1.  This appeal has been filed under section 51(1) of the Act 2019 in challenge to the Order dated 21.07.2020 of the State Commission in complaint no. 996 of 2018.

We have heard the learned counsel for the development authority (the appellants herein) and the complainant in person (the respondent herein). We have also perused the material on record including inter alia the State Commission’s impugned Order dated 21.07.2020 and the memorandum of appeal.

2.  The appeal has been filed with reported delay of 391 days.

There is no application for condonation of delay. However, in the interest of justice, to provide fair opportunity to the appellant development authority, to decide the matter on merit rather than dismiss it on the threshold of limitation, the delay in filing the appeal is condoned.

3. As evinces from the material on record, the complainant had applied online on 11.01.2012 for the subject apartment under the category of Defence Personnel. The tentative price of the apartment was Rs. 37,00,000/-. The complainant paid 10% thereof i.e. Rs. 3,70,000/- with his application through electronic transfer. He was successful in the draw of lots held on 16.03.2012. Letter of Intent (LoI) dated 18.05.2012 was issued by the development authority to the complainant. The LoI stipulated that initial 30% of the tentative price had to be paid by 22.06.2012. The complainant paid the same on 22.06.2012 through electronic transfer.

Two schemes apropos further payment of 65% of the tentative price (i.e. total 95%) were provided for. Plan ‘A’ required that 65% of the tentative price be paid within 60 days of issue of the LoI and it allowed rebate of 5% on the balance amount payable. Plan ‘B’ required that 65% be paid with 12% interest in six half yearly instalments from the date of issue of the LoI i.e. on 18.11.2012, 18.05.2013, 18.11.2013, 18.05.2014, 18.11.2014 and 18.05.2015.

Balance 5% of the tentative price was payable at the time of possession under both Plans.

The complainant opted for Plan ‘A’. He paid a total amount of Rs. 33,94,750/- by 09.10.2012, out of which Rs. 22,29,561/- was paid by taking loan from a bank and Rs. 11,65,189/- from his own sources including savings from salary and advance from provident fund. The loan was sanctioned by the bank for down payment under Plan ‘A’. The development authority had endorsed / signed the loan agreement between the complainant and the bank. The bank disbursed the loan directly to the development authority. The complainant paid 30% + 65% = 95% of the tentative price (with 5% rebate on 65%) under Plan ‘A’. However the payment of 65% was not made within the stipulated period of 60 days from the issue of the LoI.

Since the payment was made beyond the stipulated period, the development authority did not treat his case under Plan ‘A’ and also did not give him the benefit of rebate for down payment. It treated his case under Plan ‘B’.

The complainant took up the matter with the development authority. He ultimately wrote a letter dated 25.01.2017 for refund of the entire amount deposited by him along with interest, followed by letters dated 19.04.2017, 13.07.2017, 12.03.2018 and 22.03.2018.

The development authority took cognizance of the letter dated 13.07.2017 and after deducting 10% of the total sale consideration plus service tax refunded an amount of Rs.29,82,867/- on 01.08.2017.

The development authority made the deduction by relying on the condition contained in clause 5(VII) of the LoI, which is being reproduced below for reference:

(VII) In case of breach of any condition(s) of allotment or of regulations or non-payment of any amount due together with the penalty, the apartment shall be liable to be resumed and in that case an amount not exceeding 10% of the total amount of consideration money, interest and other fees payable in respect of the apartment shall be forfeited as per the provision of section 45(3) of the Punjab Regional and Town Planning and Development Act, 1995 (hereinafter to be called the Act).

The complainant went before the State Commission on 19.12.2018.

The State Commission vide its impugned Order observed that the development authority did not offer or handover possession of the subject apartment within the committed period of 36 months from the date of issue of the LoI. The said period elapsed on 17.05.2015. The completion certificate itself was dated 05.07.2018, in the absence of which meaningful legitimate offer of possession could not be made. The complainant had asked for refund with interest vide various letters including letter dated 13.07.2017, to which letter the development authority also admitted to. The refund was asked for much after the expiry of the commitment period. The State Commission allowed the complaint and ordered the builder co. to refund Rs.4,11,883/- deducted “illegally and arbitrarily” as also to pay interest on the entire deposited amount of Rs. 33,94,750/- at the rate of 8% compounded annually from the respective dates of deposit till 18.09.2017 i.e. the date on which the payment of Rs. 29,82,867/- was made to the complainant and further to pay interest on the amount of Rs. 4,11,883/- at the rate of 8% compounded annually with effect from 19.09.2017 till the date of actual realisation along with lumpsum Rs. 20 thousand as compensation for mental agony inclusive of litigation expenses.

