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Judgment
V. K. Jain, J
The complainants booked a residential flat with the appellants in a project, namely, 'Hermitage', which the appellants were to develop in Sanpada, Navi Mumbai. The flat was booked vide booking form dated 17.02.2005 and flat No. 2001 on the 20th floor of the building was allotted to the complainants for a consideration of Rs.34,65,000/- plus Rs. 2 lakh for car parking. Some payments were made by the complainants to the appellants from time to time till the parties executed an agreement dated 4.8.2005 incorporating their respective obligations in respect of the said transaction, the agregate of such payment being about Rs.23 lakhs. The said agreement to the extent it is relevant for the purpose of this appeal reads as under:-
"The said consideration shall be paid by the Purchaser to the Promoter as per the following manner (Time being essence of the contract ):-
a. Earnest Money Deposit Rs. 21,000.00
b. On Agreement Rs.10,18,500.00
c. On Commencement of work Rs. 3,46,500.00
d. On Completion of Plinth Rs. 1,73,250.00
e. On Completion of 2nd Slab Rs. 1,38,600.00
f. On Completion of 4th Slab Rs. 1,38,600.00
g. On Completion of 6th Slab Rs. 1,38,600.00
h. On Completion of 8th Slab Rs. 1,38,600.00
i. On Completion of 10th Slab Rs. 1,38,600.00
j. On Completion of 12th Slab Rs. 1,38,600.00
k. On Completion of 14h Slab Rs. 1,38,600.00
l. On Completion of 16th Slab Rs. 1,38,600.00
m. On Completion of 18th Slab Rs. 1,38,600.00
n. On Completion of 20th Slab Rs. 1,38,600.00
o. On Completion of Brick Work Rs. 1,73,250.00
p. On Completion of External Plaster Rs. 1,38,600.00
q. On Completion of Internal Plaster Rs. 1,03,950.00
s. On Flooring & Tiling Rs. 69,300.00
t. On Possession Rs. 34,650.00
Rs.34,65,000.00
The payment of all the above installments/payment will be accepted by cheque/Demand Draft or Pay Order Only and as per the schedule mentioned hereinabove. The cheque, Demand Draft or Pay Order should be drawn in favour of "M/s BHUMIRAJ CONSTRUCTIONS" and shall be sent to Office of Promoters at D-5/6, Big Splash, Sector 17, Vashi Navi Mumbai 400-703 either by hand delivery or by registered A/D or by Courier (Acknowledges Due in all types of Deliveries).
The time for payment is an essence of contract. Whether the Purchaser is availing the loan facilities from any financial institution or not, the Purchaser has unconditionally agreed to pay all the above installments due latest within 10 days from the due dates.
If the purchasers commites default in payment of any of the installments as stated in clause 5 hereinabove and/or hereinafter on their respective due dates, time being the essence of contract or commits breach of any other condition herein and if the default or breach continues even after 15 days notice in writing to that effect is given by the Promoters to the Purchasers, then the Promoters shall be entitled at his own option to terminate this Agreement.
PROVIDED ALWAYS that the power of termination hereinbefore contained shall not be exercised by the Promoters unless and until the Promoters shall intimate the Flat Purchaser the specific reason of the default breach committed by the Purchaser of the terms and conditions in respect of which it is intended to terminate the agreement and default shall have been made by the Purchaser in remedying such breach or breaches within the time mentioned above, after giving of such notice.
The case of the appellants is that there was a delay on the part of the complainants in making payment of several installments which had fallen due even before the execution of the said agreement. Though the installments had been paid before the execution of the agreement, they were not paid in time. No default in payment of installments which fell due after execution of the agreement was committed. The allotment was cancelled by the appellants vide letter dated 04.01.2006, which to the extent it is relevant reads as under:-
"Inspite of the long correspondence we had with you, you have still not paid Outstanding Dues. We are therefore constrained to cancel/terminate the said Agreement dated 4th August, 2005 in respect of the above flat with immediate effect please note.
We have prepared Cheque for Rs.33,61,050/- (Rupee Thirty Three Lakhs Sixty One Thousand and Fifty Only) towards the refund of amounts paid by you to us for the said flat. You are hereby required to forward to us all the Original Documents, Agreements, and Receipts which you possess for the said flat and collect Cheque for the refund."
Being aggrieved from the cancellation of the agreement, the complainants approached the concerned State Commission by way of a consumer complaint seeking possession of the allotted flat alongwith compensation.
The complaint was resisted by the appellants primarily on the ground that the complainants had defaulted in payment of several installments by not making timely payment of the said intallments and therefore, the cancellation of the agreement was justified.
Vide impugned order dated 11.10.2012, the State Commission directed as under:
"1. Upon receipt of balance consideration amount of Rs.1,03,950/- from the Complainants, the Opponents are jointly and severally directed to handover vacant and peaceful possession of a flat bearing No. 2001, admeasuring 745.55 sq. ft. in carpet area (894.66 sq. ft. built up area + 102 sq. fit terrace) situated on the 20th Floor in the Building known as 'Cupola A-Wing' in the project 'Bhumi Raj Hermitage' situated at Plot No. 1 and 2, Sector 18, Sanpada (East), Navi Mumbai complete in all respects, within a period of two months from the date of receipt of balance consideration amount from the Complainants without charging any interest/penal interest for the delayed payment.
The Opponents are further jointly and severally directed to pay to the Complainants an amount of Rs.5,00,000/- by way of compensation towards mental harassment and agony, within a period of two months from the date of this order and failing which the amount shall carry interest @ 12% p.a. till its realization.
The Opponents shall bear their own costs and shall pay costs of 50,000/- to the Complainants.
Being aggrieved from the order passed by the State Commission, the appellants are before this Commission.
The possession of the allotted flat has been delivered to the complainants during pendency of this appeal. Learned counsel for the complainants/respondents submits that area of the flat delivered to the complainants is less than the agreed area. If this is so, the complainants can avail such remedy, as may be available to him, in law, on account of alleged shortage in the area of the flat delivered to them by the appellants.
The first question which arises for consideration in this appeal is as to whether the appellants were entitled to cancel the agreement on account of delay in payment of several installments despite the fact that the said delay had taken place before the execution of the agreement between the parties on 04.08.2005.
On a perusal of the agreement, we find that it does not contain any obligation on the part of the complainants to pay any interest to the appellants for the delay in payment of the intallments which had fallen due and had been demanded before the execution of the said agreement. It is, therefore, evident that the said delay in making timely payment of the installments which had fallen before the execution of the agreement on 04.08.2005, had been condoned by the appellants. Had that not been the case either the appellants would not have executed the agreement without recovering the interest on the delayed payment or they would have incorporated the obligation on the part of the complainants to pay interest on the said delayed payments, in the agreement executed on 04.08.2005.
Relying upon the clause '8(a)' of the agreement, the learned counsel for the appellants contends that since there was a default in making timely payment of installments, which were payable upto the completion of 18th Slab, the appellants were entitled to cancel the agreement in exercise of the power given to them under the said clause.
We, however, find ourselves unable to accept the contention. In our view, the said clause would be attracted only in a case of delay of default in payment of any installment after execution of the agreement on 04.08.2005. The delay which had happened before the execution of the agreement on 04.08.2005 is clearly out of the purview of the said clause.
Learned counsel for the appellants also relies upon clause 7(d) of the agreement extracted here-in-above. The said clause also, in our opinion, would apply only to the installments falling due and demanded after the execution of the agreement on 04.08.2005 and would not be attracted in the case of delay in payment of the installments which had already fallen due before the agreement was executed. It has to be kept in mind in this regard that the said installments admittedly had been paid before the agreement was executed though there was a delay in making the payment. As already said, in our opinion, the appellants had condoned the said defaults by executing the agreement despite the delay and without incorporating any obligation on the part of the complainants to pay interest for the said delayed payment.
For the reasons stated here-in-above, we have no hesitation in holding that the cancellation of the agreement was not at all justified.
As a result of the unjustified cancellation of the agreement by the appellants, the possession of the allotted flat was not delivered to the complainants in time. The possession came to be delivered only in September, 2013 whereas the construction of the flat admittedly was completed in the year 2007 itself. The compensation awarded by the State Commission for the said delay cannot, by any stretch of reasoning, be said to be excessive and unjustified so as to call for any interference by this Commission in exercise of its appellate jurisdiction.
For the reasons stated above, we find no merit in the appeal, which is accordingly dismissed with no order as to cost.
The learned counsel for the appellants informs that a cheque of Rs.1,03,950/- which the complainants had handed over to them in compliance of the order of the State Commission, has been lost by the appellants. The complainants shall verify, from his bank as to whether the said cheque has been encashed or not. In case the cheque has not been encashed, he shall issue a Pay Order of the aforesaid amount to the appellants within two weeks from today. The amount of Rs.3.5 lakh, which the appellants had deposited with this Commission pursuant to an interim order dated 12.12.2014, alongwith interest, which may have accrued on that amount, subject to a maximum limit of Rs. 5 lakh, shall be paid to the complainants after three months towards part payment of the compensation awarded to the complainants by the State Commission. The balance amount, if any, shall be refunded to the appellants.