National Consumer Disputes Redressal
Gtm Builders & Promoters Pvt. Ltd. vs Deepti Ular Jain & Anr. on 29 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 522 OF 2011 (Against the Order dated 24/10/2011 in Complaint No. 100/2008 of the State Commission Delhi) 1. GTM BUILDERS & PROMOTERS PVT. LTD. GTM House, G-5, Pushkar Enclave, Outer Ring Road, Paschim Vihar, NEW DELHI-110063 ...........Appellant(s) Versus 1. DEEPTI ULAR JAIN & ANR. 8th Floor, TG-1, Orchid Gardens, Sun City, Sector-54, Guragaon Haryana 2. MS. VENU JAIN 8th Floor, TG-1, Orchid Gardens, Sun City, Sector-54, Gurgaon Haryana ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MRS. M. SHREESHA, MEMBER For the Appellant : Mr. Karunesh Tandon, Advocate. For the Respondent : Mr. V.K. Shukla, Advocate.
Dated : 29 Oct 2015 ORDER This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), has been preferred by a real estate Developer, questioning the correctness and legality of the order, dated 24.10.2011, passed by the Delhi State Consumer Disputes Redressal Commission (for short "the State Commission") in Complaint Case No. 100 of 2008. By the impugned order, the State Commission, while allowing the Complaint, filed by the two Complainants, Respondents herein, has directed the Developer, its Managing Director and a real estate Agent, to jointly and severally pay to the Complainants: (i) ₹5,00,000/- as compensation for non-delivery of the flat, booked some time in the year 2006; (ii) interest @ 10% per annum from the date of each deposit, i.e. on ₹2,90,605/- from 02.05.2006 till 01.06.2006, on ₹25,09,605/- from 02.06.2006 to 06.01.2008, on ₹15,90,605/- from 07.01.2008 till 06.07.2009 & on ₹10,90,605/- from 07.07.2009 till 20.07.2009; and (iii) ₹10,000/- as costs of litigation. The said order was to be complied within 30 days from the date of its receipt, with a default clause.
2. Being attracted by the advertisements issued by the Developer's upcoming project styled as "GTM Forest & Hills, Luxury Apartments at Dehradun, on 02.05.2006, the Complainants, British NRIs, now settled in India, applied for a 3-BHK flat, admeasuring 1650 sq. ft., along with car parking and the club membership for a total consideration of ₹28,78,450/-. A sum of ₹2,90,605/- was paid as the booking amount. Allured by the offer of the Developer that if they were ready to purchase the flat under the down payment plan, the possession of the flat would be delivered to them within 18 months of the booking, the Complainants paid the balance amount of ₹23,00,000/- vide cheque dated 02.06.2006. A formal agreement was to be executed between the parties within a few days. On receipt of the proforma agreement from the Development, some time in November, 2006, vide their letter dated 25.11.2006 the Complainants sought some clarifications on certain clauses which, according to them, were vague and contradictory. Vide letter dated 30.11.2006, the Developer informed the Complainants that no change in the agreement was possible. Having already paid 90% of the total sale consideration for the flat in question, i.e. ₹25,90,605/- and left with no option, on 08.12.2006 the Complainants executed the standard agreement. As usual, the agreement provided for its cancellation and forfeiture of the money in case there was any delay in making payments by the Complainants, the clause not being applicable in the instant case as the booking of the flat was under the cash down plan, with a further stipulation that the Developer could condone the delay in making payment by charging a minimum interest @ 24% per annum. In response to their queries regarding progress of the project, the Complainants received a letter dated 27.03.2007 from the Opposite Parties, informing them that "the work on the project had already commenced and the necessary environmental clearance/sanction from the Ministry of Environment was awaited." The Complainants were shocked to note that the Developer had commenced construction without requisite permissions from the Government before launching the project. Vide his letter dated 19.09.2007, the father of the Complainants, being concerned about his daughters investment, sought information from the Developer about the progress and possession date of the flat. There was no response to the said letter from the side of the Developer. Since, more than 16 months out of the agreed period of 18 months period for delivery of possession of the flat had already elapsed and allegedly the project had been stalled for want of requisite approvals from the Government, the father of the Complainants, acting on their behalf, vide his letter dated 28.09.2007, requested the Developer to cancel the allotment and return the money paid with interest @ 10% per annum. Vide their letters dated 01.10.2007 and 08.10.2007 the Developer informed the Complainants that the project had been duly approved by the Dehradun Development Authority; they had all the No Objection Certificates from the concerned authorities prior to the marketing of the project; and as per the agreement the construction period was 30 months. Nevertheless, the Developer agreed to cancel the booking, vide its letter dated 11.12.2007, which reads as follows:
"Dear Mr. Jain, Please refer to your above said letter and are concerned to note its contents. We are hurt by the wording of your letter as we do not expect such letter from our honoured customer.
