Madhu Gupta & Anr vs Vatika Limited

Heard Mr. Shreyans Singhvi, Advocate, for the complainants and Ms. Anukriti Kudeshia, Advocate for the opposite party.

Madhu Gupta and Urvashi Gupta have filed above complaint for directing the opposite party to (i) refund a sum of Rs.7735214/- to the complainants with interest @ 18% from the date of payment till actual payment; (ii) pay sum of Rs.5/- lacs as compensation for mental harassment, torture and inconvenience caused to the complainants; (iii) pay costs of the complaint; and (iv) any other relief which is deemed fit and proper in the facts and circumstance of the case.

The complainants stated that they are mother and daughter respectively and reside in Singapore. The opposite party is a company registered under the Companies Act, 1956 and engaged in the business of real estate and development/construction. In 2013, the opposite party participated in a property promotion fair at Singapore to promote and sell its project in India. The parents of complainant No.2 were intending to settle in India after retirement, therefore they attended the property promotion fair. The opposite party advised the complainants to purchase residential plot in the colony, namely, ‘Vatika Express City Plots’ to be developed by it in Sector 88, Gurgaon, Haryana. The opposite party also represented that the project would be ready for possession within 24 months. Upon representation of the opposite party, the complainants booked a residential plot of approximately 400 sq. yds. In the said project for a consideration of Rs.25740000/-. The complainants deposited an amount of Rs.11/- lacs. On 31.07.2013, Expression of Interest Form was executed by the complainants. Pursuant the demands of the opposite party, the complainants made payments of Rs.100000/-; Rs.450000/- on 30.07.2013; Rs.550000/- on 30.08.2013; Rs.1459260/- on 11.11.2013; and Rs.2574000/- respectively. On 27.1.2014, the opposite party allotted plot No.23 of 400.66 sq. yds in H-16, Sector-88, Gurgaon, Haryana. Thereafter, the complainants paid Rs.2574000/- on 30.04.2014 and Rs.27954/- on 21.08.2014. The complainants paid a total amount of Rs.7735214/- till 21.08.2014. On 19.02.2015, the builder buyer agreement was executed between the parties in respect of the said plot. The consideration of the plot was fixed at Rs.28380751/-. As per agreement, possession of the plot was to be handed over within 48 months from the date of the agreement, against the assurance given by the opposite party in the property promotion fair in Singapore. On 20.4.2015, 03.06.2015 and 08.07.2015, the opposite party demanded a sum of Rs.7828943.94 towards instalment due for commencement of utility service. Father of complainant No.2 contacted the opposite party via email requesting it to provide the status of the site. The opposite party replied to the said email and in order to show development on the site, attached the photographs of another sector. The complainants enquired about the development on the site through their personal sources and they came to know that there was no development on the site. The opposite party again demanded Rs.15031379.50/- towards outstanding dues on account of commencement of electrification work and threatened the complainants that in case the payment is not made within the stipulated time it would cancel the allotment and forfeit the amount deposited by them. The complainants personally visited the site on 28.09.2016 and 23.11.2016 and saw that there was no development at the site and they were shocked to know that 88 Sector wherein plot of the complainants was situated was marked as a commercial sector as per Gurgaon Master Plan 2031 published on 15.11.2012.  The complainants, vide email dated 04.11.2016 sought refund of the amount deposited by them with interest. Thereafter, the opposite party issued termination-cum-recovery letter dated 02.02.2017 demanding a sum of Rs.281226.87/-. Alleging deficiency in service and unfair trade practice on the part of the opposite party filed the present complaint on 16.11.2018.

