Per Justice Sham Sunder , President The facts, in brief, are that the complainant who is an NRI, settled at USA, wanted to purchase one flat/Penthouse in Pride Asia Complex, being developed by the OPs, for the residence of her parents, who were residing at Chandigarh. As per publication of various pamphlets and advertisements put up by the OPs, the development was to be made on the tract of land measuring 123.79 acres which was known as the project land in the Rajiv Gandhi Chandigarh Technology Park, Chandigarh. Out of the total project land, 83.119 acres was transferred to the developer- OP No.1 for a lease of 99 years under the lease dated 6.10.2006. The title of the remaining 40.671acres of land was earmarked for residential development. It was reserved by OP No.2 to be transferred on freehold basis. After going through the advertisement, put on the Internet, by OP NO.1 and seeing the pamphlets, the complainant was attracted by the said project, and consequently, applied for the purchase of a residential unit in Category-B. She was allotted Penthouse-I on the third floor, having approximately 3700 sq.ft.(equivalent to 343.73 sq.mts)of super built-up area, consisting of our bed-rooms, one drawing/dining room, kitchen, four toilets, lawn/balconies and servant quarter/utility room, excluding for I-BHK with bath room and kitchen and servant quarter with bath room and kitchen/utility room with toilet (excluding for I BHK) in the said complex, named ‘Parsvnath Pride Asia’ at a price of Rs.2,57,15,000/- calculated @ Rs.6950/- per sq.ft. equivalent to Rs.74811.62 per sq.mtr of the super area. The parties entered into an Agreement on 7.4.2008 and the complainant paid the booking amount of Rs.12,85,000/-. The complainant was given to understand that the project would be completed within a period of 36 months, as per the terms of the Agreement, referred to above. It was also told to the complainant that the plans had been sanctioned by the appropriate authority and there was no legal impediment in the development of the project. It was told to the complainant that the construction was going on in full swing. The complainant kept on depositing the amount, as per the schedule. She was assured that the project was going on, as per the schedule. On the assurance given by OP No.1, the complainant deposited a sum of Rs.1,82,00,000/-. However, OP NO.1 vide communication dated 30.10.2008 considered it Rs.1,72,67,661.50p. However, the complainant did not dispute the variation of the amount of Rs.10.00 lacs in payment made by her and the amount received by OP NO.1. It was further stated that the complainant was living in USA and she used to communicate with OP No.1 on e-mail. Every time she received the e-mail before any installment was due, that the complainant should pay the amount immediately, as the construction was going on in full swing and, in case of delay, she would be liable to pay interest @ 24% p.a. of the amount due, for the period of default. It was further stated that the complainant came across newspaper cuttings which showed that the Pride Asia project had been shelved and that the plans had not been sanctioned. No work had started at the site. She contacted her father, who went to the site and found that there was not even the earthwork had started. He also enquired from the concerned departments of the Chandigarh Administration and found that the plans had not been sanctioned. It was further stated that OP No.1 had willfully misled the complainant. Thereafter, the complainant received a communication dated 30.10.2008 from OP No.1, in reply to the legal notice dated 13.10.2008 in which it was again misrepresented that her fears were unfounded and she should not believe the unreliable news reports. Thereafter, a number of communications were sent by the complainant to the OPs, which were duly acknowledged by them. The complainant received a communication from OP No.2 dated 14.7.2009 Annexure C-9. It was further stated that thus, complainant sought refund of the entire amount deposited by her and duly admitted by the OPs. It was further stated that after deducting a sum of Rs.12,50,000/-, from the amount deposited by the complainant, the remaining amount was refunded. It as further stated that on account of non- giving of possession of the flat, nor the construction thereof, physical harassment and mental agony was caused to the complainant. It was further stated that the OPs, on the other hand, earned a sum of Rs.56,52,517/- as interest till 30.9.2010, on the amount deposited by the complainant with them, as was evident from the statement of account issued by the State Bank of India, PGI, Chandigarh Branch. It was further stated that 5% amount of the basic price could not arbitrarily be deducted by the OPs as the complainant was not at fault in making payment of installments. It was further stated that the OPs were, thus, deficient, in rendering service. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act,1986(hereinafter to be called as the Act only), was filed claiming Rs.75,28,840/- as interest @ 18% p.a. on the total amount remained deposited with the OPs, Rs.12,50,000/- illegally retained by the OPs and compensation of Rs.10.00 lacs for harassment and mental torture. 