Failure To Provide Plot-Buyer's Agreement, NCDRC Holds DLF Homes Panchkula Liable For Deficiency In Service

Brief Facts:

The Complainant booked a plot built by DLF Homes Panchkula Pvt. Ltd. (“DLF Homes”) in DLF Valley Panchkula. He paid a booking amount of Rs. 12,00,000/-, with the total cost of the plot being Rs. 1,78,10,452.51/-. This amount was to be paid over a two-year payment plan. On 31.03.2012, a receipt for Rs. 12,00,000/- was issued, followed by a letter confirming the booking and allotment. Payments were to be made in 11 instalments, starting with the booking amount and ending with the offer of possession. The Complainant further paid amounts acknowledged by receipts dated 01.02.2013 and 30.04.2013, with the last payment made on 23.08.2013, as per the payment plan.

The application form filed by DLF Homes contained one-sided terms and conditions. It specified that a Plot Buyer's Agreement had to be executed, which DLF Homes failed to send or offer. Further, DLF Homes deceitfully planned to deprive him of a valid transaction by not completing the necessary legal formalities and failing to execute the Plot Buyer's Agreement. Consequently, the plot was cancelled on 18.11.2014. The Plot Buyer's Agreement which was never executed was cited in the cancellation. The Complainant also sent reminders in 2016 for the return of Rs. 61,64,228/- with 18% interest, which DLF Homes failed to repay.

Feeling aggrieved, the Complainant filed a consumer complaint in the National Consumer Disputes Redressal Commission (“NCDRC”). He claimed that the forfeiture clause should not apply and that the cancellation letter unjustly included interest on delayed payments at a rate of 24%, which was excessive. Further, he contended that the act of DLF Homes was arbitrary and aimed at forfeiting his money.

DLF Homes argued that the Complainant did not comply with the payment plan, having only paid the booking amount and three instalments. The remaining instalments were defaulted, and notices were sent to the Complainant. Due to non-payment, a cancellation letter was issued on 18.11.2014, invoking the forfeiture clause.

Observations by the NCDRC:

The NCDRC referred to the case of State Bank of India vs B.S. Agriculture Industries, [(2009) 5 SCC 121], where the Supreme Court held that complaints filed beyond two years could only be entertained if sufficient cause was shown. The NCDRC held that the cause of action arose when DLF Homes failed to respond to the refund demand, making it a continuing cause of action. Therefore, the Complainant's claim was not barred by limitation.

Further, the NCDRC held that DLF Homes failed to execute the Plot Buyer Agreement and therefore, the forfeiture of the booking amount and the interest imposition were unfair. Additionally, the NCDRC observed that the payment plan provided along with the booking letter was part of the application form signed by the Complainant but not by DLF Homes. This discrepancy further supported the Complainants' claim of deficiency and unfair trade practice. The terms and conditions in the application form indicated that the final agreement was contingent on a Plot Buyer Agreement, which was never sent or signed.

Furthermore, the NCDRC observed that the terms and conditions of the Application Form, which DLF Homes failed to sign, did not constitute a formal Plot Buyers Agreement. According to the conditions, the plot was to be allotted within 24 months from the application date, subject to timely payments by the applicants. DLF Homes did not provide a valid reason for not offering the signed Plot Buyers Agreement to the Complainant, which led to justified concerns about future complications and delayed possession.

Further, it was held that the Complainant was entitled to stop the payment after observing a considerable delay in possession and he cannot be held liable for the same. The NCDRC emphasized that without a signed agreement, DLF Homes could not compel the Complainant to make further payments. The forfeiture of the entire earnest money and the imposition of interest on delayed payments were deemed unjust. The NCDRC held that forfeiture of earnest money must be reasonable and must not exceed 10% of the total consideration.

Therefore, the NCDRC held that only 10% of the booking amount, amounting to Rs. 1,20,000/-could be forfeited. DLF Homes was directed to refund the rest of the amount paid by the Complainant with 6% interest.

Case Title: Kuldeep Singh and Anr. vs DLF Homes Panchkula Pvt. Ltd. and Anr.

Case No.: C.C. No. 1937 of 2017

Advocate for the Complainant: Mr Harender Singh

Advocate for the Respondent: Mr Pravin Bahadur, Mr Prabhat Ranjan and Mr Ashray Bhatia

Date of Pronouncement: 22nd July 2024