JUSTICE V.K. JAIN, PRESIDING MEMBER

The complainant applied to the opposite party for the purchase of a plot bearing No.307 and measuring 500 sq. yards in Mohali, near Chandigarh, paying a sum of Rs.15.00 lacs vide cheque dated 10.7.2011, followed by payment of Rs.6.00 lacs vide cheque dated 31.7.2011. On 02.3.2012, after about 8 months of the booking, the opposite party sent the draft Buyers Agreement to the complainant for execution.  As per the said Buyers Agreement, subject to force-majeure and reasons beyond its control, the opposite party was to deliver possession of the plot to the complainant within 12 months from the execution of the said agreement.  It was also stipulated in the said agreement that in the event of the opposite party failing to deliver possession, without existence of any force-majeure or reasons beyond its control, within 18 months from the date of the agreement, it shall for the period of delay beyond 18 months, be liable to pay a penalty of Rs.50/- per sq. yards. per month.  On receipt of the Buyers Agreement, the complainant demanded suitable compensation on the initial amount of Rs.21.00 lacs from the opposite party on the ground that the possession was to be delivered to him within 18 months from the date of allotment.  The said request however, was declined by the opposite party but the complainant was informed that possession would be handed over to him within the time frame mentioned in the Buyers Agreement.  However, despite having lodged the said protest, the complainant eventually signed the Buyers Agreement on 28.3.2012, on the assurance of the opposite party to deliver possession within the time stipulated in the Buyers Agreement. 

2.     As per the statement of Accounts filed by the opposite party, the complainant paid Rs. 3,50,000/- on 04.4.2012, Rs.14,87,375/- on 01.5.2012, Rs.14,87,375/- on 30.6.2012, Rs.2,65,000/-, Rs.2,20,000/-, Rs.1,40,000/-, Rs.5,00,000/- and Rs.1,00,000/- on 29.8.2012, Rs.6,25,000/-, Rs.6,00,000/- on 27.11.2012 and Rs.6,00,000/- on 27.2.2013.  The last payment was thus made on 27.2.2013 and the total payment made by the complainant comes to Rs.84,74,750/-. Vide notice dated 14.10.2013, the opposite party demanded a sum of Rs.12,37,500/- from the complainant and informed him that on his failure to make the aforesaid payment within thirty days, the Buyers Agreement dated 28.3.2012 shall automatically stand terminated / cancelled and he will also be liable to pay interest on delayed payment, at the rate specified in the Buyers Agreement.  The complainant however, did not comply with the said notice.  The opposite party thereafter, sent a letter dated 01.11.2013 to the complainant, demanding a total sum of Rs.24,49,025/-, which included the amount of Rs.12,25,000/- which was becoming due on 30.11.2013.  The complainant did not make any payment even on receipt of the aforesaid letter.  The opposite party thereupon, vide letter dated 20.2.2014, cancelled the allotment made to the complainant and informed him that a sum of Rs.63,17,468/- was refundable to him after deducting forfeiture amount of Rs.19,16,213/- and delayed payment charges of Rs.2,41,069/-.  Being aggrieved, the complainant is before this Commission, seeking refund of the entire amount of Rs.84,74,750/- along with interest @ 24% per annum and compensation quantified at Rs.65.00 lacs.

3.     The complaint has been resisted by the opposite party.  It is stated in the written version filed by the opposite party that the complainant was a defaulter in making payment since he failed to pay the agreed sale consideration as per the time linked payment scheduled agreed by him, despite repeated reminders and demand notices sent to him.  The cancellation of the Buyers’ Agreement is sought to be justified in the written version filed by the opposite party.

4.     No payment schedule was attached to the application made by the complainant on 10.7.2011 for allotment of plot No.307 in Sector-105 of Mohali Hills.  As per Clause 18 of the terms and conditions annexed to the application, the opposite party was to make all efforts to hand over possession of the plot within 12 months from the date of execution of the Buyers Agreement, subject to timely compliance of the provisions of the said agreement by the applicant.  It was further stipulated in the aforesaid clause that the opposite party shall be entitled to a grace period of six months for compliance and obtaining necessary approvals in respect of the plot and / or the project.  Thus, the application itself envisaged a total period of eighteen months, including a grace period of six months computed from the date of Buyers Agreement, for delivery of possession to the complainant. 

