Per Justice Sham Sunder , President This order shall dispose of the aforesaid two appeals, arising out of the order dated 8.2.2011, rendered by the District Consumer Disputes Redressal Forum-I, U.T. Chandigarh (hereinafter to be referred as the District Forum only), vide which it accepted the complaint and directed the OPs as under ; “The OPs are, therefore, jointly and severally directed to refund to the complainant Rs. 2,57,150/- alongwith current SBI term deposit interest rate from the date of its deposit with them and pay the current SBI term deposit interest rate on Rs.14,28,750/- from the date of its deposit with the OPs till the date on which it was refunded to the complainant by them. The OPs shall also pay to the complainant Rs.10,000/- as compensation for causing him mental agony, harassment and financial loss by adopting unfair trade practice, alongwith Rs.5,000/- as costs of litigation. The order shall be complied with by the OPs jointly and severally within 30 days from the date of receipt of copy of this order, failing which, the OPs would be liable to pay penal interest @18% p.a. instead of paying it @ SBI term deposit interest rate, besides payment of compensation and litigation costs of Rs.5,000/- ,till the order is fully complied with.” 2. The facts, in brief, are that the complainant (now respondent) applied to OP Nos.1 & 2 (now appellants) for the allotment of a flat by submitting an application form dated 20.9.2007. Alongwith the application form, a sum of Rs.2,57,000/- towards earnest money of the said flat was also paid to OP Nos.1 & 2. The total value of the said flat was Rs.51,43,000/-. The complainant opted for the construction linked payment plan. According to this plan, the payment was to be made depending upon the progress in construction at the site. The complainant was allotted Unit No.E-105 vide allotment letter dated 15.10.2007. Thereafter, he paid Rs.14,28,750/- by way of demand draft dated 26.11.2007. A tripartite agreement, was executed amongst the complainant and the OPs. According to the said agreement, possession of the allotted flat was to be delivered within 36 months of signing of the development agreement i.e. 6.10.2006. The complainant visited the site in January 2009, but was surprised to see, that there was no construction. Therefore, he wrote letters dated 10.1.2009 and 24.1.2009 to the OPs seeking refund, but to no avail. It was further stated that the OPs by relying upon clause 5(a) of the tripartite agreement, released an amount of Rs.14,28,750/- only and illegally deducted an amount of Rs.2,57,150/-, being 5% of the total amount paid. It was further stated that there was no default on the part of the complainant, and, as such, deduction of the amount could not be made as per clause 5(a). It was further stated that the OPs were deficient, in rendering service, and also indulged into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by him. 3. OP Nos.1 & 2, in their written reply, admitted the factual matrix of the case. It was stated that the construction could not be started because after the execution of the development agreement dated 6.10.2006, possession of 123.79 acres of land, claimed to be unencumbered, was handed over to OP No.1 by the Chandigarh Housing Board. It was further stated that when OP No.1 was fencing the land, possession whereof was delivered to it, for the development of project, a dispute arose, as the Haryana Government claimed ownership with regard to a part of the same. It was further stated that when that dispute was resolved, an alternative piece of land, in lieu of the disputed portion of land, was given to OP No.1, but it was discovered to be the land of Forest Department on which there existed more than 200 full grown trees and restrictions by the Forest Department with regard to the felling of the same and use of this land for the project were imposed. It was further stated that a period of 36 months, for the completion of project, could only be counted, from the date of delivery of possession of the entire unencumbered land, and not earlier to the same. It was further stated that as per clause 5(a) of the flat buyer agreement, in case the complainant wanted the cancellation of the flat and refund of the amount, the OPs were liable to refund the same after forfeiting 5% of the basic price. It was further stated that the amount of Rs.14,28,750/- when refunded to the complainant, was received by him, without any protest. It was further stated that the complainant was not entitled to the refund of the remaining amount of Rs.2,57,150/-. It was further stated that OP Nos.1&2 were neither deficient, in rendering service, nor indulged into unfair trade practice. 