COMPLAINT FILED ON: 29.06.2009

DISPOSED ON: 27.01.2011

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)

DATED THIS THE 27^TH JANUARY 2011

  PRESENT:-  SRI. B.S. REDDY                             PRESIDENT

                     SMT. M. YASHODHAMMA               MEMBER

                     SRI. A. MUNIYAPPA                         MEMBER         

COMPLAINT No.1544/2009

O R D E R

SRI. B.S. REDDY,   PRESIDENT

The complainants filed this complaint U/s. 12 of the Consumer Protection Act of 1986, seeking direction against the Opposite Party (herein after called as O.P.) to refund an amount of Rs.14,64,710/- with interest at 18% p.a. and to pay compensation of Rs.5,00,000/- with litigation costs on the allegations of deficiency in service on the part of the OP.

2.      The case of the complainants is to be stated in brief is that:

          On 22.12.2007 complainants booked two flats in B-block of OP’s apartment project. The flat No.802 is booked in the name of complainant No.2 and flat 803 is booked in the name of complainant No.1. An amount of Rs.4,56,860/- for flat No.802 and Rs.4,58,750/- for flat No.803 was received by OP. Because of loan eligibility, the said two flats were exchanged with flat No.1102 and complainants paid additional amount of Rs.5,00,000/- to OP and OP has sent allotment letter dated 02.04.2008 pertaining to flat No.1102. The complainants have also paid sum of Rs.49,100/- towards this new booking, totally they paid sum of Rs.14,64,710/- to OP. After the payments, complainants came to know that OP’s project has been failed, there is no progress and complainants ascertained that the project will not be completed at all or it will be completed belatedly. As per understanding given to the complainants by OP at the time of booking the apartment, the project is slated to be completed before April – 2009, but there was no sign of any progress on the project. Therefore the complainants did not sign the agreement sent by OP. The complainants demanded OP to refund the amount paid towards booking of the flats. Even complainants demanded the said amount by sending mails and OP agreed to refund the booking amount within 45 days after deducting Rs.50,000/-. But OP has not refund to the amount; instead OP has been prompting the complainants to continue the booking. Legal notice dated 23.03.2009 was issued to OP demanding the amount; OP has replied the notice taking untenable grounds. Relying on the OP project, the complainants have not tried to book any other flats nor did purchase any other property. The complainants have taken loan on heavy interest to pay the said amount to the OP. Because of the deficiency and lapse on the part of the OP, the complainants have suffered heavy loss and mental agony. Thus the complainant seeking the reliefs stated above.        

3.      On appearance, OP filed the version contending that the complaint is not maintainable; there is no deficiency of service on the part of OP. The claim for refund is not a matter which cannot be adjudicated by this Forum. It is admitted that the complainants booked flat No.802 and 803 on 22.12.2007 and allotment letter was issued to the complainants on 01.01.2008. It was agreed that the complainants would pay a total consideration of Rs.11,42,150/- towards purchase of flat No.802 and Rs.11,46,875/- towards purchase of flat No.803. In order to confirm their booking, the complainants made initial payments of Rs.4,56,860/- towards flat No.802 and Rs.4,58,750/- towards flat No.803. It was agreed that the complainants would make the balance payment in installments as per the payment schedule provided to them. It was clearly mentioned in Clause – 2 of the terms and conditions of the booking application that if the applicant withdrew the booking within 7 days from the date of booking, an amount of Rs.50,000/- would be withheld as cancellation fee. However it was also mentioned that if the applicant withdraws the booking after 7 days from the date of booking, then the entire amount would be forfeited. The complainants had agreed for the same and thereafter had booked the said flats. OP issued a demand notice dated 11.01.2008 calling upon the complainants to make requisite balance payment. In reply to the said demand notice, complainants vide their e-mail dated 13.02.2008 stated that they wanted re-allocation of a different flat in place of the existing allotment of flats bearing Nos.802 and 803, due to loan eligibility problem. OP agreed to re-allocate a new flat and a new booking and flat bearing No.B-1102 was allotted to the complainants. Pursuant to new allocation an additional sum of Rs.5,49,100/- was received by OP towards the booking of new flat. Thus having paid total sum of Rs.14,64,710/-, the complainants are due and payable to the OP a sum of Rs.58,58,800/- towards the balance consideration amount in respect of the allocated flat bearing No.B-1102. OP was regularly updating the complainants about the progress of the project / construction and in this regard, they had written several letters to the complainants. The complainant was required to execute an agreement with OP, but had failed to do so. The OP had sent the agreement to the complainants for their signature. However the complainants have failed to sign the agreement as well as in making the balance payment to the OP till date. The terms of understanding between the parties is contained in the booking form that has been executed by complainants in respect of flat bearing No.B-1102. OP was shocked to receive the letter dated 07.08.2008 from the complainants, wherein the complainants sought to cancel the booking of flat No.B-1102 for reasons best known to them. It was evident that the complainants were changing and / or canceling allotment of flats due to their inability to pay the required balance amount to the OP. OP could have forfeited the entire amount and cancelled the said booking. However in order to avoid financial loss to the complainants, the OP requested to continue with the said booking and make payment of the requisite balance amount at the earliest. For the legal notice dated 23.03.2009 OP replied stating there was no deficiency or short coming on the part of the OP and it was the complainants who chose not to pay balance amount and thereby caused financial loss to the OP.

