STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(Appeal No.445 of 2010)

                                                                     Date of Institution:09.12.2010

                                                                                   Date of Decision : 21.03.2011

Sh. Harcharan Singh Baidwan S/o Sh. Bahal Singh, Resident of D-301, Rishi Apartments, Sector –70, Mohali.

                                                                                    ..…Appellant

Versus

1.                  M/s Gee City Builders (P) Limited, its Managing Director, SCO No.358-359, Sector –34, Chandigarh.

2.                  Sh. Jatinder Mittal S/o Sh. R.L. Mital, Duly constituted Attorney / Authorized Signatory of M/s Gee City Builders (P) Ltd., R/o H.No.630, Sector –8, Panchkula.

                                                                        ..…Respondents.

BEFORE:            HON’BLE MR. JUSTICE SHAM SUNDER, PRESIDENT.

                        S.  JAGROOP  SINGH   MAHAL, MEMBER.

Argued by:            Sh. Vishal Bali, Advocate for the appellant.

                        Sh. Arvind Mittal, Advocate for the respondents.

PER  JAGROOP  SINGH  MAHAL, MEMBER.

1.                     This appeal under Section 15 of Consumer Protection Act, 1986 has been filed by the complainant against the order dated 3.11.2010 passed by learned District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter referred to as District Forum) vide which the complaint filed by the appellant was dismissed.

2.                     Briefly stated the case of the complainant is that in response to the advertisement of the OPs, he submitted an application dated 05/12/2006 with O.P No.1 at Chandigarh for allotment of residential apartment/Unit in a multi-storeyed apartments known as ‘Rishi Apartments’ at Baddi, District Solan (H.P.). An Agreement to Sell dated 15.12.2006 was entered into between the parties and the complainant was allotted one apartment bearing No.C6-401, on 4^th Floor, C-Block, in the said Apartments for a total consideration price of Rs.11,25,000/-. It was averred that the said amount was to be paid as per installment plan, out of which the complainant paid a sum of Rs.5,79,737/- as booking amount and the same was adjusted by the OPs against the said apartment from the excess payments made by other family members of the complainant for the purchase of 3 Bed Room Flat and 2 Bed Room Flat respectively (i.e. against Flat No.A-202, on 2^nd Floor, A-Block and B14-307, on 3^rd Floor, B14-Block) vide receipt No.458, dated 07/03/2007. It was averred that as per agreement to Sell and the allotment letter, the possession was to be delivered by the OPs within a period of 24 months from the date of the agreement. The complainant further averred that the OPs assured the handing over of the possession of the said apartment within a period of 24 months from the date of agreement i.e. by 15.12.2008 but they failed to do so. The complainant, it was next alleged, came to know that OPs had stopped the construction of the apartments for the reasons best known to them upon which he requested them to either deliver the possession of the apartment or refund the money with interest but no heed was paid to his request. Being aggrieved by the acts of the OPs, the complainant served a legal notice dated 06.06.2009 upon the OPs and ultimately, filed the present complaint before the learned District Forum.

3.                     In their reply, apart from taking some preliminary objections regarding maintainability of the complaint etc, OPs admitted that the complainant applied for an apartment in Rishi Apartments being constructed by the them vide his application for allotment of apartment and his wife and daughters had also applied for flats earlier with the OPs, wherein an excess payment of Rs.5,79,737/- were paid by them to the OPs. It was pleaded that the wife and daughter of the complainant requested them to transfer the aforesaid excess amount towards the application of the complainant for allotment of flat as initial payment, which was allowed and Rs.5,79,737/- was transferred to the account of the complainant for the allotment of the flat by the OPs. As per the OPs, a receipt was also issued to the complainant dated 07.03.2007 in that regard. It was next pleaded that as per the payment schedule in the allotment letter dated 15.12.2006, the price of the flat was Rs.11,25,000/- after discount of Rs.75,000/- and the remaining amount was to be paid by the complainant in installments as agreed by him vide agreement dated 15.12.2006. OPs further asserted that according to the schedule, the complainant was required to pay 70% of the amount by way of installments each amounting to Rs.60,577/- per month and the balance 5% was to be paid by him at the time of delivery of possession, which came to be Rs.56,249/- but he failed to make any payment thereafter. As per the OPs, the complainant had not paid even a single installment till date for which, he was also sent a letter by the OPs reminding him to clear his dues as nothing was paid after the initial payment and further he was directed to take the possession of the flat by making the payment of Rs.6,55,263/- plus interest, but this letter was received back “unclaimed”.  Pleading no deficiency in service on their part, OPs prayed for dismissal of the complaint.

