Delhi

StateCommission

CC/10/332

ASHWANI GUPTA - Complainant(s)

Versus

PURE EARTH INFRASTRUCTURE LTD & ANR. - Opp.Party(s)

25 Jan 2019

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments :25.01.2019

Date of Decision : 07.02.2019

COMPLAINT NO.332/10

In the matter of:

 

Mr. Ashwani Gupta,

D-18, Chandra Naga,

Ghaziabad-201011.                                                                        ………Complainant

Versus

 

1. Pure Earth Infrastructure Ltd.,

(Formerly known as “DCM Estate & Infrastructure Ltd.),

Through its Chairman,

6.  

4 Rajendra Place,

New Delhi-110008.

 

2. Mr. Ravi Shanker Thakur,

General Manager (Corp) & Company Secretary,

Pure Earth Infrastrucutre Ltd.,

Manohar Lal Khurana Marg,

•  

 

 

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                     Yes/No

2.      To be referred to the reporter or not?                                                                                                           Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

1. The complaint is based on the averments that OP came out with a plan of building apartments under the name of ‘DCM Green Acres’ in 1997. One Ms. Sangeeta Gupta booked residential apartment measuring 1500 sq. ft. on 2^nd floor in aforesaid project. Later on she requested OP to substitute complainant’s name. No objection letter signed by complainant and Ms. Sangeeta Gupta was given to OP. Ms. Sangeeta Gupta requested OP that Rs.3 lakhs paid by her to the OP as booking amount may be adjusted in the account of complainant. The complainant paid Rs.2,62,500/- alongwith application for transfer of booking. OP informed about inclusion of complainants name. (Annexure C-5 at page-20. Though it is shown as service charges but during argument it was pointed out that same is transfer charges.)
2. Complainant paid Rs.37,500/- on 05.11.96, Rs.2,62,500/- and Rs.3,75,000/- on 17.12.96.He were provisionally allotted unit no.RA002 vide letter dated 27.02.98. After paying Rs.9,75,000/- he inquired regarding the status of the project and made several visits to the office of the OP but no specific information was given. Vide letter dated 18.06.99 OP stated that construction would start around December, 1999.
3. OP wrote letter on 29.08.05 informing the complainant that it had changed and rebranded its name as Purearth Infrastructure Ltd. The letter also stated that it had transferred  booking flat no.EGA 2 alongwith  booking of amount in the books of purearth Infrastructure Ltd. Vide letter dated 28.11.08 OP informed complainant that he has been provisionally allotted T 10/716 in ‘Park Square Project’ and OP was in advanced stage of starting construction of apartments. OP demanded Rs.9,74,540/- to be deposited on or before 15.12.08. The complainant informed OP that he had already paid Rs.25% of the flat cost amounting to Rs.9,75,000/- 12 years back only on the assurance that construction would soon start. Further demand should not arise until the company start construction of the project ‘Park Square’. OP sent reply dated 19.12.08 asking the complainant to meet Mr. Ravi Shanker Thakur of OP. Without waiting for the meeting, OP issued final notice warning him to make payment as per statement of account latest by 15.01.09 alongwith interest @24% per annum failing which  booking was to stand cancelled. OP again issued final notice dated 16.01.09. A final reminder was issued on 10.02.09.
4. Complainant vide letter dated 19.09.09 brought to the notice of OP that recovering 40% of revised flat cost without starting  construction is not justified. The OP issued cancellation letter dated 04.09.09 and sent back  cheque of Rs.4,87,500/- after deducting earnest money of Rs.3,79,000/- (sic. It should be Rs.3,75,000/- Annexure C-18 at page-41. Brokerage of Rs.75,000from total amount of Rs.9,37,500/- has also been deducted for which there was no justification). Complainant wrote letter dated 20.10.09 requesting OP to consider reinstatement and reconsider unjustified cancellation. He assured that he would make the payment after getting information regarding construction schedule and would returned the cheque of Rs.4,75,000/-. He returned the cheque of Rs.4,87,500/- dated 04.09.09 drawn on HDFC Bank. Still there is some discrepancy in the figure mentioned in para-25 of the complaint. Hence this complaint for directing OP to reinstatethe allotment of unit T-10/716 and withdraw cancellation letter dated 04.09.09. In ths to pay Rs.9,75,000/- alongwith interest @24% per annum.