          Mere delay even if one were such delay, is not a ground to invoke the jurisdiction of this Forum. The complainants must demonstrate that there is any unfair trade practice or deficiency of service to make a claim before this Forum. Mere claim that some delay does not entitle the purchaser to seek refund of the entire amount, there has been no delay whatsoever on the part of OP in constructing the apartment. OP often updated the complainants regarding the progress of constructions. The structure is built on the basis of promise held out by the complainants and persons such as the complainants. If the complainants cannot make payment, it is the OP who has suffered and would have been make a claim against complainants and not vice versa. Time was not essence of the contract to entitle termination; till the complete payment was made; the allottees do not have any right to occupation of the allotted premises. In the version para wise allegations made in the complaint regarding the deficiency of service are denied. The averments that the OP has agreed to refund the booking amount within 45 days after deducting Rs.50,000/- is denied as false. It is submitted that OP repeatedly requested the complainants to execute the agreement and also informed that in terms of booking form, for any withdrawal of booking, the complainants would end up losing the entire amount paid. By e-mail dated 22.12.2008, it was clearly specified to the complainant No.1 that there is no provision for refund of the amount and that the terms and conditions of the booking application could not be relaxed. OP has been progressing the construction as per the scheduled time and if the complainants have suffered any loss, it is due to their own actions, rather failures to pay admitted installments. Had the complainants paid entire amount and executed agreement, the complainants would be able to enjoy the possession of their flat in the said apartment. The complainants have not suffered any loss or mental agony. Hence it is prayed to dismiss the complaint with exemplary costs.                   

4.      In order to substantiate the complaint averments, the complainant No.1 filed affidavit evidence and produced documents. One Sri. Avinash Prabhu the authorized representative of OP filed affidavit evidence.

5.      The complainants filed memo with copies of orders passed in complaint No.1265/2009 on the file of IV Additional District Forum and in complaint No.2200/2010 on the file of Ist Additional District Consumer Forum, Bangalore against the same, OP wherein both the complaints are allowed directing OP to refund the amount with interest.

6.      Both the parties filed written arguments. Arguments on both sides heard. Points for consideration are:

       Point No.1:- Whether the complainants have proved           

                          the deficiency in service on the part of

                            the OP?

Point No.2:- Whether the complainants are entitled

                   for the reliefs now claimed?

       Point No.3:- To what Order?

7.      We record our findings on the above points:

Point No.1:- In Affirmative.

Point No.2:- Affirmative in part.

Point No.3:- As per final Order.

