For the Appellant         Mr Manish Misra, Mr V Sai Dhanush, Advocates       

                                And Ms Vaishali Mangal, A R

For the Respondent      Mr Ajay Brahme, Advocate along with

                                Respondent – IN PERSON                    

ORDER

PER SUBHASH CHANDRA

1.      The appellant, who was the opposite party in the appeal before the State Commission is a builder in whose project the respondent/complainant had booked a flat that was not delivered to the respondent as per the promised schedule. This appeal under section 19 of the Consumer Protection Act, 1986 (in short, the ‘Act’) challenges the order dated 11.09.2018 of the State Consumer Dispute Redressal Commission, Delhi (in short, the ‘State Commission’) in complaint case no. 396/2012 filed by the respondent/complainant partly allowing the complaint and directing that

(i)      the appellant/opposite party restore allotment of flat booked by the respondent/appellant,

(ii)     compensate appellant @ Rs 5/- per sq ft from the committed date of possession till the date of offer of possession (June 2012),

(iii)    pay Rs 50,000/- as litigation costs to the respondent,

(iv)    to recover the balance amount due with interest and penalty as per the Agreement till 28.05.2011 from the respondent and

(v)     the compensation to be either paid or adjusted while issuing the offer of possession.  

2.      The appellant is before this Commission with the prayer to:

(i)      quash and set aside the impugned order dated 11.09.2018 of the State Commission in CC No. 396 of 2012 and allow the present appeal;

(ii)     grant ad-interim ex-parte stay of the impugned order;

(iii)    call for the records of the case;

(iv)    pass any other further order(s) as deemed fit and proper.

3.      The facts of the case, in brief, are that the respondent/complainant was allotted a residential flat in the appellant/opposite party’s residential project “Park Serene”, Sector 37 D, Gurgaon under an exclusive scheme for armed forces personnel as per application dated 10.08.2008 on payment of Rs 1,00,000/-. Flat no. J-904 admeasuring 1788 sq ft for a sale consideration of Rs.36,29,640/- was allotted on 09.04.2009 on a construction linked plan. Rs 23,33,378/- was paid on various dates by the respondent. However, there were several delays necessitating reminders by the appellant and payments were made with penal interest. As per requests to condone delays by the respondent, appellant granted a discount of Rs 36,296/- in 2009. A Flat Buyers Agreement (FBA) was executed on 04.10.2010. Possession was promised in 42 months from the date of approval of building plans. According to the respondent, the sanction of housing loan was delayed on account of delay by the appellant in providing necessary documents, including the FBA. On 28.05.2011 respondent was asked to pay the outstanding amount of Rs 16,16,820/- with 18% interest till payment within 15 days to avoid termination of allotment. Respondent sent a cheque of Rs 4,00,000/- as part payment on 05.06.2011 and sought more time to arrange the loan. This cheque was not encashed. The home loan was sanctioned on 23.06.2011 for Rs 20,00,000/-. However, the appellant failed to provide documents including an NOC in original for the mortgage. According to the respondent, appellant failed to complete the project and hand over possession within the said 42 months and hence a legal notice was sent by the respondent to the appellant on 12.12.2011 which was replied on 12.04.2012. Appellant offered refund as per the FBA. Respondent, however, filed a consumer complaint filed. This complaint came to be decided, on contest, wherein the appellant contended that in view of default in payments, the allotment of the flat had been cancelled by the appellant after a final notice dated 28.05.2011. It was also contended that default was admitted by the respondent vide letters dated 05.06.2011 and 14.09.2011. It was denied that requests for documents were made to the appellant and contended that documents referred to were not pre-requisites for loan. The FBA had been sent on 27.05.2009 and was executed only on 04.10.2010 requesting for a fresh copy of the affidavit as the earlier one had been misplaced. The loan sanction letter is subsequent to the termination of allotment according to the appellant and certainly after several reminders to the respondent between 20.05.2010 and the final notice dated 28.05.2011. Thus, while the appellant contends that the respondent’s allotment stood cancelled for default, the respondent seeks restoration of the same.

