Rajendra Nath Kaicker vs M/s Ireo Grace Realtech Private Limited

Heard Mr. Deepak Kr. Khushalani, Advocate, for the complainant and Mr.Gaurav Sharma, Advocate, for the opposite party.

Rajendra Nath Kaicker has filed above complaint for directing the opposite party to (i) refund Rs.4997156/- with interest @20% per annum compounded quarterly from the date of respective deposit till its realization. (ii) pay Rs.500000/-, towards the litigation cost and compensation for harassment & mental agony; and (iv) any other relief which is deemed fit and proper in the facts of the case.

The complainant stated that the opposite party was company, registered under the Companies Act, 1956 and engaged in the business of development and construction of group housing project and selling its unit to the prospective buyers. The opposite party launched a group housing project, in the name of “The Corridors” at villages Dhumaspur and Maidwas, Golf Course Extension Road, Sector-67-A, Gurgaon, in the year 2012 and made wide publicity of its facilities and amenities. The complainant booked a 2BHK+S flat, super area 1483.57 sq.ft. on 25.01.2013 and deposited booking amount of Rs.1000000/-. The complainant signed Booking Application Form on 22.03.2013, in which, all the places of details were blank. The opposite party allotted Unit No. CD-C10-10-1002 and issued a demand letter dated 14.04.2013, for Rs.1814120/-, which was deposited through cheque dated 03.05.2013. The opposite party issued Allotment Offer Letter on 07.08.2013, in respect of above unit, in which, basic sale price at the rate of Rs.9200/- per sq.ft. and Club Membership charge of Rs.250000/- were mentioned. The complainant protested increase of basic sale price @Rs.450/- per sq.ft. then the opposite party assured that it would be taken back in the agreement and persuaded to deposit next demand of Rs.2183035.80, raised through letter dated 18.04.2014, which was paid by the complainant through cheque dated 22.04.2014. The opposite party sent Apartment Buyer’s Agreement for signature of the complainant vide letter dated 27.04.2014. In the agreement, basic sale price was again mentioned @Rs.9200/- per sq.ft. The complainant then again protested the rate with the opposite party. The opposite party then threaten to cancel allotment and forfeit entire amount deposited by the complainant, if agreement was not signed. Under coercion, the complainant signed dotted lines of Apartment Buyer’s Agreement. The complainant visited the office of opposite party and requested for inspection of records pertaining to licence, sanctioned building plan, clearance of other authorities but the opposite party could not supply any document. The complainant then stopped payments of instalments. The opposite party has committed unfair trade practice in collecting more than 20% of consideration before allotment and changing the rate thereafter. The opposite party projected that for a link road of 90 meter wide from junction of Sector 62-A/634, Gurgaon to Sohna Road, as approach road to the project but the opposite party concealed the fact that land acquisition proceeding for that road has been stayed by High Court. At present only access road to the project is kutcha village road. The opposite party assured for delivery of possession within 42 months from approval of building plan, which has expired on 22.01.2017 but construction has not been completed. Licence for development was granted to M/s. Precision Realtors (P) Ltd. and not to the opposite party. The opposite party has revised building plan, without consent of the buyers, in the year 2016. The complainant gave a legal notice dated 21.01.2017, for refund of his money with interest. But the opposite party through its reply dated 10.02.2017, denied to refund. This complaint was filed on 27.02.2017, alleging unfair trade practice.

The opposite party filed written reply on 29.05.2017, in which, booking of the flat on 25.01.2013 and deposit made by the complainant, issue of Allotment Offer Letter dated 07.08.2013 and execution of Apartment Buyer’s Agreement dated 11.07.2014, have not been denied. The opposite party denied that that the rate of Rs.8750/- per sq.ft. has been ever agreed between the parties or the rate has been changed after initial two deposits. In Allotment Offer Letter dated 07.08.2013, rate of Rs.9200/- per sq.ft. has been mentioned. Same rate has been mentioned in Apartment Buyer’s Agreement dated 11.07.2014. The complainant has never raised any protest in respect of rate before notice dated 21.01.2017. If the complainant had any grievance in respect of rate then the complaint would have been filed till 06.08.2015. Development licence was granted on 21.02.2013, building plan was approved on 23.07.2013 and Fire NOC was issued on 27.11.2014. Then construction was started and it is near completion. The complainant has opted for “construction link payment plan” as such demand of instalment was raised in April, 2015 on start of construction but the complainant did not make payment. The opposite party then issued reminder letters dated 05.06.2015, 10.07.2015, 14.03.2016, 04.05.2016, 26.05.2016 and 06.07.2016 but the complainant did not make payment. Then Final Notice dated 28.07.2016 was given which was not responded as such allotment was cancelled vide letter 01.09.2016 and money deposited by the complainant has been forfeited. There was neither unfair trade practice nor deficiency in service on their part.

