BEFORE THE HON'BLE NCDRC

UJJWAL KUMAR & Ors. v. GODREJ PROPERTIES LTD. & Ors.

CONSUMER CASE NO. 3446 and 3447 OF 2017
Total Consideration of Property: Rs. 2,43,83,310/-
Complainant Paid: Rs. 5,00,000/-
Prayer: i. Refund of Rs. 5,00,000/- at 18% interest.
ii. Rs. 5,00,000/- as compensation for mental agony and harassment.
iii. Rs. 55,000 for legal expenses. Kindly See Prayer at Pg 12 of the
Complaint.
Last Reminder/Demand Notice Sent to the Complainant on 29.08.2017 Kindly
See at Pg 98 of WS
Unit Terminated due to default on 04.10.2017 Kindly See at Pg 102 of WS
Amount deducted (Earnest Amount) by the Opposite Party- Rs. 5,00,000/- [2.05%
of the total Value of the property]

POINTS FOR CONSIDERATION

A. COMPLAINANT IS A DEFAULTER
A1. Complainant was completely aware of the payment plan which he chose at
the time of booking of the said Villa and the same was also mentioned in the
Welcome letter. (Annexure R6, @ Pg 75 of WS). Complainant did not make the
timely payment voluntarily and hence, committed intentional and wilful default in
making the timely payments.
A2. It is submitted that the first installment was to be made within a period of 45
days of booking as per the payment plan opted by the Complainant for a sum of
Rs. 23,65,230/-. to the Complainant vide email dated 09.01.2017 along with the
invoice requested the complainant to make the payment (Annexure R-8 @
Pg78 of WS).
A3. It is submitted that as no payment was made by the Complainant within the
time as provided, a reminder letter dated 31.01.2017, was issued to the
Complainant (Annexure R-10 @ Pg 83 of WS). Respondents issued other
Reminder letters dated 23.02.2017 and 18.04.2017 and emails dated 16.02.2017,
09.03.2017, 21.04.2017 and 20.06.2017 to the Complainant. (Annexure R-ll @
Pg 79 of WS).
A4. Respondents issued a Final opportunity letter dated 18.08.2017 and sent the
same vide an e-mail dated 19.08.2017 to the Complainant wherein the
Complainant was called upon to make the due payments or else his allotment
would be terminated and his booking amount would be forfeited (Annexure R-
13 @ Pg 92 of WS).

B. EARNEST MONEY WAS RIGHTLY DEDUCTED

B1. It is stated that the answering Respondents are legally entitled to forfeit the
earnest money since the Complainant has utterly failed to make due payments.
B2. It is stated that instead of making the due payment, the Complainant replied
vide his e-mail dated 28.08.2017. It is submitted that the said email is an
afterthought act wherein he concocted a false and frivolous story and alleged that
he had requested for cancellation of the said Villa way back in January, 2017
instead of acknowledging his default towards making the balance payments
payable to the answering Respondents. It would be pertinent to mention here that
no such e-mail or letter bearing the Complainant's request has been produced by
the Complainant.
B3. It is submitted that the e-mail dated 28.08.2017 was replied by the
Respondents vide an e-mail dated 29.08.2017 and the Complainant once again
was requested to pay his outstanding dues otherwise the amount paid at the time
of booking will be forfeited (Annexure R-15 @Pg 98 of WS). It is respectfully
submitted that the Respondents vide the letter dated 04.10.2017, cancelled the
Villa allotted to the Complainant and forfeited the amount paid at the time of
booking as per the terms and conditions of the booking (Annexure R-16 @ Pg
102 of WS).
B4. In case of default by the buyer, earnest money of 10 % can be deducted.
i. Ramesh Malhotra & 2 Ors. vs Emaar Mgf Land Limited & Anr.
[2020 SCC OnLine NCDRC 789]
Relevant Para: Para No. 8
“5. Forfeiture of earnest money under a contract for sale of property-
movable or immovable--if the amount is reasonable, does not fall within s.
74. That has been decided in several cases: Kunwar Chiranjit Singh v. Hat
Swarup (t); Roshan Lal v. The Delhi Cloth and General Mills Company Ltd.,
Delhi (2); Muhammad Habibullah v. Muhammad Shafi (3); Bishan Chand v.
Radha Kishan Das(4); These cases are easily explained, for forfeiture of a
reasonable amount paid as earnest money does not amount to imposing a
penalty. But if forfeiture is of the nature of penalty, s. 74 applies”.
It would thus be seen that only a ‘reasonable amount’ can be forfeited as
earnest money in the event of default on the part of the purchaser and it is
not permissible in law to forfeit any amount beyond a reasonable amount,
unless it is shown that the person forfeiting the said amount had actually
suffered loss to the extent of the amount forfeited by him. In our opinion,
20% of the sale price cannot be said to be a reasonable amount which the
Petitioner Company could have forfeited on account of default on the part of
the complainant unless it can show it had only suffered loss to the extent
the amount was forfeited by it. In our opinion, in absence of evidence
of actual loss, forfeiture of any amount exceeding 10% of the sale
price cannot be said to be a reasonable amount.

13. For the reasons stated herein above, we hold that (i) an amount
exceeding 10% of the total price cannot be forfeited by the seller,
since forfeiture beyond 10% of the sale price would be
 unreasonable and (ii) only the amount, which is paid at the time of
concluding the contract can be said to be the earnest money. The
Petitioner Company, therefore, was entitled to forfeit only the sum of Rs.
63,469/-, which the complainant had deposited with them at the time of
booking of the apartment. We, therefore, direct the Petitioner Company to
pay the balance amount of Rs. 81,534/- to the complainant within 4 weeks
from today, failing which, the said amount shall carry interest @ 12% p.a.
from the date of this order till payment. However, in the facts and
circumstances of the case, we find no justification for grant of any
compensation or cost of litigation to the complainant. The orders passed by
District Forum and State Commission stand modified accordingly.”
ii. V. Siva Kumar vs M3M India Private Limited and Another [2019 SCC
OnLine NCDRC 410]
Relevant Para: Para No. 9
“9. It would thus be seen that only that amount which is paid at the time of
concluding the contract can constitute earnest money and that the quantum
of the earnest money in any case cannot exceed 10% of the total
sale consideration. EDC and IDC amount could not have been deducted, in
addition to the earnest money, i.e., the amount paid at the time of
booking/allotment since that would amount to increasing the forfeitable
amount, albeit in an indirect manner. It would be an extremely unfair
trade practice to allow a term which permits such a forfeiture, in
addition to the earnest money.”
C. APPLICATION FORM WAS ISSUED TO THE COMPLAINANT
C1. It is submitted that, as a matter of practice the copy of the Application form
(Annexure R-2 @ Pg 29 of WS) is issued to customer there and then itself at
the time of the Booking. It is submitted that the Application form, therefore, was
given to the Complainant at the time of booking of the said Villa.
C2. It is to be pointed out that the Complainant since the time of the booking of
the said Villa i.e., 23.10.2016 till he received the Final Opportunity letter dated
18.08.2017, replied vide letter dated 28.08.2017 has never raised a single whisper
of not having the Application Form.
C3. It is submitted that vide email dated 13.01.2017, the account details of
the answering Respondents were shared with the Complainant (Annexure R-8 @
Pg 80 of WS). It will be pertinent to mention here that on 14.01.2017 the
Complainant had replied to the answering Respondents seeking as to in which
email the invoice was attached (Annexure R-9 @ Pg 81 of WS). It is most
crucial to mention here that no demand of the Application form was made by the
Complainant during this correspondence.
C4. In spite of having received the Application form, the Complainant has
concocted another story after ten months that the copy of the Application form
was not received by him. It would be most pertinent to mention here that the
Complainant has never once requested for the Application form in the span of 10
months and the same in enunciated by the fact that the Complainant has placed
nothing on record that would corroborate his stand. This coupled with the fact
that the said stand was made after the Final opportunity letter was served upon
the Complainant and it proves that the story put forth by the Complainant is
completely false and afterthought. It is amply clear by this fact that averments
made by the Complainant in their e-mail dated 28.08.2018 are baseless, false and
vexatious, therefore, the same cannot be relied upon.
D. THE COMPLAINANT IS NOT A CONSUMER IN TERMS OF THE ACT
D1. That the present case is not governed by the CP Act since the Complainant in
the instant case is not 'consumer' in terms of Section 2(l)(d) of the CP Act. It is
submitted that the Complainant with the intention to invest his money and to earn
profit on it made a booking of 2 Villas in the project (Villa being V5-018 and
Villa being V2-62).
D2. It is submitted that the Complainant has never disclosed why there was need
of two Villas in the same project throughout his complaint petition. It is pertinent
to mention that the Complainant has utterly failed to disclose that the bookings of
two Villas are for his residential purpose only and not for other purpose. It is quite
obvious that the bookings of two Villas by the Complainant in the said Project are
for commercial purpose.
D3. It is pertinent to mention that the Complainant also owns other residential
properties including Unit No. 503, SG Alpha Tower2, Sector-9, Vasundhara,
Ghaziabad, Uttar Pradesh and Unit No. 2074, ATS Advantage, Indirapuram,
Ghaziabad, Uttar Pradesh.

E. NO JURISDICTION OF THE NATIONAL COMMISSION

E1. The National Commission has no pecuniary jurisdiction to entertain the above
complaint. A perusal of the prayer of the Complainant in his complaint would show
that the amount claimed by him is frivolous and includes the interest and
compensation on the amount paid by him which is only Rs. 5 Lakhs. Therefore,
there is no pecuniary jurisdiction of the National Commission to entertain the
complaint.
E2. It is a well-established principle that any order passed by a court without
jurisdiction is a nullity, and that its invalidity could be brought up whenever and
wherever it is sought to be enforced or relied upon, even at the stage of execution
and even in collateral proceedings and therefore the order dated 26.09.2022
should be set aside by this Hon’ble National Commission.
Kindly See: i. Sneh Lata Goel v. Pushplata &Ors. 2019 3 SCC 594