R E A S O N S

8.      At the outset it is not at dispute that on 22.12.2007 the complainants being husband and wife booked two flats in B-block of OP’s apartment project. The flat No.802 was booked in the name of complainant No.2 and flat No.803 was booked in the name of complainant No.1. OP received sum of Rs.4,56,860/- for flat No.802 and Rs.4,58,750/- for flat No.803. The complainants have produced the receipts dated 27.12.2007 in respect of these two payments made to the OP. The complainants exchanged the said two flats with flat No.1102 and paid an additional amount of Rs.5,00,000/- to OP and OP issued the allotment letter dated 02.04.2008 in respect of flat No.1102. Further the complainants paid sum of Rs.49,100/- towards this new booking, thus totally complainants have paid sum of Rs.14,64,710/- to the OP. The complainants claims that at the time of booking the apartment they were given understanding that the project is slated to be completed before April – 2009, as there was no sign of progress in the project, they did not sign the agreement sent by OP. As there was no progress in the project, the complainants cancelled the booking and demanded the amount paid towards booking of the flat. It is stated that OP’s agreed to refund the booking amount within 45 days after deducting Rs.50,000/-, but OP’s not refunded the said amount, instead OP insisted to continue the booking. Legal notice dated 23.03.2009 was issued to the OP demanding to refund the amount paid; OP had sent the reply for the said notice denying its liability to refund the amount. Further stating that as per the terms and conditions of the booking application form entire booking amount attract forfeiture Clause. Thus the complainants claims that the act of OP in not refunding the booking amount, amounts to deficiency in service on its part as it as failed to show the progress of the work in completing the project.

9.      The main defence of the OP is the allegation that the project is slated to complete before April – 2009 is denied as false, but the project was schedule to be completed by October – 2009, subject to proper payment of installments by purchasers and executions of the work by the contractor. The work at the project was halted for few days due to absence of the contractor on the project site. The said delay was beyond the control of OP. OP has taken all steps to expedite the works by engaging a different contractor immediately and has thus averted the delay in completion of the project. It is specifically pleaded that the construction is in the finishing stage and six floors in B-block have been completed. Further it is the defence that the complainants have not made any effort to either make the balance payment or sign the agreement. With regard to the claims that the OP has agreed to refund booking amount within 45 days after deducting Rs.50,000/- is denied. It is contended that the complainants were requested to execute the agreement and they were also informed that the terms of booking form, for any withdrawal of booking, the complainants would end up losing the entire amount paid. By e-mail dated 22.12.2008, it was clearly specified to complainant No.1 that there is no provision for refund of the money; the terms and conditions of the booking application could not be relaxed.

10.    We have gone through the e-mails exchanged between the parties. The complainant No.1 in the e-mail dated 27.02.2008 requested OP to send revised letter and draft agreement so that he can approve and complete agreement signing formalities; he has clearly expressed that he is very much disappointed with the construction progress in the last two months, he has visited the site, he did not see any change in the status, which is some what disappointing, considering his personal priorities, to speed up construction and deliver as planned. It was also made clear that if the progress continues to be at the same space for couple of more months, then he may have to cancel their booking and find more readily available property which would help fulfill his personal priority.

          In the e-mail dated 03.07.2008 sent to the OP, complainant No.1 stated that he was very much disappointed to see hardly any progress on the project and he is not certain that he will be able to get possession of his apartment on time with all facilities. Due to this uncertainty he would like to withdraw the booking and requested to arrange refund of advance paid.

          OP had sent e-mail on 26.09.2008 to complainant No.1 intimating him that in case, the complainant would like to withdraw, there will be cancellation charge levied at Rs.50,000/- and the balance will be refunded after three months. The complainant was requested to forward a signed letter. Accordingly on 07.10.2008 the complainant No.1 had sent letter to OP stating that he would like cancel his booking as construction progress was too slow. Again OP for the said letter on 07.10.2008 itself had sent reply stating there will be cancellation fee of Rs.50,000/- and the amount will be refunded within 45 days. From these two reply e-mails of OP it becomes clear that initially OP has agreed to refund the amount by deducting an amount of Rs.50,000/- towards cancellation charges. However OP changed his stand through e-mail dated 10.11.2008 stating that entire booking amount will be forfeited and there would be no relaxation of the terms and conditions of the booking.