4. OP NO.3, Chandigarh Housing Board, in its written reply, admitted the factual matrix of the case. It was stated that OP NO.3, was only to provide land to OP Nos. 1 & 2. The whole project was to be constructed by OP Nos.1 & 2, as per schedule, mentioned in the agreement, and in the event of non performance of their part of the obligation, OP Nos.1 & 2, were liable to refund the amount. It was further stated that out of the sale proceeds, only 30% was to go to OP-3 and, therefore, they refunded their part of the share to the complainant, though OP Nos.1 & 2, were liable to refund the same. It was further stated that the deduction of 5% at the time of refund was made by OP Nos. 1 & 2 and OP-3 had nothing to do. It was denied that OP No.3 was deficient, in rendering service, and indulged into unfair trade practice. 5. The parties led evidence, in support of their case. 6. After hearing the Counsel for the parties , and, on going through the evidence and record of the case, the District Forum, passed the order, in the manner, referred to, in the opening para of the instant order. 7. Feeling aggrieved, the aforesaid two appeals, one by Parsvnath Developers Ltd. & another appellants/OPs, for setting aside the impugned order, and the second by the Chandigarh Housing Board, appellant/OP also for exonerating it of its liability, to pay any amount, to the complainant and setting aside the impugned order, were filed. 8. We have heard the Counsel for the parties, and have gone through the record of the case, carefully. 9. The Counsel for the Parsvnath Developers Ltd. and another, appellants/OPs in Appeal No.45/2011 submitted that, till date the Chandigarh Housing Board had not handed over the possession of the entire unencumbered land, required for the project in question. He further submitted that it was, under these circumstances, that the construction of the project could not be undertaken and the possession could not be delivered, as it was an integrated project. He further submitted that the appellants have not abandoned the project. He further submitted that the complainant was only entitled to the refund of amount, after deduction of 5% of the basic price, in view of the provisions of clause 5(a) of the flat buyer agreement. He further submitted that the interest was awarded by the District Forum, at a higher rate. He further submitted that the order of the District Forum, being illegal, is liable to be set aside. 10. The Counsel for the Chandigarh Housing Board, appellant/OP, in Appeal Case NO.60/2011, submitted that, it was the responsibility of the developer to construct the flats and deliver the possession thereof within 36 months from 6.10.2006, the date when the development agreement, between the OPs, was executed. He further submitted that, as per clause 9( c)of the flat buyer agreement, on account of non-delivery of possession, within the prescribed time, compensation indicated therein, could only be awarded against the developer, but the District Forum was wrong, in holding the Chandigarh Housing Board, jointly and severally liable to pay the compensation of Rs.10,000/-. It was further submitted that the compensation of Rs.10,000/- for alleged mental agony and harassment was wrongly awarded by the District Forum. It was further submitted that the appeal be accepted and the order of the District Forum be set aside. 11. The first question, that arises for consideration, is, as to within which period the construction of the residential units, was likely to be completed. There is, no dispute, about the factum, that the complainant applied for the allotment of a flat. He was allotted a flat. He deposited a total sum of Rs.16,85,750/- through various instalments, towards the price of flat, which was allotted to him, as admitted by the OPs. Clause 9(a) of the flat buyer agreement annexure C6, dated 25.1.2008, referred to above, which is relevant, for answering the question, posed at the outset of this paragraph, reads as under ; “Construction of the residential units is likely to be completed within a period of thirty six (36) months of the signing of the Development Agreement i.e. 06.10.2006 between the Developer and CHB and/or as may be extended in terms of the Development Agreement shall be subject to force majeure and circumstances beyond the control of the Developer, and any restraints, restrictions from any Courts/authorities. The delay in grant of environmental clearances beyond 12 months of the signing of the Development Agreement shall not be counted towards the said period of 36 months.” 