DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

          Complaint Case No.: 1312 of 2009

 Date of Inst:11.09.2009

                Date of Decision: 30.03.2010

1.              Sudhir Sagar c/o H.No.143, Sector 8-A, Chandigarh.

2.              Mrs.Archana Sagar c/o H.No.143, Sector 8-A, Chandigarh.

Both complainants being represented by Sh.S.S.Gupta r/o H.No.143, Sector 8-A, Chandigarh being power of attorney holder.

                                  ---Complainants

V E R S U S

1.   M/s Parasvnath Developers Ltd., SCO No.1, Madhya Marg, Sector 26, Chandigarh through its Managing Director/Principal Officer.

     2nd Address:

M/s Parasvnath Developers Ltd., 6th Floor, Arunachal Building-19, Bara Khamba Road, New Delhi-110001.

2.   Chandigarh Housing Board, 8 Jan Marg, Sector 9-B, Chandigarh through its Principal Officer/Estate Officer.

---Opposite Parties

QUORUM       

              SHRI LAKSHMAN SHARMA         PRESIDENT

              SHRI ASHOK RAJ BHANDARI      MEMBER

PRESENT:      Sh.Atul Sharma, Adv. for complainant

Sh.Matvinder Singh, Adv. for OP-1

Sh.K.K.Gupta, Adv. for OP-2.

                            ---

PER LAKSHMAN SHARMA, PRESIDENT

          Sh.Sudhir Sagar and Smt.Archana Sagar have filed this complaint under section 12 of the Consumer Protection Act, 1986 through Sh.S.S.Gupta, their General Attorney praying for the following reliefs:-

i)              To refund a sum of Rs.10 lacs which has been illegally deducted.

ii)         Pay a sum of Rs.50,000/-  as compensation for mental agony and harassment.

iii)    Pay a sum of Rs.50,000/-   as compensation on account of non-release of the matured amounts.

iv)         To pay interest @ 18% p.a. on the total amount paid by the complainants.

2.        In brief, the admitted facts of the case are as under:-

          In response to the advertisement made by OP-1, the complainants applied for a 3 Bed Room flat (Type II) in Parasvnath Pride Asia RGCTP, Chandigarh vide application dated 03.09.2007 (Annexure C-3).  On 28.09.2007, OP-1 allotted Unit No.C-17-2 to the complainants (vide allotment letter No.PDL/Chandigarh/ 07/C10 dated 28.09.2007) for a total cost of Rs.2,01,55,000/-.  On 25.01.2008 an agreement was signed between the complainants and the OP No.1 regarding the purchase of the said flat. As per the terms and conditions of the agreement, OPs were to deliver the possession within 36 months from the date of signing of the Developers Agreement. Initially, the complainants had agreed to make payment of the flat on the basis of time linked programme. They paid a sum of Rs.74,54,250/- in total upto January,2008. However, due to some dispute between OP-1 and the Chandigarh Housing Board (OP-2), the construction work could not commence. So the complainants requested OP-1 to permit them to make payment on the basis of the construction linked programme. Their request was accepted vide e-mail dated 10.03.2008.  Since then the complainants have waited for allotment of the completed flat but to their dismay, even construction work has not been started by OPs so far. Ultimately, the complainants wrote a letter dated 30.04.2009  (Annexure C-10) to OP-1 requesting for refund of the amount paid by them as they were not in a position to wait for an indefinite period for the construction to be completed. On their request, OP-1 refunded a sum of Rs.64,54,250/- to the complainants vide DD No.157876 (Annexure C-11) after deducting a  sum of Rs.10 lacs. The complainants thus issued a legal notice (Annexure C-12) to OP-1 asking them to refund the balance amount of Rs.10 lacs along with interest on the total amount paid by him.

          The case of the complainant is that due to some dispute between the OP-1 and OP-2 regarding the allotment of land, the construction has not commenced so far. They cannot be forced to wait indefinitely for the construction of the flats and for delivery of the possession thereof. Therefore, they have applied for the refund of the amount. In these circumstances, OP-1 had no right to deduct any amount at the time of making the refund. It has further been pleaded that OP-1 is liable to pay interest on the total amount deposited by the complainants.

          In these circumstances the complainants contend that failure on the part of OPs to hand over the possession of the completely constructed flat within the stipulated period of 36 months and deduction of Rs.10 lacs amounts to deficiency in service and an unfair trade practice.

          In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.

