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

Consumer Complaint No.676 of 2016

                                                Date of institution:  07.10.2016                                             Date of decision   :  27.09.2018

Gulshan Rai aged about 46 years son of Shri Raj Luthra, resident of House No.2915, Phase-7, SAS Nagar (Mohali), Punjab.

…….Complainant

Versus

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

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

3.     Shri Sukhwinder Mohan Lal, Director, M/s. Bajwa Developers Ltd. Office at Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar (Mohali), Punjab.

4.     Shri Jagmohan Bansal, Director of M/s. Bajwa Developers Ltd. Office at Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar (Mohali), Punjab.

5.     Shri Baldev Singh, Director of M/s.Bajwa Developers Ltd. Office at Sunny Enclave, Desu Majra, Tehsil Kharar, District SAS Nagar (Mohali), Punjab.

                                                            ……..Opposite Parties

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member.

                Mrs. Natasha Chopra, Member.

Present:     Shri Pushpinder Kaushal, counsel for complainant.

                Shri Amit Sharma, counsel for OPs.

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

Order

               Complainant, after knowing about floating of scheme of housing project in Sector 74-A, SAS Nagar known as Sunny  Apartment,  agreed to purchase one BHK BR Flat No.1372 having area of 450 sq. ft. for total sale consideration of Rs.12,50,000/-. Amount of Rs.2.00 lakhs was paid on 17.04.2011 regarding which entry in the agreement issued by OP No.1 was incorporated. Complainant paid another amount of Rs.1,12,500/- to OPs on 15.05.2011 and further amount of Rs.1,87,800/- was paid on 27.09.2011. Agreement dated 11.05.2011 was executed between complainant and OP No.1 through OP No.2.  Remaining amount was to be paid by 11.11.2012 in 5 equal installments of Rs.1,87,800/- each. As demand for remaining installments never put forth from complainant by OPs because of non start of construction and that is why balance amount not paid, despite the fact that complainant had been ready and willing to make payments provided possession of the flat handed over to him by OP No.1. OPs kept on extending dates for delivery of possession. Complainant was shocked to know that nothing worthwhile has been done for the progress of the project because no construction activity carried on the spot. Possession was to be handed over by 11.11.2012 and as such complainant kept on approaching OPs in their office, but in return got false assurances. Neither possession of the flat handed over nor the amount returned. Rather OPs have been using the funds of the complainant for other profitable business and as such by claiming that OPs adopted unfair trade practice, this complaint filed for seeking refund of the paid amount of Rs.5,00,300/- alongwith interest @ 12% per annum from the dates of payment till actual realisation. Compensation for mental harassment and agony of Rs.5.00 lakhs and litigation expenses of Rs.35,000/- more claimed.

2.             In reply submitted by OPs, it is pleaded inter alia as if relationship of consumer and service provider do not exist between the parties and that complaint is barred by limitation because after entering into agreement on 11.05.2011, last payment of Rs.1,87,800/-  made only on 27.09.2011. As no payment made after 27.09.2011 and as such in view of provisions contained in Article 54 of Indian Limitation Act, complaint alleged to be barred by limitation. Flats were meant for economically weaker sections of the society, but complainant concealed his identity, despite the fact that he is an affluent member of the society. This Forum alleged to be having no jurisdiction because transaction between the parties is purely the sale agreement as per which total sale consideration of Rs.12,52,000/- was payable by complainant to OPs. Complainant booked the apartment knowing fully well that approvals yet to be got by OPs from the authorities concerned. It is claimed that by putting extra efforts, requisite sanctions were obtained, but complainant despite that failed to deposit the installments. In view of default in paying installments by complainant, paid amount liable to be forfeited in view of Clause-3  of agreement. Besides, it is claimed that complainant estopped by his act and conduct from filing complaint in view of fault in paying installments. No cause of action accrued in favour of complainant, more so when relationship of consumer and service provider do not exist between the parties. Complainant got the flat for speculative purposes because he booked the same knowing fully well that approvals of the project were under process. Reference specifically made in Clause-6 of the agreement and as such complaint alleged to be filed for harassing and blackmailing OPs. It is claimed that OPs never made promise for building up the project in 18 months, but despite that complainant booked the apartment knowing fully well that approvals yet to be received. Other averments of the complaint except that of received amounts or of execution of agreement, are denied. As there is no deficiency in service on part of OPs and nor they adopted any unfair trade practice, so prayer made for dismissal of the complaint.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 to Ex.
C-9 and then closed evidence.  On the other hand counsel for OPs tendered in evidence affidavit Ex.OP-1/1 of Shri Jarnail Singh Bajwa, Managing Director and thereafter closed evidence.