5. The OP filed WS raising preliminary objection that complaint is bad for misjoinder of parties. OP-2 is merely an employee of OP-1 and has acted on behalf of OP-1. Complainant had impleaded OP-2 to exert pressure on OP-1 to sccumb to its untenable demand. Simply because complainant has paid provisional amount for booking, does make him consumer. None of them is obtaining service or rendering  service. Agreement to sell  or unit buyer agreement had not been entered into.
6. The project land at Bara Hindu Rao belongs to DCM Ltd. which started its operations in 1889. Pursuant to master plan 1962 DDA required DCM to shift its Mill from project site as it was situated in non confirming area. The Mill was ordered to be closed down by Delhi High Court said order was up held by Supreme Court of India. Lt. Governor permitted closure of DCM’s factory vide  order dated 30.03.89. DCM entered into an agreement in 1986 with M/s. Kailash Nath Associates to develop the land. Given the enormity of the project M/s. Ansals Properties and Industries Ltd. was also engaged by the DCM Ltd to develop the land with Kailash Nath Associates and a tripartite agreement was executed in 1988. As per the agreement, Erstwhile Builders had right to construct and develop the project and sell certain amount of built up area. The Erstwhile Builders made certain provisional bookings in the said project and also commenced construction in 1996. Due to certain acts of omission and commission on the part of the Erstwhile Builders, the project was stopped by MCD. They were not in a position to raise resources required to complete the project. So DCM Ltd terminated their agreement which resulted in litigation between DCM and Erstwhile Builders. In 2000 the infrastructure Ltd (DEIL), now known as Purearth Infrastructure Ltd. filed back to back scheme of restructuring and arrangement CP No.247/00 and CP No.251/00 before Delhi High Court under Section 391-394 Companies Act 1956. The scheme were passed on 29.10.03 and 30.10.03 respectively by High Court of Delhi. A settlement was arrived at between DCM, OP and DCM Techno Plaza and Green Acres Flat Buyers Association on 10.05.03 which was made part of the scheme by High Court of Delhi. The same became effective from January, 2004.
7. Permission for the project was given by MCD on two conditions, first was construction towards flyover which was meant to decongest the area, second condition was construction of two schools – one primary and other secondary school. Primary school has been constructed and hand over to MCD secondary school has also been constructed. Presently the schools were running  properly. All  encroachments on the land have been removed. Land had been levelled. Due to changed environmental  norms and fire norms, the layout  plan of residential project had to be resubmitted before the layout committee or MCD for fresh approval. The same was still pending and awaited.
8. Right from the inception of registration, complainant started defaulting in timely payment of instalments. Complainant was issued letter  dated 24.05.97 for making payment of Rs.1,87,500/. Vide letter dated 16.11.97 complainant sought refund of amount paid by him alongwith interest. The same was not tenable as OP was  involved in litigation with Erstwhile Builders. The OP offered revised payment plan option to the complainant vide letter dated 28.11.98. Complainant again showed his adamency to get refund of the amount and issued letter dated 21.01.02, After lapse of almost one year complainant sent letter dated 18.05.06 alongwith necessary enclosure to complete formalities of registration
9. On merits OPs took the same defence.
10. The complainant filed rejoinder reaffirming his own case as set up in the complaint and controverting the defence of the  OP. He also filed his own affidavit in evidence. He referred to the documents EX.CW1/1 to CW-1/27.
11. There is no evidence on behalf of OP. On 27.05.13 OP was allowed one week time to file evidence. On 10.10.13 mater was referred to mediation where it could not be settled. Thereafter case was fixed for written arguments by OP.
12. Both the parties have filed written arguments. I have gone through the material on record and heard arguments. The counsel for the complainant submitted that booking was done in 1996 and  now we are in 2019. OP has not yet handed over possession of the flat. So it is a case of clear cut deficiency on the part of OP. He pointed out that complainant has made prayer for allotment of the unit. At the same time complainant had made alternative prayer for refund.
13. Counsels for the complainant drew my attention towards letter dated 11.12.08 sent by complainant to the OP which is Annexure C/12 and is placed at page-32 of bunch of the complaint. The complainant has mentioned therein that he has already paid 25% of the cost of flat  12 years back, letter dated 28.11.08 asking him to further deposit Rs.9,75,540/- without starting construction is improper. As per agreement cost of the flat was inclusive of flyover cost and was not demanded separately, although its construction by OP was basic condition of MCD while approving the project.
14. I do not find any term in terms and conditions for acceptance of application for registration at page 18 and 19 of the bunch of complaint, regarding inclusion of flyover cost in the sale price.
15. Counsel for complainant also drew my attention towards final notice dated 19.12.08 sent by OP to the complainant which is at page 34. From this he wanted me to hold that since OP was demanding interest @24% per annum, it should pay interest at the same rate.
16. The counsel for the complainant also drew my attention towards payment plan at page-27 according to which the complainant was to pay 10% at the time of booking, 5% within 45 days of booking and 10% within 90 days of booking. The sum total of these three items come to 25% which complainant had already paid. The OP changed the same as per schedule at apge-36. According to same the complainant was supposed to pay 20% at the time of allotment. According to him the OP can not change the schedule for payment.
17. I do not find any force in the above argument. There is not much difference in 25% and 20%. Rather it is beneficial to the complainant in as much as the amount had reduced from 25% to 20%.
18. On the other hand the counsel for OP drew my attention towards cancellation letter dated 04.09.09. He submitted that the said letter has been filed by complainant himself. The OP referred to previous letters dated 28.11.08, 19.12.08, 16.01.09 and 10.02.09 demanding balance recoverable and certain amount towards flyover recovery payable by 15.12.08. The letter informed the complainant that since he had failed to pay the dues, the allotment stood cancelled and earnest money of 10% of the total basic price stood forfeited. After adjusting the amount forfeited, refund of Rs.4,87,500/- was sent to the complainant by cheque dated 04.09.09. The complainant himself has spoken about said cheque but pleaded that he did not encash the cheque.
19. The counsel for OP urged that clause D(2) of the terms and conditions at page-19 stipulates that timely payment of all the instalments was a condition precedent for registration, non payment of any installment was to result in automatic  cancellation of registration and forfeiture of all rights of the applicant in residential apartment. The said clause speaks of forfeiture of the entire amount of earnest money. It goes on to say that the principal amount paid over and above earnest money was to be refunded without any interest. So according to him the OP is not liable to pay any interest.
20. The counsel for OP stressed that complainant himself is not sure whether he wants the flat or refund. According to him the complaint is in fix. He wants to have cake and eat too. He himself sent a letter dated 21.01.02 which is at page-32 of the bunch of WS. In the  said letter the complainant mentioned that project had been abnormally delayed for more than 5 years for no fault of his, he was no longer interested in the flat and he had been continuously requesting OP to refund the money which he had paid  after taking house loan from his employer. This shows that complainant was in a need of money and the cause for seeking refund was not delay in project but was scarcity of money. He went on to argue that the same letter states that complainant requested for reasonable bank interest. That is all. Bank interest has never been  24% per annum.
21. Counsel for OP urged that even prior to above letter, the complainant sent a letter dated 16.11.98 copy of which is at page-29 of the bunch of WS. In that letter the complainant sought interest @18%. Now the complainant can not claim interest @24% per annum.
