1.       The present First Appeals ( FAs ) have been filed against the common order dated 03.10.2018 of State Consumer Disputes Redressal Commission, Punjab ( hereinafter referred to as ‘State Commission’) in CC No. 55 of 2018.   FA No. 246 of 2019 has been filed with a delay of 2 days and FA No. 205 of 2021 has been filed with the delay of 760 days.  In FA No. 246 of 2019, no condonation of delay application has  been filed. Delay of 2 days is condoned after considering the reasons adduced during the hearing. In FA No. 205 of 2021, an IA No. 2552 of 2021 has been filed for condoning the delay.   The delay as reported by the Registry is 760 days while delay mentioned in the said IA is 378 days.  FA was filed on 15.03.2021.  Period from 15.03.2020 to 14.03.2021 i.e. 364 is excluded being the Covid exempted period.  Hence the balance delay, after excluding the statutory permissible period of 30 days comes to 413 days. Interalia, following reasons have been given in the said IA:

a.       That the free certified copy of the impugned order was dispatched by the State Commission on 28.12.2018 and received by the Appellant on 15.01.2019 and was diarized in the office of Appellants.

b.       Thereafter, the orders of the State Commission were examined by Legal Cell, GMADA on 10.05.2019 and recommended filing of appeal against the impugned order of the State Commission.  The file was sent to the Estate Officer ( Housing) on 10.05.2019.

c.       Subsequently, the Estate Officer ( Housing ) marked this file to the higher authorities of GMADA on 16.05.2019 for taking the approval for filing the First Appeal against the impugned order before this Hon’ble Commission and for engaging the panel counsel for filing the said appeal.

d.       That on 17.05.2019 the Chief Administrator GMADA gave the approval for filing the First Appeal against the impugned order.

e.       The file was sent to the office of Ld. Advocate General, Punjab for engagement of panel counsel and thereafter the file was received on 13.06.2019  alongwith sanction to engage the present counsel for filing the present appeal on 28.06.2019.

f.        The certified copy of the impugned order was sent to the counsel in Delhi by post on 06.07.2019.  Thereafter, the  necessary documents were collected in the matter and sent to the Counsel in Delhi by post which were received on 06.07.2019.

g.       During the intervening Diwali holidays, the counsel for the Appellant had the office white washed and during that process several new files of the counsel were misplaced.  Since the papers involving the instant matter had been received contemporaneously, the same had not been inadvertently diarized by the office of the counsel for the Appellant and were misplaced by the staff of the Appellant’s counsel. 

h.       After the winter break, the papers of the instant matter were located and tied alongwith some disposed of files in the storage room of the office of the Appellant’s counsel.

i.        Thereafter, drafting of the Appeal started.

j.        Due to outbreak of Covid-19, the Hon’ble Supreme Court passed various orders from time to time.

k.       Drafts of the instant appeals were sent to the Appellants and the appellant provided the approved draft for filing on 12.03.2021.

          Although, we do not find the reason convincing, however, considering that cross appeal pertaining to same case i.e. FA No. 246 of 2019 is being taken up on merits, in the interest of justice, we condone the delay in filing the FA No. 205 of 2021 and take up the case on merits.

Notice was issued to the respondent in both the FAs.  Complainant-Rakesh Singh filed Written arguments on 30.04.2024 in FA No. 246 of 2019. 

2.       Brief facts of the case as presented by the Complainant and as emerged from the FAs, Order of the State Commission and other case records are that Complainant applied for allotment of residential allotment Type-2 in Purab Premium Apartments at Sector 88, SAS Nagar, Mohali under the general category with the OP.  The complainant was declared successful in draw of lots held on 19.03.2012 on the basis of which Letter of Intent ( LOI) was issued by the OP to the Complainant.  The tentative price of the apartment was mentioned as Rs.55,00,000/-.  As per condition 3 (II) of the LOI, the possession of the apartment was to be delivered to the allottee after completing the development work at the site within a period of 36 months from the date of issuance of the LOI and in case OP fails to deliver the possession of apartment within the stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer and in that eventuality, the OP shall refund the entire amount alongwith 8% interest.

