1.            By this First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”), Greater Mohali Area Development Authority (for short “GMADA”), calls in question the correctness and legality of the order, dated 12.08.2016, passed by the Punjab State Consumer Disputes Redressal Commission, at Chandigarh (for short “the State Commission”) in CC No. 113 of 2015. By the order impugned, the State Commission has disposed of the Complaint by holding that GMADA is entitled to charge from the Complainant interest @ 20% p.a. to regularize the delay of 23 days by him in depositing a sum of ₹33,96,250/- under payment Plan “A” and regularize the allotment of Apartment allotted under the said plan, in his favour. It has also been held that as GMADA had failed to deliver the possession of the Apartment by the stipulated date, i.e. 14.06.2015, it was liable to pay compounded interest @ 8% p.a., from 15.06.2015 till the date of possession, on the amount deposited by the Complainant. The amount, payable by the Complainant, [towards interest on the delay in paying the amount to GMADA], has been directed to be adjusted against the said amount of compensation.

2.       The material facts, necessary for disposal of the Appeal, are as follows:

(a)     Allured by the salient features of the housing scheme, advertised by GMADA, viz. ‘Purab Premium Apartments’, highlighted as “Believe in Growth; Believe in Magic; Believe in Abundance; Believe you deserve and Believe you can afford”, the Complainant, a serving Group Captain in the Indian Air Force, at the relevant time, applied for allotment of a two-bedroom Apartment under the said Scheme, under the Defense Personnel Category, in Sector 88, SAS Nagar, through online application. The total tentative cost of the Apartment was ₹55,00,000/-. Being successful in the draw, a Letter of Intent (LOI), bearing No. GMADA – EO/2012/3047 dated 15.06.2012, was issued calling upon him to fulfill the conditions precedent for allotment of the Apartment.  Complainant opted for a single installment plan under payment plan “A”, as a discount of 5% was offered under the said plan. He deposited a sum of ₹11,00,000/-, constituting 30% of the total consideration. In order to arrange funds for the remaining payment, he applied for loan from State Bank of India. Before he could complete the formalities for release of the loan amount, he received transfer orders. Thus, he could not complete all the requisite documentation/formalities. On 10.08.2012, Complainant filed an application with GMADA seeking extension of time, for making payment of the balance 65% of the cost of the Apartment, amounting to ₹33,96,250/, by one month beyond the permitted period of 60 days under payment plan ‘A’.  However, he did not receive any response from GMADA to his request.  On enquiry about the status of the application, he was told that no such application had been received by GMADA, though, according to the Complainant, the same was received in the office of GMADA on 22.08.2012 against diary No. 31968/2012. Eventually, the Complainant deposited the aforesaid amount of ₹33,96,250/- with GMADA but with a delay of 23 days.  When he again did not receive any response from GMADA regarding acceptance or rejection of the payment, vide his letter dated 07.04.2014, he applied for ‘No Objection Certificate’ from GMADA. On receipt of the said request, GMADA, vide its letter dated 07.05.2014, informed the Complainant that he had been shifted from payment plan ‘A’ to plan ‘B’. 

(b)           According to the Complainant, a unilateral shifting of his payment from plan ‘A’ to plan ‘B’, without any notice, was arbitrary and illegal. Additionally, assuming but not admitting, that the decision of  GMADA shifting him from plan ‘A’ to plan “B’, was in order then it illegally retained a substantial amount of ₹33,96,250/- for a period of 98 days, inasmuch as  the said amount, was due to be paid only under plan ‘A’, which was received by them on 07.09.2012, whereas the first installment under payment plan ‘B’ was due only on 15.12.2012, that too in six monthly installments commencing from 15.12.2012. Thus, the say of the Complainant was that had the said amount been refunded by GMADA, he would have cleared the loan, raised by him from the Bank to pay the afore-noted hefty amount under Plan ‘A’ and saved himself from at least paying EMIs to the tune of ₹9,50,000/-. 

