Anil Makkar v. M/s Reliant Infrastructure Pvt. Ltd.

for the complainant to opt for a shop-cum-office at its World 1 High Street Project and suggested to pay an amount of Rs.25 Lacs. It was further stated that the complainant expressed his concern over payment of such a huge amount. It was further stated that upon this, Sh. Hamreet Singh Chawla suggested that on payment of Rs.25 Lacs, the complainant shall enter into a Buyer's Agreement with the Opposite Parties with regard to two studio apartments at a project of Opposite Party No.2. It was further stated that it was conveyed that the price of to studio apartments would be Rs.32 Lacs and on start of the project pertaining to shop-cum-office, the amount so paid for studio apartments would be adjusted towards the same. It was further stated that the price of shop-cum-office space was fixed at Rs.32,50,000/- i.e. more than the price of two studio apartments. It was further stated that since the complainant was residing in a residential accommodation in Mohali on rent and was operating from a rented office space at Chandigarh, he thought it appropriate to opt for a shop- cum-office space.

2. It was further stated that the total price of two studio apartments was fixed at Rs.32,00,000/-. It was further stated, Buyer's Agreement dated 24.03.2011 (Annexure C-1) was entered into between the parties, wherein it was specifically stated that the Opposite Parties are in possession of the land on which the project was to come up and various licences from the local Board of Director, Town and Country Planning Punjab, for setting up a group housing scheme have already been obtained. It was further stated that the Opposite Parties agreed to sell two apartments No.608 and 609 on 6^thFloor, Tower E having super area of approximately 328 sq. ft. in the project in question. It was further stated that further as per memorandum of understanding dated 24.03.2011 executed between the parties, which was in continuation of the Buyer's Agreement, the Opposite Parties were coming up with project namely World No.1 High Street and it was agreed between the parties that once the said project was launched, the Opposite Parties will transfer the amount paid by the complainant towards Studio Apartments to World 1 High Street as per price location.

3. It was further stated that the complainant paid an amount of Rs.25,00,000/- to Opposite Party No.1 on 05.04.2011 through RTGS (Annexure C-3). It was further stated that Opposite Party No.1 never had the intention to launch the commercial project and it had sold the already sold out units in Studio Apartments to the complainant under the garb of its upcoming "World 1 High Street" Project. It was further stated that as per Clause 4 of the Agreement, the possession of shop-cum-office was to be delivered by March 2012. It was further stated that neither the shop-cum-office space i.e. "World 1 High Street" took off nor the delivery and possession of studio apartments turned out to be reality. It was further stated that the Opposite Parties rather issued demand letter dated 11.01.2012 (Annexure C-4) for Rs.7,25,000/- on account of Unit No.8 at 1^stFloor at World High Street, Sector 115, Santemajra, which was on account of shop-cum-office unit and not on account of two studio apartments, which established that the memorandum of understanding was in continuation of Agreement dated 24.03.2011. It was further stated that the Opposite Parties again issued letter dated 3.2.2012 (Annexure C-5) informing the complainant as regards launching of World High Street project comprising of shop-cum-office but on visiting the actual site, the complainant was shocked to see that there was not even an inch of development towards the project of World No.1 High Street. It was further state that the Opposite Parties sent a letter dated 15.7.2013 (Annexure C-6) informing the complainant that the construction work had already started and excavation had already been completed and sought payment of Rs.7,25,000/- on or before 31.07.2013. It was further stated that the complainant went to the site and found that the assertion made in letter dated 15.07.2013 was totally false and no excavation had commenced at all on the site. It was further stated that the Opposite Parties failed to discharge their duty and complete the project in accordance with the Agreement and abandoned the same.

4. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency in providing service and adoption of unfair trade practice. Hence, this consumer complaint was filed by the complainant, seeking refund of Rs.25,00,000/- alongwith interest @18% per annum; Rs.10 Lacs as compensation for harassment and mental agony and Rs.55,000/- as litigation expenses.

5. The Opposite Parties in their written statement stated that the complainant purchased two studio apartments vide Agreement dated 24.3.2011 (Annexure C-1) and paid Rs.25 Lacs towards the part payment and the remaining amount of Rs.5 Lacs was to be paid within a period of three months apart from other charges as mentioned in the Agreement. It was admitted that the price of two studio apartments was fixed at

2

Rs.32 Lacs. It was further stated that possession of the studio apartments was to be delivered to the complainant on payment of the balance sale consideration and other charges. It was further stated that till date, the complainant has not made the payment of the balance sale consideration. It was further stated that the Opposite Parties are ready to hand over possession of studio apartments to the complainant and the same can be obtained by him on any day on making payment of the remaining sale consideration.

