This appeal has been filed by the appellant Emaar MGF Land Ltd. & Ors. against the order dated 18.01.2016 of the State Consumer Disputes Redressal Commission, Punjab, (in short ‘the State Commission’) passed in complaint No.170 of 2014.

2.      Brief facts of the case are that the complainant/respondent purchased a residential plot, in Sector 108, SAS Nagar Mohali from the appellants/opposite parties.  She purchased plot No.380 of 300 Sq.yards.  The plot was earlier allowed to one Mr. Rajeev Kumar Jain.  Thereafter it was endorsed, with the allotment letter, to the complainant dated 8.8.2008.  Total consideration of the flat was Rs.40,28,499/-.  Total payment made by the complainant was Rs.41,78,501/-.  Opposite parties promised to deliver the possession to the complainant within 3 years, maximum subject to force majeure as per the Builder –Buyer agreement (BBA).  Till date of filing of the complainant, possession was not offered to the complainant.  Thereafter, when complainant demanded refund of money, opposite parties flatly refused it after lingering on the matter on some or the other pretext.  Aggrieved, the complainant filed a consumer complaint bearing CC No.170 of 2014 before the State Commission.

3.      The complaint was resisted by the opposite parties by filing written reply.  Opposite parties pleaded that she bought the plot from open market at her own will.  Possession will be offered shortly with compensation for delay to the complainant as per the terms of the agreement.  On 18.01.2016, the State Commission passed the following order:-

“11.  In the result, the complaint is allowed and the following directions are issued to the opposite parties:-

i)     to refund the amount of Rs.41,78,501/-, along with interest at the rate of 12% per annum from 29.6.2010 till the date of payment of that amount;

ii)    to pay Rs.1,50,000/- as compensation for the physical and mental harassment suffered by her; and

iii)   to pay Rs.22,000/- as litigation expenses.

The compliance of this order shall be made by the opposite parties within a period of one month from the date of receipt of the certified copy of this order.”

4.      Hence the present appeal.

5.      Heard the learned counsel for the parties and perused the record.  The learned counsel for the appellants/opposite parties stated that they have filed along with their evidence the copy of the intimation of possession letter dated 7^th  Feb-2015 after establishing all amenities in terms of the Buyer’s agreement. Copy of the intimation of possession letter alongwith dispatch receipt was annexed hereto.   It is not out of place to mention here that in case of any delay in handing over possession beyond the proposed period of 3 years, there are sufficient safeguards in the agreement to protect the interest of the consumer and the opposite parties are committed to honour the same.  Yet further, as per agreed terms, in case of the allottee seeking refund, the same shall be governed by clause 2(f) of the Buyer’s Agreement which provides for forfeiture of earnest money. 

6.      Learned counsel for the appellants stated that the offer of possession was sent on 07.02.2015 whereas the complaint was already filed on 14.10.2014.  This offer was given before  filing the written statement by the opposite parties.  The learned counsel mentioned that complaint was filed for delay in possession.  It was further argued that the complainant is a subsequent purchaser and the first purchaser Mr. Rajiv Kumar Jain entered into the buyer agreement on 30.6.2006.  The plot was transferred in the name of the complainant and the endorsement was made on 08.08.2008.  Learned counsel stated that as per Clause 8 of the agreement, a tentative time for possession was given from two years to three years.  Para 8 of the Plot Buyer’s Agreement reads as under:-

“8.   Subject to Force Majeure conditions and reasons beyond the control of the Company, the Company shall endeavour to deliver possession of the Plot of the Allotte within a period of 2 (Two) years from the date of execution of this Agreement, but not later that 3 (Three) years).  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 a result of any act, notice, order rule or notification of the Govt. 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 be entitled to such extension to 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 reasons beyond the control of the Company within a maximum period of 3 (Three) years from the date of execution of this Agreement, the Company shall be liable to pay to the Allottee, a penalty of the sum of Rs.50/- (Rupees Fifty only) per sq. yds per month for such period of delay beyond 3(Three) years from the date of execution of this Agreement.”