(c)           On 30.05.2014, the Complainant again wrote letter to the Estate Officer, GMADA, praying for condonation of delay of 23 days in payment of the balance amount under payment plan ‘A’.  He also lodged an online complaint with the grievance cell of GMADA on 02.06.2014. Having failed to elicit any positive response from GMADA to his representations, including offer to pay interest @18% on the aforesaid amount, as per the terms and conditions of Letter of Intent (LOI), for the period of delay of 23 days under plan ‘A’ and left with little option, the Complainant filed the Complaint before the State Commission, praying for the following directions to GMADA:-

1. to shift the payment plan of the Complainant from plan ‘B’ to plan ‘A’ and not to demand ₹2,78,253/- under plan ‘B’ and hand over the possession of the Apartment as per schedule;

2. to condone the delay of 23 days in making payment in terms of plan ‘A’’ and accept the payment of ₹33,96,250/- under the original plan ‘A’, under which the allotment was made, after charging interest @ 18% p.a. as per the terms and condition of LOI;

3. to pay a sum of ₹1,00,000/- towards compensation for the mental agony and harassment;

4. to pay ₹5500/- towards cost of legal notice and

5. to pay ₹37,000/- towards the cost of litigation.

    

   3.            The Complaint was resisted by GMADA on diverse grounds.  As a preliminary objection, the maintainability of the Complaint was questioned  on the grounds of: Complainant’s locus standi to file the complaint; mis-joinder and non-joinder of parties, as the Chief Administrator and Estate Officer of GMADA were impleaded in their personal capacity; lack of pecuniary jurisdiction of the District Forum; and the provision for resolution of dispute through Arbitration. On merits, it was pleaded that since the Complainant had failed to pay balance 65% of the consideration i.e. ₹33,96,250/-, within the stipulated period of 60 days, his payment plan was ‘automatically’ shifted from plan ‘A’ to plan ‘B’ and hence the balance amount of ₹2,78,253/- was rightly being claimed from him. It was also pleaded that in the Scheme, there is no provision for condonation of delay in payment under the relevant plan.  

   4.            On evaluation of the documentary evidence placed on record by the parties in support of their rival stands, the State Commission has partly allowed the Complaint. As regards the question, whether GMADA was justified in shifting the Complainant from plan ‘A’ to plan ‘B’, the State Commission has answered the question in his favour observing thus:-

“11.    Now the next question arises whether the plan of the complainant i.e. plan ‘A’ can be shifted to plan ‘B’ as done by OPs (Opposite Parties sic).  Again in case we go through the letter of intent, letter of intent is silent.  In case OPs have shifted the plan of the complainant from plan ‘B’ to plan ‘A’, there must be provision in the letter of intent or the policy matter of OPs how and under what circumstances the payment plan can be changed.  Counsel for OPs has not referred to any policy matter/plan how and under what circumstances, the payment plan can be changed from ‘A’ to ‘B’ as in the case of complainant, otherwise, in case OPs were to change the plan from plan ‘A’ to plan ‘B’ at least opportunity of hearing should have been given to the complainant, which has not been given.  Therefore, shifting the plan of the complainant from A to B unilaterally and arbitrarily cannot be approved and must be condemned.”  (Emphasis Supplied)

5.       On the question of condonation of delay of 23 days in deposit of the balance 65% of the cost of the Apartment, relying on Finance and Accounts Committee’s resolution dated 26.10.2004, the State Commission has held that delay of a maximum period of 10 days could only be condoned.  The State Commission has concluded as follows:-