In spite of our best efforts you have opted for the cancellation of your booking and had sent an application for cancellation (on ₹50/- Stamp Paper) duly signed by your both daughters Ms. Deepti Ular Jain and Ms. Venu Jain.
We honour your request for cancellation and would send the amount deposited with us within 90 days after processing your request at our end."
3. Since the Developer failed to refund the amounts deposited by them, the Complainants lodged protest with the Developer, and demanded interest @ 10% per annum, as per Clause 14 of the agreement. For an effectual adjudication in the matter, it would be apposite to refer the Payment Plan as also Clauses-14 and 15, which deal with the rate of interest to be paid by the Opposite Parties in case of their failure to allot the property applied for and the period required for delivery of possession respectively, of the agreement, which was binding on both the parties. The same reads as under:
Payment Plan "GTM Forest & Hills Luxury Apartments Dehradun PAYMENT PLANT (A-5/103) Basic Cost of Apartment - 2735700/-
(1650 Sq ft @ 1658/- per Sq. ft
Under down payment plan
Covered Parking - 60000/-
Club Membership - 25000/-
PLC - 57750/-
(1650 Sq ft @ 35 per Sq ft)
Total Amount of Apartment - 2878450/-
Booking Amount
(Paid on 3rd May 2006) - 290605/-
Balance - 2587845/-
PDC{Chq No. 176652(2nd June 2006)} - 2300000/-
Balance to be paid on - 287845/-
Offer of Possession
Cheques are subject to realization."
Clauses 14 & 15
"14. THAT the Developers shall, under normal conditions, complete the construction of the towers as per the said plans and specifications seen and accepted by the Apartment Allottee (with additional floors for Apartments if permissible) with such additions, deletions, alterations, modifications in the layout, building plans, change in number, dimensions, height, size, area or change of entire scheme the Developers may consider necessary or may be required by any competent authority to be made in them or any of them. To implement all or any of these changes, supplementary sale deed(s)/agreements(s), if necessary will be got executed and registered by the Developers. If as a result of the above alteration etc., there is either reduction or increase in the super area of the said premises or its location, no claim, monetary or otherwise will be raised or accepted except that the original agreed rate per sq. mtrs./sq. ft. and other charges will be applicable for the changed area i.e. at the same rate at which the Apartment was registered/booked or as the Developers may decide and as a consequence of such reduction or increase in the super area, the Developers shall be liable to refund without interest only the extra basic price and other pro-rate charges recovered or shall be entitled to recover the additional basic price and other proportionate charges without interest as the case may be. If for any reason the Developers is not in a position to allot the property applied for, the Developers, at its sole discretion, shall consider for any alternative property or refund the amount deposited with simple interest @ 10% per annum.
15. THAT the possession of the said (flat) is likely to be delivered by the Developers to the Apartment Allottee in case he/she is covered under the Special Scheme (Tie-up with UTI Bank), within 18 months and in any other case 30 months from the date of this agreement subject to force majeure circumstances and on receipt of all payments punctually as per agreed terms and on receipt of complete payment of the basic sale price and other charges due and payable upto the date of possession according to the payment plan applicable to him." (emphasis supplied)
4. On 25.11.2007 in a recorded telephonic conversation the Managing Director of the Developer, intimated the Complainants that he had made arrangements for refunding the money with interest @ 9% by 30.11.2007. Since the refund of the amount was not forthcoming, vide his letters dated 30.11.2007 itself and 14.12.2007, the father of the Complainants, again requested for early payment of the money with interest and punitive interest, but all in vain. On 07.01.2008 a cheque in the sum of ₹10,00,000/- was handed over to the Complainants and they were assured that the payment of balance amount would be made, on or before 15.01.2008, which was not made.
