DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Complaint Case No.: 552 of 2010

                                                                                    Date of Institution : 30.08.2010

                                                                                      Date of Decision   : 01.04.2011

1.      Kartar Singh Rai S/o Sh. Gyan Singh Rai;

2.      Kanwar Inder Singh Rai S/o Sh. Inder Dev Singh Rai;

Bot residents of House No.514, Sector 8-B, Chandigarh.

                                                                                    ---Complainants.

V E R S U S

1]      Parsvanath Developers Limited, through its Director, SCO No.1, First Floor, Madhya Marg, Sector 26, Chandigarh.

2]         The Director, Parsvanath Developers Limited, Regd. & Corporate Office, 6th Floor, Arunachal Building, 19 Barakhamba Road, New Delhi 110001

3]         The Chairman, Chandigarh Housing Board, 8 Jan Marg, Sector 9, Chandigarh.

---Opposite Parties

QUORUM                 SHRI LAKSHMAN SHARMA                  PRESIDENT

                                    SHRI ASHOK RAJ BHANDARI  MEMBER

PRESENT:                Sh.Arun Kumar, Advocate for the complainants.

Sh. Rahul Sharma, Advocate for OPs No.1 and 2.

Sh. K. K. Gupta, Advocate for OP No.3.

PER LAKSHMAN SHARMA, PRESIDENT

                        Sh. Kartar Singh Rai etc. have filed this complaint under Section 12 of the Consumer Protection Act, 1986 praying for the following reliefs:-

i)                   To refund a sum of Rs.16,94,075/- deducted by OPs along with interest @ 18% from the date of its receipt till realization. 

ii)                Pay a sum of Rs.2 lacs as compensation for mental agony and harassment.

iii)              Pay a sum of Rs.50,000/-   as costs of litigation.

2.                     In brief, the admitted facts of the case are as under:-

                        Dr. Monica Jain W/o Sh. Puneet Jain applied for a residential flat by depositing Rs.2,57,000/- along with the application form on 12.09.2007. She was allotted one bedroom flat No.301, 3rd floor (Category E) in Block No.E-1, in the project of OP No.1 & 2 i.e. Parsvnath Prideasia at Rajiv Gandhi Chandigarh Technology Park, Chandigarh vide allotment letter dated 11/15.10.2007. The balance amount was to be paid as per construction linked payment plan.

                        According to the complainant, Dr. Monica Jain (who was the initial allottees of the flat) was not interested to keep the said flat. Therefore, she sold it to the complainant. An agreement to sell dated 23.11.2007 for Rs.2,57,000/- was executed. The complainants paid Rs.2,57,000/- to Dr. Monica Jain.  OPs No.1 and 2 were informed accordingly and the complainants were substituted as new allottees on 4.2.2008.  The remaining payment was to be made by the complainant to OPs 1 and 2 as per the construction linked plan. As per the agreement dated 18.2.2008 executed between OPs No.1 & 3, the construction of the flats was to be completed by OPs No.1 & 2 within 36 months from 6.10.2006.  It has been further pleaded that apart from the above said amount of Rs.2,75,000/-, the complainant also paid a sum of Rs.14,37,075/- to OPs No.1 and 2, thus making it a total of Rs.16,94,075/-. According to the complainants, OPs No.1 & 2 failed to make any development at the site. So dissatisfied with the act & conduct of OPs, the complainants sought refund of the amount of Rs.16,94,075/- along  interest.  As per the complainants, OP deliberately pocketed the money from the complainants and failed to start the construction on the site. Despite it, they refused to refund the amount. So, it amounts to deficiency in service as well as unfair trade practice on their part.

                        In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.

3.                     On the other hand, the case of OPs No.1 and 2 is that the Chandigarh Administration was desirous of developing residential, commercial and other related infrastructure facilities as an integrated project at Rajiv Gandhi Chandigarh Technological Park in Chandigarh. A land measuring approximately 123.79 acres with private sector participation was earmarked for this purpose. It invited bids/proposals from private parties for this activity. It is next asserted that OP No.1 had submitted its proposal with the Chandigarh Administration, which was accepted vide their letter of acceptance (No.HB/EE-II/2006/2437) dated 09.06.2006. Thereafter an agreement was signed between OP No.1 and OP No.2 which is known as the “Development Agreement”. The relevant terms and conditions of the said agreement are as under:-

“2.2.1              The "Development Period" shall be a total  period of 36 Months (including 24 Months of construction period) starting from the Agreement Date. The Development Period includes (a) the period of 12 Months starting from Agreement Date within which the developer shall obtain all requisite Approvals     including    environmental clearance/s 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 are to be completed by the Developer.

