DR. INDER JIT SINGH, MEMBER

1.       The present First Appeal (FA) has been filed by the Appellant against Respondents as detailed above, under section 19 of Consumer Protection Act 1986, against the order dated 13.05.2015 of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) No. 221/2012 inter alia praying for setting aside the order dated 13.05.2015 passed by the State Commission in CC/221/2012. 

2.       The Appellants were Opposite Parties before the State Commission and the Respondents were Complainants in the said CC/221/2012 before the State Commission. Notice was issued to the Respondents on 01.07.2016.  Parties filed their Written Arguments/Synopsis on 18.11.2016 (Appellants) and 07.10.2016 (Respondents) respectively.

3.       The present Appeal has been filed with a delay of 73 days as pointed out by the Registry.  IA/5912/2016 has been filed for Condonation Delay.  Delay in filing the First Appeal is condoned after hearing both sides and after considering the reasons mentioned in the application for condonation of delay and those adduced during the hearing.

4.       Brief facts of the case as presented by the complainants and as emerged from the First Appeal, Order of the State Commission and other case records are that: -

The complainants/Respondents herein are Non-Resident Indian (NRI).  On 20.06.2009, the complainants had booked Flat/Unit scheme of Opposite Party namely, “KINGSBURY TERRACE GARDEN” in TDI City, Kundli, Sonepat (Haryana) @2200/- per Sq.Ft. under construction linked plan along with 15% Registration Charges. Vide allotment letter dated 23.10.2010, a Unit No. TB-0603, admeasuring about 2400 sq.ft. in the said scheme of the OP was allotted to the Respondents and the complainants/Respondents deposited/paid total amount of Rs.37,25,346/- on various dates (till 20.12.2011), which was duly acknowledged by the OP-1. The agreement to sell dated 08.05.2009, proposed to give possession of the said flat to the complainants within 36 months from the date of the signing of the agreement to sell, i.e., by May 2012. The complainants received a letter dated 21.02.2012, of cancellation of provisional allotment of their unit from authorized person of OP-1 stating therein that due to non-payment of dues they have cancelled the provisional allotment of the unit, as per company’s policy, of the complainants. The OP-1 without informing or giving any notice to the complainants, cancelled the allotment in an arbitrary and illegal manner.  On 22^nd, 23^rd and finally on 26^th March 2012, Sh. Manmohan Singh, the representative of Complainants, visited the office of the OPs at G-7 Connaught Circus, who refused to listen to the complainants and threatened him also saying that there was nothing wrong in their actions.  The OP also stated that the possession of the flat has been handed over to Sonia Verma (OP-4 before the District Forum).  The OP thus failed in performing its part of the agreement even after receiving the consideration for the same.  The complainants issued legal notice on 31.03.2012 and filed consumer complaint before the State Commission.

5.       Vide Order dated 13.05.2015, the State Commission has allowed the complaint and directed the OP to a) to refund to the complainants the amount of Rs.37,25,346/- alongwith interest @9%; b) to pay compensation to the tune of Rs.50,000/-;  c) to pay litigation charges of Rs.10,000/-.

6.       Appellant(s) have challenged the Order dated 13.05.2015 of the State Commission mainly on following grounds:

i)       The impugned order is erroneous and liable to be set aside on account of the fact that the same is not a speaking order.  The impugned order does not deal with any of the defenses raised by the Appellants.  The impugned order thus, does not speak for itself, hence, cannot be sustained.

ii)       The impugned order is erroneous as the same has been passed without any consideration to the factual matrix of the case.  The State Commission does not give any reasons on the basis of which the impugned order has been passed. There is no deliberation of any kind which is reflected in the order which could provide an insight into what weighed with the State Commission and led to passing of the said order.  The impugned order is on the basis of conjectures and surmises.  The operative part of the impugned order is entirely based on the supposition that the “dream of the Complainants of having their own home is shattered”.  The complainants themselves have not pleaded any such facts and yet words have been forced into the mouths of the Complainants in order to lay some basis to the impugned order. The impugned order is in blatant contradiction of the facts.  The impugned order has been passed on the basis of an incorrect fact that the complainants have been deprived of their dream home, it has not even been considered that the complainants are not even residents of the country.  ‘the complainants being NRIs cannot be envisioning their ‘dream home’ in India especially on account of lack of pleadings.

iii)      The impugned order does not take into consideration that by virtue of not being residents of the country and in light of the fact that the complainants have thus necessarily made the present booking by way of an investment.  The complainants do not fall in the category of ‘consumers’ as defined in Section 2(d) of the Consumer Protection Act, 1986.