The State Commission made its Order by relying on the condition contained in clause 3 (II) of the LoI, which is being reproduced below for reference:

(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. Apart from this, there shall be no other liability of the Authority.

4.  In the afore factual backdrop, learned counsel for the development authority submits that after making the initial payment of 30% of the tentative price the complainant did not make the further down payment of 65% of the tentative price within the stipulated period of 60 days from the date of issue of the LoI. As such he could not be treated under Plan ‘A’ and was therefore treated under Plan ‘B’. In Plan ‘B’, 5% rebate was not allowed. Accordingly under Plan ‘B’ he had not paid 95% of the tentative price and hence he was not offered possession. Submission is that the development authority had rightly deducted 10% of the total consideration amount plus service tax in accordance with clause 5(VII) of the LoI and made the correct refund of Rs. 29,82,867/- since the complainant had breached the condition(s) of allotment by not paying total 95% of the tentative price under Plan ‘B’ till 18.05.2015 when the last six monthly instalment was due. She submits that an amount of Rs. 3,37,500/- was still due against him on 11.12.2015.

The complainant on the other hand submits that his whole case had been processed under Plan ‘A’. The bank had approved the loan only in respect of Plan ‘A’. The development authority was in the know of things since it had endorsed / signed the agreement for loan and the loan was disbursed by the bank directly to the development authority. The development authority unilaterally and illegally changed the scheme of payment from Plan ‘A’ to Plan ‘B’ without taking his consent or even giving him any notice or opportunity of being heard. If the short delay beyond 60 days of the issue of the LoI under Plan ‘A’ was fatal and was to be construed as a breach of the conditions, his refund with deduction ought to have been made within reasonable period of his having made the total 95% payment of Rs. 33,94,750/- under Plan ‘A’ on 09.10.2012 and not after prolonged harassment and prejudice belatedly after almost three years on 01.08.2017. Submission is that his payment of Rs. 33,94,750/- was unilaterally and unduly retained by the development authority for a protracted period. He also submits that he made down payment of Rs. 33,94,750/- by 09.10.2012 even before the first instalment under Plan ‘B’ became due on 18.11.2012.

5.  We fail to understand quite to our disconcert that when the processing of the case was under Plan ‘A’ and the loan for down payment under Plan ‘A’ was taken with the development authority’s endorsement / signatures on the loan agreement and it was disbursed by the bank directly to the development authority, and if the case had to be rejected under Plan ‘A’ due to delayed payment beyond the stipulated period of 60 days, what prevented the development authority from communicating the same to the complainant and making the refund with or without deduction within reasonable period rather than retain the deposit amount indefinitely / inordinately.

We further fail to understand what prevented the development authority from communicating to the complainant about his being treated under Plan ‘B’, if not from taking his prior consent therefor.

It is of material significance that by making a payment of Rs. 33,94,750/- in all by 09.10.2012 he had paid as much as 91.75% of the tentative price (without any rebate) by the said date. As such a large amount stood paid towards the six half yearly instalments under Plan ‘B’ (from 18.11.2012 to 18.05.2015) well before the date on which even the first instalment was due. On the one hand the amount paid was unilaterally retained and the case was unilaterally treated under Plan ‘B’, on the other hand there is nothing on record to show that any benefit of advance payment of a large amount having been made towards the instalments due in future was ever provided to the complainant. The complainant was put to pecuniary jeopardy of availing and servicing a loan for down payment and then of his funds being parked with the development authority against future instalments without any monetary benefit from the development authority for the same. The development authority did not either conscionably refund the excess amount received in advance under Plan ‘B’ to the bank / complainant or even apprise or inform the complainant with candour that he ought to better pay the instalments only at the due time and not unnecessarily make advance payment(s) under Plan ‘B’. Nor did it endeavour to rationally and fairly adjust the advance payment received against future instalments due, and with intimation to the complainant.