7.      Learned counsel further referred to Clause 2 (f) and 3 of the Plot Buyer’s Agreement to assert that the complainant was bound to pay the instalments in time.  However, he has defaulted on many occasions.  The opposite parties have to issue reminder for making payment.  Clause 2(f) and 3 read as under:-

“2(f)         The Allottee has entered into this Agreement on the condition that out of the amounts paid/payable by the Allottee towards the Sale Price, the Company shall treat 30% of the Sale Price as Earnest Money (hereinafter to as “the Earnest Money”).  However, if the Allottee chooses not to sign this Agreement and further chooses to forfeit his allotment, then 20% of the amount paid by the Allottee at the time of the Expression of Interest shall stand forfeited.  And the rest of the amount (if any) shall be refunded to the Allottee.  However, after signing this Agreement, in order to ensure the fulfilment, by the Allottee, of all the terms and conditions as contained in the application and this Agreement and in the event of the failure of the Allottee to perform all obligations set out in this Agreement or fulfil all the terms and conditions of this Agreement or in the event of failure of the Allottee to sign and return this Agreement in its original form to the Company within 30 (Thirty) days from its date of Receipt by the Company, the Allottee hereby authorizes the Company at its sole option and discretion, to forfeit out of the amounts paid by the Allottee, the Earnest Money as aforementioned together with any interest paid, due or payable, any other amount of a non-refundable nature.  The Allottee further agrees that the condition of forfeiture of Earnest Money shall remain valid and effective till the execution and registration of the Conveyance Deed for the Plot and the Allottee hereby authorizes the Company to resort to such forfeiture after considering the above mentioned 30 (Thirty) days as notice period to the Allottee and the Allottee has agreed to this condition to indicate the Allottee’s commitment to faithfully fulfil all the terms and conditions contained in the Allottee’s application and this Agreement.  

3.   The Allottee agrees that timely payment of instalments and other dues is the essence of this Agreement and the allotment of the Plot.  The Allottee agrees and undertakes to make all payments including stamp duty, registration fee and other charges stipulated under this Agreement to be paid on or before due date or as and when demanded by the Company in time without any reminders from the Company through A/c Payee Cheque(s)/Demand Draft (s) payable at New Delhi.  The Allottee agrees that the payments on due dates as set out in Annexure-I shall be made promptly and the Company shall not be required to send any demand notice for payment of the scheduled instalments as per the said Annexure-I.  In the event of delay of more than 30 (Thirty) days, in making payment to the Company by the Allottee, as per the Schedule of Payments in Annexure I herein, the Company shall have the right to unilaterally terminate this Agreement and forfeit the Earnest Money as detailed hereinabove.  The Company shall also have the right to charge interest at the rate of 15% p.a. compounded at the time of every succeeding instalment from the due date of instalment, as per the Schedule of Payment, till the date of payment. The Allottee hereby agrees and undertakes that it shall not under any circumstances whatsoever, challenge such termination, forfeiture and levy of interest by the Company.  However, the Company may in its sole discretion, waive its right to terminate this Agreement, and enforce all the payments and seek specific performance of this Agreement.  In such a case, the Parties agree that the possession of the Plot will be handed over to the Allottee only upon the payment of all outstanding dues, penalties etc., along with interest by the Allottee to the satisfaction of the Company.”

8.      On the basis of these Clauses, the learned counsel stated that for deciding the deficiency on the part of the opposite parties the whole agreement is required to be seen.  The opposite parties are bound to pay Rs.50/- (Rupees Fifty only) per sq. yds per month as penalty for delayed possession beyond 3(Three) years.  The State Commission has not considered this aspect that both the parties are bound by these clauses.

9.      Learned counsel stated that for sale of immovable property and construction, time is never regarded as the essence of the contract.  Thus, complainant is not entitled to claim immediate possession or even in any time bound manner as same would amount to specific performance of the contract. In this regard, learned counsel relied upon the judgment of Hon’ble Supreme Court in  Chand Rani (Smt.) (dead) by LRs. Vs. Kamal Rani (Smt.) (dead) by LRs., (1993)1 SCC 519, wherein the following has been observed:-

“18. Having regard to the above submissions only two points require to be considered by us (1) Whether time is the essence of the contract ?

