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Judgment
Avm J. Rajendra, Avsm, Vsm (Retd.), Member
The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred as “the Act”) against the Order dated 31.05.2018 passed by the learned State Consumer Disputes Redressal Commission, Odisha (hereinafter referred as “the State Commission”), in Consumer Complaint No. 94 of 2017, wherein the Complaint filed by the Complainant (Respondent herein) was partly allowed.
There was a delay of 56 days in filing in the present Appeal. The Appellant filed IA/17034/2018, application for condonation of delay. For the reason stated thereat, the delay is condoned.
Brief relevant facts of the case are that the Respondent/ Complainant retired from service as Principal of a College on 31.07.2013. He is a senior citizen and suffers from health issues. The Appellant/Opposite Party carries on business in providing housing services for consideration. The Complainant booked Flat No. 302 in “Maa Santoshi Enclave” for total consideration of Rs.20,00,000. In terms of the Agreement, the entire amount was payable in 07 installments as per the progress of construction.
As per the Agreement dated 30.07.2015, the construction of flat and delivery of possession was to be completed within 24 months from the date of the Agreement. The Complainant paid Rs.15 Lakhs to the OP between 30.06.2015 to 05.09.2016 by cheques and cash. Despite several requests, the construction did not progress to complete in time. On the contrary, the OP insisted upon the payment of the balance Rs. 5 Lakh. It is further pleaded that the Appellant/OP gave out that he would not receive any payment from the complainant if a bank loan is availed. Under these circumstances, the Complainant canceled the Agreement by Notice dated 04.03.2017 and requested the OP to refund Rs. 15 Lakh. However, as the OP did not respond, he filed a Complaint before the State Commission seeking refund of Rs. 15 Lakhs, Rs.25 Lakhs for harassment, Rs.8 Lakhs towards mental agony, Rs.1.60 Lakh towards interest and Rs.40,000/- as litigation expenses. The OP did not appear before the State Commission. The Order of the learned State Commission dated 23.11.2017 reveals that the Notice issued to the OP was returned unclaimed with endorsement that, in spite of intimation by the Post Office, OP did not received. Thus, the matter was proceeded ex-parte against the Appellant and on 31.05.2018 the State Commission passed the following Order:
“ORDER
“In view of the above, the complaint is allowed ex parte in part. Opposite Party is directed to (a) refund Rs.15.00 lacs with interest at the rate of 15% per annum to the complainant from 4.3.2017 to the actual date of payment, (b) to pay Rs.15.00 lacs towards compensation for mental agony and (c) Rs.10,000/- towards cost of litigation.
Aggrieved by the impugned Order, the Appellant filed the instant Appeal before this Commission seeking the following:-
(A) Set aside the impugned judgment, dated 31.05.2018, in Consumer Complaint No.94 of 2017, passed by the Hon’ble State Consumer Disputes Redressal Commission, Odisha, Cuttack.
(B) Award the cost of the appeal in favour of the Appellant.
(C) Call for the records from the Hon’ble State Consumer Disputes Redressal Commission, Odisha, Cuttack.
(D) Pass any such order or orders as this Hon’ble Commission may deem fit in the facts and circumstances of the present case.
In the present Appeal, the Appellant mainly raised the following grounds:-
A. The State Commission failed to consider the settled principles of Natural Justice. In Swadeshi Cotton Mills Vs. UoI, reported in (1981) 1 SCC 664, where the Hon'ble Supreme Court has held that: "...this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.”
B. The State Commission erroneously proceeded to hear the matter ex-parte without serving notice on the Appellant. If Notice was returned with the postal remark as "unclaimed", it could not have presumed the service of notice as sufficient. The Hon'ble Supreme Court in Civil Appeal No.8159/2009 titled as Haresh Rajaldas Makhija vs. Ravi Vaswani has held that: …"9. In our view, even though the object of the Act is to ensure expeditious adjudication of complaints filed by the consumers and the Consumer Foras established under the Act are expected to act in furtherance of the object of the legislation, they cannot decide the complaints etc. without ensuring compliance of the basics of the natural justice. Like any other quasi-judicial body/ authority, the Consumer Foras are bound to comply with the rule of audi alteram partem. Since the notice sent to the appellant was returned with the postal remark "not claimed", the District Forum could not have presumed the service of notice and proceeded as ex parte. By no stretch of imagination, the said remark given by the postman could be treated as the appellant's refusal to accept the notice."
