NAVNIKETAN CO-OPERATIVE GROUP HOUSING SOCIETY LTD vs DELHI DEVELOPMENT AUTHORITY

-THE complainant M/s. Navniketan Co-operative Group Housing Society Ltd. , has filed this complaint alleging deficiency in service on the part of the opposite party Delhi Development Authority (DDA ).

UNDISPUTEDLY, the facts of the case are that the complainant formed a society having 300 members in 1983 with the object of building houses for the members. They applied for allotment to the DDA for land on 11. 10. 1990. An amount of Rs. 5,00,000 was deposited as earnest money along with the application. In response to this application, the complainant Society was allotted land by DDA, measuring 21,500 sq. mts. in Sector 22, Dwarka Phase-1 @ Rs. 975 per sq. mtr. vide opposite party''s letter dated 25. 1. 1991. Clause 6 of the allotment letter read as under: "6. The proposed allotment shall be subject to final decision in C. W. P. No. 3389 of 1990 and various other writ petitions pending in Delhi High Court and the proceedings pending before any other Court/forum-challenging the criteria/basis/guidelines for allotment of land. If felt necessary, as a result of the decision therein, the allotment is liable to be reviewed and cancelled. In that event, the entire amount received by DDA from you shall be refunded without any interest and you shall have no right or claim for any compensation/damages/alternative allotment, on any ground whatsoever. "

It is admitted position that against required deposit of over Rs. 1 crore, the complainant society deposited only Rs. 36,80,000 in view of the order of the Delhi High Court dated 22. 3. 1991. Since in-between, the Delhi High Court quashed the allotments made by the opposite party to various societies, hence the allotment made to the complainant society was also quashed. It is the case of the complainant that in view of the above order they became entitled to refund of deposited amount of Rs. 41,80,000. It is not in dispute that vide letter dated 13. 3. 1995, a further offer for allotment was issued in favour of the complainant society, for land measuring 21,500 sq. mtrs. in Dwarka Phase-I for 300 members, but in the meantime, the membership of the complainant society had fallen to 155, and since they were unable to pay the demanded amount within stipulated period, a request was made by the complainant society to the opposite party DDA, firstly to extend the period for depositing the requisite amount and, secondly, to reduce the area of the land to be able to make houses for 155 members, i. e. , the existing strength at that time. While the first request was accepted by the opposite party by extending the time upto 12. 7. 1995 but the second request was not agreed to. Since the allotment came to be cancelled in view of the cancellation letter dated 29. 8. 1995, it is the case of the complainant the opposite party DDA should have refunded the amount of Rs. 41,80,000 which was not done and when the matter was taken up with the opposite party DDA, they refunded an amount of only Rs. 36,80,000 and forfeited the amount of Rs. 5 lakh treating this as earnest money which according to the complainant is not sustained by any law. It is in these circumstances that a complaint was filed before us with the following prayers: " (a) An order in the sum of Rs. 5,00,000 be passed in favour of the complainant and against the opposite party, being the amount of earnest money deposited by the complainant and forfeited by the opposite party, be refunded to the complainant society. (b) An order in the sum of Rs. 6,75,000 be also passed in favour of the complainant and against the opposite party being the interest @ 18% p. a. on the amount of Rs. 5 lakh. (c) An order in the sum of Rs. 36,43,200 be passed in favour of the complainant and against the opposite party being the interest on the amount of Rs. 36,80,000 from 25. 3. 1991 to 30. 11. 1996 (d) Towards interest @ 18% p. a. in favour of the complainant and against the opposite party on the amount of Rs. 5 lakh from 11. 10. 1990 till the filing of the complaint (e) The cost of the petition be also awarded in favour of the complainant and against the opposite party. "

Written version has been filed by the opposite parties denying all the calculations and clearly stating that the forfeiture of the earnest money is as per Clause 4 (ii) of the allotment letter dated 31. 3. 1995 no interest is payable to the complainant.

AFFIDAVITS by way of evidence were filed by both the parties in respect of their contentions. We heard the learned Counsel for both the parties and as stated above the issues boil down as to whether the complainant is entitled to Rs. 5 lakh forfeited by the DDA? And secondly, whether the complainant would be entitled to any interest on the deposited amount and if so for what period?

AFTER hearing the parties and perusal of material on record, we find that there is no disputing the fact that earlier allotment was made by the opposite party on 25. 1. 1991. The allotment to all the societies was quashed by order of the Hon''ble High Court of Delhi and as per para 6 of the said allotment letter, since it was the condition and allotment was subject to the decision of the Hon''ble High Court, the allotment made to the complainant came to be quashed automatically. A re-allotment was made on 31. 3. 1995, para 4 (ii) of this allotment reads as follows: "4. The proposed allotment shall be subject to your the following conditions: i. . . . . . II. In case you fail to deposit the part premium and earnest money as demanded above and/or the balance premium as and when demanded as para 2 above, the earnest money deposited by you shall stand forfeited. "

It is not in dispute that it was the complainant, who on account of internal problems was unable to accept the allotment in view of which the condition 4 (ii) of the allotment letter will come into play automatically, by virtue of which the opposite party is entitled to forfeit the earnest money of Rs. 5 lakh which admittedly was deposited by the complainant as earnest money earlier. Hence we see no merit in this contention of the complainant, that forfeiture of earnest money of Rs. 5 lakh was not correct. Coming to the second issue, we need not delve any further, except to reproduce the para Nos. 96, 97, 100 and 103 (d) of the order of the Hon''ble High Court of Delhi in the case of Federation of Co-op. GIH Society and Ors. v. Union of India and Ors. , Civil Writ Petition No. 4184/1992: "96. While quashing the allotments which had been made in the year 1983 to 1991 to societies, this Court, in Kaveri Cooperative Society''s case (supra) had, inter alia directed that it would be open to the respondents to refund the money to all those 260 societies to whom allotments had been made and who had paid the allotment money but whose allotments had been quashed. No directions were issued with regard to payment of any interest.