“10. The grouse of the complainant is that he had applied for a flat and Type-II flat was allotted to the complainant vide allotment letter dated 15.6.2012 Ex. C-1 in which payment plan was given, which is under plan ‘A’ and plan ‘B’.  Complainant had opted for plan ‘A’ under which after payment of 30% i.e. ₹11,00,000/- which was already paid by the complainant, a sum of ₹33,96,250/- was to be made within a period of 60 days from the date of issuance of the Letter of Intent, which was issued on 15.6.2012, therefore, by 15.8.2012, he was required to pay this amount.  However, this amount was not paid within that period and there was delay of 23 days as admitted by the complainant in his complaint itself. He has further stated that he had written a letter dated 10.8.2012 (Ex. C-2) to seek one month extension.  OPs have stated that they did not receive this letter.  On the other hand, complainant has referred diary number, which has not been denied by OPs.  Therefore, in case this letter was received or not, it should have been replied, whether there is provision for extension of the time.  In the Letter of Intent, there is no such reference that period beyond 60 days can be extended and if so on what terms. Counsel for the complainant has referred to one policy letter of OPs Ex. C-24 i.e. letter No. 9346-50 dated 10.11.2004, which speaks that Finance and Accounts Committee in its 42^nd meeting held on 26.10.2004 vide agenda No. 42.16 has approved the facility of grace period of 10 days over and above the normal period of 60 days for making full payment, may also be extended to the allottees of residential plot on the same analogy as has been given to the allottees of built up houses/commercial site, subject to payment of penal interest @ 0.05% per day or 18% per annum.  Therefore, according to this letter, at the most the time could be extended upto 10 days but the period of the complainant is 23 days, therefore, his delay period is not covered under this letter. Therefore, delay of 23 days as claimed by the complainant cannot be extended as the letter of intent is silent and the letter Ex. C-24 speaks only upto 10 days.” (Emphasis supplied)                                                

6.       Having come to the afore-extracted conclusion, the State Commission has permitted GMADA to charge from the Complainant interest @ 20% p.a. on the aforesaid amount to regularize the delay of 23 days. 

7.       Finally, accepting the claim of the Complainant for compensation on account of delay in delivery of possession of the Apartment, the State Commission has held as under:-

“12. The next point raised by the counsel for the complainant is that the possession of the flat has not been handed as per schedule.  He again referred to the letter of intent in which according to Clause 3(ii), it was agreed by OPs that possession of the apartment shall be handed over after completion of work at site in a period of 36 months from the date of issuance of letter of intent. In case authority is unable to deliver the possession of the apartment within the stipulated period, allottee shall have a right to withdraw from the scheme by moving an application to the Estate Officer and can get the refund of the amount deposited with 8% interest compounded annually.  The letter of intent was issued on 15.06.2012, therefore, the period of 36 months was completed on 14.06.2015.  The counsel for OPs was unable to tell within how much period they will deliver the possession of the flat as per letter of intent. In case OPs is taking high amount of interest even for delay of 23 days then the complainant must be compensated with interest in case they delayed the delivery of possession.  Even in their own letter of intent, there is provision of 8% interest compounded annually.  Since the complainant has made the payment of 95%, he is not interested to get back his money because with great difficulty he got sanctioned his loan and paid a sum of ₹33,96,250/-, therefore, w.e.f. 15.6.2015, Ops will pay 8% interest compounded annually on the amount deposited by the complainant till the delivery of possession of the flat, complete in all respect including occupation certificate from the Competent Authority.” (Emphasis supplied)

8.            Aggrieved mainly by the directions to regularize the allotment under payment plan ‘A’ and pay to the Complainant interest @ 8% compounded annually, GMADA is before us.  The Complainant seems to be satisfied with the relief granted to him by the State Commission.

9.            We have heard Ms. Rachana Joshi Issar, Learned Counsel for the GMADA and the Complainant, who himself pleaded his case. 

10.           Ms. Issar, Learned Counsel appearing for GMADA strenuously urged that since the Complainant had admittedly failed to make payment of the balance amount, as stipulated under plan ‘A’ in the Letter of Intent, in the absence of any provision for condonation of delay in making the requisite deposit, he was shifted from plan ‘A’ to plan ‘B’, in order to enable him to continue to be in the zone of consideration for allotment of an Apartment.  It was asserted that directions by the State Commission to GMADA to condone the delay in the said deposit and to pay to the Complainant compound interest @ 8% p.a., amounts to re-writing the terms of a contract i.e. the Letter of Intent, which is impermissible in law.  It was also urged that if the Complainant was unable to arrange for the funds, it was open to him to withdraw from the scheme and seek refund of the deposited amount, along with compound interest @ 8% as provided in the Scheme.  It was also argued that since the Complainant had failed to make  the entire payment under plan ‘B’, the ownership and possession of the Apartment continued to vest with GMADA in terms of clause 3 (III) of the LOI and therefore, the question of delivery of possession did not arise.

