Bela Mittal vs M/S. Lokhandwala Kataria Construction Pvt. Ltd

Prem Narain, J

The present consumer complaint has been filed by Ms Bela Mittal against the opposite party M/s Lokhandwala Kataria Construction Pvt., Ltd. It has been alleged in the complaint that the opposite party has not got any approval for the construction of the building, though the complainant has paid Rs.3,88,98,091/- against the total consideration of Rs.5,38,87,000/-. The booked property was allotted on 22.10.2010, and the due date for the possession of the flat was 14.06.2015. When there was no progress in the construction, the complainant sought refund of his paid amount vide letter dated 18.01.2016. The opposite party did not refund the amount nor responded and therefore, the complainant filed the present consumer complaint. In the complaint the following prayers have been made:

The opposite party be directed to refund the entire amount of Rs.3,88,98,091/- as paid under the allotment letter to the complainant along with interest @ 20% per annum compounded annually from December 2010 until realisation;

The opposite party be directed to compensate the complainant of Rs.5.00 lakh towards mental harassment, frustration and agony;

The opposite party be directed to compensate the complainant of Rs.5.00 lakh towards litigation costs and other expenses;

Any other relief that this Hon'ble Forum may deem fit in the facts and circumstances of the case and in the interest of justice.

The complaint has been resisted on the grounds that the allotment was made in the name of Ms Bela Mittal and Mukesh Mittal and her husband Mr Mukesh Mittal had died in the year 2012, therefore, the question of LRs of Mukesh Mittal is to be decided first, if the money has to be refunded. Another ground that has been taken is that under Maharashtra Ownership of Flat (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act 1963 ('the MOFA') interest @ 9% per annum is allowed as per its section 8 in refunded cases, if the agreement is cancelled by the allottee. On some other grounds also it was requested that the complaint be dismissed.

The complainant filed rejoinder to written statement submitted by the opposite party. Both the parties have filed their evidence by way of affidavit which have been taken on record.

Heard the learned counsel for both the parties and perused the records. Learned counsel for the complainant has stated that the complainant has paid Rs.3,88,98,091/- and the possession was due on 14.06.2015, however, till that time and even in the year 2016, there was no progress in the construction as the opposite party had not got all the approvals for the construction till 18.06.2016. The complainant sought refund from the opposite party however, the opposite party has not refunded any amount so far. The project has not yet started and it has become an abandoned project, therefore, there is no question of getting any flat and consequently, the complainant can only seek refund of the paid amount.

It was further argued by the learned counsel for the complainant that the builder is charging 18% per annum interest on the defaulted instalments and therefore, the complainant is also entitled to get 18% per annum interest on the paid amount. Learned counsel further stated that if it is not possible to grant 18% per annum interest then the complainant should be paid at least 14% per annum interest on the paid amount. In support of his argument, the learned counsel for the complainant referred to the judgment of this Commission in the case of Siraj Developers and Ors vs Yasmin Razak Vanoo, in First Appeal no. 124 of 2015 decided on 15.11.2017, wherein this Commission has allowed refund alongwith interest at the rate of 14% per annum. Learned counsel further argued that total money was deposited from the account of the present complainant and she is entitled to get the total amount of the refund. He further states that "no objection" has been given by other LRs, however this has not been filed on record and permission was sought to file the same which was opposed by the learned counsel for the opposite party on the ground that proper succession certificate should have been there to decide the share of different LRs in the share of Mukesh Mittal who has since expired.

It was further stated that MOFA is only applicable in Maharashtra and it is not a binding on this Commission. The complaint has been filed under Consumer Protection Act, 1986 and this Commission has to decide the rate of interest independently. The learned counsel for the complainant further stated that section 8 of MOFA provides that the provision is without prejudice to other remedies being available to the allottee and therefore, this provision of interest @ 9% per annum is not mandatory and this Commission is not bound by this clause when other remedy under Consumer Protection Act, 1986 is being availed and this Commission has to independently order the rate of interest on the amount of refund.

On the other hand, the learned counsel for the opposite party argued that the allotment letter dated 23.12.2012 was in the name of Ms Bela Mittal and Mukesh Mittal. Ms Bela Mittal is the present complainant and she is entitled for refund of only 50% of the amount which has been deposited. There is no succession certificate of Mukesh Mittal from the competent court. No such paper has been filed as to indicate that the present complainant is the sole heir of Mukesh Mittal. Learned counsel further stated that even if "no objection" of other LRs can be filed, it cannot substitute a succession certificate as the authenticity of the succession can only be certified by a competent court.