3.       It is further the case of the Complainant that complainant was to deposit instalment of Rs.11,00,000/- which he could not deposit due to non sanctioning of his loan.  Letter for permission to mortgage has been given by the OP to the complainant.  He further requested the OP to extend the time to deposit the instalment, which was acceded to by the OP.  Against the total consideration, the complainant deposited a sum of Rs.59,75,750/- with the OP on different dates.  Further, the complainant averred that despite making the substantial amount, the OP failed to deliver the possession of the apartment within the stipulated period as per condition no. 3 (II) of terms and conditions of LOI.  Complainant requested the OP vide letters dated 20.09.2016 and 21.11.2016  to refund the amount deposited by him, on which complainant received a letter dated 02.02.2017 from the OP informing him that his refund cannot be allowed as per clause 3 (II) of the LOI and it would  be refunded as per Punjab Regional Town Planning and Development Act, 1995.  Thereafter, a cheque amounting to Rs.52,52,563/- was received by the complainant as refund of the amount deposited after deducting 10% of the total sale consideration and no interest was calculated.  The said cheque got encashed by complainant under protest. The complainant time and again requested the OP to recalculate the amount but in vain.  Despite sending legal notice, the OP did not respond too.  Being, aggrieved, the Complainant filed CC before the State Commission and State Commission vide order dated 03.10.2018 partly allowed the Complaint directing refund of the amount after deducting 10% of the amount without any deduction on account of service tax.  The OP was, however, directed to pay a sum of Rs1,25,612/- with interest @ 8% w.e.f. 12.09.2017 till realization.  Being aggrieved of the said order, both the Complainant and OP are before this Commission now in the present FAs.

4.       Complainant in FA No. 246 of 2019 has challenged the Order dated 03.10.2018 of the State Commission mainly on following grounds:

i.        State Commission wrongly interpreted the terms of the letter of Intent and observed that Respondent was justified in deducting 10% earnest amount.

ii.       State Commission failed to appreciate that Complainant was never the defaulter in payment of instalment.

iii.      Amount being paid by the Complainant was duly accepted by the OP without raising any objection and the Complainant had made 95% of the total consideration.

iv.      OP issued refund order of Rs.52,52,653/- of the total deposit of Rs.59,75,750/- i.e. after deducting 10% of earnest money and that too after delay of about 1 year from the date of first representation for refund on 20.09.2016 without any interest.

v.       State Commission wrongly relied on clause 2.3(II) of the LOI.    The Complainant sought refund in view of the clause 3 (II) of LOI.

vi.      The Complainant had deposited Rs.26.00 lacs against the due instalment of Rs.28,83,832/- from 21.05.2013 to 21.11.2014 and requested that remaining amount of Rs.2,83,832/- would be deposited soon.

vii.     Reliance has been placed on the following judgments of the Hon’ble Apex Court /National Commission

a.       Fortune Infrastructure Vs Trevor D' Lima (2018) 5 SCC 422

b.       Parsvanath Buildwell Pvt. Ltd. vs. Varun Dev II (2018) CPJ 212 (NC)

c.       Jivitesh Nayal and Anr. Vs. Emaar MGF Land Ltd. and Anr. IV (2017) CPJ 493 (NC()

d.       Bimla Dalmia Vs. Fantasy Buildwell Pvt. Ltd. III (2018) CPJ 371 (NC)

5.       Heard learned counsels 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.

6.       Learned counsel for the Complainant apart from repeating the points which have been stated in para  4 also relied upon the order of the Apex Court in Ashok Investment Co. Vs. M/s United Towers India Pvt. Ltd., Civil Appeal No. 4913 of 2014.

7.       Learned counsel for the OP emphatically relied on the clauses of the LOI, especially clause 2.1(II), 2.3 (II) read with Clause 5 (VII) and Section 45 (3) of the Punjab Regional and Town Planning and Development Act, 1995 which clearly specify that if there is a default in payment, then the OP is required to deduct / forfeit 10% of the total amount of consideration money plus interest and other fees payable.  Learned counsel further argued that State  Commission erred in interpreting clause 2.3 (II) of the LOI to forfeiture of 10% of the amount paid or deposited as the same makes the forfeited amount / deduction subjective to the amount deposited by a prospective allottee.  Further, it is argued that an applicant who merely communicated its rejection of the allotment beyond 30 days would be worse off by operation of Clause 7 (II) of the LOI than an allottee who has wilfully defaulted in payment after accepting the terms and conditions of the contract between the parties.  Learned counsel further argued that so far as refund of service tax is concerned, the same is a statutory fee, which is to be deposited with the government.   Reliance has been placed on the following judgment of the Hon’ble Supreme Court :

