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TMI Blog2025 (2) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... nes, a very meagre compensation is provided to the Apartment purchaser. Not only that clause 4.2 of the Agreement, which provides that the Apartment shall be ready for occupation within 42 months from the date of issuance of Allotment Letter, also provides that the Developer would be entitled for a grace period of 6 months over and above this 42 months' period. The said clause 4.2 further provides for various eventualities in case of which the Developer would be entitled to further extension of period for handing over the possession - In any case, clause 4.3 of the Agreement provides that, subject to the provisions of clause 4.2 of the Agreement, if the Developer fails or neglects to issue the Possession Notice on or before the Tentative Completion Date and/or on such date as may be extended by mutual consent of the Parties, the Developer shall be liable to pay to the Buyer a meagre compensation for such a delay at the rate of Rs.5/- per month per square feet of the Super Built Up Area of the Apartment. It can thus be seen that the Agreement is one-sided and totally tilted in favour of the Developer. In the case of CENTRAL INLAND WATER TRANSPORT CORPN. LTD. VERSUS BROJO NATH GANG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter, "NCDRC") disposed of the Consumer Complaint filed by the Respondents No. 1 and 2 (hereinafter referred to as, "Complainants" or "Respondents") thereby directing the Appellant to deduct only 10% of the Basic Sale Price ("BSP" for short) towards cancellation of the Complainants' Apartment and refund the balance amount along with simple interest @ 6% per annum from the date of each payment till the date of refund. Aggrieved thereby, the present appeal has been filed under Section 23 of Consumer Protection Act, 1986. 2. The facts, in brief, giving rise to the present appeal are as given below. 2.1 On 10th January, 2014 the Complainants had booked an Apartment with the Appellant in the project by the name "Godrej Summit" situated at Sector 104, Gurgaon, Haryana by an Application Form and submitted Rs. 10,00,000/- as application money. 2.2 On 20th June, 2014 by an allotment letter, the Appellant allotted an Apartment being Apartment No. C-1501 on the 14th floor in Tower 'C' to the Complainants in the above-mentioned project, pursuant to which an Apartment Buyer Agreement (hereafter referred to as "the Agreement") was entered into between the Parties. 2.3 On 20th June, 2017 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nest money and any other due payable by the buyer including interest on delayed payment. 5. He further submits that the NCDRC has specifically come to a conclusion that the Appellant was entitled to cancel the Apartment and forfeit the amount as per the terms and conditions of the Application Form and/or the Agreement between the parties. He submits that having arrived at such a finding, the NCDRC could not have come to a conclusion that the condition of forfeiture of 20% of BSP, being the earnest money liable for forfeiture in case of cancellation, was unreasonable and interfered with the same by reducing it to 10% of the BSP. 6. He further submits that, from the perusal of the email addressed by the Respondents to the Appellant, it was clear that though the Appellant had called upon the Respondents to take possession of the Apartment, they had opted out of the deal only because there was a recession in the market. He submits that since the Respondents themselves have cancelled the deal on account of recession in the market, the Appellant was fully justified in forfeiting the earnest money deposit. 7. He relies on the judgments of this Court in the cases of Satish Batra v. Sudh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid, passed the impugned order. 13. It will be relevant to refer to clauses 2.6 and 8.4 of the Agreement entered into between the Parties, which read thus: "2.6 It has been specifically agreed between the Parties that, 20% of the Basic Sale Price, shall be considered and treated as earnest money under this Agreement ("Earnest Money"), to ensure the performance, compliance and fulfillment of the obligations and responsibilities of the Buyer under this Agreement. It has been made clear by the Developer and the Buyer has understood that the Sale Consideration and Statutory Charges as mentioned in Schedule VI hereto have been computed on the basis of Super Built Up Area of the Apartment. The Buyer agrees that the calculation of Super Built Up Area in respect of the Apartment is tentative at this stage and subject to variations till the Completion of Construction. In case such variations are beyond +/- 5%, then the Developer shall take prior consent of the Buyer. *** *** *** 8.4 On and from the date of such termination on account of Buyer's Event of Default as mentioned above ("Termination Date"), the Parties mutually agree that- (i) The Developer shall, out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d along with applicable interest. We shall appreciate a prompt action on our request. Kindly share the cancellation formalities, and the refund amount." 16. The stand taken by the Respondents was specifically borne out by the NCDRC from the written statement filed by the Appellant. 17. It is thus clear that the Respondents had cancelled the deal since there was recession in the market. Not only that, but the NCDRC has specifically observed as under: "Hence, the action of the OPs in cancelling the apartment and forfeiting the amount as per terms and conditions of the application form and/or the BBA cannot be faulted with. However, the condition of forfeiture of 20% of BSP, being the earnest money liable for forfeiture in case of cancellation appears unreasonable. It will be in the interest of justice and fair play to both sides, if OPs are allowed to deduct only 10% of the BSP as earnest money i.e. Rs.17,08,140/- and refund the balance amount to the complainants." 18. This Court in the case of Satish Batra v. Sudhir Rawal (supra), after considering the earlier judgments of this Court, has observed thus : "15. The law is, therefore, clear that to justify the forfeiture of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the earlier judgments, has reiterated the aforesaid legal position. 21. We, therefore, find that Shri Dhruv Mehta, learned Senior Counsel is justified in placing reliance on the aforesaid judgments of this Court. 