National Consumer Disputes Redressal
Bhatinda Development Authority vs Gursimran Singh on 17 January, 2019
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 778 OF 2017 (Against the Order dated 02/02/2017 in Complaint No. 295/2015 of the State Commission Punjab) 1. BHATINDA DEVELOPMENT AUTHORITY THROUGH ITS ESTATE OFFICER, BDA COMPLEX, BHAGU ROAD, BATHINDA, CHANDIGARH ...........Appellant(s) Versus 1. GURSIMRAN SINGH SON OF MUKHTIAR SINGH, RESIDENT OF HOUSE NO. 19219, STREET NO. 10, GURU TEG BAHADUR NAGAR, BATHINDA, DISTRICT-BATHINDA ...........Respondent(s) FIRST APPEAL NO. 779 OF 2017 (Against the Order dated 02/02/2017 in Complaint No. 296/2015 of the State Commission Punjab) 1. BHATINDA DEVELOPMENT AUTHORITY THROUGH ITS ESTATE OFFICER, BDA COMPLEX, BHAGU ROAD, BATHINDA, CHANDIGARH ...........Appellant(s) Versus 1. GURSIMRAN SINGH SON OF MUKHTIAR SINGH, RESIDENT OF HOUSE NO. 19219, STREET NO. 10, GURU TEG BAHADUR NAGAR, BATHINDA, DISTRICT-BATHINDA ...........Respondent(s) FIRST APPEAL NO. 780 OF 2017 (Against the Order dated 02/02/2017 in Complaint No. 297/2015 of the State Commission Punjab) 1. BHATINDA DEVELOPMENT AUTHORITY THROUGH ITS ESTATE OFFICER, BDA COMPLEX, BHAGU ROAD, BATHINDA, CHANDIGARH ...........Appellant(s) Versus 1. SANJEEV KUMAR GARG S/O. SH. DIWAN CHAND GARG, R/O. 43, TYPE IV, POWER COLONY, LEHRA MOHABBAT-1511111 BATHINDA, DISTT. BHATINDA ...........Respondent(s) FIRST APPEAL NO. 933 OF 2017 (Against the Order dated 02/02/2017 in Complaint No. 297/2015 of the State Commission Punjab) 1. SANJEEV KUMAR GARG S/O SHRI DIWAN CHAND GARG,R/O#43,TYPE VI,POWER COLONY, GURU HARGIBIND THERMAL PLANT,LEHRA MOHABBT,BATHINDA-151111. BATHINDA-151111 PUNJAB ...........Appellant(s) Versus 1. BATHINDA DEVELOPMENT AUTHORITY THROUGH ITS CHIEF ADMINISTATOR,BDA COMPLEX,BHAGU ROAD,BHATHINDA, BHATHINDA, PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER For the Appellant : Ms. Rachana Joshi Issar, Ms. Vandana Mishra, Ms. K. Vaijayanthi & Mr. Shailabh Pandey, Advocates FA/778- 780/2017).
Mr. Harish Goyal, Advocate(in FA/993/2017). For the Respondent : Ms. Rachana Joshi Issar, Ms. Vandana Mishra, Ms. K. Vaijayanthi & Mr. Shailabh Pandey, Advocates (in FA/993/2017).
Mr. Harish Goyal, Advocate (in FA/778-780/2017).
Dated : 17 Jan 2019 ORDER PER HON'BLE M. SHREESHA, MEMBER
Aggrieved by the orders dated 02.02.2017 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh, (for short "the State Commission") in CC Nos. 295, 296 and 297 of 2015, Bathinda Development Authority (hereinafter referred to as "BDA") has preferred these First Appeals bearing No. 778 to 780 of 2017 under Section 19 of the Consumer Protection Act, 1986 (for short "the Act") whereas First Appeal bearing No. 933 of 2017 has been moved by the Complainant against the impugned order dated 02.02.2017 in CC No. 297 of 2015 seeking enhancement of compensation. By the impugned order, the State Commission has allowed the Complaint in part directing BDA to complete the entire developmental work as referred in the Letter of Intent (LOI) and deliver the possession within a period of 30 days from the date of the receipt of the order till the date of possession, together with interest @ 12% p.a. on the deposited amount from 03.12.2012, i.e. the date of completion of 1.5 years from the issuance of Letter of Intent, till the date of the actual delivery of possession. Compensation of ₹25,000/- and costs of ₹11,000/- were also awarded.
2. Since the facts in these Appeals are all common they are being disposed of by this common order. For the sake of convenience FA No. 778 of 2017 arising out of the impugned order dated 02.02.2017 in CC No. 295/2015 is being taken as a lead case.
