Jasvinder Singh vs M/s Ocus Skyscrapers Realty Limited Through Managing Director

Subhash Chandra, Presiding Member

This order shall dispose of both the First Appeals No.384 of 2021 and 385 of 2021 as they are against the same impugned order.  For the sake of convenience, facts are being taken from First Appeal No.384 of 2021.

This Appeal under Section 51 of the Consumer Protection Act, 2019 (for short “the Act”) has been filed by the Complainant assailing the order dated 07.05.2021 of the State Consumer Disputes Redressal Commission, Delhi (for short “the State Commission”) in his Complaint No.572 of 2017 which was dismissed.  By way of this Appeal, the Complainant prays for setting aside of the impugned order of the State Commission with direction to the Respondent (hereinafter referred to as “the Builder”) to refund the amount deposited by him along with interest and to pass any other order as deemed appropriate and just.

The facts, in brief, are that in February 2013, the Complainant had booked a commercial space with the Builder on payment of ₹5 Lakhs in its project “Ocus 24K” located at Sohna Road, Sector 68, Gurgaon for a sum of ₹58,33,548/- and Unit No.G-118 admeasuring 401 sq. ft. on the upper ground floor was allotted on 15.05.2013 and a Builder Buyer Agreement was executed on 03.12.2013.  The Complainant alleges that he subsequently came to know that the Builder had not obtained the necessary sanctions/approvals from the Competent Authority for construction of the project and his enquiries with the Directorate of Town and Country Planning, Haryana also revealed that the Builder had not been issued any approvals and that, as per records, licence No.76 of 2012 dated 01.08.2012 was granted to Perfect Constech Ltd.  The Complainant, therefore, sought refund of the amount deposited with interest by way of compensation.

Upon contest, the State Commission held that there was   no deficiency in service on the part of the Builder since the Complainant before it approached the Commission on the sole ground that the Builder lacked necessary sanctions.

We have heard the learned Counsel for the parties and perused the material on record.  Both the parties have filed their short synopsis.

Learned Counsel for the Complainant relied on this Commission’s order in M/s Ocus Skyscrapers Realty Ltd. vs. Kirti Bajpai in First Appeal No.285 of 2019 decided on 13.03.2020 wherein it was held that

“7.  xxxxxxxxxx  As noted earlier, it had been disclosed to the complainant in the agreement itself that license for this project had been issued by DTCP in the name of M/s. Perfect Constech Pvt. Ltd. and the appellant company had a collaboration agreement with the aforesaid company.  Therefore, there was no material concealment form the complainant at the time the allotment was made to him.  Hence, it cannot be said that the appellant was not competent to sell a commercial unit in the above referred project.”

It had also been held that

“11.  Since the complainant defaulted in payment of installment number four onwards, and the complainant is not willing to take possession,  the appellant is entitled to forfeit the Earnest Money paid to it by the complainant.  Though in terms of Clause-4 of the agreement, the Earnest Money would be Rs.13,41,620/-, the appellant, for the reasons stated by this Commission in its decision dated 06.1.2015 in DLF Ltd. Vs. Bhagwanti Narula, cannot forfeit more than 10% of the sale consideration or the initial payment made by the complainant for booking the unit, whichever be less.”

Reliance is also placed on Maula Bux vs. Union of India, 1969 (2) SCC 554 wherein the Hon’ble Supreme Court has held that

“only a reasonable amount can be forfeited as earnest money in the event of default on the part of the purchaser and it is not permissible in law to forfeit any amount beyond reasonable amount, unless it is shown that the person forfeiting the said amount had actually suffered loss to the extent of the amount forfeited by him.  In our opinion, 20% of the sale price cannot be said to be a reasonable amount which the Petitioner Company could have forfeited on account of default on the part of the complainant unless it can show it had only suffered loss to the extent the amount was forfeited by it.  In our opinion, in absence of evidence of actual loss, forfeiture of any amount exceeding 10% of the sale price cannot be said to be a reasonable amount.”

Since the Builder had not cancelled the allotment for default in payments, which it could have and ought to have done it was held that simple interest @ 10 % on the balance amount after deduction of 10% earnest money was payable to the Complainant.  The Complainant in the instant case relies upon this judgment since it pertains to the same project and has similar facts.