(2) Whether the first plaintiff was ready and willing to perform the contract ?

19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.”

10.    Learned counsel further relied upon the judgment of Hon’ble Supreme Court in Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 711, wherein, the following has been held:-

18.  We find that both parties - BDA as also the Respondent proceeded on the basis that time was not the essence of the contract. In a contract involving construction, time is not the essence of the contract unless specified. Even when the respondent wrote the letters dated 29.11.1989, 17.1.1990, 9.7.1993 and 11.1.1994, it did not make time for performance the essence of contract, nor fix any reasonable time for performance. The Respondent did not also choose to terminate the contract, obviously in view of the manifold increase in the value of the Houses. For the first time, by notice dated 11.7.1994, it purported to make the time the essence, but demanded delivery within an unreasonable period of one month and filed the complaint on 4.2.1995. Thus, it cannot be said that the Respondent made time the essence of contract, in a manner recognized in law.”

11.    It was further argued by the learned counsel that order of refund cannot be made until the agreement is rescinded.  The complainant has not made any prayer for rescinding the agreement. Even the State Commission cannot order rescinding of agreement as there is no such provision in Section 14 of the Consumer Protection Act, 1986.  Rescinding of the Contract is only possible under the suit being filed under Specific Performance Act. 

12.    Learned counsel for the appellant stated that the appellant is aggrieved by the award of interest on the amount paid by the complainant @12% p.a.   Learned counsel argued that in FA No.345 of 2014, EMAAR MGF Land Ltd. & Anr. Vs. Dilshad Gill, decided on 27.5.2015 (NC) this Commission has awarded only 9% p.a. interest.

13.    It was further argued by the learned counsel that if the time is essence in the agreement then the breach is accepted by the appellant though still the contract has not been rescinded for more than 5 years and therefore, the complaint is barred by limitation.  It was further argued by the learned counsel that the present case relates to purchase of plot and therefore, opposite party is not offering any service and hence, consumer forum does not have any jurisdiction to decide this complaint.   In support of his argument, learned counsel referred to the judgment of Hon’ble Supreme Court in Ganeshlal Vs. Shyam, 2014 (1) CPC 529, wherein the following has been observed:-

“6. It is submitted that failure to hand over possession of the plot of land simpliciter cannot come within the jurisdiction of the District Consumer Forum, State Commission or National Commission. We quite see merit in this submission of Mr. Lambat, particularly having seen the definition of 'deficiency' as quoted above. We may, however, note that when it comes to “housing construction”, the same has been specifically covered under the definition of 'service' by an amendment inserted by Act 50 of 1993 with effect from 18th June, 1993. That being the position, as far as the housing construction by sale of flats by builders or societies is concerned, that would be on a different footing. On the other hand, where a sale of plot of land simpliciter is concerned, and if there is any complaint, the same would not be covered under the said Act.”

  14.  It was further pointed out by the learned counsel that the State Commission has awarded a compensation of Rs.1,50,000/- for mental agony and harassment, which is not justified, once the interest has been allowed on the amount of refund as interest is also in the form of compensation.  Moreover, under Section 14(1)(d) of the Consumer Protection Act, 1986, the compensation can be allowed only when there is loss or injury suffered by the complainant due to negligence of the opposite party.  In the present case, no loss or injury has been proved by the complainant and therefore, he is not entitled to any compensation.  In this regard, learned counsel also referred to the judgment of the Hon’ble Supreme Court in Godfrey Philips India Ltd. Vs. Ajay Kumar, (2008) 4 SCC 504, wherein the following has been observed:-

“18.     So far as direction No.(iii) is concerned, it is to be noted that there was no prayer for any compensation. There was no allegation that the complainant had suffered any loss. Compensation can be granted only in terms of Section 14(1)(d) of the Act. Clause (d) contemplates award of compensation to the consumer for any loss or injury suffered due to negligence of the opposite party. In the present case there was no allegation or material placed on record to show negligence.