2.2.2               Provided further that in the event of any delay attributable to the CHB in handing over possession of the CHB's Asset to the Developer, the said period of 36 Months shall commence from the date the CHB's Asset are actually handed over to the Developer. For the avoidance of doubts, the Developer shall be obliged to procure from CHB a letter recording the date on which such hand over of assets would have been, effectuated by CHB, which date shall be the "start" date for calculation of the said period) of 36 Months."                   

4.                     The case of the OP No.1 is that soon after taking possession of the land measuring 123.79 acres, OP No.1 started erection of fencing around the said land. However, the Government of Haryana claimed ownership over a portion of the said land. OP No.1 was thus stopped from carrying out its activities. Despite the fact that OP No.1 had taken up the matter with Chandigarh Administration a number of times and a number of meetings were held between OPs No.1 and 2 and the State of Haryana; the matter regarding the ownership of the land allotted to OP No.1 still remains unsettled.  In these circumstances according to OP No.1, the construction work could obviously not be started, and the possession of the flat could not be delivered to the complainant within the stipulated period of 12 months. The said period of 36 months, according to OP No.1, shall commence from the date of delivery of the possession of the total land to it by OP No.2 as per agreement Clause 2.2.2. In these circumstances, according to OP No.1, the delay in construction of the flats and delivery of the possession is not because of the fault of OP No.1. It has further been pleaded that if the complainants want refund of his amount, they were required to get the allotment cancelled and only thereafter, they would be entitled to the refund of the deposited amount after deduction of 5% of its basic price as per Clause 5(a) of the Flat Buyers Agreement. In these circumstances, according to OPs No.1 and 2, there is no deficiency in service or unfair trade practice on their part and the complaint qua them deserves dismissal.

5.                     In the reply filed by OP No.3-C.H.B., it has been pleaded that Flat Buyer Agreement was signed between all the three parties i.e. complainant, CHB and Developer. As per clause 9(a) of the said agreement, OPs No.1 & 2 were required to complete the construction within 36 months of the signing of the agreement and under clause 9(e) of the said agreement, it is the Developer who was responsible for non-completion of the construction within the stipulated period.  According to OP No.3, as per Clause 5(a) of the Flat Buyer Agreement, in the event of the allottee’s seeking the refund of the deposited amount, the same was to be refunded to the allottee after deducting 5% of the basic price of the flat from the deposited amount and thus, the complainants are only entitled to that extent In these circumstances, according to OP No.3, there is no deficiency in service on its part and the complaint deserves to be dismissed.

6.                     We have heard the learned counsel for the parties and have gone through the entire record including documents, annexures, affidavits etc and the written arguments filed by the parties.

7.                     Admittedly, the complainants deposited a sum of Rs.16,94,075/- with OPs No.1 and 2 towards the cost of the said flat and this fact has also been admitted by the OPs No.1 & 2 in Para No.4 of the preliminary submissions and para No.7 of their written statement. It is also admitted case of the parties that the OPs have failed to construct the flats so far. It has also been admitted that nothing has been refunded to the complainants so far. According to OPs, they are liable to refund of the deposited amount after deducting 5% of the basic price of the flat, which comes to Rs.2,57,150/-. 

8.                     In the present case, the only question which needs determination is that whether OPs are justified in retaining the amount deposited by the complainants?

9.                     It has been argued by the learned counsel for the complainant that OPs have illegally retained the amount of Rs.16,94,075/- and the complainants are entitled to the refund of the said amount. Admittedly, the complainant had deposited a total sum of Rs.16,94,075/- from time to time. However, the OPs failed to commence the construction of the flats. So the complainants moved an application dated 5.10.2009 for refund of the total amount as they could not wait for an unlimited period for delivery of possession of the flat. The said application was duly received by OPs No.1 and 2, followed by number of reminders. But nothing was heard from the side of the OPs.

