Delhi District Court
Mahavir Ji Medical Institute vs Delhi Development Authority on 4 March, 2010
IN THE COURT OF Dr. KAMINI LAU ADDL. SESSIONS JUDGE: (NW-II): ROHINI: DELHI. Suit No. 435/2004 Mahavir Ji Medical Institute (earlier known as Mukul Jain Medical Institute) as society registered under the Societies Registration Act 1860, through Sh. Lalit Kumar Jain Member, Governing Body, having office at C/o Jain Pramod Jain & Co., Chartered Accountants, F-591, Sarita Vihar, G.F., New Delhi-44. ............. Plaintiff Versus Delhi Development Authority (constituted under the Delhi Development Act, 1957), through its Vice Chairman Vikas Sadan, (Near INA Market) New Delhi - 110 023. ........... Defendants Date of Institution : 24.03.2004 Arguments heard on : 08.02.2010 Date of Decision : 04.03.2010 -: JUDGMENT :- This suit for recovery of Rs.13,56,403/- has been filed by the plaintiff against the defendant. The brief facts -:1:- necessary for disposal of the same are as under: PLAINTIFF'S CASE The present suit has been filed by the plaintiff which is a registered society through its president. According to the plaintiff he had applied for a commercial flat under an scheme promulgated by the defendant DDA by the name of "First Self Finance Scheme" terms of condition of which were published in the brochure. It is pleaded that the plaintiff being the successful applicant was allocated a flat in its Laxmi Nagar Commercial Complex and the plaintiff was to pay the price of the flat to the tune of Rs.8,63,811/- in six installments. The said amount was demanded from the plaintiff vide demand-cum-allocation letter dated 27.12.1984 being File No.F-14(22) 84 COM. According to the plaintiff the defendant not being in a position to construct the building within the time framed had changed the date of payment by public advertisement. Plaintiff further states that it has paid all installments within prescribed time. As per the schedule the last installment was to be paid by 4.7.1987 whereas the -:2:- plaintiff had paid all the installments by 2.7.1987. As per the contract the defendant was to hand over the possession of the plat within six months of the payment of last installment i.e. by 04.01.1988. According to the plaintiff vide letter dated 6.11.1997 it was informed that the flats in Laxmi Nagar District Centre under Self Financing Scheme Commercial Flats have not yet been handed over to the Commercial Estate Branch and the applicants shall be informed as and when the flats are ready and the defendant could only be able to hand over the flats in 2001. According to the plaintiff he was asked to pay an additional amount of about Rs.62 lacs on the plea of additional cost and the defendant did not hand over the possession of the flat on the original price which price was already paid by the plaintiff. According to the plaintiff he is entitled to the possession of the flat on the original price since there was no escalation clause in the contract and the defendant prior to asking for additional demand has never indicated that they would demand additional money. According to the plaintiff it is a charitable institution and the -:3:- amount of Rs.8,63,811/- was an enormous sum of money in the year 1987. It is pleaded that on imposition of this additional demand he sought refund of the sale price paid by him with interest @ 12% per annum w.e.f. 01.01.1988 and received back a sum of Rs.8,94,389/- vide cheque dated 9.2.2001 on 12.2.2001 and also a sum of Rs.57,422/- vide cheque dated 21.3.2001 on 23.3.2001. According to the plaintiff the defendant did not pay any interest in terms of the contract and they vide their letter dated 19.12.2003 refused to pay any interest despite the fact that as per the contract the defendant was required to pay an interest @ 18% per annum. The plaintiff, thereafter served a notice dated 19.01.2004 which was served upon the defendant on 21.01.2004 but the defendant has not given any reply to the same till date. According to the plaintiff it is not in dispute that the original contract inter-parties reveals that the plaintiff had been allocated a flat in its Laxmi Nagar Commercial Complex area of 107 square meters in the category "Type VI" and the plaintiff has already paid the full sale consideration price. It is -:4:- stated that the defendant did not construct in the entire building any such flat which may be ad-measuring 107 sq. mts. The plaintiff further states that it has now been revealed that what was offered to the plaintiff was Flat No. 207, 2nd Floor allocated a flat in its Laxmi Nagar Commercial Complex ad-measuring 261 square meters of Category-III for a total sale consideration of Rs.62 lacs. It