The complainant, Nirmala Devi Gupta filed consumer complaint No. 50/2014 before the State Consumer Disputes Redressal Commission, U.T. Chandigarh (hereinafter referred to as the State Commission), saying that she applied for allotment of a plot measuring 350 sq. yds. In the Project Hyde Park New Chandigarh, Mullanpur Planning Area, proposed to be developed by the opposite party, DLF Universal Limited (hereinafter referred to as OP). She was provisionally allotted plot No. HPE-R1-F204, measuring 292.64 sq. mtr./350 sq. yrd. at a price of 30,498/- per sq. mtr. vide letter dated 31.03.2011 from the OP. The said letter enclosed therewith a two-year payment plan for deposit of the price of the said plot and a set of terms and conditions duly signed by the parties. The complainant deposited a sum of 12 lakh as booking amount for the said plot on 31.03.2011. The total price of the plot was indicated as 1,05,60,207.03ps. An amount of 25% of the total price of the plot minus the booking amount and 25% of the External Development Charges (EDC) were payable within 2 months of booking. The next seven instalments of 10% of the total price and 10% of EDC were payable with intervals of two to three months each, making it a total of 95%. The balance 5% of the total price, 5% of EDC, registration, stamp duty charges etc. were payable on offer of possession. As indicated in the terms and conditions attached with the offer letter, 15% of the total price of the plot was stated to be the earnest money. It was also indicated that the company shall endeavour to offer possession of the said plot within 24 months from the date of execution of the agreement or within any extended period. One of the conditions also stated that the company was entitled to forfeit the earnest money and the non-refundable amount and cancel the allotment in case of breach of terms and conditions. As per the complainant, she deposited a sum of 9,87,453/- with the OP on 25.06.2011 and another sum of 3,96,302/- on 30.06.2011. In this way, a total sum of 25,83,755/- was paid by the complainant including the booking amount. The complainant did not make any further payment as per the payment plan despite the demand raised by the OP through their letters/communications, taking the plea that the OP had failed to make any development on the said mega housing project and hence, failed to honour the commitment of giving them plot within two years of the date of agreement.
2. A Plot-buyers Agreement was executed between the parties on 14.05.2012, in accordance with which, the sale price of the plot was indicated as 89,24,934.71ps. A sum of 9,80,051.39ps. was also payable as Preferential Local Charges (PLC), thus making the total value of the plot as 99,04,986.10ps. The entire payment was to be made within a period of 2 years. The amount of external development charges was mentioned as 4,80,222.21ps. and maintenance security was indicated as 1,74,998.72ps.
3. The OP cancelled the allotment of the plot vide letter dated 23.05.2012 on the ground that the overdue payments were not made by the complainant despite communications sent by it. It was stated in this letter that a total amount of 19,23,260.50ps. stood forfeited, consisting of earnest money amounting to 15,57,781.25ps. and interest on delayed payment as 3,65,479.25ps. The balance amount refundable was stated to be 6,60,494.50ps. It was also stated that the buyers agreement if executed, stood cancelled and the allottee had no lien or right, whatsoever on the said property.
4. The complainant filed the consumer complaint in question before the State Commission alleging that the OP failed to take requisite permissions from the concerned authorities before launching the Project. She sought directions to the OP to refund the deposited amount of 25,83,755/- alongwith interest 12% p.a. from the date of deposit till realisation. It was also prayed that a sum of 25,000/- as compensation for mental harassment and 30,000/- as cost should be awarded to the complainant.
5. The complaint was resisted by the OP DLF by filing a written reply before the State Commission, in which it stated that the complainant had booked the said plot in question for investment purpose and hence, she was not a consumer within the meaning of section 2(1)(d) of the Consumer Protection Act, 1986 and thus, the complaint should be dismissed on this ground alone. Further, the complainant was bound by the terms and conditions mentioned in the plot-buyers agreement for making timely payments of instalments, but she had breached the said terms and conditions and hence, there being no deficiency in service on the part of the OP, the complaint was liable to be dismissed. The OP further stated in its reply that in fact, the allotment of the said plot had not been cancelled so far, as the complainant had assured it of making the balance payment. The question of forfeiting the earnest money, therefore, did not arise as presently, the property still stood in the name of the complainant, and the forfeiture of the required amount shall be done after the official cancellation of the allotment of the complainant.
