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Judgment
Revision Petition Nos.3907-3908 of 2012 and Revision Petition No.3938-3939 of 2012 have been filed by the Complainants while Revision Petition No.4900 of 2012 and Revision Petition No.4901 of 2012 have been filed by the Opposite Party/Developer against the common order of the State Commission dated 13.09.2012 whereby the State Commission has dismissed the Appeals filed by the Complainants for enhancement of the compensation awarded by the District Forum and partly allowed the Appeals filed by the Opposite Parties setting aside the deletion of Rs.50,000/- as compensation. Rest of the order of the District Forum was maintained.
Facts, in brief, are that the Complainants booked two flats with First Opposite Party- Lanco Hills Technology Park Pvt. Ltd. through their GPA holder and paid a sum of Rs.13,67,520/-. Second Opposite Party- Bank approved the loan and accordingly a tripartite agreement was executed on 17.12.2007. Both the Opposite Parties colluded with each other and the Opposite Party No.1 started drawing the installment amounts directly from the Bank and the Bank was releasing the same without monitoring the progress of the construction even without collecting the margin money from the Complainants. On returning from USA Complainants visited the site and found several variations and deviations from the original project and reduction in area from 1936 to 1400 sq. ft. including other variations. Therefore, Complainants sent a notice dated 05.06.2009 to both the Opposite Parties seeking cancellation of the Agreement. They also requested the Bank to take the amount back from Opposite Party No.1 with interest. Opposite Party No.1 did not reply to the notice. However, Opposite Party No.2 replied to the notice informing that they have received Rs.11,81,230/- from Opposite Party No.1 and for the balance amount they are pursuing the matter with Opposite Party No.1.
Alleging deficiency in service on the part of Opposite Parties No.1 & 2, Complainants filed a Consumer Complaint before the District Forum seeking direction to Opposite Party No.1 to refund Rs.13,67,520/- alongwith interest @ 12% p.a. and Rs.3,00,000/- towards damages as also Rs.1,00,000/- as compensation for mental agony and Rs.25,000/- as litigation cost.
Opposite Party No.1 filed its reply denying the allegations. However, admitted the booking of the flats. They pleaded that in terms of Clause 14 of the terms & conditions of the Agreement, in case the Applicant decides to cancel the Allotment, cancellation charges of Rs.50,000/- are chargeable and the Complainants are bound by the terms & conditions. Opposite Party No.1 has already returned Rs.11,08,692/- to the Bank. Opposite Party also took a preliminary objection that the Complaint is not maintainable in the Consumer Fora and the matter has to be referred to Arbitration.
Second Opposite Party- Bank also filed their Written Version taking the stand that the Complaint qua Bank is not maintainable as the Complainants have not sought for any relief against them. On merits, Opposite Party No.2 averred that there is no deficiency in service on their part and that they have simply acted on the instructions of the Complainants.
Based on the evidence adduced on behalf of the Complainants and the Opposite Parties, the District Forum allowed the Complaint in part directing the Opposite Party No.1 to refund Rs.13,67,520/- to the Complainants alongwtih 9% interest after deducting Rs.25,000/- towards cancellation charges from the date of cancellation i.e. 5.6.2009 till realization. Opposite Parties No. 1 & 2 were also directed to pay jointly and severally a sum of Rs.50,000/- to the Complainants towards compensation for mental agony and financial loss and Rs.2,000/- towards cost of litigation.
Feeling aggrieved, with the said order, Complainant- Smt. Sireesha Choppa filed FA/10/2012 and her husband Ram Pradeep Choppa filed FA/11/2012 for enhancement of the compensation. On the other hand, Opposite Party No.1 filed FA/1020/2011 and FA/1021/2011 seeking setting aside of the impugned. State Commission dismissed both the Appeals filed by the Complainants and partly allowed FA/1020/2011 and FA/1021/2011 filed by the Opposite Parties modifying the order of the District Forum with the directions as noted above.
Hence the Complainants have preferred 3907-3908/2012 and RP/3938-3939/2012 and the Opposite Party- Developer has filed RP/4900/2012 and RP/4901/2012.
Learned Counsel appearing for the Revision Petitioners/Complainants vehemently argued that the State Commission ought not to have deleted the compensation of Rs.50,000/- and confirmed the cancellation charges of Rs.25,000/- directed to be paid by the Complainants, by the District Forum. It is the case of the Complainants that though there was a tripartite agreement entered into between the Complainant, Developer and the Bank on 17.12.2007 and that the payment was construction linked but the Bank had released the entire amount to the Developer despite the fact that the Complainants' Flat Nos.704 were in 7 th Tower and in the 8 th Tower respectively and it is an admitted fact that the construction of both the towers had not even commenced.
Learned Counsel appearing for the Developer vehemently contended that the Complainants were not given an option to cancel the Agreement as the Developer had invested lot of time, effort and money in executing the project and any cancellation sought would only hamper the progress and the financial prospects of the project and hence no right to cancel was given to the Complainant as per the terms of Agreement and therefore both the Fora below have rightly directed that the Complainants ought to suffer the cancellation charges of Rs.25,000/-.
Not giving the right to the Complainants to cancel the Allotment would construe unfair trade practice as envisaged under Section 2 (r) of the Consumer Protection Act, 1986 especially keeping in view the admitted fact that construction of Tower Nos. 7 th and 8 th had not even commenced and also that payment had already been released by the Bank to the developer. At this stage, we find it a fit case for placing reliance on the case of Hon'ble Supreme Court in the matter of Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan II (2019) CPJ 34 (SC) wherein the Hon'ble Apex Court has observed that one sided clauses in the Agreement favouring the developer would amount to unfair trade practice and has deprecated such one sided clauses and terms in the Builder- Buyer Agreements. Having regard to the facts and circumstances and the ratio laid down by Hon'ble Supreme Court in Pioneer Urban Land (supra), we are of the considered view that the direction with respect to payment of cancellation charges by the Complainant be set aside.
Now we address ourselves to the aspect of compensation of Rs.50,000/- which was awarded by the District Forum and set aside by the State Commission. We do not accept the observation of the State Commission that the Opposite Party/Developer did not earn profit from the disputed venture and therefore awarding of Rs.50,000/- compensation amount was not desirable. This amount which was deducted from the amount to be paid to the Complainants has to be refunded to them. It is not disputed that the Complainants paid amount of Rs.13,67,520/- for two flats in 7 th & 8 th Tower including Rs.2,50,000/- initially paid to the Developer. Learned Counsel appearing for the Developer has submitted that they are ready to pay the entire amount and will only retain the nominal amount of Rs.25,000/-. However, since the Complainants had paid these amounts in the year 2007 hoping to purchase a home for themselves and keeping in view the principle of restitutio in integrum together with the fact that there was a tripartite agreement entered into between the complainant, Developer and the Bank and that the construction has not commenced, at the cost of repetition, we do not agree with the observation of the State Commission that Opposite Party No.1 did not make any profit and hence compensation cannot be allowed.
Learned Counsel for the Developer has fairly conceded that the amount due and payable to the Bank has already been paid and the question now which arises is only with respect to the compensation and cancellation charges.
The learned Counsel for the Developer has submitted that there is a clause of Arbitration in the agreement and therefore the Consumer Complaint was not maintainable. We may mention here that Hon'ble Supreme Court in EMAAR MGF Land Ltd. vs. Aftab Singh I (2019) CPJ 5 (SC) has held that the clause relating to Arbitration in the Agreement will not come in the way of persons filing complaints under Consumer Protection Act and, therefore, this plea is rejected.
For the above-noted reasons, RP/3907-3908/2012 and RP/3938-3939/2012 preferred by the Complainants are allowed and the Developer is directed to pay Rs.50,000/- towards compensation and also refund Rs.25,000/- which was deducted towards cancellation charges.
RP/4900/2012 and RP/4901/2012 preferred by the Developer are dismissed accordingly. No order as to costs.