12. The plain reading of Clause 9(a) of the flat buyer agreement, extracted above, clearly goes to reveal, that the construction of the residential units, was to be completed, within a period of thirty six months of the signing of the development agreement dated 06.10.2006 annexure R-2. The time could be extended, in terms of the development agreement dated 6.10.2006, subject to force majeure, and the circumstances beyond the control of the developer. OP Nos.1 & 2 admitted, in their written reply that, in the first instance, the possession of the entire project land was handed over to them by OP No.3, and when the fencing was being done, the Haryana Govt. raised dispute with regard to the ownership of a portion of the land. It is further the case of OP Nos. 1 & 2, that when that dispute was resolved, and in lieu of the disputed portion of the land, possession of some other land was given to them, the same was discovered to be that of the Forest Department. Even if, it is assumed for the sake of arguments, that the ownership of a small portion of the land was disputed, that did not mean that the construction of the residential units, could not be undertaken, on the remaining land, which constituted the major portion of the project land, and with regard whereto, there was no dispute, whatsoever. Therefore, it was not, on account of the circumstances, beyond the control of the developer, that delay was caused, in the construction of residential units . The developer also could not take shelter of force majeure clause. No document was produced by OP Nos.1 & 2, that any restriction was imposed by any Court or Authority upon them, as a result whereof, they could not raise construction of residential units, in time. Even, it was not proved that there was delay, in the grant of environmental clearance. OP Nos.1 & 2, without first confirming the clear title of the land, over which the project was to be developed, started booking the flats and allotting the same to the prospective buyers, by fleecing them of huge amounts and making misleading statement that the construction of residential units will be completed within 36 months w.e.f. 6.10.2006. Even, long after the expiry of the stipulated period, not even a brick was laid, at the site, what to speak of raising construction. OP Nos.1 & 2, thus, indulged into unfair trade practice. It is, therefore, held that the construction of the residential units was to be completed within 36 months from 6.10.2006 i.e. by 5.10.2009. 13. The next question, that arises for consideration, is, as to whether the complainant was entitled to the refund of the amount, deposited by him with interest or not ? Clause 9(d) of the flat buyer agreement annexure C6, which is relevant, to answer this question, reads as under; “9(d) If as a result of any rules or directions of the Government or if any competent authority delays, withholds, denies the grant of necessary approvals for the Project, or if due to any force majeure conditions, the Developer is unable to deliver the unit to the Buyer, the Developer and CHB shall be liable to refund to the Buyer the amounts received from the Buyer with interest at the SBI Term Deposit Rate as applicable on the date of refund.” 14. The complainant deposited instalments, in time, with the hope of getting possession of the flat allotted to him, within a period of 36 months from 6.10.2006, but all his hopes were dashed to the ground when he found that even by the stipulated date, not even a single brick had been laid, at the spot, what to speak of construction of flats, and delivery of possession thereof to the buyers. In these circumstances, the complainant could not wait for an indefinite period. The only option with the complainant, in such circumstances, was to ask for the refund of the amount. He, thus, wrote letters for refund of the amount with interest, but the OPs failed to do so. The plain reading of Clause 9(d) extracted above, reveals that if the developer, for whatever the reasons may be, fails to deliver the residential unit to the buyer, the developer and the Chandigarh Housing Board, shall be liable to refund the amounts, received from the buyer, with interest, at the SBI Term Deposit Rate, as applicable, on the date of refund. The OPs were, thus, deficient, in rendering service by neither delivering the possession of the flat, within the stipulated time, nor refunding the amount with interest as provided under Clause 9(d) of the agreement, referred to above. The complainant was, thus, entitled to the refund of the amount of Rs.16,85,750/- with interest at the SBI term deposit rate, as per Clause 9(d) of the Agreement, referred to above, from the date of deposit till realization and not Rs.14,28,750/-, The OPs, thus, were not entitled to deduct Rs.2,57,150/-. The District Forum was right, in holding so. 15. Coming to the submission of the Counsel for OP Nos.1 & 2, that since there was breach of Clause5(a) of the flat buyer agreement, by the complainant, he was entitled to the refund of the amount, deposited by him, only after deduction of 5% of the basic price of the flat, it may be stated here, that such an argument advanced by the Counsel for OP Nos.1 & 2, is misconceived. Clause 5(a) of the aforesaid agreement C6 , reads as under ; “5(a)Timely payment of the instalments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and/or the Buyer commits breach of any of the terms and conditions of this Agreement, then this Agreement shall be liable to be cancelled. In the eventuality of cancellation, earnest money being 5% of the basic price would be forfeited and the balance, if any, would be refundable without interest. However, the sellers may allow the revival of the allotment of the unit (subject to its availability) in the name of the Buyer on payment of revival charges amounting to 10% of earnest money.” 