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

Consumer Complaint No.1031 of 2018

                                                Date of institution:  28.09.2018                                         Date of decision   :  23.07.2019

Paramjeet Singh son of Mahinder Singh, resident of Dhada Kalan, Tehsil Garhshankar, District Hoshiarpur through his GPA – Balwinder Singh son of Joga Singh, resident of Majara Degreean, Tehsil Garhshankar, District Hoshiarpur.

…….Complainant

Versus

M/s. Bajwa Developers Ltd. through its Managing Director Shri  Jarnail Singh Bajwa, having its Registered Office at Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar, (Mohali).

                                                            ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:   Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:    Shri Jatinder Pal Singh, counsel for complainant.

                Shri Amit Sharma, counsel for OPs.

Order by :-  Shri G.K. Dhir, President.

Order

                Complainant applied for one BHK BR No.(68) 1068 apartment at F-21, Sector 74-A, 117 Mohali. That flat to have area of 450 sq. ft. and total sale consideration payable was settled at Rs.13,00,050/-. Agreement dated 04.05.2011 was arrived at between the parties. Complainant paid Rs.10,000/- as advance and Rs.3,25,000/- as earnest money on 20.04.2011. Thereafter amount of Rs.1,85,000/- paid in cash on 05.10.2011, but another amount of Rs.1,95,000/- vide cheque dated 17.03.2012 and Rs.1,90,000/- more in cash on 07.09.2012. Payments made through cheques were even received by OPs owing to encashment of cheques. Agreement was executed by OP in violation of PAPRA Act, 1995. Though promise was made for completing construction in two years from the date of signing of agreement, but nothing has been done on the project site actually. Possession as per terms of agreement should have been handed over latest by June, 2013. Despite making number of calls no satisfactory response received.  Infrastructure of roads, sewerage, street lights, water pipes and electrical wires has not been provided. So much so that even passages have not been carved out on the spot, what to talk of sewerage lines and street lights. It is claimed that OP adopted unfair trade practice because it failed to handover possession despite approach to it many times. Complainant claims that he is ready to deposit remaining amount provided possession delivered after carrying on development activity of project on spot. Request for refund of deposited amount even turned down in January, 2018 and that is why this complaint for seeking refund of deposited amount of Rs.9,05,000/- with interest @ 12% per annum from the dates of payment till realisation. Compensation for mental agony and harassment of Rs.1.00 lakh alongwith litigation expenses of Rs.25,000/- more claimed.

2.             In reply filed by OP, it is pleaded as if contract is void abinito because consent of OP obtained by misrepresentation and by playing fraud. Though complainant claims himself to be belonging to economically weaker sections of the society, but in fact he belongs to affluent sections of the society. As per Clause-7 of agreement of sale, complainant was supposed to submit certificate showing income not exceeding Rs.3.00 lakhs per annum and even he was required to submit domicile certificate showing resident of State of Punjab alongwith affidavit to the effect that neither he nor his spouse and nor dependent children owns any other house/flat/plot in the vicinity of Mohali, Chandigarh and Panchkula. Complaint also alleged to be barred by limitation because last transaction took place on 21.05.2012 and as such period of limitation of three years as envisaged by Section 24 of Limitation Act stood expired on 21.05.2015, but this complaint filed in 2018. Flat was sold at subsidized price i.e. 25% below normal price to the members of economically weaker sections of the society, due to which relationship of consumer and service provider do not exist between parties and as such this Forum has no jurisdiction. Agreement of sale was not entered in presence of general power of attorney holder Balwinder Singh as alleged. Admittedly OP floated scheme of developing housing project in Sector 74-A, Mohali and flat of 450 sq. feet was allotted to complainant at subsidized sale consideration of Rs.13.00 lakhs. Agreement of sale was reduced into writing on 04.05.2011. Admittedly complainant paid Rs.9,05,000/- as alleged. Complainant is not consumer within meaning of Section 2 (1) (d) of Consumer Protection Act. In the Master Plan of year 2009, GMADA reserved whole of Sector 74-A, Mohali for allotment of flats/plots to members of economically weaker sections of the society and that plan was approved by Govt. of Punjab. Complainant was made aware of that fact at the time of entering into agreement of sale. Despite issue of letter in July, 2017 complainant failed to submit requisite income certificate, domicile certificate or affidavit for showing his entitlement of allotment of flat to economically weaker sections category. By denying each and every other averment of the complaint, prayer made for dismissal of the complaint.