4.      The order of the State Commission is challenged on the grounds that (i) the impugned order is a non-speaking order that does not set out reasons; (ii) it has erroneously held that appellant was not justified in cancelling the allotment and failed to appreciate that there were admitted delays in making payments and the cancellation followed a final notice to the respondent; (iii) the FBA constituted an agreement between the parties which were binding and the same could not be re-written by courts; (iv)      the finding that the appellant defaulted in not completing the construction was erroneous since possession was offered on 01.07.2015 and based on occupancy certificate dated 10.07.2017; (v) the State Commission overlooked the fact that the respondent had stated before it on 18.11.2016 that he was not interested in the flat; (vi) the State Commission also erred in holding that the appellant failed to substantiate the delay in completion of the unit and that as respondent was a defaulter he could not benefit from his own wrongs; (vii) the finding of the State Commission that cancellation intimation was sent on 05.07.2013 after 2 years of the intimation from ICICI Bank requesting appellant to provide papers was incorrect as no such request was received and the notice dated 28.05.2011 had made it clear that failure to make payment would result in cancellation of allotment apart from the fact that respondent sent a letter dated 14.09.2011 enclosing loan sanction letter dated 11.7.2011; (viii) the State Commission’s finding that the loan could not be disbursed due to default of appellant in not providing the NOC was also erroneous since there was no occasion for the same as cancellation of allotment preceded the sanction of the loan; (ix) the responsibility of arranging a loan was squarely that of the respondent as per Clause 10..8 of the FBA and therefore the attempt of the respondent to shift the blame on the appellant was unjustified; (x) the respondent was guilty of forum shopping and had failed to disclose the fact of an earlier complaint (CC No. 99/2014) filed by him as part of the Park Serene Defence Officers Association before this Commission; (xi) Clause 10.1 of the FBA clearly stated that timely payments was of the essence of the agreement which the respondent failed to adhere to; (xii) the State Commission erred in holding that respondent was entitled to compensation for delay as there was no default on its part and the FBA had to be read as a whole; (xiii) the Supreme Court and the National Commission had in a catena of judgments held that cancellation was justified in case of failure to make timely payments; and (xiv) the impugned order ignores that a beneficial legislation was being used for obtaining a windfall gain by the respondent. 

5.      We have heard the learned counsel for the parties and perused the material on record.

6.      Learned counsel for the appellant argued as per his appeal memo and laid emphasis on the fact that the respondent was a consistent defaulter in making payments. It was submitted that the responsibility of the respondent to obtain a loan and that the delay in payments could not be justified due to obtaining the loan which was obtained after the allotment was cancelled. Respondent had also delayed signing the FBA which was executed only on 22.12.2010 and handed over on 25.02.2011. It was argued that the FBA superseded the terms and conditions of the Allotment Letter and that as per this document a period of 36 months from the date of sanction of building plans with 6 months of grace was the schedule for construction. As the sanction was dated 22.12.2008, possession was to be handed over by October, 2012. The FBA contained provisions for forfeiture on termination vide Clauses 1.15, 2 and 10.1 and the appellant could not be faulted for the same. Obtaining of finance was the respondent’s responsibility and could not be ascribed to the appellant as has been done by the State Commission as also that termination was done on 05.07.2013, two years after the ICIC Bank requested appellant to provide documents for the loan. It was therefore averred that the appeal be allowed.  

7.      Per contra, the learned counsel for the respondent contended that the claim of the appellant that the allotment was cancelled was false. It was contended that the appellant had admitted the delay and pleaded that the compensation be adjusted against the consideration payable by the respondent. Appellant wrote letters to respondent between 01.07.2015 and 17.06.2018 on 5 occasions as per the Additional Affidavit filed and the Resident Welfare Association also addressed letters between 16.11.2020 and 17.02.2021 apart from issuing an electricity bill dated 10.03.2022 in addition to which the appellant submitted information to the respondent regarding levying of property tax which indicated that the respondent continued to be an allottee of the property. It is averred that the State Commission had directed maintenance of status quo on 30.10.2013. Hence, the cancellation of allotment by the appellant is contested as a fabricated document. Respondent contends that there is a delay in handing over of possession of 115 months and that the appellant is liable to compensate him as per Clauses 2.1 and 2.3 of the FBA. It is contended that the appellant unilaterally levied Preferred Location Charge (PLC) without consent or intimation and was therefore deficiency in service. The FBA was sent by respondent on 04.10.2010 by when more than 50% payment had been paid by him and that the clauses of the FBA was an unconscionable bargain. It was contended that though the loan of Rs 20 lakhs had been sanctioned by ICICI Bank, the appellant’s deliberate delay in complying with bank’s formalities delayed disbursement, even after the bank pursued the matter with the appellant. The cancellation of the allotment with only a 15 day notice is contested on the ground that as per the contract dated 10.08.2008 a three month notice was required. The respondent therefore alleges unfair trade practice and deficiency in service.   