19. Interestingly, there was no allegation or finding of loss or injury caused to the respondent on account of the advertisement issued in 1999. The complainant himself had stated that he was smoking cigarettes for the last two decades. Therefore, the impugned advertisement cannot be said to have affected the complainant and/or caused any loss to him to warrant grant of compensation.”

15.    Learned counsel for the appellant also argued that the respondent/complainant is not the original allottee, but is a subsequent allottee and hence he is not entitled to any interest on the refund of the amount paid.  In support of his argument, learned counsel for the appellant referred to the following judgments:-

1. Haryana Urban Development Authority Vs. Diwan Singh, (2009) 2 Scale 183.  It has been held that:

“8.           One significant aspect to be noticed is that the respondent is not the allottee who was allotted the plot in 1990, but a re-allottee who was re-allotted the plot in April 1998.  When he was offered possession of the plot in May 1998, he found that a part of it was used for purposes of road.  Thereafter, the appellant even offered an alternative plot.  The respondent however rushed to the District Forum in 1999, hardly within a year of re-allotment.  The allegations of inordinate delay, negligence, harassment on the part of the appellant in a complaint filed by a re-allottee, within one year of reallotment, appears to be hollow and without merit.  In this factual background, having regard to the principles laid down in GDA vs. Balbir Singh, Huda vs. Darsh Kumar and Bangalore Development Authority vs. Syndicate Bank, the award of interest was not warranted.  A re-allottee in 1998 cannot obviously be awarded interest from 1992 on the amounts paid by the original allottee in 1990 on the ground that the original allottee was not offered delivery in 1990.”

          2.      Haryana Urban Development Authority Vs. Raje Ram, (2008), 17 SCC 407.  It has been held that:

16.    The respondents in the three appeals are not the original allottees. They are re-allottees to whom re-allotment was made by the appellant in the years 1994, 1997 and 1996 respectively. They were aware, when the plots were re- allotted to them, that there was delay (either in forming the layout itself or delay in delivering the allotted plot on account of encroachment etc). In spite of it, they took re-allotment. Their cases cannot be compared to cases of original allottees who were made to wait for a decade or more for delivery and thus put to mental agony and harassment. They were aware that time for performance was not stipulated as the essence of the contract and the original allottees had accepted the delay.

17.   The appellant offered possession to respondents (re-allottees) and they took possession of the respective plots on 27.6.2002, 21.3.2000, and 13.9.1999 respectively. They approached the  7District Forum in 1997, within a short period from the dates of re-allotment in their favour. They had not paid the full price when they approached the District Forum.

18.    In the circumstances, having regard to the principles laid down by this Court in Ghaziabad Development Authority v. Balbir Singh - 2004 (5) SCC 65, Darsh Kumar (supra) and Bangalore Development Authority v. Syndicate Bank - 2007 (6) SCC 711, we are of the view that the award of interest was neither warranted nor justified.”

16.    On the other hand, learned counsel for the respondent/complainant stated that the opposite parties in their written statement have agreed that the possession of the plot has not been offered as the development of the plot was not complete.  Thus, the opposite parties have accepted the delay and have also accepted its deficiency in service for not delivering in time the possession of the plot after proper development as per the agreement. The complainant further alleged that offer letter of possession was filed along with the evidence for the first time.  The contradiction between the written statement and evidence is sufficient to prove deficiency.  As the written statement has been filed on 11.02.2015, hence it is clear that by that time, the development of plot was not completed.  Thus, it is not possible that offer of possession could have been sent on 07.2.2015.  This fact has also been confirmed by the State Commission in its following observation:-