3.        On the other hand, the case of OP-1 is that the Chandigarh Administration was desirous of developing residential, commercial and other related infrastructure facilities as an integrated project at Rajiv Gandhi Chandigarh Technological Park in Chandigarh. A land measuring approximately 123.79 acres with private sector participation was earmarked for this purpose. It invited bids/proposals from private parties for this activity. OP-1 had submitted its proposal with the Chandigarh Administration which was accepted vide their letter of acceptance (No.HB/EE-II/2006/2437) dated 09.06.2006. Thereafter an agreement was signed between OP-1 and OP-2 which is known as the “Developers Agreement”. The relevant terms and conditions of the said agreement are as under:-

“2.2.1        The "Development Period" shall be a total  period of 36 Months (including 24 Months of construction period) starting from the Agreement Date. The Development Period includes (a) the period of 12 Months starting from Agreement Date within which the developer shall obtain all requisite Approvals     including    environmental clearance/s for the Project and (b) construction period of 24 Months starting from the said 12 Months period set out at (a) above within which the Project are to be completed by the Developer.

2.2.2         Provided further that in the event of any delay attributable to the CHB in handing over possession of the CHB's Asset to the Developer, the said period of 36 Months shall commence from the date the CHB's Asset are actually handed over to the Developer. For the avoidance of doubts, the Developer shall be obliged to procure from CHB a letter recording the date on which such hand over of assets would have been, effectuated by CHB, which date shall be the "start" date for calculation of the said period) of 36 Months."                   

          The case of the OP-1 is that soon after taking possession of the land measuring 123.79 acres, OP-1 started erection of fencing around the said land. However, the Government of Haryana claimed ownership over a portion of the said land. OP-1 was thus stopped from carrying out its activities. Despite the fact that OP-1 had taken up the matter with Chandigarh Administration a number of times and a number of meetings were held between OPs No.1 and 2 and the State of Haryana; the matter regarding the ownership of the land allotted to OP-1 still remains unsettled.  In these circumstances according to OP-1,the construction work could obviously not be  started, and the possession of the flat could not be delivered to the complainants within the stipulated period of 12 months. The said period of 36 months, according to OP-1, shall commence from the date of delivery of the possession of the total land to it by OP-2 as per agreement clause 2.2.2. In these circumstances, according to OP-1, the delay in construction of the flats and delivery of the possession is not because of the fault of OP-1. It has further been pleaded that a sum of Rs.10 lacs has been deducted as per Clause 5 of the Flat Buyers Agreement. In these circumstances, according to OP-1, there is no deficiency in service or unfair trade practice on its part and the complaint qua it deserves dismissal.

4.        In the reply filed by the OP-2, it has been pleaded that for the development of residential and commercial area in the IT Park Chandigarh, 123.79 acres of land was allotted to OP-1 on a total bid price of Rs.821.21 crores. The possession of the land was taken by OP-1 in October, 2006. Out of the total bid price of Rs.821.21 crores, OP-1 has paid Rs.516.53 crores only. Subsequently State of Haryana disputed the title of a portion of the land. The said (disputed) land as per the outlay plan is not a part of residential site where the flats were to be constructed. It has further been pleaded that a flat buyer agreement (Annexure C-8) was entered between the complainant and the OP-1 and as per the said agreement, it was the duty OP-1 to timely deliver the residential unit to the complainant. The complainants have rightly attributed the delay in construction and heading over of possession to OP-1. OP-2 has nothing to do in the present case. The complainants have wrongly claimed the relief against OP-2. In these circumstances, according to OP-2, there is no deficiency in service on their part and the complaint qua them deserves dismissal.

5.        We have heard the learned counsel for the parties and have gone through the entire record including documents, annexures, affidavits etc and the written arguments filed by the parties.

6.        The first argument advanced by the learned counsel for the complainants is that as per clause 9(a) of the Flat Buyers Agreement (Annexure C-8), OP-1 was bound to deliver the possession of the flat within 36 months from 06.10.2006.  However, OP has not even started the construction of the flats so far. So it is deficiency in service. Thus the complainants are entitled for the refund of the total amount along with interest. Clause 9(a) of the Flat Buyers Agreement reads as under:-

(a)  Construction of the residential units is likelty to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and the CHB and/or as may be extended in terms of Development Agreement shall be subject to force majeure and circumstances beyond the control of the developer and any restraints restrictions from any courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of36 months.”

          From the bare perusal of this clause, it is apparent that OP-1 was bound to deliver the possession within 36 months form the date of signing of the Development Agreement dated 06.10.06. Admittedly, the possession has not been delivered and even the construction has not commenced.

7.        The case of the OP-1 is that due to some dispute regarding ownership of land allotted by OP-2 with State of Haryana, the construction work could not be started. So as per OP-1, it is not at fault for not starting the construction work. It has further been argued that in view of clause 2.2.2. of the Developers Agreement, the period of 36 months shall commence from the date, the CHB’s asset are actually handed over to the developer.  

     Annexure K is the minutes of first meeting of Steering Group of RGCTP Habitat Project held on 26.02.2007. From this document, it is apparent that CHB had already handed over the possession of the total land to the developer on 06.10.2006 and the area which is under dispute is negligible. The area on which the construction was to be started (as per the outlay plan) is not under dispute. In these circumstances, OP-1 could have started construction of the flats as the area on which the flats are to be constructed is free from all encumbrances.