is further pleaded that as per the brochure of DDA at the second floor there was no flat of more than 61 or 64 square meters area and infact there was no flat of 261 square meter in the entire building. According to the plaintiff the defendant has arbitrarily altered the size of the accommodation by 2½ times without intimating the plaintiff and the plaintiff being a charitable institution was unable to pay the astronomic price of Rs.62 lacs. DEFENDANT'S CASE The defendant / DDA has filed a detailed written statement and has raised preliminary objections that no legal and valid notice as is required u/s 53-B of Delhi Development Act has been given to them. It is pleaded that the plaintiff has -:5:- not come to the court with clean hands suppressing the material facts and that there is no cause of action against the defendant. According to the defendant the plaintiff has not given any calculations justifying the recovery of Rs.13,56,405/- along with interest 12% per annum for the last 13 years. The terms and conditions of the scheme and the schedule of payment mentioned in the brochure are not disputed by the defendant. According to the defendant it was made clear that the design of the flats, their area etc. are liable to change on finalization of drawing or during construction for which no objection would be entertained consequent to which increase or decrease in the cost will be adjusted after payment of last installment. It is pleaded that it was stated in the brochure that in case of allocation made to an applicant on the basis of draw of lot is sought to be surrendered, he shall have to pay penalty equal to 10% penalty made with the application provided the application for surrender is made within two months from the date of issue of demand-cum-allocation letter. It is further pleaded that if the allotment of a flat is -:6:- surrendered / cancelled either on the allottee's own request or due to non fulfillment of the terms and conditions of the allotment by the allottee after the expiry of two months from the date of issue of demand-cum-allocation letter, interest calculated @ 18% per annum on the amount demanded in the letter shall be charged in addition to the amount of penalty besides other condition. It is stated that the plaintiff's predecessor-in-interest M/s Mukul Jain Medical Insitutute had applied under FIRSR SFS COMMERCIAL FLAT SCHEME, 1984 vide application no. 1086 dated 16.04.1984 with preference of a flat at Laxmi Nagar District Centre for area 107 sq.mtrs. The draw of lot was held on 5.9.1984 and M/s Mukul Jain Medical Institute was found successful and allocated a flat of 107 sq.mtrs. at Laxmi Nagar District Centre. After declaration of being successful in draw of lots held on 5.9.1984, a letter dated 27.12.1984 was issued, demanding the amount in five installments with a schedule of payment. It was made clear in this letter that sixth and final installment will be of 15% of the cost and difference between the cost on -:7:- completion and estimated cost, for this installment a separate demand letter will be issued indicating the date of deposit. According to the defendant due to some unforeseen circumstances the schedule of payment was changed and the same was also published in the newspaper dated 9.2.1985. It is pleaded that they never issued any letter for the 6th installment. It is also pleaded that after the completion of the building and its being ready for handing over possession, DDA had not been issued a demand letter as 6th and final installments thereby demanding a sum of Rs.62 lacs to be paid before the possession could be handed over, besides completing other formalities. According to the defendant the plaintiff had shown its inability and surrendered their allotment vide their application 10.01.2001 and 24.01.2001 and immediately thereafter the application was processed for the refund of the amount as per the terms and conditions and the sum of Rs.8,04,389/- deposited by the plaintiff was refunded back vide cheque no. 297975 dated 9.2.2001 vide letter dated 12.2.2001 and cheque no. 300065 dated 21.3.2001 -:8:- for Rs.57,422/- vide letter 23.3.2001 alongwith interest on earnest money. According to the defendant the suit is barred by time as the payment had already been made on 12.2.2001 and 23.3.2001. On merits all the allegations are denied by the defendant / DDA. It is denied that the defendant was not in position to construct the building and that the plaintiff made all the payments within time and that the defendant was to give possession by 4.01.1988. It is denied that the additional demand of Rs.62 lacs is raised by the defendant arbitrary. ISSUES On the basis of pleadings of the parties following issues were framed by the Ld. predecessor of this court on 15.9.2004: 1. Whether the defendants / DDA has arbitrarily demanded an additional sum of Rs.62 lacs as alleged in para 12 of the plaint ? 