The National Consumer Disputes Redressal Commission, headed by Subhash Chandra as President, held Godrej Properties liable for deficiency in service over refusal to refund the earnest money paid by the complainant, even following the cancellation of the purchase. Brief Facts of the Case The complainants booked a villa from Godrej Properties for Rs.5.00 lakh but did not receive...
The National Consumer Disputes Redressal Commission, headed by Subhash Chandra as President, held Godrej Properties liable for deficiency in service over refusal to refund the earnest money paid by the complainant, even following the cancellation of the purchase.
Brief Facts of the Case
The complainants booked a villa from Godrej Properties for Rs.5.00 lakh but did not receive the promised application form or a signed sale agreement. Despite multiple attempts to obtain the documents, they were unsuccessful. Subsequently, the builder demanded Rs.23,65,240/- per the payment schedule. The complainants requested the required documents, asked for a cancellation and refund, and sent emails for the same. However, Godrej Properties and the builder continued sending reminders for installment payments. In response to the cancellation request, an email referred to clause 14 in the application form, leading to the forfeiture of the booking amount. The complainants later received a termination letter from the builder, confirming the forfeiture based on clause 14 of the application form. The complainant contended that the booking process was incomplete since a signed copy of the booking form had not been provided to them.
Contentions of the Opposite Party
Godrej Properties contended that the complainants don't qualify as 'consumers' under the Consumer Protection Act because they booked two villas without disclosing a commercial purpose and pointed out undisclosed residential properties owned by the complainants. Godrej Properties asserted that the complainants were aware of the payment plan and failed to make timely payments, resulting in the forfeiture of their earnest money. They clarified that the complainants incorrectly identified them as a party, stating their position was solely as a partner with the builder. According to Godrej, the complainants only requested the application form at the last opportunity despite numerous letters and reminders. Therefore, the complainant was declared a defaulter, and they forfeited the earnest money paid when booking the villa.
Observations by the Commission
The commission observed that the complainant's case holds merit, primarily because Godrej Properties did not present any documentary evidence confirming the proper execution of the allotment letter, and in the absence of a valid allotment letter, the payment schedule cannot be enforced. The commission based its decision on previous National Commission rulings, specifically referencing cases like Kavita Ahuja vs. Shipra Estates and Sanjay Rastogi vs. BPTP Limited & Anr. In these cases, it was emphasized that the responsibility lies with the opposite party to demonstrate that the complainants are engaged in the business of buying and selling flats, which is crucial to establish the complainants as ineligible 'consumers' who are purchasing a flat for residential purposes. However, Godrej Properties has not fulfilled this burden of proof, making their argument untenable.
The Commission ruled that cases such as Satish Batra vs. Sudhir Rawal and Lakshmanan vs. B R Mangalgiri and Ors., cited by the opposing parties to justify forfeiting the earnest money, only hold merit when there is a default on the part of the complainant. The validity of an agreement is established when both parties properly execute the document. In the present case, there is no executed document between the parties, and the opposite party failed to produce such a document. Therefore, the question of a default on the complainant's part does not arise. Consequently, there is no justification for forfeiting the earnest money.
The Commission directed the OP to refund Rs. 5,00,000 to the complainant with an interest rate of 6% per annum till realization, along with Rs 25,000 towards the cost of proceedings.
Counsel for the Complainant: Adv. Ranvir Singh & Adv. Rishi Kumar Gautam
Counsel for the Opposite Party: Adv. Pragyan Pradeep Sharma
Case Title: Ujjwal Kumar Vs. Godrej Properties Ltd.
Case Number: C.C. No.- 3447/2017