IMPORTANT POINT
Apartment Buyers Agreement – Cancellation of allotment – To justify forfeiture of advance money being part of “earnest money” terms of contract should be clear and explicit – Agreement is one-sided and totally tilted in favour of Developer.

JUDGMENT :

B.R. GAVAI, J.

1. The present appeal takes exception to the final judgment and order dated 25th October, 2022 passed in Consumer Complaint No. 262 of 2018, whereby the National Consumer Disputes Redressal Commission (hereinafter, “NCDRC”) disposed of the Consumer Complaint filed by the Respondents No. 1 and 2 (hereinafter referred to as, “Complainants” or “Respondents”) thereby directing the Appellant to deduct only 10% of the Basic Sale Price (“BSP” for short) towards cancellation of the Complainants’ Apartment and refund the balance amount along with simple interest @ 6% per annum from the date of each payment till the date of refund. Aggrieved thereby, the present appeal has been filed under Section 23 of Consumer Protection Act, 1986.

2. The facts, in brief, giving rise to the present appeal are as given below.

2.1 On 10th January, 2014 the Complainants had booked an Apartment with the Appellant in the project by the name “Godrej Summit” situated at Sector 104, Gurgaon, Haryana by an Application Form and submitted Rs. 10,00,000/- as application money.

2.2 On 20th June, 2014 by an allotment letter, the Appellant allotted an Apartment being Apartment No. C-1501 on the 14th floor in Tower ‘C’ to the Complainants in the above-mentioned project, pursuant to which an Apartment Buyer Agreement (hereafter referred to as “the Agreement”) was entered into between the Parties.

2.3 On 20th June, 2017 the Appellant upon completion of construction applied to and subsequently received the Occupation Certificate from the Director, Town & Country Planning Department, Haryana.

2.4 On 28th June, 2017 the Appellant offered possession to the Complainants. The Complainants, however, sought cancellation of the allotment and further sought full refund of the amount paid.

2.5 On 29th September, 2017, the Complainants served a legal notice to the Appellant for refund of the amount paid totaling Rs. 51,12,310/-.

2.6 Thereafter, on 14th November, 2017, the Complainants filed a Consumer Complaint (No. 262 of 2018) before the NCDRC inter-alia praying that Appellant be directed to refund the sum totaling Rs. 51,12,310/- paid by the Complainants so far, with interest @ 18% per annum, calculated from the date of making each payment till the date of realization of the sum.

2.7 Vide impugned order dated 25th October, 2022, the NCDRC disposed of the Consumer Complaint by directing the Appellant to deduct only 10% of the BSP i.e. Rs. 17,08,140/- only towards cancellation of the Complainants’ Apartment and refund the balance amount Rs.34,04,170/- (i.e. Rs. 51,12,310/- minus Rs. 17,08,140/-) along with simple interest @ 6% per annum from the date of each payment till the date of refund within three months.

2.8 On 5th December, 2022, the NCDRC also dismissed the Review Application filed by the Appellant challenging the impugned order.

2.9 Aggrieved thereby, on 10th January 2023 the Appellant filed the present appeal challenging only the order dated 25th October, 2022.

2.10 By an order dated 24th April, 2023, this Court while issuing notice had granted stay of the impugned order on the condition that the Appellant refunds the amount deposited by the Complainants after deducting 20% (earnest money deposit) along with interest @ 6% per annum from the date of cancellation of the contract.

3. We have heard Shri Dhruv Mehta, learned Senior Counsel appearing on behalf of the Appellant and Shri Ashwarya Sinha, learned Counsel appearing on behalf of the Respondents.

4. Shri Dhruv Mehta submits that the NCDRC has grossly erred in interfering with the contractual terms as entered into between the Parties. It is submitted that the Agreement between the parties specifically provided for a forfeiture clause. The Agreement provided that the Appellant was entitled to forfeit the entire earnest money and any other due payable by the buyer including interest on delayed payment.

5. He further submits that the NCDRC has specifically come to a conclusion that the Appellant was entitled t