AAROHI CONSTRUCTIONS PRIVATE LIMITED vs MIRZA AFZAL BEG And MRS. ASHFAQ BEG

BOTH the appeals are filed against the same judgment and order dated 6.4.1998 passed by District Consumer Forum-II, Lucknow and hence both the appeals are being taken up together and disposed of by a common judgment

BRIEFLY stated the facts of the case are as follows : The complainants in response to the scheme of the opposite party, Aarohi Constructions Private Limited booked a Shop No. FF-49 on the first floor of Aarohi Bazar Block Nos. 4 and 5, Sector-H, Aliganj Scheme, Lucknow on 6.10.1987. The area of the shop was approximately 110 sq. ft. and the total consideration for which the shop was to be purchased was Rs. 54,000/-. The opposite party is engaged in the business and construction of residential and commercial complex and they sell properties to the public. The complainants after going through the advertisement and other description, booked the shop by paying a sum of Rs. 6,000/- as registration amount on 14.9.1987. The Shop No. FF-49 was allotted by the opposite party at the first floor in the building known as Aarohi Bazar which was yet to be built at the aforesaid site. As per the terms and conditions of the scheme, a sum of Rs. 6,000/- was payable as registration amount which was paid as above. A sum of Rs. 6,000.00 as allotment amount was to be paid by October, 1987. A sum of Rs. 6,000.00 was to be paid by November, 1987 and thereafter 40 equal monthly instalments of Rs. 900/- each were payable by the complainants from December, 1987 to May, 1991. As per terms and conditions stipulated by the opposite party, the construction was to start by April, 1988 and was to be completed by July, 1990. In the event of the opposite party''s failure to do so the buyers were entitled to get the simple interest at the rate of 18% per annum on the deposited amount for the delayed period. Physical possession of the shop was to be handed over after payments were made. The physical possession was, therefore, promised to be delivered by July, 1990. The complainants remitted a sum of Rs. 45,900/- on various dates with the opposite party starting from the date of booking of the said shop from 14.9.1987 to 25.7.1989. Thereafter the complainants stopped making the payment with the opposite party because they failed to start the construction of the Complex till July, 1990 by which date the construction was to be completed. The complainants addressed a number of letters to the opposite party in regard to the construction of the Complex but no reply was given to the complainants till 1989 and even till April, 1994 no construction was made. The opposite party even did not possess the land on which the aforesaid Complex was to be built which resulted into deficiency of service and unfair trade practice. A sum of Rs. 45,900/ - was paid upto 25th July, 1989 regularly to the opposite party by the complainants. The amount deposited was misutilised by the builder who has failed to construct the complex in time and failed to deliver the physical possession as stipulated earlier. The complainant had to spend Rs. 10,000/- in the various journeys to meet the opposite party in this regard and every time a false assurance was given that the construction of the Complex will start soon but in reality the Complex was never built. Ultimately the opposite party on 26.5.1989 informed the complainant that there has been delay in the execution of the building project as they were still in the process of getting the building plan approval from the Lucknow Development Authority. The delay was regretted and the complainant was requested to bear with the builder. Again the complainant enquired from the opposite party as many as eight times to immediately inform the progress of the Complex in question but the opposite party violated their own terms and conditions in not constructing the Complex which was promised to be completed and delivered by July, 1990. It came to the knowledge of the complainant that opposite party had no land where the said Complex was to be constructed. The opposite party on24.8.1992 informed the complainant that there has been hardly any progress in the execution of the project as the possession of the said site has not been handed over to the opposite party by the Lucknow Development Authority and even the building plan of the same has not been sanctioned by the Authority. Thus, the opposite party without having any land offered on sale the shops in the said Complex which was only on paper without any authority in violation of the provisions of the Transfer of Property Act. It was not even known as to when the building plan was submitted to the Lucknow Development Authority. The opposite party also informed the complainant that they are not liable to pay any interest due to delay in execution of project and further informed that the allotment of the alleged shop had been cancelled. The complainant, therefore, requested the opposite party to refund the amount in respect of Shop No. FF-49 with the interest at the rate of 18% per annum. The opposite party on 9.8.1993 informed the complainant that the deposited amount of Rs. 45,900/- will be refunded in four equal monthly instalments with effect from October, 1993 onwards.

