N.A. Britto, President
The complainants are British Nationals and are persons of Indian origin permanently settled in U.K. By the present complaint filed on 28/01/11, the complainants seek refund of Rs. 37.5 lacs with interest at the rate of 12% per annum with quarterly rests; compensation of Rs. 25 lacs; and costs.
2. The O.P. is a firm. The O.P. purchased a property admeasuring 25857 sq.mtrs, surveyed under Survey No. 635/1 situated at Mandrem of Pernem Taluka by sale deed dated 20/06/06 for a sum of Rs. 76,76,100/-. At the time of purchase, the said property was shown as orchard zone. The O.P. managed to get the property in settlement zone in the Regional Plan of 2011 notified by the Government and on the basis of the same, the O.P. obtained the sanad dated 22/12/06 under Section 32 of the Goa Land Revenue Code, 1968 for its development in an area of 25,098 sq.mtrs for residential purposes.
2.1. In view of wide spread protests from GBA and the public in general, the Government withdrew the said regional plan-2011 with retrospective effect, and without saving anything which was done under it, and as a result of the said withdrawal, the zoning of the property was reverted from settlement under regional plan-2011 to orchard under regional plan 2001 and as a result thereof the O.P. was forced to abandon the construction of their La Gardenia project.
2.2. Inspite of the withdrawal of regional plan-2011 the O.P. accepted from the complainant a sum of Rs. 37.5 lacs on 06/03/07 for the construction of a residential villa identified as villa No. 31 of an area 3200 sq.feet as per the plan and brochure shown to the complainant.
2.3. After the withdrawal of the regional plan 2011, the Additional Collector vide order dated 26/03/07 directed the O.P. to stop all development in the said property until further orders and subsequently vide order dated 14/08/07, the Collector withdrew the sanad dated 22/12/06.
3. The case of the complainant is that after receiving the said payment of Rs. 37.5 lacs on 06/03/07, the representatives of the O.P. approached the complainant on 19/03/07 and took their signatures on an agreement, styled as allotment agreement. The complainants stated that after the O.P. took their signatures on the said agreement they left India immediately thereafter and returned in November 2007 specially to ascertain the progress of work and when they went to the site found that the construction had not commenced at all and the representatives of the O.P being questioned, they gave some lame excuses and believing the promises that the work would start soon, they went back to U.K. and returned again in November 2008 only to find out that no work had started and the complainants took patience an went away. The complainants have stated that the O.P. then started demanding more payment stating that they were in need of the same to clear various objections by the authorities for the construction but the complainants did not agree to make any further payments to the complainants. The complainants again came down to Goa in November 2009 and found no signs of commencement of work and ultimately told the O.P. that they were not interested in acquiring the villa and that the agreement be cancelled and the money paid by them be returned to them with interest at the rate of 12% on compounding basis with quarterly rests as undertaken by them but inspite of several requests the O.P. failed to refund the amount paid by the complainants or the interest thereon.
Complainants stated that the acts of the O.P. amounts to deficiency in service and the complainants were entitled to receive compensation from the O.P.
4. On the other hand, the case of the O.P., is that as the said property at Mandrem could not be developed, the O.P. decided to purchase an alternate site in Goa for commercial development but they did not have sufficient finances for the purpose and they learnt about complainant No. 1 who was a professional money lender and contacted him and requested him for a loan of Rs. 40 lacs and the complainant No. 1 immediately advanced a loan of Rs. 37.5 lacs at interest calculated at 12% per annum, compounded quarterly. As per the O.P., the complainant No. 1 advanced the said loan on condition that the true transaction should be camouflaged as an agreement for sale of immovable property by the O.P. to the complainants and in furtherance of this, the complainant No. 1 himself gave a draft document entitled allotment agreement to the O.P. which upon execution, would, according to the complainant No.1, secure repayment of the aforesaid loan to the O.P. and the O.P with much reluctance printed the same on their letter head, signed the same and delivered to complainant No.1 as complainant No. 1 would have otherwise not granted the aforesaid loan. O.P. has stated that complainants always wanted to take recourse to clause 17 of the allotment agreement in the event of a default by O.P. in repaying the aforesaid loan with agreed interest. The O.P. also stated that the allotment agreement is inadmissible as it is not stamped with proper duty in accordance with the Stamp Act and therefore it cannot be read into evidence and the complainants cannot make any claim against the O.P. based on the said allotment agreement.
