RAJ RAHUL CONTRACTORS vs LALIT KUMAR

THIS appeal has been filed by the defendants against the order of the District Forum, Delhi dated 28th March, 1990.

BRIEFLY, the case of Sh. Lalit Kumar complainant-respondent was that defendant-appellant No. 1 was a Private Limited Company and defendant-appellants Nos. 2 & 3 were its Directors. On 26th June, 1982, the appellants advertised in various news papers that they were constructing residential flats and commercial shops for sale on plot No. 60/26, Parbat Marg, New Delhi. The complainant approached them for booking a shop in the said premises. It was represented by appellant Nos. 2 & 3 to him that they had purchased the plot from the D.D.A. and that they had obtained permission from Municipal Corporation Delhi (M.C.D.) and Delhi Development Authority (D.D.A.) for the construction of the residential and commercial flats thereon. He believed their statement to be true, and agreed to purchase a shop measuring 63.07 sq. ft. at the rate of Rs. 650/- per sq. ft. An agreement was executed between the parties on 25th June, 82. The sale consideration of the shop was Rs. 41,405/-. It is alleged that the appellants assured that the possession of the shop would be delivered to him on or before Diwali of 1983. He paid an amount of Rs. 6,211/- at the time of agreement. It is further stated that he paid the amounts of the instalments as and when demanded by them. The total amount which was paid by the complainant to the defendants was Rs. 39,335/-. On 7th November, 1984, the appellants sent a notice to the complainant demanding the last installment of Rs. 13,405.75P. It was also stated in the letter that the shop was ready for possession and the same would be handed over to him on making final payment Later, vide letter dated 6.8.85, a demand of Rs. 22,545.14P was made by the appellants from him.

It is further pleaded that as the possession of the shop was not delivered to the complainant before the Diwali of 1983, and the price of the shop had been increased by the appellants the complainant became suspicious about their conduct and he made enquiries regarding the property. He came to know that the completion certificate of the property had not been issued as there was no regular electric and water connection therein. On making further enquiries he came to know that the building constructed could be used for residential purposes only and not for commercial purposes.

THE complainant it is next averred thereafter made enquiries from the D.D.A. about the ownership of the premises and he was informed that the plot was owned by one Ranbir Singh S/o Tirath Singh and not by appellant No. 1 and that it was not sold to the said appellant in auction. THE complainant, it is alleged, had been cheated and a fraud had been played on him. He therefore, demanded his payment back from the appellants but they refused to refund the amount. He further claimed interest @ 24% per annum on the said amount w.e.f. 25th June, 82 till the date of the repayment. Consequently, he prayed that the defendant-appellants be directed to pay a sum of Rs. 39,335/- together with interest @ 24% per annum w.e.f. 25th June, 82 till the date of realisation, and to pay another sum of Rs. 25,000/- by way of damages. A notice was issued by the District Forum to the defendant-appellants on 5th October, 1989 for 17th January, 90. On that date an advocate appeared on their behalf and the case was adjourned to 28 th March, 90. On the adjourned date Sh. S.M. Goswami. legal Asstt. of defendant-appellant No. 1 appeared on behalf of the appellants. The Forum on the same day passed an order directing the defendant-appellants to pay Rs. 39,335/- with interest @ 24% w.e.f. 25.6.82 till the date of payment to the complainant within a month of the date of the order. The defendants have come up in appeal against the said order to this Court.

