STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(Appeal No.446 of 2010)

                                                                     Date of Institution:09.12.2010

                                                                                    Date of Decision : 21.03.2011

Ms. Indermeet Kaur D/o Sh. Harcharan Singh Baidwan, Resident of E-904, Supertech Icone Apartment, Indrapuram Ghaziabad (U.P)-201010, through her Special Attorney Sh. Harcharan Singh S/o Sh. Bahal Singh, Resident of H.No.B-403, 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, she along with her late mother Smt. Amarjit Kaur submitted an application dated 03/03/2006 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.A-202, on 2^nd Floor, A-Block, in the said Rishi Apartments, for a total consideration price of Rs.18,80,288/-. The said amount was to be paid as per down payment plan and out of the same, the complainant had paid a sum of Rs.4,00,000/- to the OPs on 03.03.2006 as Registration amount and deposited Rs.18,00,000/- was paid on 15.12.2006 at the time of execution of Agreement to Sell and allotment of the above said Unit/ Apartment against receipt No.398 dated 15.12.2006. As per the complainant, a total sum of Rs.22,00,000/- was deposited with the OPs whereas the total price of the said Apartment/Unit under down payment plan, was Rs.18,80,288/-, and as such, an excess amount of Rs.3,19,712/- was adjusted by the OPs in the payments made by other family members of the complainant for the purchase of one Bed Room Flat (i.e. against Flat No.C6-401, on 4^th Floor, C-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 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. It was alleged that inspite of several visits and requests made by the complainant, OPs had not refunded the booking amount of the complainant. ultimately, the complainant served a legal notice dated 06.06.2009 upon the OPs and finally, alleging deficiency in service and unfair trade practice on the part of OPs, the complaint filed the present complaint.

3.                     In their reply, apart from taking some preliminary objections regarding maintainability of the complaint etc, OPs admitted that the complainant had applied for three bedroom flat (Block A) in the project started by OPs in the name of Rishi Apartments, Baddi, Nalagarh, (Solan) (HP), which was allotted to them. It was pleaded that the agreement to sell, which was entered into between the OPs, was not signed by Smt. Amarjit Kaur as she had expired on 22.12.2006, which fact was never disclosed to the OPs. As per the OPs, in case of death of Smt. Amarjit Kuar, her share shall devolve upon the other legal heirs of Smt. Amarjit Kaur. It was next pleaded that the construction of block was stopped after all the allottees including the complainant gave their consent to change their flats into two bedroom flats. The OPs further asserted that the possession of the flat was to be delivered to the complainant within 24 months from the date of commencement of construction of the said unit or from the date of signing of the agreement whichever was later and further the same was subject to the condition of the issuance of completion certificate by the competent authority. It was lastly pleaded that the flat of the complainant was complete in all respects but she was not taking the possession intentionally. Pleading no deficiency in service or unfair trade practice 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 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 her 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 contention is proved true from Para No.5 of the reply 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-7. 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 the Government of India as late as on 4.1.2008. When the Pollution Control Board, Himachal Pradesh was informed about it, 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 by 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 the 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 delay was caused by the authorities in granting the sanctions for which the OPs cannot be blamed and rather they 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..”

                        It was, therefore, an unfair trade practice on the part of the OPs in misleading the complainant on having taken the necessary permissions when they had not taken all the permissions till then to start construction. In that case, 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.

12.                   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 as correct. 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 or 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 led to believe that there would not be any delay in starting the construction. However, till 4.1.2008, the construction did not start and almost the entire period of 24 months within which the possession was to be delivered in completing the construction, was about to be over.  In view of the impression given by the OPs, 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 if the OPs had been misleading their customers regarding the period of delivery of possession.

13.                   The learned counsel for the OPs argued that the complainant had agreed to the change of the flat from a 3 Bed Room flat to 2 Bed Room flat where after the flat was changed from A1-202 to B6-202. This fact was mentioned by the OPs in Para No.4 of their preliminary objections taken in their reply. The learned counsel argued that the change of the flat was with the consent of the complainant and the OP offered her 2 Bed Room flat and therefore, there was no deficient in service on their part. In support of his contention, the learned counsel referred to letter (Annexure R-5) dated 16.4.2009 written to the complainant, which reads as follows: -

“Ref. To booking of your Flat No.A1-202 & further discussion with your husband Sh. H. S. Baidwan who offered to seek your consent for change of 3-Bed Room Flat to 2-Bed Room Flat.

It may be noted that due to the circumstances explained to Sh. Baidwan & his further discussion with you, your Flat A1-202 is changed to flat bearing No.B6-202. The difference in the cost of both the flats will be refunded at the time of possession subject to adjustment against the payment due, if any at that time. However, the other terms & conditions of earlier letter of allotment shall remain the same except the number of flat which may be read as B6-202.

