Chandigarh

StateCommission

A/161/2016

Ansal Properties & Infrastructure Ltd. - Complainant(s)

Versus

Naresh Kumar Bhambari - Opp.Party(s)

Gaurav Chopra, Anurag Chopra, Adv.

01 Aug 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

                                                                 

 

Appeal No.	:	161 of 2016
Date of Institution	:	01.06.2016
Date of Decision	:	01.08.2016

 

Ansal Properties & Infrastructure Ltd., 115, Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi -110001 through its Managing Director.

2^nd Address:-

Ansal Properties & Infrastructure Ltd., SCO No.183-184, Sector 9-C, Madhya Marg, Chandigarh.

.…Appellant(s).

Versus

1. Naresh Kumar Bhambri S/o Sh. Mulak Raj Bhambri resident of House No.1601, Block A, Pushak Complex, Sector 49-B, Chandigarh.
2. Rajiv Bhambri resident of House No.1601, Block A, Pushak Complex, Sector 49-B, Chandigarh.

…..Respondents.

 

Appeal under Section 15 of the Consumer Protection Act, 1986.

 

BEFORE:   JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                SH. DEV RAJ, MEMBER.

                SMT. PADMA PANDEY, MEMBER.

               

Argued by:

 

Sh. Gaurav Chopra, Advocate alongwith Ms. Kashika Kaur, Advocate for the appellants.

Sh. Ramesh Chander Sharma, Advocate for the respondents.

 

PER DEV RAJ, MEMBER

              This appeal has been filed against the order dated 17.02.2016, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (in short ‘the Forum’), vide which, consumer complaint bearing No.278 of 2015 was allowed and the Opposite Parties (now appellants) were, jointly and severally directed as under:-

“14]      In view of the above discussion, the present complaint deserves to be allowed and the same is accordingly allowed. The Opposite Parties are jointly & severally directed as under ;-

1. To refund the amount of Rs.4.23 lacs  to the complainants along with interest @12% p.a. from the date of its deposit i.e. 26.8.2010 till actual payment.
2. To pay a sum of Rs.25,000/- as compensation to the complainant on account of mental tension, agony, harassment.
3. To pay Rs.10,000/- as litigation expenses.

         This order shall be complied with by the Opposite Parties jointly & severally within one month from the date of receipt of its certified copy, failing which, they shall be liable to refund the amount of Rs.4.23 lacs to the complainants along with interest @18% p.a. from the date of its deposit i.e. 26.8.2010 till actual payment and compensation amount of Rs.25,000/- alongwith interest @ 18% p.a. from the date of filing of the present complaint, till its realization, besides costs of litigation.”

 

2.             The facts in brief are that the complainants jointly purchased a residential unit in the project of the Opposite Parties, which was allotted to them vide allotment letter dated 11.11.2010. The basic price of the floor, in question, was Rs.28,20,000/- and the complainants paid a sum of Rs.4,23,000/- to the Opposite Parties. It was stated that at the time of offering the floor, the Opposite Parties assured that all the necessary approvals had been obtained by the Company and in the allotment letter also, it was mentioned that building plans had already been sanctioned by the authorities.  It was further stated that as per Clause 12 of the allotment letter, the construction of the floor was likely to be completed within 24 to 30 months of commencement of work, which was to be the date for all the requisite sanctions/approvals/permissions/ clearances.  It was further stated that the payments were to be made as per schedule provided in allotment letter comprising construction linked installments. It was further stated that the Opposite Parties started demanding installments without starting any construction at the site. It was further stated that even no requisite approvals were obtained by them before offering the flats for sale It was further stated that the complainants asked the Opposite Parties to show the requisite approvals but they failed to do so. It was further stated that the Opposite Parties did not complete the work at the site despite lapse of more than one year. It was further stated that when nothing was done, the complainants sought refund of the amount but to no avail. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service, and indulgence into unfair trade practice.

3.             When the grievance of the complainants, were not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was filed seeking various reliefs.

