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

Consumer Complaint No.442 of 2016

                                                Date of institution:  25.07.2016                                             Date of decision   :  09.08.2018

1.     Shveta aged 34 years wife of Mukesh Sharma, resident of 103/104, Highland Building, # 5, Lokhandwala Township, Near Orchid Tower, Akruli Road, Kandivali (East), Mumbai, permanent resident of # 132, Sarv Mangal Society, Part-2, Lohgarh, Zirakpur.

2.     Mukesh Sharma aged 38 years son of Shri Chander Shekhar Sharma, resident of 103/104, Highland Building, # 5, Lokhandwala Township, Near Orchid Tower, Akruli Road, Kandivali (East), Mumbai, permanent resident of # 132, Sarv Mangal Society, Part-2, Lohgarh, Zirakpur.. 

…….Complainants

Versus

M/s. Bajwa Developers Ltd., Sunny Enclave, Sector 125, Mohali through its Managing Director Shri Jarnail Singh Bajwa.

                                                            ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member.

Present:     Shri Deep Singh, counsel for complainants.

                Shri R.P. Sharma, counsel for OP.

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

Order

               Complainants agreed to purchase one BHK BR No. (156) 1156 in Sunny Apartment, Mohali for total sale consideration of Rs.12,50,100/-. Total area of the apartment claimed as 450 sq. ft. Rs.3,13,000/- paid as earnest amount and remaining amount was to be paid as per installments mentioned in the agreement of sale, but by keeping in view the progress of construction. Amount was payable in 5 equal installments of Rs.1,87,800/- each. Complainants paid amount of Rs.1,10,000/- on 28.09.2011; Rs.77,800/- on 01.10.2011; Rs.1,87,800/- on 23.01.2012; Rs.87,800/- on 08.06.2012 and Rs.1,00,000/- on 10.06.2012. Endorsement regarding receipt of these amounts was made on the back page of agreement of sale. Cheques of above referred amounts were encashed by OP. Next installment was payable on 25.09.2012, but final on 25.11.2012. After paying hefty amount, complainants contacted OP for asking as to why nothing concrete is being done on the site. OP extended the date of last payment as 25.01.2013 by claiming that process of getting clearance from the concerned department going on and the work will be completed soon thereafter. Possession was promised to be delivered within two years from the date of booking. Complainants were disclosed that they can make the payment of balance two installments, as and when possession offered to them. License by GMADA was granted to OP on 13.11.2014, but nothing concrete done and that is why complainants requested OP for refund of amount. However, OP dilly- dallied the matter and that is why this complaint filed after serving legal notice dated 22.04.2016 for refund of amount of Rs.8,74,500/- with interest @ 18% per annum from the dates of deposits till actual payment alongwith compensation for mental harassment and agony of Rs.1.00 lakh and litigation expenses of Rs.55,000/-.  

2.             In reply submitted by OP, it is pleaded inter alia as if this Forum has no jurisdiction because transaction between parties is purely on the basis of agreement of sale; complainants booked the apartment with due knowledge that approvals yet to be got by OP; complainants committed default in payment of installments as per agreement schedule; complainants estopped by their act and conduct from filing the complaint because they failed to pay installments as per schedule. OP got approvals by putting up extra efforts, but despite that complainants failed to deposit the installments and as such it is claimed that in view of Clause-3 of the agreement, earnest amount liable to be forfeited. No cause of action accrued in favour of complainants and moreover it is claimed that relationship of consumer and service provider do not exist between parties. Flat in question was got by complainants for speculative purposes so as to sell the same on finding availability of premium. Now good price is not fetched in open market and that is why this complaint filed for refund of the paid amount. In Clause-6 of the agreement mention specifically made that in case for any technical reason, approvals could not be obtained, then the buyer will be entitled for refund of the deposited amount, but without compensation amount. Complaint alleged to be filed on baseless, groundless facts for blackmailing and harassing the OP and as such prayer made for dismissal of the complaint in view of Section 26 of the Consumer Protection Act. Complaint is filed on 25.07.2016, but the agreement was arrived on 25.05.2011 and as such complaint also alleged to be barred by limitation. As per Clause-2 of the agreement, installments to be deposited as per schedule and in the event of failure, extension has to be sought for payment. Date of payment was extended only on the request of complainants. OP never assured complainants regarding early delivery of possession of flat. Present complaint filed for covering up default of not paying the installments in time or as per schedule. After denying other averments of the complaint, prayer made for dismissal of the complaint.

