S.M.V. Agencies Pvt. Ltd. vs B. Ganeshan

This appeal has been filed by appellant against order dated 17.10.2014 passed by State Commission in Complaint No. 327 of 2010-B. Ganeshan v. S.M.V. Agencies Pvt. Ltd. by which complaint was allowed.

Brief facts of the case are that complainant/respondent booked flat No. R-506 with opposite party/appellant for Rs. 24,10,878 and opposite party issued allotment letter dated 2.11.2006. Later on, agreement between the parties was executed on 7.11.2006 and complainant made payment of Rs. 21,66,179 in one go and rest 5% amount Rs. 1,20,544 was to be paid at the time of possession. It was further pleaded that as per terms and conditions of allotment, possession of flat was to be handed over by opposite party on 31.10.2008 and in the event of delay in handing over possession, opposite party was liable to pay compensation @ Rs. 5 per sq.ft. i.e. Rs. 6,440. Opposite party has not handed over possession so far Complainant obtained loan of Rs. 13,25,000 from Axis Bank and is making payment of EMI. Alleging deficiency on the part of opposite party, complainant filed complaint for refund of deposited amount with interest and compensation. Opposite party resisted complaint, admitted execution, issuance of allotment letter, execution of agreement and payment made by complainant but submitted that opposite party''s project was massive project with 1,000 flats and completion of project depended upon payment from other customers and clearance from banks and Government agencies. It was further pleaded that opposite party would deliver flat to complainant with additional facilities without any charge and delivery of flat shall be made by end of 2011 and expressed willingness to pay penalty for delayed possession as per agreement and denying any deficiency on its part, prayed for dismissal of complaint. Learned State Commission after hearing both the parties allowed complaint and directed opposite party to refund Rs. 21,66,179 with 18% interest p.a. from the date of deposit till realization, against which this appeal has been filed.

Heard Learned Counsel for the appellant and respondent in person finally at admission stage and perused record. Learned Counsel for appellant submitted that appellant has already offered possession vide letter dated 21.6.2012 and learned State Commission has committed error in allowing refund with excessive interest, hence, appeal be allowed and impugned order be set aside and complainant be directed to take possession. On the other hand, respondent submitted that order passed by learned State Commission is in accordance with law, hence, appeal be dismissed.

It is not disputed that parties entered into agreement to sale and complainant made payment of Rs. 21,66,179 in one go and only 5% balance was to be paid at the time of possession. It is also not disputed that parties entered into agreement on 7.11.2006 and possession of flat was to be given on 31.10.2008.

Learned Counsel for appellant submitted that by letter dated 21.6.2012, possession was offered to the complainant during pendency of proceedings before State Commission. Respondent submitted that aforesaid letter was not received by him and learned Counsel for appellant has not placed any document on record to prove that aforesaid letter was delivered to respondent. Perusal of aforesaid letter further reveals that it was mentioned in the letter that project is near completion and ready for possession meaning thereby till that time project was not complete and opposite party was not in a position to hand over possession of flat completed in all respondents. I do not find reference of letter dated 21.6.2012 in the written statement and even if it is assumed that this letter was received by complainant, flat was not complete for delivery of possession in all respects.

Learned Counsel for appellant submitted that in the light of judgment of Hon''ble Apex Court in 1996 (SLT Soft) 2155 = II (1996) CPJ 25 (SC) = (1996) 4 SCC 704-Bharathi Knitting Company v. DHL Worldwide Express Courier Division of Airfreight Ltd.; respondent is not entitled to refund except penalty for delayed possession. Learned Counsel for appellant submitted that many persons have taken possession of their flats and respondent should also take possession of the flat. Merely because other allottees opted to take possession, complainant cannot be compelled to take possession after so many years whereas possession was to be delivered in 2008 and flat was not ready for possession before filing complaint.

Learned Counsel for appellant submitted that 18% p.a. interest awarded by learned State Commission is on higher side which may be reduced whereas respondent submitted that awarded interest is not on higher side in the light of EMI paid by him on loan and many judgments passed by this Commission and by Hon''ble Apex Court.

Perusal of impugned order reveals that learned State Commission has not granted compensation for harassment and mental agony and has specifically mentioned that compensation part on account of harassment and mental agony is taken care into rate of interest awarded. When separately, compensation has not been awarded, award of 18% p.a. interest cannot be said to be on higher side in the light of judgments of this Commission in Swam Talwar & Ors. v. Unitech Ltd., CC No. 347 of 2014; HUDA v. Darsh Kumar, RP No. 1197 of 1998; Ghaziabad Development Authority v. Yash Pal Chhabra, I (2003) CPJ 165 (NC); Adltya Laroia v. Parsvnath Developers Ltd. and Nalin Bhargava & Several Ors. (Bunch of Petitions) v. Parsvnath Developers Ltd., FA No. 241 of 2015.

Perusal of record further reveals that opposite party by letter dated 1.6.2012 applied to Municipal Council for grant of completion certificate for certain blocks and by letter dated 21.3.2013, again opposite party submitted completion drawing for approval of Municipal Council and Municipal Council, Zirakpur vide letter dated 18.7.2013 apprised to opposite party that completion certificate will be issued after getting permission from the Government and completion certificate was issued on 27.9.2015 and, thus, it becomes clear that till August, 2015, completion certificate was not obtained by opposite party and in such circumstances, learned State Commission has not committed error in allowing complaint and directing refund of deposited amount with 18% p.a. interest.

I agree with the proposition of law laid down by Hon''ble Apex Court that parties are bound by terms of contract but when possession was to be delivered in two years and completion certificate was obtained in 9 years from the date of execution of agreement, complainant cannot be restrained from seeking refund with interest merely on the pretext of penalty clause which provided only Rs. 6,440 per month against payment of Rs. 21,66,179 and learned State Commission has not committed any illegality in ordering refund of the amount. Consequently, appeal filed by appellant is dismissed with no order as to costs. Appeal dismissed.