PER: HON’BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDING MEMBER
The instant complaint under section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is at the behest of joint intending purchaser against the Developer/Builder on the allegation of deficiency of services on the part of Opposite Parties in a dispute of housing construction.
Succinctly put, complainants’ case is that on 18.06.2007 they had entered into an agreement with the Opposite Party No. 1 Company to purchase of an apartment being No. 1101 on the 11th floor in Tower-05 having super built up area of 1918 sq. ft. more or less and one car parking space in the complex ‘The Gateway’ together with proportionate undivided share of land to be developed by the Opposite Parties on a plot of land lying and situated at Kona Express Highway, Howrah within the local limits of Ward No. 46 of Howrah Municipal Corporation at a total consideration of Rs.51,73,440/-. The complainant has made a payment of Rs. 4,80,000/- as booking amount/earnest money for the same. Pursuant to the agreement, the Opposite Parties were under obligation to hand over the possession of the apartment within 30.09.2010. On 22.05.2009 the Opposite Parties gave a special offer to its customers which will be valid till 20.06.2009 for more affordable option to which the complainants agreed to the same. On 24.06.2009 the complainants had entered into a new revised agreement for sale with the Opposite Parties where the new price of the booked flat was reduced to Rs. 47,13,120/- from the earlier amount and the amount of Rs. 16,71,537/- paid by the complaints with regard to the earlier agreement has been adjusted with the new agreement. In the revised agreement for sale, the date of delivery of possession has been extended form 30.09.2010 to 30.09.2011. The complainants have stated that on several occasions they visited the site but found no improvement in the work of construction and even in the year 2010 when the complainants visited the site it was found that the construction work was very low and even not up to the mark from where it can be ascertained that the said project will be completed within 30.09.2011. In such a situation, the complainant decided to stop the payment for the time being on the ground that the Opposite Party simply failed to hand over the booked flat within 30.09.2011. Suddenly, on 28.08.2013 the Opposite Party sent a letter to the complainants to bring it to their notice about the cancellation of the agreement and they have also forfeited the amount of Rs. 16,71,537/- which is nearly 40% of the total consideration of the flat so booked by the complainants due to non-payment of the dues. Hence, the complainants approach this Commission with prayer for following reliefs, viz.- (a) an order directing the Opposite Parties to hand over the flat and register the flat and car parking space in question in favour of them, alternatively, to refund the money of Rs. 16,71,537/- along with interest thereon @ 18% p.a.; (b) compensation of Rs. 10,00,000/- for harassment and mental agony etc.
The Opposite Parties by filing a written version has admitted the existence of the agreement dated 18.06.2007 and subsequent agreement dated 24.06.2009 but stated that they have issued several demand letters to the complainants but the complainants failed, neglected and were unable to pay any further amount on account of instalment and interest due in terms of the agreement. Under such circumstances, OP No. 1 had no option but to treat such non-payment as wilful breach on the part of the complainants on the terms of the allotment agreement and the OP No. 1 issued a final cancellation letter dated 28.08.2013 to the complainants for cancellation of the allotment of the said flat and forfeited the amount of Rs. 16,71,537/- in terms of Clause 2.f of the agreement. Therefore, the Opposite Parties have made a prayer for dismissal of the complaint.
Both the parties have tendered evidence through affidavit. They have also given reply against the questionnaire set forth by their adversaries. Besides the affidavits, the parties have relied upon several documents including two agreements for sale dated 18.06.2007 and 24.06.2009 respectively. At the time of final hearing on behalf of Opposite Parties, a brief notice of argument has been filed.
The pleadings of the parties and the evidence on record make it abundantly clear that on 01.06.2007 the complainants submitted an application to the Opposite Party No. 1 Company for allotment of a flat in the complex ‘The Gateway’ together with proportionate undivided share of the land being developed by the Opposite Parties on a plot of land lying and situated at Kona Express Highway, Howrah within the local limits of Ward No. 46 of Howrah Municipal Corporation. On the self-same date the Opposite Party No. 1 issued a letter to the complainants intimating that they had allotted one flat measuring about 1918 sq. ft. super built up area being No. 1101 on 11th floor at Tower- 05 along with one car parking space in the said complex at a total consideration of Rs. 51,73,440/- after receipt of booking amount of Rs. 4,80,000/-. On 18.06.2007 an Allotment Agreement was executed by and between the OP No. 1 as the developer and the complainants as the purchasers in respect of the said flat. It is not in dispute that the complainants have paid Rs. 16,71,537/- as part consideration amount towards the said total consideration amount as per terms of the agreement. The OP/Developer was under obligation to hand over the subject flat within 30.09.2010.