C. The State Commission failed to cause substituted service by affixation or publication in newspaper as per law.
D. The Respondent misused the process of the court to extort more than due and has misled the State Commission.
E. Without considering evidence, the State Commission erroneously determined deficiency of service by the OP. It failed to consider that, instead of waiting for completion of construction of the flat, on false and frivolous allegations the Complainant unilaterally forwarded a notice on 04.03.2017 cancelling the Agreement dated 30.07.2015 and sought refund of the amount paid. The project was completed in time and the Bhubaneswar Development Authority issued the Completion Certificate (Form-1) dated 28.06.2017.
F. The Respondent failed to pay balance Rs.5 lakhs. As per Clause 6 of the Agreement, the possession can only be given after payment of full consideration. By cancelling the booking prior to the date of handing over and not paying the balance, the Respondent breached the terms of agreement.
G. The State Commission erred in law by concluding deficiency of service on the part of the Appellant.
H. The Clause 16 of the Agreement was erroneously interpreted by the State Commission by observing that at no stage the Appellant issued any notice of cancellation of Agreement. In fact, it was the Respondent who chose to cancel the Agreement having failed to arrange Rs. 5 lakhs.
I. The State Commission passed a non-speaking order granting refund with an interest @ 15% per annum from 04.03.2017 till actual date of payment and compensation of Rs.15 lakhs for mental agony. No reason has been stated. The order is arbitrary and formed basis for determining compensation for any wrong/injury/harassment.
J. He was always ready to refund the amount paid and tried as well. But the Respondent, avoided on some pretext or the other to extort more.
The Respondent/Complainant filed his Reply to the Appeal reiterating that the subject agreement was entered into on 30.07.2015 for purchase of a flat with built-up area of 800 sq. ft. for Rs. 20 Lakhs in 3rd floor of Residential Apartments complex named Maa Santoshi Enclave in Bhubaneswar. Thereafter, he paid Rs. 8,30,000/- in cash on different dates as set out below.
(i) 30.06.2015 Rs. 2,50,000 in cash
(ii) 24.07.2015 Rs. 1,00,000 in cash
(iii) 17.08.2015 Rs. 1,50,000 in cash
(iv) 23.09.2015 Rs. 2, 30,000 in cash
(v) 03.01.2016 Rs. 1,00,000 in cash
The Respondent thereafter paid a sum of Rs. 6,70,000/- to the Appellant by cheque on different dates as stated below.
(i) 10.03.2016 Rs.1,70,000.00
(ii) 03.09.2016 Rs.2,30,000.00
(iii) 05.09.2016 Rs.2,70,0000.00
Thus, out of total consideration of 20 Lakhs, Rs 15 Lakhs was paid by the Respondent. Even after substantial payment, the Appellant did not undertake the construction to complete and deliver within time specified. The efforts to persuade the Appellant went unheeded. On the other hand, he demanded payment of balance Rs. 5 Lakhs. When the Respondent arranged the payment by Bank loan, he refused and demanded payment in cash.
The Respondent, therefore, was constrained and served a notice dated 04.03.2017 cancelling the subject Agreement dated 30.07.2015 and sought refund of his money. On cancellation, the Appellant sold the flat to some other person on 27.10.2017. Despite selling out the flat, the Appellant failed to refund the due and forced the Respondent to approach the State Commission vide CC Case No. 94/17. While due notice was forwarded to him by the State Commission, the Appellant deliberately avoided receiving from the Postman. The Postman sent information to him to receive the notice, but he did not turn up. The Postman returned the mail to State Commission with an endorsement "unclaimed on the envelope containing the notice. The State Commission on perusal of postal endorsement and the address of the Appellant stated in the notice and the Agreement dated 30.07.2015, treated the service of notice sufficient. Accordingly, he was placed ex-parte order dated 23.11.2017 and posted the case to 18.01.2018 for ex-parte hearing. Finally, the matter was heard ex-parte on 19.02.2018, judgment was reserved and delivered on 31.05.2018 directing the Appellant to refund Rs. 15 Lakhs with interest @15% per annum from 04.03.2017 to the actual date of payment; to pay Rs. 15 Lakhs as compensation for mental agony; and Rs. 10,000/- towards litigation cost.
