Dr. Inderjit Singh, Presiding Member
The present Consumer Complaint (CC) has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 by the Complainant against the Opposite Parties - 1 to 5 as detailed above, inter alia praying for directions to OPs:-
i. To refund of the amount of Rs.62,95,330/-(Principal Amount) along with Rs.43,00,583/- i.e. interest @18% from the date of deposit upto 30.06.2017 along with future and pendent lite interest @18% per annum to the date of payment.
ii. to pay an amount of Rs. 25,00,000/- for damages towards mental agony, harassment, and Rs.2.5 lakh towards cost of litigation.
2. Original Complaint had 6 Opposite Parties. Notice was issued to OP - 1 to 5 only on 29.08.2017, holding that OP-6 is not a necessary party to the complaint.
3. It is averred/stated in the Complaint that:-
i) That the complainant booked a flat on 22.03.2013 in the residential Project launched by the Opposite Party no. 1 in the name of "The corridors", situated in Sector 67-A,Gurgaon, Haryana and was allotted Apartment at 3rd Floor, tower B-6 with a total area 1919.64 sq. ft. vide Allotment letter dated 07.08.2013. Apartment Buyer's Agreement dated 14.04.2014 was entered between the parties. The total consideration for the flat was Rs.2,04,75,154/-out of which, the complainant paid Rs.62,95,330/-.The OPs were liable to handover the possession of the unit within 42 (forty two) months from the date of approval of the Building Plans for fulfilment of the precondition imposed thereunder ("Commitment Period"); and an additional grace period of 180 days, after the expiry of the said Commitment Period was given.
ii) The Complainant is a cancer survivor, having been diagnosed and operated upon in the year 2015. She avers that her ongoing and long-term follow-up treatment necessitated substantial medical expenditure, depleting her savings and placing her under severe financial constraints. Due to this medical exigency, she requested Opposite Party No. 1 for additional time to make the outstanding instalment payments. That her brother had also booked an apartment with the same developer. In light of her struggle to manage both medical costs and apartment instalments, the Complainant requested Opposite Party No. 1 to adjust the amounts already paid by her towards the purchase consideration of the flat booked by her brother, Mr. Atul Aggarwal. This request, made by her was declined. Opposite Party No. 1 demanded further instalments.
iii) As per the averment, during this period, widespread complaints emerged regarding significant delays in the project's completion, with minimal progress visible at the site. Opposite Party No. 1 continued its demands for payments. The Complainant further contends that he learned from other flat buyers that Opposite Party No. 1 intended to revise the sanctioned Layout Plans of the Project and would be seeking permissions from allottees for such revisions.
iv) The Complainant alleges that he discovered that the DTCP had not issued any license to Opposite Party No. 1 to construct or sell apartments in the project. The license had, in fact, been granted to Opposite Parties No. 2 to 5, with whom Opposite Party No. 1 had made certain "Internal Arrangements" for construction and sale. This arrangement, being purely internal and neither recognized nor approved by the DTCP, potentially invalidated Opposite Party No. I's authority to convey valid legal title to the allottees. The Complainant raised these critical issues with Opposite Party No. 1. The officials did not provide any substantive reply but instead threatened to cancel her allotment, citing default, and advised her to focus on balance payments rather than raising such issues.
v) The Complainant received a communication dated 04.08.2016 from Opposite Party No. 1, proposing a revision of the earlier sanctioned Building Plans for Cluster A and Cluster B. On 29.08.2016, the Complainant objected via letter/email, stating that such revisions would seriously reduce Urban/Green Areas, delay possession and common utilities, and appeared to be an attempt to extract more money from allottees.
vi) Within two days of receiving communication, Opposite Party No. 1 cancelled the Complainant's flat allotment and forfeited the entire sum of Rs.62,95,330/- paid by her. Complainant alleges that this cancellation was a direct and vindictive counter-blast to the objections she had raised against the revision of plans. The Complainant avers that she was deliberately victimized under the pretext of being in default, resulting in the wrongful cancellation of her allotment and forfeiture of her substantial payments.
