STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

P.H.Houses Pvt. Ltd., through it’s Director, SCO 362, Second Floor, Sector 44-D, Chandigarh.

….…Appellant

                           V E R S U S

1]    Manoj Sharma s/o Sh.S.P.Sharma, Resident of H.No.345/2, Sector 44-D, Chandigarh.

2]    State Bank of India, SCO 103-108, 1^st Floor, Sector 17-B, Chandigarh.

                                  ..…Respondents

Appeal U/s 15 of Consumer Protection Act, 1986

BEFORE:    MR. JUSTICE SHAM SUNDER, PRESIDENT.

                 MRS. NEENA SANDHU, MEMBER.

Argued by: Sh.T.T.P.Singh, Advocate for the applicant/ appellant.

                 Sh.V.P.Chatrath, Advocate for respondent no.1.

                 Service of respondent no.2 dispensed with vide order                            dated 09.05.2011.

PER MR. JUSTICE SHAM SUNDER, PRESIDENT

1.               This appeal is directed against the order dated 12.01.2011, passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, in the following manner:-

“In view of the above findings, we allow this complaint against OP-1 only. OP-1 is directed to handover the possession of the flat in question after completing all necessary work, within a period of four months from today failing which it shall be liable to refund the total amount paid by the complainant along with interest @ 18% p.a. from the dates of respective deposits till its actual payment to the complainant. Besides this, the OPs No.1 is also directed to pay Rs.7,000/- to the complainant as costs of litigation.

However, the complaint qua OP-2 stands dismissed with costs of Rs.10,000/- as provided under Section 26 of the Consumer Protection Act, 1986, as neither any deficiency in service against OP-2 has been alleged nor has been proved by the complainant.  More so, no relief has been sought against OP-2.  Therefore, in our opinion, the complainant has unnecessary impleaded OP-2 as party.  Otherwise also, in the order dated 26.8.2010, this Forum has already made it clear that if it is found that OP No.2 was not a necessary party and no relief is claimed against OP No.2, then OP No.2 would be compensated with costs of Rs.10,000/- as provided under Section 26 of Consumer Protection Act, 1986.

The complainant shall pay the aforesaid cost to OP No.2 within 30 days from the date of receipt of copy of this order”.

2.               The facts, in brief, are that the complainant had booked a two bedroom flat in Green Field Towers, at Zirakpur, with OP-1(now appellant), by depositing a sum of Rs.50,000/-, as booking amount on 6.11.2006. The complainant was allotted Apartment No.A-IV-5, vide allotment letter dated 6.11.2006, (Ann. C-1).  The total price of the flat was Rs.17.25 lacs. An agreement to sell, was also executed, between the parties.  It was stated that the complainant, made payment of scheduled installments, to the tune of Rs.11,21,250/, which amounted to 65% of the total cost of unit, vide acknowledgment receipts. It was further stated that the physical possession of the flat, was to be delivered by OP-1, on or before 06.11.2008, but it failed to offer or deliver the possession thereof, even, till filing of the complaint.  When the complainant requested OP-2, its banker, to make further payment of Rs.3.45 lacs, from which it had taken loan, it declined to make the payment, on the ground, that no work was going, on at the site, and the project was stand still. It was further stated that as per the evaluation report dated 02.08.2009, construction of the project work, had not been completed more than 45%. It was further stated that the complainant, requested OP-1, for handing over the possession of the flat immediately or refund of the amount with interest but to no avail.  It was further stated that the aforesaid acts of OP-1, amounted to deficiency, in rendering service, and indulgence into unfair trade practice.

3.               When the grievance of the complainant was not redressed, left with no other alternative, a Complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.

4.               OP-1, in its written reply, admitted that the complainant had booked a two bed room flat, in Green Field Towers, at Zirakpur, by depositing Rs.50,000/-, as booking amount. It was also admitted that the complainant had paid Rs.11,21,250/-, i.e. 65% of the total cost of the flat of Rs.17.25 lacs.  It was stated that the construction of the flat had been delayed, due to recession in the market, non-cooperation of the bank, from where the OPs had made arrangement for getting the loan, as well as, due to delayed payments, made by the complainant. It was further stated that the complainant was still in arrears of Rs.4,31,250/-. It was further stated that the complainant was supposed to pay 90% of the total amount i.e. Rs.15,52,500/-, by 31.6.2008. However, he had paid only Rs.11,21,250/-, which was not in consonance with the agreement, executed between the parties. It was further stated that the complainant was also liable to pay 10% of the basic sale price, at the time of possession.  It was further stated that all the arrangements had been made and the remaining construction of the units/apartments, shall be completed, in the near future and possession thereof shall be given very soon.  It was further stated that, OP-1 was neither deficient, in rendering service, nor, it indulged into unfair trade practice. All other allegations, were denied, being wrong.

5.               In the reply filed by OP-2, it was stated that as per the applicable guidelines, instructions, terms and conditions of the loan, two installments were released but thereafter the same could not be released due to the stoppage of construction work. It was further stated that the complainant had to repay the loan as per the terms & conditions, settled between the parties.  The remaining allegations, were denied, being wrong.