6. The State Commission vide impugned order, after taking into account the evidence led by both the parties, directed that after deducting a sum of 14,85,747/- stated to be earnest money in the plot-buyers agreement, being 15% of the total value of the plot, the rest of the amount deposited should be refunded to the complainant alongwith interest. They ordered that a sum of 10,98,008/- alonwith interest @9% p.a. from the date of issuance of cancellation letter dated 23.05.2012 should be paid to the complainant and further a sum of 20,000/- as compensation for mental harassment and 20,000/- as cost of litigation should be given to them. Being aggrieved against the order of the State Commission, both the parties have challenged the same before this Commission. The complainant has filed FA No. 574/2014 saying that the entire amount deposited by her, i.e., 25,83,755/- should be refunded alongwith interest, cost and compensation. The OP DLF challenged the impugned order vide revision petition, RP No. 3861/2014, praying that the order of the State Commission be set aside. The revision petition is being treated as appeal on the request made by the learned counsel for OP DLF and with the consent of the learned counsel for complainant. Both the appeals are being decided by this common order and a copy of the same be placed on each file.
7. During hearing before us, the learned counsel for the OP DLF vehemently argued that the complaint was not maintainable because the booking of the plots in the housing project of the OP was made by the complainant as well as five members of her family and hence, the said booking was made for investment purposes. He pointed out that in the legal notice dated 18.02.2013 sent by the complainant, the address of all the applicants had been mentioned as 144, sector 46A, Chandigarh. The provisions of Consumer Protection Act, 1986 were, therefore, not applicable in the present case and hence, the complaint deserved to be dismissed on this ground alone. Out of five other applicants from the same family, two had deposited the necessary amount with the OP, while for three others, the allotment had been cancelled after forfeiting the earnest money in each case. The said legal notice amounted to an admission on the part of the complainant and hence, no relief could be given to her in the present proceedings. The learned counsel for the complainant, however, stated that the said legal notice and its reply were not part of the pleadings before the State Commission and hence, at the appellate stage, notice could not be taken of these documents. The learned counsel further stated that the OP DLF had wrongly decided to deduct a sum of 19,23,260.50ps. from the amount deposited. It had shown a sum of 3,65,479.25ps. as interest on the delayed payment which it could not have done.
8. After giving due consideration to the material on record and the arguments led before us, the preliminary issue that merits our consideration is whether the complainant falls within the definition of consumer or not. The OP DLF have raised the contention that five other family members of the complainant had made applications for allotment of plots in the same project and the said bookings were made for commercial purposes; hence, the complainant did not fall under the definition of consumer under section 2(1)(d) of the Consumer Protection Act, 1986. This issue has been examined by this Commission exhaustively in the case of Kavita Ahuja vs. Shipra Estate Limited & Jai Krishna Estate Developers Pvt. Ltd. [CC/137/2010 decided on , and the following view was taken:- 12.02.2015]
6. Going by the Dictionary meaning of the expression Commerce as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).From the facts of the present case, it is clear that the complainant is not engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such properties. It is held, therefore, that the booking of the plot was not for a commercial purpose and hence the complainant does fall within the definition of consumer as defined in the Consumer Protection Act, 1986.7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.