4. OP-1 in their written statement/reply stated that:-
(i) The project in question, "The Corridors," is ahead of schedule. The Opposite Party (OP) has already applied for the Occupation Certificate (OC) for the first phase vide application dated 06.07.2017, submitted on 20.07.2017 and revised on 21.07.2017. Construction of the tower housing the Complainant's apartment stands complete, with only finishing works in progress. The present Complaint is liable to be dismissed in view of the preliminary objections detailed hereinafter.
(ii) The Complaint merits outright dismissal for the Complainant's suppression of material facts, assertion of falsehoods, and malafide intent to mislead this Hon'ble Commission. The Complainant has withheld disclosure of two prior Consumer Complaints instituted before this Hon'ble Commission: (i) Jaya Gupta v. Ashiana Landcraft Realty Pvt. Ltd., Consumer Case No. 1239 of 2017; and (ii) Jaya Gupta v. Krrish Shalimar Projects Pvt. Ltd., Consumer Case No. 2114 of 2016. These proceedings establish that the Complainant holds allotments in projects developed by these entities, evincing her status as a profit-oriented investor rather than a genuine residential user. Her averment herein of requiring the subject apartment for "self-use" is demonstrably false. The OP verily believes identical representations were advanced in the aforesaid cases.
(iii) The Complainant's claim of booking the apartment post-representations by OP officials in August 2013 is patently false, both on record and within her knowledge. The booking occurred in March 2013 via a broker of her selection, following her independent market analysis. No representations were made by any OP official. By the claimed August 2013 date, she had already remitted Rs.37,20,440/-, as evidenced by OP acknowledgements dated 13.04.2013 (Rs. 15,00,000/-) and 16.05.2013 (Rs.22,20,440/-).
(iv) The Complainant's assertion that the Basic Sale Price (BSP) was Rs.8,750/- per sq. ft. is equally false. The agreed BSP was Rs.9,400/- per sq. ft., as expressly recorded in the payment plan opted by her, annexed to the Allotment Letter dated 07.08.2013 and reiterated in the Apartment Buyer's Agreement dated 14.04.2014.
(v) The Complainant falsely claims faithful compliance with instalment payments. Beyond the booking amount Rs.15,00,000/-, second instalment Rs.22,20,440/- in 2013, and third instalment Rs.25,74,890/- in April 2014, she defaulted wilfully. Despite OP demands (e.g., 10.06.2015 for fourth instalment of Rs. 25,68,191/-, reminders (21.08.2015; 12.11.2015), and further notices for subsequent instalments, no payments followed. Her letter dated 19.11.2015 cited real estate recession and inability to sell another project's flat (intended to fund this unit), omitting any reference to cancer, treatment, or related financial hardship-revealing multiple investments for returns, not personal use. A further letter dated 09.08.2016 reiterated funds tied in other projects, market downturn, and a non-compliant transfer request to her brother, Mr. Atul Agarwal (involving surrender of his Apartment No. CD-C3-09-901). Constrained by persistent defaults, the OP cancelled the allotment on 01.09.2016.
(vi) The Complainant further suppressed her prior approach to the Economic Offences Wing (EOW), Commissioner of Police, Gurgaon, Haryana, raising identical grievances. The OP duly appeared and submitted a detailed reply thereto.
(vii) The Complaint's foundation contradicts the binding Apartment Buyer's Agreement dated 14.4.2014. The OP's obligations are confined thereto; any alleged deficiency must be assessed against its terms. Challenges to or demands beyond the Agreement fall outside the Consumer Protection Act's ambit, which confers no jurisdiction to amend or rewrite contracts.
(viii) The Complainant's investment was for commercial gain rendering her outside Section 2(1) (d)'s "consumer" definition. The Complaint fails on this jurisdictional ground alone, with the burden squarely on her to prove consumer status.