16. The plain reading of Clause 5(a) extracted above, clearly goes to show that admittedly the payment of instalments/amounts due, shall be the essence of the agreement, and if the payment was not made, within the stipulated period, or the buyer committed breach of any of the terms and conditions of the agreement, the agreement shall be liable to be cancelled and the amount would be refunded, after deduction of 5% of the basic price. The question arises, as to whether, there was default, in making the payment of instalments, or violation of any other term, and condition of the agreement aforesaid, on the part of the complainant, or not ? It was proved, as also admitted by the OPs, that the payment of instalments was made by the complainant, as and when the same fell due. There was no delay, in making payment of instalments, towards the price of the flat, on the part of the complainant. Since, after the payment of the aforesaid amount, and expiry of the period of 36 months from 6.10.2006, not even a single brick had been laid, the complainant was left with no alternative than to ask for the refund of the amount. There was also no breach of any other term and condition of the agreement, referred to above, on the part of the complainant. As such, the provisions of Clause 5(a), extracted above, relating to the deduction of 5% amount of the basic price, could not be invoked. The complainant was, thus, entitled to the refund of the entire amount, deposited by him, with interest. Deduction of Rs.2,57,150/- by OP Nos.1 & 2 was illegal. The District Forum was also right, in coming to the conclusion that by not refunding the full amount, the OPs were deficient, in rendering service. The findings of the District Forum, in this regard, are affirmed. The submission of the Counsel for the Parsvnath Developers & another appellants, in this regard, being without merit, must fail, and the same stands rejected. 17. The next question, that arises for consideration, is, as to whether, the complainant was entitled to compensation for not handing over possession to him, for causing him physical harassment and mental agony, or not ? No doubt, clause 9( c) of the flat buyer agreement, specifies as to at what rate the compensation is to be granted to the complainant, in case, the possession is not delivered in time. However, compensation was not granted, by the District Forum at the specified rate mentioned in clause 9( c). The District Forum, after taking into consideration the facts, circumstances, the physical harassment and mental agony suffered by the complainant, granted him lump-sum compensation of Rs.10,000/-. No appeal has been filed by the complainant challenging the inadequacy of compensation, awarded to him. The compensation of Rs.10,000/- awarded by the District Forum, cannot be said to be excessive, unreasonable or unfair. The submission of the Counsel for the appellants in both the appeals, being devoid of merit is rejected. 18. The District Forum, fell into an error in holding that the Chandigarh Housing Board, was jointly and severally liable with the developer to pay the compensation awarded. According to clause 9(c ) of the agreement annexure C6, it was only the developer, which was liable to pay the compensation and not the Chandigarh Housing Board. To this extent, the order of the District Forum requires modification. 19. The District Forum granted interest @ 18% p.a., in the event of non-compliance of the order within 30 days. It may be stated here, that the interest @ 18% awarded, on account of non-compliance of its order within 30 days, is also on the higher side. In our opinion, the interest @ 12% p.a., on account of non-compliance of the order, could be said to be just, reasonable and fair. The order of the District Forum, in this regard, also requires modification. 20. For the reasons, recorded above, both the aforesaid appeals are partly accepted, with no order as to costs, with the following modifications ; (i)that only the Parsvnath Developers Ltd. shall be liable to pay compensation of Rs.10,000/- awarded by the District Forum, for harassment and mental agony, caused to the complainant, and the Chandigarh Housing Board shall not be liable to pay the same. (ii) that the direction of the District Forum regarding the grant of penal interest @ 18% p.a. on non-compliance of the order within 30 days, is modified, and instead the OPs, are ordered to pay penal interest @ 12% p.a. on the payable amounts, on account of non-compliance of the order, within the period stipulated by the District Forum. (iii) the remaining reliefs, granted by the District Forum, shall remain unaltered. 21.. Certified Copies of this order be sent to the parties, free of charge. 22. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