11.           Before addressing the contentions, vehemently advanced on behalf of GMADA, it would be profitable to take note of the relevant clauses of the LOI.  These are:-  

“2.  PAYMENT SCHEDULE

2.1 For initial 30%

(I) Payment of ₹1100000/- (Eleven Lakh Only) being 20% price of the apartment is to be made by 22.6.2012 to complete 30% of the apartment.

(II) In case of failure to make the payment within stipulated period, the amount paid shall be refunded with 10% deduction and allotment cancelled.  However, this period can be further extended up to 30 days with 2% penalty, up to 60 days with 3% penalty and up to 90 days with 5% penalty on prior written request.

2.2 For Balance Payment of 65%

(I)  PLAN-A

   A sum of ₹3396250 (Thirty Three Lakh Ninety Six Thousand Two Hundred Fifty Only) being balance 65% of tentative price of apartment within 60 days of the issue of LOI with a rebate of 5% on the balance amount payable.

   PLAN-B

   A sum of ₹3575000 (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. ………………………………”

2.3 For Balance Payment of 5%

(I) The balance amount of ₹275000/- (Two Lakh Seventy Five Thousand only) being 5% of the tentative price of apartment shall be payable at the time of possession.

(II) Delays 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.  Delays 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.

(III) XXX

(IV) XXX

(V) XXX

3. OWNERSHIP AND POSSESSION

(I) XXX

(II) Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent.  In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually.  Apart from this, there shall be no other liability of the Authority.

(III) The ownership and possession of apartments shall continue to vest with Greater Mohali Area Development Authority until full payment is made of outstanding dues in respect of said apartment.

(IV) XXX

(V)  XXX

(VI) XXX

4.                                                 XXX

5. GENERAL

(I)   XXX

(II)  XXX

(III) XXX

(IV) XXX

(V)  XXX

(VI) XXX

(VII) In case of breach of any condition(s) of allotment or of regulations or non-payment of any amount due together with the penalty, the apartment shall be liable to be resumed and in that case an amount not exceeding 10% of the total amount of consideration money, interest and other fees payable in respect of the apartment shall be forfeited as per the provision of section 45(3) of the Punjab Regional and Town Planning and Development Act, 1995 (hereinafter to be called the Act).

(VIII) XXX”

12.           A bare survey of the afore-noted clauses in the LOI makes it clear that after exercise of option for the payment plan, there is no provision for switching over from payment plan ‘A’ to plan ‘B’ or vice-versa.  Pertinently, clause 2.3(II) of the LOI confers power on the Estate Officer to condone delay in payment of installments under payment plan ‘B’ upto 12 months, but there is no such provision in relation to the requirement for lump sum payment of the balance 65% of the tentative price under payment plan ‘A’.  Therefore, in the event of default on the part of an alottee, opting for payment plan ‘A’, in making payment within the specified time, the allotted Apartment can be resumed in terms of Clause 5(VII). Admittedly, in the instant case, GMADA did not invoke the said provision to resume the Apartment allotted to the Complainant.  Therefore, the question falling for consideration is whether, instead of resuming the Apartment, GMADA was justified in converting Complainant’s payment plan from ‘A’ to ‘B’, because of the delay of 23 days in deposit of the second instalment of 65% of the tentative cost of the Apartment? 

13.           In our view, answer to the question has to be against GMADA.  Apart from the fact that, as noted above, there is no provision in the LOI for switch over from one payment plan to another, with or without permission of GMADA, the shifting of payment plan by GMADA without notice to the Complainant clearly falls foul of the fundamental principles of natural justice, more so, when GMADA retained a hefty amount of ₹33,96,250/-, deposited by the Complainant on 07.09.2012, under payment plan ‘A’, when as per payment plan ‘B’ the first instalment of ₹8,10,333/- was due to be paid only by 15.12.2012. One of the fundamental maxim of natural justice is the principle of audi alteram partem, which has many facets.  Two of them being: (a) notice of the case to be met; and (b) opportunity to explain.  It is well settled by a catena of decisions of the Hon’ble Supreme Court that duty to follow the said rule of affording a fair hearing extends to even in respect of an administrative order, particularly in matters involving civil consequences.  Admittedly, in the present case, no such opportunity was granted to the Complainant to explain the reasons for delay in deposit of the afore-said amount.  In the light of decision of the Finance and Accounts Committee, dated 26.10.2004, we are unable to agree with Learned Counsel for GMADA that the time schedule for making payment under the two plans was a water tight compartment, admitting of no relaxation and as such, condonation of delay in deposit would tantamount to re-writing the terms of the contract (LOI).  Had it been so, we wonder, under which provision of law, the Finance and Accounts Committee could recommend condonation of delay upto a maximum period of 10 days, in terms of its  decision, dated 26.10.2004 which reads as follows:-