“10. Admittedly, the possession of the plot was not delivered to the complainant within the stipulated period.  The opposite party has come up with the plea that the possession of the plot was offered to her and once the same has been offered, she has no cause of action to file the complaint for refund of the amount deposited by her as the price of that plot.  The letter regarding intimation of possession, so sent to the complainant Ex.Op-1 is dated 7.2.2015.  The present complaint was filed on 14.10.2014 and the opposite parties had put in their appearance before this Commission on 28.1.2015. It appears that in order to deprive the complainant the right to claim the refund, the said letter was issued by one opposite parties.  That letter is not in consonance with the averments made in the written reply.  The opposite parties averred in their written reply that they stand committed to hand over the possession of developed plot as per the agreement and that the same has not been offered to the complainant on account of the fact that the same was not complete.  That written reply was filed on 11.2.2015.  If that was the stand of the opposite parties, how they had written the letter dated 7.2.2015.  It is very much clear from their own written reply that the plot was not ready for delivery of possession thereof.  The letter dated 7.2.2015 was written to the complainant by the opposite parties only in order to wriggle out of their liability to refund the amount received by them from the complainant.  This act of omission/commission on the part of the opposite parties in not developing the plot and delivering the possession thereof to the complainant within the stipulated period and making her to wait further for a number of years clearly amounts to deficiency in service and adoption of unfair trade practice.  The complainant was not required to further wait for possession of the plot and was very much within her rights to claim the refund of the amount.  She is entitled to interest also on that amount from the date when the possession of the plot was required to be delivered to her till the payment thereof.  Having suffered physical and mental harassment at the hands of the opposite parties, she is entitled to just and reasonable compensation also.”

17.    Learned counsel for the complainant further mentioned that the allegation of the opposite party is not correct that the complainant is a defaulter.  In fact, in the written statement filed by the opposite party, no stand has been taken that complainant was a defaulter by not paying the instalments.  It has been agreed by the opposite party in their written statement that complainant has paid Rs.40,28,501/- towards the principal amount and Rs.10,750/- towards delayed payment charges. Thus it is clear that even if there was some delay in payment of one or two instalments, it has been paid with delay charges as levied by the opposite parties.  So, there cannot be any question of complainant being a defaulter.

18.    Learned counsel stated that Clause 8 of the builder-buyer agreement clearly provides that the possession will be provided within two years from the date of execution of the agreement.  This clause also provides that if it is not possible for opposite party company to provide the possession due to any force majeure condition or any factor beyond the control of the opposite party, then the same will be informed to the allottees for their concurrence for extension of time.  In the present case, no such intimation has been received by the complainant.  This clause further stipulates that if the possession is not granted within three years, then opposite party shall pay a penalty of Rs.50/- (Rupees Fifty only) per sq. yd per month for the period of delay.  This clearly implies that the opposite party is bound to give possession within three years and this is the outer limit for giving the possession.  Clearly, possession cannot be delayed any further though there is penalty for delayed possession beyond this period.  Clearly this Clause cannot be interpreted as giving no limit for possession of the plot because delay in possession could be compensated for any period of delay.  The judgment shown by the learned counsel for the appellant in Chand Rani (Smt.) (dead) by LRs. Vs. Kamal Rani (Smt.) (dead) by LRs. (supra) is not applicable in the present case because in the present case, the agreement prescribes a time limit for giving possession of the plot.  It is also important to note that no force majeure condition has been shown by the opposite party for delay in handing over the possession and therefore, there is no question of waiting beyond three years for getting the possession. 

19.    Coming to the question of rate of interest, learned counsel for the respondent/complainant stated that the State Commission has allowed an interest @12% p.a. on the basis of the provision in the agreement. Clause 32 of the agreement clearly provides as under:-

“32.    ………….. The Allottee agrees and understands that if due to any Force Majeure Conditions …..(not readable) …. or part of the project is abandoned or abnormally delayed, the Allottee shall not be entitled to prefer any claim …..(not readable)…..  that the Company shall on demand refund the Allottee’s money with simple interest @12% p.a. from the date of ….(not readable)…. of such Force Majeure Conditions.”

20.    It was emphasised by the learned counsel for the respondent that the project was inordinately delayed, therefore, this Clause become applicable and the opposite party company would be liable to refund the amount paid by the complainant along with interest @12% p.a., therefore, the State Commission has not allowed any excessive interest and the same is as per the provisions of the agreement. 

