Fraudulent misrepresentation by a builder to a purchaser of a flat amounts to deficiency in service and the limitation period for filing a complaint under the Consumer Protection Act begins to run from the date of discovery of the fraud.

Mr. Justice R.N. Mittal, President—This appeal has been filed by the defendants against the order of the District Forum, Delhi dated 28th March, 1990.

2. Briefly, the case of Sh. Lalit Kumar complainant-respondent was that defendant-appellant No. 1 was a Private Limited Company and defendant-appellants Nos. 2 & 3 were its Directors. On 26th June, 1982, the appellants advertised in various news papers that they were constructing residential flats and commercial shops for sale on plot No. 60/26, Parbat Marg, New Delhi. The complainant approached them for booking a shop in the said premises. It was represented by appellant Nos. 2 & 3 to him that they had purchased the plot from the D.D.A. and that they had obtained permission from Municipal Corporation Delhi (M.C.D.) and Delhi Development Authority (D.D.A.) for the construction of the residential and commercial flats thereon. He believed their statement to be true, and agreed to purchase a shop measuring 63.07 sq. ft. at the rate of Rs. 650/- per sq. ft. An agreement was executed between the parties on 25th June, 82. The sale consideration of the shop was Rs. 41,405/-. It is alleged that the appellants assured that the possession of the shop would be delivered to him on or before Diwali of 1983. He paid an amount of Rs. 6,211/- at the time of agreement. It is further stated that he paid the amounts of the instalments as and when demanded by them. The total amount which was paid by the complainant to the defendants was Rs. 39,335/-.

3. On 7th November, 1984, the appellants sent a notice to the complainant demanding the last installment of Rs. 13,405.75P. It was also stated in the letter that the shop was ready for possession and the same would be handed over to him on making final payment Later, vide letter dated 6.8.85, a demand of Rs. 22,545.14P was made by the appellants from him.

4. It is further pleaded that as the possession of the shop was not delivered to the complainant before the Diwali of 1983, and the price of the shop had been increased by the appellants the complainant became suspicious about their conduct and he made enquiries regarding the property. He came to know that the completion certificate of the property had not been issued as there was no regular electric and water connection therein. On making further enquiries he came to know that the building constructed could be used for residential purposes only and not for commercial purposes.

5. The complainant it is next averred thereafter made enquiries from the D.D.A. about the ownership of the premises and he was informed that the plot was owned by one Ranbir Singh S/o Tirath Singh and not by appellant No. 1 and that it was not sold to the said appellant in auction. The complainant, it is alleged, had been cheated and a fraud had been played on him. He therefore, demanded his payment back from the appellants but they refused to refund the amount. He further claimed interest @ 24% per annum on the said amount w.e.f. 25th June, 82 till the date of the repayment. Consequently, he prayed that the defendant-appellants be directed to pay a sum of Rs. 39,335/- together with interest @ 24% per annum w.e.f. 25th June, 82 till the date of realisation, and to pay another sum of Rs. 25,000/- by way of damages.

6. A notice was issued by the District Forum to the defendant-appellants on 5th October, 1989 for 17th January, 90. On that date an advocate appeared on their behalf and the case was adjourned to 28 th March, 90. On the adjourned date Sh. S.M. Goswami. legal Asstt. of defendant-appellant No. 1 appeared on behalf of the appellants. The Forum on the same day passed an order directing the defendant-appellants to pay Rs. 39,335/- with interest @ 24% w.e.f. 25.6.82 till the date of payment to the complainant within a month of the date of the order. The defendants have come up in appeal against the said order to this Court.

7. The first contention of the learned Counsel for the appellants is, that the appellants had filed wr