In a landmark judgment, the Punjab and Haryana High Court ruled that a real estate allottee cannot be compelled to accept an alternate plot from a developer if the originally allotted plot is not delivered. The court held that the developer must refund the deposited amount along with interest to the allottee, providing significant relief to homebuyers facing undue delays from developers.
Background of the Case
The case, titled Pankaj Nandwani v. Permanent Lok Adalat & Others (CWP-1637-2019), was presided over by Justice Vinod S. Bhardwaj. The petitioner, Pankaj Nandwani, was represented by Mr. C.K. Singla, along with Ms. Kavita Joshi and Ms. Tarranum Madan. The respondents, including the developer responsible for the Tuscan Royale project in TDI City, Kundli, District Sonipat, were represented by Dr. (Ms.) Malvika Singh, a Legal Aid Counsel appointed after the respondents proceeded against ex parte.
The petitioner had booked a residential plot measuring 250 square yards in TDI City’s Tuscan Royale project, with a registration form submitted on May 14, 2012, and an initial payment of ₹18,75,000. A subsequent allotment letter dated February 5, 2013, was issued but not delivered to the petitioner until November 2013. Despite discrepancies in the terms and conditions, the petitioner continued with the booking by depositing an additional ₹14,06,250 in December 2013. However, the developer failed to make significant progress on the project, and by June 2016, the respondents informed the petitioner of their inability to deliver the plot and instead offered alternate options, including taking over an alternate plot in the same project or adjusting the deposit in another project.
Legal Issues Involved
The central legal issue in the case was whether an allottee can be forced to accept an alternate plot or if they have the right to a refund with interest when the developer fails to deliver the originally agreed plot. The petitioner argued that the developer’s offer of an alternate plot was unacceptable and sought a full refund with interest due to the developer’s failure to fulfill their contractual obligations.
The developer contended that delays were due to unavoidable circumstances, including obstructions caused by local miscreants and ongoing litigation affecting the development of the project. They argued that they were not liable for refunding the deposit as they had offered an alternative solution by providing a different plot.
Court’s Decision
In a decisive ruling, Justice Vinod S. Bhardwaj set aside the award dated November 15, 2018, by the Permanent Lok Adalat, which had directed the petitioner to choose a plot from the available options at the originally agreed price. Justice Bhardwaj emphasized that an allottee cannot be compelled to accept an alternative plot as this would constitute a novation of the original contract, which requires mutual consent from both parties.
Quoting the judgment, Justice Bhardwaj stated, “The 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 court further observed that even after more than a decade, the developer had not handed over the possession of the plot, thereby keeping the petitioner’s rights in suspension indefinitely, which is unjust and unacceptable. Consequently, the court directed the respondent developer to refund the entire amount deposited by the petitioner, along with interest at the rate of 10% per annum from the date of deposit until the actual refund is made.
Case Details
– Case Title: Pankaj Nandwani v. Permanent Lok Adalat & Others
– Case Number: CWP-1637-2019
– Bench: Justice Vinod S. Bhardwaj
– Petitioner: Pankaj Nandwani
– Respondents: Permanent Lok Adalat & Others (including developers of TDI City, Kundli, Sonipat)
– Petitioner’s Lawyers: Mr. C.K. Singla, Ms. Kavita Joshi, Ms. Tarranum Madan
– Respondents’ Legal Aid Counsel: Dr. (Ms.) Malvika Singh (appointed after respondents were proceeded against ex parte)