THE first contention of the learned Counsel for the appellants is, that the appellants had filed written statement on 28th March, 1990. However, their Counsel did not appear before the Forum on account of strike in the District Courts. A request was made to the Forum for adjournment, by an official of the appellant Company. However, the case was not adjourned by the Forum. THE appellants, thereafter, made an application dated 9th April, 90 that an opportunity be provided to them to file the written statement and defend the case. THE Forum passed the impugned order dated 28.3.90/18lh April, 90. He submits that the order is liable to be set-aside on this ground alone. We have given our thoughtful consideration to this matter, but regret our inability to accept the same. The complaint was filed in October, 89 and it was listed before the Forum on 5lh October, 89. The Forum issued notice to the defendant-appellants for 17lh January, 90. On that date Mr. Virendra Mehta, Advocate appeared on behalf of the defendants. He did not file the written statement though in the notice issued to the defendants it was specifically mentioned that they should file the written reply to the complaint. The case was adjourned to 28th March, 90. On that date the order does not show that a request was made by Mr. Goswami who appeared for the defendants for date for filing the written statement. It was the duty of the defendants to have presented written statement on that date. It was not a sufficient ground for not filing the written statement that Members of the Bar were on strike. In case the Members of the Bar were on strike the defendants could appear in person before the Forum and file the same or authorise Mr. Goswami to do so. However, this was not done. The matter may be examined from another point of view. It is that the notice was issued to the defendants-appellants for 17th January, 1990 under certificate of posting in pursuance of the order of the Forum dated 5th October, 1989, on 18th October, 1989. In normal course, the notice must have been received by them within 3/4 days from the date of posting. Taking into consideration that there could be some postal delay, we hold that the notice was served on them after seven days i.e. on 25th October, 1989. Section 13(2) of the Consumer Protection Act provides that if the complaint relates to any deficiency in services, the District Forum shall refer a copy of the complaint to the opposite party directing him to give his version of the case within a period of 30 days, or such extended period not exceeding 15 days as may be granted by the Forum.

FROM a perusal of the section it is clear that under the Act, the defendants are required to file written statement within a period of 30 days from the date of service of the notice. If it is not done the Forum can extend the period for that purpose by 15 days. These provisions have been incorporated so that the complaints are disposed of expeditiously. In the present case, about 3 months time was given by the District Forum in the first instance to the defendants to file the written statement. On 17th January, 1990 it further gave a period of more than two months for that purpose. It, however, did not find any good ground to grant further time for that purpose. After taking into consideration the above said facts we do not find any ground to interfere with the order of the Forum on this ground and consequently reject the arguments of the learned Counsel.

THE next submission of Mr. Mehta was that the agreement was entered into between the parties on 25th June, 1982 and the complaint had been filed after about 7 years. He submitted that under the Limitation Act a suit for recovery of the amount could be filed within a period of three years from December, 1984 when the possession of the premises was offered to the complainant. Thus, the complaint was barred by limitation. On the other hand the learned Counsel for the respondent argued that a fraud was played on the complainant/respondent and therefore, the period of limitation would begin to run when fraud was discovered. To support his contention he made reference to Section 17 of the Limitation Act

We have duly considered the arguments of the learned Counsel for the parties. At this juncture it is relevant to point out that the agreement between the parties is on a printed pro-forma in which certain details such as name of the purchaser, consideration etc. have been filled in hand. From a reading of the agreement it is evident that some clauses in the agreement are of onerous nature for the purchaser. In this regard reference may be made to clauses 3, 5 & 6(a) of the agreement. In Clause 3 it is stated that the drawings displayed in the office of the builders were provisional and subject to change at any time during the course of construction without any claim from the allottee. Clause 5 says that the allottee prior to the execution of the agreement had inspected all documents of title and other related papers and had satisfied himself with the title of the builders to the said plot and had agreed to accept the same. In clause 6(a) it is stated that it had been agreed and confirmed by the allottee that if payment was not made within the stipulated period given in the instalment notice, the allotment would be cancelled, 15% of the price of the flat would be forfieted and the balance amount would be refunded without any interest. It is further stated that after the cancellation notice the allottee would have no claim on the flat and the builder would be entitled to sell the same on any terms and at any price without any further intimation to the allottee. It is not shown by the appellant that the attention of the complainant was drawn specifically to all the above said conditions. It is also not stated what documents of title were shown to the complainant.