Further, it is to bring to your notice that construction of flats stands already completed & only electric connection is awaited. We shall be offering the possession as soon as the same is released by the concerned authorities.”

14.                   The perusal of letter (Annexure R-5) does not prove any consent of the complainant. Rather, it does not even prove if Sh. H. S. Baidwan ever consented to the change. All that is mentioned is that the matter was discussed with Sh. H. S. Baidwan who offered to seek her consent for change of 3 Bed Room Flat to 2 Bed Room Flat. OPs never received any consent of complainant nor even a reply to Annexure R-5. The learned counsel for the complainant/appellant argued that in fact, this letter has been fabricated by the OPs and introduced in their reply though no such letter was written to the complainant. The OPs have not been able to prove as to how this letter was sent to the complainant and they did not produce any acknowledgement thereof. The learned counsel for the complainant argued that since neither the letter was written to her nor any consent was given by her, the OPs could not have changed the flat from A1-202 to B6-202 because the terms of a written agreement could not be varied without their being a written agreement signed by her superceding the earlier one. The mere silence on the part of the complainant cannot be taken to be consent. If there was any consent of the applicant, the OPs would have obtained affidavits in writing in this respect as they obtained Annexure R-3 from Kavita Ahuja and Annexure R-4 from Shyam Khobragade. In this manner, the contention of the OPs in Preliminary Objection No.4 of their reply that the complainant consented to the change, is a false assertion, which has been made knowingly in order to defeat the claim of the complainant. The conduct of the OPs in introducing letter dated 16.4.2009 and in contending that the complainant or H. S. Baidwan consent for change of Flat No.A1-202 to Flat No.B6-202 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).

15.                   The learned counsel for the OPs has also argued that since the booking was in favour of the complainant and Mrs. Amarjeet Kaur, the amount could not be refunded to the complainant alone in the absence of the other legal heirs having been joined as a party to this complaint. This contention is devoid of merit. Such a question arose in case Patiala Central Cooperative Bank & Another, IV (2009) CPJ 220. There was an FDR in the name of two persons in which even this much was not mentioned that it was ‘either or survivor’. It was held that if one of the two dies, the remaining joint owner alone remains to be the account holder and would be entitled to the amount of the Fixed Deposit Receipt. The OPs/respondents, therefore, could not withhold the amount because the rightful owner of the same was the complainant who is one of the legal heirs of Smt. Amarjeet Kaur. At the most, the OPs could obtain the indemnity bond from her to safeguard their interest but they straightaway refused to refund the amount. In any case, 50% amount of the share of the complainant could not have been withheld by the OPs. The learned counsel has argued that if demanded the complainant/appellant was ready to furnish the indemnity bond and give an undertaking that if any of the legal heirs claims the amount, she would be liable to pay the share to him or her and not the OPs. His contention is that this undertaking would stand even after the decision of this case. In view of these facts, the stand of the OPs in withholding the amount is totally illegal and unwarranted.

16.                   The evidence, as discussed above, shows that the complainant/appellant had agreed to purchase Flat No. A1-202, which was in Block No.1. The OPs tried to unilaterally change the said flat from Block No. A1 to Block No. B6 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.B6-202 does not have the location and surroundings as were commanded by Flat No.A1-202. It is a 2 Bed Room flat with less covered area than the earlier flat, which was a 3 Bed Room flat and therefore, the complainant/appellant was not interested in purchasing this flat. The right course for the OPs/respondents in such a 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, compelled the complainant to approach the Consumer Fora for enforcing his rights.

17.                   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 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 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 benefited both ways by neither offering the possession of the flat agreed to be sold nor 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.

18.                   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 being done in the present case by the OPs. Moreover, in that case, the possession had already been delibered to the complainant, may be after some delay due to which no deficiency in service was upheld. In the present case, as referred to above, the OPs had been grossly deficient in rendering service and is rather guilty of unfair trade practice where they did not even start construction on the block in which the flat of the complainant is located. 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, which they are charging when 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.

19.                   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.18,80,228/- 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 Para No.9 of this order and another amount of Rs.1 Lac for causing delay in construction of the flat. The prices of flats are increasing and it would not be possible now for the complainant to purchase a 3 Bed Room flat in this amount. The complainant, therefore, needs to be compensated for the increase in prices. OPs shall also pay an amount of Rs.50,000/- to the complainant as compensation for introducing a false plea in their reply as held in Para No.14 above. If the entire amount of Rs.21,30,228/- with interest 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% per annum on the amount of Rs.2,50,000/- also w.e.f the date of order till its payment to the complainant. OPs shall pay Rs.10,000/- as litigation costs.

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

Pronounced.

21^st March 2011.

[JUSTICE SHAM SUNDER]

PRESIDENT

[JAGROOP SINGH MAHAL]

MEMBER

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STATE COMMISSION

(Appeal No.446 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.

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