2. Whether the suit is barred under Section 53-B of the DD Act ? -:9:- 3. Whether the plaintiff is entitled to any interest on the amount deposited / refunded? If so, at what rate and at what amount? 4. Relief. EVIDENCE In order to prove its case the plaintiff has examined one Sh. Gulzar Ahmed as PW1, a member of the Governing Body of the Plaintiff Charitable Society. PW1 in his examination-in-chief by way of affidavit has placed on record the Certificate of Incorporation of the plaintiff society alongwith memorandum of Association, rules and regulations and the resolution passed by the members of the society for change of the name of society vide Ex.PW1/1, Ex.PW1/1A and Ex.PW1/2, resolution dated 16.3.2004 passed by the society in his favour which is Ex.PW1/3, copy of the scheme / contract contained in the brochure published by the defendant / DDA which is Ex.PW1/4, demand-cum-allocation letter dated 27.12.1984 which Ex.PW1/5, public notice Ex. PW1/6, -:10:- letter of the defendant dated 6.11.1997 Ex.PW1/7,, the letter of the plaintiff society dated 10.01.2001 Ex.PW1/8, the letter of the society dated 9.2.2001 Ex.PW1/10, and the letter of defendant dated 19.12.2003 which is Ex.PW1/11, legal notice served upon the defendant on 19.01.2004 which is Ex.PW1/12. In rebuttal the defendant have examined Sh. N. C. Bhatt, Assistant Director, Commercial Estate Branch, DDA, as DW1 who has corroborated what has been earlier stated in the written statement. FINDINGS Issue No.2: Whether the suit is barred under Section 53-B of the DD Act ? Onus of proving this issue was upon the defendant who in their written statement have raised a preliminary issue that the suit is barred under Section 53 B of DD Act. The case of the defendant is that no prior notice as contemplated has been served upon them and the suit is bad. It is also stated that the suit is barred by time as the payment was already -:11:- made on 12.2.2001 and 23.3.2001. According to the defendant the limitation for filing the suit is provided in Section 53-B of DD Act and as per the Section 53-B(2) of the Act no suit would lie against the Authority after expiry of six months and therefore the present suit for recovery of Rs.13,56,405/- alongwith costs is beyond the prescribed period of limitation of six months, since it is the admitted case that a sum of Rs.8,04,389/- was refunded back to the plaintiff vide cheque no. 297975 dated 9.2.2001 vide letter dated 12.2.2001 and cheque no. 300065 dated 21.3.2001 for Rs.57,422/- vide letter 23.3.2001 alongwith interest on earnest money upto date of location and after deducting the cancellation charges of Rs.2000/- as per the terms of brochure. The defendant in support of their case have examined Sh. N. C. Bhatt, Assistant Director, Commercial Estate Branch, DDA, as DW1 who has corroborated what has been earlier stated in the written statement. In rebuttal the plaintiff has examined Sh. Gulzar Ahmed as PW1, a member of the Governing Body of the -:12:- Plaintiff Charitable Society who in his examination-in-chief by way of affidavit has placed on record the Certificate of Incorporation of the plaintiff society alongwith memorandum of Association, rules and regulations and the resolution passed by the members of the society for change of the name of society vide Ex.PW1/1, Ex.PW1/1A and Ex.PW1/2. He has identified the signatures of Sh. K. N. Bhargava who was president of the plaintiff society who has filed the present suit in March 2004 after a resolution dated 16.3.2004 passed by the society in his favour which is Ex.PW1/3. This witness has also placed on record the copy of the scheme / contract contained in the brochure published by the defendant / DDA which is Ex.PW1/4 and the demand-cum-allocation letter dated 27.12.1984 which Ex.PW1/5. PW1 also placed his reliance upon the public notice Ex. PW1/6, of the defendant dated 6.11.1997 Ex.PW1/7, the letter of the plaintiff society dated 10.01.2001 Ex.PW1/8, the letter of the society dated 9.2.2001 Ex.PW1/10, and the letter of defendant dated 19.12.2003 which is Ex.PW1/11. This witness has further -:13:- placed on record the legal notice served upon the defendant on 19.01.2004 which is Ex.PW1/12, to which no reply has been given by the respondent. No suggestion has been made to the
witness with regard to this notice dated 19.01.2004, though a suggestion has been made that the suit filed is within the period of limitation which suggestion the witness has denied.
