Punjab-Haryana High Court
Greater Mohali Area Development ... vs Permanent Lok Adalat And Another on 12 March, 2024
Neutral Citation No:=2024:PHHC:036296
Neutral Citation No. 2024:PHHC:036296
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
213 and 215
Date of decision: 12.03.2024
CWP-16637-2021 (O&M)
GREATER MOHALI AREA DEVELOPMENT AUTHORITY
......Petitioner
VERSUS
PERMANENT LOK ADALAT AND ANOTHER
.......Respondents
CWP-7955-2018
GREATER MOHALI AREA DEVELOPMENT AUTHORITY THROUGH
ITS ESTATE OFFICER
......Petitioner
VERSUS
PERMANENT LOK ADALAT AND ANOTHER .......Respondents
CWP-8011-2018
GREATER MOHALI AREA DEVELOPMENT AUTHORITY THROUGH
ITS ESTATE OFFICER
......Petitioner
VERSUS
PERMANENT LOK ADALAT AND ANOTHER .......Respondents
CORAM : HON'BLE MR. JUSTICE VINOD S. BHARDWAJ
*****
Present: - Ms. Munisha Gandhi, Senior Advocate with
Ms. Manveen Narang, Advocate
for the petitioner in CWP-16637-2021.
Mr. Aman Sharma, Advocate for the petitioner(s) in
CWP-7955-2018 and CWP-8011-2018.
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Mr. Parampreet S. Bajwa, Advocate,
Mr. Inderjit Singh Saru, Advocate,
Mr. Manjit Singh Khaira, Advocate
for respondent No.2.
Mr. Munish Goel, Advocate
for respondent No.2 in CWP-8011-2018.
*****
VINOD S. BHARDWAJ, J. (Oral)
1. Since a similar question arise in these three writ petitions, they
are being decided by a common judgment. Facts are however being
extracted from CWP-16637-2021 titled as "Greater Mohali Area
Development Authority versus Permanent Lok Adalat and another".
2. Challenge in the said petition is to the award dated 25.02.2021
passed by Permanent Lok Adalat (Public Utility Services), S.A.S. Nagar,
Mohali whereby an application under Section 22-C of the Legal Services
Authorities Act, 1987 filed by the respondent No.2-applicant-allottee has
been allowed and the petitioner-GMADA has been directed to refund the
amount deposited with the petitioner alongwith interest @ 9% from the date
of its deposits till realization alongwith a cost of Rs. 1,20,000/- towards
mental agony and harassment and Rs. 11,000/- towards litigation expenses.
In the event of failing to deposit the awarded amount within a period of 45
days of passing of the award, interest was payable @ 15% per annum.
3. Briefly summarized the facts of the present case are that the
respondent No.2-applicant-allottee had applied for and was a successful
applicant for allotment of Flat in the Purab Premium Apartment, Sector-88,
SAS Nagar, Mohali. The said scheme has been floated by the petitioner
GMADA on 12.12.2011 and closed on 12.01.2012, for allotment of Type-1,
Type-2 and Type 3 Apartments. As per the terms and conditions mentioned
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in the Brochure, an applicant desirous of Type-3 Apartment had to deposit a
sum of Rs. 6.90 lacs with the GMADA. In the draw of lots held on
20.03.2012, the respondent No.2-applicant-allottee was allotted a Type-3
Apartment Vide GMADA office letter No. GMADA-EO/2012/2559 dated
21.05.2012 against application form No. 12753. The cost of the above said
apartment was Rs. 69 lacs and the respondent No.2-applicant-allottee
selected Plan B for payment of the price of the apartment. Five installments
alongwith penalties were deposited by the respondent No.2-applicant-
allottee as on 30.03.2015 to a total amount of Rs. 79,24,981/-. According to
the Brochure the possession of the said apartment was to be handed over
within a period of 36 months from the date of draw of lots i.e. 20.03.2012
after completion of all documents. It was contended that the possession of
the said apartment was not offered by the GMADA till the date of filing of
the application before the Permanent Lok Adalat. It was further averred that
despite obtaining penal interest from the applicant-allottees, the possession
was not being offered and that an amount of Rs. 7,47,500/- i.e. the last
installment had not been deposited alongwith interest which was due on
21.05.2015. The ledger of account was also produced by respondent No.2-
applicant-allottee before the Permanent Lok Adalat. It is contended that the
above said cost of the apartment had been deposited by respondent No.2-
applicant-allottee after arranging loan of Rs. 47 lacs from the State Bank of
India, Chandigarh and the respondent No.2-applicant allottee was also
required to pay regular interest on the loan amount availed by him from the
Bank. Hence, there was dual cost imposed upon the respondent No.2-
applicant-allottee firstly in the form of payment of interest on the loan
amount already availed and secondly on account of unexplained delay in
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completion of the project and possession of the apartment. A representation
was submitted by the respondent No.2-applicant-allottee on 08.01.2016
which was duly received by GMADA alongwith a reminder for seeking
refund of the amount, however, the same was to no avail. It is averred that
the GMADA was guilty of deficiency in service and unfair trade practices,
Thereafter, the application was preferred before the Permanent Lok Adalat.
