KANTA VILAS VAYADANDE vs S.S. BENDALE

THESE thirteen petitions have been filed by the petitioner - who was the complainant before the District Forum, who had allowed his complaint but on an appeal filed by the respondent, the State Commission allowed the appeal and set aside the order of the District Forum, hence these petitions.

BRIEF facts of the case are that the first respondent was property developer on the land of one Mr. Merchant and the 2nd respondent was the President of Pune unit of State Government Employees Federation and a contact between the employees and the Property Developer. On record we see three important documents: (i) Agreement between the 1st respondent and Mr. Merchant on developing the property owned by the latter and its terms and conditions; (ii) MOU between the promoter/property developer, the Employees Federation and the owner of land, Mr. Merchant; and (iii) Individual Agreements between the (a) Property Developer (b) individual member of the Federation/Government employees desirous of owning the houses in the scheme, (c) Employees'' Federation, and (d) Mr. Merchant. Admittedly, initial payments were made by the members of the Scheme, but for reasons of non-availability of loan, further payments could not be made bringing the construction activity to a standstill beyond the plinth level. It is under these circumstances that some members of the Scheme filed complaint before the District Forum alleging deficiency on the part of the respondents. The District Forum after hearing the parties directed the respondents to refund the collected amounts along with interest @18% p.a. and cost fixed at Rs. 250 to be paid by each of the respondents to each of the complainants. On an appeal filed by the respondents it was allowed by the State Commission, hence the petitions. Admitted position is that the given amount, as per MOU, were deposited by the complainants with the 1st respondent through the 2nd respondent. After that further payments were to be paid as per terms of individual agreements entered into by the parties. It is also admitted position that construction could not go on as also is the fact that instalments payable by the complainants as per terms of the agreement were not paid ostensibly for non-availability/sanction of loan by the State Government to the complainants who were Government employees. Be that as it may, the position before us is that while the District Forum ordered refund of deposited money along with interest @ 18%, the State Commission set it aside on a very vague, unsubstantiated and a rather holy premise that we feel that the appellant (respondents before us) would certainly consider the repayment of the proper amounts to the original complainants (emphasis supplied) and went on to hold the respondent not deficient in rendering services.

The question before us is as to what amount and interest the complainants are entitled to in the facts of the case? There is no doubt that as per Clause 7 of the agreement -time was not to be the essence of the contact-yet this could not be interpreted to mean no period - which has to be reasonably- say two to three years - but at the same time the essence of the MOU and Agreement seems to show that construction was to go on with the instalments to be paid by the complainants which was not done - for whatever reason, in this case non-sanction of claim (sic loan). Both the parties appear to have reneged on the terms of the agreement. Complainants want their money back - Respondents are willing to pay but after providing for expenses already incurred. In our view whatever assets are created on the ground have a value. This cannot be allowed to work to the detriment of the complainants. There is no doubt in our mind that the complainants are entitled to refund of the total amount deposited by them as it is the respondents who have failed to show progress in the construction. We also see that none of the complainants paid instalments in time and in fact could not pay. Both have a rule to play in the failure of the scheme but the fact also remains that the respondents enjoyed the money and the complainants being low paid and employees of the State Government were deprived of the use of the money, towards which they need to be compensated. In normal circumstances we would have agreed with the order of the District Forum but keeping in view the facts and circumstances of these cases when both the parties cannot escape their share of blame we consider it just and suitable to award only the interest available on term deposits at that time which we place at 11% p.a. The complainants - in the circumstances enumerated above - are not entitled to any compensation for mental agony or cost escalation in construction of the houses.

IN result, the petitions are allowed - the order of the State Commission is set aside. Respondents are directed to refund the amounts deposited by the complainants along with interest @ 11% p.a. from two years after the date of respective deposits. The order be complied within eight weeks of this order - otherwise rate of interest shall go upto 15% p.a. No order as to costs. Petitions allowed.