5. In this background, the Complainants filed the afore-noted Complaint before the State Commission, praying for a direction the Developer to pay to them ₹15,90,605/- being he principal amount due; ₹10,02,054/- as interest @ 24% per annum on the total amount upto 27.02.2008 and further interest at the same rate from that date till the date of payment; ₹20,00,000/- as damages for the harassment caused; and ₹1,00,000/- as costs of litigation.
6. The Complaint was contested by the Developer on diverse grounds, including the pleas that the Complainants being British Nationals, were required to obtain prior permission from the Appropriate Authority to purchase a flat from them and in the absence of the same, the Complaint could not have been filed; the Complainants had also filed a case under the Companies Act, which was pending before the Delhi High Court and, therefore, the Complaint was liable to be dismissed; at the time of applying the flat in question the Complainants were made to understand that if the project had to be abandoned, the liability of the Developer would be limited to refund the amount without any compensation; before starting construction, a number of clearances were to be taken from the Government, which took time and the Complainants through their father unilaterally vide their letter dated 28.09.2007 had terminated the agreement and, therefore, there was no occasion for the Developer to inform them about the progress of the project; and that the scheduled period of delivery was only anticipated, which was subject to force-majeure circumstances.
7. On consideration of the evidence adduced by the parties, as regards the period of delivery of possession of the flat in question, the State Commission has taken the view that reply of the Developer (Exhibit P-16) clearly showed that it had undertaken to give the possession to the Complainants within 18 months. As far as the issue of interest to be paid to the Complainants on the amounts paid by them was concerned, the State Commission has come to the conclusion that the contention of the Developer that the Complainants were not entitled to interest as they had themselves rescinded the contract in September 2007, was not sustainable because the Developer had itself agreed to refund the amount deposited as it was not in a position to deliver possession by the committed date. As a matter of fact, in furtherance of the afore-extracted commitment, it had refunded an amount of ₹10,00,000/-, out of the total amount deposited by the Complainants. The State Commission has also held that since the Complainants had undergone tremendous frustration in not getting the flat, even after making payment to the extent of 90% of the total price of the flat in question, six months before the agreement dated 08.12.2006, they were entitled to compensation, quantified at ₹5,00,000/-. Accordingly, while allowing the Complaint, the State Commission has issued the afore-stated directions to the Developer. Hence, the present Appeal.
8. Learned counsel appearing for the Appellant has submitted that since Complainants had cancelled the booking on their own volition, without intimating any reason, the State Commission was not justified in awarding damages. It is asserted that there was no inordinate delay in delivery of possession as it had to be delivered within 30 months from the date of executing the agreement, dated 08.12.2006, and not from the date of application form i.e. 02.05.2006. It is also pleaded that Clause 14 of the agreement, stipulating payment of interest by the Developer in the event of delay in delivery of possession was not attracted as the Developer had never refused to allot the flat in question and, therefore, award of interest @ 10% per annum was unjustified. It is urged that at no point of time, the Developer had refused to refund the money and the delay in refund of the full amount was only on account of the fact that the Complainants did not come forward to settle their account.
9. We are of the opinion that the Appeal is devoid of any substance. It is trite that the word 'Compensation' is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. Explaining the general meaning and amplitude of the word 'Compensation' in the context of the Act, in Lucknow Development Authority Vs. M.K. Gupta - (1994) 1 SCC 243, the Hon'ble Supreme Court had observed as follows:-
"The word 'compensation' is again of very wide connotation. It has not been defined in the Act. Accordingly to dictionary, it means, 'compensating or being compensated; thing given as recompense;'. In legal sense it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. Therefore, when the Commission has been vested with the jurisdiction to award value of goods or services and compensation it has to be construed widely enabling the Commission to determine compensation for any loss or damage suffered by a consumer which in law is otherwise included in wide meaning of compensation. The provision in our opinion enables a consumer to claim and empowers the Commission to redress any injustice done to him. Any other construction would defeat the very purpose of the Act. The Commission or the Forum in the Act is thus entitled to award not only value of the goods or services but also to compensate a consumer for injustice suffered by him." (Emphasis supplied).
