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

Consumer Complaint No.277 of 2016

                                             Date of institution:  13.05.2016

                                             Date of decision   :  16.02.2018

Darshanjit Sharma son of Des Raj Sharma, resident of House No.146/11, Purana Bazar, Sunder Nagar, District Mandi, Himachal Pradesh (H.P.)

…….Complainant

Versus

1.     M/s. Harji Realtors through its authorised person, Office SCF-66, Level 2, Phase-5, Mohali at present running its office from residence F-161, Near PTC Punjabi, Phase-8B, Industrial Area, Mohali.

        (Given up OP No.1 from the array of OPs).

2.     M/s. Bajwa Developers Limited through its Managing Director, Regd. Office Sunny Enclave, Desu Majra, Kharar.

……..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 Rakesh Kundal cl. for the complainant.

                Shri Sudesh Sahi, counsel for the OP.

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

Order

               Complainant being interested in purchase of residential flat for settling his son, approached OP No.1 for purchase of one BHK flat, who assured that OP No.2 will provide proper flat, being developer and colonizer of repute. OP No.1 booked one BHK flat of Bajwa Developers Ltd. at Sector 74-A, Mohali after receipt of cheque of Rs.50,000/- bearing No.021811 drawn on State Bank of India, on 05.08.2012. Then on 20.08.2012, complainant was introduced to OP No.2 by OP No.1 for purchase of one BHK flat. OP No.2 did show sample of one BHK flat to complainant by claiming that construction will be raised on the site shown to complainant. Even OP No.2 assured that colony of the flats has been approved by authorities concerned. Total value of the said flat was fixed at Rs.13,12,000/-. That one BHK flat was to have area of 450 sq. ft.  approximately. Number of the flat so given was 1137. So complainant deposited Rs.2,77,500/- more through cheque dated 11.08.2012 drawn on State Bank of India. Agreement dated 31.08.2012 was entered after receipt of this amount of Rs.2,77,500/-. As per schedule of payments, complainant was to pay Rs.1,96,000/- each on account of first and second installments. However, complainant paid amount of Rs.3,90,000/- vide cheque No.021814 as advance of the first and second installments. That cheque was drawn on State Bank of India and was of date 29.12.2012. On 30.08.2013, when third installment of the flat became due, then complainant approached OP No.2 for ascertaining the status of construction of the flat. However, intimation to complainant was not given about starting of construction. Approach again was made by complainant to OP No.2 on 28.02.2014, but status of the flat was not disclosed. Assurance was given for delivery of possession of one BHK flat by end of year 2015, but on 22.02.2016 when complainant again visited OP No.1, then he got knowledge as if construction of the flat has not been started yet, but OP No.2 has demolished the sample flat even for the reasons best known to him. Despite service of legal notice, refund of the received amount of Rs.7,17,500/- not made and nor possession of the flat handed over till date. OP No.2 used the huge amount and as such it adopted unfair trade practice. Compensation for mental harassment and agony of Rs.1.00 lakh and litigation expenses of Rs.25,000/- more claimed.

2.             In reply filed by OP No.2, it is claimed that this Forum has no jurisdiction because transaction between complainant and OP No.2 was purely of sale agreement of flat for total sale consideration of Rs.13,12,000/- and complainant himself committed default in payment of installments resulting in forfeiture of the paid amount as per terms of the agreement. Rather, it is claimed that amount of Rs.3,28,000/- deposited by complainant liable to be forfeited as per terms of the agreement. Moreover, complainant alleged to be estopped by his act and conduct from filing the present complaint because of his fault to deposit the installments.  Agreement in question is alleged to have become void. Complaint alleged to be barred by limitation, being filed after lapse of two years of accrual of cause of action. Additionally, it is also claimed as if no cause of action has accrued to complainant. Rights of complainant in respect of flat in question already alleged to have extinguished in view of Section 27 of the Indian Limitation Act. Complainant was made aware that approvals yet to be received. LOI was received on 19.05.2014 from GMADA. Complainant got the flat booked for speculative purposes with intent to sell the same, as and when premium found payable. In view of breach of terms of the contract agreement, compensation of Rs.5.00 lakhs claimed by OP No.2 by invoking Section 75 of the Indian Contract Act, 1872. Present complaint alleged to be frivolous and vexatious, being filed with baseless allegations for abusing process of law. Complainant entered into pre launching project after verification of aspects of project during visit to OPs.

3.             Claim against OP No.1 has already been withdrawn because counsel for complainant claimed on 18.05.2016 that complaint not to be proceeded with against OP No.1. So name of OP No.1 was deleted from the array of OPs vide orders of 18.05.2016 passed in this complaint.

4.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith document Ex.C-1 to C-4 and thereafter his counsel closed evidence. On the other hand, counsel for OP tendered in evidence affidavit Ex.OP-1/1 of Shri J.S. Bajwa and thereafter closed evidence.

5.             Written arguments submitted by both the parties. Oral arguments of counsel for parties also heard and records gone through.

6.             Undisputedly agreement Ex.C-2 was arrived at between complainant and OP No.2, vide which complainant was to purchase one BHK 1137 flat having area of 450 sq. ft. approximately for consideration of Rs.13,10,400/- with rounded figure of Rs.13,12,000/-. Schedule of payments endorsed on Ex.C-2 itself. As per the balance sheet worked out by OP on the back of this agreement, an amount of Rs.3,27,500/- received by it. Ex.C-3 is another receipt produced by complainant to establish as if he paid Rs.3,90,000/- more to OP No.2 on 29.12.2012 and as such virtually payment of Rs.7,17,500/- by complainant to OP No.2 is established.  Reference of received booking amount of Rs.50,000/- paid through receipt Ex.C-1 is made on the backside endorsement of balance sheet of Rs.3,27,500/- and as such the amount of receipt Ex.C-1 virtually has been accounted for by OP No.2.

7.             It is the case of complainant that despite payment of more than 55% of amount of sale consideration, site in question not developed. Rather it is claimed through submitted affidavit Ex.CW-1/1 as well as through notice Ex.C-4 and Ex.C-5 sent through postal receipts to OPs that construction on the site in question has not been started. If the construction on the site has not started, then certainly question of handing over of possession of the built up flat to complainant does not arise. Even in the affidavit Ex.OP-1/1 of Managing Director of OP No.2, it is not mentioned that construction of the flat on the site has been started or not. Even if assuming for arguments sake that complainant was made aware of approvals to be received by OP No.2,  but despite that OP No.2 cannot retain the amount in question because part of the sale consideration was paid for purchase of flat and not for permitting OP No.2 to retain the amount without raising construction. If the agreement is void or voidable, despite that OP No.2 liable to refund the received amount in view of Sections 64 and 65 of Indian Contract Act. Being so, OP No.2 not entitled to claim any compensation by invoking provisions of Section 75 of Indian Contract Act. It is the case of OP No.2 that the contract in question has become void because complainant failed to deposit the installments as per the schedule worked out in agreement Ex.C-2. Though Clause-3 in Ex.C-2 is there to the effect that in case payment of due installments not made within time, then paid earnest amount will stand forfeited, but in this case OP No.2 himself remained at fault in not abiding by terms of agreement Ex.C-2 because he did not raise construction of the flat and nor called upon complainant to treat the agreement as cancelled because of non deposit of installments by him. As the agreement in question Ex.C-2 was entered exclusively for the purpose of sale of flat, but possession of the same never delivered and nor the execution of sale deed took place and nor OP No.2 even called upon complainant to fix a date for execution and registration of sale deed, either by way of sending notice or otherwise and as such OP No.2 cannot get benefit of his own fault by way of forfeiture of amount deposited by complainant.

8.             OP No.2 claims through written reply as well as affidavit that agreement in question be treated as void and as such virtually the agreement in question sought to be rescinded by OP No.2. In view of that virtually OP No.2 is seeking declaration of agreement as voidable. Besides after taking us through Clause-7 of agreement Ex.C-2, it is sought to be contended that as purchaser (complainant) 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-2 it is made out that flat in question allotted to complainant was subject to fulfillment of terms and conditions requisite for allotment of flat of EWS category. Even if complainant failed to submit the requisite declaration for showing his 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 No.2, if he wants to treat it as void.

9.             It is vehemently contended by counsel for OP 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. Copy of notification dated 21.09.2015 is produced during course of arguments. Even if complainant may not have fulfilled the requirement to avail benefit of EWS housing scheme, despite that OP No.2 himself remained at fault in not getting the formalities complied with in that respect by issue of notice or otherwise and as such in case OP No.2 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 he cannot retain the received amount because in doing so he virtually is seeking his  unjust enrichment. OP No.2 himself is also at fault in not starting the construction.

10.            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 complainant to EWS category flat, then the OP cannot retain the benefit received by it under contract Ex.C-2. However, OP No.2 bound to return the received amount of Rs.7,17,500/- with compensation of interest w.e.f. 29.02.2016 (the date of issue of legal notice Ex.C-4 by complainant for seeking refund of the amount) onwards till  payment because OP No.2 himself made complainant to believe as if agreement Ex.C-2 is valid and that is why he put signatures on it in token of correctness by acknowledging its terms. However, in case the OP No.2 wants to get this agreement declared as voidable at his option, even then he is bound to return back received amount of Rs.7,17,500/-.