I have gone through the written synopsis of arguments filed by the parties and also considered the submissions made before me. In so far as the ground of defendant that the legal notice has not been given them as contemplated u/s 53-B of DD Act is concerned, I find no merit in the same since the plaintiff has placed on record the copy of the legal notice given by the plaintiff society to the defendant dated 19.1.2004 alongwith the registered AD card and therefore under these circumstances I hereby hold that there is valid service of the notice u/s 53-B of DD Act upon the defendant / DDA in January 2004.
The provisions of Section 53-B Clause 1 of DD Act provide that:
-:14:-
No suit shall be instituted against the authority, or any member thereof, or any of its officers or other employees, or any person acting under the directions of the Authority or any member or any officer or other employee of the Authority in respect of any act done or purporting to have been done in pursuance of this Act or any rule or regulation made thereunder until the expiration of two month after notice in writing has been, in the case of Authority, left at its office, and in any other case, delivered to, or left at the office or place of abode of, the person to be sued and unless such notice states explicitly the cause of action, the nature of relief sought, the amount of compensation claimed and the name and place of residence of the interning plaintiff and unless the plaint contains a statement that such notice has been so left or delivered.-:15:-
Further, Clause 2 of Section 53 B of the DD Act provides that:
No suit as is described in sub-Section (1), shall, unless it is a suit for recovery of immovable property or for a declaration of title, thereto, be instituted after the expiry of 6 months from the date on which the cause of action arises.
Clause 3 of Section 53 B further provides that:
Nothing contained in sub-section (1) shall be deemed to apply to a suit in which the only relief claimed is an injunction of which the object would be defeated by the giving of the notice or the postponement of the institution of the suit.
In this regard the Delhi High Court has in the case of Municipal Corporation of Delhi Vs. Kundan Lal Sharma reported in ILR (1969) Delhi 715 under similar circumstances where the plaintiff had filed the suit for -:16:- injunction for removal of construction on land, observed that:
"....... It is not a suit either for the recovery of immovable property or for a declaration of title thereto. In these circumstances sub-section (2) of Section 478 of the Act will apply in full force and the suit have have had to be filed within 6 months from the date on which the cause of action arose. As stated above, according to the findings of the learned Subordinate Judge, the cause of action arose either in August 1959 or in December, 1959. Whatever be the date the suit has undoubtedly been filed after the expiry of six months from the accrual of the cause of action and therefore, it was instated after the time prescribed by Section 478 (2)........."
Similarly in the case of G.C. Sharma Vs. MCD reported in 1979 MCC 234 it was observed that: -:17:-
"............ The power to grant and revoke a licence is vested in the Municipal Corporation by the Delhi DMC Act and it is by virtue of Section 430 of the Act and even if the Corporation exceeds this power, it cannot be said that the Corporation had no power to cancel the licence.
The aggrieved party wants to challenge this action of the Corporation by way of a suit, it must first give two months' notice to the Corporation and must file the suit within 6 months from the date of cancellation of licence otherwise it is bound to fail being time barred....."