4.             The Opposite Parties, in their written version, stated that the complainants only paid an amount of Rs.4,23,000/- and did not pay any amount beyond that. It was further stated that the Opposite Parties had necessary approvals at the time of allotting the unit. It was further stated that after approval of the site plan by the DTP, the Opposite Parties got the sanction for the project in June 2010. It was further stated that the complainants were already aware that the Opposite Parties had the necessary approvals and sanctions for the project. It was further stated that the Opposite Parties  had been sending demand notices, call notices, reminders for further payment but the complainants failed to make any payment after one initial payment. It was further stated that before cancellation of the booking, first reminder was sent on 27.03.2012, second on 03.05.2012, third/final reminder on 23.06.2012 and final show cause notice was sent on 08.08.2012.  It was further stated that under these circumstances, the Opposite Parties cancelled the booking of the complainants on 17.08.2012. It was further stated that the relief of equity cannot be granted in favour of the complainants being defaulters. It was further stated that as per Clause 5.a of the allotment letter, if payments would not be received within the stipulated period then allotment could be cancelled and 20% of the price of the unit was to be forfeited. It was further stated that the complainants had paid less than 20% of the total price of the unit and, therefore, it was forfeited. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

5.             The complainants filed rejoinder wherein they reiterated all the averments contained in the complaint and repudiated those as contained in the written statement of the Opposite Parties.

6.          The parties led evidence, in support of their case.

7.           After hearing the Counsel for the parties and, on going through the evidence, and record of the case, the Forum, allowed the complaint, vide the impugned order, as stated above.

8.           Feeling aggrieved, the Opposite Parties have filed the instant appeal.

9.             We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.

10.           Perusal of record reveals that with reference to application dated 18.08.2010 of respondents/complainants, they were allotted Independent Floor No.933 SF measuring 1299 Sq. ft. consisting of 3 bedrooms and 3 bathrooms vide appellant’s allotment letter dated 11.11.2010, total price whereof was Rs.28,20,000/- plus Rs.20,000/- as Interest Free Maintenance Security. The complainants paid a sum of Rs.4,23,000/- vide cheque No.581079 dated 18.08.2010 drawn on HDFC Bank Ltd. (Allotment letter and receipt are at Pages 13 to 20 of complaint case file). The Instalment Plan for payment of basic sale price and payment plan for external development charges are at Page 18 of the complaint file. The same are extracted hereunder:-

INSTALMENT PLAN
At the time of Booking		10%	Rs.2,82,000/-
At the time of Allotment		10%	Rs.2,82,000/-
On start of construction		5%	Rs.1,41,000/-
On completion of DPC		10%	Rs.2,82,000/-
On completion of GF roof slab		10%	Rs.2,82,000/-
On completion of FF roof slab on constructed Area		10%	Rs.2,82,000/-
On completion of Super Structure/Masonry work		10%	Rs.2,82,000/-
On completion of Door/window frames fixing & Internal Plastering		10%	Rs.2,82,000/-
On completion of Flooring of all the areas & External Plaster		10%	Rs.2,82,000/-
On completion of Internal finishing		10%	Rs.2,82,000/-
At the time of Offer of possession		05%	Rs.1,41,000/- + Rs.20,000 (IFMS)
SCHEDULE-II
(PAYMENT PLAN FOR EXTERNAL DEVELOPMENT CHARGES)
Rate: Rs.115.87/Sq. Ft.
INSTALLMENT PLAN
1)	At the time of Allotment	25%	Rs.37,628/-
2)	Within 90 days from the date of allotment	25%	Rs.37,628/-
3)	Within 180 days from the date of allotment	25%	Rs.37,628/-
4)	Within 270 days from the date of allotment	25%	Rs.37,628/-
	Total		Rs.150510/- (In fact Rs.150512/-)