iv)      The State Commission failed to appreciate the misconduct of the Respondents as even they had admittedly not made the payment of the instalments as per the progress of the project, they did not approach the Appellant to consider their case for late payment or for any other request/settlement. The Respondents having dishonest intentions chose to directly approach the State Commission, Delhi and that too only after the provisional allotment had been cancelled by the Appellant.  The State Commission failed to appreciate that the Respondents cannot be permitted to take advantage of their own wrong.  The Respondents failed to make the payments as per the schedule which was directly linked to the further progress of the project. The State Commission failed to appreciate that the contract had already been cancelled.  Now the Respondents cannot be permitted to agitate a cause that would amount to revival of the contract as the same is beyond the scope of the Act.

v)      The State Commission has failed to appreciate that even though the Appellant has suffered serious pecuniary loss on account of omission of the Respondents to pay the amount due from them, the Appellant even then offered to refund the deposited amount to the Respondents after making necessary deductions as per the terms agreed upon between the parties.  The Respondents refused the same even though they have violated the terms of the Agreement.

vi)      The State Commission has failed to appreciate that the one who seeks equity must be willing to discharge their part of the obligation as well.  In the present case, the Respondents did not make the payment as per the agreed schedule as a result of which the Appellant suffered pecuniary loss and despite such defaults, the Appellant made all possible efforts to ensure that the development of the project does not fall behind.

vii)     The State Commission has failed to appreciate that the Respondents were not genuine consumers and had invested in the project only with a view to make profit.  The Respondents are NRIs and nothing brought on record to establish that the commodity was not bought for any purpose other than pure investment.  The impugned order is contrary to facts and law on record.  If the Respondents succeed in their malafide action, the Appellant will suffer irreparable loss and injury and will be left remediless. 

7.       Heard learned counsel of both sides. Contentions/pleas of the parties, on various issues raised in the FA, based on their FA/Reply, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

1. 1           In addition to the averments under grounds (para 6), the Appellant contended that despite the Appellant issuing demand letters dated 28.01.2011 and 14.02.2011, the Respondents did not clear the money due from him in a timely fashion.  After issuing demand letters dated 28.01.2011, 14.02.2011, 18.04.2011, 17.10.2011 and 07.12.2011, the Appellant was constrained to issue the pre-cancellation letter on 23.01.2012.  The persistent defaults of the Respondent forced the hand of the Appellant in issuing the pre-cancellation letter.  The second pre-cancellation dated 03.02.2012 was issued prior to the final cancellation letter on 21.02.2012, wherein the Appellant offered to refund the amount in terms of the contract. The Respondent chose not to avail this offer.  The Respondent thereafter proceeded to file the complaint against the Appellant.  The prayer in the complaint was for handing over physical vacant possession of the Apartment and not for refund.  The State Commission passed an order directing refund of the entire amount deposited by the Respondent.  It is further contended that a non-speaking order cannot be sustained.  (Relied upon judgment passed by the Hon’ble Supreme Court in Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Anr. It is also contended by the Appellant that the parties are bound by the terms of the contract between them. The State Commission failed to consider the fact that the Respondents did not comply with the terms of the Agreement and did not make timely payment of the instalments due on their behalf.  Timely payment of instalments was the essence of the Agreement and on failure to comply with the terms and conditions of the Agreement, the Appellant was entitled to cancel the allotment of the flat in accordance with the terms and conditions of the Agreement and company policy.  (Relied upon judgment of Hon’ble Supreme Court in the case of Bharathi Knitting Co. Vs. DHL Express Courier Division of Airfreight Ltd. It is also contended that in the absence of pleadings, NRI cannot be said to be covered under the definition of a Consumer under the Consumer Protection Act.  (Relied upon the judgment passed by this Commission in Satish Kumar Gajanand Gupta Vs. M/s Srushti Sangam Enterprises (India) Ltd.  In view of the judgment passed by the Hon’ble Supreme Court in Satish Batra Vs. Sudhir Rawal, the Appellant rightly cancelled the allotment in favour of the Respondents and forfeit the earnest money. The Appellant also relied upon  the judgment passed by the Hon’ble Supreme Court in “Housing Urban development Aurhority & Anr. Vs. Kewal Krishan Goel & Ors. It is further contended that the Court cannot travel beyond the pleading.  (Relied upon the judgment passed by the Hon’ble Supreme Court in Bharat Amratlal Kothari Vs. Dosukhan Samadkhan Sindhi & Ors. In support of its contentions the Appellant also relied upon the judgement passed by the Hon’ble Supreme Court in Kailash Nath Associates V. Delhi Development Authority [(2015) 4 SCC 136]. 