Applying the aforesaid principle to the facts of the present case, it is evidence that the present suit is neither for recovery of immovable property nor a suit for declaration of title and therefore under these circumstances Sub-Section (2) of Section 53-B of DD Act would apply and the suit should have been filed within a period of six months from the date on -:18:- which the cause of action arose.
In the present case admittedly the cheques for the principal amount i.e. for a sum of Rs.8,04,389/- was refunded back to the plaintiff vide cheque no. 297975 dated 9.2.2001 vide letter dated 12.2.2001 and cheque no. 300065 dated 21.3.2001 for Rs.57,422/- vide letter 23.3.2001 alongwith interest on earnest money upto date of location and after deducting the cancellation charges of Rs.2000/- as per the terms of brochure. The case of the plaintiff is that they have received the amount under protest. If that be so then the cause of action would commence either on 9.2.2001 or on 21.3.2001. No subsequent legal notice issued by the plaintiff can have the effect of extending the limitation or create a fresh cause of action. It is also evident from the record that the plaintiff have themselves made request for return of money vide their letter dated 10.01.2001 and thereafter having accepted the payment of the amount refunded by the DDA (even though under protest), the cause of action would commence in the year 2001 and the limitation which once -:19:- starts cannot be extended merely by writing letters and sending notices and the present suit which has been filed in the month of April 2004, is clearly after the expiry of the limitation period of six months from the date of cause of action as contemplated in Clause (2) of Section 52 of the DD Act and is also beyond the period of limitation of three years as contemplated under the Limitation Act (General Law). It maybe clarified that the communication from the DDA dated 19.12.2003 which is Ex.PW1/11 will not assist the plaintiff in any manner since it is only formal communication by the Dy. Director (In-Charge) in response to the letter of the plaintiff dated 23.10.2003 on the subject of payment of interest. The issue is hereby decided against the plaintiff and in favour of the defendant.
Issue No.1: Whether the defendants / DDA has arbitrarily demanded an additional sum of Rs.62 lacs as alleged in para 12 of the plaint ?
Issue No.3: Whether the plaintiff is entitled to any interest on the amount deposited / refunded? If so, at what rate and at what amount?
-:20:- Issue No. 1 and 3 are clubbed together for the sake of convenience involving common discussions. The onus of proving these two issues is upon the plaintiff. Case of the plaintiff is that the defendant has arbitrarily demanded additional sum of Rs.62 lacs which the plaintiff society was unable to pay compelling them to seek cancellation of the allotment and therefore the defendant having retained the principal amount and the earnest money for number of years, the plaintiff would be entitled to the interest on the amount deposited / refunded. I have considered the statement of the sole witness of the plaintiff i.e. PW1 and the defendant witness Sh. N C Bhatt i.e. DW1. Ld. counsel for the defendant has vehemently argued that the terms and conditions of the agreement are very clear and the plaintiff himself having sought cancellation of the allotment, is not entitled to seek any interest on the amount so refunded, which amount has been refunded as per the terms and conditions of the scheme as mentioned in the brochure and allotment letter.
At the very outset I may state that the terms and -:21:- conditions of the scheme as mentioned in the Brochure are admitted by the parties. Further, the amount so refunded by the defendant has been admitted by the plaintiff. It is further admitted that the entire earnest money and the principal amount has been refunded by the defendant to the plaintiff as the plaintiff itself has demanded the refund vide their letter dated 10.01.2001 which is Ex.PW1/8.
The case of the plaintiff before this court is that the defendant has been adopting unfair trade practices in view of the fact that the plaintiff which is a charitable society had applied for the commercial plot under the said scheme and in due course of time was declared by the DDA one of the successful applicants pursuant to which it had deposited six installments on or before the due date, so much so that the 6th installment was paid by them, though the formal demand was not made by the DDA. It is stated that there was a specific law with the possession would be given to the original allottee within six months of the payment of last installment failing which interest @ 12% per annum would be payable by the -:22:- DDA on the amount deposited by the allottee after the stipulated period i.e. 6 months till actual date of handing over of the possession.