Thus, as per the Installment Plan, at the time of booking/allotment, against the payable amount of Rs.2,82,000.00 + Rs.2,82,000.00 + Rs.37,628.00 (25% EDC), totaling Rs.6,01,628/- to the Opposite Parties, the complainant paid only a sum of Rs.4,23,000/-. While installments of basic price were to be paid on various stages of construction, payment of External Development Charges in the sum of Rs.37,628/- each was to be made in four installments, i.e. at the time of allotment, and within 90 days, 180 days and 270 days from the date of allotment. After payment of Rs.4,23,000/- no further payment was made. Perusal of Annexures R-1 and R-2 reveals that Site Plan was approved by the District Town Planner, SAS Nagar on 04.05.2010 and GMADA approved the building plans vide letter dated 09.06.2010. Call notices/reminders dated 17.11.2010, 01.12.2010, 12.12.2010, 01.02.2011, 21.07.2011, 04.08.2011, 17.10.2011, 04.11.2011, 19.12.2011, 27.03.2012, 03.05.2012, 23.06.2012 and 08.08.2012 asking the complainants to remit the due amount towards installments, are available at Annexures R-3 to R-15.

11.           The principle question, which falls for consideration, is, as to whether the complainants, who even did not pay the booking amount/amount payable at the time of allotment, in full and thereafter defaulted in making the payments despite repeated calls notices/reminders, were entitled to refund of the deposited amount i.e. Rs.4,23,000/- deposited by them with the Opposite Parties. As stated above, it is clearly evident that at the time of launching the project, the Opposite Parties had obtained requisite approval for construction of the unit(s), in question (Annexures R-1 & R-2). Various call notices/reminders (Annexures R-3 to R-15) were sent to the complainants to make payment of the due amount, which as per call notice dated 19.12.2011, was Rs.15,59,190/-. Till this date, the Opposite Parties did not impose any interest while raising demands. It was only vide letter dated 27.03.2012 (Annexure R-12) that the complainants were intimated that against the due amount of Rs.15,59,190/-, interest @18% amounting to Rs.2,59,729/- had accrued thereon and the due amount against them (complainants) was Rs.18,18,919/-. Again reminders dated 03.05.2012 and 23.06.2012 (Annexures R-13 and R-14) were sent to the complainants for making due payments. The complainants were informed that in the event of their failure to make due payments, action as per Clause 5.a of the allotment letter was to follow. When the complainants did not respond, the Opposite Parties issued show cause notice dated 08.08.2012 (Annexure R-15), Para No.3 of which reads as under:-

“In view of above, this show cause notice is hereby given to you as per clause No.5A of the Allotment Letter, giving you an opportunity, to Show Cause within 7 (seven) days from the date of issuance of this show cause letter, as to why the booking of the aforesaid Plot may not be cancelled and the amount to the extent of 20% of the value of the Unit may not be forfeited. If your reply is not received within the stipulated time, we shall act in accordance with the guidelines, as laid down in allotment letter i.e. the booking shall stand cancelled and the earnest money shall be forfeited. You shall be solely liable for the consequences arising out of the same.”

 

12.           Again when there was no response from the complainants, to letter dated 17.08.2012 (Annexure R-16), the booking was cancelled in terms of Clause 5.a of the allotment letter and Clause 8 of the application form for allotment of the unit, in question, which are extracted hereunder:-

“5.a  Installments due towards payment of the independent floor shall be made at intervals as per the payment schedule opted by the Allottee. If payments are not received within the stipulated period or in the event of breach of any of the terms and conditions by the Allottee, of this allotment, the Company, at its discretion, shall cancel the allotment and in that event, 20% of the price of the aforesaid floor shall be forfeited and the balance amount, if any, shall be refunded without interest.”

 

“8.    The Company and the intending allottee(s) hereby agree that the amount paid with the application and in instalments as the case may be, to the extent of 20% of the basic sale price of the unit will collectively constitute the earnest money. This earnest money shall stand forfeited in case of non fulfillment of these terms and conditions and those of Allotment Letter/Agreement as also in the event of failure by the intending allottee(s) to sign the Allotment Letter/Agreement within the time allowed by the Company.”