1. Sheo Raj Singh (D) Vs. Union of India 2023 INSC 884
2. Collector, Land Acquisition, Anantnag and Anr. Vs. Mst. Katiji and Ors. (1987) 2 SCC 107

3. Hemlata Verma Vs. Ms ICICI PrudentialLife Insurance Co. Ltd. and Anr., Civil Appeal No. 5131 of 2019.

8.       Relevant extract of orders of  State   Commission  in  CC No. 55 of 2018 ( corresponding to both the appeals under consideration in the present case ) are reproduced below :

15. Admittedly, the complainant had applied for residential apartment, Type-2, at Purab Premium Apartments, Sector 88, Mohali vide Form No.24655. In the draw of lots held on 19.03.2012, he was declared successful at Sr.No.750 and LOI for allotment of residential apartment Type II dated 21.05.2012 (Ex.C-2) in the said project was issued to the complainant for a tentative cost of ₹55,00,000/-. The complainant opted for Plan-B, which reads as under:-

“PLAN-B A sum of Rs.3575000.00 (Thirty Five Lakh Seventy Five Thousand Only) being balance 65% of the tentative price can be paid with 12% interest in 6 half yearly instalments from the date of issue of LOI. Payment schedule mentioned as under:-

16. The 10% amount was to be paid as earnest money and ₹11,00,000/- i.e. equal to 20% price of the apartment was to be paid within the period of 30 days i.e. upto 22.06.2012 but that amount could not be deposited within the prescribed period and extension was sought by the complainant vide letter dated 22.06.2012 (Ex.C-4). He was given extension of 30 days by imposing 2% penalty charges. The complainant deposited the amount on 05.09.2012 without paying any penalty. As per receipts / cheques (Ex.C-6, Ex.C-8, Ex.C-9, Ex.C-13 to Ex.C-19), the complainant deposited a sum of Rs.59,57,750/- without paying any penalty on account of delayed payment of instalments.

17. As per clause 3(II) of the LOI, it is stated that the possession of the apartment was to be handed over within 36 months after completion of development works at site from the date of issuance of LOI and in case OP fails to deliver the possession the authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually. OP in its pleadings stated that the complainant has defaulted in making the payments and stated that the refund can only be made to the complainant after cancelling the allotment under the provisions of Section 45(3) of the Punjab Regional and Town Planning and Development (Amendment) Act, 2013. Section 45(3) of the Punjab Regional and Town Planning and Development (Amendment) Act, 2013 is reproduced here below:-

“45(3) If the transferee fails to pay the amount due together with the penalty in accordance with the order made under subsection (2) or commits a breach or any other condition of transfer, the Estate Officer may, by notice in writing call upon the transferee to show cause within a period of thirty days, why an order of resumption of the land or building or both, as the case may be, and forfeiture of the whole or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money, interest and other dues payable in respect of the transfer of the land or building or both, should not be made.”

18. The above section relates to resumption of property and not cancellation of allotment, whereas in the instant case, the complainant himself has withdrawn from the scheme. As per clause 2.3 (II) of the LOI, in case allotment is cancelled, refund is to be made to the allottee after 10% deduction of the amount. Clause 2.3 (II) of the LOI dated 21.05.2012 is reproduced hereunder:-

“2.3 (II) Delay in payment of instalments shall result in cancellation of the allotment. However, on request establishing genuine grounds, delays up to 12 months can be condoned by the Estate Officer, by charging 18% interest for the period of delay. Delay beyond 12 months shall not be condoned under any circumstances and shall result in cancellation of allotment and refund of the amounts paid, after forfeiture of 10% of the amount. Possession shall not be handed over till all dues are cleared.”

