Atma Krishna vs Orris Infrastructure Ltd. & Anr.

on 21 December, 2018

National Consumer Disputes Redressal

Atma Krishna vs Orris Infrastructure Ltd. & Anr. on 21 December, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO.
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Complainant : Mr. Aditya Parolia, Advocate with
Mr. Kumar Pradyuman, Advocate For the Opp.Party :
Mr. Manvendra Singh and Mr. Ashutosh
Kumar, Advocate

For OP2 : Ms. Maihjabeen Tanweer, Advocate with

Subhojoy Banerjee, Ms. Mishah-UL-haq,
Advocates
Dated : 21 Dec 2018 ORDER

This Consumer Complaint has been filed by the complainant Atma Krishna against the Opposite Par

2. The complaint was resisted by filing the written statement by the OPs. Both the partie

3. Learned counsel for the complainant stated that as per the possession clause 5 of the

4. The learned counsel for the complainant stated that an objection has been taken by the

5. It was further argued by the learned counsel for the complainant that there is no for

i) Thangavel Palanivel and another Vs. M/s. DLF Southern Homes Pvt. Ltd., Consumer Compl

"12. The last question which arises for consideration in this regard is as to whether the op

"It is an undisputed proposition of law that ordinarily the parties are bound by the terms and

However, a term of a contract, in my view will not be final and binding if it is shown that

It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreas

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 Atma Krishna vs Orris Infrastructure Ltd. & Anr. on 21 December, 2018

The view taken in Satish Kumar Pandey (supra) reiterated by this Commission in Swarn Talwa

Therefore, I have no hesitation in reiterating that the compensation which the builder has t

(ii) Jivitesh Nayal and another Vs. Emaar MGF Land Ltd. and another, CC No.34 of 215, deci

"8. In terms of Section 14(1)(e) of the Consumer Protection Act, if this Commission is sati

Since the Act empowers this Commission to direct removal of the deficiencies in the service in

9. Also, I find no merit in the contention that the compensation stipulated in Clause 15(a)

11. If a paltry compensation of say Rs.10/- per sq. ft. per month is awarded against a builde

6. In respect of the point raised by the opposite parties that the complainant has breach

"5. This complaint was instituted way back on 10.8.2015, about two years before the occupa

7. Learned counsel for the complainant further stated that the plea taken by the OPs in r

"14. We have considered the rival contentions and perused the record. On careful consider

8. Based on the above arguments, learned counsel for the complainant submitted that the
amount paid by the complainant to the OPs be refunded to the complainant. It was stated by learned
counsel that the amount has been paid to OP-1 though the apartment buyer agreement has been

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 Atma Krishna vs Orris Infrastructure Ltd. & Anr. on 21 December, 2018

signed by both the OPs.

9. On the other hand, learned counsel for OP-1 stated that OP-1 is only the land owner and the
OP-2 is the developer. There is a development agreement between OP-1 and OP-2 and this was in
the knowledge of complainant. As per this development agreement, 35% units are to be sold by OP-1
and 65% units are to be sold by OP-2. In this background, it is to be considered that the project has
been delayed by OP-2 and therefore, OP-1 is not responsible for paying any compensation for the
delay in handing over the possession.

10. It was further argued by learned counsel for OP-1 that in the present case this Commission
does not have pecuniary jurisdiction to decide the present case as the relief claimed is for refund of
Rs.63,05,205.66 only. In support of his arguments, learned counsel referred to the decision in
Shahbad Cooperative Sugar Mills Vs. National Insurance Company Ltd., decided on 2.4.2003, II
(2003) CPJ 81 (NC) wherein it has been observed that interest will not be added to the value of
goods or services for deciding the pecuniary jurisdiction of the consumer forum.

11. Apart from that, some benches of this Commission have also taken a view that judgment of the
Larger Bench of Ambrish Kumar Shukla (supra) is not applicable on refund cases where the value of
service is to be taken as the amount of refund. The learned counsel argued that even if 18% p.a.
interest only is added to the amount of refund till the date of filing of the complaint, the figure
reaches only upto Rs.92,59,592.66. Clearly the additional compensation of Rs.15 lakhs demanded in
the complaint cannot be added to this figure as interest is also in the form of compensation only.
Accordingly, this Commission does not have the pecuniary jurisdiction to entertain the present
complaint. In support of his arguments, learned counsel referred to the judgment of this
Commission in Harmanjit Kaur and another Vs. M/s. Ansal Hi-Tech township Ltd., Consumer Case
No.236 of 2017, decided on 7.2.2017, wherein it has been observed:

"3. On perusal of the prayer clause it transpires that the complainants are seeking refund of
principal amount paid by them alongwith 24% interest p.a. from the respective dates of payment till
realization of the amount or in the alternative possession of the apartment in question. Besides, the
interest, the complainants have also sought Rs.50 lakhs as compensation. The relief claimed by the
complainants is highly unrealistic. On one hand they are seeking refund of the entire consideration
with 24% interest which is in the nature of compensation and on the other hand they are also
claiming Rs.50 lakhs as compensation for undue harassment and loss caused. Even if the opposite
party has failed to fulfill their part of the promise, the complainant cannot claim compensation
under more than one head. They can either claim lumpsum compensation for the damages suffered
by them or the interest on the amount paid. It may also be noted that 24% interest claimed by them
is on higher side. If the complainants are interested in refund with interest, then also the
consideration amount of Rs.44,69,452/- with 24% interest cannot be more than rupees one crore
and if the complainant is interested in lumpsum compensation of Rs.50 lakhs, the value of services
plus compensation works out to be Rs.94,69,452/-. In both the eventualities, the value of the
complaint for the purpose of pecuniary jurisdiction is less than rupees one crore."

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 Atma Krishna vs Orris Infrastructure Ltd. & Anr. on 21 December, 2018

12. Learned counsel for OP-1 argued that as per clause 4 of the allotment letter, the complainant
was required to make payments as per payment plan attached to the allotment letter. The
complainant had opted for a construction linked plan but has ony made payments upto 7th stage
and stopped thereafter. Thus, the complainant became a defaulter as the remaining amount was not
paid even after notices were sent by the OP. Notice-cum-demand letter was sent on 2.8.2016
wherein a demand of Rs.26,62,552/- was made which was due on the complainant. Instead of
paying the due amount, the complainant asked for refund even before due date of handing over
possession. As per clause 4.7 of the apartment buyer agreement, OP-1 is entitled to terminate the
agreement and is also entitled to forfeit earnest money equal of 10% of the total consideration and
to deduct other charges including the brokerage charges.

13. Learned counsel for OP-1 further argued that according to clause 4.3 of the apartment buyer
agreement it has been clarified that time is of the essence under this agreement and borrower
shall make the timely payment in respect of each instalment. Clearly, the complainant has agreed to
this clause and therefore, he is a clear defaulter and no relief can be granted to a defaulter in the
consumer complaint. It was argued that total consideration of the flat is Rs.1,09,15,227/- and if the
allotment is cancelled, and refund is ordered, then OP is entitled to forfeit 10% of this amount as
earnest money as per the agreed clause.

14. It was further argued by learned counsel for OP-1 that as per Section 55 of the Indian Contract
Act, if a party to the contract does not perform its part/obligation, he is not entitled to ask for relief
under the contract from other party. In this regard, learned counsel stated that the construction of
the building is depending upon the timely payment by the buyer and if the buyer does not pay
instalment in time, the buyer becomes defaulter in the performance of his part/obligation.
Therefore, under Section 55 of the Contract Act the complainant cannot demand relief as per the
agreement from the OPs. To support his arguments, learned counsel referred to the following
judgment:

DLF Southern Town Pvt. Ltd. vs. Dipu C. Seminlal, RP NO.1973 of 2014 decided on 7.1.2015 by this
Commission, wherein it has been observed as under:

"9. Complainant filled application form for provisional allotment on 30.9.2008 and rest of the
amount was to be paid in instalments within 27 months of booking. Complainant did not pay any of
the instalments and OP vide demand notice dated 31.10.2008, 4.12.2008, 17.12.2008, 31.12.2008,
2.2.2009, 2.3.2009 and 6.3.2009 asked complainant to remit payment, but complainant did not
remit payment. OP also asked complainant from time to time to return duly signed Apartment
Buyers Agreement, but that was not sent by complainant to OP. As per letter dated 28.1.2010, OP
asked complainant to deposit Rs.10,60,326/- outstanding against him on or before 1.3.2010, failing
which, allotment will be cancelled and earnest money will be forfeited. Later on, by notice dated
10.3.2010, issued by complainants Advocate it was expressed that complainant was ready to remit
unpaid instalments or in the alternative demand of Rs.4,00,000/- deposited was made which was
denied by OP vide reply dated 9.4.2010. It was specifically stated in this reply that OP was to

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complete construction within 36 months from date of execution of the agreement subject to allottee
making timely payment of instalments and when payment was not made by the complainant, OP
vide letter dated 28.7.2010 cancelled allotment and forfeited Rs.4,00,000/- earnest money and
intimated to the complainant that no balance was refundable. After this letter, complainant filed
complaint before District Forum with aforesaid prayer.

12. He has also placed reliance on judgment of this Commission in R.P. No. 624 of 2007 - Sahara
India Commercial Corpn. Ltd. & Anr. Vs. C. Madhu Babu in which also similar order was passed as
in P. Gajendra Chary (Supra). He further placed reliance on judgment of Hon'ble Apex Court
reported in (2000) 4 SCC 120 - Prashant Kumar Shahi Vs. Ghaziabad Development Authority in
which it was observed as under:

"4....Having failed to perform his part of the contract, the appellant cannot be permitted to urge that
he is not liable to pay the balance amount along with interest as according to him the
respondent-authority had failed to deliver possession as per terms of the brochure. The authority
was not expected to deliver possession in the absence of the payment of the agreed amount".

13. In the light of aforesaid judgments, it becomes clear that as complainant has not paid any
subsequent instalments and committed default in making payments of instalments and also
committed default in returning back duly signed agreement, OP had every right to forfeit amount of
earnest money deposited by complainant and learned District forum committed error in allowing
complaint and learned State Commission further committed error in dismissing appeal."

15. Learned Counsel for OP-1 further contended that the interest on the refund amount can only be
awarded under the provisions of the Interest Act, 1978 as held by the Hon'ble Supreme Court in
HUDA Vs. Raj Singh Rana, Civil Appeal No.4436 of 2008, decided on 16.7.2008 as under:

"10. The concept of levying or allowing interest is available in almost all statutes involving financial
deals and commercial transactions, but the provision empowering Courts to allow interest is 13
contained in the Interest Act, 1978, which succeeded and repealed the Interest Act, 1839. Section 3
of the said Act, inter alia, provides that in any proceeding for the recovery of any debt or damages or
in any proceeding in which a claim for interest in respect of debt or damage already paid is made,
the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the
person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for
the whole or part of the periods indicated in the said Section."

16. Learned counsel mentioned that as per the definition of the current rate of interest as given in
the Interest Act, 1978, it is the highest rate of interest payable in FDs and highest FD rate is about
7-8% p.a. and therefore, more interest cannot be granted even if a decision is taken to refund the
amount alongwith interest. The learned counsel for OP-1 agreed that there has been a delay in the
project. However, the matter has now been taken cognizance by the Real Estate Regulatory
Authority, Haryana (RERA,Haryana). The RERA Haryana had convened a meeting on 7.9.2018

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 Atma Krishna vs Orris Infrastructure Ltd. & Anr. on 21 December, 2018

where MDs of OP-1 and OP-2 participated and it has been decided that OP-2 will complete the
project in phases and the first phase will be completed by 31.3.2019 and the second phase will be
completed by 31.12.2019 and 3rd phase by 30.9.2020. The property in question is likely to be
covered in phase-I and therefore, it is most likely that the flat will be completed by 31.3.2019 and
company will be in a position by that time to give possession.

17. Coming to the force majeure conditions, learned counsel for OP-1 stated that vide order dated
31.7.2012, Hon'ble High Court of Punjab and Haryana in "Sunil Singh Vs. Ministry of Environment
& Forests parayavaran" which was numbered as CWP-20032-2008 imposed a blanket ban on the
use of ground water in the region of Gurgaon and adjoining areas for the purposes of construction.
In the light of force majeure conditions, no compensation is payable according to clause 5.2 of the
apartment buyer agreement. The delay has occurred due to conditions prevailing which were
beyond the control of the OPs.

18. In respect of the compensation, it was argued by learned counsel for OP-1 that a consumer
forum is authorized to order compensation as per Section 14(i)(d) of the Consumer Protection Act,
1986 and the compensation has to be based on the loss or injury suffered by complainant due to
negligence of the OPs. In the present case, no loss has been suffered by the complainant as no proof
has been filed by the complainant whether he has suffered any loss due to payment of any rent or
any such other thing. In support of his arguments, learned counsel referred to the judgement of the
Hon'ble Supreme Court in M/s. Fortune Infrastructure (Now known as M/s. Hicon Infrastructure(
and another Vs. Trevor D"Lima and others, Civil Appeal No. 3533-3534 of 2017, decided on
12.3.2018, wherein the Apex Court has held as under:-

"11. It is now well established that the contractual damages are usually awarded to compensate an
injured party to a breach of contract for the loss of his bargain. In the case of Johnson and Anr. V.
Agnew, [1979] 1 All ER 883, the aforesaid case has clearly held as under-

The general principle for the assessment of damages is compensatory, i.e. that the innocent party
is to be placed, so far as money can do so, in the same position as if the contract had been
performed."