4. On notice, the petitioner-GMADA entered its appearance and
file its reply raising various objections with respect to the maintainability of
the proceedings before the Permanent Lok Adalat. Without disputing the
factum of allotment letter and other factual aspects pointed out by the
respondent No.2-applicant-allottee, it was submitted that the allottee made
consistent default in payment and as a result of such default, a show cause
notice dated 17.11.2014 was served upon him and a demand notice dated
05.03.2015 was also addressed to him. In response to the communication
dated 17.11.2014, the respondent No.2-applicant-allottee sent a reply on
24.12.2014 wherein he stated that he did not pay the due amount on account
of unavoidable circumstances and submitted that he was ready and willing to
deposit the amount alongwith interest and penalty. It was further stated that
the respondent-applicant is still in default and was served with a
communication dated 28.11.2016 calling upon him to bring the receipts of
the deposit made and that in the event the amount had not been deposited,
action shall be taken as per the letter of intent and under the provisions of the
Punjab Regional and Town Planning and Development Act, 1995. It was
further stated that the letter and offer of possession had not been issued to
the respondent No.2-applicant because of the default committed by him.
The requisites documents had been appended alongwith the reply furnished.
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A reference was also made to various statistics as per which there were
1075 eligible allottees and that as many as 400 allottees had defaulted in
making due payments and nearly 100 allottees opted for refund of their
money due to which the entire planning for raising construction of the
project had to be redrawn and that the GMADA was not in voluntary default
in fulfilling its promise of delivery of possession within the time specified as
per letter of allotment. It was further submitted that a letter of possession
dated 28.11.2016 had already been issued to the respondent No.2-applicant-
allottee and he could seek possession after making payment of the balance
amount.
5. Proceedings for an amicable resolution of the issue were
initiated however, since no amicable settlement could be arrived at between
the parties, hence, adjudication of the lis was undertaken by the Permanent
Lok Adalat (Public Utility Services), S.A.S. Nagar, Mohali.
6. Upon consideration of the evidence led by the respective
parties, the application filed by the respondent No. 2-applicant-allottee was
allowed by observing as under:-
"13. We have given due consideration to the intention
raised by the learned counsel for the parties. Admittedly in this
case the applicants were allotted Type 3 apartment in draw of
lots on 20.3.2012 and later on issued letter of intent Ex-A2 on
21.5.2012. The applicants made payment of Rs. 79,24,981/- up-
to 30.3.2015 i.e. 95% of the total cost of (this amount include
penalty also) amount of Rs. 69 lacs. As per brochure Ex-A1 the
possession was to be delivered within 36 months from the draw
of lots i.e. up to 20.3.2015. However as per Letter of intent the
possession was to be delivered from the issuance of letter of
intent Ex-A2 dated 21.5.2012. The letter dated 28.11.2016 Ex-
A6 dated 25.11.2016 was written by Divisional Engineer (PH-
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2) Gmada, SAS Nagar to The Project Manager, M/s Simplex
Infrastructure Limited, C/o PURAB PREMIUM APARTMENTS
Sector 88, SAS Nagar (who was constructing the project)
mentioning therein that external development is yet to be made.
Another letter Ex-A7 dated 29.11.2016 was written by
Divisional Engineer (PH-2) Gmada, SAS Nagar to The Project
Manager, M/s Simplex Infrastructure Limited, C/o PURAB
PREMIUM APARTMENTS Sector 88, SAS Nagar mentioning
therein that due to unfurnished work there could be delay in
giving the possession to the allottee and as per letter Ex-A8
various defects have been pointed out by the Divisional
Engineer (PH-2) Gmada, SAS Nagar to The Project Manager,
M/s Simplex Infrastructure Limited, C/o PURAB PREMIUM
APARTMENTS Sector S8, SAS Nagar. As per Ex-A9 dated
20.9.2016 various grievances regarding the construction have
been pointed out. The aforesaid letters reveal that the Gmada
has not completed the work So far as this argument of the
learned counsel for the respondents that these letters cannot be
relied upon as they have not come from authentic sources. In
this regard, respondents have not denied that these letters are
forged, thus these letters cannot be thrown away and thus are
admissible in evidence. So far as the photographs Ex- R6A to
Ex-R6Y are concerned it cannot be said after looking these
photos that the Gmada has completed the project. Thus the
arguments of the learned counsel for the respondent is devoid
on merit. Under these circumstances the applicants are entitled
for refund of Rs. 79,24,981/- alongwith interest @ 9% from the
date of deposits plus compensation and litigation charges.