“Subject: POLICY REGARDING CONDONATION OF DELAY IN DEPOSITING FULL PAYMENT BY THE ALLOTTEES OF RESIDENTIAL PLOTS ALLOTTED BY PUDA.

   The Finance and Accounts Committee in its 42^nd meeting held on 26.10.2004 vide agenda item No. 42.16 has approved that the facility of grace period of 10 days, over and above the normal period of 60 days, for making full payment, may also be extended to allottees of residential plots on the same anology as has been given to the allottees of built up houses/commercial sites, subject to the payment of penal interest at the rate of 0.05 per day or 18% p.a. i.e. the rate which is applicable for allottees of built-up houses.

   The Finance and Accounts Committee in the said meeting has further approved that the delay of one day in making full payment by allottee of plot No. 3622, Sector 69, SAS Nagar as well as in other similar cases may be condoned upto 10 days subject to the payment of penal interest at the rate of 0.05% per day.

                         (Issued vide letter No. 9346-50 Dated 10-11-04)”  

14.           Evidently, GMADA did not treat the terms and conditions in the LOI as sacrosanct. As a matter of fact, it did relax them, by granting grace period of 10 days to the defaulters.  To put it differently, the said decision shows that the terms of LOI were flexible but the power to grant any kind of relaxation was retained by GMADA to itself.

15.           Besides the above, even clause 2.3(II) of LOI vested in the Estate Officer the power to condone delay in payment of instalments under plan “B’ upto 12 months, if a genuine ground for the delay was established by the allottee, subject to payment of interest @ 18%. In that view of the matter, we are of the opinion that on facts at hand, particularly the fact that the Complainant did apply for loan to make the requisite deposit but due to exigencies of his service, could not complete the requisite formalities for this purpose and actually made the payment, though belatedly, which was retained by GMADA, the rejection of request for condonation of delay of 23 days on hyper-technical ground was without application of mind, amounting to deficiency in service on the part of GMADA.  It is equally significant to note that even in the absence of any stipulation in the LOI in that behalf, the Complainant has gracefully accepted the decision of the State Commission  directing him to pay interest as high as @ 20% p.a.  In our opinion therefore, the impugned direction for regularization of allotment under payment plan ‘A’ by the State Commission, cannot be held to be illegal, warranting our interference.

16.           The question surviving for consideration is whether the direction by the State Commission to GMADA to pay to the Complainant compound interest @ 8% on the amount(s) deposited by him, because of delay in delivery of possession of the subject Apartment, is justified?      

17.           Having perused the pleadings on the point, we are of the opinion that the said direction is unsustainable for the simple reason that no such relief was even prayed for in the Complaint. As afore-noted, the main prayer in the Complaint was for condonation of delay in remittance of the 65% of the sale consideration and acceptance of the stated amount with interest @ 18% p.a.  Besides the prayer for payment of cost of litigation, the Complainant had prayed for compensation of a lump sum amount of ₹1,00,000/- on account of physical and mental agony suffered by him and his family because of the decision by GMADA not to restore the allotment under payment plan ‘A’. Hence, the direction to GMADA for payment of interest at the aforestated rate, by way of compensation for the delay in delivery of possession deserves to be deleted with a direction that GMADA shall pay to the Complainant a lump sum amount of ₹1,00,000/- as compensation for mental and physical agony suffered by him on account of inordinate delay in acceding to his genuine prayer for regularization of allotment of the Apartment under payment Plan A.  It is ordered accordingly.

18.           In the final result the Appeal is partly allowed to the extent indicated above, leaving the parties to bear their own costs.