3.             Counsel for complainants tendered in evidence affidavit Ex.CW-1/1 of complainant No.1 alongwith documents Ex.C-1 to C-7 and then closed evidence.  On the other hand counsel for OP tendered in evidence affidavit Ex.OP-1/1 of Shri Baldev Singh Bajwa, Director of OPs and thereafter closed evidence.

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

5.             Both the parties in this case relied on agreement of sale Ex.C-1.  Complainants in the complaint themselves have claimed that endorsement regarding received amounts was made by OP on the backside of the agreement. From those endorsements, it is made out that Rs.3,12,500/- was paid upto 21.05.2011 and thereafter amounts of Rs.1,00,000/-; Rs.77,800; Rs.1,87,800/-; Rs.87,800/- and Rs.1,00,000/- were paid by complainants to OP on 28.09.2011; 01.10.2011; 28.01.2012; 08.06.2012 and 10.06.2012. Total of these amounts comes to Rs.8,75,900/-. Details of these amounts given in the written arguments of complainants are correct and as such it is obvious that complainants erroneously mentioned in the complaint as if they paid Rs.8,74,500/-. As refund of the entire paid amount should be ordered with prayed interest and as such technicalities must not stand in the way of administration of justice. So even if in complaint lesser amount claimed than the paid one, despite that refund of the actual paid amount of Rs.8,75,900/- deserves to be allowed.

6.             It is vehemently contended by counsel for complainants that though agreement in question arrived at between the parties on 25.05.2011, but requisite sanctions obtained from GMADA on 13.11.2014 and as such OP committed fraud with complainants and other customers by pretending as if the colony in question is approved one. However, that submission has no force because after going through Clause-6 of relied upon agreement by parties, it is made out that in case flat/plot going to be sold to complainants 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 exist, and complainants made payments after acknowledging this agreement, then there is no escape from the conclusion that complainants were 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 complainants. As terms of agreement itself provides that complainants were made aware about non getting of approvals by OPs and as such if License to Develop a Colony from GMADA obtained by OP on 13.11.2014, then the same does not make any difference. So pleas taken in the written reply as well as in the submitted affidavit Ex.OP-1/1 are correct that complainants were made aware at the time of booking of flat that still sanctions/approvals to be obtained from competent authorities. In view of this, it is obvious that complainants booked the flat in question with OPs knowing fully well that the requisite sanctions yet to be obtained. If that be the position, then certainly submission of counsel for complainants has no force that OP committed fraud with complainants by receiving amounts in question, despite the fact that requisite sanctions were not obtained by OP at the time, when the amounts were received by it. Rather complainants were fully made aware of the fact that for the upcoming project in question, requisite sanctions yet to be obtained, but despite that complainants opted for booking of flat and as such reasonable inference that can be drawn is that complainants themselves indulged in speculations, while depositing the amounts in question with OP, but in hope that OP will get the requisite sanctions as projected by it. So allegations of fraud or of cheating not at all made out from the material produced on record.

7.             Counsel for complainants suffered statement on 09.08.2018 for claiming that complainants claim interest @ 10% per annum on the deposited amounts alongwith amount of compensation of Rs.50,000/- for mental harassment and agony and litigation expenses of Rs.20,000/-. He through that recorded statement on 09.08.2018 prayed for passing order for refund of the amount with effect from the dates of deposits. Complainants themselves have restricted the claim for interest @ 10% per annum from the dates of deposits till payment, so as to bring the complaint within the pecuniary jurisdiction of this Forum and as such interest @ 10% per annum from the dates of deposits should be allowed, more so when complainants have deposited 70% of the sale consideration amount. As and when hefty sale consideration amount deposited, then fault with the purchaser does not remain, more so when OP itself has not completed the project and has failed to hand over the physical possession. So interest at prayed rate of 10% per annum from the dates of deposit till payment allowed alongwith compensation for mental agony and harassment of Rs.20,000/- and litigation expenses of Rs.5,000/-, because complainants also remained at fault in not ascertaining as to whether allotted flat is in the general category or in the category of economically weaker sections of the society and even they failed to submit the requisite declaration in that respect as held hereinafter.