14. In view of our above discussion the applicant has been
able to substantiate his case and his application is liable to
succeed and the same is hereby allowed and the respondent is
directed:-
(a) to refund Rs. 79,24,981/- to the applicant alongwith
interest @ 9% from the date of deposit till realization.
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(b) to pay Rs. 1,20,000/- on account of mental agohy and
harassment apart from Rs. 11,000/- towards litigation
charges to the applicant.
These amounts shall be paid by the respondents to
the applicant within 45 days from the date of receipt of
order, failing which the respondents shall be liable to pay
interest @ 15% P.A. till its realization."
7. Aggrieved thereof, the present writ has been filed.
8. Learned Senior Counsel appearing on behalf of the petitioner
has vehemently argued that the respondent No.2-applicant-allottee was in
default in payment of the instalments and even as per the table extracted in
the writ petition, there was an outstanding amount to the tune of Rs. 8.18
lacs after May, 2015. She further contends that the offer of possession could
not be issued since the respondent-applicant was in breach of its own
obligations and that the show cause notice has already been issued by the
GMADA to the respondent in November, 2014 to which response has been
furnished by the respondent No.2-applicant-allottee to the effect that he
could not make the payment on account of personal hardships and
exigencies. She thus contends that the default was on the part of the
respondent in failing to make the payment as per the payment schedule and
as such, the petitioner-GMADA could not be held liable. In CWP-7955-
2018 and CWP-8011-2018, learned counsel appearing on behalf of the
petitioner(s) has additionally argued that the Permanent Lok Adalat (Public
Utility Services), S.A.S. Nagar has awarded an interest @ 8% to be
compounded annually not only on the amount already refunded but also on
the amount forfeited.
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9. Responding to the above, counsel for the respondent contends
that the contentions of the petitioner are misconceived inasmuch as the
GMADA was undisputedly in default in completion of the project and
handing over possession within a period of 36 months of the issuance of
letter of intent/allotment. The said period came to an end on 19.03.2015 and
there is nothing on record on the basis whereof it can be assumed that the
project had been completed as on the said date and an offer of possession
has been made. He contends that as per the case of the petitioner-GMADA
itself the completion certificate was obtained by them in July, 2016. He
submits that even the above said stand is disputed since the said completion
certificate relied upon by the petitioner-GMADA was not issued by the
competent authority and was by a Subordinate Official of their own
Department as had been noticed by the Permanent Lok Adalat, however,
notwithstanding that the said completion certificate had been obtained in
July 2016 for the sake of argument, yet, much prior to the issuance of the
completion certificate, an application for refund of the amount had been sent
by the respondent No.2-applicant. Further, the show cause notice would
have no bearing or consequence inasmuch as the petitioner-GMADA had
claimed penal interest from the petitioner and had accepted the amount even
in May, 2015. He further submits that even as per the undertaking offered by
the petitioner-GMADA in November, 2016, they were willing to offer
possession of the said unit. It is thus evident that there was thus no order
directing cancellation of the allotted unit or order passing forfeiture of the
amount. Hence, the undertaking was not justified in directing forfeiture of
10% from the amount deposited by them.
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10. Attention is drawn to Clause 2.3 (ii) of the letter of allotment
which contains provision relating to forfeiture and necessitates cancellation
of allotment of a unit before a penalty of forfeiture could be imposed.
11. I have heard learned counsel appearing on behalf of the
respective parties and have gone through the documents appended alongwith
the present writ petition.
12. Since the factual aspects are not disputed, the issue only
pertains as to whether the petitioner-GMADA was entitled to refund the
amount after forfeiture of 10% of the amount on a purported delay in
deposit of the installments by the allottees.
13. It is undisputed that the forfeiture was a power vested with the
Developer in the event of exercising a rate of cancellation of the unit allotted
in favour of an applicant-successful allottee. It is also not in dispute that
even the show cause notice had been issued by the GMADA to some of the
allottees, however, no order directing cancellation of the allotment had been
issued and instead, by their act and conduct, they had accepted the amount
deposited by the allottees even thereafter and after adjusting the penal
interest as stipulated in the letter of allotment. The respondents have by their
act and conduct specifically condoned the delay and have drawn benefit in
the form of levy of interest/penal interest on an allottee for delayed deposit
of the installment amount. It is also not in dispute that as against the price of
Rs. 69 lacs against a Type-3 plot, an amount of more than Rs. 74 lacs had
been deposited by the respondent No.2-applicant-allottee in the case in hand.