21.    Learned counsel for the respondent also refuted the assertion of the learned counsel for the appellant that a sale of plot does not come under the ‘service’ as defined in the Consumer Protection Act, 1986.  He stated that the judgment of the Hon’ble Supreme Court in Ganeshlal Vs. Shyam, 2014 (supra) relied upon by the learned counsel for the appellant is in respect of the simplicitor plot and not in respect of developed plot under a housing project.  Therefore, this judgment is not applicable in the facts of the present case.  Learned counsel emphasised that the project is an integrated township.  Complainant did not get her plot when she needed the same.  Now they have arranged other accommodation.  The complainant now seeks refund of the amount paid by the complainant.  The interest provided by the State commission is in consonance with the provision agreed upon by the parties in the agreement and therefore, this interest is compensation for the deficiency in service on the part of the appellant/opposite party and this interest clearly cannot be considered as compensation on account of mental agony and harassment suffered by the complainant.  Therefore, the separate compensation of Rs.1,50,000/- as awarded by the State Commission is perfectly justified.

22.    I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties. There is a provision in the agreement (clause No.3) which mentions that timely payment of instalments is the essence of the agreement and the allotment of the plot.  This means that the opposite party realises that time is the essence of the contract, but the opposite party has recognized this aspect only for compliance by the complainant and not for itself.   Once the builder/promoter has accepted that the time is essence of the contract, then he cannot take the plea that time is not the essence of the contract as this is a contract in respect of immovable property.  Clearly if the time is the essence of the contract for the payment to be made by the complainant, the builder cannot take the liberty of completing the project beyond the time agreed in the builder –buyer agreement as he is also bound by the same (time is the essence of the contract), therefore, after completion of the time period mentioned in the builder –buyer agreement for completing the construction and handing over the possession of the flat, the complainant is entitled to file the consumer complaint either for getting possession or for refund.   

23.    It is true that main prayer in the complaint is for possession and the prayer in alternative is for refund realising that the project is likely to take more time for which the complainant was not willing to agree.  The State Commission has ordered refund of the amount paid by the complainant. I do not see any illegality in this order in the light of the judgment of the Hon’ble Supreme Court in Civil Appeal No.12238 of 2018 titled as “Pioneer Urban Land & Infrastructure Ltd. versus Govindan Raghavan” wherein the Apex Court has upheld the order of this Commission by observing the following:

“3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent - Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent - Flat Purchaser could not be compelled to take possession at such a belated stage. The grounds urged by the Appellant - Builder for delay in handing over possession were not justified, so as to deny awarding compensation to the Respondent - Flat Purchaser. The clauses in the Agreement were held to be wholly one - sided, unfair, and not binding on the Respondent - Flat Purchaser. 6 The Appellant - Builder was directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent - Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation.

9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.

10. The Civil Appeals are accordingly dismissed, and the Final Judgment and Order dated 23.10.2018 passed by the National Consumer Disputes Redressal Commission is affirmed.”   

24.    Now coming to the interest part, it is seen that the State Commission has awarded refund of the amount paid by the complainant to the opposite party along with interest @12% p.a.  It is seen that in clause 32 of the agreement, there is a provision that if the project is abandoned or inordinately delayed due to any force majeure condition, the builder, shall refund the amount of the allottee along with 12% p.a. interest.  When the builder has committed to pay 12% p.a. interest on the amount of refund in case of force majeure condition, he should pay more or atleast the same when the delay is not caused by any force majeure condition rather, is due to any managerial shortcoming or any other reason. Therefore, no justification is seen in the agreement of the learned counsel for the appellants that interest of 12% p.a. should be reduced.  

25.    Coming to the question of refund the learned counsel for the appellants has argued that the refund is not possible without cancellation of the agreement.  Once the complaint has been filed before the State Commission seeking refund, the cancellation is inherent and implicit in the request of refund.

26.    It has been argued by the learned counsel for the appellants that complaint in respect of the plot cannot be dealt with by a consumer forum as held by Hon’ble Supreme Court in Ganeshlal Vs. Shyam (supra).  It is seen that the plot in question in the present complaint is part of a housing project.  It is not a plot simpliciter.  In the complaint, the booking was made for a developed plot where all the facilities like road, electricity, and water connection etc. will be provided in the housing project and allottees shall make their own construction on the plot.  Clearly, a developed plot in a housing project cannot be treated as a plot simpliciter and hence, as the service is involved on the part of the opposite parties, the consumer forum will have the jurisdiction to decide the present complaint and the judgment of the Hon’ble Supreme Court in Ganeshlal Vs. Shyam (supra) does not seem to be applicable in the present case.

