Govindra Khurana vs Satya Sai Apartments P Ltd

IN this Original Petition the complainants are Smt. Govindra Khurana, wife of Vice -Admiral I.J.S. Khurana (Retd.) and their son, Shri Amarendra Singh. The opposite parties are M/s. Satya Sai Apartments (P) Ltd. (opposite party No. 1); Shri S.K. Mitra, President/Consultant, M/s. Satya Sai Apartments (P) Ltd. (opposite party No. 2) Smt. Chandana Mitra, wife of Shri S.K. Mitra, Managing Director of M/s. Satya Sai Apartments (P) Ltd. (opposite party No. 3); Shri Robin Nag, former Director of Satya Sai Apartments (P) Ltd. (opposite party No. 4). There are two more opposite parties who are only proforma respondents and are not affected by the result of this case. The opposite party No. 4, namely Shri Robin Nag, a former Director of M/s. Satya Sai Apartments (P) Ltd. remained ex -parte. In fact, the Satya Sai Apartments (P) Ltd. is a Company doingthe business of developing land and building flats and the total control of this Company is in the hands of its Managing Director.

THE case of the complainant is that the opposite parties Nos. 1 to 4 had come out with a 10 pages brochure giving a rosy picture of flats proposed to be built and sold at C -98, Maharani Bagh, New Delhi. Tempted by the prospects of a flat at such a posh colony in Delhi, the complainants Nos. 1 and 2 in the first instance booked one basement -cum -ground floor flat each. Later, however, it was agreed between the complainants (and it appears with the consent of Vice -Admiral, I.J.S. Khurana, who is not a complainant herein) and opposite party No. 2 that in lieu of the said two basement -cum -ground floor flats complainant No. 1 would purchase from opposite party No. 1 the second floor pent -house flat No. 7 of super area of 4,000 square feet at a total cost of Rs. 32 lakhs. The cost of this flat as mentioned in the brochure was Rs. 40 lakhs, but the complainant has stated that the sum of Rs. 32 lakhs was arrived at after negotiations between the parties. As a consequence of this agreement, the complainants paid to opposite parties 1 and 2 an amount of Rs. 6,40,000/ - by account payee cheques between 22.1.88 and 7.5.88 against which 5 receipts were issued by the opposite party No. 1. In May, 1988 complainant No. 1 and Vice -Admiral Khurana on the one hand and opposite party No. 2 on the other hand, finalised draft agreement to sell in respect of this pent house for an agreed sale consideration of Rs. 32 lakhs. It is the contention of the complainants that the said draft agreement to sell was initialed by Vice -Admiral Khurana and opposite party No. 2 so as to authenticate the corrections. A fair agreement to sell was not executed and that is one of the complaints of the complainant. This draft agreement is of six pages and incorporates the following conditions : (a) The total cost of flat No. 7 would be Rs. 32 lakhs;

(b) Of this amount, the complainant had paid as advance Rs. 6.40 lakhs to the opposite party No. 1;

(c) Opposite party No. 1 assured that the possession of the flat would be delivered to the complainant No. 1 within 12 months from the date of the said agreement;

(d) In case of delay in handing over possession, the opposite party would pay to the complainant interest at the rate of 24% in respect of the period of such delay;

(e) Opposite Party No. 1 will also pay to complainant No. 1 a penalty at the rate of 25% of the agreed purchase price of Rs. 32 lakhs in addition to interest on account of delay.

The complainants have alleged that from June, 1988, the pace of construction slowed down considerably and, in fact, there was a total stoppage of work from August, 1989. Due to this delay and also because of the knowledge of the complainant that the opposite parties 1 and 2 had same problems with the Municipal Corporation of Delhi, they did not pay any further instalment due in and after July, 1988. The complainants then made repeated requests to the opposite party No. 2, including through a letter dated 1.9.90 fot singing the fair agreement but received no response from them. They sent a Lawyers notice dated 18.9.92 to which opposite parties 1 to 3 sent a reply dated 16.10.92 denying their commitment and responsibility to construct the aforesaid flat and hand over its possession to complainant No. 1. Consequently, the complainants filed the petition before this Commission on 20.9.93.

IN the written statement/reply filed by opposite parties No. 1 to 3 facts are admitted only upto the stage of complainant No. 1 opting for the 2nd floor pent -house, Flat No. 7 in lieu of the two basement -cum -ground floor flats. They have also stated that the complainants had paid only Rs. 2.70 lakhs in all and that the price of the flat was Rs. 70 lakhs. In paragraph No. 3 of their written statement, opposite parties Nos. 1 to 3 feve also stated ''the present value of the flat No. 7 pent -house is more than Rs. 1 crore''. They have contended that in August/1988 the complainant No. 1 and Vice -Admiral Khurana had approached them and expressed their inability to pay Rs. 70 lakhs as the sale consideration and that they were not interested in purchasing the flat. Therefore, the opposite parties Nos. 1 to 3 forfeited tine amounts paid to them by the complainants. To support the plea that complainant No. 1 and Vice -Admiral Khurana had expressed their inability to purchase this flat, they have enclosed with their written statement two letters dated 8.8.88, addressed to Vice Admiral Khurana and 7.2.91 sent to Ms. Khurana by opposite party No. 2 stating that the amount paid by them to the opposite parties Nos. 1 and 3 have been forfeited in view of the disinclination of the complainants to buy this flat.

IN the rejoinder filed by the complainants they have described these two letters as forgeries. Instead, the complainants have enclosed with their complaint itself a letter dated 1.9.90 written by them to opposite party No. 1 stating that the agreed price of the flat was Rs. 32 lakhs, and the construction of the flat was to be completed by March, 1990, but the construction work was lying closed since August, 1989 probably due to some problems with the M.C.D. The complainant No. 1 also requested that the formalities for the execution of the agreement to sell should be completed and the total due from them towards the price and extra work done in the flat may be intimated so that she could arrange payment thereof to the opposite party No. 1. Office copy of this letter signed by complainant No. 1 bears the acknowledgement dated 2.9.90 of opposite party No. 4, who was a Director in the Company at that time and has now left it. The case of the opposite party is that this letter was not received in his office and the opposite party No. 4, who is now no more a Director of opposite party No. 1, has colluded with the complainants in giving this acknowledgement. The pertinent question is as to whether at any stage the opposite parties had informed the complainant that the amounts paid by them as advance have been forfeited and whether the draft agreement to sell was initialed by opposite party No. 2 and Vice -Admiral Khurana. There is no acknowledgement of the letters alleged to have been sent on 8.8.88 and on 7.2.92 by the opposite parties nor they were sent by registered post. Surely, letters intimating forfeiture of Rs. 6.40 lakhs would not be sent in routine without seeking an acknowledgement. In fact, there is no mention about these letters in the reply dated 16.10.92 sent by Mr. S.K. Bhaduri, Advocate to the notice dated 18.9.92 from Mr. R.C. Beri, Advocate of the complainants. If these letters had been issued, these would have been referred to and relied on in the letter dated 16.10.92. As regards the draft agreement to sell, the opposite party No. 2 has made a bland denial of his initials. Vice -Admiral Khurana has filed an affidavit stating that the agreed price of the pent -house flat was Rs. 32, lakhs and further that Rs. 6.40 lakhs had been paid to opposite party No. 1 by Account Payee cheques. In this affidavit, the complainants have also stated that neither he nor his wife ever told opposite party No. 2 that they were not interested in the pent -house flat and further that neither he nor his wife had received the letters dated 8.8.88 and 7.2.91 allegedly sent by the opposite party No. 2. As a common sense proposition it is inconceivable that the complainants would express their disinclination to buy a pent -house flat at a price of Rs. 32 lakhs in Maharani Bagh and that too after having made a payment of Rs. 6.40 lakhs which no one would like to lose as being forfeited, much less a retired Government servant and his wife. We, therefore, hold that the draft agreement to sell is a genuine document, bearing the initials of Vice Admiral Khurana and the opposite party No. 2 because a prudent person would not normally part with a sum of as much as Rs. 6.40 lakhs without even a diaft agreement initialed by the builder. Also, as nobody would like to lose such a large sum, we are inclined to accept that the two purported letters dated 8.8.88 and 7.2.91 were not received by the complainant No. 1. Neither in the written statement nor during the arguments it has been explained satisfactorily as to why the opposite party No. 4 who was at that time a Director of the Company would initial the copy of the letter sent by the complainants, by way of acknowledgement, on 2.9.90. We, therefore, do not accept the present stand of the opposite parties 1 to 3 that the opposite party No. 4 has colluded with the complainant and put the said initials. The question of the payment of Rs. 6.40 lakhs by the complainant to the opposite party is established as these amounts were paid by the account payee cheques and the receipts were issued by the opposite party No. 1. In fact, this payment of Rs. 6.40 lakhs is further established by a letter No. SSA/PJ/ACC/16/1 -91 dated the 18th January, 1991 sent by M/s. Satya Sai Apartments (P) Ltd. - opposite party No. 1 to Ms. Govindra Khurana requesting her to confirm that a sum of Rs. 6.40 lakhs was paid by her against the captioned flat No. 7, for the purpose of Income Tax.