There is grey opacity as to whether the complainant’s case could have been taken under Plan ‘A’ in spite of the payment being slightly delayed beyond the 60 day stipulated period by imposing some monetary penalty as per some uniform policy of the development authority in this regard, whatever it may be. It is unclear whether delay in down payment under Plan ‘A’ was regularised by imposition of some monetary penalty in respect of other similarly situate person(s). On the other hand, rather than a categorical assertion that it has not regularised such delay in respect of any other person(s) and the condition of 60 days for making payment has been strictly implemented in all (repeat all) cases without exception, there is loaded reticence on the part of the development authority apropos this crucial aspect.

It is also uncertain whether any rational and fair method of adjusting down payment received in advance against deferred instalments due in future was at all in place as a systemic practice. Again, on the other hand, rather than an unequivocal assertion that it retains down payment under Plan ‘A’ if received after the 60 day stipulated period as advance payment against future instalments due under Plan ‘B’ as a matter of policy, there is expressive silence on the part of the development authority regarding this vital aspect.

We are unable to accept that the development authority on the one hand may accept down payment under Plan ‘A’ including by way of direct disbursal of loan by the bank and on the other hand should neither take the consent nor inform the complainant that was being treated for deferred payments under Plan ‘B’, and then may also go on to retain the money obtained in advance under Plan ‘A’ against instalments due subsequently in future under Plan ‘B’ without providing either the benefit of regularisation of the delay under Plan ‘A’ with imposition of some monetary penalty or providing any monetary benefit for having made advance payment for the deferred payments due in future under Plan ‘B’.

Justifications are being ventured that the conditions of allotment were violated and as such under clause 5(VII) of the LoI consequent to breach of conditions of allotment 10% of the total sale consideration plus service tax have been confiscated, but justification for retaining advance down payment against future instalments due without informing the consumer allottee and without taking his consent and any information whatsoever regarding the uniform policy in place in respect of such cases is conspicuously missing.

Its policy, uniformly applicable to all such cases, has not been produced before the State Commission or before this Commission. In the absence of the same there is no other alternative but to observe that its functioning in this arena is not in an objective regular manner but is more or less subjective and adhoc on case-to-case basis.

All this way and manner in which the consumer was treated and put to pecuniary jeopardy not only comprises ‘deficiency’ under section 2(11) but also constitutes unfair and deceptive acts as fall within the meaning of ‘unfair trade practice’ under section 2(47) of the Act 2019.

6.  The State Commission appears to have approached the matter differently. We however find the crux of the case to be as summed-up in para 5 above. We have provided our alternative reasoning in order to delineate as to how the development authority has been deficiently and unfairly & deceptively flawed in its conduct and to show as to how the consumer complainant has been diminutively wronged. Be that as it may, we feel that the award per se made by the State Commission (which is in conformity with the conditions of clause 3(II) of the LoI) is, in the facts and circumstances of the case, just and fair, commensurate with the loss and injury suffered by the complainant. As such, even though we have given our alternative reasoning, we are of the opinion that the award made by it meets the scales of equity and need not be disturbed.

7.  The appeal fails.

8.  The award made by the State Commission vide its impugned Order dated 21.07.2020 is sustained.

The amount if any deposited by the development authority with the State Commission in compliance of this Commission’s Order dated 12.11.2021 along with interest if any accrued thereon shall be forthwith released by the State Commission to the complainant as per the due procedure. The balance awarded amount shall be made good by the development authority within six weeks from today, failing which the State Commission shall forthwith undertake execution, for ‘enforcement’ and for ‘penalty’, as per the law.

The development authority through its chief executive is advised under section 39(1)(g) of the Act 2019 to inculcate systemic improvements for fair and conscionable functioning in a transparent and regular manner in this arena in future.

9.  The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel as well as to the State Commission immediately. The stenographer is requested to upload this Order on the website of this Commission immediately.