5. We have perused the record and heard the submissions made by Shri. Timble on behalf of the complainant, and Shri. Patkar on behalf of the O.P.
6. The first submission made by Shri. Patkar, on behalf of the O.P., is that the agreement dated 19/03/07 has become void for impossibility of performance as no construction can be done on the property purchased by the O.P. and therefore the complainants cannot recover the money paid under the said agreement.
6.1. We are not impressed with the said submission of Lr. Adv. Shri. Patkar. Section 56 of the Indian Contract Act, 1872 deals with agreement to do impossible act, and it provides that an agreement to do an act impossible in itself is void. It further provides that a contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent unlawful becomes void when the act becomes impossible or unlawful.
6.2. Admittedly, the O.P. is unable to construct the La Gardenia housing scehme in which the complainant had booked villa No. 31 and had paid Rs. 37.5 lacs, out of Rs. 75 lacs, as the property is reverted to orchard zone and cannot be developed on account of the withdrawal of RP-2011. In other words, this is a case where the doctrine of frustration of contract can be invoked. The doctrine of frustration comes into play when a contract becomes impossible of performance after it is made on account of circumstances beyond the control of the parties. It is a special case of discharge of the contract. However, it does not mean that O.P. can retain the benefit obtained under a contract which has become impossible of performance. Answer to Section 56 can be found in Section 65 of the Indian Contract Act, which provides that when an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract, is bound to restore it, or make compensation for it, to the person from whom he received it. In other words, the O.P. is bound to refund the money accepted from the complainant for booking of the said villa, as the villa now cannot be built as property is reverted to orchard zone from settlement zone.
7. The second submission of Shri. Patkar is that the O.P. had taken a specific plea that the payment of Rs. 37.5 lacs was towards a money lending transaction and had filed an affidavit to support the same and yet the complainant No. 1 made no whisper in his affidavit filed nor filed a rejoinder, denying the said allegation. Shri. Timble, the Lr. Adv. on behalf of the complainants, on the other hand, would submit that the complainants had produced sufficient evidence in support of the claim of the complainant, and which would dislodged the claim of the O.P., that the sum of Rs. 37.5 lacs was paid for the booking of the flat and therefore there was no necessity to deny the claim made by O.P. Shri. Timble has referred to letter dated 06/03/07, receipt dated of the same date and other documents.
7.1. We are not inclined to accept this submission from Lr. Adv. Shri. Patkar, only because complainant No. 1 did not deal with the plea taken by O.P., in his affidavit. Apart from the said allotment agreement dated 19/03/07, the case of the complainant is based on various other contemporaneous documents which we would prefer to rely upon then the self serving statement made on oath by the partner of the O.P., contrary to a written agreement. The plea that Rs. 37.5 lacs was part of a loan taken, gives an impression that the so called loan of Rs. 37.5 lacs was taken from the complainant No.1 only after the Collector withdrew the sanad by order dated 14/08/07 but the letter dated 6/3/07 addressed on behalf of the O.P. to the complainant No. 1 shows that the payment was made by cheque on 6/3/07 towards the booking of villa No. 31 in their La Gardenia project. This letter alongwith the annexure as well as the receipt would clearly prove that the complainant had paid the said sum of Rs. 37.5 lacs being 50% of the amount at the time of booking, out of 75 lacs to be paid in all, and Rs. 18.75 lacs at the time of taking possession. Another letter dated 07/07/10 sent by the complainant No. 1 to the O.P. shows that the complainant requested for refund the deposit in full for non fulfillment of the contract on failure to complete the unit by 31/07/08. The letter dated 26/08/10 written on behalf of the O.P. to the complainant No. 1 shows that the complainant was interested in canceling the booking of the villa and they were also willing to pay interest on the same but they would require the documents as mentioned earlier for processing the request of complainant No. 1. All these documents produced by the complainants are sufficient to prove that the complainant had paid the said amount of Rs. 37.5 lacs on 06/03/07 towards the booking of the villa and not as part payment of any loan. These documents falsify the plea of the O.P., raised for the first time before this Commission, as an afterthought, to deny a just claim of the complainants for refund of the money paid by them towards the booking of the said villa. In the circumstances, the mere fact that the complainant No. 1 did not deny in his affidavit-in-evidence, the plea taken by the O.P. that the money taken was towards the loan, is not sufficient to defeat the claim of the complainant which is supported by the documents referred to hereinabove as well as by the said allotment agreement dated 19/03/07, the execution of which is not disputed by the O.P.