NO written statement has been filed in the proceedings by the appellant as already mentioned. In the circumstances that allegations in the complaint shall be taken into consideration to find out whether any fraud was played on the complainant by the defendants-appellants. The complainant stated in paras 3 & 9 of the complaint that defendants NOs. 2 & 3 (i.e. Rajinder Jain & Mrs. Sudha Jain) represented that they had obtained the permission from the M.C.D. and D.D.A. for the construction of residential and commercial flats in the said premises. He further stated that on enquiry he came to know that the Completion Certificate had not been issued and that there were no electric and water connections in the building. That fact made him more suspicious and he made further enquiries and came to know that the premises in the said plot could only be used for residential purpose and not for commercial purpose. In para 10 he said that on further enquiries from DDA about the ownership of the premises he was informed that the plot in question (bearing NO. 60/62 Prabhat Marg, New Rohtak Road, New Delhi) was owned by one Sh. Ranbir Singh S/o Sh. Tirath Singh and that it was never sold to defendant NO. 1 in any auction. The said information was confined from the records of M.C.D. & D.D.A. that Sh. Ranbir Singh S/o Sh. Tirath Singh was the owner of the said plot. In.para 11, he pleaded that the respondents had cheated the petitioner and had committed a fraud on him. The word ''fraud'' has not been defined in the Limitation Act. An essential condition of the fraud is that there must be intention to deceive another party. In Shorter Oxford Dictionary (reprint 1988), the word ''fraud'' has been defined as follows: "the using of false representations to obtain an unjust advantage or to injure right or interest of another." From the aforesaid allegations, it is evident that the building could not be used for commercial purpose. It is also evident that the Completion Certificate was not issued by the concerned Authority, the plot on which it was built did not belong to the appellants and that electric and water connections had not been given in the premises. There is no evidence on the record, that the above said allegations are incorrectly made by the complainant

THE property is situated within the limits of the Municipal Committee, Delhi. It is common knowledge that unless a completion certificate is issued by the Municipal Authorities regarding a newly constructed building that cannot be occupied by any reason. It is also well known that unless certain premises are declared as commercial premises by the Municipal Authorities those cannot be used for commercial purposes. It may further be mentioned that if a builder is not entitled to get electric connection and water connection in his building, no one will like to purchase a flat in such a building. In Section 17 of the Limitation Act it is provided that where, in the case of any suit for which a period of limitation is prescribed by the Act, the suit is based upon the fraud of the defendant, the period of limitation shall not begin to run until the plaintiff has discovered the fraud. The allegations made in the complaint show that as soon as the complainant discovered the fraud he filed the complaint. Further the allegations in the complaint make it clear that the appellants made false representations to the complainant at the time of entering into agreement with him and thus obtained unjust advantage over him. Therefore, the respondent committed a fraud upon the complainant and the latter is entitled to take benefit of the provisions of Section 17 of the Limitation Act It is true that in the agreement to sell it had been mentioned that the complainant had examined all the title deeds and other relevant papers and that he had satisfied himself with the title of the builder. However, it has not been established that specific attention of the complainant had been brought to those clauses of the agreement. We are of the opinion that in case the defendant-appellants required the complainant to sign printed pro-forma it was their duty to bring such clauses to the notice of the complainant specifically. There is no proof on the record that it was so done.

IT is also relevant to point out that the complainant has paid almost the total price of the flat purchased by him. In case the fraud had come to light earlier he would not have paid all the instalments. IT goes a long way to show that fraud come to his notice immediately before the filing of the complaint.

IN the end the learned Counsel for the appellant urged that the interest granted by the Forum to the complainant-respondent was highly excessive. He also submitted that the period for which the interest was granted was not correct. We have duly considered the matter. The interest granted by the District Forum is @ 24% P.A. which in our view is on the higher side. Consequently we reduce it to 12% P.A. The period for which the interest has been granted to complainant is also not correct. He is entitled to the interest from the dates on which the amounts of instalments were paid by him. For the aforesaid reasons we partly accept the appeal, modify the order of the District Forum and direct the defendant to pay Rs. 39,335/- with interest @ 12% P.A. w.e.f. the dates the instalments were deposited by him till the date of payment of the amount, to the complainant. No order as to costs. Appeal modified.