6. It was further stated that the complainant also showed his desire to purchase the commercial space in World 1 High Street Project, which was yet to be launched by the Opposite Parties. It was further stated that it was agreed between the parties that on launching World 1 High Street Project, the complainant shall have the option to get the amount paid towards the studio apartments transferred towards the sale consideration of World 1 High Street. It was further stated that the final amount for the commercial space was not settled because there was no certainty of launching the said project. It was admitted that letter dated 11.2.2012 was sent to the complainant to pay the amount towards the booking of the unit at World 1 High Street. It was further stated that vide letter dated 31.7.2013, the complainant was informed that excavation has been done and the construction work has been started and accordingly, the complainant was requested to make the payment of installment of Rs.7.25 lacs, which was due to be paid at the start of the construction. It was further stated that since the complainant did not pay anything towards the unit in world 1 High Street project, he cannot raise any claim for World 1 High Street. It was further stated that the Opposite Parties were neither deficient, in rendering service nor did they indulge into unfair trade practice. The remaining averments, made in the complaint, were denied.

7. The complainant, in support of his case, submitted his own affidavit, by way of evidence alongwith which, a number of documents were annexed.

8. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Hamreet Singh Chawla, their Managing Director, by way of evidence, alongwith which, a number of documents were annexed.

9. Since neither the Counsel for the complainant nor the complainant turned up to address arguments, despite opportunities granted, in terms of Clause 13(2)(c) of the Consumer Protection Act, 1986, which stipulates that "where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint for default or decide it on merits.", this Commission in the absence of the Counsel for the complainant and the complainant, heard arguments on behalf of the Opposite Parties on 29.06.2016 to decide the case on merits.

10. Admittedly, the complainant purchased two studio apartments No.608 and 609 on Sixth Floor, Tower E having a super area of approx. 328 Sq. ft. each, fully furnished, in the complex, "WORLD 1", Santemajra, Tehsil and District Mohali, Punjab and Agreement to this effect was executed between the complainant and the Opposite Parties at Chandigarh on 24.03.2011 (Annexure C-1). Though the Agreement is signed on behalf of the Opposite Parties only but reliance on the same has been placed both by the complainant and the Opposite Parties. The total cost of the apartments, in question, including basic price, preferential location, external development charges, power back up charges and club membership, as per Clause 2.a of the Agreement, was Rs.30,00,000/-. As per Clause 2.c of the Agreement, the complainant opted for Payment Plan, as per which, Rs.25,00,000/- was to be paid at the time of booking and remaining Rs.5,00,000/- was to be paid within three months. The complainant paid Rs.25,00,000/- on account of booking/registration amount to the Opposite Parties, receipt whereof was admitted by the Opposite Parties vide Clause 2.b of the Agreement. Further as per Clause 2.g of the Agreement, an amount equivalent to 10% payable as per clause 2.a was to be treated as the earnest money. Admittedly, as per Clause 4.a of the Agreement, possession of the apartments was to be delivered by the Opposite Parties to the complainant by March 2012, subject to force majeure circumstances beyond the control of the Opposite Parties and upon registration of sale deed, provided all amounts due/payable have been paid by the complainant within the stipulated period.

11. Perusal of record reveals that the complainant opted for World - 1 High Street and the amount paid by him for the purchase of studio apartments was to be adjusted against the price of the unit at World-1 High

3

Street. A demand of Rs.7.25 Lacs was raised by the Opposite parties vide letter dated 11.01.2012 (Annexure C-4), copy of which has been annexed by the complainant himself. The said installment was not paid. The Opposite Parties in Para 13 of their written statement have stated as under:-

'13. That the contents of para No.13 of the complaint are wrong and hence denied. As a matter of fact the amount of Rs.25 lacs was paid by the complainant towards the consideration for two studio apartments. Once the complainant has not made any payment towards the World 1 High Street, he cannot claim any right over the said property. It is also wrong that the amount of Rs.25 lacs received from the complainant against the commercial Project was intentionally altered/diverted to the studio apartments. The studio apartments are ready and the possession is with the OPs and the same can be obtained by the complainant on any day after completion of the formalities and on payment of the balance sale consideration."

12. The principal question, which falls for consideration, is, as to whether the complainant is entitled to refund of the amount deposited and if so, to what extent. Clearly, the allotment of the studio apartments was to be regulated in accordance with the Payment Plan given in Clause 2.c of the Agreement, which is extracted hereunder:-

13. Clauses 2.f and 2.g of the Agreement, being relevant, are extracted hereunder:-

"2.f. Failure/Delay in Payment:

In the event Purchaser fails to pay any installment(s) with interest within 90 days, from due date, the Developer shall have the right to forfeit the entire amount of Earnest/Registration money deposited by the purchaser(s) and in such a case the allotment of the Said Apartment shall stand cancelled and the Purchaser shall be left with no right or lien on the said Apartment and the Developer would be free to sell the same. The amount paid, if any, over and above the Registration/Earnest Money shall be refunded by the Developer without interest after adjustment of interest accrued on the delayed payment(s), if any, due from the Purchaser.