1. 2 On the other hand Respondents contended that the appeal has been filed on frivolous grounds.None of the grounds raised by the Appellant are relevant as the Appellant has assumed the authority and jurisdiction of the Court by unilaterally and arbitrarily cancelling the Agreement which was duly executed on 23.01.2010 between the parties. There is statutorily no provision of automatic cancellation of any agreement.The Appellant was delinquent in meeting the conditions of the agreement, but its intention was always malafide which is evident from the fact that- a) Flat No. TB-0603, allotted to Respondents vide Provisional Allotment letter dated 23.01.2010 b) The Appellant issued last demand letter dated 17.10.2011, directed the Respondents to make the payment of the instalment of Rs.2,99,226/-; c) the Respondents made the last payment of Rs.2,99,226/- through cheque dated 20.12.2011 as demanded by the Appellant vide its last demand letter dated 17.10.2011; d) the Appellant allotted the said flat in question one Ms. Sonia Verma, vide its letter dated 28.01.2012 ; e) the Appellant intentionally and deliberately encashed the cheque amounting to Rs.2,99,226/- on 13.02.2012, which was made by the Respondents as per the demand of the Appellant after allotting the flat in question to Sonia Verma; f) The Appellant cancelled the allotment vide Cancellation letter dated 21.02.2012 after encashing the above cheque of amount of Rs.2,99,226/- on 13.02.2012 after allotment of the flat in question to Sonia Verma on 28.01.2012.It is further contended that in view of the above, the Appellant is not only liable to refund the amount paid by the Respondents in terms of the order passed by the state Commission on 13.05.2015, clarified on 14.07.2015, but is also criminally liable for alienating/re-selling the flat in question to Sonia Verma, inspite of existing agreement with the Respondents.An additional exemplary cost of at least Rs.10 lakhs may be imposed on the Appellant for their malafide action.This Commission may also initiate action against the Appellant as provided under Section 13(5) of the Consumer Protection Act.

8.       Short point for determination in the present case is whether the Appellant/OP builder is entitled to forfeit earnest money while refunding the amount paid by the Respondent/Complainant, if yes, how much.  State Commission in its order dated 13.05.2015 has ordered refund without any forfeiture of earnest money.  Before the State Commission, the complainants have contended that OP did not raise any demand after they deposited the amount of Rs.37,25,346/-.  The only communication received from the OP is letter dated 21.02.2012 vide which OP cancelled the allotment stating that the Complainants had failed to clear the outstanding dues.  Complainants also contended that OP prior to the aforesaid cancellation allotted the flat in question in favour of one Sonia Verma on 10.03.2012, and placed on record a document dated 30.01.2012 showing that the allotment of the flat in favour of Ms. Sonia Verma had been initiated on 30.01.2012.  OP on the other hand had contended before the State Commission that Complainants were defaulting in making timely payments.  OP wrote letters dated 28.01.2011, reminders dated 14.02.2011, 14.05.2011 & 18.04.2011 were also sent.  However, the Complainants contended that as per reminder dated 18.04.2011 and 17.11.2011, the outstanding amount was shown as nil. Another letter dated 04.05.2011 was sent by OP showing outstanding amount as Rs.2,92,428/- , and that they paid the said amount on 13.02.2012.  State Commission observing “it is shocking to note that OP after having received part outstanding amount on 13.02.2012, issued a letter of cancellation on 21.02.2012, and that Complainants got their flat booked in the year 2009, so far they have not been able to receive possession, dream of the Complainants of having their own home is shattered”, ordered refund.  During the hearing before this Commission, OP contended that under the provisions/terms and conditions of Application Form, in case of failure on the part of Complainants to pay due instalments, OP is entitled to forfeit earnest money, which is 20% of the sale consideration.  OP drew our attention to following clauses of the application form’s terms & conditions:

“6.          Applicant(s) understand that 20% of the Sale Consideration shall always form as Earnest Money.

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9. Applicant(s) understand that its failure to pay any instalment(s) with interest within 90 days, from due date, the Company shall have the right to cancel the allotment and forfeit the entire amount of Earnest Money and the Applicant(s) shall be left with no right, claim or lien on the said Apartment.The amount paid, if any, over and above the Earnest/Registration money shall be refunded by the Company without interest after adjustment of interest accrued on the delayed payment(s), if any, or any other charge due from the Applicant(s).”

