Delhi District Court
Through Her Power Of Attorney vs MTech Developers Pvt. Ltd on 19 August, 2013
1
IN THE COURT OF MS POONAM CHAUDHARY, ADJ03, SAKET
COURTS COMPLEX, NEW DELHI.
SUIT NO. 342/2012
Unique Identification No. : 02406C0174452011
IN THE MATTER OF
Smt. Shakuntala Devi
W/o Sh. Harish Chand Rastogi
R/o 641, Sector15,
PartI, Gurgaon122001 (Haryana)
Through her Power of Attorney
Sh. Roop Kishore Rastogi ..... Plaintiff
VERSUS
MTech Developers Pvt. Ltd.
ANS House,
144/2, Ashram
Mathura Road, New Delhi110014
(Through its Managing Director/Directors)
.... Defendant
DATE OF INSTITUTION : 14.07.2011
DATE OF RESERVING FOR JUDGMENT/ORDER : 14.08.2013
DATE OF PRONOUNCEMENT : 19.08.2013
J U D G E M E N T
1. This is a suit filed by plaintiff against the defendant for recovery of Rs. 10,02,200/ (Rupees Ten Lacs Two Thousand Two Hundred Only) along pendentelite and future interest @ 24 % per annum.
2. Briefly stated the facts of the present case are that present suit is being instituted by plaintiff through her son & power of attorney who has been duly authorized by the plaintiff to sign verify/ 2 depose on behalf of the plaintiff vide the GPA dated 26.08.1978. It is alleged that the defendant is engaged in the business of real estate development including construction and development of various residential and commercial projects. It is further stated that a residential project was launched by defendant by the name of MTech Heights, Bhiwadi, Rajasthan.
3. It is further averred that plaintiff being interested in purchasing an apartment in the project approached the defendant to find out the details about the project. The defendant represented that the project is strategically located on BhiwadiAlwar Road, minutes away from National Highway8 (NH8) and is surrounded by many existing and upcoming townships promoted by top builders and boasts of offices, schools, hospital and shopping centers in close vicinity. It was also represented that the project is designed to be the world class township and would offer homes equipped with comprehensive modern city infrastructure comprising of internal amenity centers and facilities of all kinds.
4. It is further alleged that defendant also represented that it had obtained all the requisite permissions, sanctions and approvals for the development of the project as such, the construction of project would be completed and plot allotted to the plaintiff would be handed over within 36 months from the date of application for allotment.
5. It is further stated that on the basis of the representations given by the defendant, the plaintiff agreed to purchase an apartment in the project admeasuring 1,500 Sq. fts. for a total sale consideration of Rs. 21,75,000/ (Rupees Twenty One Lacs Seventy Five Thousands only) and made a part payment of Rs. 2,25,000/ 3 (Rupees Two Lacs Twenty Five Thousand Only) by cheque bearing No. 250572 dated 18.09.2006. The defendant issued a receipt No. M311 dated 03.10.2006 of the payment received.
6. It is further averred plaintiff received a letter dated 25.03.2008 from defendant informing that defendant has obtained No objection Certificate from authorities and have completed the soil testing work and that the construction work would start very shortly and raised demand of Ist installment of Rs. 2,25,000/ (Rupees Two Lacs Twenty Five Thousand Only) being 10 % of the total sale consideration which was stated to be as per the installment payment plan. It is further alleged that plaintiff paid the amount of Rs. 2,25,000/ towards first installment by way of cheque bearing No. 279842 dated 02.06.2008, duly accepted by the defendant vide receipt No. 18560 dated 04.07.2008.
7. It is further alleged that thereafter, plaintiff on several occasions enquired from the defendant regarding the status of the project but defendant gave evasive reply and false promises.
8. It is further alleged that defendant failed to hand over the plot to the plaintiff inspite of expiry of more than four years from the date of booking. It is further averred that some time in July 2010, the plaintiff came to know from newspapers report that the defendant had indulging in large scale fraud upon the allottees in its various projects by in inducing them to pay huge amount of sale consideration without acquiring lands and obtaining sanctions and approvals from the concerned authorities. It is also alleged that plaintiff learnt that various allottees of the have lodged the complaint with Economic Offences Wing of Delhi Police, against the defendant for cheating and fraud. It is alleged 4 that defendant is guilty of cheating the plaintiff by making false assurances to the plaintiff and thereby inducing the plaintiff to pay huge amount for plot without having acquiring the land or obtaining the sanctions and approvals from the concerned authorities/departments.
9. It is further stated that inspite of various requests and reminders made by the plaintiff, defendant has deliberately failed to refund the amount of Rs. 4,50,000/ thus, having no other option, plaintiff issued legal notice to the defendant calling upon the defendant to pay the amount of Rs. 4,50,000/ with interest @ 24 % per annum from the date of booking i.e. 18.09.2006. It is also stated that plaintiff has also called upon the defendant to pay Rs. 1,00,000/ (Rupees One Lacs Only) for loss of opportunity cost and Rs. 20,000/ (Rupees Twenty Thousand Only) for mental harassment with interest @ 24 % per annum and notice charges. It is alleged that legal notice dated 23.10.2010 was sent to the defendant through registered post and courier but inspite of 8 months having been elapsed defendant neither paid the money nor replied to the notice. It is also stated that legal notice sent through registered post and courier have not been received back by the plaintiff. It is prayed that a decree for recovery of Rs. 10,02,200/ (Rupees Ten Lacs Two Thousand Two Hundred only) along with pendentelite and future interest @ 24 % per annum till the date of actual realization in favour of the plaintiff and against the defendant, alongwith the cost of the proceedings.
10. The defendant filed WS contesting the suit taking preliminary objection that the suit was not maintainable. It was also alleged that plaintiff had no cause of action. It was also stated that there 5 was no written contract between the parties regarding the refund of the booking amount as such the claim of the plaintiff was liable to be dismissed. It was also alleged that suit was barred by limitation and also by order 2 rule 2 CPC as earlier suit filed by the plaintiff was compromised/ dismissed as withdrawn.
11. On merits it was alleged that all the avernments made in the plaint were false. It was denied that the defendant represented to the plaintiff that the project was designed to be world class. It was also denied that defendant represented to the plaintiff that they had obtained requisite permission and sanction for development of the project from the concerned department and that the construction of the project shall be completed and the plot alloted to the plaintiff would be handed over within 36 months from the date of the sanction for allotment.
12. It was further stated that defendant had obtained all the requisite permission from the concerned departments and construction of the flats at the project was almost complete and defendant was ready to allot the flat/plots to the concerned persons subject to the payment of balance outstanding. It was denied that defendant sent letter to the plaintiff dated 25.03.2008. It was alleged that plaintiff failed to make payment of the remaining installment in time as per the schedule, hence the booking of the plaintiff stood canceled. It was denied that the defendant is liable to refund Rs. 4,50,000/ (Rupees Four Lacs Fifty Thousand Only) with interest as alleged. The service of legal notice was also denied.
13. It was also denied that plaintiff had any cause of action against the defendant. It was also denied that the suit was within the period of limitation. The other averments were also denied.
614.On the pleadings of the parties following issues were framed:
1. Whether the suit is barred by limitation? OPD.
2. Whether the suit is barred by order 2 Rule 2 CPC? OPD.
3. Whether the plaintiff is entitled to recovery of suit amount, as prayed for? OPP.
4. Whether the plaintiff is entitled to interest on the suit amount, if yes, at what rate and for what period? OPP.
5. Relief.
15.In support of its case the plaintiff examined his attorney Sh. Roop Kishore Rastogi, who tendered his evidence by way of affidavit Ex. PW1/A, reiterating therein the contents of the plaint. He proved the advance registration application as Ex P1. He also proved the part payment acknowledgment receipt as Ex. P2. He also proved letter dated 25.03.2008 written by defendant to plaintiff, Ex. PW1/1, newspaper report Mark A, legal notice dated 23.10.2010 Ex. PW1/3, postal receipt of same Ex. PW1/4 and Ex. PW1/5, courier receipts Ex. PW1/6 & 7. In his cross examination he stated that the GPA executed in his favour by the plaintiff. He also stated that he had personal knowledge of the facts of the case since he was personally involved from the very beginning in making the application for booking of the plots and making payments. He also stated that no flat was alloted against the booking. He also stated that booking was done directly. He also stated that there was no document has filed to show that in the event of refund any interest was payable. He also stated that no formal agreement to sell or MOU was executed between the parties. He denied that the claim was time barred or that defendant is not liable to pay the claim amount. He denied that 7 the defendant had not received the legal notice. He also stated that a compromise was arrived at between the parties in Suit No. 1025/10 but denied that the compromise was subject matter of this suit. He further denied that plaintiff had not suffered any damages. The plaintiff thereafter, closed his evidence.
16. On the other hand defendant examined Sh. Amit Jha, the director of defendant company as DW1, and he also tendered his evidence by way of affidavit reiterating therein the contents of the WS. In his cross examination he has stated that all the correspondence of the company was received at the office address of the defendant. He further stated that Phase I of the project was complete. He also deposed that possession was given to several persons. He also stated that the allotment of plaintiff was cancelled due to non payment of installments. He also testified that the defendant had not filed any document to show the cancellation of allotment. He also stated that no documents was filed to show the demand of installment from the plaintiff. He denied that no demands was ever raised towards the installment for plaintiff. He also denied that demands was never raised since the project was nonstarter due to lack of approvals from the authorities. He also denied that defendant could not forfeit the booking amount paid by the plaintiff because the defendant company was itself in default by failing to complete the project. He further denied that demands of installments was not made from the plaintiff as the payments was to be made as per the construction linked payment plan. He further stated that he could not tell whether the letter Ex. PW1/1 was issued by defendant to plaintiff and whether on the said date the 8 construction activity had started or not. He denied on the date of writing the letter Ex.PW1/1 dated 25.06.2008, approval has not been obtained from the concerned authorities. He also denied that there was any agreement between the parties to hand over the possession of plot /flat within 36 months from the date of booking. He denied that as per the terms of booking defendant was to pay interest in case of cancellation of booking on the booking amount. He further stated that he did not know whether the defendant had received any legal notice Ex. PW1/2. He denied that the defendant did not reply to the legal notice as it avoided payment. The defendant thereafter, closed DE.
My findings on issues are as follows:
17.As regards Issue No. 1, "Whether the suit is barred by limitation?". The onus of this issue was upon the defendant but defendant did not lead evidence to show that the suit is barred by limitation, accordingly, the said issue was decided against the defendant and in favour of the plaintiff.18.As regards Issue No. 2
, "Whether the suit is barred by Order 2 Rule 2 CPC?" the onus of this issue was also upon the defendant but defendant did not lead any evidence to show that the suit is barred by order 2 Rule 2 CPC, accordingly, this issue was also decided against the defendant and in favour of the plaintiff.
19.As regards Issue No. 3 & 4.
"Whether the plaintiff is entitled to recovery of suit amount as prayed for?" and "Whether the plaintiff is entitled to interest on the suit amount if yes, at what rate and for what period?" It is an admitted case of the parties that there was no written agreement between the parties when the plaintiff booked the plot and made part payment to the defendant for 9 which the defendant issued the receipt. In this regard PW1 stated in his cross examination, it is correct that no formal agreement to sell or MOU was executed. However, defendant denied that plaintiff was entitled to claim the suit amount. DW1 stated that plaintiff is not entitled to refund of the amount, however, in his cross examination DW1 has stated that he had not filed any documents to show the cancellation of allotments, neither the defendant had filed any document to show the demand of installment from the plaintiff. He also denied that no demand of installment was made since the payment of installment was construction linked. Thus, as there is no documents on record filed to show booking amount was forfeited due to non payment of installments by plaintiff. He also stated that defendant had also not filed any document to show the booking amount paid by the plaintiff was forfeited, I am of the view that the plaintiff is entitled to refund of the advance amount paid with interest.
20. As regards the interest on the suit amount, as there was no written agreement between the parties as such there was no agreement also regarding payment of interest. In this regard PW1 stated in his cross examination that there was no interest clause in the terms and condition of booking.
21. However, PW1 deposed that defendant is guilty of cheating the plaintiff by making false representations and assurances and inducing the plaintiff to pay huge amount of Rs. 4,50,000/ (Rupees Four Lacs Fifty Thousand Only) towards part consideration of the apartment without even having obtained the requisite sanction, permission and approval for development 10 of the project which establish that the defendant since inception never had intention to develop the project and his intention was to dupe the allotees of their lawful money. He further testified that the legal notice was sent to the defendant which is ex. PW1/3 demanding interest @ 24 % p. a. with effect from date of payment of advance till the actual payment. He also stated that the notice was duly received by the defendant but defendant did not respond to the same. He also testified that action of defendant in extracting the money from the plaintiff on false representations was not only unlawful but has resulted in huge monetary losses to the plaintiff as such the defendant is liable to refund the amount with interest @ 24 % per annum.
22. In this regard PW1 also stated that he had come to know from the newspaper report that defendant had duped various allottees by inducing them to pay huge amount towards sale consideration and plaintiff had learnt various allottees have lodge the complaint against the defendant in Economic Offence Wings of Delhi Police for fraud and cheating. However, it is pertinent to note that plaintiff had not lodged any complaint against defendant and stated in his cross examination that P1 was provisional registration form and no specific flat was allotted against the book. In the said facts & circumstances no fraudulent intention in inducing the plaintiff to make advance payment for allotment can be inferred and defendant stated that the delay was due to time being taken for obtaining approval from various departments of Government of Rajasthan.
23. It was also contended on behalf of the defendant that defendant never assured the plaintiff that the villas would be delivered 11 within 24 months from the date of booking. DW1 deposed that the advance registration in any scheme does not attract any interest and is not a guarantee for allotment. In his cross examination he also stated that he was not aware whether the defendant company has received any legal notice and whether any reply of the same was sent.
24. Ld. Counsel for defendant also argued that PW1 stated in his cross examination that there was no document to show that in the event of refund, any interest was payable.
25. It was also contended on behalf of defendant that no interest could be claimed prior to filing of suit. In this regard Ld. Counsel for defendant has placed reliance upon "Sh. Zile Singh Vs. Sh. Mangloo Ram Bansal" RSA No. 195/2004 wherein it is held " that no interest could have been claimed much less decreed prior to the date of filing of the suit. So far as pendente lite and future interest are concerned, it is well settled that such matters are within the discretion of the Court. Therefore, the calculation of the interest @ 12 % per annum during the pendency of the suit and 6 % per annum after the decree which is based on the discretion of the Trial Court cannot be said to be arbitrary and in view of the judgment of the Supreme Court in the decision reported as Mahesh Chandra Bansal Vs. Krishna Swaroop Singhal & Anr. 1997 (III) CTC 367, I do not find any reason to interfere with such part of the decree."
26. Admittedly there was no agreement for payment of interest. Section 3 and 4 of the interest Act 1978 relates to payment of pre suit interest, are as follows: Section 3. Power of Court to allow interest. (1) In any proceedings for the recovery of any debt or damages or in any proceedings in 12 which a claim for interest in respect of any debt or damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say,
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then from the date when the debt is payable to the date of institution of the proceedings;
(b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings:
Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment. (2) Where, in any such proceedings as are mentioned in subsection (1),
(a) judgment, order or award is given for a sum which , apart from interest on damages, exceeds four thousand rupees, and
(b) the sum represents or includes damages in respect of personal injuries to the plaintiff or any other person or in respect of a person's death.
Section 4. Interest payable under certain enactments. (1) Notwithstanding anything contained in Section 3, interest shall be payable in all cases in which it is payable by virtue of any enactment or other rule of law or usage having the force of law.
13(2) Notwithstanding as aforesaid, and without prejudice to the generality of the provisions of subsection (1), the Court shall, in each of the following cases, allow interest from the date specified below to the date of institution of the proceedings at such rate as the Court may consider reasonable, unless the Court is satisfied that there are special reasons why interest should not be allowed, namely:
(a) where money or other property has been deposited as security for the performance of an obligation imposed by law or contract from the date of the deposit;
(b) where the obligation to pay money or restore any property arises by virtue of a fiduciary relationship, from the date of the cause of action;
(c) Where money or other property is obtained or retained by fraud, from the date of the cause of actions;
(d) where the claim is for dower or maintenance, from the date of cause of action.
27. In judgment titled as Sh. Zile Singh supra reliance was placed upon Batliboi & Co. Ltd. vs. Beama Mfg. Pvt. Ltd. (2006) 1 MLJ 276 wherein it was held as under: "A combined reading of the provisions contained in Section 3 and 4 makes it clear that, (1) interest is payable on a presuit claim, if there is any statutory enactment to that effect (provisions contained in the Negotiable Instruments Act or the Land Acquisition Act or Specific instances where interest is payable under an enactment);
(2) interest is payable under other rule of law;
(3) interest is payable by virtue of any usage having the force of 14 law;
(4) interest is payable as of right by virtue of any agreement as contemplated under section 3 (3) (a);
Keeping in view the fact that in Section 3 (3) the expression "agreement" has been used in contradistinction with Section 3(1)
(a), where the expression "written instrument" has been used, it is obvious that such agreement contemplated under Section3 (3)(a) can be express agreement or even implied agreement. (5) interest is payable if the claim relate to a debt payable by virtue of a written instrument at a certain time;
(6) interest is payable from the date of any written notice given by the person entitled to such claim.
It is however required to be noticed that in the matters coming within Section 4 of the Interest Act, 1978, it is mandatory for the court to award Page 1560 interest, whereas in the matters coming within the Section 3, it is discretionary for the court to consider the question of grant of interest."
28. Reliance was also placed on judgment titled as Bengal Nagpur Railway Co. Ltd. V. Ruttanji Ramji and Ors. AIR 1938 Privy Council 67 wherein it was held as under : ".... The crucial question however, is whether the Court has authority to allow interest for the period prior to the institution of the suit; and the solution of this question depends, not upon the Civil Procedure Code, but upon substantive law. Now, interest for the period prior to the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to 15 recovery interest, as for instance, under Section 80, Negotiable Instruments Act, 1881, the Court may award interest at the rate of 6 per cent per annum, when no rate of interest is specified in the promissory note or bill of exchange. There is in the present case neither usage nor any contract express or implied to justify the award of interest. Nor is interest payable by virtue of any provisions of the law governing the case. Under the Interest Act 32 of 1839, the Court may allow interest to the plaintiff, if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument."
It was further observed: "...There is a considerable divergence of judicial opinion in India on the question of whether interest can be recovered as damages under Section 73, Contract Act, where it is not recoverable under the Interest Act. Now Section73, Contract Act, gives statutory recognition to the general rule that, in the event of breach of a contract, the party who suffers by such a breach is entitled to recover from the party, breaking the contract, compensation for any loss or damage thereby caused to him. On behalf of the plaintiffs, reliance is placed upon Illus. (n) to that section. The illustration however, does not deal with the right of a creditor to recover interest from his debtor on a loan advanced to the latter by the former. It only shows that if any person breaks his contract to pay to another person a sum of money on a specified date, and in consequence of that breach the latter is unable to pay his debts and is ruined, the former is not liable to make good to the latter anything except the principal sum which he promised to pay, together with the interest up to the date of payment. He is not 16 liable to pay damages of a remote character. The illustration does not confer upon a creditor a right to recover interest upon a debt which is due to him, when he is not entitled to such interest under any provision of the law. Nor can an illustration have the effect of modifying the language of the section which alone forms the enactment."
29. Considering the above judgments, as there was no written agreement for payment of interest in case of refund. In this regard PW1 stated in his cross examination that there is no document to show that in the event of refund any interest was payable, thus, no interest can be claimed for the period prior to the filing of the suit. However, as defendant has retained the advance amount, it is liable to pay pendentlite and future interest. As the transaction was of commercial in nature the interest @ 12 % per annum from the date of filing of the suit till realization is payable by the defendant.
30. I accordingly, pass a decree for a sum of Rs. 4,50,000/ (Rupees Four Lacs Fifty Thousand Only) with interest @ 12 % per annum from the date of filing of the suit till realization, along with the cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room after due compliance.
Announced in the open Court (POONAM CHAUDHARY)
on 19.08.2013 ADJ03, SAKET COURT COMPLEX,
NEW DELHI
17
CS No. 342/2012
Smt. Shankutala Devi
Vs. M Tech Developers Pvt. Ltd.
19.08.2013
Present: Counsels for parties.
Vide separate judgment, I pass a decree for a sum of Rs. 4,50,000/ (Rupees Four Lacs Fifty Thousand Only) with interest @ 12 % per annum from the date of filing of the suit till realization, along with the cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room after due compliance.
Announced in the Open Court (POONAM CHAUDHARY)
on 19.08.2013 ADJ03, SAKET COURT,
NEW DELHI/19.08.2013