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 District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

8.               Feeling aggrieved, the instant appeal, was filed by the Appellant/OP-1. 

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

10.            The first question, that arises for consideration, is, as to when, the complainant was entitled to possession of the flat. There is no dispute, about the factum that the complainant booked the flat and was issued the allotment letter dated 06.11.2006, Annexure C-1.There is also hardly any dispute, with regard to the factum, that the total price of the flat was Rs.17.25 lacs. Admittedly, an agreement was executed, between the parties. The complainant, undisputedly paid a sum of Rs.11,21,250/-, i.e. 65% of the total price of the flat. According to note (a) appended underneath Clause 5 of the allotment letter C-1, possession of the apartment, was to be given to the complainant, only after full payment was made to OP-1, as per the terms and conditions, set out in the agreement/payment plan. According to note (a), appended under the Payment Plan-B of the agreement C-2, the possession was to be given to the complainant, only after full payment was made to OP-1, as per the terms and conditions, which were agreed to between the parties, as per the aforesaid documents. Admittedly, the entire price of the flat had not been paid, by the complainant to OP-1. Under these circumstances, the complainant did not become entitled to get possession of the flat. Whether, the aforesaid conditions in the allotment letter C-1, and, agreement C-2, were onerous or one sided, and, as such, illegal, cannot be determined by this Commission. As stated above, since the entire price of the flat had not been paid by the complainant, he was not entitled to possession, as per the documents C1 and C2. The District Forum was, thus, wrong in granting relief of possession of flat, to the complainant. The findings of the District Forum, in this regard, are liable to be set aside.

11.            The next question, that arises for consideration, is, as to whether, the complainant was entitled to the refund of amount deposited by him, alongwith interest or not. As stated above, a sum of Rs.11,21,250/-, was deposited by the complainant, towards the part price of the flat. No progress in construction had taken place, beyond 45% at the site, as per the evaluation report dated 02.08.2009. Since, the construction was not being raised, as per the construction linked payment plan, the complainant, could certainly stop making payment of the remaining installments. He could not be forced, to make payment of the remaining installments, towards the price of flat, especially, when no progress in further construction, was being made by OP-1. In Prasad Homes Private Limited Vs. E.Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), no development work was carried out, at the site. In these circumstances, the payment of further installments was stopped by the complainant. It was, under these circumstances, held that the builder could not be allowed to take shelter under the agreement Clause, to usurp the money deposited by the complainant. Ultimately, the Hon’ble National Commission, ordered the refund of amount with interest. In the instant case, relief was also impliedly sought by the complainant, claiming the refund of the amount with interest. The District Forum was, thus, right in holding that by not refunding the amount, deposited by the complainant, OP-1 was deficient, in rendering service. The District Forum was also right in holding, that the complainant was entitled to a sum of Rs.11,21,250/-, deposited by him. The findings of the District Forum, being correct, are affirmed.

12.            The next question, that arises for consideration, is, as to whether, the complainant was entitled to interest, if so, at what rate? The complainant, prayed for the payment of interest @24% p.a. on the amount of Rs.11,21,250/- deposited by him from 06.11.2008 (i.e. the alleged scheduled date of possession), till the date of realization, which was being charged on delayed payments, as per note (d) appended under Clause 5 of the allotment letter dated 06.11.2006. The District Forum granted interest @18% p.a. In our considered opinion, the interest @24% p.a., claimed by the complainant, and the interest @18% p.a., granted by the District Forum, can be said to be on the higher side. The Consumer Fora is required to grant interest, at a reasonable rate. Since, the amount of Rs.11,21,250/-, which was deposited by the complainant, was withheld improperly by OP-1, it must have earned interest, thereon, by investing the same, in some business or depositing the same in the bank. Even, on the fixed deposits, now a days, the interest is ranging between 9% per annum to 10% per annum. Had, the interest at a rate somewhat higher than` that been granted by the District Forum, the same would have been reasonable and fair. We are of the considered opinion, that penal interest @15% p.a., if awarded, shall be reasonable and fair. The order of the District Forum requires modification, in this regard.

13.            No other point was urged by the Counsel for the parties.

14.            For the reasons recorded above, the appeal is partly accepted, with no order as to costs with the modifications, in the following manner:_

(a)   The directions given by the District Forum, for handing over the possession of the flat, within four months, from the date of the impugned order, being not inconsonance with the allotment letter C1 and the agreement C2 and, as such, erroneous are set aside.

(b)   The complainant is held entitled to the interest @15% p.a., instead of 18% p.a., on the amount of Rs.11,21,250/-, from 06.11.2008 (the alleged scheduled date of possession] till realization, and not from the respective dates of its deposits, as the same was not claimed from those dates, by the complainant.

(c)   The other directions given by the District Forum, shall remain unaltered.

15.         Certified Copies of this order be sent to the parties, free of charge.

16.         The file be consigned to record room.

Pronounced.

08.09.2011.                                                                                                                                                             Sd/-

 [JUSTICE SHAM SUNDER]

          PRESIDENT

Sd/- 

[NEENA SANDHU]

                                                                             MEMBER