stipulates that time is the essence with respect to the allottee to pay sale price.  Admitted failure of the Respondents to timely pay the instalments was a fundamental breach of contract. In a Group Housing Project, timely payment of instalments is of utmost importance in order to ensure timely completion of project. 

(ii)       The State Commission on one hand pardoned the Respondent for its admitted failure to pay timely instalments, however, on the other hand penalized the Appellant for no delay in completion of project.  Despite the latter obligation of Appellant being dependent on the former obligation of Respondents. 

(iii)     The State Commission failed to take into consideration the effect of Clause 13 (b) of Buyers’ Agreement which stipulates that in case of delayed payments, the possession of apartment shall be handed over only upon payments of all dues, installments, penalties etc. by the Allottee.  The Appellant in many cases waived off the interest on delayed payments and only imposed a reasonable amount of interest for default of the Respondents.   The State Commission failed to consider Clause 14 of Buyers’ Agreement which clearly stipulated that the time for handing over of possession of apartment would be 36 months from the date of entering of Buyers’ Agreement, subject to fulfillment and compliance of all terms and conditions including payment of dues, installments etc. by the Respondents.  Further, sub-clause (vi) clearly stipulates that in case of default/delay in payments by Apartment Allottee the date of handing over of possession shall be extended till the payment of entire consideration or outstanding amounts by the Allottee.  The OC was received on 22.08.2012 and the letter dated 18.05.2011 and 14.05.2013 by Respondents, clearly indicate that the Respondents did not pay the requisite consideration/sale price as well as failed to make timely payments of installments for timely handing over of possession. 

(iv)      The State Commission failed to consider the catena of judgments of the Supreme Court and National Commission that when the allottee fails to abide by the terms and conditions of timely payment of instalments and other conditions of the agreement in spite of repeated reminders, then the Builder is well within its rights to forfeit the earnest money and cancel the allotment.

(v)       The State Commission failed to take note of the false and inconsistent averments of Respondents.  On one hand they wrongly state that they were not aware of the time for making payment for instalments despite there being a clear construction linked payment plan in Buyers’ Agreement and Allotment Letter and on the other hand, Respondents themselves suggest the Appellant to accept their suggestion of alternative payment plan.  These facts manifestly suggest that the Respondents failed in their primary obligation to make timely payment of instalments under the Buyers’ Agreement.

(vi)      The State Commission erred in directing the refund of entire amount including the expenses incurred by the Appellant on brokerage, EDC charges, taxes etc. which is an obligation of payment of Allottees. 

6.         Heard counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the FA, based on their FA/Reply, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

6.1. In addition to the averments made under the grounds (para 5), the Appellant contended that Apartment Buyers Agreement was executed between the Respondent and the Appellant.As per Clause 14, the time periodfor handing over the possession of the apartment was 39 months, inclusive of 90 days grace period, i.e. by 16.03.2012.However, the time period for handing over the possession was subject to the Respondents complying with all the terms and conditions of the ABA.The appellant sent various demand notices/reminder letters for payment of instalment in terms of the payment plan.However, the Respondents defaulted in payment of the instalments. It is further contended that the Appellant informed the Respondents that the architects have certified the final super area of the unit at 2184 sq.ft. and accordingly demand was raised for the balance amount of Rs.3,88,476/-.The Respondents were given an option to pay either in lump sum or in 2 equal instalments, i.e., Rs.1,94,238/- on or before 15.08.2010 and Rs.1,94,238/- on or before 15.09.2010. On 19.11.2010, the Appellant informed the Respondents that due to their non-compliance of the agreed payment plan, their allotment stands cancelled in terms of the ABA.It was also informed that in terms of ABA, Rs.11,65,411/- was forfeitable by the Appellant and Rs.12,46,733/- will be refunded to the Respondents after sale of their apartment, in 3 EMSs.On 11.05.2011 the Appellant paid Rs.5,50,000/- to the Appellant.On 18.05.2011, the Respondents sent a letter acknowledging that there is an outstanding of Rs.25 Lac and stated that he has been assured that on payment of Rs.15 Lac by 19.06.2011, the interest will be waived.The Respondents gave their payment plan wherein they agreed to pay Rs.5.5 Lac by 11.05.2011 (paid), Rs.4.5 Lac by 28.05.2011, Rs. 5 Lac by 19.06.2011, Rs.7.5 Lac by 15.09.2011 and Rs.7.5 Lac by 15.11.2011.The Respondents stated that once they receive the confirmation on the interest waiver, they will pay the rest of the amount. On 18.07.2011, final reminder was issued to the Respondents to remit dues of Rs.18,74,738.40 along with interest of Rsl.6,78,139.39 at the earliest. On 04.10.2011, the Appellant issued letter to the Respondents requesting to remit an amount of Rs.3,84,210/- towards additional EDC by 15.11.2011 in terms of the notification issued by the Govt. of Haryana.On. 14.03.2012, the Appellant informed the Respondents that despite several reminders, the Respondents have not paid the balance amount.Under these circumstances, the Appellant is constrained to cancel the allotment and forfeit the amount, unless balance amount (Rs.24,73,441.06 and Rs.11,89,476.97 towards interest) is received within 15 days.On 02.04.2012, the Appellant informed the Respondents that since they have failed to pay the outstanding amount despite reminders/emails, the Appellant is constrained to treat the booking as cancelled and forfeit the deposited amount in terms of the agreement, unless balance amount is received within 5 days. On 29.05.2012, the Appellant requested the Respondents to rectify all defaults including payment of interest (up to date) within a period of 30 days.It was also stated that failure in making the payment would result in the termination of the buyers’ agreement.On 22.08.2012, the Appellant received Occupation Certificate (OC) by Directorate of Town & Country Planning, Haryana (DTCP).It is further contended that the Respondents wrote to the Appellant on 14.05.2013 seeking restoration of the apartment in question.For the first time the Respondents stated that they did not pay the instalments as the Appellant has increased the area and that there was an enormous delay in completing the project. The Respondents also gave their offer of settlement: Option 1-If allotment is restored, the Respondents will not dispute the demand towards increase in area, will pay the principal amount as per ABA and will also pay Rs.5 Lac towards delayed interest.Option 2- In case any other apartment is allotted, the Respondent will not dispute the area of the apartment and will make payment of all the principal amounts as per the ABA. The Respondents undertook to make payments as:

- Rs.32,62,144/- already paid.

-Rs.15 Lac on acceptance of the offer

-Balance within 2 months.

The Appellant issued cancellation letter to the Respondents on 19.07.2013 as the Respondents have failed to make payment of  instalments in terms of the ABA despite several demands/reminders.  The Appellant had sent a final letter of cancellation on 29.05.2012 and adjustment in terms of the ABA and invoked the provisions contained in clause 20.2(a) and (ai) due to breach of contract, for rectification of all defaults within a period of 30 days including payment of outstanding dues along with interest.  However, till date no default has been rectified, and as per the terms of the ABA, the agreement stands cancelled.  It was further stated that the Appellant shall be at liberty to enter into sale of the said apartment to any third party, after expiry of 10 days from receipt of the present letter/notice.  The Respondents herein filed Complaint before the State Commission.  The State Commission directed the Appellant to refund Rs.32,62,144.30 with interest @12% p.a. from the date of payment till the date of refund within 45 days of receipt of order.  Hence, this Appeal has been filed.

1. 2 

   On the other hand, Respondents contended that they had applied for Registration/Provisional allotment of a Residential Apartment in the project- "The Pranayam" located at Sector 82-85, Faridabad, Haryana for consideration amount of Rs. 50,98,756/-, vide application form dated 07.01.2008. Thereafter, an Apartment Buyer's Agreement was entered on 16.12.2008 wherein the Respondents were allotted Apartment bearing No. C2/501 having a super area of 2022.00 sq. ft. with a condition to handover the possession within 36 months. The Respondents made a payment of Rs.19,20,192.30 before entering into the Apartment Buyer's Agreement. Since the construction was delayed by the builder and demands were raised before reaching the agreed milestones and the Appellant charged additional EDC on the cost of the Apartment without giving satisfactory answer, therefore, the Respondents stopped making the payments, consequently the builder started imposing interest. It is further contended that without seeking the consent of the Respondents, the Appellant increased the super area of the Apartment and raised a demand of Rs.3,88,476/- towards the cost of the Apartment. Due to this, disputes arose between the parties and in order to resolve the issues, the Appellant agreed to waive off the interest, whereupon the Respondents made a payment of Rs.5,50,000/- on 11.05.2011 and Rs.50,000/- on 16.09.2011 and the said amounts were accepted towards the remaining sale consideration of Apartment. However, no such interest was waived off and the Appellant kept on raising illegal demand of interest, EDC and increased cost for increased area. The fact of waiving the interest has been admitted by the Appellant in Para 5 of the Evidence by way of affidavit. The Respondents had made total 60% payment of the total sale consideration and were willing to make the payment of balance sale consideration. But since no response has been received from the Appellant, the Respondents filed the Consumer Complaint No. 227 of 2014 before the State Commission. The State Commission was pleased to grant ad-interim ex-parte stay in favour of the Respondents vide Order dated 23.05.2014 and the said fact was within the knowledge of the Appellant since their counsel had appeared before State Commission on 14.01.2015. Despite being aware of the Stay granted by the State Commission, the Appellant sold the Apartment of the Respondents to a third party for Rs.75,56,008/ on 11.02.2015 in violation of the stay order. It is also contended that since the Appellant has sold the flat is, therefore, liable to pay compensation and contempt lies against the Appellant, on the application of the Respondents under Section 27 of the Act neither the Appellant was being punished for contempt nor any compensation granted to the Respondents. The State Commission has wrongly observed in para 15 that violation of stay order is not a criminal contempt in which the party should be punished by sentencing to imprisonment. The State Commission also observed in Para 16 that since buyers agreement was executed on 15.12.2008 and the flatwas to be constructed and possession was to be handed over to the Respondents within 36 month from the date of agreement, which expired in December, 2011. Since the Occupancy Certificate was granted on 22.08.2012, it is apparent that the project was beyond the prescribed period, consequently, the Appellant could not demand interest for the delay in payment made by the Respondents. It has been correctly observed by the State Commission that the Apartment of the Respondents was sold to third party on 11.02.2015 at a price of Rs.75,56,008/- which was escalated by almost 50% of the sale consideration agreed between the Appellant and the Respondents. It was further observed that the Appellant has no right to retain the amounts received from both, the Respondents and new buyer, hence liable to return the same with suitable interest. Further, it was observed by the State Commission that the Appellant was guilty of not completing the project within time so it is not entitled to invoke forfeiture clause. However, the State Commission has not granted compensation for the troubles faced by the Respondents and litigation charges have not been granted. The State Commission has only directed to refund the amount paid by the Respondents along with interest rate of 12%. Since, the project was under delay and the interest imposed on the Respondents by the Appellant was illegal due to its own inactions, under the circumstances, the State Commission has rightly passed the order against the builder. Due to the actions of the Appellant the Respondents are deprived of the flat purchased by them and are living on rent in Noida. The money paid by the Respondents has also been illegally retained by the Appellant for a long period of time despite the fact that the flat was sold to the third party on 11.02.2015. A substantial loss has been caused to the Respondents since they are not only forced to stay on rent due to inaction of the Appellant but also due the escalation in price of the property in Delhi and NCR. Since, 2008 the price of the properties in Delhi have skyrocketed and now in order to purchase a 3 bedroom flat with servant room the Respondents have to pay more than 1 crore rupees, under the circumstances, the Respondents are entitled to appropriate compensation and interest at the rate of 18% per annum which is chargeable by the builder in case of default in payment. It is also contended that in Para 2(v) it was wrongly typed as Rs. 5,00,000/- payment made to the Appellant whereas the same was Rs. 2,50,000/- paid vide Cheque No. 163794 dated 05.07.2009, therefore, under the circumstances, the total payment made to the builder was Rs. 30,12,144.30/- (Please refer Para No. 6 of evidence of respondents in Appeal). Hence, the same may kindly be adjusted towards the interest payable by the Appellant. Hence, it is prayed that the Resp1ondents may kindly be granted an interest @ 18% per annum along with compensation and litigation expenses.