5. Heard counsels of both sides. Contentions of the parties are summed up as follows:
5.1 Complainants contentions
a) DTCP had not issued any license to OP No.l to construct or sell the apartments. Instead, the license had been issued in favour of OP Nos.2 to 5. OP No.l was allegedly constructing and selling the apartments pursuant to an internal arrangement with OP Nos.2 to 5, which was neither approved nor recognised by DTCP. As a result, OP No.l could not convey valid and legal title to the complainant or other similarly placed allottees.
b) OP No.l issued a letter dated 04.08.2016 intimating that the previously sanctioned and approved building plans were proposed to be revised. The complainant, vide reply dated 29.08.2016, strongly opposed the proposed revision, stating that it would adversely affect urban and green areas, common areas and utilities, delay possession, and was an attempt by the OPs to illegally extract additional money from allottees. The cancellation and forfeiture were allegedly deliberate, arbitrary, illegal and issued as a counterblast to the objections raised by the complainant, with the intent of making wrongful gains. These acts constitute deficiency in service.
c) In the present case, the cancellation was purportedly carried out under Clause 21 read with Clause 7.4 of the Agreement, which are alleged to be arbitrary and one-sided.
d) Reliance is placed on the order dated 06.01.2015 passed by this Hon'ble Commission in DLF Ltd. vs. Bhagwanti Narula (Revision Petition No. 3860 of 2014, decided on 06.01.2015), wherein it was held that only a reasonable amount can be forfeited as earnest money, and that forfeiture beyond 10% of the total sale price is impermissible unless actual loss to that extent is proved.
5.2. OPs' contentions
a) The complainant is a willful defaulter and therefore not entitled to any relief.
b) Clause 13.3 of the Apartment Buyer Agreement provides that possession is subject to fulfillment of all terms and conditions, including payment of the total sale consideration, and the order of performance is specified in the payment plan. The complainant breached the agreement by discontinuing payments after the 3rd installment, despite the OP continuing construction.
c) It has performed its contractual obligations by completing construction and obtaining the Occupation Certificate on 31.05.2019. Sections 51 and 52 of the Indian Contract Act, 1872, which provides that "a promisor is not bound to perform unless the reciprocal promisee is ready and willing to perform, and that reciprocal promises must be performed in the order fixed by the contract."
6. This case was heard at length from both sides on 07.11.2025. The said order, which is reproduced below, captures in brief the arguments of the parties.
Order dated 07.11.2025
"1. Heard counsel for both sides. Complainant is present in person.
2. The complaint was filed inter alia praying for refund of the amount of Rs.62,95,330/- with interest. The unit in question was cancelled vide tetter dated 01.09.2016 by the Opposite Party, as per which, an amount of Rs.1,26,07,249/- has been forfeited towards various items. Extract of relevant para is reproduced below: (page 84-85)
Under the circumstances and in terms of said Agreement, and since the period of 30 days provided for in the said Notice has expired, your allotment of the said apartment is hereby cancelled and the Agreement is terminated with immediate effect, under the terms of Clause 21 read with clause 7.4 of the said agreement. Accordingly, in terms of Clause 21.3 the amounts paid by you on account of Earnest Money, interest on delayed payments, brokerage / commission charges, service tax (if any) and other amounts due and payable stands forfeited. In terms of the said clause of the Agreement, the amount refundable, if any, shall be paid to you only after resale of the said agreement. The details of the forfeited amount are given hereunder:
| Total Paid | Rs.6295330/- |
| Less: Earnest Money Forfeited | Rs.4037442/- |
| Interest on delayed payment | Rs.871951/- |
| Brokerage | RS579232/- |
| Service Tax | Rs.823294/- |
4. During the hearing on 04.11.2025, counsel for the Opposite Party on instructions submitted that as a goodwill gesture, they would be willing to refund the amount after making the deduction of 10% of the BSP, which as per the agreement is i.e. Rs.1,80,44,616/- ( page 62) i.e. deduction of Rs.18,04,461/- but without any interest on the amount forfeited. However, this was not acceptable to the complainant and she prays for the refund of the amounts even if it is with deduction of 10%, with reasonable interest as decided by this Commission. Hence, the case was taken up on merits.