In reply to the letters, the complainants were informed on 4.2.1994 that in case the complainant are interested in booking of the another shop in a Complex in Aarohi Bazar then the complainants may select a shop on revised terms and conditions of the allotment of shop. Thus, instead of refunding the amount alongwith the interest at the rate of 18%, the opposite party grossly failed in their services to their clients. The cancellation of the shop was arbitrary, illegal and not sustainable in the eye of law. It was prayed by the complainant that the opposite party be directed to deliver the possession of the Shop No. FF-49 to the complainants with 18% interest per annum on the deposited amount compounded on six monthly basis from various dates of deposit till the date of payment and a compensation of Rs. 50,000/- for mental agony, physical torture, illegal harassment and financial hardship. A sum of Rs. 5,000/- for expenses in meeting the officers of the opposite party alongwith the cost of Rs. 5,500/- be also paid.

IN their written version before the District Consumer Forum, the opposite party stated that the complaint has been filed by the attorney holder of the complainants and not by the commplainants themselves. The opposite party had not assured to provide any services and the price of the alleged shop was Rs. 54,000/ - and not Rs. 49,000/-. The shopping complex were to be made on the land to be made available on the basis of auction conducted by the Development Authority. The cancellation of allotment was made by the opposite party as per the rules because the complainants failed to make the full payment. Since the full amount was not paid the opposite party had a right to cancel the allotment. The opposite parties have now constructed a commercial complex in Aarohi Bazar and there is no question of giving possession of another step to the complainants because his earlier allotment has been cancelled. The complainant has been informed that he can take back the money deposited by him and 5% deduction on account of administrative and other charges will be made. The original papers have not been submitted by the complainants and till such time the original receipts are handed back to the opposite party the payment cannot be made. It was also stated that initially there was delay in the scheme as the building plan was not approved timely by the Lucknow Development Authority but later-on all the problems were solved and the project was completed. The complainant was, therefore, not entitled to get the possession of the shop nor he is entitled to get any interest on the deposited amount. The opposite party was even prepared to pay back the money deposited by the complainant without any deductions but the complainants have not returned the original papers including the receipts etc. The complaints were also informed that in case they want a new shop to be allotted then money deposited by them against the earlier allotment could be adjusted against the new. shop and the increased price will have to be paid by the complainants. The complainants on the suggestion of the opposite party had consented to take the Shop No. LGF-8 and they were asked to pay an additional amount of Rs. 87,933/- for extra space and increased price but this payment was not made by the complainants, therefore, there was no question of allotting this shop to the complainants.

THE Distict Consumer Forum after considering the evidence and hearing the parties, ordered the opposite party to refund the entire amount deposited by the complainants alongwith interest at the rate of 18 % with effect from 1.8.1990 and a cost of Rs. 1,000/- was also allowed. Aggrieved of this order of the District Consumer Forum, the opposite party Aarohi Constructions Private Limited have come in Appeal No. 1285/1998 and has challenged the correctness of the order passed by District Consumer Forum. In the memo of appeal, the opposite party have reiterated its version that the price of the Shop No. FF-49 was Rs. 54,000/- against which an amount of Rs. 45,900/- only was deposited by the complainants and therefore, the allotment of the shop had to be cancelled. The opposite party was prepared to make the refund of the deposited amount without any deduction and the interest of 18 % per annum imposed by the District Forum is arbitrary. It has also been stated that the case is not maintainable before the District Consumer Forum and the complainant is not a consumer.

THE complainants also aggrieved of the order of the learned District Consumer Forum have filed Appeal No. 2358/98.

IN the memo of appeal, the points contained in the complaint before the District Forum have been reiterated. The District Forum erred in awarding the interest on the entire deposited amount from 1.8.1990. The District Forum ought to have passed direction for refund of the entire amount with 18% interest per annum from the respective dates of deposit from 1987 till the date of refund. The hard earned money of the complainant remain blocked for no use and the respondent allotted the shop on the land in the year 1987 when the land in question was not in the possession of the opposite party. It has also been stated that the learned District Forum ought to have awarded a sum of Rs. 50,000/- as compensation to the complainants a~ claimed in the complaint alongwith the expenses and cost, etc. We have heard the arguments of the learned Counsels in the two appeals. The learned Counsel for the appellant has argued that the appellants are prepared to return the amount of Rs. 45,900/- deposited by the complainants without any deduction. In the alternative a shop can be allotted to the complainant in case he is prepared to pay the increased cost of Rs. 87,000/- because of the higher cost and extra area being allotted for the new shop. On the request of the complainants, the appellant revived his registration on 10.3.2000 and Shop No. LGF- 8 is still reserved for him. It has also been argued that the shop in question LGF-8 was constructed in December, 1994 and no cause of action arises to the complainants as the full cost of the originally allotted shop was not deposited by him with the appellant The learned Counsel for the appellant, builder also argued that the complainants did not accept the new offer. The originally deposited amount of Rs. 45,900/ - was to be adjusted against the cost of new shop proposed to be allotted to the complainants and a difference of about Rs. 87,000/- was to be paid by the complainant which they did not do.

