LAJYA GUPTA vs Sham Sunder

WHAT is the time-frame within which a contract betwixt a promoter-builder and his purchaser is to be executed, in the total absence of any specific agreed period, therefor? This has come to be the core question in this complaint.

ADMITTEDLY Opposite Party No. 1 Shri Sham Sunder is the sole promoter-cum-partner of Swastik Vihar which is a residential-cum-commercial complex on the outskirts of Chandigarh in Panchkula. Way back in the end of 1987, the complainant Smt. Lajya Gupta applied for a house at Swastik Vihar on a 10 marlas plot with a total built up area of 1250 sq. ft. thereon. An amount of Rs. 10,000/- was paid as earnest money vide receipt P1 dated the 28th of December, 1987. On 4.1.1988 the opposite parties vide Annexure P-2 communicated the terms and conditions for the said house stating that the price thereof was to be Rs. 2.95 lacs and expressly confirmed that House No. 68 had been duly allotted to her and requested her to further deposit a sum of Rs. 65,000/- which was done vide receipt Annexure P-3 dated the 10th of March, 1988. According to the terms and conditions, the balance amount was to be paid in six half yearly equal instalments and it is common ground that the complainant thereafter paid three more instalments of Rs. 36,666/- each vide Annexures P-5 to P-7, the last being dated the 8th of December, 1989. It is the complainant''s case that despite the passage of nearly two years and the payment of the aforesaid amounts and also the extensive advertising done by the promoter-builder with regard to the complex, no development whatsoever was actually done at the site by Opposite Party No. 2 Swastik Construction. Instead vide communication dated the 12th of April, 1990 (Annexure P-8) the plot holders in the complex were summoned to a meeting to be held on the 21st of April, 1990 including the complainant. In the said meeting Shri Vinod Sharma, the owner of the Piccadily Hotel and Piccadily Enterprises informed the anxious allottees/investors including the complainant that the Haryana Government has levied external development charges on the complex and the promoters have moved the Punjab and Haryana High Court against the same. Later vide another communication dated the 14th of March, 1990 (Annexure P-9), the complainant was informed that the levy of the aforesaid charges had been stayed by the Hon''ble High Court and that a further meeting was to be held to arrive at some definite conclusion. However, to the complainant''s surprise, vide Annexure P-11 dated the 14th of November, 1990 the opposite party demanded a remittance of Rs. 73,332/- forthwith. On receipt thereof the complainant repeatedly attempted to contact the opposite party, but they refused to hear anything and said that whatever she wanted to say she should put the same in writing and it would appear that subsequently a fresh letter of demand was despatched vide Annexure P-12 dated the 25th of February, 1991. In reply to these communications the complainant sent a detailed letter Annexure P-13, wherein she highlighted that under the contract, the construction work should have been commensurate with the payments made, whereas in her case nothing whatsoever has been done and even the foundations had yet to be dug up. It was pointed out that she had been assured that she would be given possession of the house within two years of the date of the allotment. She further indicated that she had no objection to make the balance of the payment provided the promoters share with her the exact situation with regard to the viability of the complex and the time and date when she would be given the possession of her house.

It is then the complainant''s case that she had repeatedly visited the site personally and found to her consternation that no construction whatsoever was made on plots No. 61 to 68 in the site plan of the Swastik Vihar (AnnexureP-14) and photographs of the site have been placed on the record vide Annexures P-17 and P-18. These clearly indicated that the land was lying totally uneven with bushes and trees grown over the same and no marking even of the plots had been done, far from there being any development in the shape of roads, levelling sanitation, electricity or water supply etc. Despite evasion on the part of the opposite parties, the complainant managed to meet Shri Sham Sunder who assured her that she would see construction activities in full swing shortly and then make the payment of further instalments.