11.    OP has not produced any material to show that any draft agreement was sent to the complainant for approval and to complete the agreement signing formalities, despite the request of complainant in the e-mail dated 27.02.2008. OP has not sent any draft agreement and taken any steps to complete agreement signing formalities. Merely because in the application form for allotment of flat, it is stated that in case of cancellation after 7 days till the execution of the sale agreement complete booking amount will be forfeited, OP is not justified to take advantage of the said clause. When the lapses are with the OP in not submitting any draft agreement for approval and there was no any progress in the construction work on the spot; the complainant expressed his displeasure with regard to the progress of the work in his e-mail letters dated 27.02.2008 and 03.07.2008 and ultimately he had left with no option except to withdraw the booking requesting to arrange refund of advance paid.

12.    OP had sent e-mails dated 14.01.2008 and 15.01.2009 with imprinted site photographs of the project, after going through the imprinted photographs of the project; it becomes clear that there was no any progress in the construction of block-B of flat No.1102. Only some foundation with pillars appears to have been put up. OP along with his letter dated 13.12.2008 has furnished the period of completion of the work as          December – 2009. The imprinted site photograph sent with letters clearly indicates that as on 13.12.2008 only the foundation with some pillars have been put on the spot. OP has not produced any material to show that there is substantial progress in the work of B-block and now 6^th floor has been completed as pleaded in its version.

13.    The learned counsel for the OP contended that time was not essence of the contract, even if there is any delay in completing the project, the same cannot be a ground to seek refund of the amount, the complainants failed to pay the balance sale consideration; on account of the same, OP was not able to complete the project on time. In our view on account of OP’s failure to furnish draft agreement for approval, the complainants could not enter into agreement stipulating the terms and conditions. As the work was not in progress for about 4 to 5 months, the complainants cancelled the booking as they expected completion of the project within a reasonable time. Without any progress in the work; complainants cannot be expected to pay further installments. The payment schedule depends on the progress of the work. Therefore we are unable to accept the contention of the OP that the complainants are not justified to seek refund of the amount only on the ground of delay in completing the project. The principles laid down in AIR 2007 SC 2198 BDA Vs. Syndicate Bank cannot be made applicable to the facts of the case. When OP has not shown any progress on the construction, the complainants cannot be made to part with further payments. Further it is contended that the contractor to whom the work was entrusted stopped construction work for some period, later the work was entrusted to new contractor. On account of the same the work was not in progress for some period. In our view OP has not produced any material to show that the earlier contractor to whom work was entrusted has left the job and the work has been entrusted to new contractor. The project was scheduled to be completed by December – 2009, but even at this stage OP has not produced any material to show that the project has reached final stage of completion.

14.    The principles laid down in AIR 1996 SC page 2508 Bharathi Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd., and (2009) 4 SCC page 684 Bhubaneshwar Development Authority Vs. Susanta Kumar Mishra  are not applicable to the facts of the case. In case if OP has executed the construction work, as per the schedule and furnished the draft agreement for approval and the complainants have not executed the agreement deed; then it could have been said that the complainants are bound by the terms of forfeiture clause contained in the booking application form. The act of OP in not refunding the amount received from the complainants even after its failure to fulfill its obligations; amounts to deficiency in service on its part. The complainants are entitled for refund of the amount paid. When OP was not able to continue the project and complete the same; it would have been fair on its part to refund the amount when demanded by the complainants. The said amount has been wrongfully withheld and utilized for the project work by OP; depriving the complainants from utilizing the said amount. In view of the same OP is liable to pay interest on the said amount at the rate of 18% p.a. Accordingly we proceed to pass the following:

O R D E R

The complaint filed by the complainants is allowed in part. OP is directed to refund an amount of Rs.14,64,710/- with interest at 18% p.a. from the date of respective payments till the date of realization and pay litigation cost of Rs.5,000/- to the complainants.

This order is to be complied within four weeks from the date of this order.

Send the copy of this order to both the parties free of cost.

(Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 27^th day of January - 2011.)

PRESIDENT

MEMBER                                                      MEMBER 

Snm: