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Judgment
Heard Counsel for the Parties.
The appeal was decided in the absence of the Appellant by the order dated 19.09.2023. The Appellant has filed MA/603/2023 for recalling the order dated 19.09.2023. In the MA the Appellant has stated that the Appellant used to check online status, but, listing of the case on 19.09.2023 could not be noticed, therefore, nobody could appear on that day on behalf of the Appellant. In the fact of the case, we recall the order dated 19.09.2023 and restore the appeal to its original number.
The Counsel for the Appellant as well as the Counsel for the Respondents are heard for the purposes of admission of the appeal.
Office has submitted a report that the appeal has been filed beyond 231 days of the limitation. The Appellant has filed IA/7864/2022 for condoning the delay in filing the appeal. In the delay condonation application, it has been stated that the Appellant came to know about the impugned order of the State Commission only when notice of the execution application was served upon the Appellant. In the interest of justice, we condoned the delay in filing the appeal and heard the appeal on admission.
The above appeal has been filed against the order of Karnataka State Consumer Disputes Redressal Commission, Bangalore dated 25.10.2021 passed in CC/483/2019 whereby the complaint has been allowed and the Appellant has been directed to refund Rs.5497505/- with interest @ 12% per annum from the date of deposit till the date of refund.
Mr. Madhukar B.S and Mrs. N. Vanaja (the Respondents) filed CC/483/2019 for directing the Opposite Party to procure occupation certificate and registered the apartment no.T1-C303 at GM Infinite Silver Spring Fields in favour of the Complainants and pay delay compensation @ 12% per annum from 30.07.2014 till the date of possession. In alternate the Respondents prayed for refund of sale consideration of Rs.5597505/- along with interest @ 18% per annum and also pay Rs.52577/- which was the expenses for obtaining home loan and pay compensation of Rs.10 lacs for mental agony and harassment and Rs.40000/- as litigation cost.
The Respondents stated that the M/s GM Infinite Dewelling India Pvt. Ltd. (the Appellant) was a company registered under the Companies Act and engaged in the business of development and construction of group housing project. On the basis of joint-development agreement dated 17.08.2009, the Appellant launched a group housing project in the name of GM Infinite Silver Spring Fields at Jodi Mallasandra Village, Yeshwanthapura Hobli, Bengaluru North Taluk, Bangalore, in the year 2010. On coming to know about the project the Respondents booked an apartment in the project. The opposite party allotted apartment no.T1-C303 in Tower T1 of the aforesaid project. The Appellant also executed an agreement of sale dated 25.03.2013 and another agreement for construction on the same date. Schedule E of the agreement for construction provides a time link payment plan. The Complainant used to deposit the installment as per prescribed period as well as demand raised by the Opposite Parties and the Complainant has made total payment of Rs.5497505/- till May 2014, but, the Respondents found that the Appellant was not proceeding with the construction on the spot. Thereafter, the Respondents gave a legal notice to the Appellant for completion of the Project and obtaining occupation certificate and transferring the flat in their favour. The Appellant replied the legal notice on 09.10.2018 in which they have raised an authorized demand. Due to inordinate delay in handing over the possession, the complaint was filed in October 2019.
Although, the Appellant put appearance before the State Commission after notice but the Appellant did not file their written version and evidence. The State Commission, therefore, proceeded ex-parte against the Appellant and by the impugned order has directed for refund of money along with interest @ 12% per annum. Hence, this appeal has been filed.
The Counsel for the Appellant submits that the Respondents were defaulter in payment of the installment, inasmuch as, the installment was payable on fix time, but, inspite of various demands as well as remainders, the Respondents have not paid the installment on time and they were defaulter, therefore, in case of refund of money their earnest money is liable to be forfeited. He further submits that the Appellant has given a letter dated 25.12.2017 in which delay compensation which was more than the agreed compensation was assured to the Respondents, in such circumstances, filing of the complaint was not expected. Due to force majeure reason, the construction could not be completed on time and the Appellant was entitled for extension of time.
We have considered the arguments of the Counsel for the Parties, so far as, force majeure reason is concerned the Appellant has not filed any order of competent court which has restrained the Appellant from proceeding with the construction. So far as, litigation is concerned mere filing of the litigation does not amount to stay of the construction, inasmuch as, even after filing the suit, the Appellant themselves entered into the agreement with the Respondents on 25.03.2013 and given due date of possession as 30.07.2014. The Appellant has neither filed written version before the State Commission nor any evidence to prove the force majeure reason, the Commission was stopped for any period. Before us, also no preventive order has been produced. Therefore, the argument on its basis is not liable to be accepted.
So far as, the argument that the Respondents were a defaulter, therefore, the earnest money of the Respondents was liable to be forfeited is concerned the Respondents in the complaint has stated that till May 2014, they have made payment of Rs.5497505/-. The possession was likely to be delivered on 30.07.2014. But by that time the requisite construction has not been done. Therefore, the Respondents cannot be forced to pay the balance amount which was approximately Rs.10 lacs. In any case, the Appellant has not exercised its right for canceling the agreement and forfeiture till the filing of the complaint, therefore, after filing of the complaint they are not entitled to forfeit the earnest money.
Till today, the Appellant has neither obtained the occupancy certificate nor offered valid possession to the Respondents. The Appellant has relied upon a letter dated 09.06.2017, which was allegedly given in the office of joint director town planning on 08.09.2017 for issue of the occupation certificate. It may be mentioned that the Appellant in his letter written to the Respondents, on 26.12.2017 has clearly admitted that the construction was likely to be completed till January 2018. Therefore, the contention of the Appellant that in September 2017 the construction was complete and he has validately apply for issue of occupation certificate, as such expiry of 30 days period deemed occupancy certificate in favour of the Appellant shall be presumed under Section 310 of Karnataka Municipal Corporation Act, 1976, is not liable to be accepted. Since, the construction of the tower in which the Respondents were allotted, was incomplete even till January 2018, then there is no question of raising any presumption of deemed occupancy certificate. In any case, it is admitted that possession has not been offered to the Respondents. It is well settled that a home buyer cannot be made to wait for possession for unlimited period and the order of State Commission allowing the complaint for refund does not suffer from any illegality.
So far as, the order of the State Commission in respect of interest is concerned, the Supreme Court Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, 2022 Live Law (SC) 352, has held that of 9% per annum interest in case of refund is just compensation.
In the result we partly allow the appeal. The order of state Commission directing for refund of Rs.5497505/- is upheld. However, the part of the order in respect of 12% interest is modified and is reduced to 9% per annum from the date of respective deposit till the date of payment.