5.     It was vide letter dated 02.3.2012, the opposite party sent the allotment letter along with the draft Buyers Agreement and Payment Schedule to the complainant.  Though, the complainant had a grievance on account of the time period stipulated in the said Buyers Agreement for delivery of possession of the plot to him and he also demanded compensation from the opposite party on the initial payment of Rs.21.00 lacs which he had already made before receipt of the aforesaid allotment letter dated 02.3.2012, he eventually executed the said agreement on 28.3.2012 thereby, accepting the terms and conditions contained therein. If the time period stipulated in the Buyers Agreement, for delivery of possession of the plot, was not acceptable to the complainant, he ought not to have signed the Buyers Agreement and ought not to have made further payment to the opposite party.  Had he done so, and asked the opposite party to refund the initial amount of Rs.21.00 lacs and the opposite party had refused to refund the said initial amount, he could have approached an appropriate Forum for the redressal of his grievance, but having executed the Buyers Agreement on 28.3.2012, he became bound by the terms and conditions contained therein.

6.     Clause 8 of the Buyers’ Agreement executed on 28.3.2012 reads as under:

        “8.    Subject to force majeure conditions and reasons beyond the control of the Company, the Company shall make every endeavour to deliver possession of the plot to the Allottee(s) within a period of 12(twelve) months from the date of execution of this Buyer’s Agreement.  In the event that the possession of the plot is likely to be delayed for reason of any force majeure event or any other reason beyond the control of the Company including government strike or due to civil commotion or by reason of war or enemy action or earthquake or any act of God or if non delivery is as a result of any act, notice, order, rule or notification of the Government and any other public or Competent Authority or for any reason beyond the control of the Company, then in any of the aforesaid events, the Company shall upon notice claiming, force majeure to the Allottee(s) be entitled to such extension of time till the force majeure event persists or the reason beyond the control of the Company exists.  In the event that the Company fails to deliver possession of the Plot without existence of any force majeure event or reason beyond the control of the Company within 18 (eighteen) months from the date of execution of this Agreement, the Company shall be liable to pay to the Allottee(s), a penalty of the sum of Rs.50/- (Rupees Fifty only) per sq. yard. per month for such period of delay beyond 18 months from the date of execution of this Agreement.  It is made clear to the Allottee(s) and understood by the Allottee(s) that under no circumstances the Possession of the Plot will be handed over to the Allottee(s) prior to the execution of the Sale Deed / Conveyance Deed”.

A combined reading of the above referred clause of the Buyers Agreement with Clause 18 of the terms and conditions annexed to the application for allotment of plot clearly shows that after obtaining the requisite approvals, the opposite party was required to deliver possession of the plot to the complainant within 18 months from the execution of the buyers agreement.  The said period of 18 months expired on 27.9.2013.

7.     As noted earlier, no payment schedule was attached to the application submission by the complainant on 10.7.2011.  The payment schedule however, was annexed to the letter dated 02.3.2012, whereby the allotment letter and the draft Buyers Agreement was sent to the complainant.  The aforesaid schedule of payment, to the extent it is relevant reads as under:

        Thus, as per the above referred schedule, the complainant was required to pay a sum of Rs.1,21,62,250/- (1,27,74,750/- – 6,12,500/-) to the opposite party by 24.8.2013.  The balance amount of Rs.6,12,500/- was payable on intimation of possession.

8.     The statement of accounts filed by the opposite party shows the following payments:

        As noted earlier, the complainant has made a total payment of Rs.84,74,750/- and admittedly no payment was made by him after 27.2.2013.  As per the payment schedule agreed by him, he ought to have paid a total amount of Rs.1,03,24,750/- by 26.4.2013, a total amount of Rs.1,15,49,750/- by 25.6.2013 and a total amount of Rs.1,21,62,250/- by 24.8.2013.  Having not made payment in accordance with the aforesaid schedule, the complainant committed breach of the terms of the Buyers Agreement.  Consequently, the opposite party was entitled in law to terminate the said agreement.

9.     The case of the complainant is that since the opposite party had failed to complete the development of the plot, he was justified in stopping further payments after making the last payment on 27.2.2013.  We however, find no merit in this contention.  As noted earlier, the Buyers Agreement envisaged delivery of possession by 27.9.2013.  Therefore, the complainant was under a contractual obligation to make all the payments, including the payments which, as per the schedule of payment, had fallen on 26.4.2013, 25.6.2013 and 24.8.2013.  It is only the last payment of Rs.6,12,500/- which could have been deferred till the date on which the possession was offered to him.

