Allottee Cannot Be Compelled To Accept Alternate Plot Offered By Developer Instead Of Refund: Punjab & Haryana High Court

Observing that "the willingness of one cannot be thrust upon the other", the Punjab & Haryana High Court has set aside the award passed by Lok Adalat wherein a developer who failed to provide possession was directed to provide an alternative plot instead of giving a refund of the deposited amount.

The allottee had booked a residential plot in 2012 by depositing the initial amount but the same was never delivered.

Justice Vinod S. Bhardwaj said, "I am of the opinion that exercise of discretion/choice by an allottee cannot be made subject to a counter offer made by the developer and such counter offer cannot be accepted in law to give rise to a binding obligation on the applicant to seek such an allotment. Such renewed offer has to be seen in the law of contract as a fresh counter offer to which acceptance by the applicant, is a pre-requisite to create any obligation. The willingness of one cannot be thrust upon the other."

The Court further noted that even after a period of more than a decade, the actual physical possession of the plot has not been given to the petitioner.

"The fate of the applicant cannot be kept under suspension indefinitely and merely for the convenience of the developer," added the judge.

These observations were made while hearing the plea of one Pankaj Nandwani challenging the award passed by Permanent Lok Adalat (Public Utility Services), Sonipat.

The Lok Adalat under Section 22C of The Legal Services Authorities Act, 1987  (1987 Act) filed by the petitioner was partly allowed and the respondent developer was directed to allow the petitioner to choose a plot from the available plots, of the same size and in the same location, at the initially agreed price instead of directing a refund of the entire deposited amount, along with interest.

Facts In Brief 

According to Nandwani, he had booked a residential plot at TDI City, Kundli, District Sonipat in the project.

The registration form was submitted by him in 2012 and a sum of Rs.18,75,000 was duly deposited. A letter of allotment was stated to have been issued to the petitioner but the same was actually never delivered to the petitioner, alleged counsel for the petitioner.

The petitioner submitted that he waited for a period of four years for the progress to be made and possession to be offered by the developer, however, no such development took place.

In 2016 the petitioner and the developers expressed their inability to hand over possession of the plot to the petitioner and gave him the option to accept an alternate plot of the same size or to adjust the amount in any other unit.

In the reply filed before the Permanent Lok Adalat, the respondents admitted that they were unable to complete the development works as some miscreants had filed a suit and therefore they were unable to offer the possession to the petitioner. 

Terms of settlement were drawn as per the provisions of Section 22 C(4) to (7) of the Legal Services Authorities Act, 1987, wherein it was proposed that either the respondents no.2 and 3 offer the possession of the original plot or refund the said amount but the same could not be fructified.

The Lok Adalat passes an order directing the developers to choose a plot from the available plots of the same size in the same location at the initially agreed price.

After hearing the submissions, the Court considered the question, "whether an allottee can exercise his option not to seek an alternate plot and instead to seek a refund of the money deposited by him."

The Court agreed with the submission made by the Legal Aid Counsel, that an allottee/applicant cannot be compelled to seek any other plot as the same would be in the nature of a novation of the contract.

Justice Bhardwaj opined that "the applicant cannot be compelled to accept the offer of any other alternative plot."

It directed the developers to refund the entire deposited amount along with interest @ 10% per annum from the date of its deposit till its actual refund.

Title: Pankaj Nandwani v. Permanent Lok Adalat & others

Mr. C.K. Singla, Advocate with Ms. Kavita Joshi, Advocate and Ms. Tarranum Madan, Advocate for petitioner.

Dr. (Ms.) Malvika Singh, Advocate (Legal Aid Counsel for respondents no.2 and 3.

Citation: 2024 LiveLaw (PH) 222

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