Another argument advanced by the learned counsel for the opposite party is that vide letter dated 18.01.2016, the complainant has cancelled the agreement and therefore, after cancellation of the agreement, there is no relationship left, to be treated as relationship of consumer and service provider as all services come to an end on the date of cancellation i.e., 18.01.2016, therefore, the complainant is not a consumer and the opposite party is not a service provider today and hence, the complaint which has been filed on 22.09.2016 is not maintainable.

It was further argued that the construction of flats in Maharashtra is under the provisions of MOFA. Section 8 of MOFA provides only 9% per annum interest in the case of refund, therefore, this provision of MOFA is a statutory provision and has to be followed in all the cases.

Learned counsel for the opposite party has stated that the OP has paid Rs.11,71,091 as service tax to the Government and thus the OP has only received Rs.3,77,97,000/-, therefore, if order of refund is given by this Commission, then the order for refund can be given only for this amount.

Learned counsel for the opposite party has further stated that the judgment of this Commission relied upon by the learned counsel for the complainant in the matter of Siraj Developers and Ors vs Yasmin Razak Vanoo (Supra), is not relevant for the present case as that decision was taken in the year 2017 and since then the interest rates have fallen sharply.

I have carefully considered the arguments advanced by the learned counsel for the parties and perused the material on record. From the arguments of both the counsels it is clear that construction is not proceeding and the project is not likely to be completed within a reasonable time. Therefore, the complainant cannot expect that the possession will be given within a reasonable time and therefore, the only remedy available to the complainant is for seeking refund of the paid amount.

So far as the question of payment of service tax is concerned, the OP will be filing the return for the service tax and they can get the benefit for other new flats or the OP can seek refund of the tax from the Government. So far as consumer is concerned, he is entitled to the refund of full amount including the service tax because the OP has failed in completing the project and the consumer is constrained to seek refund. Accordingly, the complainant is entitled to get refund of Rs.3,88,98,091/-.

Now coming to the question of interest on the amount of refund, it is seen that section 8 of MOFA provides for refund with 9% per annum interest. The Hon'ble Supreme Court in the case of Kolkata West International Pvt. Ltd. Vs. Deva Asis Rudra, II (2019) CPJ 29 (SC), has reduced the interest rate from 12% per annum awarded by this Commission to 9% per annum. Looking at the bank rates even if 9% interest is given, it is quite reasonable and substantial. This interest rate meets the provisions of MOFA as well as is in accordance with the recent orders of the Hon'ble Supreme Court. Accordingly, in view of the aforesaid, the complainant is entitled to refund with interest @ 9% per annum.

An objection has been raised by the opposite party that no heirs of Mukesh Mittal have been substituted in the booking and the question is to whether the complainant will be entitled to the whole share in case the refund is ordered. Clearly, the builder has not raised this issue while accepting the amount from the allottees as to whether the money was coming from Mukesh Mittal or from the complainant herself. However, the builder is now asking whether the total amount could be refunded to the surviving allottee. Though the objection has been raised by the opposite party, however, the opposite party has not claimed that nobody else has approached the opposite party to refund any amount which was paid by the two allottees, i.e., the complainant and Mukesh Mittal. During the pendency of the complaint also nobody has approached this Commission that he is entitled to any share in the amount of refund. However, because an objection has been raised, it will be in the interest of the complainant that the complainant produces the affidavits of the LRs of Mukesh Mittal and the complainant also files the affidavit herself that LRs who have filed the affidavit giving no objection in favour for release of the total amount to the complainant are the only legal heirs of Mukesh Mittal. However, this process cannot be allowed to delay payment to the complainant. Now the complaint has been decided in favour of the complainant and refund is being ordered and the amount cannot be allowed to remain with the OP.

On the basis of above discussion, the complaint is allowed and the opposite party is directed to refund the amount of Rs.3,88,98,091/- (rupees three crore eighty eight lakh ninety eight thousand ninety one only) along with 9% interest per annum from the date of respective deposits till actual payment. The interest shall be first calculated till the date of this order and 50% of the total amount will be paid by the opposite party to the complainant directly within a period of 45 days from the date of receipt/ service of this order and the remaining 50% plus interest for the remaining period till the actual payment on the total amount will be deposited with the Registry of this Commission within a period of 45 days from the date of receipt/ service of this order. The complainant will then file an affidavit clearly stating as to who are the LRs of Mukesh Mittal and will also submit the affidavit of all the LRs of Mukesh Mittal giving no objection for the payment of remaining amount deposited with the Registry of this Commission to the complainant. Once these affidavits are filed with the Registry, the Registrar shall release this amount to the complainant if everything seems to be in order.