The PW1 has deposed that the plaintiff has deposited the entire amount even before the stipulated date i.e. 2.7.1987 yet the possession of the plot was not handed over to the plaintiff and therefore it is entitled for interest @ 12%. It is also alleged that the DDA has allotted a flat admeasuring 261 square meters of Category-III for a total sale consideration of Rs.62 lacs, which the plaintiff being a charitable society was not sufficient means to pay this astronomic demand and therefore was constrained to refused the demand. It is stated that it is ultimately on the request of the plaintiff that the amount was refunded which is accepted by the plaintiff without prejudice.
Case of the defendant on the other hand is that the condition with regard to the handing over of the possession of the flat was subject to the payment of the last installment within six months by 4.01.1988. It is contended that neither -:23:- the DDA had constructed nor handed over any flats nor they had informed the plaintiff of the same when the plaintiff made the payment of 6th installment. It is admitted that the last installment was paid by the plaintiff on 2.7.1987 but according to them, the DDA had neither constructed nor handed over the possession of the flats to the plaintiff. An arguments has been raised by the Ld. counsel for DDA that the plaintiff has deposited the 6th installment without any formal demand, and is therefore not entitled to any interest. It is argued that even otherwise, it was clearly mentioned that the 6th and final installment would be 15% of the cost of the flat and final calculations would be made on the basis of the actual calculations. It is pointed out that it was clearly stated in the brochure that in case of allocation made to an applicant on the basis of draw of lot is sought to be surrendered, the applicant shall be liable to pay penalty equal to 10% penalty made with the application provided the application for surrender is made within two months from the date of issue of demand-cum- allocation letter. It is pointed out by the counsel for the -:24:- defendant that this demand of Rs.62 lacs does not find mention in the letter dated 10.01.2001 which is the basis of the legal notice and it appears that the whole story has been concocted as an after thought.
Counsels for the parties have also placed their reliance upon the judgment in the case of "Manjul Srivastava Vs. Govt. of U.P. & Ors." reported in Vol. III(2008)SLT 14, wherein the Hon'ble apex court had granted the interest to the allottee @ 18%, which judgment I have duly perused.
Coming now to the facts of the present case, it is evident that the refund has been made by the DDA on account of the request of the plaintiff which is vide letter dated 10.01.2001 which is Ex.PW1/8. Nowhere in the letter it has been mentioned that they are compelled to seek refund on account of change of specifications of the flat because they were not in a position to make the payment of the additional payment of Rs.62 lacs as the additional cost incurred by the defendants. Had this been so, the plaintiff would have not failed to mention the same in his request letter or in his -:25:- communication made to the DDA at the first instance. The apprehension of the defendant that the ground has been subsequently raised as an after thought is not without merit and the possibility that it has been subsequently concocted on advice, cannot not be ruled out. Not only the suit has been filed after the expiry of period of three years, but is also beyond the period of limitation as contemplated under Section 53 B of DD Act. No doubt the defendant is under obligation to pay the nominal interest equal to the existing market rate at the relevant time on the refunded amount, yet this claim has to be made at the earliest and the plaintiff having defaulted in doing so, would not be entitled to claim this amount after expiry of period of limitation. The issues are decided against the plaintiff and in favour of the defendant. Relief On the basis of the discussions held above on the various issues, I hold that the plaintiff is not entitled to any relief.
-:26:-
The suit of the plaintiff is dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly.
File be consigned to Record Room.
Announced in the open court (Dr. KAMINI LAU) Dated: 04.03.2010 ASJ/NW-II, Rohini : Delhi. -:27:- Suit No. 435/2004 Mahavirji Medical Institute Vs. Delhi Development Authority 04.03.2010 Present: None.
Vide separate detailed judgment dictated and announced in the open court, but not yet typed, the suit of the plaintiff is dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly.
File be consigned to Record Room.
(Dr. KAMINI LAU) ASJ/NW-II, Rohini : Delhi.
-:28:-