10. Endorsing the said observations, in Ghaziabad Development Authority Vs. Balbir Singh - (2004) 5 SCC 65, the Supreme Court, had observed that in order to redress any injustice done to an consumer, a Consumer Fora is competent to award not only value of goods or services but also to compensate a consumer for the injustice suffered by him. However, sounding a note of caution that the compensation cannot be awarded in all cases on a uniform basis or at a uniform rate, the Court has observed that the loss has to be determined by the Fora keeping in view a number of factors, like loss of rent which could have been earned if possession had been delivered or the rent a consumer had to pay because of non-delivery of possession on time etc. Emphasizing that compensation in case where delivery of possession is being directed would be different from the case where only refund of amount is being directed, the Hon'ble Court observed thus:-
"That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher."
11. Bearing in mind the afore-stated broad principles for determining the question of award of compensation and interest to the Complainant, we may now advert to the facts at hand. Indubitably, in the instant case, the Complainants had deposited 90% of the sale consideration with the Developer even prior to execution of the agreement in the hope that they would get a flat in Dehradun within a period of 18 months, but it was not to be. It is not in dispute that vide their letter dated 30.11.2006 (page 68 of the paper-book) the Developer had informed the Complainants that the flat in question was covered under the UTI Scheme tower and they would be given possession of the flat within 18 months subject to force majeure circumstances. Therefore, the question for consideration is whether in view of the stipulation in the Agreement for refund of the amount deposited with simple interest @ 10% per annum, the Complainants were precluded from claiming refund of the amount(s) deposited by them as consideration for the flat and compensation for depriving them of the possession by the committed timeframe. We have no hesitation in holding that if a Developer fails to deliver possession of the allotted plot/flat within the stipulated time, the allottee is under no obligation to wait endlessly. At the cost of repetition, we may reiterate that in the event of a Developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to wait endlessly and he would be within his rights to seek refund of the amount deposited with the Developer against allotment if the delivery of possession of the flat in question as per the scheduled time frame is not in sight. This is what happened in the present case and realizing the difficulty in meeting the deadline for handing over of the possession, the Developer readily agreed to refund the total amount deposited by the Complainants. Having agreed to refund the amount deposited by the Complainants within 90 days, the Developer again failed to honour its commitment even in refunding the full amount. In our view, the plea of the Developer that the Complainants were not entitled to any compensation and interest on the amounts deposited by them is absolutely untenable and deserves to be outrightly rejected.
12. We are in complete agreement with the State Commission that the Complainants were within their rights in praying for refund of the amount deposited, with interest as also compensation.
13. As regards the rate of interest on the amount(s) deposited by the Complainants, on the point, the State Commission has observed as follows:-
"11. The third question is about the rate of interest. The complainants claim interest @ 24% p.a. while the agreement provides interest rate @ 10% p.a. The complainants' contention in this regard is that the agreement postulates payment @ 24% p.a. in case of default of payment of instalments by the complainant and what is sauce for the gander is also the sauce for the geese and the OPs should also be made to pay interest at the same rate. We are not inclined to accept this contention because the agreement stipulates payment of interest by the OPs @ 10% p.a. and we must go by the agreement between the parties. The complainants very well knew at the time of agreement that there is dichotomy in the rate of interest in the agreement, and since they agreed to same they should not now be heard to say that they are entitled to receive interest @ 24% p.a., we would therefore hold that the complainants are entitled to interest @ 10% p.a."
14. In our opinion the State Commission has taken into consideration very cogent reasons for awarding more than reasonable rate of interest @ 10% p.a., when award of interest @ 18% p.a. under similar circumstances has been upheld by the Hon'ble Supreme Court. Therefore, interference on this point also is not warranted.
15. Similarly, having failed to deliver possession of the flat for a considerable period, undoubtedly tremendous mental agony and physical harassment was caused to the Complainants. Under the stated circumstances, award of an amount of ₹5,00,000/-, as compensation, cannot be said to be unreasonable by any standard.
16. For the afore-going reasons, the Appeal, being bereft of any merit, must fail. It is dismissed accordingly with costs, quantified at ₹20,000/-. The statutory deposit of ₹35,000/- shall stand transferred to the Consumer Welfare Fund by way of a Bank Draft drawn in favour of PAO, Ministry of Consumers Affairs, New Delhi.
......................J D.K. JAIN PRESIDENT ...................... M. SHREESHA MEMBER