5. At the outset, Opposite Party raised issue of limitation stating that complaint is time barred as cause of action arose when the complainant made last payment on 04.09.2014 (page 90). On the other hand, counsel for the complainant contended that cause of action arose when the unit in question was cancelled by the Opposite Party i.e. 01.09.2016 and the complaint was filed on 31.07.2017 which is well within limitation. Both sides have relied upon various judgments of the Honb/e Supreme Court and this Commission in support of their arguments.
6. On merits, Opposite Party have drawn our attention to various clauses of the agreement, which entities them to forfeit the amount in case of default on the part of the complainant ( clause 21.3 at pge 51). This clause entities the Opposite Party to forfeit the earnest money, interest on delayed payment, brokerage/ Commission / charges, service tax and other amounts due and payable. Cancellation letter at page 84-85 contains that 4 items under which the amount has been forfeited with amounts indicted against each item, this includes Rs.8,71,951/- towards interest on delayed payment. During the hearing, counsel for the Opposite Party fairly admitted that there appears to be no rational in charging interest on delayed payment where possession is not given and the amount is being refunded after forfeiture. He insisted that brokerage and service tax alongwith earnest money would continue to be forfeited contending that service tax has already been paid to Government Authority and brokerage has been paid to the concerned agent. However, he was not in a position to state categorically whether service tax will be paid again to the Govt. Authority when this unit in question is sold again to another allottee.
7. Payment plan is at page 62, the complainant made first three payments and did not make the payment at Si. No. 4 ( casting of tower basement roof stab) followed by various reminders. Complainant does not dispute that they could not make payment towards this instalment as complainant was suffering from serious medical ailments ( cancer), although, this reason is not seen mentioned in any of their communication seeking extension of time for making payment.
8. After hearing both sides, judgment reserved.
9. Both sides are directed to file complete compilation of various judgments they wish to rely upon in support of their contentions, duly indexed and paginated, marking relevant paras and legal points they wish to draw out of such judgments."
7. As regards contentions of OPs regarding Complaint being time barred, we are in agreement with the contentions of the Complainant that cause of action arose when the unit in question was cancelled by the OPs i.e. 01.09.2016 and not on 04.09.2014 when the last payment was made by Complainant, as is contended by the OPs. Hence, we hold that the Complaint filed on 31.07.2017 is well within the statutory limitation period of 2 years.
8. Clause 21.3 of the Agreement, which entitles the OPs to forfeit the earnest money etc. is reproduced below:
"21.3 The Allottee understands, agrees and consents that upon such termination, the Company shall be under no obligation save and except to refund the amounts already paid by the Allottee to the Company, without any interest, and after forfeiting and deducting the Earnest Money, interest on delayed payments, brokerage/commission/charges, service tax and other amounts due and payable to it, only after resale of the said Apartment. Upon termination of this Agreement by the Company, save for the right to refund, if any to the extent agreed hereinabove, the Allottee shall have no further right or claim against the Company and/or the Confirming Parties which, if any, shall be deemed to have been waived off by the Allottee and the Allottee hereby expressly consents thereto. The Company shall thenceforth be free to deal with the said Apartment in any manner whatsoever, in its sole and absolute discretion and in the event that the Allottee has taken possession of the said Apartment, then the Company shall also be entitled to re-enter and resume possession of the said Apartment and everything whatsoever contained therein and in such event, the Allottee and/or any other person/occupant of the said Apartment shall immediately vacate the said Apartment and otherwise be liable to immediate ejectment as an unlawful occupant/trespasser. This is without prejudice to any other rights available to the Company against the Allottee."
9. After careful consideration of the above stated clause, and keeping in view the observations in our order dated 07.11.2025, we hold that OP cannot include interest on delayed payments (Rs.8,71,951/-) while determining the amount to be forfeited under the above clause. Further, we hold that in view of OPs not clarifying their stand whether service tax will be paid again to the Government authority when this unit in question is sold again to another allottee, OPs cannot include Service Tax (Rs.8,23,294/-) also for determining the amount to be forfeited.