22. However, the issue does not rest at that. It will be relevant to consider the reciprocal obligations of the Appellant i.e., the Developer in case the Developer does not comply with the timelines in the Agreement. Clauses 4.2 and 4.3 of the Agreement are as follows: "4.2. The Apartment shall be ready for occupation within 42 months from the date of issuance of Allotment Letter. ("Tentative Completion Date"), however the Developer is entitled for a grace period of 6 months over and above this 42 month's period. Upon the Apartment being ready for possession and occupation the Developer shall issue the Possession Notice to the Buyer of the Apartment. Notwithstanding the above, the Developer shall be entitled to an extension of time from the Tentative Completion Date for issue of the Possession Notice, if the Completion of Construction of the said Apartment or the part/portion of the Project where the said Apartment is situated is delayed on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cease to have any interest or claim on the said Apartment and the proportionate undivided interest in the Common Areas and Facilities and Limited Common Areas and Facilities whatsoever or howsoever. The Developer thereafter shall be entitled to sell the said Apartment along with undivided interest in the Common Areas and Facilities and Limited Common Areas and Facilities to any prospective buyer/third party of its choice." 23. If we consider the obligations of the Developer in the event it does not comply with the timelines, a very meagre compensation is provided to the Apartment purchaser. Not only that clause 4.2 of the Agreement, which provides that the Apartment shall be ready for occupation within 42 months from the date of issuance of Allotment Letter, also provides that the Developer would be entitled for a grace period of 6 months over and above this 42 months' period. The said clause 4.2 further provides for various eventualities in case of which the Developer would be entitled to further extension of period for handing over the possession. 24. In any case, clause 4.3 of the Agreement provides that, subject to the provisions of clause 4.2 of the Agreement, if the Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction." 27. This Court in the case of Pioneer Urban Land and Infrastructure Limited (supra) was considering similar clauses in an Agreement between a Developer and an Apartment Purchaser. This Court observed thus : "6.4. A perusal of the apartment buyer's agreement dated 8-5-2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4(ii) of the agreement entitles the appellant builder to charge interest @18% p.a. on account of any delay in payment of instalments from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such onesided clauses in an agreement constitutes an unfair trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder. 7. In view of the above discussion, we have no hesitation in holding that the terms of the apartment buyer's agreement dated 8-5-2012 were wholly one-sided and unfair to the respondent flat purchaser. The appellant builder could not seek to bind the respondent with such one-sided contractual terms." 28. The view taken by this Court in the case of Pioneer Urban Land and Infrastructure Limited (supra) was followed in the case of Wing Commander Arifur Rahman Khan and Aleya Sultana and others v. DLF Southern Homes Private Limited (Now Known as Begur OMR Homes Private Limited) and others (2020) 16 SCC 512. 29. Further, a three-judge Bench of this Court in the case of Ireo Grace Realtech Private Limited (supra) approved the legal position as laid down in the case of Pioneer Urban Land and Infrastructure Limited (supra). 30. It is further to be noted that when the cases of Pioneer Urban Land and Infrastructure Limited (supra), Wing Commander Arifu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In case I fail to complete the transaction as stipulated above, the purchaser will get double the amount of the earnest money. In both conditions, the dealer will get 4% commission from the faulting party." 34. It can thus be seen that in the aforesaid case though the term in the Agreement provided for forfeiture of the earnest money in the event the prospective purchaser fails to fulfill the conditions, it also provided for payment of double the amount of earnest money by the vendor to the purchaser in case the vendor fails to complete the transaction. As such, the said term cannot be said to be one-sided. 35. Similarly, in the case of Desh Raj and others (supra), this Court was considering an Agreement to Sell with respect to the landed property. A perusal of the judgment would reveal that it was a case of an Agreement between two equal Parties and there are no terms in the Agreement which could be said to be one-sided and tilted totally in favour of one of the Parties. 36. We are, therefore, of the view that the present case would not be governed by the law laid down by this Court in the cases of Satish Batra (supra) and Desh Raj and others (supra), but would be governed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DRC. We see no reason to upset the view consistently taken by the NCDRC based on the judgment of this Court in the case of Maula Bux (supra). 40. Though we are not inclined to interfere with the direction of the NCDRC for refund of the amount in excess of 10% of the BSP, we however find that the NCDRC was not justified in awarding interest on the amount to be refunded. 41. As has been pointed out herein above, after the Agreement was entered into between the Parties in the year 2014, only after the possession was offered by the Appellant to the Respondents, they sought cancellation of the allotment. The reason given by them is that on account of sharp decline in the prices, a person would be able to buy a flat at a substantially lower price even in Primary market. 42. It is quite probable that the Respondents would have utilised the money which was payable by them to the Appellant for purchasing another property at a lower rate. 43. In the facts and circumstances, therefore, we find that the NCDRC was not justified in awarding interest on the amount to be refunded by the Appellant. 44. In pursuance of our order dated 24th April 2023, the Appellant has refunded an amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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