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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, (President) and Rajan Sharma, Member (Judicial)
V.K. Jain – Complainant
versus
M/s. Anjali Promoters &
Developers Pvt. Ltd. and Anr. – Opp. Parties
Complaint Case No.420/2012
Decided on 1.8.2022
(A) Consumer Protection Act, 1986 – S.12(1)(a)[Consumer Protection Act, 2019 – S.35(1)(a)] – Services – Real Estate – Commercial Space – “Consumer” - Whether Complainant fall in the Category of “Consumer” under the Consumer Protection Act, 1986 – Thus commercial purpose does not include if it is for the purpose of earning his livelihood by means of self-employment - In the present case, the Opposite Parties has merely made a statement that the Complainant purchased the space for commercial purpose and on perusal of the record before us, we fail to find any material which shows that the Complainant has booked the said Space for Commercial purpose and for gaining profit. Mere allegation, that the purchase of the space is for commercial purpose, cannot be the ground to reject the present consumer complaint. [Paras 12 to 14].
(B) Consumer Protection Act, 1986 – S.12(1)(a)[Consumer Protection Act, 2019 – S.35(1)(a)] – Services – Real Estate – Commercial Space – Whether the Present Complaint is barred by Limitation under the Consumer Protection Act, 1986 - Opposite Party No.2 sent the allotment termination letter on 24.05.2013 and the cause of action arises after the allotment termination letter was sent to the Complainant and the complaint has been filed in the year 2013. Therefore, the Complaint is treated to have been filed within the limitation period. [Para 16].
(C) Consumer Protection Act, 1986 – S.12(1)(a)[Consumer Protection Act, 2019 – S.35(1)(a)] – Services – Real Estate – Commercial Space – Whether the Opposite Party is Liable for Deficiency in Service - On perusal of the records, it becomes clear that Complainant has not paid subsequent instalments in spite of repeated reminders and has committed default in making payments of the instalment in accordance with the payment plan, Opposite Party No.1 had every right to terminate the allotment of the Complainant and forfeit amount of earnest money deposited by Complainant. [Para 20].
(D) Consumer Protection Act, 1986 – S.12(1)(a)[Consumer Protection Act, 2019 – S.35(1)(a)] – Services – Real Estate – Commercial Space – “Earnest Money” – What constitutes – “Reasonable deduction” – Earnest Money is part of the purchase price when the transaction goes forward; it is forfeited when the transaction falls through, by reason of the fault or failure of the vendee – Thus that amount would constitute earnest money which is paid at the time of contract is concluded between the parties. Any payment made after the contract is concluded, cannot be said to be part of the earnest money. In the present case, admittedly, only a sum of Rs.63,469/- was paid to the Petitioner Company at the time the deal was concluded between the parties -Thus It would thus be seen that only a “reasonable amount” can be forfeited as earnest money in the event of default on the part of the purchaser and it is not permissible in law to forfeit any amount beyond a reasonable amount, unless it is shown that the person forfeiting the said amount had actually suffered loss to the extent of the amount forfeited by him.
Thus an amount exceeding 10% of the total price cannot be forfeited by the seller, since forfeiture beyond 10% of the sale price would be unreasonable and (ii) only the amount, which is paid at the time of concluding the contract can be said to be the earnest money. The Petitioner Company, therefore, was entitled to forfeit only the sum of Rs.63,469/-, which the complainant had deposited with them at the time of booking of the apartment. [Paras 21 to 25]
Result: Compliant allowed.
JUDGMENT
Sangita Dhingra Sehgal, (President).—The present complaint has been filed under Section 12 of Consumer Protection Act, 1986 by the Complainant before this commission alleging deficiency of service and unfair trade practice by the Opposite Parties and has prayed the following reliefs:—
(a) Order the Opposite Parties to refund the amount of Rs. 25,98,750/- (Rs. Twenty Five Lacs Ninety Eight Thousand Seven Hundred Fifty only) paid by the complainant towards the purchase of commercial space along with interest @ 18% per annum from the date of payment till realization to the complainant.
(b) Order the Opposite Parties to pay compensation to the tune of Rs.2,00,000/- to the complainant for mental pain and agony being suffered by the complainant at the hands of the Opposite Parties;
(c) Allow the litigation charges of Rs.25,000/- in favour of the complainant and against the Opposite Parties;
Pass any other or further order(s) or relief(s) which this Hon’ble Forum may deem fit and proper in the facts and circumstances of the complaint in favour of the complainant and against the Opposite Parties, in the interest of justice.
2. Brief facts necessary for the adjudication of the present complaint are that the Complainant booked a commercial space having tentative size of 1000 Sq. Feet, in Project of Opposite Party No.2, situated at Faridabad, for a basic price of Rs.5775 per Sq. Feet. Complainant has paid an amount of Rs.11,55,000/- towards the basic cost to the Opposite Parties.
3. The Complainant had paid a total sum of Rs.20,21,250/- as demanded by the Opposite Party No. 2 till date 22.03.2007. The Complainant vide letter dated 21.12.2007 showed his interest to change the booking from Faridabad to the Project of Opposite Party No.1, which is situated in Gurgaon. Thereafter, a payment of Rs.5,77,500 was made to the Opposite Party No.1 by the Complainant for the commercial space allotted in Gurgaon. The Opposite Party No.1 issued an Allotment Cum Demand Letter for Unit No. O10-1004 in the Project “Centre One” dated 10.06.2008. Wherein, a demand of Rs.8,89,750/- was raised by Opposite party No.1 in accordance with the payment schedule for the commercial space. It is contended by the Complainant, vide letter dated 15.05.2009 the Opposite Party No.1 increased the rate of basic sale price from Rs.5775/- per Sq. Feet to Rs.7500/- per Sq. Feet without the consent of the Complainant. However, neither the physical possession of the space has been handed over to the Complainant nor the project was completed within the stipulated time period.
4. The Complainant sent letter dated 31.05.2011 to the Opposite Party No. 1 vide which he asked for refund of the amount already paid by him, but the Opposite Party No.1 failed to give appropriate response to the said letter. Aggrieved by the aforesaid, Complainant served legal notice dated 08.10.2012 and requested Opposite Part No.1 to refund the amount of Rs.25,98,750/- paid by the Complainant towards the purchase of commercial space along with interest but of no avail.
5. Consequently, due to non-payment of outstanding amount as per the opted plan, the Opposite Party vide letter dated 24.05.2013, cancelled the allotted flat of the Complainant.
6. The Opposite Parties have contested the present case and has raised preliminary objections as to the maintainability of the complaint case. The counsel for the Opposite Party submitted that the Complainant is not a “consumer” under the Consumer Protection Act, 1986 as the Complainant has invested the money for opening his office that reflects that the investment was made by the Complainant to earn profit, which amounts to commercial purpose. The counsel for the Opposite Parties contended that the present complaint is liable to be dismissed as the present complaint is barred by limitation period. The counsel for the Opposite Parties further submitted that the Complainant has defaulted in making due payments as per the payment plan opted by the Complaina
Commercial Space - commercial purpose does not include if it is for the purpose of earning his livelihood by means of self-employment.
Shop Buyer’s Agreement – Only a ‘reasonable amount’ can be forfeited as earnest money – Any amount exceeding 10% of total sale price cannot be forfeited by Builder.
Commercial Purpose – Mere allegation, that the purchase of the property is for commercial purpose, cannot be the ground to reject the present consumer complaint.
Allotment of plot – If there is no time limit for performance of particular promise given by one party, it is to be performed within reasonable time.
Forfeiture of earnest money beyond 10% of the sale price without evidence of actual loss is unreasonable; hence, only reasonable deductions from consumer funds are permissible.
Flat Buyer’s Agreement – Only a ‘reasonable amount’ can be forfeited by Opposite Party which cannot exceed 10% of total sale price of unit, in case of delay in payment by Buyer.
Earnest money – As the allotment letter was not signed/accepted by the Complainants, the Opposite Party does not have any right to deduct the earnest money and cannot use or sit over the Complainants....
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