10. Not paying any amount after paying the first 3 instalments as per payment plan is not in dispute by the Complainant. No valid reasons have been given by the Complainant for this. Hence, we are of the considered view that OPs were justified in cancelling the unit. However, as regards the amount which the OPs can forfeit, we have considered the issue in the light of various judgments of Hon'ble Supreme Court and this Commission, some of which are referred to below. What constitute an earnest money and what would be a reasonable amount which the builder can forfeit in the event of a default by the allottee, was discussed at length by this Commission in DLF Ltd. Vs. Bhagwanti Narula 2015 SCC Online NCDRC 1613.
10.1. In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon'ble Supreme Court observed that "a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted Une, on a contract framed by the builder.......... the incorporation of one sided clause in an agreement constitute an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling flats by the builder........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms" In Ireo Grace Realtech Pvt.Ltd. Vs. Abhishek Khanna & Anr. (2021) 3 SCC 241, Hon'ble Supreme Court held "Developer cannot compel apartment buyers to be bound by one-sided contractual terms contained in apartment buyers agreement"
10.2. In DLF Ltd. Vs. Bhagwanti Narula, 2015 SCC Online NCDR 1613, this Commission held that -
7....However, the question which primarily arises for consideration in this case is as what would constitute the "earnest money" and to what extent the Petitioner Company is entitled to forfeit the same. The contention of the petitioner is that as agreed by the parties in terms of Clause 8 of the Agreement, 20% of the sale price, irrespective of the stage at which the payment was made constitutes earnest money whereas the case of the complainant as submitted during the course of arguments was that only the amount of Rs. 63,469/- which was paid at the time of booking the apartment can be said to be the earnest money and only that amount could be forfeited.
8. In Maula Bux v. Union of India, (1969) 2 SCC 554, the Hon'ble Supreme Court quoted the following observations made by the Judicial Committee in Kunwar Chiranjit Singh v. Har Swarup-AIR 1926 PC 1-
"Earnest money is part of the purchase price when the transaction goes forward; it is forfeited when the transaction falls through, by reason of the fault or failure of the vendee".
9. In Shree Hanuman Cotton Mills v. Tata Air Craft Ltd.-(1969) 3 SCC 522, the Hon'ble Supreme Court quoted the following characteristics of the earnest money-
"15. Borrows, in Wotte & Phrases, Vol. II, gives the characteristics of "earnest". According to the author, "An earnest must be a tangible thing. That thing must be given at the moment at which the contract is concluded, because it is something given to bind the contract, and, therefore, it must come into existence at the making or conclusion of the contract. The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith, and as a guarantee that he will fulfil his contract, and subject to the terms that if, owing to his default, the contract goes off, it will be forfeited. If, on the other hand, the contract is fulfilled, an earnest may still serve a further purpose and operate by way of part payment."
After considering several decisions on the subject, the following principles were laid down by the Hon'ble Supreme Court regarding 'earnest':
(1) It must be given at the moment at which the contract is concluded.
(2) It represents a guarantee that the contract will be fulfilled or, in other words, 'earnest' is given to bind the contract.
(3) It is part of the purchase price when the transaction is carried out.
(4) It is forfeited when the transaction falls through by reason of the default or failure of the purchaser.
(5) Unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest".
The above referred principles were reiterated in Satish Batra v. Sudhir Rawai-(2013) 1 SCC 345. It would, thus, be seen that only that amount would constitute earnest money which is paid at the time of contract is concluded between the parties. Any payment made after the contract is concluded, cannot be said to be part of the earnest money. In the case before us, admittedly, only a sum of Rs. 63,469/- was paid to the Petitioner Company at the time the deal was concluded between the parties. Therefore, in view of the above said referred authoritative pronouncements of the Hon'ble Supreme Court, only the aforesaid forfeited amount can constitute earnest money.