2. OP No.1, in its written reply, admitted that a Flat Buyer Agreement between the complainant and the OPs was executed which constituted a binding contract dated 7.4.2008 R-1/2. It was also admitted that a sum of Rs.1,72,67,661.50p by way of installments, towards the part price of the flat, in question, was deposited by the complainant, from time to time. It was further stated that as per agreement, dated 6.10.2006 annexure R-1/1, which was originally executed between the OPs, development of the project was handed over to OP No. 1. It was further stated that the development period, according to Clause 2.2.1 of the Development Agreement dated 6.10.2006 Annexure R-1/1 was 36 months (including 24 months of construction period) starting from the Agreement date. It was further stated that this Clause provided that the development period included (a)the period of 12 months starting from the Agreement date within which the developer shall obtain all requisite approvals including environmental clearances 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 was to be completed by the developer. It was further stated that timely payment of the installments/amounts due to the OPs against the complainant, was the essence of the Agreement dated 7.4.2008, referred to above. It was further stated that there was breach of Clause 5(a) of the Flat buyer Agreement executed, amongst the complainant and the OPs, as the remaining amount towards the price of the flat was not deposited. It was further stated that the project could not take off as the entire land, as mentioned in the Agreement dated 6.10.2006 R1/1, was not handed over to OP No1, by OP No.2. It was further stated that a dispute arose between the OPs, as a result whereof, the matter was referred to the Arbitrator and its decision was still pending. It was further stated that, in case, the complainant wanted the refund of the amount, he had to apply for cancellation of the plot, and thereafter, the matter was to be dealt with according to Clause 5(a) of the Flat Buyer Agreement, and 5% of the basic price of Rs.2,57,15,000/- was to be forfeited, and the balance amount was to be returned, without any interest and without any other charges. It was further stated that the project was still on, and OP Nos.1 & 2 have not abandoned the same. It was further stated that, since unencumbered possession of the entire land demarked for the project, had not been handed over to OP No.1, by OP No.2, there was no deficiency, in rendering service on the part of OP No.1, nor it indulged into unfair trade practice. The remaining allegations, were denied, being wrong. 3. OP No.2, in its written statement, admitted the execution of the Development Agreement dated 6.10.2006 R-1/1 between it, and OP No.1. The execution of Flat Buyer Agreement dated 7.4.2008 amongst the complainant and the OPs was also admitted. It was also admitted that the basic price of the flat, which was allotted to the complainant, was Rs.2,57,15,000/-. It was also admitted that a sum of Rs.1,72,67,661.50 was deposited by the complainant against the said flat. It was further stated that as per terms and conditions of the Agreement dated 7.4.2008,it was the entire responsibility of OP No. 1 to refund the deposited amount by the complainant. The application of the Complainant for cancellation of dwelling unit and refund of amount was received through OP No.1 and accordingly the Chandigarh Housing Board addressed a letter to its bankers at Sector-12, Chandigarh to do the needful in terms of the Escrow Agreement dated 1.6.2007 and intimation of the same was sent to complainant as OP No.2 was only liable to grant refund to the extent of 30% of the amount as per Clause 5 of the Escrow Agreement OP-2/2. It was admitted that the developer had failed to carry out the development of the project as per terms and conditions of the Development Agreement, and on account of the dispute, the matter was referred to the arbitrator and its decision was still pending. It was further stated that there was no deficiency, in rendering service, on the part of OP NO.2 as it had already refunded 30% of the principal sum and it was OP No.1 who was liable to refund the balance 70% of the amount. 4. The complainant, in support of her case, filed affidavit of Sh.Ramesh Khosla as attorney, by way of evidence and produced documents C-1 to C-12. 5. OP No.1, in support of the case, submitted the affidavit of Sh.V.Mohan, its Senior Vice President (Legal), by way of evidence, who also proved the documents R-1/1 the Development Agreement dated 6.10.2006 executed between OPs , Annexure R-1/2 the Flat Buyer Agreement and R-1/3 the Escrow Agreement executed amongst the Chandigarh Housing Board, M/s Parsvath Developers Limited and State Bank of India, R-1/4 a letter written by OP No.1 to the Chief Executive Officer of Chandigarh Housing Board. 6. OP No.2, in support of its case, submitted the affidavit of Sh.M.M. Sabharwal, Secretary, Chandigarh Housing Board, by way of evidence and also proved OP-2/1 the copy of the document relating to land handing over/taking over, OP-2/2 the Escrow Agreement, and OP2/3 the copy of the application filed by OP NO.2 U/s 17 of the Arbitration and Conciliation Act,1996 before the Arbitral tribunal. 7. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 8. The Counsel for the complainant, submitted that, at the time of refund in July,2009, of the remaining amount, out of the amount deposited by the complainant, a sum of Rs.12.50 lacs was illegally retained by the OPs on the ground that there was breach of terms and conditions of the Agreement R-1/1, on the part of the complainant. He further submitted that, on the other hand, OPs earned interest on the amount deposited by the complainant with them to the tune of Rs.56,52,517/- @ 14.25% p.a., as is evident from the statement of account furnished by the State Bank of India. He further submitted that a lot of physical harassment was caused to the complainant, besides mental agony. He further submitted that she also suffered a financial loss as her hard earned money was withheld by the OPs for a long time, without paying her any interest thereon, and on the other hand, they enriched themselves, by getting interest on that amount. He further submitted that there was no breach of terms and conditions of the Agreement on the part of the complainant. He further submitted that the complainant made payment of the installments towards the price of the flat in question, always in time. He further submitted that according to the Agreement dated 7.4.2008, 5% of the basic price of the flat could only be forfeited by the OPs at the time of refund, had there been breach of any condition of the said Agreement by the complainant. He further submitted that the complainant was, thus, entitled to the amount illegally retained by the OPs, being 5% of the basic price of the flat. He further submitted that the complainant was also entitled to interest @ 18% p.a. on the amount deposited by her till the date part refund therefrom, as also on the illegally retained amount. He further submitted that the complainant was also entitled to compensation for physical harassment and mental torture to the tune of Rs.10.00 lacs. 9. On the other hand, the Counsel for OP No.1 submitted that, no doubt, Development Agreement R-1/1 dated 6.10.06 was executed between OPs, as a result whereof, unencumbered land for the project was to be provided by OP No.2. He further submitted that since OP No.2 did not handover the possession of the entire chunk of the land, required for the development of the project, the construction could not be undertaken. He further submitted that there was, thus, dispute between the parties, as a result whereof, the matter was referred to the arbitrator and the final decision therein before the Arbitral Tribunal is still pending. He further submitted that, since there was breach on the part of the complainant in depositing the remaining installments towards the price of the flat, he was only entitled to the refund of the amount, if he applied for the cancellation of the allotment, after deduction of 5% of the said amount, as per Clause 5(a) of the Agreement dated 7.4.2008. He further submitted that a period of 36 months was provided under Clause 2.2.1 of the Agreement R-1/1 dated 6.10.2006 and under Clause 9(a) of the Agreement dated 7.4.2008 for the completion of the construction, and the same was to commence only after the possession of a chunk of unencumbered land had been handed over to OP No.1for the development of the project. He further submitted that, under these circumstances, OP Nos.1 was not at all deficient, in rendering service, nor it was liable to pay any compensation, but only liable to refund the amount after deducting 5% of the basic amount, from the amount deposited by the complainant, towards the price of the flat. However, a sum of Rs.1,59,82,662/- had already been refunded to the complainant by rightly retaining a sum of Rs.12.50 lacs as 5% amount of the basic price of the flat. He further submitted that in the present case the complainant applied for cancellation of the allotment and sought refund in October,2008, before the expiry of 36 months for construction of the flats from 6.10.2006 , therefore, she is not entitled to the amount forfeited by OP No.1, in view of the Agreement between the parties. 10. On the other hand, the Counsel for OP No.2 submitted that it was the responsibility of OP No.1 to complete the construction in 36 months, commenced from 6.10.2006 as per Agreement R-1/1. He further submitted that a big chunk of land i.e. about 112 acres on which the residential complex was to be developed had already been handed over to OP No1 , according to the Agreement, executed between the OPs. He further submitted that the construction of residential flats could certainly be started by OP Nos.1 & 2 on that land, but they did not do so intentionally and, as such, they were liable to pay the amount sought by the complainant. 11. The first question, that fall for consideration, is, as to whether, the OPs were entitled to forfeit Rs.12.50 lacs being 5% of the basic price of the flat. The main contention of the Counsel for OP No.1 is that the deduction of Rs.12.50 lacs was perfectly legal and valid in view of clause 5(a) of the Flat Buyer Agreement R-1/2 , according to which, it could forfeit 5% amount of the basic price . Clause 5(a) of the Flat Buyer Agreement reads as under :- “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 of 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.” 12. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly payment of the installments/amounts due shall be the essence of the Agreement and if the payment was not made within the stipulated period or the buyer committed breach of any of the terms and conditions of the Agreement, the Agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was any breach in payment of the installments, or of any other terms and conditions of the Agreement dated 7.4.2008 , on the part of the complainant, or not ? It was proved, as also admitted by the OPs that the payment of the installments was made by the complainant, from time to time, as and when fell due. There was no delay in making payment of the price of the flat through installments, on the part of the complainant. Since, till October, 2008 not even a brick had been laid, the complainant had to ask for the refund of the amount vide legal notice dated 13.10.2008 C-1/1.. As stated above, there was no breach of the terms and conditions of the Agreement dated 7.4.2008, on the part of the complainant and, as such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainant was entitled to the refund of the entire amount deposited by her and the OPs were liable to refund the illegal deducted amount of Rs.12.50 lacs. The submission of the Counsel for the OP No.1 ,in this regard, being without merit, must fail, and the same stands rejected. 13. The next question, that arises for consideration is, as to whether, the complainant is entitled to the interest on the amount deposited by her, or not ? There is, no dispute, about the factum, that the complainant applied for the allotment of a flat. She was allotted a flat. She deposited Rs.1,72,67,661.50p in installments, towards the price of the flat, which was allotted to her, as admitted by the OPs. Clause 9(a) of the Agreement dated 7.4.2008, reads as under ; “Construction of the residential units is likely 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 CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restrains, 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 of 36 months.” 14. The plain reading of Clause 9(a) of the Agreement dated 7.4.2008, extracted above, clearly goes to show that the construction of the residential units was to be completed within a period of thirty six months of the signing of the Development Agreement dated 06.10.2006 R-1/1. The time could be extended in terms of the Development Agreement dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the Developer. In the instant case, the possession of 112 acres of land which was unencumbered, was handed over to OP No.1 for the development of the project. On this land, construction of residential flats could certainly be undertaken, if OP No.1 wanted to do it. The mere fact that it was an integrated project, does not mean, that if a few acres of land measuring about 11/12 acres was not given to the developer, due to some dispute, the construction could not be undertaken. Therefore, no circumstance was, beyond the control of the developer which could cause delay in the construction of the residential units. The developer also could not take shelter of force maejure, moreover, as none existed. The complainant had invested her hard earned money worth Rs.1,72,67,661.50p by making payment through installments, in time, with the hope of getting possession of the flat allotted to her, within a period of 36 months from 10.6.2006, but on coming to know that even, not a single brick had been laid at the spot till October,2008, but to speak of construction of flats, in such circumstances, she sought refund of the amount through legal notice dated 13.10.2008. Ultimately, the complainant received refund of Rs.1,59,82,662/- on 9.7.2009, as stated by her Counsel at the bar. It is, therefore, held that the complainant was entitled to the refund of the total amount deposited by her with interest, as per Clause 9(d) of the Agreement dated 7.4.2008. The OPs were, thus, deficient, in rendering service by not refunding the amount with interest as provided under Clause 9(d) of the Agreement dated 7.4.2008. The complainant is, thus, held entitled to interest on the amounts remained deposited with the OPs till 9.7.2009 at the SBI term deposit rate, as per Clause 9(d) of the Agreement dated 7.4.2008 and on Rs.12.50 lacs from 10.7.2009 till its actual realization. 15. For the reasons, recorded above, the complaint must succeed and the same is accordingly accepted with costs of Rs.5000/-, in the following terms ; (i) Parsvnath Developers Limited and the Chandigarh Housing Board are held liable jointly and severally to refund the amount of Rs.12,50,000/- illegally deducted by them, alongwith interest at the SBI Term Deposit rate with effect from the date of its illegal deduction/withholding i.e. 10.7.2009 till actual realization, as provided in Clause 9(d) of the Agreement dated 7.4.2008 ; (ii) Parsvnath Developers Limited and Chandigarh Housing Board are held liable jointly and severally to pay interest at the SBI Term Deposit rate on the amount of Rs.1,59,82,662/- with effect from the respective dates of deposit till the date of refund i.e. 9.7.2009, as provided in Clause 9(d) of the Agreement dated 7.4.2008 ; (iii) The aforesaid directions shall be complied with, by the OPs, within 30 days from the date of the receipt of a copy of the order, failing which they shall be liable to pay penal interest @ 12% p.a. on the aforesaid payable amounts. 16. Certified Copies of this order be sent to the parties, free of charge. 17. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