    

7.         During the hearing on 21.02.2024, it was admitted by both sides that principal in question has already been refunded in compliance of orders of the State Commission read with interim orders of this Commission. The Counsel for Appellant stated that actually they have refunded Rs.2,50,000/- in excess towards principal as the principal amount paid by the Respondents was only Rs.30,12,144/- while they refunded Rs.32,62,144/-, this fact is admitted by the Counsel for the Respondent.  The only issue for consideration and determination in the present case is with respect to the payment of interest. While the case of the Appellant is that no interest is payable as the Respondents were in default, the case of the Respondents is that at the time of various demands which were not paid, the construction as per the payment plan was not complete. Before the State Commission also the Complainants have contended that construction work was not as per schedule and they stopped payments due to said reason. The Opposite Party was to handover possession on or before 15.12.2011, however, the construction was completed in 2013.  Originally the cost envisaged was Rs.50,98,756/-, whereas demand of 08.06.2011 showed the same as Rs.54,86,980/- and same was further increased to Rs.56,55,037/- on 14.03.2012.  OP on the other hand contended that Complainants were defaulters in payment.  The construction stood completed in last quarter of 2011, after which OC was applied for and granted on 22.08.2012.  The State Commission observing that Apartment Buyer Agreement between the parties was executed on 15.12.2008 and even if the period of 36 months is counted from the said date, the same would come to an end in December 2011.  As per OP, OC was granted on 22.08.2012.  So the project of OP was beyond the prescribed period.  Consequently, the OP could not demand interest for the delay in payment made by the Complainants.  The State Commission also noted that sale deed in favour of the new purchasers was for Rs.75,76,008/- and the escalation in the price was almost 50% of booked price.  The OP has no right to retain the amounts received by them from Complainants and new purchasers both.  The State Commission also observed that OPs are not entitled to invoke the forfeiture clause, moreover, forfeiture can be at the most 10% of the earnest money.  The State Commission, in view of facts and circumstances of the case, directed the OP to refund Rs.32,62,144/- along with interest @12% p.a. from the date of payment to the date of refund.

8.         We have carefully gone through the order of the State Commission, other relevant records and rival contentions of the parties.  The State Commission has given a well-reasoned order and we are in agreement with its findings with respect to granting refund with interest.  Hence, we uphold the order of State Commission, with slight modification to the amount of principal amount paid by the Complainants, which is Rs.30,12,144/- and not Rs.32,62,144/- and the same is not disputed by the Complainants.  OP shall pay the interest payable as per order of State Commission on Rs.30,12,144/- after adjusting the excess amount of Rs.2,50,000/-, within 45 days of date of this order.  Revision Petition is disposed off accordingly.

9.         The pending IAs in the case, if any, also stand disposed off.