4.                     The parties led evidence in support of their contentions. 

5.                     After hearing the learned counsel for the parties and perusing the record, the learned District Forum dismissed the complaint vide the impugned order dated 3.11.2010 as already mentioned in the opening para of the judgment.

6.                     The complainant has challenged the impugned order through this appeal.

7.                     We have heard the learned counsel for the parties and have gone through the record.

8.                     The learned counsel for the appellant has argued that the OPs collected the amount from him alleging that all the necessary permissions had already been obtained by it. He referred to Para No.3 on Page No.4 of the agreement (Annexure C-1), in which it was mentioned that seller (OP/respondent) has already obtained the requisite permission/sanction from the concerned authority, that the seller has already taken over the possession of the said land, surveyed the same and maps have been got sanctioned from the concerned authorities. This assurance was given by the OP on 15.12.2006. However, it was subsequently found that it had not obtained the permission and had lied to the customers to grab the amount from them. This fact is proved true from Para No.4 of the reply filed by OPs in which it was admitted that a license had been obtained by the OPs from the Himachal Pradesh Housing and Urban Development Authority on 26.8.2006, copy of which is Annexure R-5. In this license itself, the OP was directed to obtain the necessary No Objection Certificate/permissions from other authorities as required for the project. OPs admitted that the permission from Baddi-Barotiwala Nalagarh Development Authority, Himachal Pradesh was obtained on 7.2.2007 and the environmental clearance was obtained from Government of India as late as on 4.1.2008. When the Pollution Control Board, Himachal Pradesh was informed, they directed the OP to comply with Condition No.8 of the said clearance letter, which was done by the OP on 1.5.2008. It is, therefore, clear that the OP had misled the complainant through Annexure C-1 alleging that the necessary permissions/sanctions had already been obtained from the concerned authorities though the same had not been obtained till about two years thereafter. In case Kamal Sood Vs. DLF Universal Ltd., III (2007) CPJ 7 (NC), the Hon’ble National Consumer Disputes Redressal Commission (hereinafter to be referred as National Commission) held as follows: -

“2. In our view, it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/building.”

9.                     The contention of the learned counsel for the OPs/respondents that time was taken by the authorities in granting the sanctions for which the OPs cannot be blamed and rather he would be entitled to reasonable extension of time in delivery of possession was considered in the aforementioned authority and the Hon’ble National Commission, further held as follows: -

“22. Normally, delay in construction of building may arise because of various reasons. But, in our country, it is known fact that delay occurs in obtaining various permissions from different governmental authorities, and this fact is well-known to the builder. The time normally taken in getting such permissions could have been contemplated by the builder before issuing the brochure. It would be unfair trade practice, if the builder, without any planning and without obtaining any effective permission to construct building/apartments, invites offers and collects money from the buyers.”

10.                   It was, therefore, an unfair trade practice on the part of the OPs to have collected the amount from the complainant before obtaining all the necessary permission from the concerned authorities permitting it to raise constructions.  It is also an unfair trade practice in misleading the complainant on having taken the necessary permissions when they had not taken all the permissions till then. In case mentioned above besides refunding the entire amount, the OPs were directed to pay Rs.1 Lac as compensation to the complainant for delay in delivery of possession by the State Commission and the said amount of compensation was upheld.

11.                   The learned counsel for the OPs has argued that in fact, the period of 24 months for delivery of possession should start from 4.1.2008 when the environmental clearance was given to the OPs and not from the date of agreement. This argument cannot be accepted. The OPs never informed the complainant at the time of entering into agreement (Annexure C-1) if he had not obtained the environmental clearance or other permissions from the competent authorities and the same would take time. Rather the assurance was given by the OPs/respondents that all the permissions have been obtained and therefore, the complainant was given to understand that the start of construction would take no time.  In view of this fact, the period of 24 months would start from the date of the agreement as mentioned in Annexure C-1 itself and not from the date of start of the construction. The Hon’ble National Commission in the case Kamal Sood (Supra) held as follows: -

“20. In our view, before obtaining statutory clearances, such as, sanction for construction and approval of Site Plan and other relevant documents, if the builder issues tempting advertisement or promises to deliver the possession of the constructed flat within 2 to 3 years, then the fault lies with the builder.”

                        This contention of the learned counsel for the OPs, therefore, cannot be accepted as correct because the OPs had been misleading their customers regarding the period of delivery of possession.