YET again the complainant avers that despite the aforesaid assurances no development or construction actually took place on the site and she was compelled to contact Shri Sham Sunder and Shri Vinod Sharma, Chairman in September 1991 who to the total astonishment of the complainant made a total volte-face and informed her that she should take a flat instead of a 10 marla constructed house, which had been allotted to her. It is suggested that the opposite parties are indulging in a policy of pick and choose and have offered possession of houses to similarly situated persons and have also further advertised for allotment etc. in Swastik Vihar. Despite repeated protestations by the complainant to the opposite party there has however, been no response except that she could take a flat if she desired instead of her original allotment. Ultimately the stand is that she is always ready and willing to make the balance of payment provided that the house would be allotted to her in a certain time-bound frame and development work begins on the plot No. 68 which stands allotted to her. The primal relief claimed is that the opposite party should be directed to build and allot house No. 68 to her within four months and ancillary reliefs due to the infraction of the agreement and the conduct of the opposite parties are sought. In the reply filed on behalf of the opposite party two fragmentary preliminary objections were taken, to which reference is unnecessary because the same were not pressed. Para Nos. 1 to 4 of the complaint stands wholly admitted, whilst the substantial part of para 5 is admitted and the rest of it denied. Para 6 of the complaint is admitted to the extend of the issuance of letters Annexures P-11 and P-12 by the opposite party and the stand now taken is that the allotment of the complainant''s house was cancelled for non-payment vide Annexure R-1 which is identical with Annexure P-12. It is then the opposite party''s case that the complainant and other allottees had agreed to pay even the external development charges levied/by the Government of Haryana in the meeting held in April 1990. The somewhat specious stand taken is that the opposite parties were restrained from starting any new construction by the Hon''ble High Court whilst granting the stay against the orders of the Director dated 6th of May, 1988, but they were free to complete the construction which was already in progress. Paras 10 and 11 are denied and the somewhat curious averment is that there is no question of allotting a plot to the complainant because it is a Group Housing Scheme and the plans for group housing with three stories was passed by the Director, Town and Country Planning in 1985. The persistent refrain is that the complainant'' allotment stood cancelled because the payment schedule of the instalments was the essence of the agreement between the parties.

IN support of the complainant''s case a detailed affidavit supporting every material averment in the complaint was placed on the record and reliance was placed on the documents annexed to the complaint, the authenticity of Which was not challenged. The complainant herself remained present on the 23rd of January, 1992 for her cross-examination, but owing to the absence of the learned Counsel for the opposite party, she was not cross-examined and no subsequent prayer for doing so was at all made on their behalf. Consequently, the evidence of the complainant was closed on that date. On behalf of the opposite parties a wholly cryptic one-page affidavit of Shri Sham Sunder was placed on the record praying that the photocopies of the agreement betwixt the parties and the application of the complainant be admitted in evidence and undertaking to produce the original at the time of arguments. Apart from the above no other evidence was led on behalf of the opposite parties. In view of this no evidence by way of rebuttal was adduced by the complainant. At the very out-set what strikingly meets the eye is the fact that herein for reasons best known to the opposite parties, they have virtually allowed the complainant''s case to go unrebutted. As already noticed the detailed and exhaustive averments of the complaint were butteressed by as many as 22 documents (Annexure P-l to P-22) which were not challenged on behalf of the opposite parties. The equally exhaustive affidavit of the complainant running into eight pages and supporting her case to the hilt was placed on the record and the same has gone unchallenged on behalf of the opposite party. As already noticed she was not cross-examined and even a counter-affidavit has not been filed to allege that her stand was incorrect, leading to the inevitable result that her testimony and documentary evidence has to be accepted. This apart the solitary evidence on behalf of the opposite party is a three paragraph affidavit of Shri Sham Sunder which is totally cryptic and all that is suggested in it is the bald assertion that the allotment of the complainant was cancelled for non-payment of instalments which was a violation of the terms and conditions of the agreement. The documentary evidence consists of nothing more than the application admittedly made by the complainant for the purchase of the house on the 1st of March, 1988 and the terms and conditions of allotment of sale of built up residential flats/ houses in Swastik Vihar bearing the complainant''s signatures on the 28th of December, 1987. It bears repetition that in the aforesaid context when the opposite party either because of the inherent weakness of their case or other reasons (which are neither disclosed on the record nor were made evident in the course of arguments) have neither challenged the complainant''s evidence nor led anything worth the name of their own behalf, the conclusion seems inevitable that the complainant''s case as set up remains virtually unchallenged.