The aforesaid Clause 6 of the letter of allotment dated 25th January, 1991 clearly stipulated that no interest was payable by the DDA on the cancellation or review of the allotment. It appears to us that it is wholly immaterial whether the societies to whom original allotment had been made are, subsequently, re-allotted land. These societies, like the petitioners of the second category, cannot get a more beneficial treatment than those societies whose allotment was cancelled and have not been re-allotted land. On the allotments being quashed all the societies who had deposited money became entitled to refund of money and according to Clause 6 of the allotment letter the interest was payable. This clause is applicable irrespective of the fact whether any one of those societies was re-allotted land or not.

It is, no doubt, true that payment of interest was ordered in the case of Sriniketan Co-operative Society''s case is that here in the letters of allotment itself it was stated that on the allotment being cancelled no interest would be payable. Therefore, there can be no claim of interest by the societies, w. e. f. the date of their deposit. Furthermore the Supreme Court contemplated interest not being awarded to those societies who were re-allotted land. Before us there is no society who had deposited the money and has not been re-allotted land. It would, however, be just and fair that if a demand for the refund is made on the DDA then the DDA, if it does not re-pay the money within a reasonable time, should be bound to pay some interest. We are informed that some of the cooperative societies had written to the DDA for refund of money. If the DDA did not refund the money on its own then it would be unfair and it would not be entitled to take benefit of the aforesaid Clause 6 and escape the liability to pay interest when a demand for refund of the money is specifically made on it by a cooperative society. In such a case, in our opinion, the DDA would be liable to pay interest @ 12% p. a. which rate was awarded by the Supreme Court in Sriniketan Cooperative Society''s case (supra) w. e. f. the date the notice of demand was served on the DDA till the date of payment. This payment of interest will only be made to those societies to whom no re-allotment of land had been made.

For the aforesaid reasons we hold and direct that- (a) as far as pre-1983 Cooperative Housing Societies are concerned, viz. , Civil Writ Petition Nos. 4184/92, 4396/92 and 767/93, same are allowed and the revised demand and fresh letters of allotment issued to them by the respondents at the rate of Rs. 1650. 65 per sq. mtr. are quashed and subject to the terms of their letters of allotment they will be liable to pay at the rate of Rs. 975 per sq. mtr. (b) the challenge to the pre-determined rate of Rs. 1650. 65 per sq. mtr. made by the other Cooperative Group Housing Societies who were registered in 1983 and thereafter fails. (c) we hold that the provisions of Rule 41a of the Delhi Cooperative Societies Rules are ultra vires and bad in law and the cooperative societies are at liberty to fill up their vacancies ignoring the said rule. (d) as far as the Co-operative Group Housing Societies are concerned, it is the Lt. Governor, who is the head of Administration, who had framed the illegal rule, which prevented the vacancies from being filled and, consequently, resulted in payment being not made to the DDA. The rate of Rs. 1650. 65 per sq. mtr. had been valid upto 31st March, 1993. As the demand raised at this rate could not be paid by the cooperative societies because of an illegal rule viz. , Rule 41a it will be just and proper to extend the time so as to enable the cooperative societies to fill up the vacancies and to make the payment as demanded. We, therefore, direct that petitioners and other cooperative societies who are similarly situated will be entitled to make the payments, as had originally been demanded @ Rs. 1650. 65 per sq. mtr. by 30th April, 1993 without incurring any other liability including interest. "

While the learned Counsel for the complainant wishes to rely upon paras 96 and 97 of this judgment the learned Counsel for the opposite party wishes to rely upon paras 100 and 103 (d) of the cited judgment, extract of which had been reproduced above.

AFTER going through this judgment in our view, it is the contents of para 100, which is important and relevant for our purposes. It is clearly laid down by the Hon''ble High Court, ". . . . . it would however be just and fair that if a demand for refund is made on the DDA and then the DDA, if it does not repay the money within a reasonable time, should be bound to pay some interest". But more importantly, it is further stated in the same para, ". . . . . . Supreme Court contemplated interest not have been provided to those societies who are re-allotted land". A very plain reading of this would mean that interest shall be payable on demand to the societies who are not re-allotted land.

IN view of the above, the complainant would not be entitled to any interest as admittedly the complainant was re-allotted land by opposite party DDA vide their letter dated 31. 3. 1995 and it is the inability shown by the complainant on its part, that allotment had to be cancelled by way of withdrawal of offer of allotment letter dated 31. 3. 1995 vide opposite party''s letter dated 29. 8. 1995. We are thus clearly of the view, that in the light of the judgment of the Hon''ble High Court (supra) the complainant would not be entitled to any interest.

However, we see that there has been delay on the part of the DDA in not refunding the amount after cancellation/withdrawal of offer on 29. 8. 1995. Admittedly, the amount has been paid back to the complainant by the opposite party on 30. 11. 1996, which in our view, is a clear case of deficiency in service on the part of the opposite parties, for which DDA is directed to pay interest @ 12% p. a. on the amount of Rs. 36,80,000 for the period from 1. 9. 1995 to 30. 11. 1996 along with cost of Rs. 5,000. The above mentioned payments shall be made within 6 weeks from the date of receipt of this order, failing which the complainant shall be at liberty to proceed against the opposite party under Sections 25/27 of the Consumer Protection Act, 1986. The complaint stands allowed in above terms. Complaint partly allowed.