3. The brief facts as stated in the Complaint are that the plot bearing No. 8, admeasuring 500 sq. yds, situated at Phase-IV & V (BDA Enclave), Bathinda was allotted by BDA to Sh. Sham Singh vide Letter of Intent bearing No. 2493 dated 03.06.2011. Subsequently the Complainant purchased the said plot from Sh. Sham Singh and the Letter of Intent was transferred in the name of the Complainant vide letter dated 20.04.2012. It was stated that Sh. Sham Singh had deposited an amount of ₹5,50,000/- towards application fee and ₹8,25,000/- towards instalment. As per the Letter of Intent, it was agreed by BDA that possession of the plot in question would be delivered within 1.5 years from the date of issuance of the Letter of Intent i.e. 03.06.2011 after completion of the developmental work.
4. It was averred that even after expiry of about 3 years, BDA has failed to deliver the possession. The pace of development work was very slow and even the basic amenities such as water supply, sewerage, roads, street lights etc. have not been provided. It was stated that the Complainant had earlier filed CC No. 205 dated 20.03.2014 before the District Forum which was allowed vide order dated 15.07.2014. That order was challenged by BDA before the State Commission and vide order dated 03.08.2015, the Appeal was decided in favour of BDA for want of pecuniary jurisdiction of the District Forum.
5. It was averred that BDA issued an allotment letter dated 19.03.2014 despite the fact that the developmental work was incomplete as on that date. Hence the Complainant approached the State Commission seeking the following reliefs:-
"The opposite party may be directed to deliver the possession of plot no. 8 to the complainant and also directed to complete the development work at site and further directed to the opposite party to refund the amount of ₹12,00,000/- as interest amount deposited by the complainant along with interest @ of ₹2% p.a. w.e.f. from the date of issuance of first Letter of Intent till the date of delivery of possession of the said plot to the complainant and the complainant is also entitled compensation to the tune of ₹1,00,000/- on account of mental tension, agony, botheration and harassment suffered by the complainant and further it is prayed that the opposite party may also directed to pay a sum of ₹50,000/- as litigation costs."
6. BDA filed their Written Version resisting the Complaint on the ground that the Complainants are not original allottees and are transferees and, therefore, they are not consumers; that if the Complainants are not interested in the scheme they had an option to withdraw from the scheme at any time by moving an application with the Estate Officer as per Conditions No. 15 and 16 of the Letter of Intent; the allotment letter was already issued to the Complainants vide letter No. 2114 dated 19.03.2014; the possession of the plot was to be given to the allottees within 30 days from the date of issue of allotment letter but the possession was not taken by the allottees within 30 days and, therefore, it is deemed to have been handed over from the expiry of the said date. It was averred that the development work has been completed. It was denied that the allotment letter was issued without completion of the basic amenities. It was pleaded that the Complainants did not exercise their choice from withdrawing from the scheme and as long as they are continuing in the scheme, they are not entitled for any interest and, therefore, there is no deficiency of service on their behalf.
7. The State Commission based on the evidence adduced and the pleadings put forward observed as follows:-
"It is not necessary that in case the Ops are not giving the possession then complainant must apply for refund of the amount. It was one of the option but basically the complainant had applied for plot to get it for his residential purposes and he has not applied with an intention to get a refund. Therefore, deficiency in service is to be judged on the part of the OPs as per the terms and condition No. 15 of the LOI. The original allotment letter is dated 3.6.2011 and 1.5 years are completed by 3.12.2012. With regard to the development work at the site, the OPs has stated that a letter (Ex. OP-1) dated 11.9.2014 was issued to the complainant to contact with office of the OP to get the possession but the complainant had not come forward to get the possession. Mere this letter is not sufficient. Before giving this letter to take the possession, OP was required to prove on the record whether the development work at the site referred in Clause No. 15 is complete but no such document has been placed on the record. Therefore, deficiency in service is there on the part of OPs not to deliver the possession as agreed as per LOI (Ex. C-1). According to Clause 8 of the LOI, payment schedule given by OPs, the complainant was to deposit the instalment with interest and according to Clause No. 8, in case there is delay upto 1 year then penal clause @ 3% p.a., after 2 years, 4% p.a. and upto 3 years or more 5% p.a. penal rate of interest. In case we put the OP in the similar situation then they are also required to pay the penal charges in that manner, otherwise, as per Clause 16, they had agreed to pay interest @ 10% simple interest in case refund is applied for. Counsel for the complainant has referred to the judgment of the Hon'ble Supreme Court report in IV (2010) CPJ 7 (SC) "DDA versus Krishan Lal Nandrayog." In that case, there was inordinate delay in delivery of possession of flats. District Forum allowed interest @ 18%. State Commission reduced to 15%. National Commission upheld the order of the State Commission. Appeal filed before the Hon'ble Supreme Court and it was observed by the Hon'ble Supreme Court that award of cost is not interest in substance but it is to compensate respondents by way of damages for loss in terms of money, mental agony and other sufferings of respondents by late delivery of possession. Hon'ble Supreme Court in 2005(1) CPJ 19 (SC) "Ghaziabad Development Authority versus Rajesh Chandra" also upheld the interest awarded @ 12%. These judgments were not rebutted by the counsel for the OP. Therefore, in case there is delay in delivery of possession then OPs are required to pay interest on the amount deposited by the complainant for the delayed period. Similar view was taken by this Commission in Consumer Complaint No. 15 of 2016. "Gurvinder Singh & Anr. Versus Bathinda Development Authority", decided on 22.11.2016. Accordingly, we allow the complaint....."