12.                   The learned District Forum dismissed the complaint on the ground that the possession of the flat had already been offered to the complainant but he was adamant in the refund of the amount. The learned District Forum, however, lost sight of the fact that the agreement (Annexure C-1), was regarding the sale and purchase of Unit No.C6-401, which was on the 4^th Floor of Block C-6 of the complex. The learned counsel for the OPs/respondents referred to Annexure R-1 dated 13.7.2009 and Annexure R-3 dated 23.12.2009 vide which the possession of Flat No.C2-402 was offered to the complainant. Admittedly, the OPs never offered possession of Unit No.C6-401 as agreed to vide Annexure C-1. The learned counsel for the OPs at the stage of arguments referred to a letter dated 16.4.2009 (now marked Annexure R-19) which was never produced before the learned District Forum and has not been mentioned in any of the letters (Annexures R-1 and R-3) that due to change in the numbering pattern of the flats, Flat No.C6-401 is to be read as C2-402. He has not been able to produce any evidence to suggest if this letter was ever sent to the complainant and if so, by which mode. The acknowledgement issued by the complainant of having received this letter was not produced. OPs did not produce any evidence before the learned District Forum if there ever was a change in the numbering pattern or that Flat No.C2-402, which was being offered to the complainant was earlier numbered as C6-401. No such fact was mentioned even in the written reply fled by the OPs. There is, therefore, no doubt in our minds that letter dated 16.4.2009 has been fabricated by the OPs now to defeat the case of the complainant and a false assertion has been introduced that there was any renumbering of the earlier flats or that this fact was ever conveyed to the complainant. In order to prove this assertion, OPs were required to produce the approved site plan prior to the agreement (Annexure C-1) and the subsequent approved site plan showing the change of the numbering pattern, which they have failed to prove, presumably due to this very reason that in fact, there had not been any change in the numbering pattern but the OPs have not constructed Block C6 in which the flat of the complainant was located. Even at the stage of arguments on 17.3.2011 the counsel for the OPs was asked to produce the same and he undertook to produce it on 18.3.2011 but till today i.e. 21.3.2011 he has not produced the same, which shows that there is no truth in this contention.  The learned counsel for the complainant/appellant has argued that in fact, the OPs have constructed only one Block C2 and such like letters are now being issued to other allottees also to mislead not only the customers but the Consumer Fora also. The conduct of the OPs in fabricating letter dated 16.4.2009 (Annexure R-19) and in falsely contending that Flat No.C6-401 and Flat No.C2-402 is one and the same flat amounts to perjury, which is a criminal offence for which the OPs can be prosecuted. However, instead of prosecuting them, it would be appropriate if they are burdened to pay compensation of Rs.50,000/- for introducing a false plea in their reply as held in the case Reliance India Mobile Ltd. Vs. Hari Chand Gupta-III (2006) CPJ 73 (NC) & Jodhpur Vidyut Vitran Nigam Ltd. Vs. Rameshwar Prasad Vaishnav & Ors. – II (2007) CPJ 280 (NC).

13.                   The evidence, as discussed above, shows that the complainant/appellant had agreed to purchase Flat No.C6-401, which was in Block No.6. The OPs tried to unilaterally change the said flat from Block No.6 to Block No. 2 and flat No.401 to 402 without the consent of the complainant/appellant, which they cannot do. The learned counsel for the complainant/appellant has argued that in fact Flat No.C2-402 does not have the same location and surroundings as were commanded by Flat No.C6-401 and therefore, the complainant/appellant was not interested in purchasing the changed flat. The right course for the OPs/respondents in such situation was to refund the amount forthwith and not to thrust a different flat on the complainant instead of the one regarding which the agreement to sell had been entered into. OPs, however, forced the complainant to approach the Consumer Fora for enforcing his rights.

14.                   The learned counsel for the OPs/respondents has also cited the judgment rendered in the cases of Ashwani Anand Vs. Gee City Builders Private Limited bearing Appeal No.649, 650 and 651 all of 2009 decided by a common order dated 16.9.2010 in which it was held by this Commission that since there was no clause in the agreement for refund of the deposited amount, the same, therefore, could not be ordered to be refunded to the complainants. In that case, the flat, which was agreed to be purchased, had been constructed and offered to the complainant but  he was not willing to accept it. However, it is not so in the present case. Here, neither the flat agreed to be sold has been constructed nor offered to the complainant. If there is any default on the part of the builder in constructing the requisite flat, he cannot be doubly benefited firstly by not constructing and offering the possession of the flat agreed to be sold and secondly by not refunding the money deposited with him. This authority is, therefore, on different facts and cannot be of any help to the OPs in this case.

