Dharampal Satyapal Ltd. Vs. Shreeniwas Cotton and Another - Court Judgment

Excerpt:
the consumer protection act 1986 - section 2(1)(d) -barkat ali zaidi, president: 1. facts of the case are that the op no.1, who is a builder and developer company and op no.2 who is a property dealer, made a joint gesture before public that they are going to construct super luxury apartments calling “world one” at mumbai. the complainant on 01.09.2010, sent an application form(annexure –b), which was sent by the ops to him, to op no.1, annexing with the application a bank draft of rs.18 lac, in the name of op no.1, for allotment/purchase of one unit on 21st floor of the proposed building, its total consideration amount being rs.8,90,31,879/-. it is averred by the complainant that in the application form, op no.2 has been shown as channel partner. it is alleged by the complainant that as provided in clause 3 of the application, op no.1 was to accept the application within 45 days from the date of application (08.09.2010/15.09.2010), and had to inform the complainant its acceptance in writing, with further stipulation that the application would not be deemed to have been accepted unless the op communicates his acceptance, within 45 days, and duration of this 45 days expired on 30.10.2010 from 01.09.2010, and no communication was received by the complainant from the side of op no.1. subsequently the op by sending letter dated 27.09.2010 (annexure-d) demanded from the complainant an amount of rs.72,86,095/-. the op again sent a letter dated 27.10.2010 (annexure –d) to the complainant asking to pay rs.20984763/- also with interest @18%. the complainant again received a communication dated 27.10.2010 (annexure –e) from op no.1, demanding from the complainant to pay rs.5354939/- towards stamp duty charges and registration charges for execution of agreement to sell. in january 2011, the complainant received from the op no.1, a copy of draft ‘agreement to sell (annexure –f). 2. it is alleged by the complainant that during aforementioned period ops, introduced the representative of the complainant to h.d.f.c. bank, munirka branch, new delhi, for the purpose of financing 85% of the value of the flat, and in this meeting the bank offered loan @ 8.5% to 9% pa, but the bank subsequently resiled from the rate of interest saying that the said amount to be advanced as loan, will be treated as corporate loan and not home loan and shall invite interest @15% p.a., and for taking the loan, the complainant shall have to give additional security to the extent of 100% beside mortgaging the proposed flat. during this course of aforementioned time, the complainant asked the op several times to issue a letter of acceptance which op was supposed to issue by or before 30.10.2010. the op vide its letter dated 24.02.2011 again asked the complainant to pay some amount within 15 days, further informing the complainant in case of failure, the op will be constrained to take an appropriate legal action. finally the op vide letter dated 14.03.2011(annexure –g) informed the complainant that the application of the complainant for allotment of the flat has been rejected with immediate effect, in terms of the application form and the amount paid by the complainant stands forfeited. the complainant on receipt of this information sent a letter dated 31.03.2011 (annexure –h) to op no.1, raising serious objections, also accusing hdfc bank for its behaviour. the complainant then on 22.04.2011 (annexure-j) again wrote to op no.1, not to transfer the flat in question in any way, and after sending another letter dated 27.04.2011, sent a legal notice dated 06.05.2011 (annexure-k), calling upon op no.1, to withdraw their letter dated 14.03.2011 and not to encumber upon the said property and issue letter of acceptance, but with no response. ultimately the complainant filed this complaint before this commission in may 2011 with the prayer that the op be directed to refund rs.18 lac alongwith interest @24% p.a., rs.20 lac as damages and costs of the proceedings. 3. op no.1, in its written version denied all the adverse allegations in the complaint against him alleging therein that the facts as mentioned by the complainant are at variance with the booking application signed by the complainant, which tantamount to agreement between the parties. complainant at no point of time asked op no.1 to communicate acceptance of the booking application, and which was made for the first time in the legal notice, and complainant only asked for draft of agreement to sell, which was accordingly sent. op no.1 further alleged that, though clause 3 of the application mentions that the op no.1, will have to communicate acceptance of the application to the complainant, but it also provided in the clause that this was subject to payment of booking amount, application money and fulfillment of all necessary formalities, which were not complied with by the complainant. the payment plan annexed to the application expressly provided that 19.9% of the consideration value was payable on booking within a period of 45 days, which includes the application money of 10% of the consideration value, which was payable within 27 days of the booking application, and its balance 9.9% was to be paid within a period of 45 days. op no.1 further alleged that application form also contained cancellation clause 8, to the effect, that in case complainant withdraws for any reason, prior to the allotment of the flat, the booking amount paid by the complainant would stand forfeited, and in the event the complainant wishes to withdraw after allotment the complainant was liable to pay further 10% cancellation charges. op no.1, was therefore well within his rights to forfeit the amount deposited by the complainant. as the complainant did not pay the booking amount as well as application amount, therefore question of acceptance of application of the complainant by op no.1 did not arise. op no.1 further alleged that clause no.11 of the booking application further provided that the complainant also accepted that, there were no representations oral or otherwise other than the provisions and conditions contained in the booking application. op no.1 averred that with regard to arrangement of loan, in terms of clause 9 of the booking application, it was the sole responsibility of the complainant. op no.1 further alleged that the complainant which is a company booked the flat which is a commercial purpose and therefore the case does not fall within the ambit of the consumer protection act. op no.1 thus denying deficiency in service and unfair trade practice on its part prayed that the complaint of the complainant be dismissed. 4. op no.2 also filed its written version, denying all the adverse allegations against him, and averred that op no.2 is real estate consultant, based in delhi, and complainant approached him and expressed his desire to purchase some luxury apartment in mumbai. op no.2 stoutly denied being an agent of op no.1, and averred that he had only facilitated the aforesaid transaction between the complainant and op no.1. op no.2 further averred that he is neither a proper party nor any relief has been prayed against him, and he has been impleaded in the complaint only to gain jurisdiction of this commission, for filing the present complaint, otherwise this commission has no jurisdiction to entertain this complaint. op no.2 further alleged that no consideration was paid to him by the complainant or by op no.1, therefore there is no relation of consumer and service provider between the complainant and op no.2. 5. the complainant in replication filed by him denied all the adverse allegations of the ops. he alleged that letter dated 10.11.2010 placed on record by the complainant, unravels that op no.2 made representations to the complainant on behalf of op no.1. the complainant alleged that the flat he proposed to purchase is not for commercial purpose as spending a huge amount on purchase of flat is not a viable commercial activity. he alleged that in terms of clause 3 of the booking application, op no.1 was obliged to issue him a communication of acceptance or otherwise within 45 days by or before 30.10.2010 which he did not and forfeited his amount vide letter dated 14.03.2011, five months later, and during this period op no.1 claimed interest @18% from the complainant, which he is not legally authorized. if op no.1 could forfeit his amount, it should have been on 46th day of the booking application and not after five months, beside that op no.1 at no point of time intimated the complainant that if op no.1 does not convey his acceptance to complainant his amount will be forfeited. 6. besides the aforementioned documents, the complainant in his evidence filed affidavit of sh. atulesh rajwanshi, an authorized representative, annexing with it four information collected under right to information act from the different authorities of bombay with regard to construction of the ops project, one more affidavit of sh. j.p. suri, an authorized representative of the complainant, annexing with it 07 communications addressed by op no.1 to the complainant which will be discussed in the order ahead, if need be. 7. op no.1 in his evidence filed the affidavit of sh. surender nayar, his authorised signatory annexing some documents which we have already mentioned above. op no.2 in his evidence filed affidavit of one sh. ashish jain, his authorized representative. 8. we have heard sh. deepak dhingra, counsel for the complainant, sh. vibhu bhakhru, senior advocate alongwith mr. somarind sharma, counsel for op no.1 and sh. vishnu anand, counsel for op no.2, in this complaint. 9. the booking application contains terms and conditions which are not in dispute between the parties. clause 3 of the application form is as follows: “3.acceptance of application: subject to payment of the booking amount and application money by the applicant, and fulfillment of necessary formalities, the company will within 45(forty five) days from the date of receipt of the application, communicate in writing to the applicant the acceptance or otherwise of this application. the application shall not be deemed to have been accepted unless the company has communicated in that regard to the applicant in writing.” 10. it will thus appear from the aforesaid condition that before the agreement could be finalized op no.1 had to communicate to the complainant, acceptance of application or otherwise. it has also been specified in this condition that the acceptance “has to be communicated in writing”. no such acceptance was communicated in writing to the complainant. argument from the side of op no.1, was that within 45 days as stipulated in the aforesaid condition he sent two communications dated 27.09.2010 and 27.10.2010 (annexure –d(colly)) asking the complainant to make remaining payments, but in both the letters there is no mention of the fact that application of the complainant has been accepted. they are both payment plans, in which amount to be paid has been specified. it was further argued by the learned senior advocate of op no.1 that demand for payment indicated that the application of the complainant had been accepted. 