Sudip Ahluwalia, Member

This Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 alleging deficiency in service, unfair trade practice and fraudulent conduct on the part of Opposite Parties in relation to allotment of a residential flat bearing No. A-202, Tower 'A', in the project 'Symphony', situated at Rajpur Road, Dehradun.

2. The Complainant, who is an NRI residing in Kenya, has pleaded that he was induced by Opposite Party No. 2, namely Mr. Raghav Chaudhry, partner of Opposite Party No. 1 firm, to purchase the said flat for his residential and retirement purposes on representations that the project would be a premium residential development with modern amenities and timely completion. It has been averred that relying upon such representations, the Complainant entered into an allotment arrangement with the Opposite Party No. 1 and paid a total amount of Rs. 1,27,17,200/- inclusive of taxes out of the agreed consideration of Rs. 1,30,00,000/-. The Complainant has further alleged that despite receipt of almost the entire consideration amount, the Opposite Parties failed to complete the project within the stipulated period and thereafter clandestinely transferred the concerned property, including the tower in which the Complainant's flat was situated, in favour of Opposite Party No. 4 through a registered Sale Deed dated 15.01.2019 without disclosure of the Complainant's rights under the allotment agreement, thereby defeating and extinguishing his vested rights in the flat. The Complaint accordingly seeks refund of the deposited amount along with interest, compensation and other consequential reliefs.

3. The case of the Complainant, as emerging from the pleadings and evidence, is that the initial booking was made in March 2015 and subsequently formalized through an Allotment Agreement dated 29.11.2015 which was later substituted by another Allotment Agreement dated 26.02.2016 on account of financing requirements of M/s. Dewan Housing Finance Ltd. presently known as M/s. Piramal Capital & Housing Finance Ltd. The Complainant has relied upon the allotment agreements to contend that the contractual obligation of the Opposite Party No. 1 was to complete construction and hand over possession by 30.03.2018 (Pages 31 and 35 of the Complaint). The Complainant has further provided the Payment Schedule (Pages 14-17 of the Complaint and Pages 4-7 of the Evidence Affidavit of the Complainant) to establish that a total amount of Rs. 1,27,17,200/- was paid, out of which Rs. 1,24,00,000/- was paid towards the flat consideration and Rs. 3,17,200/- towards statutory taxes. It has further been alleged that despite repeated requests and communications, the Opposite Parties neither completed the project within time, nor executed the sale deed. The Complainant then sent a letter dated 02.08.2018 requesting the Opposite Parties to either execute the Sale Deed, or refund the entire payment made by him along with costs and charges. Due to inaction on part of the Opposite Parties, the Complainant issued a Notice dated 22.11.2018, to invoke arbitration as per the Allotment Agreement, but the Opposite Parties never responded. Hence, Arbitration proceedings did not commence.

4. It is further the case of the Complainant that when he personally visited India in April 2019 for an amicable settlement, he discovered through title search that the entire Tower A', including the flat allotted to him, had already been sold by Opposite Party Nos. 1 to 3 in favour of Opposite Party No. 4 vide registered Sale Deed dated 15.01.2019 (Page 55 onwards in the Complaint). The Complainant contends that the property was falsely represented therein as free from encumbrances despite subsisting rights created in his favour. According to the Complainant, the conduct of the Opposite Parties clearly demonstrates fraud, unfair trade practice and deliberate suppression of his contractual rights.

5. The Opposite Party Nos. 1 to 3 contested the Complaint by filing their written version as well as Evidence Affidavit of Opposite Party No. 2, Mr. Raghav Chaudhry. The principal defence raised was that there was no deficiency in service on their part and that the flat in question had already been completed and was ready for possession. It has been pleaded that notices dated 28.05.2019, 02.06.2019 and 04.07.2019, all of which are dated after the filing of the present Complaint, were issued calling upon the Complainant to appear before the office of the Sub-Registrar, Dehradun for execution of the sale deed, but the Complainant deliberately failed to appear. The Opposite Parties have further contended that the Complainant defaulted in repayment of the loan availed from M/s. Dewan Housing Finance Ltd. and consequently proceedings under the SARFAESI Act were initiated by the said Financer which ultimately took possession of the flat vide notice dated 18.01.2021. It has further been pleaded that the actual agreed price of the flat was subsequently revised to Rs. 90,00,000/- since the Complainant had agreed to undertake furnishing and finishing work himself and that a sum of Rs. 37,27,500/- was refunded to him.

6. According to the Opposite Parties, the Complainant was liable to pay the balance amount along with charges and taxes and his failure to do so, disentitled him from seeking any relief. The Opposite Parties have also alleged that the Complainant was merely an investor engaged in financial transactions with the developer, and had even booked another penthouse in a separate project for investment purposes. It has further been pleaded that since the Complainant had invoked arbitration and had also initiated criminal proceedings, the present Consumer Complaint was not maintainable.