However, the fact remains that on 22.05.2009 the OP No. 1 by a letter informed the complainants about an offer relating to New Universal Specification which would provide greater value for money and being influenced, the complaints by issuing one letter dated 18.06.2009 accepted the offer of OP No. 1. On 22.06.2009 the OP No. 1 issued a letter to the complainants informing them that they accept the request of the complainants for change in the specification and that the consideration amount was being revised form Rs. 51,73,440/- to 47,13,120/-. Subsequently, on 24.06.2009 a new revised agreement was executed by and between the parties whereby the period of completion of construction and handing over the possession was extended from 30.09.2010 to 30.09.2011. In the process, the amount already paid by the complainants amount to Rs. 16,71,537/- which comes to 40% of the total consideration amount has been adjusted in the new agreement.
The materials on record indicate that it was a construction linked payment plan and the payment plan, (annexure A to the agreement) dated 24.06.2009 is set out below:
Payment Schedule
SL. No. | Description | % | Due date | Due Amt |
1 | Instalment | 40% | | 1671537 |
2 | On casting of Grd. Roof | 5% | | 203382 |
3 | On casting of 2nd floor roof | 5%+50%of CMC | | 233382 |
4 | On casting of 4th floor roof | 5%+PLC+Parking Charges | | 601002 |
5 | On casting of 6th floor roof | 5% | | 203382 |
6 | On casting of 8th floor roof | 5% | | 203382 |
7 | On casting of 10th floor roof | 5% | | 203382 |
8 | On casting of 12th floor roof | 10% | | 406764 |
9 | On casting of Top floor roof | 5% | | 203382 |
10 | On Compl of Masonry work | 5% | | 203382 |
11 | On Compl of Internal Plaster | 5% | | 203382 |
12 | On Compl of Flooring | 5% | | 203382 |
13 | On Final notice of poss | 5%+50%of CMC+other charges* | | 233379 |
| Total | | | 4773120 |
Evidently, the Complainants had paid Rs.16,71,537/- prior to the revised Agreement for Sale dated 24.06.2009. In fact, after execution of the revised Agreement for Sale dated 24.06.2009 the complainants did not pay any amount whatsoever to the developer/builder simply on the ground that they could not complete the said project within the committed date of delivery of possession i.e. within 30.09.2011. On the contrary, it is alleged by the developer/builder that the complainants have defaulted in payment of instalments and in this regard all the demand letters went in vain for which they compelled to cancel the agreement by a letter dated 28.08.2013 and forfeited the entire amount as per Clause 2.f of the Allotment Agreement dated 24.06.2009.
At the time of hearing, Ld. Advocate for the complainants has submitted that the OPs/developer has unilaterally cancelled the agreement although they could not keep their promise to deliver the possession of the apartment in question within 30.09.2010 as per Agreement dated 18.06.2007 and when they failed to fulfil their part of obligations, they offered the alternative proposal for a revised agreement in reduction of price just to overcome the hurdle of payment of compensation in handing over the possession from 30.09.2010 to 30.09.2011. The Ld. Advocate for the complainants further submitted that the developer/builder could not obtain Occupancy Certificate even within two years after the committed date of possession. In that perspective, the OP/developer must refund the amount of Rs. 16,71,537/- along with compensation in the form of interest @ 18% p.a.
Per contra, Mr. Abhik Kumar Das with Mr. P.R. Baksi, Ld. Advocates for the Opposite Parties has contended that the parties are bound by the terms of the agreement. Inviting our attention to several letters and correspondences, he has submitted that time and again demand letters were sent to the complainants but they have shown masterly inactivity in fulfilling their part of obligations, which compelled the OPs to cancel the agreement on 28.08.2013 and forfeited the amount of Rs. 16,71,537/- in accordance with Clause 2.f of the Agreement.
We have given due consideration to the submission made by the Ld. Advocates appearing for the parties and scrutinised the materials on record.