8. Learned Counsel for the Appellant vehemently argued that the State Commission had erred in granting interest @ 12% p.a. as this would only unduly enrich the Complainant. Learned Counsel relied on Clauses 13, 15 and 16 of the Letter of Intent dated 03.06.2011 which are reproduced as under:-
"13. The said plot is being offered on "as is where basis is"
"15. The possession of the said plot shall be handed over to the allottee after completion of development works at site within a period of 1.5 years from the date of issuance of this Letter of Intent. In case for any reason, B.D.A. is unable to deliver the possession of plot within this stipulated period, you will have a right to withdraw from the scheme by moving an application to the Estate Officer and in such case B.D.A. shall refund the entire amount deposited by the applicant along with 10% simple interest. Apart from this, there shall be no other liability of the Authority."
"16. In case B.D.A. is unable to give the possession of the plot due to any reason, the allocation of the plot shall be cancelled and BDA shall refund the entire amount deposited by you along with a simple interest @ 10 p.a. Apart from this there shall be no other liability of the Authority."
9. She further relied on Clauses 1, 11 and 19 of the letter of allotment dated 19.03.2014 which was issued in favour of the Complainants. The same is reproduced as under:-
"1. The allotment shall be subject to the provisions of Punjab regional and town Planning and Development Act 1995, Rule and Regulations and policies framed there-under as well as the terms of and condition of the brochure/LOI on the basis of which application was made by you."
11. Possession of plot shall be handed over to the allottee within 30 days from the date of issue of allotment letter. If possession is not taken by the allottee within 30 days from the date of issue of allotment letter, it shall be deemed to have been handed over on the expiry of the said date."
19. The Plots shall be allotted on "as is where is" basis. No person shall have any claim to an alternative plot due to any reason."
10. She contended that in terms of Clause 11 of the letter of allotment, possession was handed over to the Complainants but they have failed to take possession even after 30 days of the issuance of letter of allotment and, therefore, possession is deemed to have been handed over on expiry of 30 days. No separate letter was required to be issued. She vehemently argued that it was only to avoid the liability to raise construction on the plot that the Complainant has preferred to file this Consumer Complaint with an ulterior motive of undue enrichment.
11. Learned Counsel appearing for the Respondents strongly opposed this argument and contended that the developmental work was not complete as on the date of offer of possession and, therefore, possession cannot be construed to be legal viewed from any angle. Learned Counsel submitted that many senior citizens after retirement with a dream of owning a home purchased the plot and paid the entire amount to BDA in 2011 but the BDA did not complete the developmental works and, therefore, the purchasers cannot be forced to take possession of an undeveloped plot.