7. The Complainant filed his rejoinder denying the allegations made in the written version. It has been submitted that the alleged refund entries relied upon by the Opposite Parties pertained to independent financial dealings and not to the flat transaction in question. The Complainant further denied being an investor and asserted that the flat was intended solely for residential use after his retirement from Kenya. The Complainant has also disputed the allegation that possession was ever lawfully offered before the institution of the present Complaint and emphasized that all notices seeking execution of sale deed were issued only after filing of the Complaint and after transfer of Tower 'A' to the Opposite Party No. 4.

8. The Complainant filed his detailed Affidavit of Evidence reiterating the contents of the Complaint and exhibited the allotment agreements, bank statements, correspondence exchanged between the parties, legal notices and the impugned Sale Deeds. The Opposite Party No. 2 has also led his Evidence by way of Affidavit reiterating the pleas taken in the written version and relying upon notices issued to the Complainant, certain E-mails allegedly acknowledging receipt of refund amounts, and the SARFAESI possession notice.

9. During the course of hearing, Ld. Counsel appearing for the Complainant has argued that the Opposite Parties, after receiving almost the entire consideration amount, had deliberately failed to complete the project within time and fraudulently alienated the entire tower to third parties, thereby extinguishing the Complainant's rights. It was submitted that the subsequent notices offering possession after institution of the Complaint cannot cure the fundamental breach already committed by the Opposite Parties. Ld. Counsel further argued that the alleged refund of Rs. 37,27,500/- was unsupported by any agreement or acknowledgment showing reduction in sale consideration and that no documentary evidence had been produced showing amendment of the original allotment agreement from Rs. 1,30,00,000/-to Rs. 90,00,000/-.

10. On the other hand, Ld. Counsel appearing for the Opposite Parties has submitted that the Complainant was himself a defaulter who failed to pay the outstanding amount and had deliberately avoided execution of the sale deed. It is also submitted that the flat had been completed and that the rights of the Complainant always remained protected. It is further argued that the Complaint was not maintainable in view of the arbitration proceedings and criminal proceedings initiated by the Complainant. It is the further contention of the Opposite Parties that the balance amount of Rs. 6 Lakhs along with the amount refunded was required to be paid for delivery of the Complainant's Apartment.

11. Heard Ld. Counsel for the Complainant as well as the Opposite Parties, and perused the material available on record.

12. Considering the pleadings, documentary material placed on record, affidavits of evidence and submissions advanced on behalf of both sides, this Commission finds that the existence of the allotment agreements and receipt of payments amounting to Rs. 1,24,00,000/- by Opposite Party No. 1 from the Complainant are not disputed. The contractual obligation under Clause 6 of the Allotment Agreement dated 26.02.2016 (Pg. 35 of the Complaint) clearly stipulated completion of the flat, handing over of possession and Execution of Sale Deed on or before 30.03.2018. Admittedly, possession was not offered within the contractual period. The notices relied upon by the Opposite Parties seeking execution of the sale deed are all dated after institution of the present Complaint and significantly after execution of the Sale Deed dated 15.01.2019 in favour of Opposite Party No. 4. This aspect assumes importance because by the time the Opposite Parties called upon the Complainant to execute the sale deed, they had already transferred the entire Tower 'A' including the subject flat to a third party. The registered Sale Deed dated 15.01.2019 (Pg. 55 onwards of the Complaint) specifically describes the property transferred and records that the same was free from encumbrances. There is no mention whatsoever of the subsisting allotment rights of the Complainant despite the Opposite Parties having already received almost the entire sale consideration from him. Such conduct cannot be termed as bona fide. The subsequent plea that Opposite Party No. 4 was willing to honour the transaction does not dilute the fact that the original developer had already divested itself of title in the project property behind the back of the allottee.

13. This Commission is therefore satisfied that the Opposite Parties have committed clear deficiency in service and adopted unfair trade practices by failing to complete and deliver the flat within the stipulated time despite receipt of substantial consideration and thereafter alienating the entire Tower 'A' to a third party while suppressing the Complainant's vested rights under the allotment agreement. The conduct of the Opposite Parties in executing the Sale Deed dated 15.01.2019 without disclosure of the Complainant's allotment and then subsequently issuing notices offering possession after institution of present Consumer proceedings reflects a deliberate attempt to defeat the legitimate rights of the Complainant. The Complainant cannot be compelled at this stage to accept possession in a project over which title complications and third- party transfers have already arisen. In terms of the law laid down by the Hon'ble Supreme Court in "Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, 2019 (5) SCO 725 and Fortune Infrastructure v. Trevor D'Lima, 2018 (5) SCO 442", an allottee cannot be made to wait indefinitely for possession and is entitled to seek refund with reasonable compensation where the developer has failed to honour its contractual obligations.

14. The main controversy which now survives for consideration is whether the Opposite Parties are liable to refund the entire amount claimed by the Complainant or whether the amount allegedly returned by the Opposite Parties is liable to be adjusted while determining the final relief. It is not in dispute that out of the total payment made by the Complainant, a sum of Rs. 1,24,00,000/- was paid towards the sale consideration of the said flat, apart from the statutory taxes. The Complainant has maintained that no part of the sale consideration was ever refunded by the Opposite Parties. The Opposite Parties, however, have specifically pleaded that a sum of Rs. 37,27,500/- had already been remitted back to the Complainant and duly received by him.