10.   It is an admitted position that a revised payment schedule was sent by the opposite party to the complainant on 17.7.2013.  A perusal of the said schedule shows that the complainant was required to pay Rs.84,73,775/- by 18.6.2013, followed by payments of Rs.12,38,475/- by 30.8.2013 and Rs.12,25,000/- each by 30.11.2013 and 28.2.2014.  He was required to pay Rs.19,17,010/- by 28.10.2014 on intimation of possession.  The case of the complainant is that the aforesaid revised payment schedule was not acceptable to him.  If that is so, he was bound to make payment as per the schedule of payment sent to him on 02.3.2012, along with allotment letter and as noted earlier; he had failed to make the payment as per the said schedule of payment.  Even if we give benefit of the revised schedule of payment sent on 17.7.2013 to the complainant, admittedly, he did not make payment, in terms of the said schedule, since he did not pay Rs.12,38,475/- by 30.8.2013 and Rs.12,25,000/- by 30.11.2013.  Both the aforesaid payments had fallen due by the time the allotment came to be cancelled vide letter dated 20.2.2014.  Therefore, from whatever angle we may look at it, it cannot be disputed that the complainant failed to perform his contractual obligation in the matter of making payment as per the schedule of payment agreed by him.

11.   As per Clause 18 of the terms and conditions attached to the application for allotment, the opposite party was to deliver possession, subject to timely compliance of the provisions of the Plot Buyers Agreement, by the complainant. Since he failed to make payment as per the schedule of payment agreed by him, the opposite party stood relieved of its obligation to deliver possession to him.  Had the complainant made payment as per the payment schedule agreed by him, he could have claimed adequate compensation from the opposite party for the delay in offering possession of the plot as per the time schedule contained in the Buyers Agreement dated 28.3.2012.  But, he himself having defaulted in performing the terms of the said agreement; he is not entitled to any compensation at all from the opposite party.

12.   Clause 2(f) and 3 of the Buyers’ Agreement, to the extent they are relevant read as under:

        “2(f)  The Allottee (s) has entered into this Buyer’s Agreement on the condition that out of the amounts paid / payable by the Allottee(s) towards the Total Sale Price, the Company shall treat a sum equivalent to 15% as Earnest Money.  However, if the Allottee (s) chooses not to sign the Agreement, or chooses to cancel the plot, in that event the entire amount of 15% of the total sale price shall stand forfeited and the balance if any shall be refunded to the allottee(s)”.

        3.     The Allottee(s) agrees that the payment of instalments and other dues, within the time stipulated in this Buyer’s Agreement is the essence of this Buyer’s Agreement…………………………….  … In the event of delay of more than 30(thirty) days, in making payment to the Company by the Allottee(s) agrees that the payments on due date, as set out in Annexure-III herein, the company shall have the right to unilaterally terminate this Agreement and forfeit the Earnest Money as detailed hereinabove”.

        In view of the Clause 3 referred above, the opposite party was fully justified in terminating the agreement and forfeiting the Earnest Money.

13.   The case of the opposite party is that as per Clause 2(f) of the Buyers’ Agreement, extracted hereinabove, 15% of the total sale price constitutes the Earnest Money which they were entitled to forfeit.  However, it has been held by this Commission in DLF Ltd., Vs. Bhagwanti Narula, Revision Petition No.3860 of 2014, decided on 06.1.2015, that an amount exceeding 10% of the total price of the property cannot be forfeited as Earnest Money unless the opposite party can show that it has suffered loss to the extent of the amount actually forfeited by it.  Applying the principle laid down in the above referred decision of this Commission, the opposite party could have forfeited only a sum of Rs.12,77,475/- from the amount paid to it by the complainant.  The balance amount of Rs.71,97,275/- (84,74,750/- - 12,77,475/-) was required to be refunded to the complainant, which the opposite party has failed to do.

14.   In the event of the failure of the allottee to make the timely payment of the sale consideration, the agreement could be terminated after a delay of more than thirty days from the due date.  In the present case, the default on the part of the complainant occurred for the first time on 26.4.2013 since the instalment payable on that date was not paid in full.  Therefore, the agreement could have been terminated on 26.5.2013.  The opposite party however, failed to do so and continued to utilize the entire amount, which the complainant had paid to it from time to time.  The opposite party therefore, must compensate the complainant by paying compensation by way of interest on the balance amount of Rs.71,97,275/- with effect from 26.5.2013.

15.   For the reasons stated hereinabove, the opposite party is directed to refund the amount of Rs.71,97,275/- to the complainant within six weeks from today, along with compensation in the form of simple interest @ 10% on that amount with effect from 26.5.2013, till the date on which the said amount is paid in full, along with compensation in terms of this order.

16.   In the facts and circumstances of the case, there shall be no order as to costs.  The complaint stands disposed of accordingly.