19. Learned counsel for OP-1 further argued that the buyer was aware about the Development
Agreement between OP-1 and OP-2 as clarified in clause 9.1 of the Apartment Buyer Agreement
wherein it is clearly stated that the buyer has understood the terms and conditions of the
Development Agreement as well. It was further argued by the learned counsel that the timely
construction was subject to timely payment of all the buyers and it was OP-2 who had committed to
complete the building in 36 months plus six months of grace period. The main responsibility of
construction was of the developer i.e. OP-2. OP-1 is only the land owner and no liability for delay in
construction can be fastened on OP-1. Learned counsel further argued that as per clause 5.5. of the
Apartment Buyer Agreement, the company is liable to pay delay charges @ Rs.10/- per sq. ft. per
month if the delay is more than 9 months and in the present case this will be applicable. As the

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parties are bound by the agreement and the company is ready to pay the delay charges as per the
agreement, there should be no question of seeking more compensation by the complainant and the
Commission would not be justified in ordering further compensation beyond the one agreed in the
agreement between the parties.

20. Learned counsel for OP-2 stated that OP-1 is the owner of the project and entire amount
paid by the complainant has been taken by OP-1. Learned counsel for OP-2 further stated that as per
clause 4.7 of the Apartment Buyer Agreement, OP-1, M/s. Orris Infrastructure Pvt. Ltd. is
responsible for refund and therefore no liability of OP-2 is there for refunding the amount as per the
agreement and also due to the fact that no money has been paid to OP-2. It was further argued that
complainant has not paid any amount to OP-2 and therefore, complainant is not a consumer qua
OP-2 under the provisions of Consumer Protection Act, 1986. Therefore, the complaint against OP-2
is not maintainable. On the aspect of delay in construction, learned counsel for OP-2 pleaded the
same argument as pleaded by learned counsel for OP-1.

21. I have carefully considered the arguments advanced by learned counsel for the parties and
have examined the material on record.

22. Coming first to the question of pecuniary jurisdiction, it is seen that the total
consideration of the flat is Rs.1,09,15,227/- and Rs.63,05,205.66 has been paid by the complainant.
As per the judgement of National Commission passed in Ambrish Kumar Shukla & Ors. vs. Ferrous
Infrastructure Pvt. Ltd., (supra), while deciding the pecuniary jurisdiction of a Forum, the total
consideration of the flat alongwith compensation demanded is to be considered. The learned
counsel for OP-1 has argued that interest will not be applicable for refund of the paid amount as
there is no provision in the Apartment Buyer Agreement for such interest and in this regard the
learned counsel has referred to the judgment of larger Bench of this Commission in Shahbad
Cooperative Sugar Mills Vs. National Insurance Company Ltd. (supra) where this Commission has
held that interest will not be added to the value of goods or services for deciding the pecuniary
jurisdiction. This judgment is of the year 2003 whereas the larger Bench of this Commission in
Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd(supra) has decided in the year
2016 that interest is also in the form of compensation and the same needs to be added to the value of
goods or services for deciding the pecuniary jurisdiction of a Consumer Forum. As this Commission
has revised its view in later judgement, the current decision of the larger Bench of this Commission
in Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd(supra) shall prevail so far as
adding of interest to the value of goods or services for consideration of the pecuniary jurisdiction is
concerned. This Commission in the matter of Gaurav Aneja & anr. Vs. Supertech Limited, II (2018)
CPJ 365 (NC) has taken a view that for deciding the pecuniary jurisdiction, the compensation in
the form of interest @ 18% per annum should be considered. Learned counsel for OP-1 has given a
calculation where the amount deposited alongwith interest of 18% per annum till the date of filing of
complaint comes to Rs.92,59,592.66. However, the learned counsel for the complainant has
calculated the same interest beyond one year of filing of the complaint which comes to
Rs.1,04,29,508/-. The fact is that if the interest is calculated till the present date, the pecuniary
jurisdiction of this Commission is clearly established even if no compensation is added to the value
of service, though the complainant has demanded a compensation of Rs.15 lakhs separately for

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mental agony and harassment. If at this time, this complaint is dismissed on the ground of
pecuniary jurisdiction and complainant is directed to go before the State Commission, the State
Commission would not be having the pecuniary jurisdiction to decide the present case and they will
also return the complaint to be filed before the appropriate forum and then the appropriate forum
would be this Commission. Accordingly, in my view, this complaint needs to be decided by this
Commission.