19. From the perusal of the record, it is evident that the complainant defaulted in making the due payments right from the issue of the LOI. The complainant was issued LOI on 21.05.2012 and he was required to pay ₹11,00,000/- within 30 days from the date of LOI to complete 30% price of the apartment. Although he was given extension of 30 days with penalty of 2% vide letter dated 23.07.2012 (Ex.C-5). The complainant deposited ₹11,00,000/- on 05.09.2012 without any 2% penalty. Not only this, the other instalments were not paid as per schedule. The detail of scheduled payments as per LOI and payments made by the complainant is as follows:          

20. From the above, it is clear that the complainant has not deposited even a single instalment in the year 2013 – 2014 and thus defaulted in paying the due instalments. A public notice dated 05.12.2014 (Ex.C-11) was also published by the opposite party, vide which the allottees were given time to pay the instalments with penalty by 30.12.2014. In view of this public notice, the complainant paid the above amounts again without penalty amount on account of delay. Without paying the penalty it cannot be considered that the complainant has paid due instalments as per the schedule. As such, the complainant has defaulted in making the due instalments as per the schedule of payments given in LOI. Therefore, the refund of the deposited amount cannot be made as per clause 3(II) of the LOI and due to his own act and conduct, no interest and compensation can be awarded as he himself has not complied with the terms of the LOI.

21. Sequel to the above, the complaint is partly accepted and the opposite party are directed to refund the amount paid after deducting 10% of the amount without any deduction on account of service tax. The complainant has deposited ₹59,75,750/-, so after deducting 10% of the amount, the complainant is entitled to refund of ₹53,78,175/-, out of which ₹52,52,563/- had already received by the complainant. Therefore, the opposite party is directed to pay a sum of ₹1,25,612/- along with interest at the rate of 8% with effect from 12.09.2017 till realization to the complainant.

9.       A similar issue pertaining to the allottees of the same project of Petitioner herein came up for consideration before this Commission in FA No.1011 of 2018 filed by the Complainant / allotee and this Commission vide its order dated 10.09.2024 held as follows :

9.       As regards judgment of Hon’ble Punjab and Haryana High Court in Rajiv Arora ( supra ), Complainant has contended that the said judgment varies from the instant case as the Complainant in the above mentioned case asked for refund before the stipulated time to deliver possession as per LOI, whereas in the present case, application for refund was made by Complainant after the OP failed to deliver the possession within the stipulated time, contending further that there has been no default as such on the part of Complainant as OP have been deficient in services as they have not been able to complete development work by the committed date of possession.

 10.     We have carefully gone through the order of the State Commission, other relevant records and rival contentions of the parties.  In this case, the unit in question was not ready for possession after completion of development work by the committed date of possession as per LOI i.e. 22.05.2015, hence the Complainant was justified in withholding further payments beyond 30% paid by him.  If OP considered it a case of default on the part of Complainant, it ought to have cancelled the allotment under clause 2.3 (I) and 5 (VII) and refunded the balance after forfeiting of amounts permissible as per these clauses.  However, no such cancellation was done by the OP. It was the Complainant, who applied for refund under clause 3 (II) of LOI on the ground of OP not being able to deliver the possession by the due date.  Hence, we are of the considered view that in the present case, Complainant is entitled to refund in accordance with clause 3 (II) and action of the OP to process his refund under clause 2.3 (II) and 5 (VII) is not correct.  Hence, we hold that order of the State Commission suffers from a material irregularity and cannot be sustained.  Accordingly, order of the State Commission is set aside, appeal is allowed and OP is directed to refund the entire amount of Rs.20.70 lacs paid by the Complainant ( after adjusting the amount already refunded, if any), alongwith interest @ 8% p.a. as per clause 3 (II) w.e.f. date of receipt of his request dated 22.06.2015 in the office of the OP, within 45 days of date of this order,  failing which amount payable at the end of 45 days shall carry interest @ 12% p.a. till the date of payment.  OP shall also pay litigation cost of Rs.25,000/- to the Complainant.

