SHASHI KIRAN RATTAN vs SWASTIK CONSTRUCTION

THIS appeal is directed against the order of the State Consumer Disputes Redressal Commission, U.T. Chandigarh. The facts of the case out of which this appeal has arisen, may be summarized as under.

THE complainants deposited a sum of Rs. 10,000/- by means of cheque dated 6.2.1986 with the respondent for purchase of built up house for Rs. 2.95 lacs. THE total price was to be paid in instalments. THE respondent further demanded a sum of Rs. 65,000/- which was deposited on 28th March, 1988. THE other two instalments were paid on 5.11.1988 and 23.5.1989 in the sum of Rs. 36,666/- each and in all a sum of Rs. 1,48,332/- was deposited by 23.5.1989. THE case of the complainant was that despite having paid the amount the respondent cancelled the allotment by letter dated 18.6.1990 on the plea that the third instalment which was due on 11th September, 1989 was not received. THEreafter, the complainants sent a draft of Rs. 68,000/- on 23rd September, 1991, but it was not accepted by the respondent. THE complainant sought direction to the respondent for possession of a flat No. 7 or any other house of the same size; compensation in the sum of Rs. 4.00 lakhs and refund of the entire deposit together with 24% interest. The complaint was contested on behalf of the respondent. The pleas taken were that the complaint was not maintainable under the Consumer Protection Act. The allotment was cancelled on account of non-payment of instalments which were due from the complainants, since long and they violated the terms and conditions of the allotment. The flat in question had been allotted to some other eligible person and the complaint had become infructuous.

After considering the material placed on record by the parties and taking into consideration the contentions raised on behalf of the parties, the State Commission returned the finding that since there were defaults by the complainants themselves, the respondent could not be held liable to make available an alternative house. It further directed that the entire amount deposited by the complainant together with interest @ 18% per annum from the date of deposit till realisation shall be paid to the complainant. Aggrieved by the order of the State Commission present appeal has been filed.

THE contentions raised on behalf of the complainants were that the complainants had made substantial payments and the respondent had failed to complete the constructions. In fact, hardly any construction activity was taken within a period of two years from the date of allotment. In these circumstances, the delay of payments beyond the second instalment could not be held as a default against the complainants. THE State Commission erred in relying on the letter of cancellation dated 18th June, 1990. No such letter of cancellation had been communicated to the complainants and the same had been fabricated. It was further argued that the State Commission failed to appreciate that the records of the respondent had been manipulated to provide for a letter of demand dated 21.9.1989. THE complainants were always ready and willing to pay the consideration of the said house allotted to them. THEre were delays in paying the instalments as at the material time it did not seem probable that the house would be constructed. THE State Commission erred in not appreciating that the investment made for the house represented the life savings of the complainants and once the newspaper reports indicated that the Government had stopped the construction activity, the complainants could no longer take a risk in continuing to pay the instalments oblivious of the fact that the permission to construct had elapsed. On becoming aware that the building activity had started, and the house would be built, the complainants immediately remitted the instalments. On the other hand, it was submitted on behalf of the respondent that the complainants failed to pay the instalments in terms of the agreement. As such the allotment was cancelled. The cancellation of the allotment was proper, legal and justified. The State Commission passed the order after due consideration of the material placed on record and is justified in law.

WE have carefully considered the relevant contentions of the parties. Before proceeding further, it will be useful to refer to the letter of allotment dated 10.2.1988 which is as under : "Subject : Allotment of a House at the Swastik Vihar. Madam/Sir, WE acknowledge with thanks the receipt of your application dated the 6th Feb., 1988, on the subject cited above, forwarding therewith a Cheque for Rs. 10,000/- being the earnest money for the booking of a house at the Swastik Vihar. 2. WE are pleased to inform you that house No. 7 has been allotted to you in the Swastik Vihar at the cost of Rs. 2.95 lacs. You are now requested to remit a sum of Rs. 65,000/- which would after adjusting Rs. 10,000/-, work out to be Rs. 75,000/-. Kindly send a Demand Draft for Rs. 65,000/- in favour of M/s. Swastik Construction on any Bank at Chandigarh, by the 11th March, 1988, the latest. The balance of Rs. 2.20 lacs would be payable by you in six half-yearly instalments of Rs. 36,666/- each; the first instalment being due on the 11th September, 1988. Assuring you of our best co-operation. Yours faithfully, For SWASTIK CONSTRUCTION Sd/- (G.S. Matwala) Administrative Officer"

The letter would go to show that the complainants were required to pay six half-yearly instalments of Rs. 36,666/- each. The first instalment was due on 11.9.1988. The complainants deposited Rs. 10,000/- on 6.2.1988, Rs. 65,000/- on 28th March, 1988, Rs. 36,666/- on 5.11.1988 i.e. the first instalment and Rs. 36,666/- on 23rd May, 1989, i.e., second instalment, the total amount of Rs. 1,48,332/-. It is clear after depositing the instalment of Rs. 36,366/- on 23rd May, 1989, there were defaults for payment of the other instalments by the complainants. The complainants themselves had written on 25th April, 1989 that the second instalment of Rs. 36,666/- which was due on 11th March, 1988 was outstanding. The respondent cancelled the allotment on 18th June, 1990. Admittedly at that point of time, the complainants were defaulter in payment of the amounts of the instalments due. The justification given by the complainants for not paying the instalments on the due date was that the complainants had read in newspaper report on 11.9.1988 that the Government had stopped construction activity at Swastik Vihar. Another newspaper report dated 20.5.1988 stated that the colonizer had been asked to stop construction as the validity of the licence and building plan had lapsed. The matter was also pending before the High Court. In our opinion this contention is devoid of force. The State Commission has dealt with the proceedings arising out of the writ petition filed in the High Court in the following manner : "The learned Counsel for the complainants has referred to proceedings of the Writ Petition No. 11173 of 1988, Sham Sunder v. The State of Haryana & Ors., where the respondent had approached the High Court against the demand of some external development charges but his order did not debar the customers/allottees from depositing the instalments. On the contrary there is a specific mention in this order that the coloniser was at liberty to receive the instalments of the flats already allotted and could even utilise the said amount for the internal development and construction of the flats. This order of 27.10.1988 gave no liberty to the complainant to withhold the payments of the instalments. In the circumstances there was no deficiency on the part of the respondent."

Complainants could not withhold the payment of the instalments. The respondent had to acquire land, develop it and construct houses by the funds to be supplied by the allottees. The complainants paid only two instalments and did not pay the rest of the instalments. The respondent developed land and started constructing houses. At that point of time i.e. on 23rd September, 1991 after a period of about 2-1/2 years of the payment of the second instalment, the complainants sent a draft of Rs. 68,000/- but by that time the allotment of the complainants had already been cancelled on 18th June, 1990. The allotment was cancelled on justifiable ground that the complainants had not paid the instalments on the due dates. In these circumstances, the State Commission was right to hold that there was no deficiency on the part of the respondent. Finding of the State Commission is based on due consideration of material placed on record and does not suffer from any infirmity which may call for our interference. In any case, the State Commission has directed the respondent to refund the entire amount paid by the complainant along with interest @ 18% per annum from the date of deposit till realisation. The complainants have been well compensated. We see no ground to interfere in the order passed by the State Commission. As a result thereof, we find that the appeal is devoid of merit and it deserves dismissal. We order accordingly. However, in the facts and circumstances of the case, we make no order as to cost. Appeal dismissed.