8.             It is also contended by counsel for complainants that OP accepted amounts in question from complainants for allotment of EWS category flat by assuring as if the flat is in general category. That submission of counsel for complainants again has not much force because after going through Clause-7 of agreement in question, it is made out that duty was cast upon complainants, being purchasers, to comply with the terms and conditions for allotment of flat in EWS category. If OP has not issued notice to the complainants for calling upon them to comply with requirements for allotment of EWS category flat, then at the same time complainants 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 complainants in view of non compliance with the obligation put on them under Clause-7 of the agreement.

9.             OP claims through written reply as well as affidavit Ex.OP-1/1 of Baldev Singh Bajwa, Director that agreement in question be treated as void and as such virtually the agreement in question sought to be rescinded by OP. In view of that virtually OP is seeking declaration of agreement as voidable. Besides after taking us through Clause-7 of agreement Ex.C-1, it is sought to be contended that as purchaser (complainants) failed to fulfill the terms and conditions of agreement or bye laws providing for allotment of EWS category flat and as such agreement in question is void. Certainly after going through Ex.C-1 it is made out that flat in question allotted to complainants was subject to fulfillment of terms and conditions requisite for allotment of flat of EWS category. Even if complainants failed to submit the requisite declaration for showing their entitlement to the EWS category flat in question, despite that the agreement at the most can be declared as voidable at the option of OP, if it want to treat it as void.

10.            It is vehemently contended by counsel for OP that in fact flat sought by complainants 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 complainants may not have fulfilled the requirement to avail benefit of EWS housing scheme, despite that OP itself 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 complainants requisite for getting benefit of EWS housing scheme, even then OP cannot retain the received amount because in doing so OP virtually is seeking unjust enrichment. OP itself is  also at fault in not starting the construction.

11.            Section 65 of Indian Contract Act, 1872 specifically provides that when an agreement is discovered to be void, or the contract becomes void, then any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person, from whom he received it. Likewise, Section 64 of Indian Contract Act provides that when a person at whose option a contract is voidable rescinds it, the other party there to need not perform any promise therein contained, in which he is the promisor Further as per second part of this Section 64, the party rescinding a voidable contract shall, if he had received any benefit thereunder from other party to such contract, will restore such benefit, so far as may be, to the person from whom it was received.  In view of these provisions contained in Sections 64 and 65 of Indian Contract Act, it is obvious that if the contract is sought to be declared as void due to non compliance of the formalities requisite by rules and regulations for entitlement of complainants to EWS category flat, then the OP cannot retain the benefit received by it under contract Ex.C-1. However, OP is bound to return the received amount of Rs.8,75,900/- with compensation of interest with effect from the dates of deposits till  payment because OP itself made complainants to believe as if agreement Ex.C-1 is valid and that is why they put signatures on it in token of correctness by acknowledging its terms. However, in case the OP want to get this agreement declared as voidable at its option, even then it is bound to return back received amount of Rs.8,75,900/-.

12.           Complainants certainly are consumer of OP within meaning of Section 2 (1) (d) of CPA because they availed services of OP 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 complainants that OP has not developed the project and as such fault lays with OP in not fulfilling promise of delivering the possession to complainants. For that fault of OP, complainants cannot be made to suffer and as such on equitable considerations also, complainants entitled for refund of paid amount of Rs.8,75,900/- with interest.

13.            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 OP 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 OP has not completed the project or even started the same, despite receipt of hefty amount from complainant, as referred above.

14.            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 complainants till refusal, certainly complaint is not barred by limitation and submission of counsel for OP to the contrary has no force.

15.            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.

16.            As a sequel of above discussion, complaint allowed by directing OP to refund the received amount of Rs.8,75,900/- with interest @ 10% per annum from the dates of deposits till payment. Compensation for mental agony and harassment of Rs.20,000/- and litigation expenses of Rs.5,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies of the order be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

August 09, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                       (Amrinder Singh Sidhu)

Member