The complainant has filed Rejoinder Reply, Affidavit of Evidence, Affidavit of Admission/Denial of documents of Rajendra Nath Kaicker and documentary evidence. The opposite party has filed Affidavit of Evidence, Affidavit of Admission/Denial of documents of Subhasis Lahiri and documentary evidence. The complainant has filed written synopsis.

We have considered the arguments of the counsel for the parties and examined the record. The complaint has been filed on the ground that the opposite party had increased basic sale price after collecting two instalments in Allotment Offer Letter dated 07.08.2013. Third instalment was deposited on assurance that originally agreed rate would be mentioned in the agreement but it was not done. Thus the opposite party has committed unfair trade practice and the complainant is entitled to avoid the agreement and seek refund. The complainant made first deposit through cheque dated 25.01.2013, second deposit through cheque dated 03.05.2013 and third deposit through cheque dated 22.04.2014. Allotment Offer Letter was issued on 07.08.2013. According to the complainant, the opposite party sent Apartment Buyer’s Agreement for signature of the complainant vide letter dated 27.04.2014. In the agreement, basic sale price was mentioned @Rs.9200/- per sq.ft., which was mentioned in Allotment Offer Letter. The complainant signed Apartment Buyer’s Agreement on 11.07.2014. If the allegation of the complainant that the opposite party had assured that originally agreed rate would be mentioned in the agreement at the time of deposit of third instalment, is accepted, then there was no reason for the complainant for signing Apartment Buyer’s Agreement as in it rate of Rs.9200/- per sq.ft. has been mentioned. Till the issue of notice dated 21.01.2017, the complainant did not raise any written protest that agreed rate has been changed in Allotment Offer Letter dated 07.08.2013. The case set up by the complainant in respect of change of rate is not liable to be accepted.

The opposite party has stated that Development Licence was granted on 21.02.2013, building plan was approved on 23.07.2013 and Fire NOC was issued on 27.11.2014. Then the construction was started. The complainant had opted for “construction link payment plan” as such fourth demand of instalment was raised in April, 2015 on start of construction but the complainant did not make payment. The opposite party then issued reminder letters dated 05.06.2015, 10.07.2015, 14.03.2016, 04.05.2016, 26.05.2016 and 06.07.2016 but the complainant did not make payment. Then Final Notice dated 28.07.2016 was given which was not responded as such allotment was cancelled vide letter 01.09.2016 and money deposited by the complainant has been forfeited. Allotment has been cancelled in terms of clause-7.4 of the agreement and there is no illegality.

So far as forfeiture of earnest money is concerned, clause-6 of the agreement, provides that 20% of sale consideration will be “earnest money”. Supreme Court, in Maula Bux Vs. Union of India, (1970) 1 SCR 928 and Sirdar K.B. Ram Chandra Raj Urs Vs. Sarah C. Urs, (2015) 4 SCC 136, held that forfeiture of the amount in case of 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 flat remains with the developer 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 CC/730/2017 Mr. Saurav Sanyal Vs. M/s. IREO Grace Pvt. Ltd. (decided on 13.04.2022) held that 10% of basic sale price is reasonable amount to be forfeited as “earnest money”.

ORDER

ln view of aforesaid discussion complaint is partly allowed. The opposite party is directed to refund balance amount, after forfeiting 10% of basic sale price, with interest @9% per annum from 02.09.2016 till the date of payment, within a period of two months from the date of this judgment.