10.     While hearing the above stated FAs No. 246  of 2019 and 205 of 2021 alongwith FA Nos. 206 and 207 of 2021 on 30.04.2024 and reserving the judgment in these cases, this Commission observed as follows :

“FA No. 246 of 2019 has been filed against the order dated 03.10.2018 of the State Commission vide which the State Commission has partly allowed the complaint and directed refund of the amount after deducting 10% of the amount, without any deduction on account of service tax.  In the FA, prima challenge is for the order of the State Commission towards 10% deduction.  Learned counsel for the respondent has drawn our attention to para 5 ( vii) of the LOI which entitles the OP ( respondent herein ) to deduct an amount not exceeding 10% of the total amount of consideration money on account of breach of condition of allotment or of regulations or non payment of the amount due. The total amount paid by the complainant in this case is Rs.59,75,750/- and the State Commission allowed the OP to deduct 10% of this amount.  However, the OP contends that they are entitled to deduct 10% of the total amount of consideration, which according to them is Rs.70,61,923 as detailed in their office order dated 23.06.2015.  A perusal of this document shows that total cost of the plot is Rs.55.00 and Scheme Interest of Rs.7,50,750 and Penal Interest of Rs.8,11,173 are added and calculating total consideration money as Rs.70,61,92/- and hence 10% is Rs.7,06,192/-.  One of the contention of the respondent authority herein, who is petitioner in FA No. 205 of 2021, challenging the same order, is that they are entitled to deduct 10% of Rs.70,61,923/- and not Rs.59,75, 750/- as has been ordered by the State Commission.  They have challenged the similar order of the State Commission in FA No. 206 of 2021 and FA No. 207 of 2021, in which respondents being absent today, have been proceeded ex parte.

2.       It is the contention of the Appellant in FA No. 246 of 2021 that under para 2 of the brochure , delay in payment of instalment shall result in cancellation of allotment.  However, on request, establishing genuine grounds, delay up to 12 months may be condoned by the Estate Officer, by charging 18% interest for the period of delay.  Delay beyond 12 months shall not be condoned under any circumstances and shall result in cancellation of allotment and refund of the amounts paid, after forfeiture of 10% of the amount.  It is argued by the Appellant that in this case, no cancellation of the allotment has been done by the respondent – authority, hence they are not entitled to forfeiture of 10% contending further that this part refers to 10% of the amount paid and not of the total consideration.

3.       As per brochure / LOI, possession of the apartment to be handed over to the allottee after completion of development work at site, in a period of 36 months from the date of issuance of LOI, which in this case expired on 20.05.2015.  It is admitted by the respondent -  Authority that possession could not be handed over as per this time schedule. Further, in case authority fails to deliver the possession as per this time schedule, allottee have a right to withdraw from the scheme on moving an application to the Estate Officer in which case the authority shall refund the entire amount deposited by the applicant alongwith 8% interest compounding annually.  It is the case of the Appellant that there being no cancellation of the authority, they sought withdrawal from the scheme and refund for the first time on 20.09.2016  which was followed by another reminder dated 21.11.2016  and another letter dated 02.03.2017

4.       Appellant has also drawn our attention to letter dated 23.07.2012 of the authority vide which extension in deposit of 20% amount for one month from 22.06.2012 to 21.07.2012  was given.  He has further drawn our attention to the public notice issued by the Authority with respect to the deposit of amount by the allottees. 

11.     The present cases(s) are fully covered under the order of this Commission in FA No. 1011 of 2018 cited above. Hence, after careful consideration of all the facts and circumstances of the case, we are of the considered view that State Commission went wrong in interpreting the relevant clauses and holding that OP Authority is entitled to forfeit 10% of the amount. On the lines of this Commission’s order in FA No. 1011 of 2018,  we hold that complainant is entitled to refund in accordance with clause 3 (II) and action of the OP in forfeiting 10% is not correct.  Hence, we hold that order of State Commission suffers from a material irregularity and cannot be sustained in the present form.  Accordingly, order of State Commission dated 03.10.2018 in CC No. 55 of 2018 needs modification.  Accordingly, we allow the FA No. 246 of 2019 with directions to the OP Authority to refund the entire amount of 59,75,750/- paid by the Complainant ( after adjusting the amount already refunded, if any) alongwith interest @ 8% p.a. as per clause 3 (II) w.e.f. date of receipt of his request for refund, within 45 days of date of this order, failing which amount payable at the end of 45 days shall carry interest @ 12 % till the date of payment.  OP shall also pay litigation cost of Rs.25,000/- to the Complainant.  In view of these orders, FA No. 205 of 2021 filed by OP Authority is dismissed.

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