11. we refuse to buy this argument because terms and conditions have to be strictly adhered to. since condition stipulate that the acceptance of the application shall be communicated in writing, it was mandatory for op no.1 to communicate in writing the acceptance of booing application in clear terms within 45 days. it was only then, that the agreement could come into force. since this was not done, it has to be taken, that there was no ‘agreement between the parties. 12. the argument of the learned senior counsel for op no.1, was that the question of acceptance of the booking application did not arise, because the complainant did not deposit the booking amount. this plea is unsustainable, because, it is not mentioned in the booking application that the question of op no.1 communicating his acceptance or otherwise, could depend upon the payment of the booking amount. even if the booking amount was not paid, op no.1, should have informed the complainant, that his application has not been accepted. in either case it was mandatory on op no.1, to inform the complainant of acceptance or otherwise of the booking application. 13. since there is no agreement between the parties, the complainant becomes entitled to refund of the advance amount, paid by him. 14. condition no.2 of the booking application also stipulates that in case application is rejected by the op, the booking amount and the application money will be refunded to the applicant(complainant) without any interest within 60 days of the rejection of the application. since application was not accepted as mentioned above within 45 days it will be deemed to have been rejected because there is no middle path, as such complainant will be deemed entitled for refund of the booking amount. 15. even otherwise justice and equity demand, that, if there is no legal compulsion like agreement, any amount paid by a person, as earnest money should not be allowed to be forfeited, if any benefits therefrom have been received by him. this has also been the consistent policy, in, judicial decisions of such nature, and, the doctorine of unlawful enrichment. 16. one of the argument advanced by the learned senior counsel for the op no.1, was that since the flat was to be booked in the name of the company, the complaint will be hit by commercial transaction as provided under section 2(1)(d) of the consumer protection act 1986. this argument does not appeal to us because, ultimately it was an individual person who was to reside therein through aegis of the complainant. in the proforma of the booking application provided by the ops it is mentioned, that, flat is residential in character, the flat was therefore not to be used for business purpose or for any work, relating to the company. the provisions restricting transaction for commercial purpose has to be construed strictly, because, this is a beneficial legislation, and, as such, we are of the view, that the transaction will not be hit by the provisions of section 2(1)(d) of the consumer protection act, relating to commercial nature, as provided in the act. 17. it was argued from the side of the op no.2, that this commission at delhi does not have territorial jurisdiction to entertain this complaint, because the flat in question is situated in mumbai. in the booking application given by op no.1, to the complainant op no.2, has been described as channel partner. he is the facilitator and through him all transaction was being processed admittedly, residing in delhi and has his office there. it cannot therefore be said that he is an unnecessary party, even though no specific relief against him may be called for! section 11(2) of the act provides as follows: (2) a complaint shall be instituted in a district forum within the local limits of whose jurisdiction,— (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the district forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. 18. it will thus appear that because of the aforesaid provision, complaint could be filed in delhi, plea of territorial jurisdiction is therefore unacceptable. 19. the question of complaint being barred by pecuniary jurisdiction was also raised, it was also pointed out that the consideration of the flat is rs.8,90,31,879/-, while pecuniary jurisdiction of this commission is of rs.1 crore. jurisdiction of this commission is determined on the basis of the relief sought by the complainant, not on the basis of the valuation of the property. in this case relief sought is refund of rs.18 lac being paid by the complainant as earnest money, plus compensation of rs.20 lac, complaint could therefore to be filed here. 20. in view of the above findings, the complainant is entitled to refund of rs.18 lacs. it was pointed out from the side of op no.1, that the complainant will not be entitled to interest because a clause in the booking application that op no.1 will not be liable to interest, if the booking application is rejected, but this condition will not apply since the application was not specifically rejected by op no.1. the complainant should therefore be awarded interest, because the money is lying with op no.1 without any valid agreement. the rate of interest is fixed at 9% per annum. 21. we dont think this is a case when grant of compensation is required, and we are of the view, that the interest of justice would be fairly subserved by ordering a refund with interest. costs of the case is determined at rs.20,000/-. the decretal amount to be paid by op no.1 within 30 days. 22. a copy of this order be provided to the parties as per rules. the file be consigned thereafter to record room.