Punjab and Haryana High Court

Observing that “the will of one cannot be imposed on another”, the Punjab and Haryana High Court has set aside the Lok Adalat award in which a developer who had failed to provide possession was directed to provide alternative land in lieu of refunding the deposited amount.

The lessee had reserved a residential plot in 2012 by depositing the initial amount, but it was never delivered.

Justice Vinod S. Bhardwaj said, “I am of the view that the exercise of discretion/selection by an awardee cannot be made conditional upon a counter-offer made by the promoter and that such a counter-offer cannot be accepted in law to give rise to a binding obligation on the applicant to apply for such an award. Such a renewed offer must be regarded in contract law as a fresh counter-offer, the acceptance of which by the applicant is a pre-condition to create any obligation. The will of one cannot be imposed on the other.” . “

The Court also noted that even after a period of more than a decade, actual physical possession of the land was not granted to the applicant.

“The applicant’s fate cannot be suspended indefinitely and simply for the convenience of the promoter,” added the judge.

These observations were made during the hearing of the plea of ​​one Pankaj Nandwani challenging the award passed by the Permanent Lok Adalat (Public 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 select a plot from the available plots of the same size and location at the price originally agreed upon in lieu of ordering a refund of the entire amount deposited along with interest.

Quick Facts

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

The application form was submitted by him in 2012 and a sum of Rs.18,75,000 was duly deposited. An allotment letter was allegedly issued to the petitioner but in fact it was never handed over to him, the petitioner’s counsel alleged.

The applicant argued that he had waited a period of four years for progress to be made and for the developer to offer him possession, but no such development took place.

In 2016, the petitioner and the developers expressed their inability to hand over possession of the land to the petitioner and gave him the option of accepting another plot of the same size or adjusting 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 work as some miscreants had filed suit and hence they were not in a position to offer possession to the petitioner.

The terms of settlement were made in accordance with the provisions of Section 22 C (4) to (7) of the Legal Services Authorities Act, 1987, wherein it was proposed that respondents Nos. 2 and 3 should offer possession of the original plot or refund the said amount, but the same could not be fructified.

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

After hearing the arguments, the Court considered the following question: “if an allottee can exercise his option not to seek another plot and instead request reimbursement of the money he has deposited.”

The Court accepted the submission made by the legal counsel that an allottee/applicant cannot be compelled to seek alternative land as this would amount to novation of the contract.

Justice Bhardwaj held that “The applicant cannot be compelled to accept the offer of another alternative land.”

It ordered the developers to repay the entire amount deposited along with interest at 10% per annum from the date of its deposit until its actual repayment.

Title: Pankaj Nandwani v. Permanent Lok Adalat and others

Mr. CK Singla, Advocate with Ms. Kavita Joshi, Advocate and Ms. Tarranum Madan, Advocate for the applicant.

Dr. (Mrs.) Malvika Singh, Advocate (Legal Advisor for Defendants No. 2 and 3).

Reference: 2024 LiveLaw (PH) 222

Click here to read/download the order