IMPORTANT POINT
What is a ‘commercial purpose’ is a question of fact to be decided in facts of each case.

V.K. Jain, Presiding Member—Ghaziabad Development Authority (GDA) started construction of 14 Multi-storied Residential Apartment Towers. However, the construction of the aforesaid residential towers ran into difficulties and came to be a grinding halt, in the year 1995. The Authority then decided to dispose them off, either through an outright sale/lease deed or through a joint venture agreement, where the joint venture would complete and market the flats on behalf of the GDA in such a manner that it was able to recover full cost of its investment and highest possible margin, without any further risk on its investments and thereafter, allow the joint venture partner to obtain a return on its investments. The flats were to be advertised and marketed by the joint venture partner and the deed of conveyance was to be executed only by GDA, which continued to be the sole owner of the property.

The opposite party which is a partnership firm of two companies submitted highest bid for Module II in Indirapuram Scheme, which was accepted by the GDA. As per the MOU executed between the opposite party No. 1(hereinafter referred to as the developer) and GDA, a Monitoring Committee under the chairmanship of Vice Chairman, GDA was to be constituted for monitoring the progress for timely completion of the project. It was also agreed between the developer and GDA that a joint account in the name of the Authority and the Developer shall be opened in a nationalized Bank and all the monies received out of the proceeds of bookings etc. will be credited to the said account. The minimum amount stipulated in the MOU was to be paid to the Authority out of the accumulation in the said account and shortfall, if any, was to be met by the developer from his own sources. After meeting the aforesaid minimum liability, the proceeds in the account were to be distributed between the Authority and the developer in the ratio of 60:40. Once all the amount due to the authority had been paid, all the proceeds in the account were to go to the developer. It was also agreed in the MOU that the developer would complete the construction and internal development within seven years from the date of the agreement. It was also agreed between the GDA and the developer that in case of any litigation by the purchaser, the responsibility will be that of the developer and the said clause should be incorporated in the Flat-Buyers Lease Deed.

2. The complainant Smt. Kavita Ahuja submitted three separate applications for purchase of flats in the aforesaid project and paid the booking amount of Rs.5.00 lacs each against all the three bookings. Three separate Letters of Allotment were issued to the complainant, allotting flats No. Deodar 1301, Deodar 1302 and Deodar 1303, to her for a consideration of Rs.1,09,76,100/-, 1,13,93,825/- and 1,25,66,150/- respectively. The construction was to be completed within 22 months of the date of commencement. The complainant paid a total sum of Rs.65,85,800/-, 68,36,400 and 75,39,730/- respectively against flat No. Deodar 1301, Deodar 1302, and Deodar 1303 respectively. However, the developer failed to complete the construction within the stipulated time and according to the complainant when she visited the site on 02.02.2008, she found that the construction had barely commenced with no prospects of its being completed in near future. The complainant wrote a letter to the developer, seeking complete details as to the stage of construction of the flats and the date on which the possession would be handed over to her. The developer however, did not respond to the said letter of the complainant. Later, vide letter dated 12.3.2009; the developer intimated a revised installment schedule on 31.3.2009. In reply, the complainant pointed out to the developer that it had failed to hand over the possession of the flat and sought refund of the money she had paid along with interest on that amount @ 21% per annum. In reply, the developer offered a rebate of