15. A perusal of the material available on record reveals that there was continuous correspondence between the parties concerning financial transactions over a considerable period. The Opposite Parties have relied upon such communications to establish that various amounts were transferred to the Complainant and were duly acknowledged by him. Reliance is placed on an E-mail dated 15.05.2017 sent by the Complainant to the Opposite Party No.2 (Exhibit R-5 on Pg. 29 of the Evidence by way of Affidavit of the said Opposite Party) and two subsequent E-mails dated 06.06.2017 and 31.01.2018 (Pg. 31 of the Opposite Party's Affidavit), in which the Complainant purportedly acknowledges receipt of certain amounts.

16. During the course of final arguments on 12.05.2016, Ld. Counsel for the Complainant admitted that the said amounts were received by his client but claimed that those pertained to independent transactions unconnected with the allotment of the subject flat (as recorded in Para 6 of the Order dated 12.05.2026). However, no cogent documentary evidence has been placed on record to substantiate the nature of such alleged independent transactions or to demonstrate that the amounts admittedly received from the Opposite Parties were wholly unrelated to the transaction in question.

17. Considering the rival submissions and the documentary material placed on record, and by applying the principle of preponderance of probabilities, this Commission finds that the explanation offered by the Opposite Parties regarding refund of a sum of Rs. 37,27,500/- appears more probable and credible. The admitted receipt of the said amounts by the Complainant, coupled with the contemporaneous correspondence exchanged between the parties, lends support to the version advanced by the Opposite Parties. In contrast, the plea of the Complainant that the amounts related to separate and unconnected dealings is not supported by sufficient material capable of displacing the probability arising from the record. Accordingly, this Commission is inclined to accept that a sum of Rs. 37,27,500/- stood returned by the Opposite Parties and received by the Complainant.

18. However, acceptance of the aforesaid plea does not absolve the Opposite Parties of their primary liability arising from the allotment transaction. The record clearly establishes that despite receipt of substantial consideration, the Opposite Parties had failed to bring the transaction to its logical conclusion and subsequently dealt with the project in a manner which rendered the Complainant's allotment incapable of effective enforcement. The subsequent notices issued by the Opposite Parties calling upon the Complainant to execute the sale deed, having admittedly been issued after institution of the present Complaint, do not cure the earlier deficiency in service and breach of contractual obligations.

19. In the circumstances, the Complainant is held entitled to refund of the total amount paid towards the consideration of the flat, i.e., Rs. 1,27,17,200/- (which also includes Rs. 3,17,200/- paid towards taxes since the contractual obligations have not been fulfilled), after adjustment of the amount already returned by the Opposite Parties. Accordingly, from the total consideration amount of Rs. 1,27,17,200/- paid by the Complainant, a sum of Rs. 37,27,500/- is liable to be deducted.

20. Considering the prolonged deprivation of the Complainant's funds and the failure of the Opposite Parties to discharge their contractual obligations, this Commission is of the view that interest @ 9% per annum would constitute fair and reasonable compensation.

21. It is, however, clarified that the present finding regarding adjustment of Rs. 37,27,500/- has been recorded on the basis of probabilities emerging from the material available in these summary Consumer proceedings. In the event the Complainant maintains that the aforesaid amount relates to separate transactions and that any further sums remain recoverable from the Opposite Parties on that account, it shall be open to him to pursue such remedies as may be available in law before the competent Civil Court. Any such proceedings shall be decided independently on the basis of evidence to be adduced therein and shall not be influenced by the limited findings recorded in the present Complaint.

22. In view of the foregoing discussion, the Consumer Complaint is partly allowed. Opposite Party Nos. 1 to 3 are jointly and severally directed to pay interest at the rate of 9% per annum on each instalment deposited by the Complainant. Such interest to be calculated from the respective dates of deposit until the date(s) on which the aforesaid sum of Rs. 37,27,500/- was refunded. If the said refund of Rs. 37,27,500/- was refunded on different dates in different instalments, the interest shall be computed from the respective dates of deposit until the respective date of each refund instalment. Every refund instalment comprising the aggregate amount of Rs. 37,27,500/- shall be appropriated, in the first instance, towards the interest accrued and payable up to the date of such refund instalment and, thereafter, the balance, if any, shall be adjusted towards the principal amount.

23. After giving effect to the aforesaid adjustment, the Opposite Parties shall refund the outstanding principal amount together with any unpaid or shortfall interest remaining as on the date of adjustment. The outstanding principal amount shall thereafter further carry interest at the rate of 9% per annum from the date of such adjustment until the date of actual realisation/payment, and any earlier unpaid or shortfall interest shall also be added to the said amount. The Opposite Parties shall also pay litigation costs quantified at Rs. 50,000/- to the Complainant. The aforesaid directions shall be complied with within a period of eight weeks from the date of this Order, failing which any outstanding amount shall carry interest @ 12% per annum for the period of default.