22. After going through the material on record, particularly the plea taken in the WS, I find that it is not a case of deliberate default or wilful default. Rather the OP has been facing difficulty after difficulty, at one time from builder M/s. Kailash Nath Associates, at another time it had to move High Court for scheme of restructuring and arrangement, then there was change in un-environmental norms and fire norms which compelled the OP to resubmit the lay out plan of residential project to MCD for fresh approval.
23. Rather it is the complainant who was defaulter in making the payment. He was issued letter dated 24.05.97 for paying Rs.1,87,500/-. By that time the assured period of handing over possession had not passed and so the complainant had no justification not to pay the said amount.
24. It was held in HUDA vs. Rajey Ram AIR 2009 Supreme Court  2030 and by National Commission in FA No.6/14 titled as Randhir Singh Vs. Omax decided on 27.11.14 that when the complainant is defaulter in making payment, he is not entitled to any interest. The same coupled with terms and conditions at page-19 of bunch of complaint mentioning that the principal amount over and above earnest money would be refunded to the applicant by the OP without any interest shows that complainant is not entitled to any interest.
25. Still since the OP has been retaining the amount for about 22 years, it would be in the fairness of things that it is directed to pay some reasonable interest. For the same reason I do not think that OP is justified in forfeiting the earnest money of 10% of total basic price because the complainant alone is not to be blamed for delay in project. It was something beyond the control of both the parties that project could not be completed.
26. Counsel for the complainant relied upon decision of this commission in Prabha Mahalay vs. VGP Agra Firm Pvt. Ltd. 1 (2009) CPJ 258 to make out that even after refund of the amount deposited by complainant, compensation for mental agony and harassment was awarded. The fact of the said case are totally different. In that case the OP  had executed the sale deed and got the same registered in complainant’ name. But the same was not accepted by this Commission on the ground that sale deed could not be executed in the absence of complainant.
27. Counsel for the complainant also relied upon decision of National Commission in Kunj Bihari Cooperative Housing Society vs. Ranvir Toor I (2009) CPJ 170. In that case the amount taken in cash for which no receipt was issued, was directed to be refunded by District Forum and up held by State Commission. The defence version was not allowed to be taken by the National Commission at the stage of revision. That has no applicability to case in hand.
28. In Bangalore Development Authority vs. Syndicate Bank (2007) 6 SCC 711, the order of National Commission awarding interest at the rate of 18% per annum was found to be not sustainable. In 21 of the judgement it was held that complainant was not entitled to interest or compensation. This judgement does not help the complainant.
29. In Parshar Homes Pvt. Ltd. vs. E. Mahender Reddy I  (2009) CPJ 136 it was held that builder can not allowed to take shelter under agreement clause to usurp money deposited by complainants. Directions for refund of the amount with 9% interest was maintained. It may be observed that in 2009 the interest rates were at the peak. Even then interest was allowed @9% per annum. I propose to award the same interest in 2019 when the rates of interest are going down day by day.
30. Counsel for the complainant cited decision of  Goa State Commission in Agnala Anthany D Souza vs. Mahesh G. Mehta I (2000) CPJ 410 to press that complainant should be allowed interest @18% per annum. He also cited decision dated 23.02.17 passed by State Commission, U. P. in CC No.174/14 titled as Bhanu Pratap Sirohi vs. Gaur Sons Promotors Pvt. Ltd. In that case the OP was directed to restore the cancellation. Each case has to be decided on its own facts and there can be no hard and fast rule for grant of interest.
31. As a result of the above discussion OP-1 is directed to refund Rs.9,75,000/- with interest @9% per annum from the date of deposit till the date of refund.
32. Copy of the order be sent to both the parties free of cost.
33. File be consigned to record room.

 

(O.P. GUPTA)                                                   

   MEMBER (JUDICIAL)