The learned Counsel for the Appellant vehemently argued that since the construction of the building was already completed and the specific flat in question was ready for occupation before the due date, there was no deficiency in service. He asserted that the Respondent was unable to fulfill his contractual obligations of making necessary and timely payment. As a result, the Respondents cannot seek equitable relief from the court. He reiterated that no opportunity of hearing was afforded to the Appellant by the learned State Commission. He urged that the Service was incomplete and the postal remarks as "unclaimed" does not constitute effective service on the party. Further, the Complainant had not filed any application for substitution of service such as paper publication or Dasti notice or any other mode of effective service. Further, the relief granted by the SCDRC was beyond the pleadings and harassment whatsoever was meted out to the Respondent. He cited the followed Orders:-
(1) Bombay High Court: Abdul Mueed Mujeeb Gazdhar Vs Ronak Marbel Industies & Ors, Order dated 27.11.2018.
(2) Calcutta High Court: Sri Paltu Sarkar Vs Smt. Suvra Sarkar Order dated 17.04.2014, CRR 3653 OF 2013.
(3) Bombay High Court: In Udhav Baliram Adawale Vs Babruwan Papanarsh Gaikwad, Order dated 25.07.2017, WP No.293 of 2016: 2017 SCC Online Bom 6865.
(4) Mahant Madhavramji Durgaramji since dead through Ramkishore & Ors. Vs Ambalal Nagarji Naik: 1984 SCC Online Guj. 221,: Civil Revision Application No. 518 of 1979.
(5) Hon’ble Supreme Court in Sushil Kumar Sabharwal Vs Gurpreet Singh & Ors. Order dated 23.04.2002, Civil Appeal No.5111 of 2000: (2002) 5 SCC 377.
The learned Counsel for the Respondent/Complainant argued in support of the impugned order passed by the learned State Commission and submitted that the present Appeal be dismissed with costs.
We have examined the pleadings and the associated documents on record and carefully heard the arguments of learned counsels for both the parties.
It is an admitted position that both the parties entered into an Agreement on 30.07.2015 for sale/purchase of the Flat in dispute. In terms of the said Agreement, the Flat was to be ready within 24 months. The Respondent had paid Rs. 15,00,000 out of the total consideration of Rs. 20,00,000. Subsequently, there was some perceived delay on the part of the Appellant due to limited progress in the project as well as certain contentions pertaining to payment of balance of Rs. 5,00,000. While the Respondent claimed that he arranged the amount through bank loan, the Appellant is alleged to have demanded cash payment, which he was unable to arrange. As a consequence, the contract was cancelled, and the Appellant had sold off the said flat booked by the Respondent to some other party.
In his Appeal, in addition to the contentions pertaining to absence of service of notice and ex-parte proceedings before the learned State Commission, absence of any deficiency in service, granting of relief beyond the pleadings etc., the Appellant mainly contended against the Interest @ 15% per annum granted on the amount of Rs. 15,00,000 due to be refunded; and compensation of Rs.15,00,000 granted by the learned State Commission.
Notwithstanding the above, it is also an admitted position that the Appellant is and has been willing to refund Rs. 15,00,000 to the Respondent which was paid as part consideration for the Flat. Since both the parties have admitted the transaction as well as payment of Rs. 15,00,000 and that the Appellant has fairly agreed and expressed willingness to refund Rs 15,00,000 to the Respondent in the case, the contentions pertaining to ex-parte proceedings before the learned State Commission, absence of any deficiency, grant of relief beyond the pleadings etc. are of limited consequence at this stage. Therefore, the limited question that needs determination is to examine the quantum of relief that can be granted to the Respondent with due regard to the facts and circumstances of the case.
The Hon’ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 07.04.2022 has that:-
“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the Order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”
After due consideration of the entire facts and circumstances of the case and the said Order of the Hon’ble Supreme Court as regards the scope for compensation, the order of the learned State Commission is modified as under
ORDER
The Appellant/Opposite Party shall refund Rs. 15,00,000 (Rs. Fifteen Lakhs Only) to the Respondent/ Complainant, along with simple interest @ 9% per annum from the respective dates of deposit till the date of payment, within a period of one month from the date of this order. In the event of default, the amount payable shall carry interest @ 12% per annum from the date of expiry of one month till the realization of the entire amount. The Appellant/ Opposite Party shall also pay Rs. 10,000 (Rs. Ten Thousand Only) towards cost of litigation.
Consequently, the instant First Appeal No. FA/1616/2018 stands disposed of. All the pending Applications, if any, also stand disposed of. The statutory amount deposited by the Appellant, if any, may be refunded after due compliance of this Order.