4.             Written arguments submitted by the parties. Oral arguments heard and records gone through.

5.             Both the parties relies on agreement Ex.C-1 as per which complainant agreed to purchase the flat in question on payment of total sale consideration of Rs.12,50,100/-.  It is not disputed that amount of Rs.5,00,300/- had been paid by complainant to OPs in the written reply or in the affidavit of representative of OP and the same fact even borne from the acknowledgement receipt produced on record as Ex.C-2. So complainant able to establish as if he has paid Rs.5,00,300/- in all to OPs out of total sale consideration of Rs.12,50,100/-. This means that 40% of the sale consideration amount alone deposited by complainant with OPs. Being so, inference of continuous, readiness and willingness to abide by terms and conditions of agreement Ex.C-1 on part of complainant cannot be drawn.

6.             It is the case of complainant that construction of the project in question has not been started and that is why possession not delivered despite legal notice Ex.C-3 issued through postal receipts Ex.C-4 to Ex.C-8. Rather it is contended by counsel for complainant that requisite sanctions from the concerned authorities not got by OPs, and that is why the project not completed.  

7.             It is not denied by OPs in their written reply that requisite sanctions from GMADA and other authorities earlier could not be got, but now they have been obtained. So it is contended by counsel for complainant that OPs committed fraud with complainant and other customers by pretending as if colony in question is approved one, whereas in fact it was not approved one.  However, that submission has no force because after going through Clause-6 of relied upon agreement Ex.C-1 by parties, it is made out that in case flat/plot going to be sold to complainant for any technical reason, does not get approval of the authorities, then the allottee will be entitled for return of earnest amount, but without seeking compensation. When this specific clause 6 of the agreement exists, and complainant made payments after acknowledging this agreement, then there is no escape from the conclusion that complainant was specifically made aware of the fact that requisite sanctions from authorities yet to be obtained and that is why it has been specifically mentioned in Clause-6 that in case for any technical reason, requisite sanctions from the authorities not received, then refund of the earnest amount without compensation can be claimed by complainant.  As terms of agreement itself provides that complainant was made aware about non getting of approvals by OPs from GMADA and other authorities, and as such plea taken in reply and in the submitted affidavit of representative of OPs are correct that complainant was made aware at the time of booking of the flat that requisite sanctions/approvals yet to be obtained from competent authorities. Despite this knowledge, complainant booked the flat in question and as such question of commission of fraud by OPs with complainant does not arise. Rather complainant booked the flat in question even after knowing that requisite sanctions yet to be obtained, but in hope that OPs will get the requisite sanctions as projected by them. So allegations of fraud or of cheating not at all made out.

8.             Counsel for complainant vehemently placed reliance on composite decision dated 08.02.2018 of Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh delivered in CC No.716, 789, 835 etc. of 2017 titled as Mangal Singh Kondal & others Vs. Bajwa Developer & Another for arguing that refund of the deposited amounts should be with interest @ 12% per annum from the dates of deposit till realisation. That submission of counsel for complainant has no force for purposes of this case, because complainant after depositing 40% of the sale consideration amount, made no efforts for making payment of balance amount, despite the fact that as per schedule worked out in agreement Ex.C-1, remaining 4 installments i.e. installment No.2 to 5 of Rs.1,87,800/- each were to be paid on 11.09.2011; 11.01.2012; 11.05.2012; 11.09.2012 and 11.11.2012. As complainant himself has not sticked to the payment plan and as such he is not entitled for interest from the dates of deposits, but he is entitled for interest @ 12% per annum from the date of first ever demand put forth through legal notice Ex.C-3 for refund of the amount. This notice Ex.C-3 served by complainant on OPs through postal receipts Ex.C-4 to C-8 and as such entitlement of complainant for claiming interest will be with effect from 20.07.2016 and not before that, more so when in view of law laid down by Hon’ble National Consumer Disputes Redressal Commission in case of Randhir Singh and Anr. Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. 2015(1) CPJ 514 (NC),  the depositor not entitled for interest in case he himself committed default in making payment of installments in time. 