8. The third submission made by Shri. Patkar is with reference to Section 35 of the Indian Stamp Act, 1899. It is his submission that the allotment agreement dated 19/03/07 between the parties is not stamped and as such cannot be admitted in evidence for any purpose or acted upon in view of Section 35 thereof. Section 35 of the Indian Stamp Act, 1899, inter alia, provides that instruments not duly stamped are inadmissible in evidence. It further, inter alia, states that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer unless such instrument is duly stamped. There are certain exception to Section 35 by way of provisos but we need not refer to them. This submission need not detain us any longer for reasons more than one. Firstly, it has not been demonstrated by Lr. Adv. Shri.Patkar that the allotment agreement was required to be stamped. Secondly, it can always be relied upon on payment of duty with which it is chargeable. Thirdly, the complainant case is sufficiently proved, apart from the said allotment letter, based on other documents produced by the complainant including the letter dated 06/03/07 addressed to complainant No. 1, on behalf of the O.P.
9. We have discarded the plea of the O.P. that the amount of Rs. 37.5lacs was paid towards a loan taken. We therefore need not refer to the provisions of Goa Money-Lenders Act, 2001 to which reference was made by Lr. Adv. Shri. Patkar. The parties are at idem that interest payable was at the rate of 12% with quarterly rests. This is specifically stated by the O.P. in para 4 of the written version apart from the fact that it was stipulated in clause 17 of the allotment agreement dated 19/03/07. The O.P., therefore, would be liable, not only to refund the amount of Rs. 37.5 lacs to the complainant but also with interest at the rate of 12% per annum with quarterly rests from 6/3/07 until payment.
10. We do not see that there was any need for the complainants to visit the site every year in November 2007, 2008 or 2009 to verify whether the work of construction had began or not. It appears to us, to be more probable, as suggested on behalf of the O.P., that the Complainants came to Goa during that time of the year and for three years for hol
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idays as Goa is a holiday destination. The complainants could have always written a letter to the O.P. and asked for the progress of the work with photos made by the O.P. in the construction of their said La Gardenia project. In this context we would refer to certain observations made by Rajasthan State Commission, as they appear in Arun Khanna, 2012(4) CPR 191: '9. Before we conclude, we may add that it has become a practice for many complainants in the complaints to claim damages which has no co-relation with the loss suffered and these inflated amounts are stated with a hope that some amount would become payable. This a practice which must be discouraged'. 11. Nevertheless, the complainants would be entitled to compensation in terms of prayer clause (b) for mental tension and suffering and on that count we are inclined to award to the complainants a sum of Rs. 1 lac under prayer clause (b) plus a sum of Rs. 5000/- as cost of the complaint. 12. For reasons stated hereinabove, we allow the complaint partly and order the O.P. to pay to the complainants Rs. 37.5 lacs with pending and future interest at 12% per annum with quarterly rests from 6/3/07 until payment in terms of prayer clause (a), Rs. 1 lac in terms of prayer clause (b) and Rs. 5000/- in terms of prayer clause (c). Payments to be made within a period of 30 days and in case not paid the payments under clause (b) and (c) shall carry further interest at the rate of 10%.