9. The basic issue that arises for our consideration is whether the cancellation of the plot, in question, as intimated by the OP to the complainant vide their letter dated 23.05.2012 and the forfeiture of the amount indicated, was justified or not. It has been stated in the complaint itself that the OP DLF got Letter of Intent for the housing project, issued from the Punjab Urban Planning and Development Authority (PUDA) Mohali on 20.01.2011 and thereafter, it sought permission for Change of Land Use (CLU), which was also granted by the office of Chief Town Planner, Punjab with certain terms and conditions. The advertisement to the public inviting applications for selling the plots in the project was issued after obtaining the said Letter of Intent and permission for CLU. The case of the complainant is that before starting booking of the plots in the said project, the OP should have obtained all required clearances from the concerned authorities like sanctioning of lay-out plans, zoning plans, pollution clearances etc. However, we do not find any reason to agree with the contention of the complainant that booking of plots should have commenced only after all possible clearances were obtained from the authorities concerned. In the plot-buyers agreement executed on 14.05.2012, the OP gave a commitment that possession of the plot will be offered within 24 months of the date of execution of the agreement or within any extended period. It was also mentioned that in case of delay (except for force majeure conditions) by the company, they shall pay a compensation of 50/- per sq. mtr. per month to the allottee. The said period of two years would have expired in May, 2014 only. Moreover, as per the terms and conditions attached with the application form, the applicant was supposed to make 95% of the payment within two years of the booking, i.e., before 31.03.2013. It is quite obvious that the complainant failed to honour her part of making payments in time, as per the agreed payment plan. She could not have withheld the payment to the OP on the presumption that it may not be able to obtain the requisite clearances and offer possession in time. It has also come on record that various letters were sent by the OP to the complainant by way of demand notices and reminders, requesting her to make payments of the outstanding amount, but admittedly, the said payments were not made. It is held, therefore, that in accordance with terms and conditions agreed between parties, the OP DLF was well within its rights to cancel the allotment of the said plot, made in favour of the complainant.
10. We have now to consider whether the forfeiture amount mentioned in the letter of cancellation under the head earnest money and non-refundable advance was justified or not. It has been stated in the said letter that a sum of 15,57,781.25ps. was being forfeited as earnest money. In the plot-buyers agreement, however, this amount has been shown as 14,85,747/-. It is to be seen, however, whether the OP DLF was within its rights to treat 15% of the total price as earnest money of the plot. In a case recently decided by this Bench in DLF Limited vs. , we have taken the view that Bhagwanti Narula, RP No. 3860 of 2014, decided on 06.01.2015 an amount exceeding 10% of the total price of the property cannot be forfeited by the seller as earnest money being unreasonable, unless the OP can show that it had suffered loss to the extent the amount was forfeited by it. Applying the same principle in the present case as well, it is held that the OP DLF was competent to forfeit only 10% of the total amount of the plot in question as earnest money. Since the total value of the plot including Preferential Location Charges (PLC), is 99,04,986.10ps. as already indicated, 10% of the earnest money comes out to be 9,90,500/-
11. In so far as interest on delayed payments, stated to be non-refundable amount in the agreement, is concerned, the OP deducted a sum of 3,65,479.25ps. in the cancellation letter. It is observed in this regard that the complainant made payments of a sum of 12 lakh at the time of initial booking and then made two further payments in the last week of June 2011. Since no further payments were made, as per the terms and conditions of the allotment as contained in para
65 of the plot-buyers agreement, the OP was well within its rights to initiate the process of cancellation of the plot after the first default in making payment of an instalment. In its own wisdom, if it decided not to do so immediately, it is not entitled to charge interest as non-refundable amount on the subsequent instalments in the wake of cancellation of plot. The letter of cancellation dated 23.05.2012 makes it clear that the plot-buyers agreement if executed, stood cancelled and the allottee shall not have any lien or right on the said property. It is held, therefore, that the OP cannot deduct a sum of 3,65,479.25ps. as non-refundable amount from the money deposited by the complainant.
12. Based on the discussion above, these two appeals are disposed of with the direction that the OP DLF shall return the amount deposited by the complainant to her after deducting only 10% of the price of the plot, i.e., 9,90,500/- as earnest money. In this way, the OP shall return a sum of 15,93,255/- (25,83,755/- minus 9,90,500/- = 15,93,255/-) along with interest @9% p.a. from the date of cancellation of the plot, i.e., 23.05.2012 till realisation. It is also made clear that if payment in terms of this order is not made within 45 days of date of the order, the OP shall be liable to pay interest @12% p.a. till realisation. There shall be no order as to costs. ......................J
V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER
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