Learned Counsel for the Builder argued that the Appeal was not maintainable since the Complainant was not a ‘consumer’ as per the Consumer Protection Act, 2019 since he had bought the Unit with the aim to earn income and profits.  It was stated that the Unit had been acquired only for commercial purpose with the intention to earn returns on investment in the form of rent or resale.  It was also argued that the Builder was authorized to develop the project in view of the collaboration agreement executed between it and M/s Perfect Constech Private Limited dated 25.03.2013.  The Unit had been transferred from Ocus ‘Medley’ to ‘Ocus 24K’ vide letter dated 24.03.2013 of the Complainant requesting for transfer of the booking.  It was stated that 14 reminders and a demand letter had been issued to the Complainant between 10.06.2013 to 18.08.2017 to clear his dues which he had failed to do so.  It was submitted that the construction had been completed in March 2019 and Occupancy Certificate obtained on 17.07.2019 following which an offer of possession had been made on 08.08.2019.  Only a sum of ₹16,15,651/- had been paid by the Complainant despite reminders to make the payment as per the construction linked plan opted for by him.  It was also contended that Kirti Bajpai (supra) was not applicable to the facts of the instant case since the facts of that case related to the ground floor and not upper floor as in the present case.  It was further argued that the order of the State Commission was valid and did not deserve any interference by this Commission.

The preliminary contention of the Builder that the Complainant was not a ‘consumer’ has been considered in the light of in Laxmi Engineering Works Vs P.S.G. Industrial Institute, (1995) 3 SCC 583 in which the Hon’ble Supreme Court has clearly laid down that “commercial purpose” needs to be considered in the facts and circumstances of each case.  Merely because the Unit in question was commercial shop, it cannot be contended by the Opposite Party that it was booked for a commercial purpose since he has not brought on record any evidence to indicate that the Complainant had other sources of income or that this shop was not intended for the purpose of earning of his livelihood.  The contention that the said Unit had been booked with the sole intention to be on rent or resale is also not supported by way of any evidence on record to prove that the Complainant was engaged in the business of real estate i.e. purchase and sale of flats or shops for flats, the onus of which lies squarely upon the Builder as held by this Commission in Kavita Ahuja Vs. Shipra Estates & Jai Krishna Estate Developers Pvt. Ltd. & Ors., I (2016) CPJ 31 (NC).

Having not cancelled the allotment of the Complainant for being a defaulter, as alleged, the Builder cannot now contend that the Complainant was not entitled to any relief as held by this Commission in Ankur Goswami vs Supertech Ltd., Anr. 2017 SCC Online NCDRC 1240. Therefore, this contention cannot be accepted.

On merits, the issue of the Builder being eligible to develop and promote the project, the Builder has submitted a letter dated 08.03.2019 issued by the Directorate of Town & Country Planning, Haryana (DTCP) Haryana, Gurgaon which is addressed to both the Builder and M/s Perfect Constech Pvt. Ltd. wherein it has been clearly stated that their request for permission for joint development rights and marketing rights has been considered and allowed subject to fulfilling, within 90 days, on the condition of submitting fresh registered collaboration/development agreement between the licencee land owners, Perfect Constech Pvt. Ltd. and Ocus Skyscrapers Realty Ltd.  No document in pursuance of this direction has been brought on record.

For the foregoing reasons, it is evident that the State Commission’s conclusion that the Builder was entitled to undertake the execution and marketing of the project was based on the General Power of Attorney between Perfect Constech Pvt. Ltd. and Ocus Skyscrapers Realty Ltd.  whereas the DTCP had sought, vide letter dated 08.03.2019, a fresh registered collaboration/development agreement between the licencee land owners, Perfect Constech Pvt. Ltd. and Ocus Skyscrapers Realty Ltd. which has not been brought on the record.  The State Commission’s order was, therefore, flawed in its assessment and is accordingly set aside.

We are convinced that the case is squarely covered under Kirti Bajpai (supra) which deals with the same facts and even relates to the same project.  It is not material whether the Unit is on the ground floor or an upper floor so long as it is the same project.

In view of the above, it is ordered that

(i) the Builder shall refund the entire amount of ₹16,15,651/- to the Complainant after deducting ₹5 Lakhs towards earnest money with compensation in the form of interest @ 6% p.a. from the respective dates of deposit till 08.08.2019 (the date of offer of possession);

(ii)  This order shall be complied with within eight weeks, failing which the applicable rate of interest payable will be 9% p.a.

(iii)  Litigation costs of ₹50,000/- is also directed to be paid by the Builder to the Complainant.

Pending applications, if any, stand disposed of with these directions.