Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member and Dr. Sadhna Shanker, Member
Macrotech Developers Ltd. – Appellant
versus
A. Syamala Reddy – Respondent
First Appeal No.422 of 2023
(Against the Order dated 26/10/2022 in Complaint No. 36/2015 of the State Commission Telangana)
Decided on 19.8.2024

Counsel for the Parties:
For the Appellant:Mr. Rahul Kripalani, Advocate With Ms. Supraja V. and Mr. Aditya Chauhan, Advocates
For the Respondent:Mr. Alabhyya Dhamija, Advocate With Mr. Ranjeet Mishra and Dr. Aruna Gupta, Advocates

IMPORTANT POINTS
(1) Multiple compensation for singular deficiency is not justifiable.
(2) Forfeiture of amount – Cancellation of allotment – Deduction of more than 10% of deposit as earnest money held invalid.

Headnote:
Consumer Protection Act, 1986 – Section 2(1)(d) – Refund of amount – Non-completion of construction by appellant-builder – Cancellation of allotment of flat – ”Consumer” – Deficiency in Service – Unfair Trade Practice – Appellant-builder cannot raise issue as to Pecuniary jurisdiction of State Commission at appellate stage – Complainant has paid total of Rs.54,50,000/- to Builder – Builder company cancelled allotment of flat after demand from complainant to amend the clauses in agreement, forfeiting sum of Rs. 29,72,000/- & refunded Rs.24,78,388/- – Deduction of more than 10% of deposit as earnest money is invalid & amounts to unfair trade practice & it is unconscionable – Deducting another sum of Rs. 2,82,284/- towards service tax on cancellation is also not maintainable – Amount of Rs. 4.50 lacs deposited as earnest money by complainant towards allotment of flat is liable to be deducted – Order of State Commission is modified to extent that builder company shall refund balance amount of Rs. 22,83,852/- plus Rs. 2,82,284/- along with interest @ 9% p.a. from date of deposit till realization. (Paras 15, 16, 17 and 18)
Result: Appeal disposed of.

ORDER

Dr. Sadhna Shanker, Member.—The present appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) by Macrotech Developers Ltd. (hereinafter referred to as the “builder company”) assailing the order dated 26.10.2022 passed by the State Consumer Disputes Redressal Commission, Telangana (hereinafter referred to as the “State Commission”) in complaint no. 36 of 2015 whereby the complaint was partly allowed.

2. There is a delay of 121 days in filing the present appeal.

In the interest of justice and considering the reasons mentioned in the application for condonation of delay, the delay in filing the appeal is condoned.

3. The brief facts of the case are that the respondent (hereinafter referred to as the ‘complainant’) applied for Villa no. 600, 4 BHK on the 6th floor of the Bellezza Benicia project by Lodha Healthy Constructions and Developers Pvt. Ltd., for a total consideration of Rs.2,28,38,517/-. On 25.04.2011, the complainant paid Rs.4,50,000/- by cheque to secure the allotment. The application forms issued by the builder company, including the complainant, specified a payment schedule linked to construction progress. The builder company promised to complete the construction on or before 30.06.2013 but pressured the complainant to make payments without commencing construction and under the compelling circumstances, the complainant paid Rs.50 lakhs by cheque dated 10.08.2011. In all, the complainant had paid a total amount of Rs.54,50,000/-. It is alleged that the builder company sent a draft agreement of sale on 19.9.2011, which the complainant found objectionable due to unreasonable conditions in clauses 7, 8, 11, 14, 23 to 30, 36, 38, and 44 and sought modifications. Despite repeated requests for amendments, the builder company did not accommodate her concerns, which amounted to unfair trade practice. On 22.12.2011, the complainant informed builder company that without a signed agreement of sale, there is no binding contract and hence, she had no obligation to make further payments. The builder company replied on 16.03.2012 ignoring her requests for clause modifications. On 25.10.2011, the builder company emailed to the complainant stating that only typographical errors would be corrected, refusing further modifications. On 22.12.2011, the complainant notified the builder company of her decision not to proceed with the purchase and requested for refund of the deposited amount. Despite several demands for a refund, the builder company unilaterally deducted Rs.29,72,000/- from the amount (Rs.54,50,000/-) paid by the complainant and refunded only Rs.24,78,388/-. The complainant asserts that the actions of the opposite parties were illegal and the entire project violated several Acts including the A.P. Housing Board, Land Acquisition Act, 1894, AP Land Revenue Act, and A.P. Apartments (Promotion of Construction and Ownership) Act, 1987 and the deduction of Rs.29,72,000/- under Clause 7 of the allotment letter is contested as unlawful.

4. Being aggrieved, the complainant filed a complaint before the State Commission with the following prayer to direct the builder company to pay, jointly and severally, :-

(a) a sum of Rs.29,71,612/- with interest @18% per annum from the date of payment i.e. 10.08.2011 till realization;

(b) to pay a sum of Rs.5,00,000/- (Rupees Fifty lakh only) punitive damages;

(c) to pay sum of Rs.5,00,000/- (Rupees Fifty lakh only) towards compensation for subjecting the complainant for mental agony and harassment;

(d) to award costs of Rs.25,000/-;

(e) and pass such other order or orders as this Hon’ble High Court may deem fit and proper in the circumstances of the case.

5. The builder company contested the complaint by filing written version raising the preliminary issues, firstly, that the complaint is barred by limitation and secondly, that the complainant is not a ‘consumer’ within the ambit of Section 2(1)(d) of the Act. It is further stated that th

Click Here to Read the rest of this document