27.    The complainant is a subsequent purchaser and not the original allottee.  The endorsement has been made in favour of the complainant on 08.08.2008 and in the light of the judgment in Haryana Urban Development Authority Vs. Diwan Singh (supra), the complainant cannot get interest on the amount deposited by the original allottee before 08.08.2008. 

28.    Learned counsel for the appellants has argued that if the complainant cancelled the agreement and seeks refund at a stage when the builder-buyer agreement is already signed, then the appellants are entitled to deduct 30% of the consideration as earnest money.  In this regard, first of all, this Commission has held in DLF vs. Bhagwanti Narula, RP No.3860 of 2014, decided on 06.01.2015,  that at many occasions the earnest money cannot be more than 10% p.a., which can be forfeited.  The observations of this Commission read as under:-

29.    Moreover, Hon’ble Supreme Court in the matter of M/s. Kailash Nath Associates Vs. Delhi Development Authority & Anr., Civil Appeal No.193 of 2015, decided on January 09, 2015 has laid down that the opposite party is not entitled to deduct the earnest money until they have suffered the loss. The judgment reads as under:-

“29.         Based on the facts of this case, it would be arbitrary for the DDA to forfeit the earnest money on two fundamental grounds. First, there is no breach of contract on the part of the appellant as has been held above. And second, DDA not having been put to any loss, even if DDA could insist on a contractual stipulation in its favour, it would be arbitrary to allow DDA as a public authority to appropriate Rs.78,00,000/- (Rupees Seventy Eight Lakhs) without any loss being caused. It is clear, therefore, that Article 14 would apply in the field of contract in this case and the finding of the Division Bench on this aspect is hereby reversed.”

30.    The provision in the agreement forfeiture of earnest money does not entitle the opposite party to deduct the earnest money unless the opposite party has suffered a loss and the loss is proved.  This is clear from the following observation of the Hon’ble Supreme Court in M/s. Kailash Nath Associates Vs. Delhi Development Authority & Anr. (supra):-

“43.6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.”

31.    The opposite parties have not filed any proof for any loss suffered by the opposite partiers.  Thus, the appellants are not entitled to deduct earnest money in the present case. Moreover, no breach of the agreement has been occasioned by the complainant before the due date of possession as per the agreement.  Therefore, the clause relating to deduction of earnest money cannot become applicable in the facts of the present case.

32.    The appellants have also raised another point that the complainant is not entitled to any compensation as she has not suffered any loss.  In this regard, it is seen that the amount paid by the complainant remained with the appellants/opposite parties for quite some time and the complainant has suffered interest for that period.  The complainant has suffered atleast interest on this amount.  Moreover, the Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) has held that:-

“9.  It may be mentioned that there is misconception about interest.  Interest is not a penalty or punishment at all, but it is the normal accretion on capital.  For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount.  Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period.  Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.”

33.    Based on the above observations of the Hon’ble Supreme Court, as the money remained with the opposite parties for quite some time, the complainant is entitled to get refund along with interest.  Thus, it is not correct to say that the complainant has not suffered any loss.  Moreover, the complainant has demanded compensation in the present case.  Hence, the facts of the case referred to by the learned counsel for the appellant viz Godfrey Philips India Ltd. Vs. Ajay Kumar, (supra) are different as no compensation was demanded in this case.  Therefore, this judgment is not applicable in the present case.

34.    I agree with the contention of the learned counsel for the appellants that when the interest is being given on the amount of refund, there is no justification for awarding separate compensation of Rs.1,50,000/- to the complainant because the interest is also in the shape of compensation only.

35.    Based on the above discussion, the first appeal no. 375 of 2016 is partly allowed and the order of the State Commission is modified to the extent that the order of the State Commission in respect of award of compensation of Rs.1,50,000/- is set aside.  No interest will be payable to the complainant for period before 08.08.2008.  With these modifications, the order of the State Commission is upheld.  Parties to bear their own costs for this appeal.