9.       Our attention was also drawn to pre-cancellation letter dated 23.01.2012, wherein the outstanding amount is shown as Rs.7,30,072/- and the Complainant was given time upto 01.02.2012 to deposit the same, stating that in case of any further delay, OP would be constrained to cancel the allotment.  Again, another pre-cancellation dated 03.02.2012 was issued giving time to deposit the outstanding amount of Rs.7,30,072/- by 13.02.2012. There is a receipt on record dated 13.02.2012 issued by OP showing receipt of an amount of Rs.2,99,220/- vide cheque dated 20.12.2011 giving description as “At the start of 9^th floor unit charges”.  Then there is a cancellation letter dated 21.02.2012, contents of which are reproduced below:

“Subject: Cancellation of provisional allotment of Unit No. TB-0603 at "Kundli Terrace Garden" in TDI City, Kundli, Sonepat.

Dear Sir/Madam,

This is in reference to the provisional allotment of Unit No. TB-0603 in TDI City at Kundli, Sonepat.

It is to bring to your notice that the said Provisional Allotment was made subject to certain terms and conditions, foremost being, your strict adherence to the payment schedule.

But on verification of your accounts, it has been noticed that you have failed to clear your outstanding till date and we would like to inform you that due to non-payment of dues we hereby CANCEL the provisional allotment of the unit as per company's policy, with immediate effect.

You are requested to submit the necessary documents which will enable us to process your refund (if any) which shall be as per company's policy.

We would also like to inform you that henceforth you are left with no Right, Title, Interest or Claim over the said unit.”

10.     It is important to note that notwithstanding the terms & conditions of Application Forum cited in preceding paras, which gives the Petitioner right to cancel the allotment in case of failure of Complainant to pay due instalments and forfeit the entire amount of earnest money (20% of sale consideration), in neither the pre-cancellation letter dated 23.01.2012 and 02.02.2012, nor in the cancellation letter dated 21.02.2012, OP has either conveyed any specific decision to forfeit the earnest money or made any mention of its intention to forfeit the earnest money.  It only states “you are requested to submit the necessary documents which will enable us to process your refund (if any) which shall be as per Company’s policy”. 

11.     Our attention was drawn by Complainants to request dated 08.01.2012 from Ms. Sonia Verma where the unit allotted to the Complainants is seen approved on 30.01.2012. The Annexure which is dated 10.03.2012, shows Applicant’s name as Ms. Sonia Verma, and shows booking amount has been received vide cheques dated 10.02.2012. 

12.     OP has argued that State Commission has passed a non-speaking order, the Complainants have sought restitution of his cancellation and had prayed for handing over the property, the said relief was not considered by the State Commission, no reasoning has been recorded to order refund, State Commission did not even consider that refund was not asked.  In this regard, OP relied upon the judgment of Hon’ble Supreme Court in Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Ors. , (2010) 9 SCC496.  OP further contended that in the absence of pleadings, a Non-Resident Indian cannot be said to be Consumer under the definition of Consumer under the Consumer Protection Act, Court cannot travel beyond pleadings, as Complainants have sought allotment, refund could not have been ordered.  In this regard, OP relied upon judgment of Hon’ble Supreme Court in Bharat Amratlal Kothari & Anr. Vs. Dosukhan Samadkhan Sindhi & Ors. (2010) 1 SCC 234.  OP also relied on judgment of Hon’ble Supreme Court in Kailash Nath Associates V. Delhi Development Authority (2015) 4 SCC 136.

13.     After careful consideration of all the facts & circumstances of the case, we are of the considered view that on account of the facts that OP has not specifically exercised its right of forfeiture of earnest money while issuing pre-cancellation letter dated 23.01.2012 and 03.02.2012 and cancellation letter dated 21.02.2012, and having accepted part payment on 13.02.2012 vide cheque dated 20.12.2011, was not justified in issuing cancellation letter on 21.02.2012. Having received part amount of Rs.2,99,220/- vide cheque dated 20.12.2011, date of receipt of which by OP is in dispute, OP was possibly not justified in mentioning in the pre-cancellation letter dated 23.01.2012 that amount due is Rs.7,30,072/-. They have already initiated the process of sale to a third party even before cancellation. Therefore, the OP cannot forfeit any earnest money even if Complainants have defaulted in some payments. Hence, notwithstanding that State Commission, has not given elaborate reasons in support of its final order, we are in agreement with the final findings of State Commission, for which State Commission has given reasons in brief in its order.  We are in agreement with the final directions of State Commission in ordering refund with interest, without forfeiture of any earnest money.  We find no illegality or material irregularity in the order of the State Commission, hence, the same is upheld.  Accordingly, the First Appeal is dismissed.

14.     The pending IAs in the case, if any, also stand disposed off.