          For the sake of arguments even if is admitted that the total outlay of the project could not be prepared because of dispute over the ownership of a portion of land, then OP-1 should have not invited applications for allotment of flats till the dispute was settled. Inviting applications without the dispute having been settled  amounts to deficiency in service as well as unfair trade practice as has been held in the case of Kamal Sood Vs. DLF Universal Ltd., III(2007) CPJ-7 (NC).  So in all eventualities, non-delivery of possession of the completely constructed flat within the prescribed period of 36 months amounts to deficiency in service on the part of OP-1.

8.        The next argument advanced by the learned counsel for the complainants is that OP=1 has illegally deducted a sum of Rs.10 lacs and the complainants are entitled to the said amount. Admittedly, the complainants had deposited a sum of Rs.74,54,250/- till Jan. 2008. The construction has not commenced so far. So the complainants moved an application dated 30.04.2009 (Annexure C-10) for refund of the total amount as they could not wait for an unlimited period for delivery of possession of the flat. On the basis of the said application, OP-1 refunded a sum of Rs.64,54,250/- vide DD No.157876 (Annexure C-11) dated 09.07.2009 after deducting Rs.10 lacs as per clause 5 of the Flat Buyers Agreement. Clause 5 of the Flat Buyers Agreement reads as under:-

“5(a)         Timely payment of the installments/amounts due shall be of the essence of this agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this agreement, then this agreement shall be liable to be cancelled. In the eventuality or cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the buyer on payment of revival charges amounting to 10% of earnest money.”

9.        To our mind, clause 5(a) of the Flat Buyers Agreement relied upon by OP-1 is not applicable  in the present set of circumstances. As per this clause, timely payment  is the essence of the agreement and if the payment is not made within the period stipulated and buyer commits breach of any of the terms and conditions of this agreement, the developer had a right to cancel the allotment and in that eventuality the developer has right to forfeit 5% of the basic price. However, in the present case, the complainants have not made any breach of the terms and conditions of the agreement. Rather they have timely paid a sum of Rs.20.15 lacs upto 10.01.2008 which is more than the amount required to be paid by them till that time. So, Clause 5(a) of the Flat Buyers Agreement is not applicable to the facts and circumstances of the present case. OP-1 has no right to deduct 5% of the basic price i.e. Rs.10 lacs in the present set of circumstances. Allotment has not been cancelled for any alleged breach of contract from the side of the complainant. Therefore, Clause 5(a) will not be applicable. So the amount of Rs.10 lacs could not be deducted.

          To our mind, in the circumstances of the case in hand, the refund should have been made as per clause 9(d) of the Flat Buyers Agreement which reads as under:

 “9(d)        If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the project, or if due to any force majeure conditions, the developer is unable to deliver the unit to the buyer, the developer and CHB shall be liable to refund to the buyer the amounts received from the buyer with interest at the SBI term deposit rate as applicable on the date of refund.”

          In the present case, as OP-1 has failed to deliver the possession within the stipulated period prescribed in the Flat Buyers Agreement due to dispute over a portion of land. So both M/s Parasvnath Developers Ltd. and Chandigarh Housing Board (OPs No.1 and 2) are liable to refund the amount to the complainants with interest at the current SBI term deposit rate as per the agreement. Failure on the part of OPs to refund the entire amount along with interest amounts to deficiency in service.  No deduction of any amount as per clause 5(a) as alleged by them is allowable.

10.       Thus, the complainants are entitled for the refund of the remaining amount of Rs.10 lacs. They are also entitled to receive interest at the current SBI term deposit rate on the total paid up amount i.e. Rs.74,54,250/- from the dates of respective deposits till the dates of its realization.

          In addition to this, the complainants are also entitled to a compensation of Rs.50,000/- for mental agony and harassment besides Rs.5000/- as costs of litigation.

11.       In view of the above findings, this complaint is allowed with following directions to OPs to:-

i)   Refund the remaining amount of Rs.10 lacs to the complainants.

ii)  Pay interest on the total amount paid to them by the complainants from the respective dates of deposits till dates of its return at the current SBI term deposit rate.

iii) Pay Rs.50,000/- to the complainants as compensation for causing mental agony and harassment

iv)  Pay Rs.5,000/- to the complainants as costs of litigation.

12.       This order be complied with by OPs jointly and severally within 45 days from the date of receipt of its certified copy, failing which OPs shall be liable to pay Rs.10,50,000/- along with interest on the total amount paid by the complainant from the respective dates of deposits till its realization @ 18% p.a. besides Rs.5000/- as costs of litigation.

13.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

30.03.2010

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

cm

sd/-

(ASHOK RAJ BHANDARI)

MEMBER