10. In Mauia Bux case (supra), the Hon'ble Supreme Court took the following view with respect to forfeiture of the earnest money-'s. Forfeiture of earnest money under a contract for sale of property-movable or immovabie-if the amount is reasonable, does not fall within s. 74. That has been decided in several cases: Kunwar Chiranjit Singh v. Hat Swarup (t), Roshan Lal v. The Delhi Cloth and General Mills Company Ltd., Delhi (2); Muhammad Habibullah v. Muhammad Shafi (3); Bishan Chand v. Radha Kishan Das (4); These cases are easily explained, for forfeiture of a reasonable amount paid as earnest money does not amount to imposing a penalty. But if forfeiture is of the nature of penalty, s. 74 applies".
It would thus be seen that only a 'reasonable amount' can be forfeited as earnest money in the event of default on the part of the purchaser and it is not permissible in law to forfeit any amount beyond a reasonable amount, unless it is shown that the person forfeiting the said amount had actually suffered loss to the extent of the amount forfeited by him. In our opinion, 20% of the sale price cannot be said to be a reasonable amount which the Petitioner Company could have forfeited on account of default on the part of the complainant unless it can show it had only suffered loss to the extent the amount was forfeited by it. In our opinion, in absence of evidence of actual loss, forfeiture of any amount exceeding 10% of the sale price cannot be said to be a reasonable amount.
11. It was contended by the learned Counsel for the Petitioner Company that since the complainant had specifically agreed to deliver 20% of the sale price as earnest money, the forfeiture to the extent of 20%) of the sale price cannot be said to be unreasonable, the same being inconsonance with the terms agreed between the parties. This was also his contention that so long as the Petitioner Company was acting as per the terms and conditions agreed between the parties, it cannot be said to be deficient in rendering services to the complainant. We, however, find ourselves unable to accept the aforesaid contention, since, in our view, forfeiture of the amount which cannot be shown to be a reasonable amount would be contrary to the very concept of forfeiture of the earnest money. If we accept the aforesaid contention, an unreasonable person, in a given case may insert a clause in Buyers Agreement whereby say 50%o or even 75%) of the sate price is to be treated as earnest money and in the event of default on the part of the Buyer; he may seek to forfeit 50%o of the sale price as earnest money. An Agreement for forfeiting more than 10%o of the sale price, in our view, would be invalid since it would be contrary to the established legal principle that only a reasonable amount can be forfeited in the event of default on the part of the Buyer. In Bharathi Knitting Company v. DHL Worldwide Express Courier Division of Airfreight Ltd.- (1996) 4 SCC 704, the Hon'ble Supreme Court accepted the contention that in an appropriate case, the Consumer Forum without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant relief, though, each case depends upon its own facts.
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13. For the reasons stated herein above, we hold that (i) an amount exceeding 10%o of the total price cannot be forfeited by the seller, since forfeiture beyond 10%> of the sale price would be unreasonable and (ii) only the amount, which is paid at the time of concluding the contract can be said to be the earnest money.."
11. After careful consideration of the entire facts and circumstances of the case, we partly allow the Consumer Complaint with following reliefs to the Complainant/directions to the OPs: .
(a) The OPs shall be entitled to forfeit a maximum of 10% of BSP of Rs. 1,80,44,610/- i.e. Rs. 18,04,461/-. Such deductions/forfeiture shall be from out of the first/initial payment(s) made by the Complainant.
(b) OPs shall refund the balance amount from out of the total amount paid by the Complainant i.e. Rs.44,90,869/- (Rs.62,95,330/- minus Rs. 18,04,461/-) to the Complainant alongwith interest @ 6% p.a. from the date of each deposit till the date of actual payment.
(c) Entire amount as per above orders shall be refunded within a maximum of one month from the date of this order, failing which total amount payable at the end of one month shall carry interest @9% p.a. from the expiry of one month of date of this order of actual payment.
(d) Liability of OPs-1 to 5 shall be joint and several.
(e) Parties to bear their respective costs.
12. Pending IAs, if any, also stand disposed off.