9.             Besides Hon’ble State Consumer Disputes Redressal Commission Punjab in above referred casted titled as Mangal Singh Kondal & others Vs. Bajwa Developer & Another (supra)  allowed interest @ 12% per annum with effect from the dates of deposit in view of Rule 17 of PAPRA Rules framed under Punjab Apartment and Property Regulation Act, 1995. However, present case before us is a case covered by provision of Section 12 of Punjab Apartment and Property Regulation Act, 1995 which provides that if the promoter fails to give possession in accordance with terms of agreement for reasons beyond his control and of his agents, by specified date or further agreed date, then the promoter shall be liable on demand, but without prejudice to any other remedy to which he may be liable, to refund the amounts already received by him in respect of that plot or apartment with simple interest at the rate as may be determined by competent authority, from the date the promoter received the sums till the date the amounts and interest thereon is refunded. Rule 17 of PAPRA Rules framed under Punjab Apartment and Property Regulation Act, 1995 applicable in cases covered by Section 6 (1) of Punjab Apartment and Property Regulation Act, 1995. That Section 6 (1) of the Act provides that a promoter intending to construct a building/apartment before acceptance of any money as advance payment or deposit, will not accept more than 25% of the sale price and thereafter will enter into an agreement for sale with each of the persons, who are to take possession of apartments/plots. Present is a case in which  OPs as promoter failed to deliver possession on account of non getting of approvals, the circumstance beyond their control and as such by keeping in view the law laid down in Randhir Singh and Anr. Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. (supra), entitlement of complainant for interest is not there till seeking of refund for the first time. It is on account of this that entitlement of complainant for interest @ 12% per annum from the date of issue of notice Ex.C-3 dated 20.07.2016 till payment is held. Moreover, complainant was made fully aware through Clause-6 of agreement Ex.C-1 that approvals from the authorities concerned yet to be got, but despite that complainant opted for depositing the amounts. Effect of Clause-6 of the agreement Ex.C-1 has already been discussed above.

10.            It is also contended by counsel for complainant that OPs accepted amounts in question from complainant for allotment of EWS category flat by assuring as if the flat is in general category. That submission of counsel for complainant again has not much force because after going through Clause-7 of agreement in question, it is made out that duty was cast upon complainant, being purchaser, to comply with the terms and conditions for allotment of flat in EWS category. If OPs have not issued notice to the complainant for calling upon him to comply with requirements for allotment of EWS category flat, then at the same time complainant also remained at fault in not ascertaining as to whether the allotted flat is in general category or is in the category of EWS. So fault also lay with complainant in view of non compliance with the obligation put on him under Clause-7 of the agreement.

11.            It is vehemently contended by counsel for OPs 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 OPs themselves remained at fault in not getting the formalities complied with in that respect by issue of notice or otherwise and as such in case OPs 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 they cannot retain the received amount because in doing so they virtually are seeking unjust enrichment. OPs themselves are also at fault in not starting the construction.

12.            Even if assuming for arguments sake that consent of OPs in entering into agreement Ex.C-1 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 OPs not entitled to retain amount of Rs.5,00,300/- at all, even if Clause-3 regarding forfeiture of earnest amount may be there in this agreement.

13.           Complainant certainly is consumer of OPs within meaning of Section 2 (1) (d) of CPA because he availed services of OPs 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 OPs have not developed the project and as such fault lays with OPs in not fulfilling promise of delivering possession to complainant. For that fault of OPs, complainant cannot be made to suffer and as such on equitable considerations also, complainant entitled for refund of paid amount of Rs.5,00,300/- with interest.

14.            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 OPs 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 OPs have not completed the project or even started the same, despite receipt of hefty amount from complainant, as referred above.

15.            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 OPs to the contrary has no force.

16.            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.

17.            As a sequel of above discussion, complaint allowed by directing OPs to refund the received amount of Rs.5,00,300/- (Rs. Five Lakhs  Three Hundred only) with interest @ 12% per annum w.e.f. 20.07.2016 (the date of issue of legal notice Ex.C-3) till payment. Compensation for mental agony and harassment of Rs.20,000/- (Rs. Twenty thousand only) and litigation expenses of Rs.5,000/- (Rs. Five thousand only) more allowed in favour of complainant and against  OPs.  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 OPs are liable to pay interest @ 7% per annum on these amounts of compensation and litigation expenses. Certified copies of the order be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

September 27, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                       (Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member