10.                   It was argued vehemently by the learned counsel for the OPs that the complainants are only entitled for the refund in accordance with Clause 5 of the Flat Buyers Agreement, which reads as under: -

 “5(a)               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 or 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.”

11.                   To our mind, clause 5(a) of the Flat Buyers Agreement relied upon by OPs No.1 and 2 is not applicable in the present set of circumstances. As per this clause, timely payment is the essence of the agreement and if the payment is not made within the period stipulated and buyer commits breach of any of the terms and conditions of this agreement, the developer has a right to cancel the allotment and in that eventuality the developer has the right to forfeit 5% of the basic price.

12.                   In the present case, the complainants have not made any breach of the terms and conditions of the agreement. There is no default in payment of any installment. Rather the complainants have paid a sum of Rs.16,94,075/- before time. So, Clause 5(a) of the Flat Buyers Agreement is not applicable to the facts and circumstances of the present case. Therefore, OPs cannot deduct 5% of the basic price i.e.Rs.2.57 lacs while refunding the deposited amount. Even the allotment has not been cancelled for any alleged breach of contract from the side of the complainant.

13.                   Thus, the OPs are clearly deficient in retaining the total amount deposited by the complainants to the tune of Rs.16,94,075/-, when they themselves have not fulfilled their part of contract.

14.                   To our mind, in the circumstances of the case in hand, the refund should have been made as per clause 9(d) of the Flat Buyers Agreement which reads as under:

 “9(d)              If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the project, or if due to any force majeure conditions, the developer is unable to deliver the unit to the buyer, the developer and CHB shall be liable to refund to the buyer the amounts received from the buyer with interest at the SBI term deposit rate as applicable on the date of refund.”

15.                   In the present case, OPs have failed to deliver the possession within the period prescribed in the Flat Buyers Agreement due to some dispute over a portion of land. So both M/s Parasvnath Developers Ltd. and Chandigarh Housing Board are liable to refund the amount to the complainants with interest at the current SBI term deposit rate as per the agreement. Failure on the part of OPs to refund the entire amount along with interest amounts to deficiency in service. 

16.                   Faced with this situation, it was argued by the learned counsel for the OPs that as the project has not been abandoned, nor the OPs have  become unable to deliver the unit to the buyer. Therefore, Clause 9(d) is not applicable in the present case. To our mind, the argument advanced by the learned counsel for the OPs has no force. As per the Flat Buyer Agreement, the OPs were required to deliver the possession within 36 months from 06.10.2006. Admittedly, the OPs have failed to do so. The complainants cannot be forced to wait for indefinite period for the possession of the flat. So even if the project is still continuing, the failure to deliver the possession within reasonable time amounts to inability in delivery of possession.

17.                   Thus, the complainant is entitled for the refund of the total deposited amount of Rs.16,94,075/- along with interest at the current SBI term deposit rate from the dates of respective deposits till the dates of its realization.  In addition to this, the complainants are also entitled to a compensation of Rs.50,000/- for mental agony and harassment besides Rs.7,000/- as costs of litigation.

18.                   In view of the above findings, this complaint is allowed with following directions to OPs to:-

i)         Refund the amount of Rs.16,94,075/- to the complainants along with interest at the current SBI term deposit rate from the respective dates  till actual payment.

iii)       Pay Rs.50,000/- to the complainants as compensation for causing mental agony and harassment

iv)        Pay Rs.7,000/- to the complainants as costs of litigation.

19.                   This order be complied with by OPs jointly and severally within 45 days from the date of receipt of its certified copy, failing which OPs shall be liable to pay Rs.17,44,075/- i.e. [Rs.16,94,075 + Rs.50,000] along with interest @18% per annum. The above said interest shall be payable on Rs.16,94,075/- from the date of respective deposits whereas the above said interest shall be payable on the amount of compensation of Rs.50,000/- from the date of filing the present complaint i.e.30.8.2010 till actual payment. In addition to this, OPs are also liable to pay Rs.7,000/- as costs of litigation.

20.                   Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

1^st April 2011.

Sd/-

 (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(ASHOK RAJ BHANDARI)

MEMBER

Ad/-

C.C.No.552 of   2010

PRESENT:    None.

                                                                        ---

                        Arguments heard on 17.05.2010. The case was reserved for orders. As per separate detailed order of even date, this complaint is allowed. After compliance file be consigned.

Announced.

01.04.2011                            Member                                 President