12. The facts not in dispute are the purchase of the plot from one Sh. Sham Singh who is the original owner. The contention of the Appellant that the Complainants are not consumers because they are not original allottees but transferees is completely unsustainable in the light of the fact that amounts were also deposited by the Complainants and accepted by BDA and, therefore, it is deemed that consideration for the said plot has been paid and thus the Complainants fall within the definition of 'Consumer' as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. It is also an admitted fact that it was agreed by BDA that the possession of the plot in question shall be delivered within 1.5 years. During the course of arguments, Learned Counsel for the Appellant submitted that the Letter of Intent cannot be construed to be a concluded contract between the parties. It is also not in dispute that the Letter of Intent was issued in favour of the purchaser and the terms of the Letter of Intent include the tentative price of the plot, the number of plot, the square yards, the total price of the plot, the additional price for corner plot, the schedule of payment and also the time for delivery of possession of plot. In the same Letter of Intent an option was also given to the Complainant to withdraw from the scheme if the possession was not delivered within time which the Counsel for BDA is relying on. A perusal of Letter of Intent clearly shows that all these terms and conditions were incorporated. It is an offer made by BDA which was accepted by the Complainant and the acceptance was also communicated and, therefore, it is construed as a concluded contract between the parties. It is pertinent to note that BDA has also been receiving payments from purchasers based on the price mentioned in the letter of allotment and, therefore, viewed from any angle the Letter of Intent is a concluded contract. A bare reading of Clause 15 shows that possession of the said plot shall be handed over to the allottee after completion of developmental work at site within a period of 1.5 years from the date of issue of Letter of Intent. In case for any reason BDA is unable to deliver the possession within the stipulated period the purchaser has a right to withdraw from the scheme by moving an application to the purchaser and the amount shall be refunded with interest @ 10% p.a. Admittedly, as per the Letter of Intent the possession was to be delivered within a period 1.5 years and BDA did not comply with the time period regarding the delivery of possession. The State Commission has rightly observed that Letter of Intent and the letter of allotment have to be seen in their entirety. Further, there are no substantive reasons given by BDA for the delay in offering the possession. Apart from relying on these Clauses there is absolutely no pleading regarding the reasons for the delay in the delivery of possession. Clause 11 of the allotment letter regarding presumption that possession is deemed to be taken within 30 days cannot be considered in isolation. According to Clause 15 the possession of the plot was to be handed over 'after completion of the developmental work at site'. Though, the Learned Counsel appearing for BDA vehemently contended that developmental work was complete at the subject site and has drawn our attention to the inter-se communication with respect to water and sewerage pipes, approach road, development of park etc., it can be seen from the record that there was no letter issued that development work was complete. There is absolutely no documentary evidence to substantiate the contention of the Learned Counsel of the Appellant that the developmental work was indeed complete as on the date of offer of possession and, therefore, offering possession without completion of developmental work at site itself is in violation of their own Clause 15. In the light of this finding that such an offer of possession cannot be considered to be a legal possession, we are of the considered view that the stand taken by BDA that the purchasers have not exercised their right to withdraw from the scheme and, therefore, are not entitled to interest, not only amounts to deficiency in service but also unfair trade practice.
13. We find it a fit case to place reliance on the judgement of this Commission in Prem Chand Dhiman Vs. Haryana Urban Development Authority 2017 (1) CPJ 105 in which it has been clearly laid down that as HUDA committed an inordinate delay in the delivery of possession of the plot, the Complainants could not construct their house on time and during the relevant period the cost of construction escalated substantially for which the Complainant was entitled to reasonable compensation. In Punjaburban Planning & Development Authority Vs. Darshana Devi 2017 (3) CPJ 134 this Commission has laid down the ratio that when possession of plot was not given within reasonable time, concurrent finding of fact by the Fora below holding the Petitioner authority guilty of deficiency in service bordering on unfair trade practice was upheld. In that case no allotment letter was issued. Though the offer of allotment was issued to the Complainants in 2014 in this case BDA was not adhering to the terms of the Letter of Intent as the developmental work was incomplete. Hence the ratio laid down by both the afore-noted judgements squarely apply to the facts in the instant case.
14. As can be seen from the order of State Commission only a reasonable interest @ 12% has been awarded on the deposited amount from 03.12.2012 i.e. after completion of 1.5 years from the issuance of Letter of Intent together with a meagre compensation of ₹25,000/- which we do not find a fit case to interfere.
15. For all the afore-noted reasons we do not see any illegality or infirmity in the well-reasoned orders of the State Commission and resultantly the Appeals filed by BDA bearing Nos. 778 to 780 of 2017 are dismissed accordingly with no order as to costs. The statutory amount in each Appeal shall stand transferred to the respective Complainants.
15. First Appeal bearing No. 933 of 2017 has been filed by the Complainant seeking enhancement of compensation. At this stage we are not inclined to go into the aspect of refund of ₹2,50,000/- charged for a plot situated in front of a park or not. We hope that to meet the ends of justice, BDA would consider looking into the aspect of any excess amount to be refunded together with the situation of the plot and of any extra amount charged at the time of delivery of possession to the Complainant. The Appeal No. 933 of 2017 preferred by the Complainant is disposed of accordingly. It is clarified that the Complainant is entitled to release of the Statutory amount of ₹35,000/- in FA No. 780/2017.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER