Delhi District Court
Shri Rajiv Singh vs Shri Sangwan Heights Pvt. Ltd on 25 November, 2020
IN THE COURT OF SHRI SANJAY SHARMAI :
DISTRICT JUDGE (COMMERCIAL COURT)
EAST DISTRICT
KARKARDOOMA COURTS : DELHI
CS (Comm) No. 62/2019
1. Shri Rajiv Singh
S/o Dr. MP Singh
2. Ms. Ayesha Singh
W/o Shri Rajiv Singh
Both R/o C75/201, Ramprastha Colony,
Chander Nagar, Ghaziabad, UP ................Plaintiff
Versus
Shri Sangwan Heights Pvt. Ltd.
(Earlier known as Shreya Developwell Pvt. Ltd.)
210 & 211, 2nd Floor,
Harsha Commercial Complex,
DDA LSC Ghazipur, Delhi96 ................Defendants
Date of institution : 31.10.2018
Date of reserving judgment : 19.11.2020
Date of judgment : 25.11.2020
JUDGMENT:
The plaintiffs have filed the present suit for recovery of Rs.14,62,650/ against the defendant.
2. In brief, the facts as averred in the plaint are that the defendant (earlier known as Shreya Developwell Pvt. Ltd.) is a company running business of developing residential flats. The representative of the defendant approached the plaintiffs, who are husband and wife, as they CS (Comm) No. 62/2019 Rajiv Singh & anr Vs. Sangwan Heights Pvt Ltd. 1 of 8 were interested in purchasing a residential flat. On the assurances and representation of the defendant, the plaintiffs agreed to purchase a two bedroom flat under construction linked payment plan and they booked Flat No. 501, JasmineII, 5th Floor, Hindon Heights, NH58, opposite Raj Nagar, Ghaziabad, UP, having super area of 1200 sq. feet. The plaintiffs paid a booking amount of Rs.2,22,000/ towards 10% of the basic cost of the flat and total negotiated cost of the flat was Rs.21 lacs besides other charges, making aggregate cost of flat to be Rs.23,30,000/. It has further been averred that after payment of the booking amount, the defendant issued letter of allotment dated 13.6.2007 to the plaintiffs mentioning therein the original price and other specific details of the flat.
3. Subsequently, the plaintiffs paid another amount of Rs.5,13,000/ by way of various demand drafts and receipts thereof were duly issued by the defendant. However, Flat Buyers Agreement was neither provided nor executed by the defendant despite receipt of payment of Rs.7,35,000/ in total. Thereafter, the defendant issued various demand letters to the plaintiffs for further payment and when the plaintiffs asked to update the construction of the project, they failed to provide the same. In the year 2012, when the plaintiffs visited the office of the defendant at 124, AGCR Enclave, Delhi92, it was found sealed under orders of the Hon'ble High Court. It was revealed to the plaintiffs that no construction work had taken place and when the plaintiffs visited the site, no information was provided to them about the office and promoters of the defendant company.
4. It has further been averred that on 13.8.2017, it was noticed by the plaintiffs that two residential towers in the name of JasmineI and CS (Comm) No. 62/2019 Rajiv Singh & anr Vs. Sangwan Heights Pvt Ltd. 2 of 8 JasmineIII have been raised near the site of the defendant where the proposed flat in JasmineII was alloted to the plaintiffs. On inquiry from the local property agents, it came to their knowledge that promoters of the defendants are in the process of selling the project to someone and some discussions were going on between Shreya Developwell Pvt. Ltd. and the promoters of the defendant.
The plaintiffs issued a legal notice 15.12.2017 to the defendant which was returned unserved. The plaintiffs made a written complaint to the SHO, Preet Vihar but no action was taken by the police.
5. It has been submitted that as on date, the defendant is liable to pay the entire amount of Rs.7,35,000/ to the plaintiffs alongwith interest @ 9% per annum as they have failed to deliver the possession of the flat and further as per the terms and conditions of the letter of allotment dated 13.6.2017, the admitted interest payable by the defendant comes to Rs.7,27,650/ (calculated from the last date of payment, i.e. April 2008) with further pendent lite interest. Hence, vide the present suit, the plaintiffs have claimed an amount of Rs.14,62,650/ from the defendant alongwith pendente lite and future interest @ 24% per annum from the date of last payment, i.e. 23.4.2008 till the realization of actual amount.
6. Summons of the suit were issued to the defendant but it could not be served. Service of the defendant was affected through publication in the newspapers 'The Statesman' and Hindi daily 'Veer Arjun', both dated 04.10.2019. However, neither anyone put in appearance on behalf of the defendant nor written statement was filed. Defendant was thus, proceeded against exparte vide order dated CS (Comm) No. 62/2019 Rajiv Singh & anr Vs. Sangwan Heights Pvt Ltd. 3 of 8 05.2.2020.
7. The plaintiffs led their evidence and examined themselves as PW1 and PW2. PW1 Shri Rajiv Singh tendered his evidence by way of affidavit Ex.PW1/A and relied upon the following documents :
Copy of original receipt as Ex.PW1/A (OSR).
Copy of Allotment letters dated 13.6.2007 and another undated letter, as Ex.PW1/B and PW1/C respectively. (OSR).
Copies of receipts issued by the defendant as Ex.PW1/D to Ex.PW1/G. Legal Notice with postal receipts as Ex.PW1/H (colly.). Legal Notice returned unserved vide Ex.PW1/I (colly.).
Copy of Fresh Certificate of Incorporation demonstrating change in the name of defendant company, as downloaded from the Ministry of Corporate Affairs as Ex.PW1/J. Copy of order dated 05.6.2020 passed by UPRERA as Ex.PW1/K (certified copy seen and returned).
Certificate under Section 65-B of the Indian Evidence Act in support of computer generated documents as Ex.PW1/L. Similarly, PW2 Ms. Ayesha Singh also led her evidence by way of affidavit Ex.PW2/A and relied upon the documents already proved by PW1.
8. I have heard Shri Nagendra Kumar and Shri Kaushal Kumar
- Ld. Counsels for the plaintiff and have also gone through the written submissions filed as well as records of the case.
9. The plaintiffs have filed copy of an order dated 05.6.2020 passed by UPRERA and proved it as Ex.PW1/K which apparently shows that defendant was served with the suit alongwith other documents. In that suit, it was submitted on behalf of the defendant before the concerned authority that the plaintiffs have already filed a suit for recovery before the Delhi Courts, i.e. the present suit. It is thus, clear that it was in the CS (Comm) No. 62/2019 Rajiv Singh & anr Vs. Sangwan Heights Pvt Ltd. 4 of 8 knowledge of the defendant that present suit for recovery is pending against it. However, none appeared on behalf of the defendant and no written statement was filed.
10. In the absence of the defendant, the evidence led by PW1 and PW2 has gone unrebutted and unchallenged and there is nothing on record to disbelieve the same. PW1 deposed that he booked a flat with the defendant in February 2007 and made last payment in April 2008 and by then, the defendant company had issued only two documents, i.e. Allotment letter dated 13.6.2007 followed by another allotment letter dated 17.8.2007 which are Ex.PW1/B and PW1/C respectively. The defendant had issued receipts Ex.PW1/D to PW1/G against the payments made by the plaintiffs.
11. It has been submitted that the defendant company was earlier known as Shreya Developwell Pvt. Ltd. When the plaintiffs had booked the flat but later it changed its name to Sangwan heights Pvt. Ltd. PW1 has filed Certificate of Incorporation in this regard which is Ex.PW1/J.
12. The plaintiff Bank filed the present suit on 11.10.2018. It has been admitted by the plaintiffs that they had made last payment to the defendant in April 2008. Thus, this suit has been filed beyond the period of limitation as per the Limitation Act. Ld. Counsel for the plaintiff has relied upon the judgment delivered in Popat and Kotecha Property Vs. State Bank of India Staff Association (2005) SCC 510. However, the said judgment was passed on an application under Order 7 Rule 11 CPC wherein it was held that the question of limitation is a mixed question of law and fact. In the instant case, the stage of Order 7 Rule 11 CPC is well over as we are at the final stage.
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13. It was submitted by Ld. Counsel for the plaintiff that the allotment letter Ex.PW1/B contains a Clause No.22.1 and according to it, in case the defendant abandoned the project or is not in a position to give possession of the flat, plaintiffs would be entitled for refund of their amount alongwith interest @ 9% per annum till the date of refund. It was submitted that there was no timeline fixed in the allotment letter for the delivery of possession of the flat. It was thus submitted that the defendant abandoned the project and failed to deliver the possession of the flat and therefore, the plaintiff are entitled for the refund of the money paid alongwith interest, as agreed upon .
14. Ld. Counsel for the plaintiffs further submitted that the defendant did not communicate anything about the status of the flat to the plaintiffs and has maintained the status of the plaintiffs as buyer in its record and hence, cause of action to seek recovery of the refund of the paid amount continues on day to day basis.
15. According to the plaintiffs, the defendant was absconding during the period 2012 to July 2017 and because of lack of details, it could not be approached by them. It is further their case that it was only in August 2017 that for the first time, the plaintiffs came to know that someone else was constructing flats at the site of the proposed flat of the plaintiffs.
16. Ld. Counsel drew the attention of this Court to Section 17 of the Limitation Act wherein it is provided that where the suit or application is based upon the fraud of the defendant or his agent, the period of limitation shall not begin to run until plaintiff or applicant have discovered the fraud or mistake or could, with reasonable diligence, have CS (Comm) No. 62/2019 Rajiv Singh & anr Vs. Sangwan Heights Pvt Ltd. 6 of 8 discovered it.
17. Section 22 of the said Act provides that in case of continued breach of contract or in case of continuing fraud, a fresh period of limitation begins to run at every moment of time during which the breach or the tort, as the case maybe, continues.
18. In the instant case, the defendant failed to communicate the plaintiff about the reasons of not commencing the construction or the delay in delivering the possession of the flat. After the last demand dated 08.9.2011, no further demand was raised by the defendant. This clearly shows fault as well as fraud on part of the defendant who, despite receiving substantial amount from the plaintiffs, failed to deliver the possession of flat within a reasonable time and further failed to convey reasons for the delay. The defendant further failed to execute the Builder Buyer's Agreement within a reasonable period. The plaintiffs despite due diligence could not unearth the fraud on part of the defendant as according to them the office of the defendant was sealed and no representative of the defendant was found available at the site. The above acts of the defendant also amounts to breach of contract. Hence, though the present suit has been filed after more than 10 years of the last payment made by the plaintiffs to the defendant, this Court is of the opinion that since this is a clear cause of fraud by the Developers, i.e. the defendant, and a case of breach of contract, the limitation would be continuing one in terms of Section 17 and Section 22 of The Limitation Act and therefore, the suit is considered to have been filed within the limitation period. This Court also has the pecuniary jurisdiction to try and dispose of the present suit.
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19. In view thereof, the suit of the plaintiff is decreed in their favour and against the defendant and it is directed that the defendant shall pay to the plaintiffs a sum of Rs.14,62,650/, which includes the principle amount paid by the plaintiffs to the defendant, i.e. Rs.7,35,000/ and interest on the said amount @ 9% per annum, i.e. Rs,7,27,650/, alongwith pendente lite and future interest @ 9% per annum from the date of filing of the present suit, till the realization of the said amount. Though the plaintiffs have sought interest pendente lite and future @ 24% per annum but since the agreed rate of interest as per Ex.PW1/B was 9% per annum, they are entitled to only that rate of interest. Costs of the suit are also awarded to the plaintiff. Decree Sheet be prepared accordingly.
Digitally signedFile be consigned to Record Room. SANJAY by SANJAY SHARMA-I SHARMA-
ANNOUNCED IN OPEN COURT I
Location: Delhi
Date: 2020.11.25
13:47:26 +0530
ON 25th day of November 2020
(SANJAY SHARMAI)
District Judge (Commercial Court)
East District
Karkardooma Courts, Delhi
CS (Comm) No. 62/2019
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