 

13.           The notice cancelling allotment was sent to the complainants through registered post as is evident from copy of postal receipt appended on the notice (Page 57 of the complaint). The cancellation letter was sent to the respondents at the same address, which has been given in the complaint and had also been given to the appellant(s). The Hon’ble National Commission in similar circumstances in case titled ‘Devendra Kumar Vs. UP Awas and Vikas Parishad’, 2015 SCC OnLine NCDRC 3400, in Para 5 held as under:-

“5.    The respondent has placed on record the letter dated 23.11.1995 sent to the complainant by registered post, directing him to furnish the proof of the deposit of the installments and informing that in case of default, the allotment made to him shall be cancelled. The respondent has also placed on record a copy of the postal receipt whereby this letter was sent to the complainant. The aforesaid letter was sent to the complainant at the same address which he has given in the complaint and had also been given to the respondent. Since there is a statutory presumption of service of the demand letter sent by registered post, we have no hesitation in holding that the aforesaid letter was duly served upon the complainant/ petitioner in due course.”

 

Therefore, the complainants cannot be heard to say that cancellation letter was not received. Their averment that the appellant(s) did not have necessary approvals at the time of launching the project is also devoid of truth in view of contents of Annexure R-2. The Counsel for the appellant(s) stated that as per Clause 5.a of the allotment letter, the Opposite Parties could forfeit 20% of the amount towards cancellation and since in the instant case, amount deposited was less than 20%, appellants rightly forfeited the entire amount viz. 4,23,000/-.

14.           It may be stated here that a similar question regarding forfeiture of amount upon cancellation arose before the Hon’ble National Commission in DLF Commercial Developers Limited Vs. Ravinder Zutshi, 2009 (4) C.P.J. 163. A complaint was filed before the District Forum alleging that the complainant had booked office space at DLF Galleria in 1998 and paid a sum of Rs.4,41,838/- against the total consideration of Rs.16,35,000/-. After paying the aforesaid two instalments, the complainant vide letter dated 18.5.99 requested the Opposite Party to cancel the allotment and refund the amount on account of some unavoidable circumstances. As a result of this, the Opposite Party refunded the amount of Rs.1,98,640/- on 23.2.2002. It was the case of the complainant that the balance amount of Rs.2,43,198/- was still to be refunded by the Opposite Party, to the complainant. The District Forum partly allowed the complaint and directed the Opposite Party to refund the amount after deducting 10% of the basic sale price, i.e. Rs.80,127/-, alongwith interest @12% from 1.8.99 till the date of realisation together with cost of Rs.5,000/-. Aggrieved by this order, an appeal was filed by the Opposite Party before the State Commission, which was dismissed. In Revision Petition, the Hon’ble National Commission, held in Paras 5 and 6, held as under:-

“5.    We have very carefully gone through the provisions and find that as per terms of agreement the petitioner is correct in arguing that in the case of cancellation of space, he is entitled to forfeiture of earnest money, which is 10%. But our careful scrutiny of the terms reproduced above, does not help the case of the petitioner, to recover the interest on account of delayed/non-payment(s) of the instalments due at the time of refund. The learned Counsel  for the petitioner wishes to rely upon this part of Clause 11, which is as under:-

“…..the firm may at its sole discretion waive the breach of agreement committed by the allottee in not making the payments at specified time but on the condition that the allottee shall pay interest @24% p.a. for the period of delay and such other penalties, the firm may impose.”

6.     After careful consideration of the condition 11, part of which is extracted above, we are left in no doubt that the condition 11 would help the case of the petitioner only if the breach is waived. This is not the case here. It is very difficult for us to read the point relating to “payment of interest @24% p.a.” in isolation. It has to be read in continuation of the words appearing earlier to this point on payment of interest, which relates to breach of agreement. In this case, there is no request from the complainant to waive the breach of agreement. Our understanding of the clause is, that this would be applicable only in case, the complainant or the allottee make request for restoration of the property in question. This is not the case here.”

Further in DLF Universal Limited Vs. Nirmala Devi Gupta, 2016(2) CPJ 316, the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in Paras 10 and 11 of its order, held that the Revision Petitioner was not entitled to charge interest as non-refundable amount on the subsequent installments in the wake of cancellation of plot. Paras 10 and 11 of the order read as under:-

“10.          We have now to consider whether the forfeiture amount mentioned in the letter of cancellation under the head “earnest money” and “non-refundable advance” was justified or not.  It has been stated in the said letter that a sum of Rs.15,57,781.25ps. was being forfeited as earnest money.  In the plot-buyers’ agreement, however, this amount has been shown as Rs.14,85,747/-.  It is to be seen, however, whether the OP DLF was within its rights to treat 15% of the total price as earnest money of the plot.  In a case recently decided by this Bench in “DLF Limited vs. Bhagwanti Narula,” RP No. 3860 of 2014, decided on 06.01.2015, we have taken the view that an amount exceeding 10% of the total price of the property cannot be forfeited by the seller as earnest money being unreasonable, unless the OP can show that it had suffered loss to the extent the amount was forfeited by it.  Applying the same principle in the present case as well, it is held that the OP DLF was competent to forfeit only 10% of the total amount of the plot in question as earnest money.  Since the total value of the plot including Preferential Location Charges (PLC), is Rs.99,04,986.10ps. as already indicated, 10% of the earnest money comes out to be Rs.9,90,500/-

11.           In so far as interest on delayed payments, stated to be non-refundable amount in the agreement is concerned, the OP deducted a sum of Rs.3,65,479.25ps in the cancellation letter. It is observed in this regard that the complainant made payments of a sum of Rs.12 lakh at the time of initial booking and then made two further payments in the last week of June 2011. Since no further payments were made, as per the terms and conditions of the allotment as contained in Para 65 of the plot-buyers’ agreement, the OP was well within its rights to initiate the process of cancellation of the plot after the first default in making payment of an instalment. In its own wisdom, if it decided not to do so immediately, it is not entitled to charge interest as non-refundable amount on the subsequent instalments in the wake of cancellation of plot. The letter of cancellation dated 23.05.2012 makes it clear that the plot-buyers’ agreement if executed, stood cancelled and the allottee shall not have any lien or right on the said property. It is held, therefore, that the OP cannot deduct a sum of Rs.3,65,479.25ps as non-refundable amount from the money deposited by the complainant.”

This view was reiterated by the Hon’ble National Commission in case titled Shri Harjinder S. Kang Vs. M/s Emaar MGF Land Ltd., Consumer Complaint No.482 of 2014 decided on 04.07.2016. 

                The aforesaid judgments clearly lay down that not more than 10% of the total price of the property, in question, as earnest money, can be forfeited.

15.           In the instant case, out of the basic sale price of the unit, in question, being Rs.28,20,000/-, the Opposite Parties could forfeit a sum of Rs.2,82,000/- only and the balance amount is refundable to the complainants. The Opposite Parties ought to have refunded the balance amount after forfeiting 10% earnest money. Thus, the complainants are held entitled to the refund of an amount of Rs.1,41,000.00  i.e. [Rs.4,23,000.00 (-) minus Rs.2,82,000.00]. By not refunding the aforesaid amount of Rs.1,41,000/-, the Opposite Parties indulged into unfair trade practice and the same also definitely amounted to deficiency, in rendering service, on their part. In fact the complainants committed default in making payment as per payment schedule from the very beginning. They were issued allotment letter on 11.11.2010 and as per payment schedule, payment in the sum of Rs.6,01,628/- was required to be made. However, as per Call Notice dated 17.11.2010, after taking into account Rs.4,23,000/- paid by the complainants, demand was raised for Rs.37,628/- only, payable by 27.11.2010. The Opposite Parties continued to utilize the amount of the complainants without cancelling the allotment despite default of the complainants w.e.f. 27.11.2010. Having not made the payment in accordance with the aforesaid schedule/demand raised, the complainants committed breach of the terms of the Buyer’s Agreement and consequently, the appellants were entitled in law to terminate the said Agreement. The Agreement, thus, stood rescinded on 27.11.2010. The case of the complainants is squarely covered by Shri Harjinder S. Kang Vs. M/s Emaar MGF Land Ltd.’s case (supra), wherein the National Commission, held in Paras 7 and 14, inter-alia, as under:-

“7.  …….As noted earlier, the complainant has made a total payment of Rs.84,74,750/- and admittedly no payment was made by him after 27.2.2013. As per the payment schedule agreed by him, he ought to have paid a total amount of Rs.1,03,24,750/- by 26.4.2013, a total amount of Rs.1,15,49,750/- by 25.6.2013 and a total amount of Rs.1,21,62,250/- by 24.8.2013. Having not made payment in accordance with the aforesaid schedule, the complainant committed breach of the terms of the Buyers Agreement. Consequently, the opposite party was entitled in law to terminate the said agreement.

 

14.           In the event of the failure of the allottee to make the timely payment of the sale consideration, the agreement could be terminated after a delay of more than thirty days from the due date. In the present case, the default on the part of the complainant occurred for the first time on 26.4.2013 since the instalment payable on that date was not paid in full. Therefore, the agreement could have been terminated on 26.5.2013. The opposite party however, failed to do so and continued to utilize the entire amount. The opposite party therefore, must compensate the complainant by paying compensation by way of interest on the balance amount of Rs.71,97,275/- with effect from 26.5.2013.”

 

The appellants were not only deficient in prolonging the matter for about two years but even when they cancelled the allotment, they did not refund the amount by forfeiting 10% of the earnest money. Till the aforesaid amount was refunded, there was cause of action to the complainants to seek refund of the same. The appellants were to forfeit 10% of the basic sale price and the complainants were entitled to refund of balance sum of Rs.1,41,000/- alongwith interest @12% per annum from the date they committed breach of terms and conditions of allotment of the unit, in question, by not making due payment on 27.11.2010.  The Forum erred in ordering refund of entire amount of Rs.4,23,000/-. To this extent the impugned order passed by the Forum needs modification.

16.           However, the compensation and litigation costs awarded by the Forum, to the tune of Rs.25,000/- and Rs.10,000/- respectively are kept intact being just and adequate.

17.           No other point was raised by the Counsel for the parties.

18.           For the reasons recorded above, the appeal is partly accepted. The impugned order passed by the Forum is modified in the manner that the appellants/Opposite Parties are, jointly and severally, directed:-

1. To refund the amount of Rs.1,41,000/- (instead of Rs.4,23,000/- as ordered by the Forum), to the respondents/complainants alongwith interest @12% p.a. w.e.f. 27.11.2010 till actual payment.
2. To pay a sum of Rs.25,000/- as compensation to the respondents/complainants on account of mental tension, agony, harassment, as awarded by the Forum.
3. To pay Rs.10,000/- as litigation expenses to the respondents/complainants, as awarded by the Forum.
4. This order be complied with by the appellants/Opposite Parties, jointly & severally, within one month from the date of receipt of a certified copy of the order, failing which, the appellants/Opposite Parties shall refund the amount of Rs.1,41,000/- to the respondents/complainants alongwith interest @18% p.a. from the date of filing the complaint i.e. 29.05.2015  till actual payment and compensation amount of Rs.25,000/- alongwith interest @18% from the date of filing the complaint i.e. 29.05.2015 till its realization, besides costs of litigation.”

19.           Certified copies of the order be sent to the parties free of charge.

20.           File be consigned to the Record Room after completion.

Pronounced

August   01,  2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

(DEV RAJ)

MEMBER 

 

 

 

(PADMA PANDEY)

      MEMBER