On the other hand, the learned Counsel for the complainant argued that there was no basis on which the cost of Rs. 87,000.00 was arrived at by the appellant. The construction of the originally constructed shop was to be completed by 1990 which was resulted into a huge loss to the complainant as he would have started the business on allotment of the earlier shop and the District Forum has not awarded the compensation of Rs. 50,000/-.

IT is not disputed among the two parties that Shop No. FF-49, Aarohi Bazar was allotted to the complainants by the builder who is the appellant. IT is also an admitted fact between the two parties that the cost of this shop was Rs. 54,000/- against which only an amount of Rs. 45,900/- was paid by the complainants and the rest amount was not paid. The appellants have also admitted that on account of the dispute with the Lucknow Development Authority the matter remained pending with the Hon''ble High Court in a writ petition and there has been delay in construction of the Complex in which the shop was allotted to the complainant. The contention of the appellant is that since the entire amount demanded was not deposited, therefore, the allotment was cancelled. On the contrary, the contention of the complainant is that when he came to know that the builder has not been able to procure the land on which the proposed construction was to be constructed, it was natural for him to withhold the rest of the payment and therefore, he demanded an explanation from the builder as to why the amount has been got deposited and the land in question has not been procured and therefore, the Complex has not been constructed. Because of a short payment of Rs. 8,100/- the appellant cancelled the allotment of Shop No. FF-49 made in favour of the complainant. All these facts are borne out from the affidavit filed on behalf of the complainant and other records placed on file. IT is also borne out from the correspondence made by the appellant to the complainant. A letter dated 26.5.1989 page 23 of the memo of appeal is a letter from the appellant to the complainant informing him that there has been some delay in execution of the building project and the delay has occurred due to non-availability of electricity supply. IT was also stated that the Lucknow Development Authority had not approved the building plan. The complainant was, therefore, requested to bear with the builder by which time, the complainant had already deposited a sum of Rs. 45,900/- and in case the appellant had thought that the complainant has not fulfilled the terms and conditions by not paying the remaining amount of Rs. 8,100/- they would have given notice for cancellation of the allotment. IT was only when the complainant has been time and again pressing hard that the allotment was cancelled. Therefore, the cancellation of allotment appears to be mala fide. The builder was to complete the construction by year 1990 which was not done, therefore, the complainant was within his right not to deposit the remaining amount when he was satisfied that the construction work was not in progress. IT was only in 1992 that appellant informed the complainant that the allotment cancelled. This is apparent from the Annexure-3 of the memo of appeal. Therefore, the previous booking of the Shop No. FF-49 in favour of the complainant was cancelled vide letter of the appellant dated 31.7.1992. The stand taken by the complainant that in case of delay ed construction, the appellants had promised to pay 18% interest from 1.8.1990 on the deposited amount has not been rebutted by the appellants before the District Forum. Instead vide letter dated 31.7.1992 the complainant was asked to take the refund of the deposited amount after deduction of 5% of the cost of the shop as overhead charges in due course. IT clearly goes to show that the appellant never wanted to make the refund at once but wanted to make the payment of the refund in due course only. On 7.12.1994 the complainant requested the appellant that he wanted Shop No. LGF-8 in the said Complex. As already stated above, the learned Counsel for the appellant has admitted that on this request Shop No. LGF-8 was reserved for him and the shop is still reserved. In this case the conduct of the appellant has been far from satisfactory. They collected money from the complainant, who paid the entire cost minus Rs. 8,100/-. They could not complete the construction of Complex in. time. At the same time, subsequently the allotment of the shop was cancelled on the pretext that full amount was not deposited by the complainant. On record also this is admitted from the letter of the appellant Annexure-2. This letter indicates that although the money has been deposited upto 1989. The appellant was interested only in refunding the amount in four monthly instalments with effect from October, 1993 only. This is an unfair trade practice and indicates that the amount of Rs. 45,900/- deposited by the complainant was being retained by the appellants for their own use and therefore, it is clear deficiency of service. In the circumstances, even if the complainant had not deposited an amount of Rs. 8,100/- and had deposited the bulk of the amount which was Rs. 45,900/- some four years back, the appellant was on the wrong side in not paying the interest for the amount deposited and at the same time, the complainant had taken a reasonable stand that since the land was not available and the Complex cannot be made in time on the land in question, the demand for refund of interest was perfectly justified and the letter dated 24.8.1992 of the appellant Annexure- 2 of the supplementary papers filed by the appellant was not justified in which the interest due to delay in an execution of the project was not granted. This was only an afterthought when the appellant had obtained the land for making the complex and decided selling the shop at higher rate. On representation of the complainant, the appellant wrote back a letter that in case the Complainant was interested in booking of another shop in complex Aarohi Bazar he may select a shop of his choice on revised terms and conditions. In continuation of this, on 16.12.1994 the Complainant again informed and decided to book Shop No. LGF-8, Arohi Bazar in his favour in lieu of shop No. FF-49 and the complainant was asked to pay an additional amount of Rs. 87,933.60 after adjusting Rs. 45,900/- already paid by the complainant for the earlier shop. The total area of the Shop FF-49 was 110 sq. ft. and the total area of the Shop No. LGF-8 Phase-I is 156.64 sq. ft. The excess area of the newly proposed shop to be allotted was 46.64 sq. ft. and the cost of this excess area per square feet is stood at Rs. 1,582.50 per sq. f t. The amount thus calculated by the appellant was Rs. 87,933/ -. Apparently certain other terms and conditions were also imposed on the complainant by letter dated 16.12.1994. Apparently price per square feet had increased because of higher cost of land because of the delay in construction and increase in the cost of construction. We are not interfering with the prices arrived at. This is more so because the complainant in his claim preferred before the District Forum did not ask for alternative allotment specifically. Two papers on record of the appeal that the complainant at one stage was willing to be allotted the alternative shop for which a new price package was given by the opposite party as discussed in the foregoing part of the judgment. The application dated 7.12.1994 for such a consent for allotment of Shop No. LGF-8 is Annexure-4 page 35 annexed with the memo of appeal.

