Booking cancelled and earnest money forfeited by builder-TDI Infrastructure held deficient in services
“OP Having accepted part payment as demanded on 13.02.2012 vide cheque dated 20.12.2011, was not justified in issuing cancellation letter on 21.02.2012. Builders had already initiated the process of sale to a third party even before cancellation. Therefore, the OP cannot forfeit any earnest money even if Complainants have defaulted in some payments”
Held by NCDR on 16.10.2024
Case Title TDI INFRASTRUCTURE LTD V/S PRAKASH VOHRA &ANR
First Appeal No 13.05.2015
FACTS
The complainants/Respondents present before this commission are Non-Resident Indian (NRI). On 20.06.2009, the complainants booked Flat/Unit scheme of Opposite Party namely, “KINGSBURY TERRACE GARDEN” in TDI City, Kundli, Sonepat (Haryana) under construction linked plan along with 15% Registration Charges. Home Buyer Vide allotment letter dated 23.10.2010, deposited/paid total amount of Rs.37,25,346/- on various dates (till 20.12.2011)
The agreement to sell dated 08.05.2009, proposed to give possession of the said flat to the complainants within 36 months from the date of the signing of the agreement to sell, i.e., by May 2012.
The complainants received a letter dated 21.02.2012, of cancellation of provisional allotment of their unit from authorized person of OP-1 stating therein that due to non-payment of dues they have cancelled the provisional allotment of the unit, as per company’s policy.OP had not issued any notice to the complainants, cancelled the allotment in an arbitrary and illegal manner.
It was also noticed by Complainant that OP had also given the possession of the flat to one Sonia Verma
Consumer filed consumer complaint before the State Commission. Vide Order dated 13.05.2015, the State Commission has allowed the complaint and directed the OP to
a) refund to the complainants the amount of Rs.37,25,346/- alongwith interest @9%;
b) b) to pay compensation to the tune of Rs.50,000/-;
c) c) to pay litigation charges of Rs.10,000/-.
Appeal Against this order before NC by Builder:
Objections raised by OP
• The order has been passed without any consideration to the factual matrix of the case. Complainant/Respondent had admittedly not made the payment of the instalments as per the progress of the project. Appellant then offered to refund the deposited amount to the Respondents after making necessary deductions as per the terms agreed upon between the parties offer to refund the deposited amount to the Respondents after making necessary deductions as per the terms agreed upon between the parties which was refused by respondent
• After issuing demand letters dated 28.01.2011, 14.02.2011, 18.04.2011, 17.10.2011 and 07.12.2011, Respondents did not clear the money due from him in a timely and the Appellant was constrained to issue the pre-cancellation letter on 23.01.2012. The second pre-cancellation dated 03.02.2012 was issued prior to the final cancellation letter on 21.02.2012
• The complainants are NRIs which is a fact on record and the State Commission has failed to appreciate that the Respondents were not genuine consumers and had invested in the project only with a view to make profit.Hence fall under commercial purpose
Issues
Whether the Appellant/OP builder is entitled to forfeit earnest money while refunding the amount paid by the complainant.
Complainants Plea /Observation
• Complainants have contended that OP did not raise any demand after they deposited the amount of Rs.37,25,346/-. The only communication received from the OP is letter dated 21.02.2012 vide which OP cancelled the allotment stating that the Complainants had failed to clear the outstanding dues.
• Complainants also contended that OP prior to the aforesaid cancellation allotted the flat in question in favour of one Sonia Verma which is shown in a document dated 30.01.2012 placed on record. It shows that the allotment of the flat in favour of Ms. Sonia Verma had been initiated on 30.01.2012 later possession also given on 10.03.2012,
• This is also the contention of Complainants that as per reminder dated 18.04.2011 and 17.11.2011, the outstanding amount was shown as nil. Another letter dated 04.05.2011 was sent by OP showing outstanding amount as Rs.2,92,428/- Complainants paid the said amount on 13.02.2012 and there after issued a letter of cancellation on 21.02.2012
Observations by State Commission and Confirmed by NC
• State Commission observed
“it is shocking to note that OP after having received part outstanding amount on 13.02.2012, there after issued a letter of cancellation on 21.02.2012. There is a receipt on record dated 13.02.2012 issued by OP showing receipt of an amount of Rs.2,99,220/- vide cheque dated 20.12.2011 giving description as “At the start of 9th floor unit charges”. In pre-cancellation letter dated 23.01.2012, Complainant was given time upto 01.02.2012 to deposit the same, stating that in case of any further delay, OP would be constrained
• Neither the pre-cancellation letter dated 23.01.2012 and 02.02.2012, nor in the cancellation letter dated 21.02.2012, OP has either conveyed any specific decision to forfeit the earnest money or made any mention of its intention to forfeit the earnest money. It only states “you are requested to submit the necessary documents which will enable us to process your refund (if any) which shall be as per Company’s policy”.
Order NC
OP has not specifically exercised its right of forfeiture of earnest money while issuing pre-cancellation letter dated 23.01.2012 and 03.02.2012 and cancellation letter dated 21.02.2012, and having accepted part payment on 13.02.2012 vide cheque dated 20.12.2011, was not justified in issuing cancellation letter on 21.02.2012.
They have already initiated the process of sale to a third party even before cancellation. Therefore, the OP cannot forfeit any earnest money even if Complainants have defaulted in some payments.
We are in agreement with the final directions of State Commission in ordering refund with interest, without forfeiture of any earnest money.