3.             As per latest instructions received from Hon’ble State Consumer Disputes Redressal Commission, parties were required to submit their affidavits and documents in support of their claim which they submitted and thereafter oral arguments heard. Written arguments not submitted by any of the parties.

4.             Admittedly agreement Ex.C-2 was arrived at between parties, as per which 450 sq. ft. of plot referred above, was allotted to complainant and the sale deed was to be executed on payment of sale consideration of Rs.13.00 lakhs.  Ex.C-1 is General Power of Attorney executed by complainant in favour of Balwinder Singh for authorizing him to pursue proceedings of cases pertaining to above referred allotted plot. Endorsements of acceptance of Rs.9,05,000/- by OP from complainant on different dates referred above are made on this agreement under signatures of Shri J.S. Bajwa, Managing Director of OP. Even OP has admitted in the written reply as well as submitted affidavit of its representative having received Rs.9,05,000/- from complainant.  However, bone of contention remains that complainant failed to comply with requirements of Clause-7 of agreement Ex.C-2 and also that complainant failed to abide by payment schedule envisaged through Clause-2 of agreement and as such complainant not entitled for refund of earnest amount in view of Clause-3 of agreement Ex.C-2.

5.             OP has not carried on development work on the spot is a fact established by contents of affidavit Ex.CW-1/1 of Balwinder Singh, GPA of complainant because he after visiting the spot, found no development work carried on the spot. Though assurance through agreement of sale was given to handover possession within 2 years, but same has not been handed over till date because no works of project carried on the spot. Rather contents of Para-6 of affidavit of Balwinder Singh establishes that due permissions/approvals from concerned authorities have not been obtained. Rather it is claimed that no infrastructure of roads, sewerage, street lights and water pipes carried on the spot and as such certainly OP adopted unfair trade practice by accepting hefty amount from complainant, but without carrying of commitment of handing over of possession within stipulated period. Virtually violation of Sections 3 and 5 of PAPRA Act committed by OP because of non obtaining of requisite sanctions/approvals from GMADA and other authorities before acceptance of above referred amounts and also owing to non carrying out any development activity on the spot. So complainant entitled for refund of deposited amount with interest @ 12% per annum from the dates of deposit till payment in view of Section 12 of PAPRA Act read with Regulation 17 thereof as well as in view of law laid down by Hon’ble State Consumer Disputes Redressal Commission Punjab in CC No.716, 789, 835 etc. of 2017 titled as Mangal Singh Kondal & others Vs. Bajwa Developer & Another and First Appeal No.318 of 2018 titled as Harpreet Singh vs. M/s. Bajwa Developers Limited & another,  decided on 30.07.2018. 

6.             Certainly sale consideration amount was payable in 6 installments, but complainant has paid only Rs.9,05,000/- and has not paid the balance sale consideration. In view of non payment of balance sale consideration amount as per stipulations contained in Clause-2 of agreement Ex.C-2, it is vehemently contended by counsel for OP that the amount in deposit liable to be forfeited in view of Clause-3 of agreement Ex.C-2. However, that submission of counsel for OP has no force because in case enforcement of Clause-3 of agreement ordered, then it will amount to giving undue benefit to OP over complainant, more so when OP itself committed violation of Sections 3 and 5 of PAPRA Act by not obtaining requisite sanctions/approvals from GMADA or other authorities at the time of acceptance of amount of Rs.9,05,000/-. Besides OP has not started construction and nor carried out any development activity and as such entitlement of complainant for compensation for mental agony and harassment is also there because fault exclusively lays with OP resulting in non deposit of balance payment by complainant.  Non deposit of balance payment was on account of the fact that OP did not carry out any development activity on the spot and nor they obtained requisite sanctions.

8.             OP claims through written reply as well as affidavit Ex.OP-1/1 of Baldev Singh, Director of OP that agreement in question be treated as void and as such virtually agreement in question sought to be rescinded by OP. In view of that virtually OP is seeking declaration of agreement as voidable. Besides after taking us through Clause-7 of agreement Ex.C-2, it is sought to be contended that as purchaser (complainant) failed to fulfill the terms and conditions of agreement or bye laws providing for allotment of EWS category flat and as such agreement in question is void. Certainly after going through Ex.C-2, it is made out that flat in question allotted to complainant was subject to fulfillment of terms and conditions, requisite for allotment of flat to EWS category. Even if complainant failed to submit requisite declaration for showing his entitlement to EWS category flat in question, despite that agreement at the most can be declared as voidable at the option of OP, if it wants to treat it as void.