11.           Complainant certainly is consumer of OP within meaning of Section 2 (1) (d) of CPA because he 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 complainant that OP has not developed the project and as such fault lays with OP in not fulfilling its promise of delivering the possession to complainant. For that fault of OP No.2, the complainant cannot be made to suffer and as such on equitable considerations also, the complainant entitled for refund of paid amount of Rs.7,17,500/- with interest from 29.02.2016 (the date of issue of legal notice Ex.C-4 by complainant for seeking refund of the amount) and not before that, as discussed above.

12.            In cases titled as  Dream Land Promoters & Consultants Vs. Pramod Kumar, 2013 (1) CPC 357 (SC); Emaar MGF Land Ltd. and another Vs. Karnail Singh, 2014 (3) CPC 49 (NC) as well as in case of  Rajubhai Tank, Director of Odhav Hari Developers Pvt. Ltd. & Ors. Vs. Bindraben Bharatkumar Mavani (Minor) through her Natual Guardian, 2014(1) CPC 624(NC) and in case of  Pushpak Infrastructure Pvt. Ltd. Vs. Santanu Mukherjee 2014(3) CPC 336(NC) and  Ram Niwas Garg Vs. Nagar Nigam, Kanpur & Anr. 2015(2) CLT 96 (NC), it has been held that if possession cannot be handed over to the allottee for any reason, then the allottee entitled to refund of paid amount with interest. However, in case he has paid the full sale consideration amount, then direction to seller to execute the sale deed even can be issued. In the case before us, the full sale consideration amount has not been paid, but part of sale consideration alone paid and as OP No.2 itself has taken plea that complainant not complied with requisite formalities of getting him declared as entitled to flat of EWS category and as such virtually OP No.2 is seeking declaration as if the contract is voidable. Even in case of voidable contract, OP No.2 bound to refund back the received amount.  That refund in the facts and circumstances of the case must be ordered with interest @ 12% per annum from 29.02.2016 (the date of issue of legal notice Ex.C-4 by complainant for seeking refund of the amount) as discussed in detail above.  OP No.2 cannot be permitted to retain the money paid by complainant and even the flat/plot agreed to be sold by it because in case it is so ordered, then it will amount to unjust enrichment of OP No.2 at the cost of complainant, despite the fact that fault lays with OP No.2 also in not getting the formalities of EWS category allotment complied with from complainant at earliest. The entitlement of complainant to interest @ 12% per annum w.e.f. 29.02.2016 will be there. Complainant suffered mental agony and harassment at the hands of OP due to refuting of his claim of refund resulting in his dragging in this litigation and as such certainly complainant entitled to compensation for mental agony and harassment as well as litigation expenses.

13.            As OP No.2 himself failed to deliver possession of the flat or refund the received amount despite issue of legal notice Ex.C-4 dated 29.02.2016 and as such certainly complaint is within limitation, more so when recurring cause of action has accrued in favour of complainant because the photographic depiction Ex.C-6 also shows that development work on the site in question not carried out and that is why wild grass existing on the spot with signs of some prospective construction only. Fault of OP No.2 to construct the flat for long gave recurring cause of action to complainant and as such benefit of Section 27 of Indian Limitation Act not available to OP No.2. In view of existence of recurring cause of action in favour of complainant, the complaint certainly is within limitation. Complaint, therefore, cannot be termed as groundless at all.

14.            As a sequel of above discussion, the complaint is allowed  with direction to OP No.2 to refund the received amount of Rs.7,17,500/- with interest  @ 12% per annum  w.e.f. 29.02.2016 (the date of legal notice Ex.C-4) till payment. Compensation for mental agony and harassment of Rs.20,000/- and litigation expenses of Rs.5,000/- more allowed in favour of the complainant and against OP No.2. Payment of these amounts of compensation and litigation cost be made within 30 days from receipt of certified copy of order.

                Since there is shortage of postal stamps in this Forum, therefore, the parties through their counsel are directed to receive free certified copy of the order by hand and it is the responsibility of the learned counsel for the parties to inform them accordingly.  This direction issued by following the principle laid down by Hon’ble  Punjab State Consumer Disputes Redressal Commission, Chandigarh in Consumer Complaint No.956 of 2017 titled as Partap Rai Sharma Vs. Greater Mohali Area Development Authority (GMADA), decided on 25.01.2018.

Announced

February 16, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                            (Amrinder Singh Sidhu)                                                                Member

(Mrs. Natasha Chopra)

Member