Date of Decision:   16.07.2014

First Appeal No. - 430/2011

(Arising from the order dated 21.07.2011 passed by District Forum-V in Complaint Case No. 1226/2007)

1. We have heard Ms Manpreet Kaur, Proxy Counsel for the Appellant and Ms Garima Bhardwaj, Counsel for the Respondent.
2. Present appeal is directed against the orders dated 21.07.2011.  Vide impugned orders, the Ld. District Forum has directed the OP/Appellant to refund to the Complainant a sum of Rs. 1,73,283/- alongwith interest @ 10% per annum from the date of cancellation of the commercial unit i.e w.e.f. 27^th April, 2006 till the date of payment.  Besides this, a compensation to the tune of Rs. 25,000/- and litigation expenses of Rs. 10,000/- were awarded.
3. In brief, the Complainant had booked a commercial unit in a Mall being constructed by the Appellant/OP vide application form dated 10.11.2005.  Total cost of the property was Rs. 17,32,830/-.  After the payment of the earnest money of 10% i.e. Rs. 1,73,283/-, the Appellant herein had sent a letter of demand dated 29.11.2005 calling upon the Complainant to pay an amount of Rs. 1,73,283/-.  Thereafter, vide letter dated 27.01.2006, the Appellant had asked for the payment of an amount of Rs. 5,19,849/-.  Vide letter dated 18.04.2006, the Appellant herein forfeited the booking amount by stating that in case 25% of the total cost stood not deposited, the whole of the said amount would be forfeited.  In other words, no specific amount was indicated.
4. It may be mentioned here that as on the date of the letter of demand, only an amount of Rs. 1,73,283/- stood deposited by the Complainant.  It was this amount that became the bone of contention in the proceedings before the District Forum.  The issue between the parties before the District Forum as to whether the Appellant herein was entitled to the forfeiture of the amount of Rs. 1,73,283/- paid by the Complainant towards booking of the unit.  Ld. District Forum observed that there was no completed contract entered into between the parties.  While relying upon the letter of allotment dated 6.11.2005, Ld District Forum observed that the approval of Board of Directors to the contract had not been conveyed to the Complainant.  It was further observed by the Ld. District Forum that an ‘acceptance’ is required to be conveyed to the ‘proposal’ before a contract comes into being.  Ld. District Forum relied upon the case of Life Insurance Corporation of India vs Raja VAsireddy Komalavalli Kamba and others reported as 1984 AIR (SC) 1014.  The apex court in the said case had laid down the law as under:

“The mere execution of the policy is not an acceptance; an acceptance, to be complete, must be communicated to the offerer, either directly, or by some definite act, such as placing the contract in the mall.  The test is not intention alone.  When the application so requires, the acceptance must be evidenced by the signature of one of the company’s executive officers.”           

1. Ld. Counsel for the Respondent/Complainant has drawn the attention of this Commission to the letter dated 27.1.2006 written by the Appellant herein to the Complainant.  It refers to an endorsement reading thus:

“Bring your PAN No., Two Photographs and Identification Proof (Election I Card, Driving Licence etc.) along with photocopy at the time of signing the Agreement.”

1. Perusal of the above said endorsement shows that the agreement between the parties stood ‘not signed’ on that date i.e. 27.1.2006.  This is an admission on the part of the Appellant herein.  In the absence of conclusion of a contract, the Appellant herein was not entitled to forfeit the amount of Rs. 1,73,283/- paid by the Complainant towards earnest money.  We are of the considered opinion that the order dated 21.7.2011 passed by the Ld. District Forum do not suffer from any ambiguity or illegality.  Appeal is thus devoid of merits.  The same is dismissed. 
2. FDR/Bank Guarantee, if any, furnished by the appellant be returned forthwith after completion of due formalities.
3. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.