IN view of the facts as stated earlier and taking into account the circumstances of this case, we hold that the opposite parties Nos. 1 to 4 in general and opposite party No. 2 in particular have committed deficiency in service in not handing over the possession of the second floor pent -house flat to complainants.

ONE plea which has been raised by the opposite parties is of limitation. In a construction project, when delay takes place particularly due to objections raised by the M.C.D., the purchaser would normally wait in the hope that the objections would be cleared in due course and in the further hope of getting the possession of the property. In this case, the reply of the Lawyer of the opposite party repudiating their liability and duty to construct and delivering of possession of the pent -house to complainant No. 1 is dated 16.10.92 which reached the complainants on 22.10.92. The cause of action, in our view, would, therefore, arises only from 22.10.92 when the opposite party repudiated their liability and went back on their commitment. This complaint was filed on 20.9.93 and, therefore, taking the base date of 22.10.92, it was within the period of limitation. This plea of the opposite parties has, therefore, no force. The final arguments in this case were completed on 29.9.95. On that date Mr. S.K. Bhaduri, learned Counsel for the opposite par - ties Nos. 1 to 3 requested for time of two weeks , for filing written arguments. We allowed this time and also one week to the complainants thereafter for filing their reply. Interestingly the opposite parties Nos. 1 to 3 filed an application after taking time for Written arguments seeking for an amendment of their earlier reply and stating for the first time that they have sold the flat No. 7 to one Smt. Kanchan Mehra in 1993 and that a power of attorney has also been executed in her favour in 1994. The opposite party has also claimed that she is now staying in the front portion of the second floor flat.

THE complainants in their counter filed to the said application for amendment questioned the genuineness of the power of attorney and also pleaded that this belated plea should not be accepted.

WE have given our serious consideration to the pleas made by the parties in this regard. We find from the perusal of the records that the fact of this sale to Smt. Kanchan Mehra through a power of attorney was not mentioned at any stage during the pendency of this petition or even in the reply dated 14.1.94 filed by the opposite parties Nos. 1 to 3. This fact was not brought to our notice by the learned Counsel for the opposite parties even during the final arguments as late as 29.9.95. In the power of attorney filed by the opposite parties the price of the flat and the consideration paid by Smt. Kanchan Mehra is not mentioned. Even the date on which this power of attorney was executed is not mentioned anywhere. Taking the attendant circumstances around this power of attorney into consideration we do not place any reliance on it as regards the settlement of dispute before us. Even otherwise, the purported transfer to Smt. Kanchan Mehra is lis -pendens and cannot be accepted as valid. Therefore, Smt. Kanchan Mehra, even if she is in possession of this flat or any part of it has to vacate it. As the opposite parties have not filed their written arguments, we are relying on the oral arguments advanced by Mr. S.K. Bhaduri, their learned Advocate.

WE are of the considered view that there has been a clear deficiency in service in not completing the construction in time and handing over the possession of the flat on receipt of the agreed price as mentioned in the draft agreement to sell. The main motivation for the deficiency in service, which has been committed, is obviously the fact that the value of this flat must have increased substantially. In fact, the opposite parties have stated in their reply dated 14.1.94 that the present value is more than a crore of rupees.

FOR the reasons as stated in the proceeding paragraphs we hold that the opposite parties Nos. 1 to 3 are liable jointly and severally for the deficiency in service and direct them to (a) deliver vacant possession of the entire 2nd floor pent -house flat No. 7 with a total area of 4,000 square feet at C -98, Maharani Bagh to complainant No. 1 within 30 days from the date of receipt of this Order, after receiving an account payee crossed pay order from the complainants for the balance sale consideration amounting to Rs. 25.60 lakhs together with interest thereon at 15% per annum from 20.9.93, the date of which this case was filed, with the condition that if vacant possession is not given within 30 days, the said interest will cease to accrue after 30 days. There is no order as to costs.