9.             It is vehemently contended by counsel for OP that in fact flat sought by complainant is of EWS category and as such for getting benefit of EWS Housing Scheme, certificate of annual income of complainant, being less than Rs.3.00 lakhs, from all sources required as per Clause-1 (viii) of scheme evolved by Department of Housing & Urban Development, Govt. of Punjab. Even if complainant may not have fulfilled the requirement to avail benefit of EWS housing scheme, despite that OP itself remained at fault in not getting the formalities complied with in that respect by issue of notice or otherwise and as such in case OP to get the agreement declared void, on account of non fulfillment of conditions by complainant, requisite for getting benefit of EWS housing scheme, even then it cannot retain the received amount because in doing so it virtually is seeking unjust enrichment. OP itself is also at fault in not starting the construction.

10.           Even if assuming for arguments sake that consent of OP in entering into agreement Ex.C-2 was obtained by complainant by misrepresentation of his being belonging to economically weaker section category, despite that entitlement of complainant for refund of deposited amount is there in view of Section 64 and 65 of Indian Contract Act, 1872. After going through these sections, it is made out that in case agreement becomes void or is liable to be treated as void at the option of one of the parties, then the party who treats it as void or voidable, must restore such benefits, it has got, to the person from whom these were received. So OP not entitled to retain amount of Rs.9,05,000/- at all, even if Clause-3 regarding forfeiture of earnest amount may be there in agreement Ex.C-1.

11.          Complainant certainly is consumer of OP within meaning of Section 2 (1) (d) of CPA because he availed services of OP for purchase of flat on payment of part of sale consideration with promise of paying balance amount on execution of sale deed or on getting of possession of flat in question. It is the case of complainant that OP has not developed the project and as such fault lays with OP in not fulfilling promise of delivering the possession to complainant. For that fault of OP, complainant cannot be made to suffer and as such on equitable considerations also, complainant entitled for refund of paid amount of Rs.9,05,000/- with interest.

12.           Benefit from ratio of case titled as State of Gujarat Vs. Rajesh Kumar Chiman Lal Barot, AIR 1996 SC 2664 cannot be availed by OP because of existence of relationship of consumer and service provider between parties in the case in hand. In view of existence of that relationship, this Forum has jurisdiction. Ratio of cited case applicable when the court concerned has no jurisdiction. However, this is not the position in this case. Even benefit from ratio of case titled as Maheswar Patra Vs. Block Development Officer, Panchayat Samiti, Gosani, III (2011) CPJ 480(NC) cannot be got by counsel for OP because after going through reported case, it is made out that State Govt. refused to supply monthly ration and essential commodities except kerosene in the reported case. That monthly ration of essential commodities to be supplied while discharging executive functions of the Govt. and not on account of existence of contractual obligations consisting of the element of passage of consideration in lieu of goods supplied or services to be rendered.  However, in the case before us part of the price amount accepted by OP from complainant in consideration of allotting one BHK flat and as such facts of the reported case are quite distinct than those of the case before us.

13.           Even if condition No.3 in agreement may be providing for forfeiture of the earnest amount in case payment of installments not made as per schedule, despite that enforcement of this clause by OP is not legally tenable, because of provisions of Section 64 and 65 of Indian Contract Act referred above and also because of the fact that OP has not completed the project or even started the same, despite receipt of hefty amount from complainant, as referred above.

14.           Even as per law laid down in Vasant Mahadero Kate Vs. Shastri Gruha Nirman Sahkari Sanstha Ltd. II (2015) CPJ 4 (NC),  purchaser of plot has continuous cause of action available to him unless and until possession of plot handed over to him. So in view of availability of recurring cause of action in favour of complainant till refusal, certainly complaint is not barred by limitation and submission of counsel for OP to the contrary has no force.

15.           As per case of Kushal K. Rana Vs. M/s. DLF Commercial Complex Ltd., 2015(1) CLT 134 (NC), terms and conditions of buyers agreement for purchase of flat/plot is not a one way traffic, but both the parties are bound by it. In the event of deficiency in service on part of builder, the builder bound to refund the received amounts with interest.

16.           As a sequel of above discussion, complaint allowed by directing OP to refund the received amount of Rs.9,05,000/- (Rs.Nine  Lakhs Five Thousand only) with interest @ 12% per annum from the dates of deposits till payment. Compensation for mental agony and harassment of Rs.25,000/-  (Rs. Twenty Five Thousand only) and litigation expenses of Rs.5,000/- (Rs. Five thousand only) more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order, failing which the complainant will be entitled to interest @ 7% per annum on the amounts of compensation and litigation expenses from today till payment. Certified copies of the order be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

July 23, 2019.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member