8.      From the foregoing it is apparent that the central issue in this case is whether the cancellation of the allotment by the appellant was valid or otherwise. The letter of cancellation dated 05.07.2013 reads as under:

2.       We regret to inform you that despite numerous reminders and adequate opportunities being given by the Company to you, you have deliberately and repeatedly failed to pay the overdue/ outstanding amounts. The company, as a goodwill gesture, had served you with the Final Notice providing you final opportunity to clear all outstanding amounts overdue for payment along with the accumulated interest thereon on the terms contained therein, to avoid the cancellation/ termination of the booking/ allotment/ agreements. It was also specifically made clear in the Final Notice that if you still fail to comply with the terms of the Final Notice, such action on your part shall be treated as your acceptance and confirmation to termination/ cancellation of allotment of the aforesaid Unit as on the date of the Final Notice and that you shall cease to have any right or interest whatsoever in the Unit or under the Agreements and also that the earnest money deposit, accumulated interest and brokerage paid (if any) shall stand forfeited.

3.       However, despite receipt of the last and final opportunity vide our Final Notice, you have deliberately failed to pay the overdue payments as per the terms thereof. Thus, your willful failure to comply with the terms of the Final Notice expressly signifies your acceptance and confirmation to termination/ cancellation of allotment of the aforesaid Unit as on the date of the Final Notice and, hence, your booking/ allotment/ Agreements in respect of Unit no. J904 stands cancelled/ terminated with effect from the date of Final Notice. Consequently, the earnest money, accumulated interests thereon and brokerage (if any) paid accordingly stands forfeited by the Company and henceforth you do not have any rights and/ or interest in the allotment/ registration/ booking/ agreement in respect of the Unit and all rights, title and interest in the said Unit henceforth vests solely in the Company. Further, by willfully refusing and failing to comply with the reminders and Final Notice and the terms of the Agreements you have voluntarily, consciously and intentionally waived and relinquished all your rights and privileges under the terms of the Agreement with effect from the date of the Final Notice. Accordingly, the Company shall be free to deal with the said allotment or the Unit, at its sole discretion.”

9.      From the record it is evident that the respondent had been pursuing with the appellant for various documents in order to process his loan. It is also evident that there was delay in the sanction of the loan as one of the essential documents required to obtain the loan was an NOC from the appellant in order for the bank to secure the loan through mortgage. The contention of the appellant that the responsibility of arranging a loan was that of the respondent needs to be viewed in the context of the fact that the respondent did not at any point of time ask the appellant to arrange the loan to finance the flat in question. It had approached the ICICI bank for the same. The delay was due to the appellant not providing the NOC in time which has not been controverted by the appellant. It is also evident that the respondent had attempted to make a payment of Rs.4.00 lakh on 05.06.2011 by way of a cheque, pending the sanction and disbursement of the loan. This cheque was not encashed by the appellant. No pleadings as to the reasons for the same are brought on record. The cancellation of allotment was admittedly done in July 2013.

10.    It is evident from the submissions and the material on record that when there was provision for delayed payment although with penal interest @ 18%, the appellant did not provide the respondent an opportunity to pay the installment with interest and instead proceeded to cancel the allotment. Even the period of notice provided of 15 days was contrary to the normal practice of 30 days. These actions indicate a perverse and arbitrary approach on the part of the appellant. Deficiency in service on part of the appellant is evident in view of the foregoing.

11.    In view of the discussion above, and the facts and circumstances of this case, we are not inclined to accept the contentions of the appellant to allow the appeal. The same is dismissed and the order of the State Commission is affirmed.

12.   Pending IAs, if any, also stand disposed of with this order.