15.                   The learned counsel for the OPs has argued that after making initial payment, the complainant did not make the payment of the installments and therefore, when the complainant/appellant himself was at fault, he cannot attribute any deficiency in service on the part of the OPs. This argument also does not carry any weight. As per the agreement (Annexure C-1) and the allotment letter (Annexure C-2), the complainant was to pay Rs.1,12,500/- as registration amount and Rs.1,68,750/- towards 25% within 30 days of the date of allotment, which he has already paid. Out of the remaining amount,  70% i.e. Rs.7,87,501/- were to be paid in 13 Equated Monthly Installments of Rs.60,577/- per month and the balance 5% i.e. Rs.56,249/- at the time of offer of possession. The complainant paid a total of Rs.5,79,737/-, which included the registration amount and 25%, which was to be paid within 30 days of the date of allotment. He has also paid Rs.2,98,437/-, which comes out to about five monthly installments out of 70% to be paid as such. However, for about two years, the OPs did not lay even a brick at the spot and were not having any permission to start the construction and in the meantime the period of two years within which the possession was to be delivered also expired. If in these circumstances, the complainant stopped paying further installments, he cannot be said to be at fault. In support of his contention, the learned counsel referred to the case Prasad Homes Private Limited Vs. E. Mahender Reddy & Ors., 2009 (1) CPC 494. In that case also, the builder failed to deliver possession of plots despite payment made by the complainant, the builder did not supply the approved layout plans nor necessary development was carried out. It was held that if the complainant stopped further installments, builder cannot take shelter of Clause of agreement, which is loaded in his favour but against the purchaser and the agreement itself amounts to unfair trade practice. In view of this authority, substantial amount of sale consideration had been paid to the OPs but no construction was started by him even if the complainant stopped further payment, he cannot be accused of default.

16.                   The learned counsel for the OPs has referred to the case Ashok Khanna Vs. Ghaziabad Development Authority, 2009 (3) CPC 728 and argued that the period of two years mentioned in the agreement is not essence of the contract and therefore, there cannot be any deficiency in service on their part. It is also argued that the interest allowed @18% per annum by the learned District Forum was set aside by the State Commission, which was upheld by the Hon’ble National Commission. This authority is not applicable in the present case because in that case, there was no misstatement of facts as was done in the present case by the OPs. Moreover, in that case, the possession had already been handed over to the complainant, may be after some delay due to which no deficiency in service was held to be made out. In the present case, as referred to above, the OPs had been grossly deficient in rendering service and are rather guilty of unfair trade practice where they misstated the facts and concealed true information and did not even start construction on the Block in which he flat of the complainant is located.

17.                   As regards interest, the OPs have provided in Para No.9(b) of the agreement (Annexure C-1)  that they would charge interest @24% per annum and again in Annexure II i.e. Schedule of Payments as per Clause 4 of the Installment Plan, they claimed to be entitled to interest @24% per annum in case of default in payment. Ordinarily, the OPs should pay interest at the same rate at which they are charging interest if they committed default in refunding the amount to the complainant. However, we take a lenient view against the OPs and direct them to pay interest @18% per annum.

18.                   In view of the above discussion, we are of the opinion that the learned District Forum did not appreciate the facts correctly. The complaint was bound to be allowed but the same has been wrongly dismissed. We are, therefore, of the opinion that the present appeal succeeds and the same is hereby allowed. Consequently, the impugned order is set aside and the complaint is allowed and the OPs are directed to refund the amount of Rs.5,97,737/- along with interest @18% per annum since the date of deposit till the date of payment to the complainant. They are further directed to pay an amount of Rs.1 Lac as compensation for unfair trade practice as referred to in Paras No.8 to 10 of this order and for harassment caused to the complainant by not giving the possession within the period agreed to between the parties. OPs shall also pay an amount of Rs.50,000/- to the complainant as compensation for introducing the false plea and the  letter dated 16.4.2008 at the stage of arguments as held in Para No.12 above. If the entire amount is not paid within 30 days from the date of receipt of certified copy of this order, OPs would be liable to pay interest at the same rate of 18% P.A. on the amount of Rs.1,50,000/- also w.e.f the date of order till its payment to the complainant. OPs shall pay Rs.10,000/- as litigation costs.

19.                   Copies of this order be sent to the parties free of charge.

Pronounced.

21^st March 2011.

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Ad/-

STATE COMMISSION

(Appeal No.445 of 2010)

Argued by:            Sh. Vishal Bali, Advocate for the appellant.

                        Sh. Arvind Mittal, Advocate for the respondents.

Dated the 21^st day of March, 2011.

ORDER

                    Vide our detailed order of even date recorded separately, this appeal has been allowed.

Ad/-