The opposite party resisted the complaint by filing the written statement on 27.02.2013 wherein allotment of plot and deposits made by the complainants had not been disputed. It was stated that the opposite party never approached the complainants and they approached the opposite party for booking of the above plot for a consideration of Rs.28380751/-, through a broker “Studio Architect”. They booked the plot vide application dated 31.07.2013 and opted for construction linked plan. They were allotted plot No.22, Street No. H-16, Sector 88, Vatika Express City Plots, Vatika India Next, Gurgaon measuring 400 sq. yds., vide allotment letter dated 27.01.2014. The complainants concealed the fact that the opposite party vide letter dated 30.06.2016 informed them that there was revision in numbering of plot due to some cosmetic changes in the layout and area of the plot and the allotment of the complainants was shifted to plot No.23 in the same project and the area of the plot was enhanced by 0.66 sq. yds according to which the complainants were required to pay the difference amount. Thereafter, builder buyer agreement was executed on 19.02.2015 whereby possession was to be handed over within 48 months from the date of the agreement (upto 19.02.2019) subject to certain conditions. The opposite party never represented that possession of the plot would be handed over within 24 months. The complainants failed to make payment as per schedule despite payment demands followed by reminders dated 16.10.2013, 14.03.2014, 03.04.2014, 14.08.2014, 03.06.2015, 08.07.2015, and 09.06.2016. Then the opposite party issued termination notice dated 30.06.2016 and 02.02.2017. Alongwith the termination notice, the opposite party also attached the statement of account according to which the complainants were liable to pay Rs.15164676.69/- The opposite party forfeited the earnest money deposited by the complainants as per terms & conditions of the agreement. As previous allotment has been cancelled, the opposite party is ready to handover another plot in the same project on the same terms and conditions subject to balance payment by the complainants with interest. The National Commission has no pecuniary jurisdiction to entertain the complaint as the complainant has sought refund of Rs.7735214/- with 18% interest and Rs.5 lacs as compensation.  The complainants are not consumers as they have not filed any evidence to prove that the unit/plot was booked by them for their personal use. Complainant No.1 has authorised her daughter through Special Power of Attorney to represent her. The SPA filed by the complainants has been stamped by Singapore authorities and not the Indian authorities as per provisions of Power of Attorney Act, 1892. As per agreement, possession of the unit was to be handed over on 19.02.2019. The complaint filed on 18.11.2018 is pre-mature. On these allegations the opposite party prayed that the complaint is misconceived and is liable to be dismissed.

The complainants filed Rejoinder Reply, Affidavit of Evidence of Urvashi Gupta and documentary evidence. The opposite party filed Affidavit of Evidence of Sanjeev Kumar Tirpathi and documentary evidence. Both the parties have filed their written arguments.

We have considered the arguments of the counsel for the parties and examined the record. In clause 9 of the agreement dated 19.02.2015, it is specifically mentioned that possession of the residential plot would be given within 48 months from the date of the agreement. The complainants have not adduced any evidence to prove their allegation that possession of the plot was to be given within 24 months. The complainants sent the request for refund of the deposited amount with interest vide email dated 04.11.2016. After cancellation request from the complainants the opposite party was required to refund the amount deposited by the complainants after forfeiting the earnest money. The opposite party cancelled the allotment vide letter dated 02.02.2017. Instead of refunding the amount deposited by the complainants, the opposite party sent recovery letter demanding interest and other charges, which was not justified. The opposite party is not permitted to demand any interest and other charges when the buyer is seeking refund of the amount. Therefore, the opposite party is liable to refund the amount deposited by the complainants with interest after forfeiting the earnest money. Supreme Court in Fateh Chand Vs. Balkishan Das, AIR 1963 SC 1405, Maula Bux Vs. Union of India, (1969) 2 SCC 554 and Kailash Nath Associate Vs. Delhi Development Authority, (2015) 4 SCC 136, held that forfeiture of earnest money for breach of contract must be reasonable and if forfeiture is in the nature of penalty, then provisions of Section 74 of Contract Act, 1872 are attracted and the party so forfeiting must prove actual damage. After cancellation of allotment, the plot will remain with the opposite party as such there is hardly any actual damage. This Commission in CC/438/2019 Ramesh Malhotra Vs. EMAAR MGF Land Ltd. (decided on 29.06.2020), CC/3328/2017 Mrs. Prerana Banerjee Vs. Puri Construction Ltd. (decided on 07.02.2022 and Mr. Saurav Sanyal Vs. M/s. Ireao Grace Pvt. Ltd. (decided on 13.04.2022) held that 10% of basic sale price is reasonable amount to be forfeited as “earnest money.”

As the complainants have sought refund of money and not possession of the plot, the complaint cannot be said to be pre-mature. In the agreement it is mentioned that the opposite party is developing a residential plotted colony. The complainants also stated that they booked the plot for residential purpose. Therefore, the complainants are Consumers under Section 2 (1) d of the Consumer Protection Act, 1986. Regarding Special Power of Attorney, the complainants cannot be denied their legal right due to technical reason more so when it is specifically stated in the rejoinder that they can file the appropriate SPA. This Commission has the pecuniary jurisdiction to entertain the complaint as the consideration in this case is the cost of the plot i.e. 25740000/-.

ORDER

In view of the aforesaid discussions, the complaint is partly allowed. The opposite Party is directed to refund the entire amount deposited by the complainants with interest @9% per annum from the date of cancellation of the allotment i.e. 02.02.2017 till the date of refund, after forfeiting 10% of basic sale price, within a period of two months from the date of this judgment.