23. So far as Sections 54 and 55 of The Indian Contract Act, 1872 are concerned, learned counsel
for the OP-1 has relied upon the judgment of this Commission in DLF Southern Town Pvt. Ltd. vs.
Dipu C. Seminlal (supra), whereas the learned counsel for the complainant has relied upon the
decision of this Commission in Rakesh Mehta Vs. Emaar MGF Land Limited (supra). In the case of
DLF Southern Town Pvt. Ltd. vs. Dipu C. Seminlal (supra) the complainant has deposited only the
booking amount and no instalments were paid whereas in the present case instalments have been
paid upto the 7th stage and the payment was stopped later on as there was no progress in the
construction. Thus, two cases cannot be compared and therefore, it cannot be said that the
complainant breached the agreement and he is not entitled to any relief in the light of Section 54
and 55 of The Indian Contract Act, 1872.

24. Clearly the OPs have not been able to complete the project in time and deliver the possession
of property in question to the complainant in time as per the allotment letter or the Apartment
Buyer Agreement. It is now clearly established that the allottees have right to ask for refund if the
possession is inordinately delayed and particularly beyond one year. In the present case, the project
is not yet complete though the possession was to be given in February, 2016. The OP-1 has taken the
defence of force majeure conditions for delay whereas the fact is that the learned counsel for OP-1
has mentioned about the order of the Hon'ble High Court of Punjab and Haryana in "Sunil Singh
Vs. Ministry of Environment & Forests Parayavaran (supra) wherein the use of ground water was
restricted and OPs had to bring water from outside. Clearly, there was no ban on construction and
OP-1 company should have put its resources and managerial skills to bring water from outside and
to complete the construction in time. On the one hand, learned counsel for OP-1 has pleaded force
majeure conditions for delay and on the other hand, OP-1 has pleaded that OP-2 is responsible for
delay in construction. Clearly it was a joint project of OP-1 and OP-2 as both of them have signed
the Apartment Buyer Agreement, therefore, both are responsible for delay. However, as OP-2 has
not received any amount of money from the complainant and complainant is only seeking refund,
clearly the joint liability of OP-2 cannot be considered in the present case.

25. As OP-1 has received all the amount paid by the complainant, OP-1 would be liable to refund
the same to the complainant. Learned counsel for OP-1 has argued that interest can only be ordered
as per the Interest Act, 1978. The current interest rate as per the Interest Act, 1978 is 10% p.a.

26. So far as the question of forfeiture of earnest money is concerned, it is seen that the
complainant has to seek refund as the project has been inordinately delayed. Even though the
RERA, Haryana has taken a meeting to expedite the project and OP-2 has agreed to complete the
project in phases, it is seen in the same proceedings that the following has also been observed:

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"7. The license holder and developer have entered into an agreement without permission of the
government/DTCP Haryana which may attract action against the license holder as well as against
the developer which finally in turn will affect the interest of the allottees. BIP permission is
necessarily and legally required to regularize the already entered agreement by the developer and
license holder. License holder shall apply for BIP in favour of 3C Shelters Pvt. Ltd. with DTCP
Haryana, preferably within a month. The fee for BIP shall be paid to the government for which the
drafts shall be made by the developer 3C Shelters Pvt. Ltd. preferably within a month and thereafter
within three days of getting the draft the licensee shall apply for the BIP and pursue with the
Government for issuance of the same well in time."

27. From the above, it is clear that OP-1 and OP-2 have not entered into the agreement as per
provisions of law and accordingly, the Development Agreement itself becomes questionable and
without any basis. Though this ground has not been taken by the complainant for seeking refund,
however this is also a valid ground for the complainant for seeking refund. If there is uncertainty in
the development agreement itself, as entered between OP-1 and OP-2, some allottees may not want
to block their money in such a project. Similarly in para -4 of the same proceedings it is mentioned
that the OPs have not paid EDC and IDC to the Government and it seems that the OPs were not
serious in timely completing the project.

28. Based on the above examination, it is clear that the project has been delayed by more than 2
years and complainant has right to seek refund in the circumstances when even the EDC and IDC
have not been paid to the competent authority by the OPs and even the Development Agreement is
not as per the provisions of law. In such circumstances, there should be no question of forfeiting any
earnest money as the sole responsibility for delaying the project is of OP-1 and OP-2. Complainant is
seeking refund under compelling circumstances. Accordingly, the complaint is allowed and
following order is passed:

ORDER

29. "The OP-1 shall refund the amount of Rs.63,05,205.66 alongwith interest @ 10% p.a. from the
date of respective deposits till actual payment to the complainant. This order be complied with
within a period of 45 days from the date of receipt of this order."

30. Parties to bear their own cost.

...................... PREM NARAIN PRESIDING MEMBER

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