It is quite apparent that by the notice of cancellation dated 28.08.2013 the OPs have forfeited the entire amount of Rs. 16,71,537/- paid by the complainants was forfeited. Therefore, let us see the contents of Clause 2.f of the Agreement which reproduces below –
“2.f Failure/Delay in Payment:
THAT in the event Allottee(s) fails to pay any instalment(s) with interest within 90 days, from due date of such payment, the Developer shall have the right at its sole option to cancel the Allotment and forfeit the entire amount of Earnest money/Application amount deposited by the Allottee(s) and the Allottee(s) shall be left with no right, claim or lien on the said Apartment. The amount paid, if any, over and above, the Earnest money/Application amount shall be refunded by the Developer without interest after adjustment of the interest accrued on the delayed payment(s), if any, or any other charges due from the Allottee(s)”.
The above clause clearly provides that the OPs being developer was under obligation to refund the amount over and above the earnest money/application amount due to the allottee(s). Now, from the evidence on record, it would reveal that the earnest money was only Rs.4,80,000/-. In this regard, the reply given by Sri Gour Saha, being Authorised Signatory of OP No.1 Company appears to be relevant. In question No.25, it was asked – Is it true that deposit of Rs. 16,71,537/- is not the booking/earnest money? to which it was replied – “Earnest money is Rs.4,80,000/-“. Therefore, in all fairness the OP/developer should have refunded Rs.11,91,537/- through a bank draft along with the cancellation letter dated 28.08.2013. In that perspective, the non-payment of the said amount i.e. Rs.11,91,537/- rounded off Rs.12,00,000/- by the OPs on the date of cancellation letter i.e. on 28.08.2013 itself amounts not only deficiency in services within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act but also amounts to unfair trade practice within the meaning of Section 2(1)(r) of the Act.
It should also not be out of place to mention here that the OPs/builder obtained Occupancy Certificate from Howrah Municipal Corporation on 23.08.2013. In accordance with the terms of the Agreement, the OPs were under obligation to handover the subject flat within 30.09.2011. Therefore, the OPs/builder could obtain the Occupancy Certificate almost two years after the date stipulated in the Allotment Agreement dated 24.06.2009. As a consequence, there was a failure to hand over possession of the flat to the complainants within a reasonable time. In a landmark decision reported in (1994) 1 SCC 243 [Lucknow Development Authority – Vs. – M.K. Gupta] the Hon’ble Supreme Court has held that when a person hires the services of a builder or a contractor, for the construction of a house or a flat and the same is for a consideration, it is a ‘service’ as defined by Section 2(1))o) of the Act. The inordinate delay in handing over possession of the flat clearly amounts to deficiency in services. The Hon’ble Supreme Court in another case reported in (2018) 5 SCC 442 [Fortune Infrastructure – Vs. – Trevor D’Lima] has held that a person cannot be made to wait indefinitely for possession of the flat allotted to him and is entitled to seek refund of the amount paid by him, along with compensation.
Considering the entire facts and circumstances of the case and having heard the Ld. Advocates appearing for the parties, it appears to us that when the complainants are not ready to accept the offer of the flat, an order directing the OPs to refund the amount Rs. 16,71,537/- - Rs.4,80,000/-= Rs.11,91,537/- rounded off Rs.12,00,000/- from the date of cancellation of Agreement i.e. from 28.08.2013 till its realisation will meet the ends of justice. The OPs /developer without refunding the money along with cancellation letter dated 28.08.2013 certainly invested the same to earn profit from their business and as such they must pay compensation and considering the nature of the case, it appears to us that a compensation in the form of simple interest @ 10% p.a, from 28.08.2013 till its realisation will meet the ends of justice. Under compelling circumstances, the complainants had to approach this Commission and as such the OPs must be saddled with cost which we quantify at Rs.20,000/-.
In view of the above discussion, the complaint is allowed on contest with the following directions:
(i) The Opposite Parties are jointly and severally directed to refund the amount of Rs.12,00,000/- only to the complainants along with compensation in the form of simple interest @ 10% p.a. from the date of letter of cancellation i.e. from 28.08.2013 till its realisation;
(ii) The Opposite Parties are jointly and severally directed to pay a sum of Rs.20,000/- to the complainants as costs of litigation.