Thus, the petitioner-GMADA cannot yet portray itself as a victim on
account of a delay in deposit of the installments. Further, it cannot be
accepted as an excuse that as against 1600 allotments made, there was a
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default by nearly 400 allottees and 100 of them have sought a refund of the
said amount. Every developer is required to be conscious of the fact that
there would be a default by various allottees in payment of money and yet
the project is required to be completed in time. Appropriate resource
mobilization is required to be done and the developer is incentivized on
account of the interest/penal interest which he is entitled to claim from an
allottee in the event of delay/default in payment of the instalments in time.
Once a mode has been agreed upon, the petitioner-GMADA cannot read the
offer/allotment document through its convenience at faces where it favours
then and try to apply the hard provisions against allottee notwithstanding
that the clauses may inure in favour of an allottee. Such leeway cannot be
extended to the developer.
14. It is also seen that once the agreed contractual period within
which the possession was required to be offered has come to an end, a right
gets accrued in favour of an allottee to receive refund of the said money
since the occurrence of a default is established after coming to an end of the
period within which the offer of possession was required to be made. Any
delay or default thereafter by an allottee cannot be read as disadvantage or to
hold that exercise of an option is an act of default by the respondent-allottee
himself.
15. Considering it from either of the perspectives it is not in dispute
that the entitlement for directing forfeiture of 10% of the amount would
accrue only in the event of cancellation of allotment. Once the petitioner-
GMADA has chosen not to exercise its option for cancellation of an
allotment and had instead preferred to levy a penal charge on a defaulting
allottee, it commercially exercised an option of not cancelling the plot, yet, it
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would not be entitled to invoke the said clause for effecting forfeiture and
seeking enforcement in an event where an allottee seeks refund of the
money.
16. All the aspects have been considered by the Permanent Lok
Adalat (Public Utility Services), S.A.S, Nagar Mohali and a considerate and
just decision has been passed. The Permanent Lok Adalat (Public Utility
Services) is governed by Principles under Section 22 (d) of the Legal
Services Authorities Act, 1987 while discharging/adjudication of its
functions and the said guiding principles are objectivity, fairness, equity,
principle of natural justice and other principle of justice. Hence, once a view
has been taken by the Permanent Lok Adalat (Public Utility Services) and
which such view is not found to be illegal, perverse or suffers from
impropriety or gross misappreciation of the evidence available on record,
such view would not normally be interfered with by the High Court in
exercise of its powers of judicial review under Article 226/227 of the
Constitution of India.
17. There is however some merit in the contention of the petitioner
where the Permanent Lok Adalat (Public Utility Services), has directed
refund of the service tax deposited and has also imposed compensation for
mental harassment and agony. The Hon'ble Supreme Court in the judgment
of "Vijay Gupta versus Estate Officer, GMADA, Mohali in Civil Appeal
No. 6060 of 2016 vide order dated 20.02.2019 has already held that when
the agreement stipulates damage is in the form of an interest or the amount
to be refunded, no separate amount could be awarded towards harassment
and mental agony. It was further held that service tax cannot ordered to be
refunded since it's a statutory dues.
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18. The said legal aspect has not been taken note of by the
Permanent Lok Adalat (Public Utility Services). The award in question
would thus be hit by the judgment of the Hon'ble Supreme Court in the
matter of Vijay Gupta (Supra) and has to be modified to be in conformity.
19. Accordingly, the award passed by the Permanent Lok Adalat
(Public Utility Services), S.A.S. Nagar, Mohali is modified to the extent that
the petitioner would be liable to refund the amount as deposited by the
allottees alongwith the interest @ 8% compounded annually in terms Clause
3 (II) of the letter of allotment from the date of deposit till its refund to the
allottee. The award with respect to the refund of service tax and towards
compensation for harassment and mental agony are however alleged to be
bad. Litigation expenses as awarded are however retained since the
petitioner-GMADA has forced the allottees to undergo a litigation which
ought not to have been thrust upon an allottee since the petitioner itself was
in default.
20. For the foregoing reasons, the present petitions are partly
allowed and the award passed by the Permanent Lok Adalat (Public Utility
Services), S.A.S. Nagar Mohali is modified in terms of aforesaid.
21. A photocopy of this order be placed on the file of connected cases.
(VINOD S. BHARDWAJ)
MARCH 12, 2024 JUDGE
Vishal Sharma
Whether speaking/reasoned : Yes/No
Whether Reportable : Yes/No
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