FROM the above discussions, we find that the builder of the Complex did not stand to his promise, delayed the construction of the shop allotted to the complainant, went back on the promise of giving 18% interest per annum on the deposited amount for the delayed period and instead insisted for 5% deduction as overhead charges on the deposited amount. In addition, the amount was not immediately refunded but the complainant was told that the amount will be payable in four instalments from a later date. This was gross deficiency of service on the part of the appellant and this also amounts to unfair trade practice. The appellants retained the money deposited by the complainant for their own gain and thereby put the complainant to harassment and financial loss. In case the proposed allotted shop had been given in time, the complainant would have gained financially and he has been deprived of this financial gain, therefore, the complainant would be entitled to get the refund of the entire amount deposited by him with the appellant alongwith interest at the rate of 18% per annum with effect from 1.8.1990 till the date of payment. In addition, the compensation in terms of business and financial loss, mental torture and harassment will also be payable to the complainant and the amount is determined at Rs. 20,000/-. The complainant will also be entited for the cost of the proceedings of Rs. 5,000/-. However, it will be open for the complainant that in case he wants possession of the Shop No. LGF-8 as offered by the appellant at a cost of Rs. 87,933.60 which includes the amount deposited by him then the same may be given to him by the appellant after adjusting an amount of Rs. 45,900/- alongwith the interest and compensation as indicated above. The appeal No. 1285/98 is liable to be dismissed and the Appeal No. 2358/98 is to be partly allowed. The order of the District Forum deserves to be modified on these lines. ORDER The Appeal No. 1285/98 is dismissed, and, Appea'' No. 2358/98 is partly allowed. The appellant within six weeks from the date of this order shall pay to the complainant the entire amount of Rs. 45,900/- deposited by him with the opposite party alongwith simple interest at the rate of 18% per annum which shall be paid to the complainant from 1.8.1990 till the date of payment. In addition, the complainant shall also be entitled to Rs. 20,000/- as compensation for financial and business loss and harassment meted out to him. Besides, a cost of Rs. 5,000/- shall also be paid to the complainant within the same period. The judgment and order of the District Consumer Forum is modified accordingly. Let compliance of this order be made within a period of six weeks from the date of this order. Let copy of the order as per rules be made available to the parties. Appeal 1285/1998 dismissed and 2358/1998 partly allowed.