THE other salient feature which prominently stands out is the fact that during the passage of more than four years the opposite parties have done next to nothing with regard to either demarcating the 10 marlas plot No. 68 in Swastik Vihar or constructing the agreed house of the dimensions of 1250 sq.ft. of built up area. It is not in dispute that in the light of the terms and conditions of allotment the complainant had as early as the 28th of December, 1987 vide Annexure P-l deposited the earnest money of Rs. 10,000/-. Soon thereafter she deposited another Rs. 65,000/- on the 10th of March, 1988 and continued to consistently pay the number of stipulated half yearly instalments to the tune of a total sum of Rs. 1,84,098/-. However, the opposite parties have not done the least in performing their part of the contract at all. THE clear and unrebutted case of the complainant is that despite the payment of the sizeable amount aforesaid she found that at the actual site even the alleged plot allotted to her was not demarcated and the ground was lying totally uneven and overgrown with vegetation. This stand of her''s in the complaint as also her affidavit and other evidence including the photographs P-17 and P-18 was not even seriously challenged on behalf of the opposite parties by their learned Counsel. THEre is not a title of evidence led on behalf of the opposite parties to show that even upto the time of arguments, the plot allotted to the complainant had been demarcated or some construction thereon in accord with the building plan thereof had been started. Instead the somewhat curious stand in Para 9 of the reply was that there was no question of allotting a plot because it was a Group Housing Scheme and the plans for group housing with three storied buildings had been passed by the Director of the Town and Country Planning in the 1985. At no stage either in evidence or in the course of arguments, it was even suggested that the opposite parties had made any attempt to develop the plot and build house No. 68 thereon which in terms had been admittedly allotted to the complainant vide the unchallenged document Annexure P-2 dated the 4th of January, 1988. THEre is no escape from the conclusion that despite the agreement of the parties and the receipt of Rs. 1,85,000/- from the complainant, the opposite parties have chosen not to take a single step to perform their part of the reciprocal promise.

AGAINST the aforesaid background one has to examine the crucial question whether the opposite parties have defaulted in the performing of their part of the contract and thus have been guilty of grave deficiencies in the service which they had agreed to render to the complainant as a promoter builder. Herein the nature of the contract betwixt the parties first needs a passing notice. It is somewhat plain from the opposite parties own document of the terms and conditions of the allotment that the promoter-builder has promised to demarcate and develop a plot of 10 marlas and a built up house of 1250 sq. ft. of carpet area thereon and the complainant had agreed to pay for the same by first depositing the earnest money of Rs. 10,000/- and thereafter 25% of the total sale price whilst balance was to be paid in six half yearly equal instalments. Clearly these were the reciprocal promises on either side which were to be finally culminated by Clause 7 of the terms and conditions of allotment which is as under:- "The sale deed shall be executed in the name of the intending purchaser within a suitable time only after the flat/house has been fully constructed, delivered to the purchaser and entire sale price received which would also include the costs of stamp papers, registration etc."

In view of the above, it is unnecessary to labour the point that herein the contract clearly was one for the performance of reciprocal promises in which the order of performance was not precisely and expressly fixed by the contract. In such a situation Section 52 of the Indian Contract Act would obvious come into play with particular reference to illustration (a) thereof. This may be noticed in extenso :- Section 52: "Order of performance of reciprocal promises: Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires. Illustrations (a) A and B contract that A shall build a house for B at a fixed price. A''s promise to build the house must be performed before B''s promise to pay for it."

In the context of the aforesaid statutory provisions reference may now be made to the terms and conditions of allotment. A perusal of the 12 clauses thereof would indicate that the order of the performance of reciprocal promises is not even remotely fixed therein after the agreement has been finalised by the payment of earnest money and 25% of the total sale price at the time of allotment of the house. Therefore, the order of performance has necessarily to be governed by the nature of the transaction. Herein plainly the promoter-builder has agreed to build a house for the complainant at a fixed price of Rs. 2,95,000/- on a 10 marla plot and to execute the sale deed thereafter. This would clearly attract illustration (a) which almost squarely covers the case. Thereunder the opposite partie''s promise to build the house has to be even performed before the complainant''s promise to pay the total price, therefor. In such a context it cannot possibly be said that the complainant or purchaser must pay the whole of the price in the first instance, whilst the promoter-builder does not take any steps whatsoever to build the house at all. Even viewing the matter with the greatest liberality in favour of the opposite parties and taking the case at the highest in their favour, it is manifest that there must be a matching order of performance on either side with regard to the reciprocal promises. Whilst the complainant has to pay the stipulated instalments, the promoter-builder must necessarily reciprocate by the corresponding stages of building the structure of the house. This would so both by virtue of the law laid down in Section 52 above and would be equally so on the larger anvil of rationality.

THE stage is now set to examine the question noticed at the out-set with regard to the time-frame for the execution of the contract betwixt the parties. Herein again a reference to the terms and conditions would make it manifest that no time for performance as regards the building of the house is specified therein. Obviously a contract of this kind cannot be wholly independent of a time-frame. THE complainant had clearly taken up the stand even in the complaint that a categorical assurance had been held out to her that she would be given the possession of the built house within two years of the date of its allotment namely the 4th of January, 1988 (Ex. P-2). This stands butteressed up by her forth-right affidavit on the point which has gone unchallenged. It is supported by the documentary evidence of P-13 wherein this fact finds express mention. As already noticed this stand has not at all been adequately repelled. Even otherwise it stands to reason that the complainant could not have entered into the contract without any assurance or representation as regards the completion of the house and the delivery of its possession after payment, therefor had been made. THEre seems no reason, therefore, to doubt or distrust the well supported stand of the complainant on this point. 14A. However, we would not at all wish to rest ourself wholly on the above. This is so because the larger principles of the law of contracts also lead to an identical conclusion. It bears repetition that the time for the performance of the promise to build the house was not specified in the written terms and conditions of allotment. That being so Section 46 of the Indian Contract Act would necessarily be attracted to the situation. This is in the terms following:- "TIME AND PLACE FOR PERFORMANCE: Time for performance of promise where no application is to be made and no time is specified: Where, by the contract, a promisor is to perform his promise without application by the promisee, and no time for performance is specified, the engagement must be performed within a reasonable time. Explanation - THE question, "What is a reasonable time" is in each particular case a question of fact."

Now plainly enough, there was no question of any application by the promisee for seeking performance and no time having been specified in the written terms of the contract as a matter of law, the engagement had to be performed within a reasonable time. As mentioned in the explanation above and otherwise settled by precedent the question what is the reasonable time has to be found in the particular case within the mosaic of its facts. Herein, we have already indicated that with reasonable flexibility a period of two years from the date of allotment can well be said to be a reasonable one. However, taking the case at the highest in the favour of the opposite party the reasonable time is plainly indicated by the number and the period within which the instalments of the price had to be completed. Clause 1(c) of the terms and conditions required that the balance amount had to be paid in six half yearly equal instalments. Therefore, the opposite parties themselves visualised the total payment to be made within three years of the date of allotment and consequentially the reciprocal promise of completing and delivering the house cannot be stretched beyond that time-frame. We are clearly of the view that on the over-all conspectus of the evidence and the particular stipulation of the terms and conditions would mean that a reasonable time in the present case as visualised by Section 46 would be three years or less.

IN the light of the aforesaid discussion, the answer to the ''question posed on the out-set has to be rendered in the terms that the time-frame within which a contract betwixt a promoter-builder and his purchaser is to be executed in the absence of any specific agreed period therefor, would be within a reasonable time. The performance of such contracts cannot possibly be wholly liberated from the constraint of time altogether. IN the present case the same lies within a period of three years. Once the answer to the legal question and the specific time limit has been arrived at, it is somewhat plain that the opposite parties have clearly defaulted in the performance of their reciprocal promise which is obviously an integral part of the contract. It is un-necessary to labour the obvious because it has been repeatedly held above and is established on the record that upto the period of three years from the date of allotment i.e. till the 4th of January, 1991 virtually next to nothing had been done by the opposite parties both with regard to the demarcation of the plot as also in constructing the promised structure of the house thereon. Till the last it was not even remotely the case of the learned Counsel for the opposite parties that any structure conforming to the promised house on Plot No. 68 had been built even till today. Apparently aware of the aforesaid inherent and indeed fatal weakness in their case the opposite parties attempted to take shelter under the pretence that construction in the complex had been halted by virtue of a High Court stay order. There is however, not an iota of evidence to establish the same. Clearly enough this was a matter which is one of record and could be easily established by a copy of the Hon''ble High Court''s order. Not the least attempt to place any such document on the record was made. Indeed on the opposite parties own showing the Hon''ble High Court soon after granting an interim stay vacated the same. In any case, it is unnecessary to enter into the realm of conjecture in the context of a total absence of evidence on the point. The opposite parties attempt at a proverbial clutching at a straw in this context must be rejected.