2.g. Earnest Money.

4

The payment of Earnest money to ensure fulfillment of the terms and conditions as contained in the application and this Agreement. An amount equivalent to 10% (Ten percent) payable as per clause 2.a above shall always be deemed to have been paid by the Purchaser as and by way of Earnest Money."

14. No doubt, the complainant paid an amount of Rs.25,00,000/- at the time of booking of two studio apartments but he was required to pay the remaining amount of Rs.5,00,000/- to the Opposite Parties within next three months as per the Payment Plan. However, the complainant did not do so. The possession of the studio apartments was to be handed over to the complainant on payment of complete payment towards the studio apartments.

15. The Opposite parties have specifically stated in their reply that possession of the studio apartments is ready and the complainant can obtain the same after payment of complete sale consideration.

16. Clearly, since the complainant did not make payment of the remaining due amount to the Opposite Parties, as per payment plan, which was to be paid on 24.06.2011, he committed breach of terms and conditions of the Agreement (Annexure C-1) and, as such, possession could only be given to him on payment of complete payment. Admittedly, the earnest money was 10% of the sale consideration of Rs.30,00,000/-, which came to be Rs.3,00,000/-. When the complainant did not make the balance payment of Rs.5 Lacs on the due date viz. 24.06.2011 and even within 90 days thereafter, the contract stood rescinded by the complainant and the money deposited by him, after deducting the earnest money, which as per Clause 2.g of the Agreement was 10% of the total sale consideration of Rs.30,00,000/-, was required to be refunded to the complainant on 24.09.2011 (24.06.2011 + 3 months). Thus, the Opposite Parties could forfeit the amount of Rs.3,00,000/- only. The Opposite Parties, however, did not do so and kept the amount with them and utilized the same. This clearly amounted to deficiency, in rendering service, and indulgence into unfair trade practice on their part.

17. It may be stated here that in DLF Commercial Developers Limited Vs. Ravinder Zutshi, 2009 (4) C.P.J. 163 and DLF Universal Limited Vs. Nirmala Devi Gupta, Revision Petition No.3861 of 2014 decided on 26.08.2015, the Hon'ble National Consumer Disputes Redressal Commission, held that in such a situation, the Opposite Parties could forfeit only earnest money to the extent of 10%. The aforesaid judgments clearly lay down that not more than 10% of the earnest money can be forfeited. In the instant case, the earnest money is 10%, which the Opposite Parties could forfeit.

18. Thus, in view of above, out of Rs.25,00,000/- paid by the complainant, the Opposite Parties could forfeit a sum of Rs.3,00,000/- only and the balance amount was refundable to the complainant. Thus, the complainant is entitled to the refund of an amount of Rs.22,00,000.00 i.e. [Rs.25,00,000.00 (-) minus Rs.3,00,000.00]. By not refunding the aforesaid amount of Rs.22,00,000/-, the Opposite Parties indulged into unfair trade practice and the same also definitely amounted to deficiency, in rendering service, on their part. The complainant is, thus, entitled to refund of a sum of Rs.22,00,000/- alongwith interest @12% per annum w.e.f. 24.09.2011 when due to non-payment of the balance amount, the Agreement by the complainant stood rescinded.

19. So far as the claim of the complainant for shop-cum-office at the proposed project, namely, World 1 High Street is concerned, it may be stated here that the complainant did not pay consideration towards the same and, as such, he cannot claim anything on account of that.

20. For the reasons recorded above, the complaint, is partly accepted with costs. The Opposite Parties are, jointly and severally, held liable and directed as under :-

to refund the amount of Rs.22,00,000/-, to the complainant, alongwith (i) interest @12% per annum (simple), w.e.f. 24.09.2011.

5

(ii) to pay Rs.25,000/- to the complainant as cost of litigation. The amounts mentioned, in Clauses (i) and (ii) above, shall be paid, by the Opposite Parties, within a period of 45 days, from the date of receipt of a certified copy of this order, failing which, they shall pay penal interest @15% per annum, on the amount mentioned in Clause (i) (iii) above from the date of filing the complaint i.e. 16.03.2016 till realization and rate of interest i.e. @12% per annum on the amount

mentioned in Clause (ii) above from the date of filing the complaint i.e.

16.03.2016 till realization.

21. Certified Copies of this order be sent to the parties, free of charge.

22. The file be consigned to Record Room, after completion. Pronounced.

July 22, 2016.

(DEV RAJ)

PRESIDING MEMBER

(PADMA PANDEY)

MEMBER

6