IT remains to deal with the last and equally untenable stand of the opposite parties that the contract with the complainant stood cancelled. This is tenuously sought to be rested on Annexure P-12 dated the 25th of February, 1991. At the very out-set, it has to be noticed that we have held above that even by January 1991, the opposite parties had themselves grossly defaulted in their part of the reciprocal promise to build or atleast start construction of the house on plot No. 68. Having not admittedly done so, it was no longer within their power even to unilateraly cancel the contract and take advantage of their own wrong. In the reply it is sought to be insinuated that the complex was a Group Housing Scheme of three storied structures and no question of allotting a plot to the complainant arose. Obviously this has to be only noticed and rejected. Apart from this it is not possible to read P-12 as a cancellation of the contract. The ultimate purpose thereof was only a demand for the payment of Rs. 73,332/- within a fort-night, failing which a threat was held out that the allotment of the complainant house would be cancelled. Obviously a mere threat is not a cancellation in itself. Admittedly no formal communication of cancellation was ever made by the opposite parties far from being served on the complainant. Under Clause 4 of the terms and conditions, it is expressly laid out that in the event of cancellation the promoter-builder could only forfeit the earnest money or the additional earnest money and were obliged to refund the remaining amount without any interest. Admittedly till date the opposite parties have neither issued a formal cancellation of the contract nor refunded a penny of Rs. 1,85,000/- which they have admittedly received. IT is the persistent stand of the complainant that far from any cancellation the opposite parties were only offering and pressurising to accept a flat in the multi-storied building instead of the 10 mar la plot No. 68 which they have had clearly contracted to deliver with the built up structure thereon. As noticed earlier there is nothing in the opposite parties''s evidence which repels the complainant''s case. The theory of the purported cancellation of the plot vide Annexure P-12 has, therefore, to be rejected both as a matter of law as also on facts.

WAY back on the 27th of July, 1989 the National Commission in I (1991) CPJ, 1 (NC) ''U.P. Avasevam Vikas Parishad (Housing & Development Board) v. Garima Shukla & Others'' had held as under with regard to the activity of promotor-builder: "The Board is clearly engaged in rendering service for consideration to the public and therefore those who are allotted plots/houses from the Board are clearly consumers falling within the definition in Section 2(1)(d)(ii) of the Act. Again under Section 2(1)(o) of the Act the definition of the term "service" is very comprehensive; it means "service of any description" including banking, financing, insurance, transport processing, supply of electrical or other energy, entertainment etc. This leaves no room for doubt that the type of service which the Board renders to the public for a consideration is clearly covered by Section 2(1)(o)."

The aforesaid view has been consistently followed in the consumer jurisdiction thereafter. Consequently there is no manner of doubt that the opposite parties were rendering a service within the meaning of the Act which undoubtedly had been hired by the complainant for consideration. On the factual findings recorded above, it would be manifest that herein there was grave and blatant deficiency in the nature and manner of performance of the same. We have already held above that the opposite parties had themselves plainly infracted the terms of the contract betwixt themselves and the complainant. Consequently the latter is clearly entitled to relief within the consumer jurisdiction.

The primal relief sought by the complainant is the allotment of the House No. 68 to her within a time-bound frame preferably within four months. In ''U.P. Avasevam Vikas Parishad (Housing & Development Board) v. Garima Shukla & Others'', the National Commission has clearly held that such a relief is within the four corners of the Act. In the said case the State Commission of U.P. had expressly issued directions to the Housing and Development Board for allotment or providing alternative plot in the original colony Vikas Nagar itself within a period of three months with the further direction that the same should be 330 Sq. meter in area and it would be of the choice of the complainant therein. This direction was strenuously challenged in appeal before the National Commission by the Housing and Development Board. The National Commission however, upheld the said direction with a minor modification in the following terms :- "We, therefore, uphold the judgment of the State Commission regarding reliefs granted to the Respondent except to the extent of making a slight modification by our directing that in case all the plots in the original area have been allotted to others a plot in an adjacent area, according to the choice of the Respondent, may be allotted to him."

IN lining with the above, this State Commission in II (1991) CPJ 552, M.L. Sharma v. Chief Administrator, HUDA'' has followed and taken an identical view. IN accordance therewith we hereby direct the opposite parties to deliver possession of the 10 marla plot No. 68 to the complainant. It was suggested at the bar that perhaps the particular specific site may not be now available because of construction or modifications of plan etc. IN that event we direct in the alternative that the opposite parties shall allot and deliver possession of a 10 marla plot in a adjacent area according to the choice of the complainant. The complainant has also sought the added relief of a built up house on the site according to the specifications in the original agreement. However, it is common ground that the complainant has as yet not paid the full price of Rs. 2,95,000/- for the same and a sum of Rs. 1,85,000/- has been paid. In all fairness, the parties have to be held to their contract. It is consequently further directed that if after the delivery of the possession of the plot aforesaid, the complainant tendered the balance amount due in lumpsum to the opposite parties, they shall proceed to abide by their promise of building the specified structure of a carpet area of 1250 sq. ft within a reasonable time.

THE complaint is allowed with costs which are assessed at a modest sum of Rs. 1000/- only. THE opposite parties shall comply forthwith with the direction contained above in Para No. 23 within one month from today alongwith the payment of costs, failing which compliance will be enforced under Section 27 of the Act. Complaint allowed.